It's a question that’s been asked countless times before—and for good reason: should you lease or buy when it comes time to move out? It’s one of the biggest decisions we’ll make in our lifetime. The quick answer is this: there is no one right answer. It depends entirely on your individual situation, current circumstances, and future plans. In today's pandemic reality, apartment vacancies across Canada are rising and the average monthly rent is dropping. At the same time, the national average home price is up 17.5 per cent from last year. A high supply and a lower demand for apartments due to fewer students, new immigrants, and travellers is part of the cause of reduced monthly rents, according to Paul Danison, content director for Rentals.ca. On the other hand, increased social distancing measures and more employees working from home has led to a rise in the value of home ownership.
All this to prove that one option is not always better than the other—the housing landscape is an ever-shifting one. Here are a few things to keep in mind when deciding whether leasing or buying is the right decision for you: Weigh your current reality against your long-term plans. Although you might someday see yourself in a large, spacious house in the suburbs, it's also important to consider your current reality when deciding whether to rent or buy. Perhaps you travel a lot, aren't ready to commit to living in one place for a few years, or might be forced to up-and-move with a work promotion. In this case, the freedom of a lease might be preferred, as much of your home equity gains would be quickly eaten up by realtor commissions and closing costs on a new home. Decide where you want your money to go. Some people have an issue with paying a monthly rental fee with seemingly no return. They instead value the idea of home equity and ownership. Others prefer to keep their assets available and close at hand, or invest them elsewhere while renting a home. They aren't interested in the additional expenses of property tax, mortgage interest, and upkeep of a home that they own. It's also important to keep in mind what you can actually afford, as purchasing a house requires a substantially larger amount up-front in down payment and closing costs. Depending on the housing market in your city, the monthly amount you spend on a lease might be cheaper than your monthly mortgage payments, meaning you can save that money or invest it elsewhere, like paying down debt or purchasing a car. Work with a finance or real estate expert when buying or leasing a home. They'll make sure you're set up for success and provide valuable assistance throughout the process. Vexxit can match you with a qualified and top-rated professional for free in just a few simple steps.