Rent or Own

There are many things to consider when you make your decision whether to rent or buy a home. Some of are financial, but many are not — and all will depend on each individual's circumstances.


Here are Various Points of View





You should primarily think of a house purchase as the acquisition of a home, rather than

as an investment, but that doesn't exclude the possibility of making intelligent financial

decisions that can help you build wealth. As an asset, a home has some very attractive

characteristics. For one, it's probably the only asset purchase you will ever make in

which significant leverage is not only possible, but advisable (if you make a 20% down

payment on the property, your leverage is five-to-one).


Social: For men and women who are single and who are looking for a spouse/ life

partner, then owning a home sends a certain message. If you tell a potential mate that

you own your home, then there's a reassuring subtext: "I'm settled and responsible

enough to carry a mortgage." (And if you were a cash buyer, all the better!)


In my experience, the question "Do you rent or own?" comes up very frequently in that type of situation — I think that's hardly coincidental.




While I respect the choice to buy a home, I'm not sure it's for everyone. In particular, people who aren't sold on a particular place to live will likely find renting to be financially advantageous.


Many aspiring homeowners look only at their monthly rent versus their potential mortgage payment, but the true cost of home ownership is much higher, particularly for people who move often. 


Buying a home results in a number of transaction-related expenses like closing costs, inspection and appraisal fees, deed transfer tax,  The more often you move, the more often you'll encounter these expenses, which can be significant compared to a home's total purchase price.


There's also the fact that renting smooths out the housing-related costs in your budget. Whereas a homeowner might have to shell out thousands of dollars unexpectedly for a new roof or other repairs, these expenses are effectively built into monthly rents, which can make budgeting easier. 

For right now, renting, even at a premium price, seems like a fair trade-off for the extra optionality. Being able to pack up and move with little notice — and without the stress of selling a home — is also worth the premium.




Owning a home only makes financial sense if you plan to stay in the home for a long period of time. And there are many valid financial reasons to own — building equity over time, and so on.


The financial benefits of ownership certainly influenced my decision to own, rather than rent. For starters, in the Halifax area, home prices are relatively cheap, and houses with the yard space we need, in the school district we want to live in, would cost significantly more to rent than to buy — especially with the record-low mortgage rates available.


However, our reasons for owning our home go beyond the financial considerations. I love being able to make modifications to my house as I see fit and really make it "ours." And buying a home gave us much more control over our physical location, as rental houses are virtually non-existent in our neighbourhood. We also have two dogs, which any pet owner knows can limit your options in terms of rental housing.

We're not planning on going anywhere in the near future, so for my family, home ownership was a no-brainer for all of the reasons mentioned here.




While I'm a huge fan of renting, and happily did so for many years, my wife and I decided to buy our first house in 2011, and we're happy with that decision. We were lucky enough to benefit from the big downturn in housing prices, and we ended up locking in a terrific interest rate on our 25-year mortgage.


Our reasons for doing so were not based on finances at all, as we would have been much better off financially if we had kept on renting for the last few years, as real estate taxes and surprise housing expenses certainly have a way of adding up. However, my wife and I both grew up in families that lived in the same house for decades, and we wanted to provide the same stability to our three children. Since we were super-picky about the location, size, school district, and distance to work, once we found our ideal place, we acted quickly, and we haven't regretted that decision at all.


Now that we're in the neighbourhood where we want to live, that puts us close to family, friends, we are quite happy with our decision to purchase, and we plan to live here for years to come.

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