While there are many perks to owning a property, renting your home comes with benefits as well. So, how should you decide whether to buy or rent your home? Personal finance columnist Christopher Liew breaks it down in an exclusive column for CTVNews.ca.
: This depends on the cost of the house and province you’re in, but realtor fees and closing costs amount to an average ofSo, how should you decide whether to rent or buy a property? There’s a simple calculation you can use to help you determine this.The price-to-rent ratio is a simple calculation to determine if the current market you want to buy in is potentially overvalued, and if you might be better off renting:Divide that number by the total annual rent of that same property.
Take the results of the price-to-rent ratio with a grain of salt. Like any ratio or rule of thumb, it’s one factor of many that you can evaluate when making the decision to buy or rent a home. There are also many non-financial benefits to renting as well. As a renter, you have more mobility and freedom to choose where you want to live. There can also be a lot of stress in owning a house if repairs need to be done or property taxes increase. When moving to a new city, there’s a lot you might not know about the area, and it might be better to rent for a period of time before buying.
There’s also no guarantee that activity within the Canadian housing market will continue to grow in the future. In a worst-case scenario, there could be a housing correction or crash after you purchase a home, and your house could be worth a lot less. This seems to be starting to happen
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