Quote:
Originally Posted by bizkitgto
This struck a chord with me, as I've thought of this for a while now....has anyone done a good study in some of the inflated cities like Calgary and Toronto for comparing the benefits of renting vs owning?? I keep hearing people say renting is better in the long run but I don't see how, but I've never looked into it....there's lots of condos getting built these days for investment purposes....can anyone make an argument for renting?
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The sales pitch from realtors when you let them know you are renting is "Oh, so you are paying someone else's mortgage". You sort of are, but there are definitely upsides to renting. If the dishwasher breaks, the landlord is responsible for getting you a new one. Any maintenance such as leaky pipes, cracked window, painting, etc. is covered by them. Any special assessments for balconies, new gates, a flood are covered by the landlord. If you are in a house and the roof needs repairing, landlord covers it.
If it's short term, renting is a good hedge against declining price values. In early 2009 there were a ton of condos and houses that were owned and under water (financially, not literally). When realtors spouted the paying someone else's mortgage line, I would reply yes, but I can leave in 30 days, I don't have to pay someone 2.5% to sell my house, and I don't have to pay $30,000 to the bank when my house closes since the sales price is below what I owe.
If you are planning on keeping the place long term and renting it out, it likely will make sense. You still have to come up with 5% (possibly 20%) of a down payment. Many people can afford the rent (mortgage payment), but can't come up with the funds to purchase. As an owner/landlord you have those funds invested in the house, and can't use them for stocks, pleasure, savings, etc.
Here's a thread from 18 months ago
http://forum.calgarypuck.com/showthread.php?t=125273