The Great Rent vs Buy Debate

As a realtor, one of the most common questions I receive is whether or not people should rent or buy their home. While you can guess in which direction I lean (buy!) I would never want to push someone into a direction that wouldn't be right for them. A client of mine may be more inclined to pick one over the other depending on what their goals are and what their financial situation currently is or will be. In order to help you make the best decision possible when it comes to buying or renting your next home, I've outlined some benefits and some drawbacks that come with each option!

Pros of Renting:

1. Renting can sometimes cost a fraction of home owning costs, especially when you consider costs like maintenence fees. Most banks agree that first-time home buyers should be putting 20% down on their first home; if you don't have enough money, buyers should look into getting getting mortgage loan insurance.

2. Broken locks? Backed up sewage system? Busted water pipes? According to the Canadian Mortgage and Housing Association, emergency repairs like these must be paid by the landlord. If you are the owner of a property, it is your responsiblily to fix any and all damages.  If you're living pay cheque to pay cheque without a lot of disposable income to spend on emergencies, renting may be the better option. 

3. Depending on the tenancy terms, renters have the ability to move without much dificulty when compared to a homeowner. If you want to move across the country for a new job or find a better deal in the city, you've got the freedom to take advantage of the offer.  

4. When you rent a home, you have the possibility of living in a neighbourhood that you might not be able to afford if you bought the home outright. During this time, you can work to improve your finances and/or decrease your expenses.  

5. If you're looking to improve your credit before you buy a home, renting can be a great first step to increase your score.

Cons of Renting:

1. Landlords are able to increase the rent if there has not been a rent increase in the last 365 days or at the beginning of the tenancy, whichever is later. Different rules apply for the minimum amount of time required to inform tennants of the changes (In Alberta, weekly and monthly notice is 12 weeks and 3 months, respectively; any other tenancy requires 90 days of notice) so renters must be able to anticipate a rent increase or find a new place to live if they cannot abide by the landlord's rules.

2. While smoking and/or having pets in your home is not grounds for ending a tenancy, landlords can include a clause in the rental agreement. The clause must be in writing and agreed upon by both parties; if the renter violates the promise, a landlord is allowed to contact the Residential Tenancy Dispute Resolution Service and apply for the termination of the tenancy. 

3. Your home isn't always in your hands. If your landlord decides to sell the property, there's not much you can do to pursuade them. You'll be forced to find another home and pay for moving costs.

4. Although you may have a great relationship with your landlord, they have no obligation to renew the lease once it's over. 

5. Your renting experience is largely defined by those arround you, including the surrounding tenants and your landlord. It will be the responsibility of your landlord to hold any noisy, messy neighbours accountable for their actions.  

Pros of Buying: 

1. Your home is your home. Once you've purchased your home, you don't need anyone's permission to make renovations. If you want to extend a living room by removing a wall or you decide to completely revamp your kitchen, you can do it (within reason). 

2. Buying gives you the opportunity to become a landlord and rent out your home to tenants. The money you collect from them can then be used to pay bills, a mortgage, or any other expenses. As the saying goes "whether you rent or own, you're paying a mortgage, why not make it your own?"

3. Buying a home means security and privacy. If you plan on starting a family or you want a place to raise them, it can be a great option for the long-term to introduce them to a community.  

4. Need to pay for a new vehicle, a trip, or a similar large purchase? If you own your home, you can use your home's equity as credit. 

5. There are many tax deduction avalible to homeowners, including the first time home buyer's tax credit and the Home Buyer's Plan. The latter of which allows you to withdraw up to $25,000 from your RRSP in order to help you buy or build your home.

Cons of Buying

1. If you plan on selling your home, you'll have to be patient while going through the sales process. Depending on the condition of the home and whether its a buyer's or a seller's market, finding a buyer might take a while. 

2. A stable, predictable income is essential when buying a home. If you default on your mortgage because you lose your job or have a slow season (if you own your own business), you run the risk of being forced to sell the property or losing it to the bank entirely.   

3. In Edmonton, property owners are required to pay property taxes each year. This is not a fixed amount and can be dificult to pay when you've got a mortgage and other living expenses to take care of. 

4. Every area runs the risk of losing value. If the neighbourhood you live in experiences many foreclosures, your property will be impacted by the changes. While it's possible for the market to recover, there's no way to tell when prices will go back up.  

5. Be prepared to pay for extra fees like legal and home inspection expenses. Before you budget for that new home, it's best to work with a professional that'll work with you to identify those often forgotten costs.

At the end of the day, the choice between owning versus renting shouldn't be an impluse decision. If you would like more information on which option is best for you, I'd love to help you any way I can. Feel free to give me a call at 780-438-2500 or email me at

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Working with Chris and his team was an absolute pleasure. Specifically to Chris, we found him to be very professional and he catered to our home needs as much as possible - there was no wasted time. He was able to understand our search quickly and showes us homes that fit what we were looking for, eventually taking us to the home that we ultimately chose as ours. The process was friendly and seamless. I would without hesitation recommend Chris and his team to anyone searching for a new home. Thanks again for all of your hard work and help!

- Rajan Bhatti

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