Have you been renting a property in Toronto for some time and you are considering buying a property? It could be a dilemma choosing between these options; however, weighing the pros and cons of the two options can lead to making an informed decision in the long run. Before making a “rent or buy” choice, read further.
The Pros of Renting a Property in Toronto
- Low Maintenance and Expenses: The landlord is solely responsible for maintaining the property, and you do not incur any maintenance costs. If the drains get backed up, you just call the landlord to get it fixed unlike when you are the landlord.
- A Certain Amount as Rent: As a tenant, you know how much you pay as rent but buying a property makes you open to payments such as mortgage, property taxes, condo fees, insurance, utilities, and more.
- Mobility: If you are not pleased with your neighborhood, you can relocate every year, if you so desire.
However, irrespective of how cheap and convenient renting is, you are helping someone to pay their mortgage instead of yours.
The Pros of Buying a Property in Toronto
- You Own the Property: Each mortgage payment you make reduces your mortgage total and adds equity to your property. It can be likened to a forced saving, which makes you the owner of the property after the mortgage has been fully settled unlike when you rent a property and pay someone else’s mortgage.
- Buying is Cheaper Sometimes: The Toronto rental market is not that cheap if you want to live downtown. With a decent-sized down payment, buying a property will be less expensive than renting on a monthly cash flow basis.
- Freedom: As a property owner, you are free to upgrade, remodel, paint or do anything you wish to the building without seeking anybody’s approval.
- Investment instead of Expenses: Buying a property is an investment with a handsome ROI at a later date while renting a property is nothing but recurrent expenses without any returns whatsoever now or in the future.
- Last Resort to Financing: The property you buy now can be used to apply for a reverse mortgage at a later date if the property is qualified unlike renting that offers nothing tangible as an asset.
Conclusion: Considering the pros of the two options while renting a property seems to be the easy way out, buying a property offers more significant benefits and returns. Besides, the Toronto real estate market has been more predictable and generated more returns than other types of investment options. Although there are no guarantees, buying a property in Toronto is still a better long-term investment plan you should consider.