Career & Side Hustle Coaching For High Achievers

Renting vs. Owning: The 5 Pros and Cons You Need To Consider


Renting vs. Owning is the never-ending debate in personal finance. And the truth is, there is no right or perfect answer because it all depends on your personal situation, circumstances, and goals. 


 I’ve debated ever writing about this topic because it is a realm of personal finance that includes so many factors and real estate is very regional.  

However, this podcast episode was requested by a member of the MLA community, Emily, and I’m so happy to share my thoughts and experience on this topic. In this article, I’m going to be sharing the 5 things you need to consider when looking at renting vs. owning. 

To start off, I want to preface this episode by talking about my experience and mindset around renting vs. owning that will shape 

1. I have done both. I have rented and I currently own. And I actually don’t think renting is a waste of money. I know a lot of homeowners clap back with the argument of renting saying “you’re paying off 

2. I will be using my personal experience (and numbers) as examples because I think it’s easier to understand. However, real estate costs vary so much from area to area. I bought an apartment in New Westminster and that is the example I will be using in this article. However, I currently live with my boyfriend in the property he owns in Vancouver. 

3. In this article, I’m really going to be talking about renting vs. owning your first home – not investment property. I think investment property is a different conversation because you are looking at your rate of return and have more capital/loan options. 

4. There is no right answer. The whole decision regarding renting vs. owning is solely based on your short and long term goals and no one can determine that but you. 

There are thousands of articles on the internet that talk about the pros and cons of renting vs. owning so I’m going to be coming at this topic a little different. Because the truth is, there is no right answer, so much of it depends on personal circumstances and goals and no one can determine that but you. So in this article, I’m going to be outlining the 5 questions you need to ask yourself when evaluating what is the best decision for you. This is just an overview, please listen to the podcast episode for the full details. 

Let’s get started. 


1. Assess Your Flexibility Needs In The Next 5-10 Years

The great pro in renting (and con in owning) is the flexibility it provides for your life. There is no doubt about it. Renting allows you to have a lot of flexibility because you could be renting month to month or even on a lease, it’s not forever. However, unless you buy a home in cash, it’s not easy to break a mortgage or sell a home. Owning is a contract, and it comes with a lot of financial responsibilities and obligations. It also forces you to create a long term commitment to one area. And if you don’t know if you’re sure you want to stay somewhere for the next 5-10 years, it’s better not to own because it has a lot of upfront costs. All of the pros of owning (building wealth, owning a large asset, investment gains) only come to fruition if it’s done for the long term. I don’t believe in relying on property values to skyrocket or crash, in the lifespan of a mortgage or owning a home, property (like the stock market and everything in life) will go up and down. However, you need to 

So how do you assess whether or not you still want or need flexibility in your life for the next 5-10 years? Well, I have an exercise for you that will help you answer that question. 

Consider this: If I presented you with your dream career, dream opportunity, but the only caveat is that you have to move either across the country or to another country, would you take it? 

To follow up, if you are not in a relationship (and want to be in one), would you move for love? And if you are in a serious relationship and your partner needed to move away, would you go with them? 

If the answer is yes to any of those questions, you’re probably in the part of your life where you still value and require lots of flexibility. 

Because there will be a point in your life when the answer is no, and it can be a for several reasons. There will be a point when you hit a wall and it doesn’t have to be at a particular age. It can be in your 20s, 30s, 40s, or even 50s. For me, it was when I was 27 and it was due to 2 things: my goals and my family. 

For most of my twenties, I was very nomadic. I used to come home to Vancouver, work 2-3 jobs burning myself out, and then go travelling for 4-6 months. I was lucky enough to live at home with my parents in Vancouver and I rented anytime I lived somewhere else (sometimes up to a year). Even though I had the money to buy a place (and if I did back then, I would be making bank right now because Vancouver real estate skyrocketed shortly after), I didn’t want to. I know 100% that if I did, I would have resented it because it wasn’t the life for me. 

But something happened when I was around 26-27 (and I know this sounds pretentious), but I actually achieved all my goals when it came to long term travel. No, I haven’t been everywhere, but I don’t travel according to a checklist; I travel according to what pulls me to an area to be challenged. This has taken me to study meditation in Thailand, and to confront and understand the challenges of economic development and volunteering through microfinance projects in Tanzania. 

At 26-27, I was done. I didn’t feel challenged by travel anymore, and I didn’t want my life to solely rely on travel and grandeur for fulfillment. So I stopped to search for my next challenge: creating a home. 

The next thing that happened was my dad got really sick. And I needed to stay home. My family has always been very important to me and I’ve always done my best to find that balance but I had been away too long and made the decision to keep my roots in Vancouver. It’s not just my immediate family, I have a lot of extended family too, and that was my reason to create a home here. 

But the truth is, those were very personal factors that affected my decision. I didn’t plan on achieving all my goals, and I didn’t plan on my dad getting sick. 

When you’re looking at renting vs. owning the first thing you need to look at is how much flexibility you want and need in the next 5-10 years. If you’re not sure, then it might be better to rent until you are truly ready to commit to buying a home. It’s a lot of upfront costs and the return will not be worth it if you sell at an unideal time. Secondly, you will resent the life you’ve created if you make a decision based on what society tells you, only you can figure that out.  


2. Evaluate Your Current Circumstances and Aptitude For Change

Owning your home changes your mindset. It just does, and anyone that tells you differently is lying or doesn’t acknowledge their own privilege. In the first point, we looked at the future, but when looking at renting vs. owning, you have to understand that whatever career, financial, or relationship situation you’re in right now, owning will not make it easier, it will solidify it. 

This goes back to goals when you are looking at renting vs. owning, you need to look at your short term goal. 

When you own a home, it’s not easy to quit your job with no backup plan. That’s why I’m so against people who just say “quit your job, and follow your dreams” because if you can afford to do that, you probably have support from either a partner or family in some form or another. And there’s NOTHING wrong with that. For the longest time, I had that. I had the support of my family and then of my partner, but there was a time in the middle which I had neither. That’s why I want to talk about how difficult it was to have a mortgage on your own. I struggled so hard to try to get up my emergency fund on one income because I also had to pay all the maintenance costs. I also didn’t change careers until I lived with a partner because it was not as easy to find the time to work full-time, go to school part-time, build my business and dedicate the time for a career change.

So if you are not happy with your career or still have a lot of short term goals, it’s easier to rent. Renting is great because you have flexibility in your budget, if you want to go back to school, you can find a cheaper place to rent with a roommate, or start your own business, or change careers; it’s so much easier to do when you don’t have a mortgage. I’m not saying it’s impossible to do with a mortgage, it’s just harder and takes a lot more planning.

When you’re looking at renting vs. owning, look at your current situation and how much you want it to change, because owning a home only magnifies your situation. The same goes if you decide to buy with a partner, both myself and my partner own separate properties. However, if you are buying with a partner, know that it is a huge commitment in case things don’t work out and that it shouldn’t be a band-aid problem because you feel that’s the next step.  


3. Price Out Both Scenarios

Of course, we come to the costs! I know most renting vs. owning articles solely focuses on costs so we get that into it here. Now, right off the bat, these are the very basic costs of renting vs. owning:  

Costs in Renting: Rent, Deposit, and Renter’s Insurance

Costs in Owning: Downpayment (up to 20% of the home in your area), closing costs including – notary fee, taxes on purchase (which can vary), property taxes, strata fees (if it’s a condo), maintenance fees (if it’s a detached home), renos/fixing costs, insurance, mortgage interest, and mortgage payment.

However, the exact specifics when it comes to costs vary from area to area. That’s why I highly recommend you use this calculator from the New York Times to find out if renting or owning is right (BUDGET-WISE) for you based on the home prices for your area.

So in this section, I’m going to be breaking down the costs, using myself! As I mentioned, I once lived in my property so I’m to use myself as an example. 

I rent out my apartment for $1400/month. I originally listed it for higher, but my tenants negotiated with me, and I really like them. 

This is my break-even point. 

I know I could get more money for it, but I also know the costs of having bad tenants, and I am willing to pay the cost for keeping good ones. The thing people don’t always talk about is rental income is income you’re legally supposed to pay taxes on (although I don’t know how many landlords actually follow that rule), so I don’t really see the point in raising it for few extra dollars.

So now let’s look at the costs of me living in my property. 

My mortgage is bi-weekly (you pay more off the principle that way), and it’s approx $450/month (it’s actually less but I was doing math on the spot in the podcast so I just rounded off all the numbers). If you times that by 26 weeks and divide it by 12 months, it’s about $975 I pay towards my mortgage. My strata is currently $270 (raised last year from $250 because of insurance) so the total I pay is $1250(ish). I rent it out for $1400 and the other $150 goes towards property tax, insurance, and maintenance, so I break even. 

Now when I was living in it, it actually cost me less because I got a grant for being an owner living in the property. But as you can see, I pay a lot of money (about $425/month) solely towards the maintenance of the property each month, not the mortgage itself. That’s why I don’t really buy into the argument that “renting is burning money” because I also pay over $400/month to maintain my investment….and that’s kind of like “throwing away money too” because it’s not being invested itself.

Now the thing not a lot of people know regarding mortgages (I didn’t) is that the bank will actually take the interest off the total right away. So for the first few years, You’re paying a lot of interest. For the first full year I owned my property (I bought like mid-2017 so I’m not going to count it), I paid almost $5500 in mortgage interest (and my rate is pretty low at 2.5%), that’s about 50% of my total payments. So essentially each month, one payment went to my principle and one payment went to paying off the interest (also money that’s not being invested). Now, the thing about this is that this is not the interest they take on it forever, obviously, there’s re-financing and signing a new term when it is over. And my sister pointed this out to me (cause I was so stupid not to think of this), but when you refinance, you obviously have a lower principal amount (because you’ve been making payments towards it for 5 years duh), so the longer you have the investment, the more you are paying off towards the principle. 

Now if you do the math, that’s about $900/month that I’m actually not investing. 

So for the long term, this will hopefully pay off for me. There’s also the property value that goes up. As of today, my property value is 12% higher than what I bought it for, but it fluctuates a lot. The first year it was 15% and then it dropped and it could still drop or increase in the next few years who knows. 

However, these are all long term decisions. If I had just wanted to live in the property for 1-2 years, this would not make sense. Actually it would be horrible because the costs would be too much. 

Owning in is a long term game and when you want to look at renting vs. owning, you have to see the costs ALL the way through. Personally, I would never rent my own property for $1400/month by myself. My tenants are a couple so it equates to $700/person which is much more reasonable. So if I was only in this for the short term, it would be more beneficial for me to find something to rent for less than $900/month (which is possible if I lived with my partner or a roommate) and invested the rest (at least $400/month).  

But because I know my short and long term goal is to live in Metro Vancouver, this makes sense for me right now. And it makes even more sense because I am renting it out, actually I don’t pay anything towards the property right now.

The math may be different in your situation though. I know this section was very long but I wanted to really show the costs of renting vs. owning when you are evaluating your decision. 


4. Consider How Much Responsibility You Want In A Property

Owning a property is a lot of responsibility and if you don’t want to put that much time, energy, and money into it, that’s okay. I don’t believe in the argument that even having a rental property is “passive income” because you still need to find and respond to your tenants and any property issues. 

It’s work. 

And if you want to re-direct your time, money, and energy is property there is a big pay off but it takes work. 

However, the other side of it is that if you want to forgo the responsibility of property maintenance, there is a cost to that as well. When you own, your financial obligations lie with the bank, insurance company, and government (for property taxes). And there is a ton of responsibility that comes with it. 

If you rent, you don’t have that responsibility, but you are still at the mercy of landlords when it comes to rates. Now, depending on where you live, there could be tons of legislation that protects tenants vs. landlords in disputes, but again, that varies a lot from area to area. 

When you are looking at renting vs. owning, also understand your rights and the responsibilities on both sides. 


5. Understanding Wealth Building Strategies 

Lastly, I want to address the notion of wealth-building when it comes to renting vs. owning. Owning is great for wealth building because, in the end, you own the asset. However, it’s not the only way to build wealth. 

I personally believe that owning is best for building generational wealth. Because it takes so long to fully pay a property off and reap the benefits of owning, real estate is great for building generational long-term wealth. As I talked about, they’re a lot of costs along the way (which a lot of advocates for homeownership “conveniently” forget about in their arguments), and the pay off is truly in the long term. So owning is great especially if you want to have a family because it may take you into retirement before you can truly see the benefits. 

I’m NOT saying you cannot own if you don’t want a family, but if that’s not something for you, you actually have more avenues for building wealth that can allow you to use more cash flow upfront. 

However, owning a home can also be a part of your retirement plan if you don’t want a family, there are many ways to build wealth. 

As we talked about in this article, you could also rent and invest the rest of your money that others (like myself) are paying for maintenance, property taxes, etc. But that too takes discipline. If you’re renting and really do have more income in comparison to owning, but just using that on eating out and clothes, then you’re not in much of a better position. 

Investing is very important and it can come in so many different ways. You can invest in real estate, stock market, retirement, GICs, your business, etc., there are a million different combinations to do it. 

So don’t think that you have to solely invest in real estate, it definitely has its pros but at the end of the day it comes down to your long and short term goals.


This was a really long answer to a short question, so before I sign off, I just want to share with you my philosophy (and I found out it’s also Warren Buffet’s philosophy) when it comes to buying a home, and that it is…

Buy a home when you can afford it and if it is the right decision for you.

That’s it, that’s the magical answer.

Good luck! Happy saving and spending! 

Leave a Reply

Your email address will not be published. Required fields are marked *