Should You Buy a Home or Keep Renting? Key Considerations to Help You Decide
Are you planning to rent or buy a home anytime soon? It’s no secret COVID-19 has created a lot of uncertainty, but you’ll be excited to know that the Canadian housing market is booming.
As a potential first-time buyer, you’ll want to know whether you should continue renting or become a homeowner. This decision is a difficult one driven by both financial and lifestyle factors. It also depends on individual preferences too, so no single answer can apply to everyone.
What are the advantages and disadvantages of renting a home versus buying a house in Ontario?
Take some time to think about the key considerations when deciding between buying a home or renting a property.
The Cost
It’s no secret that homeownership can be a significant investment. On top of the down payment, there are also the regular carrying costs, which include things like your mortgage, insurance, utilities, maintenance, and property taxes. And with condos, make sure to budget for your monthly condo fees.
When it comes to rentals, you need to expect that your rent will increase every year based on the latest rent increase guidelines. You may also be responsible for sudden moving costs should your landlord decide to take possession of the house or look to sell.
Buying a house in Ontario is an incredibly attractive option for many, given that low interest rates have made it easier for first-time buyers to find that perfect home.
The Location
Prices vary when it comes to renting or buying in different regions. Prices in Toronto and the GTA tend to be higher due to larger populations and increasing demand.
However, the shift to remote work has caused housing booms in many non-traditional markets as younger buyers look to settle down in quieter communities outside of Toronto and the GTA.
Location plays an important role in what schools, parks, and amenities are available—so it’s important to understand what a particular location has to offer. You will also want to take into account local property taxes since they are city-specific.
The Time Frame
You must also factor in how long you expect to stay at your new property. A rule of thumb is to rent if you’re thinking of moving out after three years and buy if you plan to stay for at least five.
Why is this? The cost of quickly buying and selling a house is high. You have the transaction fees, moving costs, legal fees, and early termination fees for terminating a mortgage.
If you are looking for a short-term place to live, renting may be the better option. The added flexibility provided by renting gives you a lot of control that you may not be able to enjoy if you have a fixed-rate mortgage.
However, the longer you expect to stay at your future property, the more attractive the option of buying a house is since real estate is a long-term investment that appreciates over time.
So, how do you decide how long you will stay in a single location? Answer this question by taking into account your lifestyle needs and future work opportunities.
- Will you be welcoming new members into the family, or will a few move out soon?
- Will your work require you to travel in the future?
- Are the amenities and services around the location enough for you to stay?
If you’re choosing to purchase a home, you want to minimize the chance you will need to move again soon.
Looking to Buy a Home in Milton? Work With Milton’s #1 Real Estate Team
Should I buy or rent in Milton? That’s a popular question we get asked a lot.
Are you looking for rentals in Milton? Buying may be the better long-term option for you. If you’re looking to explore all of your opportunities, get in touch with Milton’s #1 real estate team.
Amy Flowers can help you find the perfect house for sale in Milton.
Get in touch today with our team today to learn more.
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