Renting vs. Owning
Most Canadians will at some point wrestle with the question of whether to buy or rent. There are many factors involved but above all it really comes down to a matter of time and planning.
Renting is good as a short term solution for housing. In a single year the average renter saves more money compared to a homeowner. But with time homeownership makes more financial sense and over a lifetime the amount of equity homeowner builds becomes a small fortune.
The average one bedroom renter in Toronto will pay about $20,000 dollars a year in rent. After five years they will have paid over $100,000 dollars with nothing to show for it. A buyer on the other hand over five years will have built up some equity paying off their mortgage and have their property value increase with inflation.
Over time property ownership has many advantages. Properties increase in value and mortgages decrease until property is owned mortgage free resulting in equity that would be hard to reach through savings alone. Another advantage is that property owners are offered credit at much higher levels and better rates than non-property owners.
In the long run as people age one of the foundations of retirement security is the property or properties they own. The value in one`s property affords the owner a comfortable lifestyle after retirement. If your view is to the future, property ownership is at the heart