Rent or Buy: What’s the Right Choice for You?

A main driver behind deciding to buy a home instead of rent, is the appeal of building up your equity. However, the satisfaction that comes from being identified as a home owner can often provide you with a sense of pride and achievement that no amount of equity could amount to.

Choosing to rent as opposed to buy removes much of the extra strain that purchasing brings with it. The majority of the issues that arise over the span of your lease are taken care of for you.

Either choice comes with benefits that the other struggles to compete with.


Reasons to Rent:

  • Less Commitment – Although the standard lease term for most properties is 12 months, it is possible to negotiate different terms depending on the situation. This is especially valuable if you are new to the area and don't want to rush into purchasing a new place. Signing a 12, 6, or even month to month lease provides flexibility and allows you to avoid the long term commitment of deciding to buy.  
  • Preview Neighbourhoods – Branching off of the above point, renting allows you to preview neighbourhoods that you are considering purchasing in. By renting you give yourself the opportunity to test out the amenities and security of the area before committing to it.
  • Reduces Risk of Uncertainty – This can relate to a number of different factors. Whether it be uncertainty in your career (relocate for work, unemployment) or your income (pay raise, pay cut) renting provides you with flexibility to respond to almost any of these scenarios.
  • Build Credit – For someone who is looking to purchase a house, but doesn't have the greatest credit history to qualify for a reasonable mortgage rate, renting is a smart option. Having a record of on time monthly payments will help boost your score to eventually buy.
  • No Maintenance Work – When something breaks in your apartment you don't need to hire someone to fix it or go to the store to get parts to do it yourself. Instead, you can call your landlord and have the situation repaired quickly and generally at no cost.
  • Reduced Expenses – Your landlord generally pays for your heat and water. In some cases, A/C, electricity, cable, and more will be included depending on the property and incentives.


Reasons to Buy:

  • Build Equity – As mentioned earlier, when you rent, you own nothing. Each time you make a mortgage payment, you increase your ownership in the property. Growing your home equity then becomes an investment in itself that can be used as leverage to make additional major purchases in the future.
  • Space – As you grow, your possessions, family, and need for space generally grow too. To achieve the space you will most likely need and want, purchasing is generally the go to solution. Not to mention the appeal of the privacy associated with providing more space for yourself.
  • Total Creative Control – You have free reign to decorate wherever and whatever you want. New lighting? Crazy wall colors and designs? Tons of shelving, and pictures? You can do it all. This can also include anything from deciding to knock down a wall to updating your kitchen cupboards.
  • Maintenance Decisions – Any decisions associated with the repair and maintenance of your house are completely up to you. Whether that means fixing something yourself or contracting it out to someone of your choice.
  • Tax Deductions and Credits – A large benefit to purchasing a house is the tax benefits associated with it. This includes First-Time Home Buyers Credit, GST/HST Tax Rebate, Home Buyers Plan, working from home deductions, and many more. For a full list of tax deductions and credits in Canada available to home owners, check out  


What should you choose?

Of course, as you may expect, it depends on your situation. In many cases, renting acts as a stepping stone for you in the process of committing to the purchase of a home. Renting allows you to reduce risk, reduce expenses, and build credit. Purchasing allows you to build equity, receive tax deductions and credit, and have total control over what happens within your walls.

A decision like this also weighs heavily on the market. Is it a buyer's or seller's market at the time? As mentioned earlier, a house is not only a home, but an investment, and in a sense should be approached as one.

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