Debating the viability of renting vs. buying and which is better has become a common activity in Canada, especially in the past few years. While buying a home was once considered to be a milestone in the life of an average Canadian, it has become a long-term goal for many. As a leading provider of lending solutions for prospective buyers, the team at PHL Capital Corp knows how difficult it can be to determine which option is right for you. That is why we have compiled some information outlining the pros and cons of renting and buying.
Learn about some tips for first-time home buyers.
Renting
Contrary to popular belief, renting is not a waste of money. For some individuals and families, renting may make more sense than buying. Renting offers the following benefits and potential drawbacks:
Pros
Renting offers the following benefits:
- Flexibility – Once your lease is over, you are free to look at other housing options instead of being forced to stick around to avoid penalties for breaking your mortgage.
- Maintenance – Renting typically means that your landlord is responsible for any maintenance or repair issues that may arise.
- Less Expensive – While rent prices are continuing to rise, renting is still typically cheaper than buying due to the lack of property taxes, maintenance costs, and strata fees (if applicable).
Cons
Potential drawbacks of renting include:
- Difficult to Customize – Whether you want to paint or update certain elements of your home, it can be difficult to obtain approval from your landlord for these changes.
- Increasing Rental Prices – As noted earlier, rent prices are continuing to rise every year. In some cases, rent prices can be equivalent to a mortgage payment.
- Less Stability – Renting can be unstable due to several factors including rising rent payments, changes to your rental agreement, and landlords choosing not to renew your lease.
Buying
Buying is often preferable to owning, though some individuals may find it difficult to be approved for a mortgage by a bank or mortgage lender, especially as living costs continue to rise. Buying offers the following benefits and potential drawbacks:
Pros
- Building Equity – The biggest benefit of owning a home is that your monthly mortgage payments build equity. In a way, home ownership can be a method of forcing you to save some of your money each month. As the market continues to grow, you can stand to make a significant profit if you sell in the future.
- Stability – When you own your home, you never need to worry about yearly/monthly leases or changing policies from your landlord.
- Freedom to Customize – When you own your home, you are truly free to make it your own through painting, renovations, and other projects.
Cons
- Maintenance and Repairs – When you own your home, you are responsible for any maintenance or repair costs.
- Additional Expenses – Home insurance, property taxes, amenities, and strata fees need to be accounted for when owning your home.
- A Bigger Commitment – Buying a home is a big commitment as breaking your mortgage can result in stiff financial penalties.
To learn more about the benefits of buying property or to inquire about our lending solutions, get in touch with the team at PHL Capital Corp. We can be reached through our online contact form and will be happy to answer any questions you may have regarding our services.