Are you currently renting? Have you been contemplating making the leap to homeownership but have cold feet?

Undoubtedly, buying a home is a huge commitment. After all, it's the biggest investment you'll likely ever make in your life and is probably the most expensive asset you'll ever purchase. Considering the financial weight of buying real estate, you'll certainly want to think about whether or not it's the right time for you to change your status from "tenant" to "owner."

READ: Rental Homes You Can Get For The Same Price As A One Bed In Toronto

But before you do, be sure to ask yourself the following questions first.

1. Are You Financially Prepared?

One of the biggest questions you'll have to ask yourself is whether or not you're financially ready for the cost of buying and owning. For most, cost is the biggest factor when it comes to deciding to rent versus buy.

There are other costs of homeownership besides just the mortgage, so you'll need to do some serious number-crunching before you make your decision. That said, it's also possible that you live in an area where rent can actually be more expensive than mortgage payments. This is certainly the case in certain parts of Toronto and the GTA, which makes homeownership seem even more financially feasible.

2. How Long Do You Plan On Living There?

Are you ready to plant some roots? Can you see yourself living in the same community - or even in the same home - for the long haul? Or do you prefer a more transient lifestyle that doesn't tie you down to any particular place?

Your lifestyle and needs will play a key role in your decision to be a tenant or owner. Generally speaking, you may be better off taking advantage of the flexibility that comes with renting if your job is transient and takes you all over the place. Ending a lease and moving elsewhere is a lot easier and less time-consuming than going through the process of selling.

On the other hand, if you like the area you live in and love the idea of establishing some roots there, buying might make more sense. And if you do plan to stick around, buying might be best simply from a financial standpoint, as you can take advantage of the appreciation in your home, especially if you end up selling a few years down the line.

3. Do You Like The Idea Of Having Free Capital To Invest?

A rising trend among consumers these days is to rent in an effort to free up funds to invest. Of course, this concept only works if you're renting in an area where the costs are significantly less than the costs of homeownership.

Without having to dedicate funds to paying property taxes, property insurance, repairs, condo fees (if applicable), and utilities (if you're not paying for them), you may have more money to use to invest in stocks, bonds, or even another piece of real estate.

But owning property also comes with a slew of benefits, even beyond appreciation. This is an important factor to consider.

4. How Much Freedom Do You Want To Have With Your Home?

If you rent, you'll most likely have certain restrictions with what you can and can't do with the place. For instance, you might even need permission to make a hole in the wall to hang artwork or mount a TV.

With homeownership, on the other hand, you're the owner, therefore you're free to do with your place as you please. While this might not be a big deal for some, it's an issue for others. Decide for yourself if having freedom with your property is an important factor for you.

5. Are You Willing To Assume All The Responsibilities That Come With Homeownership?

While you might have a lot of freedom by owning and can take advantage of the appreciation in value, you also have to be ready for more responsibilities. If you rent, your landlord will likely take care of things like repairs and maintenance. And depending on your arrangement, they may even tackle the snow removal and lawn mowing, too.

But when you own, all those responsibilities fall on your lap. Not only can they cost you money, but they're time-consuming as well. Just be sure you've accounted for that before you buy.

6. Do You Have An Appetite For Risk If Your Landlord Decides To Terminate Your Lease?

Even if you're an ideal tenant, there could be any number of reasons why your landlord may request that you move out and terminate your lease. For instance, perhaps they want to move in the place themselves or have family members who would like to take over occupancy.

Or, maybe the landlord wants to sell and the buyer has no desire to rent the place out. Or perhaps there is a new development in the area and your home or the area is going to be rezoned.

Whatever the case may be, you'll be at the mercy of your landlord and could realistically have to start looking for a new place to live at some point. But if you own, you are the boss and don't have to leave unless you make the decision to do so.

So, what's it going to be? Will you continue to rent, or is it time to jump into homeownership with both feet?

Real Estate News