Does it Make More Financial Sense to Buy or Rent a Condo?

 

Every year, countless individuals and families ponder whether to buy a new property or rent a similar one. The question as to whether buying or renting is the better of the two is a hard one to answer and will not be the same in every circumstance. It is important to know what you expect out of a home, how long you will be living there, where you plan to live and many other elements. If you are in the market for a new home, then getting to the bottom of this question is of the utmost importance. Below, we will attempt to shed light on your situation by discussing the pros and cons of renting a condo versus owning one.

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Photo by Ashton Coleman

Benefits of Renting a Condo

Using Montreal as an example, let’s first examine the benefits of renting a condo. On the surface, upfront costs will be considerably less when renting a condo. You will not have to worry about putting down a huge down payment, which means that your short-term cost of living will be substantially lower. Renting a condo in Montreal means that you do not have to worry about upkeep or maintenance of the property (the same goes for owning one in most cases, but not all). Depending on the length of your lease, you will also be free to relocate elsewhere whenever the time comes to take a new job or try out life elsewhere.

Benefits of Buying a Condo

With the cost of homes being quite reasonable for a condo in Montreal, buying one in some cases can make more sense. While you will still be held to the regulations of the home owner’s association, owning a condo gives you a sense of ownership that you will not have otherwise. In this case, you will be able to build up equity over time in the property and sell it later for a profit in most cases. In addition to this, the right of the condo owner to the unit is guaranteed, which is not the case in many condo rent agreements. All in all, there are many benefits to owning a condo in Montreal that come when you are planning long-term residence in one.

How the Balance Can Vary

Much like with any form of property, renting versus owning will vary in many circumstances. If you have a family and do not expect any additions in the near future, then owning a condo that suits your needs will provide stability for children in terms of their neighbourhood and schools. Those planning to reside at the condo for a decade or more will likely come out better in the end by purchasing it.

If, however, you are a young professional or someone who is not completely settled down in life, then renting a condo may be a better option. With a large down payment (when buying) comes long-term responsibility – you may not be able to make back the initial investment if you sell in just a couple of years. Changes in profession or a desire to live elsewhere will further complicate owning a condo, as you will have more responsibilities – in the form of liquidating the property – before you can move elsewhere.


Categories: Real Estate

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March 2, 2015 Does it Make More Financial Sense to Buy or Rent a Condo?