Pros and Cons of Renting vs. Buying This Season

As the real estate market continues to evolve, potential homebuyers and renters in Ontario face a critical decision: Is it better to rent or buy this season? Both options come with their advantages and challenges, and the right choice depends on financial goals, lifestyle preferences, and market conditions.

Renting: Pros

• Flexibility: Renting allows for easy relocation, with lease terms typically lasting 6 to 12 months. In Ontario, average rent for a one-bedroom is $2,152 as of September 2024, up 9.2% from last year.
• Lower Upfront Costs: Renters only need first and last month’s rent, unlike homebuyers who require a down payment. Ontario’s average home price in 2024 is $884,800, requiring at least $44,240 (5%) as a down payment.

Renting: Cons

• No Equity: Rent payments don’t build ownership. Ontario rents have risen 14.1% in Toronto over the last year, making renting increasingly costly.
• Rent Increases: Tenants face potential rent hikes. In Ontario, the rent increase cap for 2024 is 2.5%, but properties built after 2018 are exempt.

Buying: Pros

• Building Equity: Homeowners build equity over time as they pay off their mortgage. Ontario’s home prices have increased by 18% in the last five years, boosting homeowners’ investments.
• Stability: No sudden rent hikes or fear of eviction. Homeowners have control over their property, creating long-term security.

Buying: Cons

• High Upfront Costs: A down payment of 5–20% is required to buy a home. With Ontario’s average home price of $884,800, a 20% down payment amounts to $176,960.
• Maintenance Costs: Homeowners are responsible for all repairs and upkeep. This can lead to unexpected expenses beyond the monthly mortgage payment.

Renting offers flexibility, while buying provides stability and investment potential. The right choice depends on your financial goals and lifestyle. Cripps Realty can help you make the best decision for your future.

Sources: Rentals.ca and CREA for Ontario market data.