Rent or buy? Is that still the question?

Gpaphic showing the title: Rent or buy? Is that still the question? CREDIT: FSU PUBLICATIONS AND COMMUNICATIONS DEPARTMENT

As a college student living in dorms or shared accommodations, you may look forward to a time when you embark on the next phase of your life and begin to think about home ownership. I guarantee somewhere looming in the back of your mind is a list of milestones to be accomplished as young adults and buying a house is probably high on that list.

Canute Demello, a former hotel management student who is currently employed in a supervisory role at Fanshawe’s Chef’s Table restaurant has a goal of one day being able to purchase a home of his own here in Canada.

“I don’t want to pay rent to someone else to basically pay their mortgage,” Demello said. “If it is my house, I know I paid for it by myself, and that house is mine.”

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But home ownership is still out of reach for many recent grads making renting a more financially feasible option. For some, renting may also be preferable to owning.

Paul Sery, a London homeowner, recently decided that for him, renting had more benefits.

“With owning a house, there is no peace of mind. You are worrying about mortgage rates, needing a new roof or furnace. You are stuck there if you hate your neighbours. With renting nothing is your problem regarding repairs or other issues. When I was young working towards my first home was everything, but hopefully young people don’t feel that way anymore.”

Still, statistics released by the Canadian Real Estate Association show national home sales consistently growing. Clearly there is still plenty of interest in home ownership in Canada.

The benefits of buying

When renting, all your outgoings and bills are simply expenses. They do not build equity for you over time.

When you own a home, part of your expenses are expenses and some are mortgage repayments, which are an investment. It’s also currently a great time to buy, as according to the Market Report published on, the average home in London was priced at $621,912 in 2023, decreasing by a whopping 24 per cent from previous years.

The entire London market is down compared with the rest of the province. More houses are being built and purchase prices are dropping according to data taken from London and St. Thomas Association of Realtors and Canadian Real Estate Association.

The benefits to renting

1. Avoiding maintenance costs: Equal to roughly one per cent of property value each year.

2. No property tax: This can be a major expenditure.

3. No interest payments: Currently very high and predicted to increase.

4. No fees for realtors, closing costs ot solicitors: depending on where you live, these costs can average between two to three per cent of the cost of the property.

We have been brought up believing that getting on the property market is the wise move. We live in a society that covets that notion.

To make the renting vs buying debate a little easier to navigate, here is one way of calculating the price-to-rent ratio and work out weather it’s more feasible for you as a young person to take the plunge and get on the property market or not. Take the price of the property you are thinking of buying and divide that number by the annual rent of that same property. If the number you get is between one and 15, it’s suggested that it is more in your best interest to buy than rent. If that number is above 21, then it is highly recommended that you rent instead of buy.

For example, if you are planning to buy a condo for $800,000 but you can rent that same property for $2,800/ month, the calculation would be: $800,000 divided by $33,623.80 (2,800 x12 months) which comes out over 23.35. This calculation would suggest it’s better to rent than buy. It’s a great goal to own a property as an investment, but only if it makes sense financially. There is nothing worse than when a material item owns you more than you own it. You can’t put a price on freedom.