As inflation soars, the cost of living has put a significant strain on the wallets of Ontarians. These issues combined with high mortgage interest rates have left many wondering if it’s better to rent or buy property now. 

In this post, we’ll take you through our top five reasons to rent property instead of buy property in Ontario.

1.  Lower Non-Recurring Costs

Buying property requires a significant up-front investment in addition to money to cover the full cost of necessary repairs and renovations. Thankfully, renters don’t have to stress about potentially dipping into their savings account to secure and maintain a home.

Here are some of the benefits of renting:

• Less Up-Front Costs: Buyers have to pay to retain a lawyer, inspector, and real estate agent, in addition to covering a hefty down payment. In Canada, the minimum down payment for homes prices below $500,000 is 5% while the minimum down payment for homes priced between $500,000 and $999,999 is 5% plus 10% of the remaining amount. Homes priced over $1 million require a whopping 20% deposit to avoid paying mortgage loan insurance. Luckily, most renters in Ontario are only required to provide first and last month’s rent to their landlord.
• No Renovation & Repair Costs: Homeowners are faced with the full bill of any renovations and repairs that their home may require. While renters may be responsible for some repairs if they caused damage, landlords are generally required to cover the cost of renovation and repairs to a rental property. 

Overall, renters save more on renovation, repairs, and up-front costs making it a better option for people of various income levels.

2. Less Ongoing Costs 

It’s no secret that buying property in Ontario can be costly. Many often think that purchasing property to build equity justifies the higher costs of buying compared to renting. But, think again. There are dozens of costs associated with buying that you might find are better put toward other investments. Based on your income, this could be the deciding factor between choosing to rent or buy. 

Here are some of the cost savings that renters benefit from: 

• Lower Ongoing Living Expenses: Renters don’t have to worry about property taxes and they may benefit from paying less for utilities than homeowners depending on the city and property size. Some landlords will even cover the costs of certain utilities such as water, heat, or electricity in Ontario — which can save you a lot of money in the long-term. 
• No Mortgage & Interest Expenses: Renters are immune to the pain of getting locked into an unfavourable mortgage and the potentially high interest rates that buyers face. Buyers are subject to credit score assessments which may impact the interest rates they pay for their mortgage and insurance premiums. 
• No HOA or Condo Association Fees: Homeowners association and condo association fees can easily reach hundreds of dollars a month. Not to mention, these fees may increase to match rising inflation or cover the cost of capital improvements. Unfortunately, buyers may have little control over the amount and timing of these increases. 

Not only are renters free from higher regular expenses that may vary with time, but they can benefit from fixed rent during the term of their lease. 

3. Flexibility, Flexibility, Flexibility 

Not sure where your career or life might take you? Unlike buyers, renters have the flexibility to relocate with relative ease because they aren’t faced with a long-term commitment. In fact, various rental agreement types exist in Ontario, including month-to-month, short-term rental agreements, and one-year leases. 

Here are some of the ways that renting allows for greater flexibility:

• Employment: Whether you’ve received a job offer in another location or you want to live closer to relatives, renting means that you can easily relocate without enduring the hassle of listing your home. 
• Home Type: Interested in living in a condo, house, multi-residential building, or bachelor unit? Looking to downsize or increase your space? As a renter, you can easily select and change your space as your needs evolve. 
• Neighbourhood: As developments and changes to neighbourhoods occur, you may find that you don’t fit in as well with your neighbourhood as you once did. Perhaps, your once-quiet neighbourhood has shifted to a more commercialized area with construction projects. Or perhaps, you’ve had children and you’re looking to locate to live near a top school district. As a renter, you don’t have to commit to one neighbourhood for long.
• City, Province, and Country: Dreaming of living in another city, province, or even country? The benefits of renting mean that you can easily move without dealing with the complicated logistics of selling. 

For anyone who desires greater flexibility in their lives, renting is clearly the better choice.

4. Avoiding a Risky Investment

Owning property is often touted as one of the best ways for people to invest. But the truth is, property ownership comes with its own set of risks. Homeowners can do their best to manage risks, however there is no certain way to avoid all risks. 

Here are some of the risks of home ownership:

• Neighbourhood Changes: Various factors that can change over time affect the property value of a home, including crime rates. 
• Market Fluctuations: The financial crash of 2008 took a major toll on the housing market as home prices plummeted. This left many homeowners with financial losses that proved that the market isn’t as stable as it’s made out to be.
• Property Age & Condition: With time, many homes may be considered outdated for the market — requiring time and money to upgrade.
• Unforeseen Damage: Property owners can be subject to dealing with fire, flood, and natural disasters that are costly and difficult to manage without the ability to move. Tornados have become a growing issue in recent years with many facing catastrophic damage. 

Property is not always an appreciating asset. There are certain risks that are beyond the control of the homeowner which can affect the property value and their mental wellbeing. Renting property means that you can forgo the financial risks of owning property.

5. Amenities

Not only do renters enjoy lower overall costs, but many have access to a wide range of amenities offered by landlords. While the amenities offered will vary by landlord, many landlords provide their renters with access to useful amenities that make the case for renting all the better.

Examples of amenities that may be offered by landlords include: 

• 24/7 concierge
• Fitness rooms and gyms
• Laundry rooms
• Swimming pools
• Conference or party rooms

Not only can renters get many of the same perks of homeowning for less, but some renters can actually access more amenities than homeowners!

Looking to Rent in Ontario? We Can Help

Buying a home in Ontario is expensive and can be financially risky. Homeowners are not only tied to a specific geographic area in the long-run, but they may also be missing out on amenities available to renters depending on their property type. 

As a renter, you deserve to be treated with respect and dignity by your property management agency. At SPM, we believe that you are entitled to the same level of comfort, safety, and support as a homeowner. Let us help you find a property that suits your needs. 

Talk to a specialist today to learn more.