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  • Hina Khosa

Given the current economic conditions in Ontario, is it better to buy or rent?

With all the media coverage we have been seeing as of late about growing inflation, rising cost of living, and high mortgage interest rates, that is a timely question.

I get asked this frequently, but the truth is that there isn’t a one-size-fits-all answer. It is a big decision that ultimately boils down to each person’s individual situation and objectives.

We expect the inflation rate to fluctuate, and we know that the market is always shifting. And while this is certainly a key factor to reflect on when deciding whether to buy or rent, it is not the only one. Your financial circumstances, goals, priorities, and preferences are also important, and will be key considerations as you work towards making an informed decision that’s right for you. With that said, here are some tips.

Crunch your numbers and have a budget you are comfortable with. Be honest about how much you can afford, and see how that compares to what is on the market for sale and rent. If you are considering buying, account for all the related costs like general maintenance, repairs, utilities and taxes as well.

Reflect on your goals, priorities and preferences. Are you looking to build equity or settle into one place for a while? Do you want to have flexibility to move to another place in the near future, pursue a business venture, take a sabbatical or finally take that vacation that has been on your bucket list?

If you choose to buy, you can renovate the space to your liking. However, if you opt to rent, your landlord will manage most, if not all, of the maintenance and repair needs, and might even cover the cost of utilities. You will want to make sure it’s clear which utilities are included and those that are not. Also, with repairs and maintenance, the landlord might not have the same standards you might expect.

So, here are some questions to reflect on:

  • How much responsibility are you willing to take on?

  • Do you have the financial means to afford a down payment, mortgage and other expenses that come with home ownership?

  • Do you have a good credit score?

  • Do you value the flexibility to move or are you looking to build equity?

  • Can you afford higher interest rates beyond the stress test?

Give these questions some serious thought and discuss it with your loved ones. If you are still not sure, consult with a real estate agent or financial expert to help you decide.

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