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Rent vs Ownership

Rent vs Ownership

Typically, if you are living in a house, you're either on rent or you own the property. People do have their own opinions based on experiences and other things about buying or renting. The truth is that neither is a bad option. There are various factors that matter -the person and, their lifestyle, their budget, the value of the real estate in the long term, and lastly their plans for the future.

Housing in Canada

Till 2018 the tilt in Canada has been towards owning the house rather than renting. Buying a home was a milestone that was common for an average Canadian Citizen. But with an increase in inflation and overall prices, it has become rather difficult for an average person to buy a house.
Let’s take a look at both the pros and cons of renting and ownership through evaluating different factors.

An Investment Perspective

The best bet in investment is always real estate, as the rates never dip too much and your investment is almost always safe. Given the increase of property value in the main cities of Canada, it is an even better investment. You will be bound to deposit some money (both principal and interest) and as an outcome, you will own property after a fixed period of time.
On the contrary, opting to rent a house, provides you an array of other options. You’ll have more money on hand to invest in mutual investments and other funds.

Maintenance Costs

Complete ownership means ownership of damages and also of the cost incurred to fix it. When you own a house, you’re likely to face scenarios where your plumbing will go bad or your electrical appliances need to be fixed. In those or any similar cases, you will bear the cost as the house belongs to you.
Whereas the situation is different when you are on rent. The landlord is responsible to fix any damage that has happened in the house and you simply have to inform him/her and your job will be done.

Payment Structure

The payment is visibly different in both situations. In the case of mortgages, you get to pay a fixed amount of mortgage for a fixed number of years. All of this is finalized when the mortgage is being bought. This diminishes the chances of any sudden payments or an increase in payment. This way you will have to pay the same amount each month as your mortgage.
There are several factors that can affect the amount of rent one pays. Interestingly, it is not necessary that these factors are under the control of an individual. Factors like a sudden increase in housing value, supply vs demand ratio, inflation, or any other factor can be the reason for an increase in the amount of rent. This instability can be a dangerous factor when a tenant is already dedicating a huge chunk of his income towards rent payment.
In a nutshell, neither option is a bad one. It depends upon your circumstances, the flexibility in your budget, and long term plans. So, think before you decide – invest in a house or opt for renting a place.

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