If you're reading this, chances are you've been wrestling with this question yourself. A quick Google search for the question "Should I rent or buy?" yields hundreds of hits. But the results might surprise you.
It's no secret that more and more people are opting to rent their home, condo or apartment instead of buying it. Whether you're a student out on your own for the first time, a professional couple, a family, or retired, the advantages to renting over buying are plenty.
Here are the top three reasons why you should rent instead of buy:
We're not just talking the freedom to change where you live easily–we're also talking financial freedom. In the current global financial climate, it's seemingly tougher than ever to purchase a home or condo. When you rent, you forgo more than just huge monthly mortgage payments. You also escape the clutches of property tax, maintenance costs, astronomical electricity bills, overinflated insurance costs, and much more.
Not convinced? Try one of the many online rental calculators that will help you break down exactly how much your monthly costs will be. The results can be eye-opening. "We designed a one-of-a-kind 'Rent-or-Buy' calculator on our site that compares monthly costs in an easy-to-understand way," says Chaim Rivlin of RentSeeker.ca. "Far too often, consumers forget about certain monthly costs associated with home ownership, or they just don't realize how much they will be in the end. With our calculator, it's right there in black and white." And that's the key: there cannot be any grey area when it comes to your monthly expenses. Arm yourself with knowledge before you make the life-changing decision to purchase a home.
Many young couples and families are discovering that their goals and priorities actually don't involve home ownership. Instead, they would rather live in the neighbourhood they want to live in, put away money for travel and vacations, and have the convenience of being able to move when they need to. A 2012 Fannie Mae investigation found that 42 of renters prefer their housing situation, as it allows them to live in a more convenient location than owning a home would. For millennials, the vast majority prefer city living—which often doesn’t jive with owning a home. In fact, two-thirds of this demographic are renters, reports a 2014 Nielson study.
It's not just millennials that are flocking to the rental life, either. Retirees are interested in renting too, for a number of reasons ranging from not wanting to carry debt into retirement to needing the flexibility to live closer to family, to not wanting to worry about costly repairs. The 2006 Canadian Census revealed that older Canadians (65 and above) showed an increased preference to renting. In fact, the percentage of seniors renting grew to 32 per cent once they reached 75 years old.
You don't need to be a jack-of-all-trades when you rent. If something requires repair, simply contact your landlord. There's no paying out of pocket to patch a leaky faucet, fix a drafty window or replace an old refrigerator. If you buy a house, all of those expenses are on you. And in the current housing market, the likelihood that you’ll need to purchase the dreaded fixer-upper is high.
Finally, the convenience of being able to live in the neighbourhood you want to live in, near the school you want your kids to go to, and within walking distance of the amenities that are important to you, makes renting a far more ideal situation.
Saving money, having peace of mind, and having the freedom to do the things you want to do: it seems that renting is the new normal.