Should I rent or buy the apartment?

Not own or possess, that is the question! It is the dream of almost everyone to have a place to call home, your home. If you're young, you probably debating whether you should buy or rent. It's an interesting question, especially if you intend to live in a big city like Montreal for years to come.

Should I give my money to a landlord?

Or should I tighten my budget to accommodate payment of the mortgage?

Some people say that may cost as much as a condo than an apartment depending on where you live. In fact, payment of the mortgage may be close to your monthly rent, but it is much more than that. You should consider the condo fees, municipal taxes and maintenance expenses to name a few. Therefore, we are talking of at least $ 400 more in monthly fees. On the other hand, you do not give your money to someone else. You give the bank Seriously, there are many things to consider on both sides:

Good points for rent

- You are not responsible for the maintenance (but you still have to clean).

- It requires less cash.

- You do not have maintenance costs to pay.

- You can move almost whenever you want (owners' rights are very limited!).

Bad points for rent

- You'll never see the color of your money.

- You can miss a great opportunity in the housing market.

- Instead of putting money aside (as you would be paying a mortgage), it is easy to simply go elsewhere and not build equity in a savings account.

- Your landlord can not be an ugly guy who does not care if your toilet is leaking for days before dealing with it.

Benefits of ownership

- You build equity (note that a principal residence is a poor investment in terms of absolute return).

- You can change / renovation that you want.

- You can always rent it in the future.

- It is easier to get credit because you have a tangible asset (do not argue, I'm just saying that banks like to see the property on a balance sheet!).

The decline in property

- Condo fees may increase over time.

- It is more difficult to pass the time (early to sell, mortgage penalty, etc..)

- It requires more evidence of cash flows (and this would be a good idea to have an emergency fund or a credit line in case you need to fix something).

Thus, the question of ownership, there is no obvious answer (as is the case for many issues personal finance!). One may prefer to enjoy the freedom and rent an apartment where someone else may choose to buy a condo in order to build equity faster (so they hope).

In my opinion, I might consider buying a condo if you think you live there for over 5 years. Your chance to benefit from an increase in the housing market are very good and you would probably a good business selling the latest 5 years.

Another interesting option if you do not mind roommates would buy a condo and find a roommate to split expenses. In this mode, you pay the same as you would in an apartment but you build equity (funded by the tenant) in the interval. Foreign students may be a type of customer interest because they usually have to pay money (funded by mom and dad) and they do not stay more than 1 year.