There's no shame in the renting game. In fact, it often makes more sense to rent than to buy.
"When are you going to buy something?" Many renters are familiar with this question. After all, home ownership is seen as a milestone; an obvious move once you have enough money saved. But across the country, a growing number of Canadians are happily renting—even if they can afford to buy. Although homeownership is shrinking in Canada, house-shaming still exists. The common belief is that if you're renting, you're not building equity and are basically burning your money every month to pay off your landlord's mortgage.
Here, why you should feel good about renting.
Reason No. 1: You want to be able to have more experiences.
It's time to accept that home ownership simply isn't as attainable as it once was. In Toronto and Vancouver, sky-high housing prices have rendered owning a house a pipe dream for many, and people are choosing to rent rather than become "house poor" in expensive cities. In a culture that now values experiences over material things, they would rather have the funds to take advantage of their city's culinary scene, attend concerts or professional sporting events and accumulate stamps on their passports. "You can look at the rent/buy debate from a financial perspective, but it actually has a lot to do with your lifestyle," says Bridget Casey, a successful Calgary-based financial blogger.
Reason No. 2: You want to keep your options open.
Serious relationships are coming later in life for young people. Greater career flexibility than in generations past has made them geographically mobile, especially in our growing freelance economy. Where to lay down roots is no longer a simple decision. "You really need to live in a place for at least five years to build equity in your home," says Jessica Moorhouse, a money expert, accredited counsellor, and speaker. If you can't see yourself in the same spot in a couple of years, you should rent. "In most cases, in fact, it makes more financial sense to rent right now," says Moorhouse. A Vancouver native who now lives in Toronto, she knows many young professionals across Canada who are renters.
Reason No. 3: You don't want to be stressed about money.
"There's a lot that goes into buying a home—whether it's a house, townhouse, or a condo," says Moorhouse. "There's the down payment, mortgage payments, property tax, insurance, maintenance fees for a condo, and expensive closing costs. There are costs to maintain actually being a homeowner—something many people forget about." She and her husband have owned their Toronto townhouse for two years. "Since then, we have shelled out I'd say collectively $15,000 on replacing major appliances, our air conditioner, and other things that have broken," she says. "You need to have a really large emergency fund to pay for these things unless you want to be the statistic that put it on the line of credit or credit card because you didn't prepare and are now swimming in debt."
Reason No. 4: You want to have a more flexible life.
When it comes to personal finances and the rent V. buy decision, online tools can crunch numbers to compare rents to mortgage payments. In some cities, soaring rental costs are heading into the same range as mortgage payments, and a study recently found that owning a home in Canada may be more affordable than renting. Regardless of where they live—major city or tiny town – however, some Canadians prefer the financial flexibility offered with renting and to invest what they are saving elsewhere, potentially building comparable wealth to that of a homeowner in the process.
Reason No. 5: You know raising a family is completely possible—and often better—in a rental.
A sign of the times, renting isn't what it used to be. Rather than uninspiring high-rises, today's made-for-rental buildings can have all the frills of a condominium—plus more. New to Toronto, The Selby luxury apartment is designed specifically for rental and features a state-of-the-art gym, a yoga spinning studio, a spa, Italian fabricated Scavolini kitchens, an outdoor pool and an on-site bistro. Recognizing that more kids will be raised in high-rises in Toronto by the way of New York City, builders are also now creating units with multiple bedrooms and kid-friendly amenities. "We grow up with this idea that in order to have a stable family, you need to be a homeowner, which is ridiculous," says Moorhouse. "You create that stable environment just from being a good parent." Small living spaces should actually facilitate stronger, more communicative families.
Reason No. 6: You're with the times.
Casey – who rents with her young daughter – acknowledges the reality of house shaming. "My generation isn't surprised at all, because they understand current prices," she says. "But to older generations, you're seen as financially unstable if you're renting." As long as house prices remain where they are and continue to rise – even with interest rates increasing – house affordability won't change, says Casey. "Unless we see a dramatic increase in salaries, the government forgives all student debt or the markets crash in every major Canadian city, I don't see trends changing." So, it's time to accept it; there's no shame in renting.