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Renting Vs Buying a home by : Maya Austin

Welcome to my padlet!

In my padlet you can expect to learn all about buying a home versus renting a home.

Thank you for your time and I hope you enjoy my content.

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This website gives an extensive list of the pros and cons of owning vs renting due to high housing values and high interest rates. Many young Canadians won't even qualify to get a mortgage to buy a house. Younger Canadians in this situation are better off renting but the author encourages them to be very strict about a savings plan that would mirror what homeowners do when they pay into the equity of their house. This article is helpful by reminding renters to invest in other things for their savings.

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The Rent vs. Buy Debate in the Current Canadian Housing Market

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Renting vs. owning a home? There's no easy answer to which is better, but we break it down to help you make a decision on rent vs. buy a house.

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This article says that there is no right or wrong answer to the buying vs selling debate. Renters can still invest in real estate through the stock market without having to be tied to the ownership of a house that might be hard to sell should you need to. The article points out the financial freedom and flexibility that renters have over the stability and commitment that owners have. Each buyer or renter should carefully consider the stability of their finances and the freedom of lifestyle they desire. I chose this article because it shows that there is no right or wrong answer to the question but that each person should consider their own tolerance for financial risk and lifestyle choices.

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There is a point in their lives when virtually all Canadians ask themselves if they should buy a home or keep renting. Traditionally considered a sign of adulthood, owning a home is seen by Canadians as the most stable investment a person can make, and something that every person should aim for.

However, there are other factors such as lifestyle or financial circumstances that add complexity to the decision of buying a home. That's why many young Canadians are starting to see homeownership as something more optional than mandatory.

Starting from this new mentality, buying vs. renting a home in Canada has a series of pros and cons to consider before making a decision.

Pros of Renting

More Flexibility and Freedom

It's easy to pack your things and leave when you rent a home. This advantage is closely linked to people's lifestyle. It doesn't make much sense to own a home to live in when you have to (or like to) move frequently.

Less Maintenance Costs

Buying a home is a big ticket investment that requires constant upkeep and maintenance to keep its value over time. If you rent, this responsibility goes to your landlord or the property management company.

It Can Be Cheaper

In general, paying a monthly rent can be more affordable than committing to pay a mortgage for several years, especially if you're not thinking of settling in the area you're currently living in.

You Can Still Benefit from Investing in Real Estate

Buying a property is not the only way to invest in real estate. Options like REITs allow investors exposure to the benefits of real estate without buying a single property, and overall are easier to trade and sell when the time to take profits comes.

Cons of Renting

Less Stability

There are cases when a landlord chooses to put their rental property for sale, even if there is a tenant occupying the property. The laws for this situation vary from province to province. In the case of Alberta, landlords are free to sell an occupied rental property without notifying the tenant. However, the lease contract remains in effect and the landlord must give notice of at least 24 hours for visits and repairs.

Once the property is sold, the exit of the tenant will vary depending on the type of contract. If it's a year-long lease, the tenant can't be evicted until the contract expires. If it's a monthly lease the landlord has to give the tenant a notice to vacate, and the tenant has a 90-day period to leave the property.

No matter the circumstances involving the sale of the property you're renting, it is a very stressful situation to be in and can cause tenants a hassle to find a new place to rent.

Rent Increases

Your landlord can increase the rent at the end of the rental period. The amount varies from province to province, but no matter where you live this can make renting your home a less attractive option financially in the long run.

No Freedom to Make Changes

You may have the flexibility to leave your rental house or apartment when you need to, but you can't make any changes. Even cosmetic changes such as painting or installing extra amenities require your landlord's approval, which can make your place feel less like home.

Pros of Buying

Stability and Freedom of Choice

Owning your home means you are not living under the will of a landlord. No one is going to evict you because of a sudden sale, or any other unexpected event. Also, if you want to paint or make a large renovation, you don't need to ask for permission. You can truly make your property your home.

Build Equity

Eventually, the monthly mortgage payments you make help you build home equity, one of the most important indicators Canadians use to calculate the distribution of their wealth.

Many people use their home equity as an asset to borrow against with a home equity loan, often used for large purchases, like home renovations, university tuition fees, or medical bills.

Accumulate Capital Gains

Another advantage that helps you build wealth is that Canadians don't have to pay capital gains tax for their primary residence, all the value your home might accumulate over time will go into your pocket.

Cons of Buying

(Sometimes) Hard to Sell

If you want to sell your home, you might get caught up in market fluctuations that could give you a hard time to sell your home at a good price. Depending on the market, your home can be listed for months.

Maintenance Could Get Pricey

Home ownership is an investment that demands ongoing maintenance costs to keep your property in good condition, and these costs could get unexpectedly higher in case of a major emergency repair.

Buying vs. Renting a Home: What's Better?

There is no right or wrong answer when it comes to buying or renting a home. Your lifestyle and financial situation need to be considered carefully before making a decision on your housing needs. With proper planning, you can still invest in real estate and enjoy its benefits without buying a home if you wish so, and become a homeowner when your life situation requires you to settle into a home for the long run.

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Buying vs. Renting a Home in Canada: What's Better? - Amhurst...

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There is a point in their lives when virtually all Canadians ask themselves if they should buy a home or keep renting. Traditionally considered a sign of adulthood, owning a home is seen by Canadians as the most stable investment a person can make, and something that every person should aim for...

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This article debunks the myth that renting is throwing away money. Owning a house has a lot of extra costs at the beginning of the process that make it hard for home owners to keep up with all the extra payments and get ahead. On contrary, renters dont have to make a downpayment, maintenance costs, repairs, or insurance. All of this extra money not paid upfront by renters could pay off debt, go into savings or into other investments for the future.  I like this article because it gives an opposing view of the traditional one.

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Renting vs Buying a Home in Canada - Tips for Decision

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Do you dream of making your home just the way you want it? Then buying makes that much easier. When you rent, your tenancy arrangement typically restricts what customizations you can make to your living area - assuming you get to make any at all.

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This article also compares the pros and cons of renting vs ownership. Renting has fewer hidden costs and gives more flexibility to move when financial circumstances require it. Renters have the ability to put this extra money into savings but the realities of life and spending mean that they often don’t. Home ownership forces people to save by putting money into their mortgage that will become equity in an expensive asset that will benefit them in the future. I chose this article because it talks about the importance of saving for the future through a mortgage.

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Choosing whether to rent or buy a home can have a long-term impact on your finances.

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In current market conditions it is cheaper to rent than to buy. Mark, the man in the video suggests that buying costs in Ottawa for example would average out to $3600 a month vs $2200 a month. While renters don’t have the advantage of paying equity into a house, buyers have many additional costs, such as mortgage insurance, property taxes, possible condo fees, insurance and utilities. Renters also have the benefit of moving should they need to financially.

I chose this video because it gives a good contrast of the different sets of expenses of the housing market. Not only does he talk about it, but he shows it as well which is beneficial for visual learners like myself.

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Renting VS. Buying a Home in Canada [2024 Edition] Which is ACTUALLY Cheaper??

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This video discusses the hidden costs that come with owning a home such as the utilities of water, electricity and gas for example. These costs are not fixed and can easily add up to 20% of your monthly living cost. Home owners are responsible to pay these utility bills and so renters have the advantage of paying the flat monthly rate. This article is useful because its a good warning for first time home buyers and immigrants inexperienced in the market to be prepared to pay extra money every month.

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[Viet sub] Monthly expenses of owning a house in Canada | Cost of owning vs renting a house

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The video host compares the costs of owning and renting in an expensive city like Vancouver and concludes that while the monthly cost is cheaper for the renter, the owner will benefit more in the long run. The owner benefits because by putting down a smaller amount of money up front in the form of a down payment they get to own a very valuable asset. They have time to pay it off and in the end when their home grows in value they will have an even bigger asset. This video is useful because it gives wise insight into the long-term gains of the housing market.

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Renting vs Buying a Home in Canada| The Honest Truth

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Traditional advice has always been that it is a better investment to buy a home than to rent. But this has changed in recent years. Real Estate prices in major Canadian cities have skyrocketed making it nearly impossible for new buyers to afford anything New owners have to put down at least 10% which is over $100,000. Since covid housing prices have dropped and interest rates have risen, meaning that those who can afford a down payment are paying extremely high costs every month just to pay the interest on the mortgage. The Man in the video concludes that it is wiser for young people to rent and invest their money in other opportunities like the stock market. This video is useful as it breaks the old advice and shows young people the smart new way to invest.

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This picture compares the flexibility and stability of renting vs owning. Renting offers the flexibility to move for job and lifestyle choices while home ownership offers the flexibility to renovate and decorate your property to your own style. Renting offers the stability of payments so that the renter can pay down debt and explore other opportunities while home ownership offers the stability of paying into an asset for the future. I like this image because flexibility and stability are both important for young Canadians to consider.

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This picture talks about the reality of living situations that young Canadians will find themselves in when they graduate from college or university. You should only buy if you have enough money for a down payment, if you have a secure job to qualify for a bank mortgage and if you are ready to take on the debt of owning a home. If you are living from paycheck to paycheck, still saving for a down payment and don’t have a stable job renting is the way to go. I like this picture because it makes the choice very clear based on circumstances.

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What did you learn about your topic that surprised you the most?

What I learned regarding my topic that surprised me most is that there is in fact no right or wrong answer and that it is strictly situational per person and what will suit them and their lifestyle best.

Provide a real life example of how this topic is relevant or interesting for you.

This topic is relevant for me as I am looking into moving out in the coming years so it is something I am actively learning about.

If you could pass on your knowledge to a family member or friend, what do you think is the most important thing to pass on.

The most important knowledge I would pass on is to do your research. Everyone is different and just because something works for someone else, doesn’t necessarily mean it will work for you.