Rent vs. buy, how to make the best decision?

With the real estate market exploding in the year 2021 and 2022, we can sometimes feel the urgency to buy a house as soon as possible, especially when we it's a first purchase. There is a feeling that property prices will only continue to rise and that it is now or never.

However, in situations where decisions must be made quickly, many aspects can sometimes be overlooked or forgotten. The truth is, many households feel very comfortable living in a rental situation as they conclude that there are fewer problems to deal with. In both cases, it is important to make the best decision for ourselves, without being influenced by market prices, mortgage brokers or current listings. The following article will help guide you in your decision to buy or rent a home.

Buying a home - think about it!

The first question to ask yourself is where you see yourself in five years? For example, if you live alone, but plan to have children soon, there is no point in buying a small one-bedroom condo. Your marital status is also important. If you are a couple, it is important to be aware of your partner's financial situation and to discuss it before planning to buy a property. In short, a proper analysis is crucial.

You must also be aware that buying a property means many investments, especially at the beginning, whether it is for renovations, furniture purchases, moving expenses, home inspection, or notary fees. We have to be prepared for unexpected expenses and leave some room in our budget. It is also important to be aware of the mortgage rate when doing your research. Think also about all the additional fees when you look at house prices.

When buying a property, it is not enough to only consider the amount of the mortgage with interest in your budget, you must also take into account the welcome tax, real estate broker fees, school and municipal taxes, your home insurance and condominium fees (if that is what you are buying).

Is renting an apartment an economical option?

In today's real estate market, renters tend to think that they need to buy in order not to lose money. However, considering some aspects of renting, it can sometimes be more economical in certain situations.

For example, by renting, you save on additional monthly costs such as taxes and condo fees (depending on the agreement with your landlord). It is also important to consider that tenants do not assume the costs of renovations or breakdowns, which allows you to have a more stable budget. We also save on snow removal in the winter and annual landscaping costs (watering the grounds, spider treatment, etc.)

However, it is important to understand that buying a property is also an investment. You will be able to recuperate your investment with your mortgage payments and even more, as the value of the property will increase over the years. With a rental, your rent is likely to be less than the cost of ownership combined, but you will never get back the money you spent annually on your apartment.

Think long-term

If you have a stable job and income, a good credit score and a realistic budget, you will most likely be accepted apply for a mortgage at your financial institution. However, you must first accumulate enough to put a cash deposit down. This gives you time to open savings account, observe and analyze the current market, see what interest rates are and what properties are for sale to see what your needs are and make an informed decision. This also gives you time to contact a real estate agent to help you with your research.

Nevertheless, you have to think long term when buying a property. What will you need in five or ten years? What will your financial or family situation be in the long term? A good property will be one that can grow with you and your life. If you have difficulty projecting yourself into the future, no problem! It may be more suitable to stay in renting until you see more clearly, as a lease is renewed every year, it is easily possible to change your mind quickly before you become a homeowner.

After reading this article, we hope that it has shed some light on what you need and what is the best option for your situation. When it comes to a home, whether it's a rental or a property, the best place will be the one that makes you feel good!


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