# rent vs own



## D-ru (Nov 27, 2011)

Wondering if someone could break this down for me.

Out of these 2 what one would you be better of with, If you purchase a home at age 25 or started renting a home at age 25 assuming same scenario with both, sq footage, lot size, bed rooms, garage etc. and being able to put down 25% on a home if you decided to purchase instead of rent.

Assume you retire at 65, what one would you be better off with doing for those 40 years. 

Thanks


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## londoncalling (Sep 17, 2011)

There is clearly not enough information to give a proper response. You need to indicate market, prices for both mortgage and rent, cost of maintenance. cost of increase or decrease in property value etc. You also need to know property tax and interest rates for mortgage. This is just a start. Another thing that needs to be addressed is what would this money that is going to be used for the down payment be used for otherwise. We can play which is the better option for ever but to be honest nobody really knows because we can't predict the future. Possibly the most important thing one has to decide is if home ownership suits their personality. I know many individuals that have bought and regretted all the time it can take to upkeep their home. I know others that are very house proud. IMO owning a home is a lifestyle choice first and an investment option last.


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## crazyjackcsa (Aug 8, 2010)

The answer is clearly pie. Warm apple pie.


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## the-royal-mail (Dec 11, 2009)

LOL crazy. Yet another topic that has been discussed to death here, yet the OP doesn't take the time to search past threads.


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## 50invester (Feb 10, 2010)

cashmoney said:


> Wondering if someone could break this down for me.
> 
> Out of these 2 what one would you be better of with, If you purchase a home at age 25 or started renting a home at age 25 assuming same scenario with both, sq footage, lot size, bed rooms, garage etc. and being able to put down 25% on a home if you decided to purchase instead of rent.
> 
> ...


cashmoney:

This is a good question that probably has been discussed to death hear, but I have never seen a good answer. If only every person in their 20's asked this, housing would certainly be more affordable today. Londoncalling is right, there is alot of info you need to make such a decision and over the span of 40 years, you would need to make alot of assumptions about what house prices will be, interest rates, where your buying, the age of the house, etc. This would be difficult to do ten years out. However, let me say this, never, ever, ever treat buying a house as your principal residences an investment. Anyone who tells you this has never owned a home or is an idiot. At this point in time, if you purchased a home in this country in any place other than Windsor, ON or PEI, your pissing money away. If you bought right now in the GTA, or worse, Vancouver, your screwed. Anyone who says house prices ALWAYS goes up is an idiot ... no, they are a moron! 
There are lots of Rent vs. Owning info on the Net. Just do a lot of research yourself and you will eventually find out that owning a house is not the Utopia that every Real Estate agent (Don't get me going on these guys, please) wants you to believe. Just google it. See below a few links to some info I have saved. 

http://www.getrichslowly.org/blog/2007/07/16/renting-vs-buying-the-realities-of-home-buying/

http://www.nytimes.com/interactive/business/buy-rent-calculator.html

http://pricedoutforever.com/more-rent-vs-purch.html

Also, a little light reading for you: http://www.greaterfool.ca/

Spread the word brother. Cheers.


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## Berubeland (Sep 6, 2009)

It depends where you are right now. 

I have never regretted purchasing my home however, buying my house at the time was cheaper than renting the same house. 

Today in the same area it would cost me a lot more to buy this house than to rent it so if I were doing this today I would not buy this property. 

Renting is no piece of cake either, lots of landlords sell their properties and you must move...and sometimes affordability is a problem. 

When I bought for instance, the mortgage was $750 and I could rent out he basement suite for $700. I was currently paying $800 in rent plus utilities. So that made perfect sense. 

It also depends on your work, I have always had jobs that require me to be in different areas all the time so I could select a place that was just about anywhere in the GTA. At the time I didn't have a child and was told I could not have one so schools and neighbourhood were relatively unimportant. 

There are so many different things to consider and weight other than the financial aspects of it. If it's an income property it's easy to figure out. Just plug in the numbers. For your own personal residence it's a little more complex


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## Eclectic12 (Oct 20, 2010)

50invester said:


> cashmoney:
> 
> This is a good question that probably has been discussed to death hear, but I have never seen a good answer.
> 
> ...


IMHO, there are good answers - it just that the "good answer" involves a lot of variables and is not a "one-size-fits-all" situation. 

Some places I've lived were easy to find rentals, where most offers included two months free rent plus other goodies. Other places were difficult to rent.


As for people educating themselves earlier = cheaper house prices, why do you think that? 

It's the same as the stock market, prices will depend more on supply and demand. Regardless of how the buyers are paying for the house, if there are a lot of buyers, prices are likely to be high. Similarly, if there are fewer buyers but sellers won't reduce their price, again prices will remain high. Bottom line is that it would be one factor of many and may not result in cheaper house prices.

As an example - years ago, my parents were not recommending my brother buy in Toronto as "prices are ridiculous". Then it's published in the paper that Asians were projected to spend $1 Billion in the T.O. area on real estate over twelve months and had already spend that sum in four months. With this type of competition, how are house prices going to fall?


As for *never* treating your principal residence as an investment - again it depends. I've known several people who enjoy fixing up houses. They buy a run down place, spend a couple of years fixing it and then sell. In fact they prefer to use their principal residence as it is tax free. This isn't for everyone but that is where the OP has to know his or herself.


Cheers


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## kcowan (Jul 1, 2010)

Eclectic12 said:


> As an example - years ago, my parents were not recommending my brother buy in Toronto as "prices are ridiculous". Then it's published in the paper that Asians were projected to spend $1 Billion in the T.O. area on real estate over twelve months and had already spend that sum in four months. With this type of competition, how are house prices going to fall?


Just like they did from 1991 until 1997 when the prices were supposed to be rising before the takeover of HK. Asians will leave the market as soon as it stops bubbling.


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## Belguy (May 24, 2010)

Renting gets glamorous:

http://www.thedailybeast.com/articles/2011/12/16/real-estate-trends-renting-gets-glamorous.html


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