The striking phrase “Stop paying someone else’s mortgage” is already stuck in our teeth, admit it. Who hasn’t heard this argument about the necessity of buying your own property? Both as a “you need to have something of your own” and as an investment, we are convinced from all sides that we absolutely must buy our own home — without it, life is incomplete, insufficiently protected, and generally quite unpleasant. The American dream, and all that.
I prefer to consider (and show clients) arguments from different sides, often opposite, and often to my own detriment. This is exactly such a case. Let’s talk — is it really necessary for everyone to buy their own home at the first opportunity? What, generally speaking, is wrong with renting?
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Society’s attitude toward renting is sometimes a bit condescending. They say that those who rent are people who can’t afford to buy. In reality, I’m sure it’s easy enough to get into debt, while renting itself is often a quite conscious and reasonable choice.
First of all, renting is usually cheaper than owning property. Besides the direct mortgage payments, the owner has to pay property taxes (in the case of a condo — also maintenance fees), fix breakdowns, periodically replace the roof, i.e., deal with a lot of headaches that renters are spared from. Living in a rental and investing the money saved can, financially speaking, be a wiser choice than owning property.
Secondly, renting is, to a much greater extent, freedom of movement. You’re not tied to any particular place. Yes, any move is a headache, but moving from one rental to another, without selling and buying property, is incomparably simpler in terms of hassle.
Thirdly, growth of anything can’t last forever — this applies to real estate prices as well. The price growth of recent decades has turned into a pause (and even a decline) in the past few years, so I wouldn’t count on real estate as a straightforward investment, nor would I bet on inevitable price increases. A balanced market from time to time involves both rises and falls. If you are leveraged to the limit of your capacity, economic conditions and rising interest rates can easily throw you off financially. In the case of renting, you risk practically nothing — everything remains fairly predictable for you.
Fourthly, not every property becomes an asset. Sometimes a house or apartment just drains money from the family budget — if bought in an unlucky neighborhood, with defects discovered over time, requiring expensive repairs, or simply if some unforeseen global pandemic radically changed the economic situation of a specific area (no, don’t remind me about the price drop in downtown Toronto a few years ago!).
Fifthly, owning a home always means some kind of worries. Even when you’re not in the mood to deal with them. Roof leaking? Deal with it. Boiler not turning on? Search, call, pay, urgently. Wasp nest appeared? Something needs to be done! Raccoons settled in the attic? Handle the problem!
You have to insure, maintain, pay taxes, keep an eye on the market and legislation.
The tenant, on the other hand, can remain a zen observer: a breakdown happened — wrote, called, informed the owner, and you, enlightened, continue to contemplate the world.
By profession, of course, I can’t in any way discourage anyone from buying. But I believe that my favorite clients (they’re all my favorites, just so you know) should see and understand all the pros and cons of each option, so they can make a balanced decision — not the same for everyone, but the best for their specific situation.
Renting is not “throwing money away.” It’s a way to live flexibly, economically, and consciously.
And if you’re renting now — maybe you’re simply playing your very smart strategy.
Call me, let’s talk about your situation, what makes sense for you and what doesn’t.
Serge Skyba
Realtor at Realty 7 Ltd, Brokerage
416 305 6525
