# Continue Renting, Or Buy?



## Twenty 5 (Dec 16, 2012)

Hello CMFers,

I'm in a situation where I'm looking for some experienced insight. My wife and I currently rent a 1 bedroom + 1 bathroom for a hair under $1200. Where we live, we can rely on one vehicle to get us both to and from work. Our combined income is around 120k, and we're actively looking at jumping into our own place. We've found a 2 bedroom condo which would work itself out to around $2k per month for a 10-year mortgage, including maintenance fees ($1400 for the mortgage, $600 for maintenance fees including utilities and cable), and would also allow us to maintain only one vehicle. The issue we're having is we'd like to obviously move into a detached home in the future (a family home), but we think the reasonable thing may be this condo while we build equity. The detached home these days would require us to have 2 cars unless we want to purchase a home in the 450-550k range (in our opinion, too much given our 120k income).

General financial situation....

We have no debt, around $25k in savings, one of us has DBPP from work (Govt of Ontario job), and the other has a DCPP and contributes 5% which is matched. We also put away another 100/week for retirement (will be 200/week starting next year), and another 100/week for rainy day funds/savings. We're both under 30 and want kids within 2-3 years.

We appreciate any feedback you can provide.


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## Cal (Jun 17, 2009)

I would continue to rent, build up equity, and when you find a home to move to, then buy. To buy a condo, build up some equity, and loose your built up equity to the RE agent fees makes no sense. Plus it is great to be able to hand in your 60 days notice when you finally buy. No hassle of showing, staging during the selling process.


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## andrewf (Mar 1, 2010)

Hope OP saw the replies yesterday before they were lost.


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## MoneyGal (Apr 24, 2009)

Most of them were me saying, "yeah, that!" to what other posters said. :biggrin:


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## Twenty 5 (Dec 16, 2012)

andrewf said:


> Hope OP saw the replies yesterday before they were lost.


Shoot, I missed them!

Thanks for the responses though. Maybe I can get some of them to send another reply.


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## marina628 (Dec 14, 2010)

Stay where you are and save ,you can live in that space with a toddler for sure.


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## andrewf (Mar 1, 2010)

To summarize the points that were made:


-It doesn't really make sense to buy a place for only a few years. Transaction costs will eat a substantial portion of the value of the property. Just bank what you can now, at least the difference between your rent now and what you would have spent on the condo (all in), and hopefully more. I think I manage to save more than you are, with a lower household income.


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## MoneyGal (Apr 24, 2009)

and also that your plan is premised on no correction / continuing price increases. If that doesn't happen, you will be further behind than if you stayed where you are and saved more. 

(And also, I'm a little confused. Is the $450K house what you ultimately want, and you expect a correction at some point?)


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## Twenty 5 (Dec 16, 2012)

MoneyGal said:


> and also that your plan is premised on no correction / continuing price increases. If that doesn't happen, you will be further behind than if you stayed where you are and saved more.
> 
> (And also, I'm a little confused. Is the $450K house what you ultimately want, and you expect a correction at some point?)


Thanks for the replies. The homes in our immediate area are around 450-550k. If we stay in this area, we can maintain one vehicle. If we seek areas outside our immediate area where homes are in the 300's, we'd need to factor in an additional vehicle.

To the reply before yours, we save approximately 2k/month while we also pay for a graduate degree. We could otherwise save about half our income... kudos to you on your saving plans. The rainy day fund and retirement savings is money we don't touch. The rainy day fund only if the worst happens.

Again, thanks for the advice and replies.


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