The Rent or Buy Decision

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This is a decision which many people face, and the decision is not as easy to make as it may sound.

As a homeowner, you can reasonably expect the equity in your home to increase over time as your mortgage is paid down. That, combined with regular appreciation in property values, can be a rapid and rewarding way to increase your net worth. In contrast, the person renting over the same amount of time is left with no property investment but may have enjoyed lower living expenses and the opportunity to invest in other opportunities.

When comparing owning to renting, you have to add up all of the figures, including the cost of your home, the size of your down payment, utilities, immediate repairs, interest rates and insurance, and compare them with how much you are currently spending on rent. You also have to account for the fact that any cash flow savings from renting (vs. mortgage payments) can be invested in other more lucrative opportunities (as long as you know what you are doing).

Of course, you also have to place a value on the enjoyment and satisfaction that you will derive from owning your own home.

Please click herefor a simple calculator to help you make the decision whether to continue renting or to make the jump to buying a Toronto home. Please be aware that this calculator is only intended as a guide to give you some indication of the cash flows associated with renting and buying. It does not account for utility costs which may be extra and it does not account for investment returns that may be derived from cash flow savings associated with renting.

Tired of Renting?

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