Condo buildings offer the option of buying a unit or renting one from an investor, depending on your lifestyle preferences

Helen Morris, National Post

Whether we own our own homes or pay rent, living costs make up a large portion of our monthly outgoings. The decision whether to rent or own a home may be as much to do with the kind of life you wish to lead as how your finances line up.

“When all parts are equal from an investment side of things, home ownership has to be more of a lifestyle decision,” says Trevor Le Drew, financial planning expert and regional director at Investors Group in Windsor. “Before I even get into the financial side, I always make sure that [ownership] is a good fit.”

Mr. Le Drew says location and facilities are key.

“Is it something that you get emotional joy from? Is your career going to accommodate it?” Mr. Le Drew asks clients. “Are you gardeners, do you like to have a workshop? Those are things you’ll have more control over if you actually own as opposed to rent.”

For those who like to travel a fair bit, Mr. Le Drew suggests that renting a small place and investing the money that would have gone toward a more expensive mortgage may be more practical than owning a home. Of course, regular voluntary cash investing probably takes more discipline than making a mortgage payment.

“There are still traditional values associated with owning a home. It’s forced savings, it’s tax-free growth. Just by going through life we end up creating a tremendous asset,” says Mr. Le Drew. “However, if measured over time, home ownership or property is not one of the best performing asset classes.”

Many of us are changing jobs, cities and even countries more often than in the past. The costs involved in buying and selling a home mean that, if we move frequently, any tax-free gain in the value of our home could be wiped out by real estate, legal fees and other moving costs.

With the decision that your lifestyle and financial plan favour homeownership, there may be some hard choices ahead.

“In Toronto, it’s not easy to purchase for [the same monthly outflow] you’re renting for,” says Lois Volk, mortgage broker with Invis. “If you’ve got a rent of, say, $1,600 a month, it could be very hard to keep it at that level and buy.”

A number of Ms. Volk’s clients are looking to buy a home prior to having children.

“Generally, they have to move out of the downtown core area anyway, depending on their income,” Ms. Volk says. “A lot of them want to start a family, so they’ll be down to one income for a while.”

Moving out of the downtown may allow for cheaper housing but there will be new costs.

“Living in downtown Toronto is a different lifestyle from commuting, for sure,” says Ben Melick, a mortgage broker with Mortgage Intelligence in Kitchener-Waterloo. “The biggest sacrifice that most people have to realize, if they plan on moving out this way, getting back and forth to the city [for work] is going to be a little bit of a stress and a demand on their time.”

Back to the lifestyle question: Does the time, money and stress of commuting balance owning versus renting?

“The problem is that a house in Toronto is probably double the price of a house here, if not more. It’s a huge difference,” Mr. Melick says. “You’d have to have dual incomes to purchase a property downtown whereas here you could at least get away with one income. It boils down to affordability and lifestyle really.”

If moving out of town is not for you, downsizing may be a way to move from being a renter to a homeowner.

“I’m finding a lot of people are being forced into buying condos if they want to live centrally because it’s all they can afford, or all they want to afford,” Ms. Volk says. “Weighing the difference in the value versus the time travelling and the travel costs is something to consider.”

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Contact the Jeffrey Team for more information  –  416-388-1960

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