RENTING VS BUYING TORONTO REAL ESTATE
Which is the better option? Owning a house or leasing a condo
While renting in Toronto may be cheaper than buying, research shows that Torontonians who own their own homes become wealthier over time than renters. That's because a mortgage forces people to save and build equity simply by paying their mortgage every month. Toronto homeowners are also at an advantage because of the tax benefits of owning a principal residence.
Considering the number of incentives available to first-time buyers, it may be a prudent financial move to say goodbye to the landlord. First-time buyers can get a break on closing costs from the federal government and on the land transfer tax from the provincial government. They can also borrow money for their down payment from their RRSP through the Home Buyer's Plan.
Real Estate has always been considered a Long-Term Investment. The real question you need to ask yourself; do I really want to pay RENT for the rest of my life? Generally, a home in Toronto makes financial sense if you are going to live in it for at least three, four, or preferably five years.
When people lose money in the Toronto real estate market it is often because they did not own the property long enough and they sold too quickly. This usually means within the first few years after they purchased. This is not enough time to allow for the property to appreciate over and above the original purchase price plus the land transfer tax that was paid. There is real estate commission to be paid when one sells which will also eat into the appreciation.
You cannot depend on making any real profit in real estate in the first 2 years. In fact, the market may fall after you buy your home. However, also keep in mind; the longer you own your property, history has shown us, you can be sure it will have increased in value when you come to sell.
Renting remains a good option for those who are not sure where they will be in the next 3 to 5 years. If you have not yet established a firm career path and may possibly have a job transfer to another city or want to get married and have children in the immediate future stay put and continue to rent.
Real estate has proven to be one of the most stable long-term investments there is. It is your guarantee of retirement security. Overall, in Toronto it is far better to own your own home than rent. Not only for the pride of ownership but because it is your only long-term hedge against inflation. With rental rates increasing constantly, there is no guarantee you will be able to afford them as the years go by.
Thinking about buying a home or condo in Toronto? Have questions about the buying process? Contact Victoria
Victoria Boscariol is a real estate agent in Toronto Canada with Chestnut Park Real Estate Limited Brokerage. With over 20 years experience, Victoria has been helping people successfully buy and sell condos and houses in Yorkville and downtown Toronto. As a Certified International Property Specialist (CIPS) she has worked with Buyers from around the world moving to Toronto from China, Russia, Brazil, India, South Africa, United Arab Emirates, Jordan, Cyprus, Italy, Germany, The United Kingdom, Australia and the United States.
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