Owning vs Renting
- Lower cost upfront – As a renter, you will be required to pay first and last month’s rent and perhaps a security deposit for a pet. If you buy, you will be required to pay a hefty down payment, plus costs for the home inspection, closing costs and other potential items such as a survey and sewer scope. It’s a difference of a few thousand dollars if you rent compared with tens or even hundreds of thousands of dollars if you buy. Freedom and flexibility – If you are new to the area, you can rent and use this time to check out neighbourhoods to see where you might possibly want to buy. By renting you can test an area without committing to it.
- Invest money elsewhere – You can take money that would normally be spent on a down payment and house costs and invest in the stock market or other investment opportunities that could get a better return on value, depending on location.
- Uncertainty in your career – If you think you might need to move in the near future, or are mulling job changes where you could be relocated elsewhere in the country, renting affords the freedom to come and go as needed.
- Uncertainty in income – If you expect a pay hike or pay cut in the near future, that can change your borrowing ability as well as impact your ability to pay a mortgage.
- Time to establish credit – Got bad credit? By creating a history of on-time rental payments, it can help you build good credit that you would need to qualify for a mortgage.
- No maintenance – When the pipe leaks under the sink, you don’t head to your nearest hardware store, you head for the telephone and call the landlord.
- Incidental expenses – Occasionally, the landlord might pick up costs for utilities such as water, sewer, garbage, and in some cases heat and hot water as well.
- You may have no control over the fluctuation of your rent
- You might be limited in decorating the home or apartment.
- You won’t build equity in your home.