Real estate prices in Canada continue to rise, and this is not news to anyone. Places like Toronto and Vancouver are the cities that have been most affected by this real estate bubble. Prices are so high that it is pushing the younger generation out of the market. This is causing some new trends to develop, as people struggle to afford buying anything, most notably, in big cities. Trends such as: buying a multi-family home, living in the suburbs, and high rise living have emerged as alternatives for those who cannot afford to purchase detached, or even semi-detached homes.
Another trend that is becoming very prominent is that people are giving up on purchasing a home, and they are looking for other options, such as searching for condos for rent. Renting is not an ideal living arrangement for most, as they feel as if they are just pouring money down the drain instead of having those payments go towards a mortgage. Unfortunately, for many home seekers, they simply cannot afford to place a down payment on a home, so leasing a home is their only option.
While it may not be exactly what a lot of people want, there are actually many benefits to renting when compared to home ownership. Some advantages of renting include, no maintenance, no real estate taxes, no big down payment and amenities being easily accessible. While you may, in a sense, be “pouring money down the drain”, it can also be viewed as “getting your feet wet” before making one of the biggest decisions of your life: purchasing a home.
Renting cuts out maintenance and repair fees almost entirely. Of course, if something is severely damage because of your actions, you may be forced to pay for it, but general maintenance and repairs will be entirely covered by the landlord. Things such as floods, leaks, or broken appliances can make a huge dent in your wallet as a home owner, but tenants need not worry.
Property taxes go up every year, and this is troublesome for home owners. For tenants, on the other hand, they do not need to worry about this as they pay a fixed rent amount. Every year, property taxes increase, yet that is not always the case with monthly rent.
The main advantage of renting is that you do not need to break the bank to afford a down payment on a house. In Toronto, down payments must be 5% of the purchase price if the home is under $500,000 and 10% of the remaining balance. Keep in mind that it is impossible to find a house in Toronto for $500,000 so chances are your minimum down payment will be in excess of $25,000. For many, especially those looking to purchase their first home, this is far too much money to fork out at that stage in their life.
Another advantage to renting is that you may have access to amenities that would be far too expensive to purchase on your own. Things like swimming pools, saunas, squash courts, and fitness centres are generally accessible in most condo or apartment buildings. Tenants are able to take advantage of these amenities that would otherwise cost thousands of dollars to purchase as a home owner.
So while it may not seem like an ideal living situation, there are many advantages to renting that may not be evident. Looking for rentals can be very easy by simply using the MLS® listing service to find hundreds of homes in your area. Renting means that you do not need to pay for maintenance or repairs, you do not need to pay real estate taxes, you do not need to make a huge down payment, and you have access to amenities that would be far too expensive to pay on your own. If purchasing a house appears to be out of your league at your current stage in life, give renting a shot, it’s not as bad as most people make it out to be.