Rent Vs Buy Canada


Is buying a home a good idea in Vancouver? Or should you rent? 

I will discuss 5 reasons for renting a home and 5 reasons for buying a home.

First lets talk about the reasons you should rent

1. You don't have stable employment - renting can be a great alternative as many lenders won't lend to you until you are gainfully employed full time and can provide pay stubs.

2. You don't have a downpayment of more than 5 percent down. Renting is a great option as buying a home comes with a lot more expenses. It is recommended that you save up for a large enough down payment so when it is the right time to buy you are not struggling to meet your monthly payments.

3. Prices are too high for what you can purchase versus what you can rent.  If you really need a 3 bedroom home with 3 baths, and it costs only $2300 to rent versus 1 million to buy. I would consider renting. For example with 20 percent down on a 1 million dollar home with a interest rate at about 3.5% your monthly mortgage payment would be about $4000 per month, thats not even including maintenance fee and property taxes.

4. You are able to find investments that yield a greater return than real estate. Looking at dividend stocks, you can get paid dividends as much as 6% per year on top of any equity gains.

5. You are a good saver. For every dollar you save from renting versus buying you are able to invest it diligently.

Now lets talk about the reasons to buy real estate

1. You have strong employment   Nowadays the only way to get approved for a mortgage these days is if you have employment, or some sort of income proof.

2. You have a large downpayment  another reason to buy a home. If you have a larger downpayment your mortgage payments maybe less than your rental payments.

3. The numbers work - If its an investment that you can receive greater rental income than your total expenses. Think Airbnb, Simi Furnished Short Term Rentals over 30 days, or renting to international students.

4. Overall real estate has yielded strong returns over the last 10 years and this trend should continue for the foreseeable future as Vancouver has strong population growth, low inventory and strong government intervention.

5. Buying a home with a mortgage is a forced savings account. With each mortgage payment you are paying interest plus principle. In 25 -30 years the home will be paid off, and hopefully the asset has more than doubled.

So there you have it the pros and cons of renting or buying a home in Vancouver.

If you have any questions please reach out to me. 

Question of the day, would you consider buying or renting? Please leave it in the comments below. I will try my best to personally answer all comments myself.

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