As most of my clients are families, their situations are very much similar. There are 3 to 5 family members, moving to Toronto for business opportunities or job transfer, they have sold, or they are in the process of selling their current home, and they are looking to accommodate themselves in a quiet, safe neighbourhood with a good infrastructure and highly ranked schools. In their moving process, the first question they face is – is it better to buy right away or to rent for a year and then buy.
Let’s analyze the benefits, disadvantages, and actual cost of renting first and buying later.
Pros and Cons of Renting First
- A great thing about renting is Minimal Maintenance Troubles and Expenses. When you rent, practically any issue with a property is solved with one phone call to your landlord. It’s not nearly as much convenience when it happens in your own home, especially if you are new to everything.
- Second good thing- is that you have One Easy and Predictable Payment, because owning a home involves more than just paying your mortgage. You need to include property taxes, maintenance fees for condos, water and sewage bills for houses, utilities, home insurance, etc.
- Third great thing – Is that if you are Not happy with your neighbourhood, you can move every year. Tenants can move easily and affordably whenever they want. Buyers, on contrary, must pay land transfer tax, legal and real estate fees.
Of course, the main convenience of renting is an opportunity to test-drive neighbourhoods before committing to your own place. With this respect, I suggest you choose a very similar home to the one that you would want to buy in the future and try to settle in the neighbourhood of you first choice.
Read this post to find out how to rent a home when you are relocating to Toronto.
What are the Cons of Renting First?
A renting option sounds very sweet and reasonable, doesn’t it? So why do most relocating clients take the risk and buy a home right away?
Let me give you some perspectives. We all know the obvious advantages of owning a home. First of all, you pay your own mortgage, not your landlord’s. For example, you can rent a middle size family home in Midtown for $5000 per month, which totals $60,000 after a year of your stay. It is a significant expense. It is also reasonable to consider an annual increase in home prices in Toronto as an additional expense to add to your rent.
Meanwhile, I would like to highlight, there is nothing wrong with renting if you understand the cost associated with it.
Are you looking for more resources to help with your move to Toronto? Read these posts next:
- How to Get Settled After Moving to Toronto
- Homes and Neighbourhoods for Relocators Moving to Toronto
- Best Private Schools in Toronto
Reasons to Buy First When Relocating to Toronto
Now I would like to give some guidance to those who decided to buy vs rent and those who are hesitating not knowing how to approach the process.
First of all, if you have relatives, friends or trusted acquaintances in Toronto who live here and know the city, contact them and use their opinion in the process.
Second, find a realtor who you can trust and discuss all your needs and expectations. Interview several agents and ask questions about their knowledge of neighbourhoods, schools, if they are full-time or part-time, what additional assistance they provide for relocators, where they reside and what areas they specifically service. You will be also interested in what category of clients a realtor mostly deals with: buyers, sellers, seniors, young professionals, singles, families, relocators and so on.
After you make your choice, stay in constant contact with your realtor for analysing new listings, which you like, for virtual showings and for all the information you may need.
Book a relocation consultation with me right here to learn more about my services.
What to Look for in a Home when Relocating to Toronto
Now let me outline some important features of a property to look at when buying. This will help you to analyze your purchase better.
- Analyze location. Look at the features in the area. Highly ranked schools, lots of local stores and businesses, good walkability, transportation and proximity to central streets – these are main characteristics, which will support the value of your property. Your realtor should be able to provide you with this information.
- Analyze demographics. Ask your agent to provide a demographic brake down of the population living there.
- Review the recent sales in the area with your realtor and study the demand.
- Avoid irregular properties that look or feel differently from most of the homes in the close by area
- If you are buying a condo, let your lawyer review a status certificate, pay attention to the maintenance fees and find out is the building mostly occupied by owners or tenants.
I gave you only a few parameters to look at if you are not very much familiar with Toronto, but you choose buying over renting. For the full information, please contact me directly so we can set up the time for your first consultation. You can contact me here.
Final Note About Buying Vs. Renting when Relocating to Toronto
As much as I recommend buying over renting, I must also outline some reasons or situations when people should not buy a property in their first year.
You shouldn’t be buying a home in your first year if you think only about a price increase in the future. If you are buying only for making money, then this strategy will not work because the prices will not always be appreciating 15-20% a year and an efficient investment strategy is always different from the strategy of buying a home for your personal use.
The second reason why You should not be buying a property is that you will be selling it in a year and will make lots of money. This is not how it works in Toronto even though you might have heard many stories on how people made a fortune within a year, but I have to tell you that it is not that fast and easy.