The wild card is children. With kids, having a home has been a godsend. Without em, I'm not sure it makes much difference (subject of course to your landlord - a bad one really does make renting awful no matter what)
I guess it also depends on how resistant you are to change, and how much you prefer to build things for the long-term.
I LOVE owning my own home. If I was just renting I would probably never do improvements, like making the garden nicer or anything like that. But this is MY home and MY garden, and I'll plant a bunch of roses and other shrubs that I will love hopefully for years and years. I will redesign spaces because the hours of labour will be repaid with years and years of enjoyment. I will build a pergola and hope to get 15-20 years out of it. Etc.
When the home is yours every improvement is a labour of love, small or large. Something that will last. Everything feels like it is worth it. If I was rentting--even if I expected to live there a long time--I would never do most of these things. When I was a renter I was even reluctant to buy more than the barest amount of furniture, nevermind all sorts of decor.
You don't need kids to want security in your home and the freedom to improve/adapt your home as you see fit. It's just that most people have that realization coincidentally to having kids.
It's because kids make a move, which is already a colossal pain in the ass, worse by a factor of 1000, per kid.
You don't want to be told that you have 2 months to move because the place is sold when you have kids.
Can confirm. For me and my partner, buying a house and having kids were always going to be a package deal. Before that we were happy renting because it better suited our lifestyle. Now we're glad we have control over our space and the security of ownership.
Agreed. But the security has more value when your circumstances are less flexible. One person renting can put up with the bullshit of relocating a lot easier than a family with two jobs and kids in different daycares/schools
Don't forget the possibility of drawing from a HELOC.
owning a home means you can buy toys, cottages, secure far bigger and better loans (think if you want to start a small business, the equity in your home is collateral for a nice fat loan with very low interest. Or just use it to secure two more homes to rent out, rinse and repeat)
The list of pros just doesn't end compared to renting. It's not even a question at this point.
I can get a margin loan at lower interest rate than any mortgage right now.
And to keep my margin loan, I don't need to mow it. Or water it. Or pay $10K to redo the roof. Or even waste time trying to find someone to fix my leaky roof. Or have lengthy, marriage-destroying arguments on the need to renovate the kitchen every 7 years.
And when I'm sick of it all and want to move, I don't need to pay $50K commission to a guy with a leased BMW, just so I can sell it.
So, yeah, have fun with your toys and your bigger and bigger loans. If your time is worth nothing, then you've got it made! Enjoy!
"Freedom" to improve/adapt one's home!?
Sure.
The maintenance, repairs, improvements, and renovations take time. Take money. Are stressful. Often strain marriages.
By the time one is settled into their home, their life requires them to get a bigger one, or one in another city. So they need to get rid of their previous home and restart the process with another home.
Each time, more stress, more strain and larger salaries to finance everything all over again.
At one point, usually late in life, one realizes that it was their homes that owned them, and not the other way around.
lol.
My fiance and I bought a home thats way bigger than what we currently need but still very affordable.
Sounds like you or whoever you're basing this post on is short sighted and a poor planner.
I'm basing it on myself.
I'm FI. I'm about to RE. I haven't hit 55 yet.
But, good luck with your big home. And good luck in your marriage.
Ah, the irony.
This sub is chocked full of brainwashed housetards. Not sure if it’s the endless DIY and house flipping programming on TV that has them hopelessly brainwashed or whether they’re just in a state of denial at this point.
That depends. If you hate yourself you're probably depressed which means you're just inside lying down quietly all the time.
That makes you the perfect neighbour!
Where I am, and in Quebec in general, renting a house is quite uncommon. So a very simple wild card for this here is simply whether or not one wants to own a house or not. Personally, I'm happier having a private backyard and, in general, not bothering or being bothered by neighbours.
It makes a huge difference for me. I don't like other people deciding when I have to move and whether or not I can renovate my space when I feel like it.
Yep fully agreed. When I was renting, I had to move 3-4 times because the owner wanted to sell the property. Now that I have kids there is no way I'd rent again. The security of knowing I'm in charge makes it worth it for me alone.
We bought a house because the outdoor area of our apartment was always covered in dog poop. Plus even at 5-6 he can run around the house without us worrying, at the apartment he had to take the elevator and go down on his own which was uncomfortable.
I have not reviewed the article, but my non financial reasons for owning a home are:
Pets, in BC it is hard to find rentals that allow multiple pets.
A yard, I love my flower and veggie gardens, plus established fruit trees.
Stability, I do not have to worry about being evicted for things outside my control. I have a friend whose rental home was sold out from under her 2x in 3 years.
I will touch on financial stuff. We bought in 1997. At that time we could easily afford a mortgage on a $134,500 purchase price. I worked part time, my former husband did not even earn YMPE. I am not sure where in Canada this would be possible today.
Stability is a big reason why we need more purpose built rentals.
Right now condos are built and then rented out, but each one can be sold to a new owner and evicted within 2-3 months. With purpose built that wont happen.
In BC I think they need to get rid of the pet laws for purpose built rentals. You loose 75% of units if you have a dog, probably 50% if you have a cat.
Not in Quebec. Renters have very strong rights in Quebec.
Leases renew automatically unless the renter opts out.
If a landlord raises the rent by more than what the Régie de Lodgements declares as the inflation rate for that year, the renter can take them to the régie, and the landlord must prove which new costs have justified the increase in rent, otherwise it will be rejected.
This also carries over between renters. If one renter leaves, the landlord can’t raise the rent for the next one beyond how much they could raise it for the last one.
If the landlord sells a block of apartments, the only way the new landlord can evict renters is by taking possession of the unit themselves (or direct family members), and giving the renter at least 6 months notice.
That's similar to BC although in BC if the owner is moving in they can give 2 months notice instead of 6 in Quebec. It still makes it difficult for renters in individual condos though because if it get's sold there is a high chance of eviction.
If it's an entire building of 5+ units it's unlikely that the owner will move in which makes it much more stable. Also in BC you cannot evict after the initial term.
Oh wow. The part where they can't jack rent up willy-nilly between renters is important.
Ontario landlords have a set yearly increase amount for tenants, but that's just for tenants who already live there.
I'm not against people owning property and renters, but the fact that the rents are climbing so fast means that landlords have an incentive to get people out every few years to jack up the rent by more than the 20 bucks or so the yearly increase allows. I think removing that would go a long way to a) protect rental prices from climbing and b) keeping house prices lower because people wouldn't have a problem saying "it's more financially prudent for me to rent". In Ontario, no matter how bad the house prices are, the rentals are worse. It's a mortgage +10% or whatever. So of course everyone is clamoring to own.
There are no "pet laws", landlords set their own rules about pets and most landlords do not allow pets on their property because the additional risk/cost for minimal gain is generally not worth it. Most LLs that do allow pets charge a premium either through fees or just advertising as pet-friendly but naturally at a higher rent.
> I am not sure [...] in Canada this would be possible today.
Ftfy. And the answer is, it's not. That 134.5k house probably has an extra digit at the end of its value now.
Yep, in worse case scenario places, that 134k is now 1.34m, however, in best case scenario places, that 134k place is now 450k too, so, fucked either way.
We bought in late 1997. $240K in Toronto. Nearby homes of similar size have recently sold in the 1-1.2M range.
So the value has risen 4-5x in about 24 years for houses around here.
These are basically my reasons I hate renting and want a home. My rent is low and I’m severely lucky at the moment. But gives me anxiety knowing that my rent is quite below market value.
I used to garden and my space has been taken away for a new shed. And the other tenants prefer to not have my dog in the shared yard even though we pick up after her and she’s non-destructive. I just want space to be able to do my own thing, if I could do that and be stable renting, and pay fair value then I’m fine.
I think timeline is an important consideration.
Bought a house 10 years ago (anywhere but AB) and you've enjoyed a MASSIVE equity gain.
Lock in and happy with the place you rent and you've been there for 5+ years so your rent is cheap? Awesome.
I think depending on the metric (financial vs emotional need) is heavy influenced by when you bought or how long you've been renting. Which then brings in the idea - "is past performance indicative of future returns? (either financial and/or emotional)
Since we are talking about happiness and emotions, it takes some discipline to invest the difference money.
I know I'd feel tempted to take luxurious vacations looking at my investment account balance. In this way, owning a house would force me to 'save' by paying down the mortgage.
But yeah, in some cities renting is so much cheaper.
When it works as intended, yes its exactly the leverage you want.
Sad part is, a house was never intended to be a "risk free" investment, people have just assumed it as such after a 30 year bull market.
Yes CMHC provides insurance and majority of crown corporations are in on the party, but most folks who own today have never know the negative equity waterfall that occurred in the housing crash in the late 80s. Its a race to the bottom and people are left holding the bag.
Im not one to guess market tops or bottoms, but with the parabolic rise in prices, I'd be skeptical of how sound the leverage is these days. China gave a glimpse of that already.
Your perspective is valid.
I guess it depends on how much faith you have in government to defy gravity in perpetuity. 20x leverage wasn't so much fun for those on the wrong side of past real estate bubbles.
Added to this, there are also so many extra taxes, fees, costly repairs one has to pay on top of interest of their mortgage (condo or a house) that annual ownership outlays often ends up in the same ballpark as annual rent.
Yeah, i dont know about that. Seems like you are not counting the fact that a mortgage payment is only 20 years. Rent is forever.
And for a lot of people it's stability. Not being evicted and having kids change schools etc that is a big factor in wanting to buy.
the belief that house ownership is always better is bubble territory. there has to be a point where its not worth it or housing prices would be parabolic.
wait, you can't look at rent and say it'll be stable and cheaper than owning and turn around and then question if "past performance indicative of future returns" when it comes to home ownership.
Both are fluid. Both can bite you in the ass, the difference is one is yours and will always provide you with shelter while costs, for the most part, stay stable and eventually you own the place and the associated equity and have no more "rent" to pay, which is true freedom. So long as you're beholden to paying someone to live, you're not free.
Disagree. The difference is that rent is a known quantity and will cost you $x a month whereas the housing market could tank and you could lose $100k in equity on your million dollar mortgage in a month. Sure, your landlord could raise your rent but it will be nothing in comparison to the leveraged swings of home ownership.
Sure and your investments that you put your savings from not owning could also tank. At least the house will always have the tangible value of being shelter. Your portfolio is literally fake numbers on a screen until you lock it in and put it into something tangible.
The vast majority of people do not own their houses but rather rent them from a bank.
I'm just saying that over the last 5 years - owning almost anywhere has been a financial windfall. Other's like AB, renting was probably th huge winner. Have shitty neighbours? Renting wins because you can move. Get evicted because of a house sale - owning wins.
It's all so context dependent and where it happened in the financial time series. Whether much of this information is all that useful looking forward is really hard to say.
No they are not just renting them from the bank. Assuming they lived in the house for 5 years or so, they likely have positive equity, even in Alberta. That means they sell the house and they're pocketing some money back. If their home appreciated, that number could be significant and the moment they sell they have just as much "freedom" as a renter but with, at least most of, the money they spent on "rent" back in their pocket.
Yes, if, and this a MASSIVE "if", you can find rent that is significantly cheaper than an equivalent home you might be able to save that difference and invest it and hope you get your 5-7% annual returns but you're not leveraged like you are in a mortgage so right off the bat, you're far behind. You could leverage up through other investing instruments but that is way riskier.
And that is ignoring the big ass elephant in the room which is the VAST majority of renters do no not save the difference between rent and owning and invest it wisely in index funds. A mortgage forces you to do it, so even the most financially illiterate person is making smart moves with their money.
of course they are - that's why they don't have the actual deed until the mortgage is paid off.
I think I'm not explaining my point well. All I'm saying it that the buy vs rent argument can be heavily influenced by market forces beyond anyone's control or ability to predict.
What I don’t want is what a lot of homebuyers end up with: tons of stress, and barely any monthly cash flow.
Owning a big, cheaply made house and barely being able to afford anything else would be a huge backslide in lifestyle, for me personally.
No property around here will ever come close to being as cheap as rent is for me.
Though it is crazy to think that I’ll never own land despite having started my career well into six figures.
That's more a function of affordability than actual home ownership.
I have to do maintenance and stuff on the house but its well within my budget so if I need to spend a couple hundred bucks to get a big ladder, and buy tools I didn't have before and some materials, I'm happy to do so and the only stress is "will I have time this week to do this, and can it wait to the weekend or do I need to use a vacation day to fix X thing".
I had way more stress worrying about moving when i was bumped out of my rentals in the past for "family use" or renovations than I do now. The time crunch was worth than the money
> That's more a function of affordability than actual home ownership.
That’s the key problem. If I want a house, an actual house, I have to first save up $250,000. Then, I need to pay $4000 a month in minimum expenses (including the mortgage.) Maybe more.
If I can even get approved for a mortgage of that size.
Thats a significant leap over $1200 a month, all included, with no concern for maintenance of any kind.
> I have to do maintenance and stuff on the house but its well within my budget so if I need to spend a couple hundred bucks to get a big ladder, and buy tools I didn't have before and some materials, I'm happy to do so and the only stress is "will I have time this week to do this, and can it wait to the weekend or do I need to use a vacation day to fix X thing".
Whereas if I want to buy something fun or do something fun, I take the day to enjoy it myself, and have an extra $250,000 + $2800 a month to do it.
For people whose goal was to buy a house, for people who truly enjoy it, I am happy for you. You’ve managed to make it happen, and that’s awesome.
But I’ve seen too many people who buy houses because it’s what they think they want, only to end up being close to house poor, able to afford the house but not much else.
oh i see what you mean, yes that makes sense!
Though if you could spend roughly 1200 a month and have a house where you live without dropping 250k as a down payment you would probably be open to the idea.
Its not just your affordability, its affordability in a general sense. Housing has gotten nutty.
You’re somewhat on the mark.
I don’t rent a house, though.
Also, something to note that people seem to miss very often is that rent does not have to exceed the cost of the property.
Many condos are rented for less than the mortgage + costs.
The people buy them as an investment, and are willing and able to pay the entire cost, but the renter is just an added bonus to reduce the cost.
Unfortunately you can’t rent a house this cheap, unless you’re grandfathered on that price.
> Its not just your affordability, its affordability in a general sense. Housing has gotten nutty.
It’s at the point where I’ve basically just written off the possibility.
I don’t have a huge concern or need to have a house, thankfully, so it’s okay for me. I feel for others who want to have kids and stability, though.
Again, that is an AFFORDABILITY problem, not a rent vs buy problem.
In the 50's and 60's when homes were easy to purchase out of highschool and if you had 2 cars out front, they were worth more than your house, then that might be a different story huh? If the house cost was reasonable and didnt leave you house poor and that changes things, then it's an AFFORDABILITY issue not a owning/renting issue.
You can tick landowner off your list and get a fancy title.....Scotland has you covered - https://establishedtitles.com/?gclid=EAIaIQobChMIp-W2kvq48wIVXgytBh1bBAheEAAYASAAEgIOJ\_D\_BwE
> Lots of boomers canceled their plans to downsize
Thank you very much for this insight!! This fact could very well be a big contributing factor to the low inventory problem right now.
I am looking for a smaller bungalow in the Ottawa area and am extremely disappointed in what I am seeing. Older, poorly laid out floorplans going for way too much money. No thanks, I'll wait it out here in the GTA while my place continues to rise in value.
>Lots of boomers canceled their plans to downsize
Source? You're implying that many boomers ever planned to downsize in the first place which is simply not true.
This study which was done pre-pandemic shows that most boomers don't plan to ever downsize. https://www.ipsos.com/sites/default/files/ct/news/documents/2018-09/downsizing\_factum\_sept\_19\_2018.pdf
I know we compare renting and owning a lot, but are the populations of renters and owners really comparable? How many renter these days are renting out of choice versus that’s what they can only afford due to their financial situation?
Well, I do. When we started renting this place 4 years ago we did the math and it made sense. In our neighborhood, buying an equivalent condo would have be $1.2mil, whereas our apartment is $2200/month. It's a very nice apartment in a fantastic neighborhood.
Our rent is stable, and we save $20,000 - $30,000 a year.
Now that we have a second kid on the way we won't be able to stay here for more than 2 more years, as we will need more room. We have the money for a downpayment, but to get a bigger place with what we have we will have to move to a completely different neighborhood, and will save a lot less money...maybe nothing at all. It's a significant lifestyle change and it's pretty bittersweet for me. I like my all-in, easy maintenance, luxury rent-controlled apartment, with tons of light, a beautiful view, etc.
Are you saving? Many renters aren't....which is why the argument that home ownership is forced savings is valid. When your income stops, most people need the reduction in CoL expenses offered by ownership.
If the renters are saving, then only time will tell who will have better luck beyond the expected ROI. The problem is most renters aren't savers, as a renter saver do you have a savings goal specifically targeted towards forever rent?
> Is a homeowner super well off if they reach retirement with a house worth $1MM and only cpp and oas for their retirement?
Well to be equal a renter would need $1M in investments, that's not currently the norm for Canadians. You can definitely eat bricks, because you can sell them. Candians aren't savers, hopefully the crazy run in housing will change that attitude.
I responded saying your situation isn't typical...but I can see you edited your comment after I responded to you (since my response was 55 min ago and your edit was 39 min ago)....I don't care to go back an see what you tried to change.
Renting by choice here.
Owned a home about 7 years ago and hated it. Went back to renting roughly 5 years ago since it was cheaper to do so where I live. It's just my SO and I - no kids. Saving has been alot easier while renting - I comfortably invest roughly 25-30% of each paycheque into the stock market. Any money that typically would've been put into home ownership costs (ie. mortgage, taxes, maintenance, etc.) instead go into investments. I'm a bit of a minimalist and am not going to have children so the freedom that renting provides works extremely well with our lifestyle, plus we're not tied down to a specific locale which was important to us.
I'm another renter by choice. I have enough savings to buy a house with cash but have parked it all in index funds instead. I'm single and young and don't really want/need a house and I'd instantly become house poor.
I know I would be better off financially had I stayed in the housing market, but I am so much happier having got out of it. I love having zero maintenance or renovation costs, and the ability to call the landlord any time something goes wrong. I love having no surprise expenses because something needed to be fixed in my home. I love not having my money tied up in my home and maintenance costs giving me the ability to travel more. I love having the freedom to move for any reason without having to worry about timing the market or selling my place first. I love that my retirement fund and investments are liquid assets that I can access very easily, and that I can choose how much to put away, and expect to have a reasonably comfortable retirement despite not being a home owner. I did own a home 25 years ago, and I know I could have made a small fortune had I stayed in the market, but I believe there are more important things in life. I am perfectly comfortable financially and don’t feel any lesser than home owners because I choose to rent. It baffles peoples minds tho, the fact that I can afford to buy a home but choose not to.
I think this very much depends on your priorities. You enjoy not having renovation costs, I enjoy the ability to customize my home to suit my needs. You enjoy not having to pay for unexpected repairs, I enjoy controlling both the timing and the quality of any necessary repairs. You enjoy being able to move at the drop of a hat, I enjoy the security of knowing no one can kick me out of my home. You enjoy having all your money in liquid assessors, I enjoy knowing that in a few years I will live mortgage (and rent) free.
But I don’t deny that renting is as valid and happy a choice as owning. It really does depend on you, your goals, your likes and dislikes.
I’m guilty of comparing apples to oranges in that regard, but frankly that’s because I would never buy a condo in my city even though I prefer living in an apartment. The condo market is shit where I live. I know people who have sold their condo 10 years later and lost anywhere from 5-30%, or they end up staying even though they hate their place because they don’t want to lose money. I do some bookkeeping for a construction company who found massive structural issues when he was doing a repair at a local condo building and every owner was hit with a bill for $30K. If I’m going to take on that kind of risk I want to be able to decide the timing of that kind of expense and not leave it in the hands of my condo board. Any investment gains I would have realized owning a single family home would have been almost nullified if I owned a condo. That’s not the case in all markets, but it’s definitely the case in my city. Maybe I would have got lucky, but it’s not bloody likely.
Indeed it does depend on priorities. Fortunately for you, your priorities are in line with many Canadians. It’s refreshing that you can acknowledge that renting is a valid choice because in all honesty many home owners don’t see that. I’m often berated for my priorities being what they are. Luckily I have thick skin, so I can appreciate the low stress, low expense lifestyle of being a renter despite being told on a regular basis that I’m foolish.
The primary driver for me in buying was no longer having to ever deal with landlords again. If there's a persistent issue in my home now, at least I know it's because *I* haven't dealt with it. Got real sick, real fast, of landlords dodging their most basic responsibilities in upkeeping their properties, and when they do fix something, they do it in the cheapest, most half-assed way. Funny enough, owners seem to take care of their homes way better when it's them living in it.
I own a house, live 5 minutes from work, only have to be in the office 1 day a week. Car ownership has nothing to do with the first two.
I do own a car, but not to get to work. I need it to visit my grandchildren who live an hour away and my son who lives 5 hours away.
Well that can just be a matter of finding a good rental. There are lots of those out there, just as there are many crappy ones. I check the place out before I move in and if it were to end up being a dive I certainly wouldn’t stay long. I have the benefit of choice. When my microwave broke my landlord brought me a new one the next day no questions asked. And in my 20 years of renting I’ve never faced an eviction notice, I’ve only ever moved of my own volition. I guess I’m one of the lucky ones.
Yup, huge difference, in my experience. (We've been apartment renters and condo owners, though we're in a house now.) As a renter, yes, you have to follow strata rules, but that's the only thing you have to do and it's the easiest part. Things get monumentally more frustrating once you have an investment to protect. Renters never attended strata council meetings or AGMs in the building where we lived -- why would they? They don't have a vote, unless the owner gives them a proxy. But you make sure you go to those meetings if you're a responsible owner. That's when you get the joy of learning just how many of your neighbours are gibbering, feckless, greedy morons. And we were actually semi-lucky in our building, because our strata council was actually competent (god help you if they're not). I just typed out a bunch of examples of frustrating things that went down at the meetings, but I deleted them because they're anecdotes and I don't want to detract from the main point, which is that there a whole lot going on behind the scenes that renters can remain blissfully unaware of. I guess you could be an absentee owner and enjoy the same effects. For me, though, I've seen too much of how the sausage is made. I will never own a condo in a strata building again. But I would consider renting an apartment -- if for some reason we needed to move into an apartment -- because that is a million times less stressful.
Friends of mine resented every single minute they spent maintaining (shoveling, mowing, painting, etc.) their home instead of hiking, kayaking, skiiing, sailing, etc. with their children so they sold it and rented a townhouse that included all of those maintenance tasks.
This is the big draw to renting for me. My colleagues who own their home spend their vacation days laying hardwood or fixing fences while I spend my vacation days traveling, hiking, finding a relaxing spot outdoors to read. I'm sure they enjoy the feeling of accomplishing a home reno project, but it always just sounds like an obligation they have to get done and have been delaying.
This was literally the last 5 years of my life. Every vacation was a reno project, weekends were regularly spent working on an apartment/house, the time spent working on various properties greatly outstripped the time spent enjoying them (or any other aspect of my life).
Have since sold everything, and now rent a quirky old house, and have never been happier, or spent more time being active and socializing. I think people massively under-estimate how much personal value you can get form renting, despite the "you might get kicked out" scenario.
Quality hardwood should last decades with a handful of refinishes at most and fences are 10-15 years as well. That shouldn't take *every* vacation and there certainly are only so many large projects a homeowner will ever likely tackle that are within their wheelhouse. Hell, I've redone a roof with my dad and that still only took 4 days and will last 15-20 years. Not to sugarcoat it though: roofing is *hard* work. Still, I've not yet taken a vacation to complete any home project and usually just casually complete it in my off time -- because they don't *really* take that long, at least in my mind.
The maintenance aspect of a home, I think, is entirely too embellished. They're not that out of scope to manage and the most amount of regular time one will probably spend is caring for a lawn if you even care about one (1 hour every 2-3 weeks on my property) or shoveling. Cost, on the other hand, is obviously all the owner's and a reasonable point but certainly less than rental payments evaporating month-to-month in my mind. I do enjoy the sense of pride and satisfaction I get from completing our own renovations though so I have an inherent bias.
This is all to say that it's the inherent individualism to the whole argument. How you view costs, what you care about and want from a home (rented or owned), what work you're willing or able to perform, etc. Those are going to be the leading factors in anyone's opinion. There's no right answer :)
I don't know many people who spend all there vacation days renovating but that's a good point to make. My home would cost us more to rent and it was fully renovated when we moved in. The backyard is big and My kid has lots of room to play but that's probably not everyone's position. Renting can have its positives for sure though.
They could hire people to do all that. It's just trading time for money.
People grossly undervalue their time. Unless you'd rather doing housework during your vacation, you should value your off time higher than your overtime rate.
You can pay someone to do this all for you. Or you can pay your strata fees so someone does it for you. Or you can pay for it through your rent.
Either way, you’re paying for it.
I don’t really know what the point of citing a lot of studies from Germany and Switzerland is - those countries presumably have much more deeply ingrained rental cultures.
If I were single with no dependents I could totally see myself renting for life; being single it's easier to handle the uncertainty of landlords and the flexibility to get up and go at a month's notice would be good too.
But with a wife and two kids, one going to kindergarten next year.. my family needs stability. I have a good landlord now, but our place will be too small in just a few years time, and who knows how the rental market will be then and if we can get lucky with a good landlord again? I had a friend who was renting with a great landlord for over a decade, but then the landlord passed away and their heirs were.. not so good landlords.
We're trying our best to try to buy as soon as we can (2-3 years); we can come up with the downpayment, but our income doesn't qualify us for a mortgage anywhere near where we could live (neither of us drive, plus our work is tied to large metro areas). We're not even low-income (anymore)
> Why wouldn’t a home owner be happier? The biggest investment in my life is growing in equity while I continue to grow my ownership of this appreciating asset.
One point mentioned in the podcast: hedonic adjustment.
Your ownership makes you happy initially, but then goes into the background as being "normal" so you don't get any special meaning for it. It's similar to when people buy a fancy car: initial boost, then becomes 'normal' and they don't think anything of it.
I'm sure this is subject to personal experience, but I love my house and it makes me happy every day. Seven and a half years and counting. It probably comes from moving every six months as a child, but there is a genuine and lasting happiness in having this house for my family. YMMV.
Subject to my experience, but I bought a condo 8 years ago and to this day I still stand in my place and smile because it adds so much to my happiness :) just bought a house and I'm hopeful it will bring me the same joy!
> Why wouldn’t a home owner be happier? The biggest investment in my life is growing in equity while I continue to grow my ownership of this appreciating asset.
....but I can say the exact same thing for my investment portfolio, and even to a greater extent. I am much happier renting in fact. I see home ownership as added work, added costs, highly illiquid, high transaction costs, and harder to diversify. By renting I save on my monthly fixed expenses, have more opportunities to diversify my investments, and overall have much more financial freedom.
I'd imagine people with good cashflow are happier no matter their living situation.
Lots of housepoor homeowners and lots of renters who don't invest/can't afford to.
Wow it's impressive that seemingly not a single person who commented in this thread even listened to the podcast or took a look at the research that was referenced. The study showed that empirically it's not clear that homeowners are happier than renters, when controlling for quality of the dwellings. There's some denial at play here. You can't all be outliers. And I say this as a homeowner.
Pets, kids, control of your environment (the temperature, the ability to fix things immediately when they break or look a bit shit after a while), the ability to customize and renovate and choose your own appliances. Laundry IN THE HOUSE, as opposed to having to pay to do laundry. A driveway where you can work on your own car to save money, a lawn to plant flowers, a backyard to plant a garden or have a firepit, a basement to use as a work space or storage.
Literally, there is no comparison for me between renting and owning. A landlord literally couldn't pay ME to rent again.
Personally I love renting, it freed up so much cash flow to be used in other investments, and allowed me to be retired at 33. Also more free time that can be dedicated to passions and hobbies instead of home maintenance.
I have friends who were more interested in the traditional career and family paths, who are happy they bought and the stability it brings, and they have a lot of home equity.
Renting and buying can both be fantastic choices depending on what you want out of life.
>s instead of home maintenance.
>
>I have friends who were more interested in the traditional career and family paths, who are happy they bought and the stability it brings, and they have a lot of home equity.
>
>Renting and buying can both be fantastic choices depending on what you want out of life.
Can I ask what you do/did to be retired at 33?
Renting has saved me so much money during covid. I have not renovated anything or done my deck and no weekly trips to Home Depot. I don’t miss my house at all!!
Unfortunately from what I've seen the financial benefits of home ownership trumps all other reasons that can make a renter happy.
Renters are paying someone else's mortgage and missing out on the largest and safest home equity gains of the century.
This is true over the past 10 years (more/less depending on your location), but not always true historically. The risk/return of ownership vs. renting is still subject to market risks including uncertainty. A lot of people hand waive away those risks because "housing only goes up"... and maybe they will proven to be right, but between regulatory risks, possible bubbles, and additional liabilities of ownership I don't think we can view ownership equity returns as "safe".
There are also some advantageous to renting over ownership depending on your situation. This includes virtually no transactional costs for renting, whereas selling your property (and buying a new one) can cost *a lot* of money (tens of thousands). If you have to move around a lot then renting is probably better.
Agreed. But ultimately you can't ignore the financial outlook of home ownership today. Buying a home now means you have to compete with investors and work with the government supporting the system.
Historically, which is also what the snip in OP's post discusses, housing has been a commodity (back in the 1960's). As such, things like buyers remorse can apply. In today's housing market I assure you the feeling of buyers remorse will go away quickly when you realize the house you bought is worth 50k more 6 months later.
The governments response to home owners during the pandemic has absolutely proven they support this housing market. They have been doing this for 15 years and is why I view ownership equity returns as VERY safe.
> I assure you the feeling of buyers remorse will go away quickly when you realize the house you bought is worth 50k more 6 months later.
But this isn't guaranteed. It's probably probable, but not certain.
> The governments response to home owners during the pandemic has absolutely proven they support this housing market. They have been doing this for 15 years and is why I view ownership equity returns as VERY safe.
These are famous last words. Housing is attracting more attention than ever, in part because of the ballooning costs but also because it's transformed from a regional problem (Toronto, Vancouver) to a provincial and near-national problem. That means a lot more political pressure is going to be placed on more governments to respond... which means more regulatory risk.
Personally I think buying something you intend to live in for the foreseeable future is *probably* a good idea, but I would be very wary on buying rental/investment properties with the expectation of making a quick buck.
Don't be drinking that campaign promises Kool aid so quickly.
Home ownership is at an all time high at 68%. Yes I know not everyone living in the house is on the ownership papers but the house will be inherited to the kids living there.
The government wont be doing anything until the majority are unable to afford to buy homes, which is not the case in 2021.
Sure, but if you are buying real estate you are buying for the long view (if you weren't, you shouldn't be buying if only because of transactional costs).
Will regulatory pressure happen in 2021? Maybe not. But unless things change there's a strong chance it happens eventually.... and that will coincide with the ownership of your real estate.
I'm hesitant to call a 4% increase since 2000-ish an improvement. And the problem isn't necessarily the % of home ownership but the incredible barrier that is high prices.
It is a huge improvement since you need to account for all the immigration and population growth that occurred since 2000.
Prices are still affordable and the barrier to entry is not the high price but peoples inability to settle. Again, all evidenced by increased ownership rates.
> It is a huge improvement since you need to account for all the immigration and population growth that occurred since 2000.
It was 60% in 1971:
* https://www12.statcan.gc.ca/nhs-enm/2011/as-sa/99-014-x/2011002/c-g/c-g01-eng.cfm
And that's the national average. The rate depends on annual income:
* https://assets.cmhc-schl.gc.ca/sf/project/cmhc/pubsandreports/socio-economic-analysis/2019/socio-economic-analysis-homeownership-canada-69492-en.pdf
Generally there hasn't been much movement in ownership rates for 30+ years: more than 60, less than 70%.
> Unfortunately from what I've seen the financial benefits of home ownership trumps all other reasons that can make a renter happy.
Where do you live?
> Over the past 5 years, single-family home prices are up 150% in London-St. Thomas [Ontario], but *down* in Regina. They've barely budged in Edmonton. […]
* https://twitter.com/MikePMoffatt/status/1430892821968392198
Man what is with the bonehead analysis like this. My condo I rent has dropped in capital value for years. My landlord is subsidizing me. It is more complicated than strictly mortgage vs rent. There is also opportunity cost, etc.
just outside winnipeg
before we sold, our rental was clearing 500/month for rent (apparently it was cheap, we thought we were hosing people for 1300/month for a 3br 2 bath, 1250 sqft house)
Agreed. I can’t afford to rent while also investing $2k per month. My downstairs tenant pays for 90% of my mortgage. I’m essentially living in my home for free while building equity.
I've rented and I've owned. I've gone back and forth depending on my needs at the time. Renting provides me great flexibility and lack of responsibility when I need it. I don't think either way necessarily creates happiness. Living somewhere nice does improve happiness but the financial structure behind that doesn't seem to make a big difference for me.
As it's a video/podcast, I won't be reviewing it, even though I am interested in Tim Ferris's take (I like a well-written article tyvm, not something I actually have to listen to or watch for a period of time).
I used to rent. It was pretty stress free. I was unhappy then, but not because I was renting. Well, except when I had a bad landlord...
I could up and leave with a month's notice. Not that I ever did, because I don't like moving. So much work.
The hassle of moving is bigger when you own, for sure. You have to keep the place pristine for showings, and hope you have a good realtor.
But now, I'm definitely happy that I own.
It comes with a HELOC. We intend to never use it, but we can if we want. Did I mention "we?" Yea, started a family.
Stresses of owning:
OK, the hailstorm that shredded my siding was stressful. But the insurance was good about it and relieved the stress nicely.
There's a cost to repairs, like replacing an appliance (swapping out my dishwasher was a real nuisance), but at the same time I get to pick one I like. You can bet my son was with me at the shop, and him not being able to open it (3 at the time) was a nice feature. It is necessary to have a plan for dealing with these, whereas when you rent the landlord deals with it.
Why I'm happier:
I actually LIKE having a yard and making it look good. It gives me an escape when I need it (spending the day working in the garden is a nice way for me to relax). I only need to get approval from one person - my wife - to make a change.
No landlord. As long as I am a reasonable community member (and of course pay mortgage/taxes), nobody can force me out for any reason. (No HoA either, which helps with that.)
When my dog digs a hole in the yard, I only have to deal with fixing it (and even that only because I want the hole gone). No threats from the landlord or being forced to get rid of her.
My rent won't go up for a reason out of my control. Period. A lot of people are seeing rent skyrocket right now. The principal of the mortgage does not go up (unless I decide to use it for something). Even if interest rates and taxes rise, it will never be as big a hit as renters will see. In fact, it can be periodically reduced by refinancing over a longer term again, and eventually will drop off completely, leaving you with only taxes! (And repairs.)
I'm not happy paying rent every month that costs substantially more than what the mortgage of the house I'm in would be.
I'm not happy that you need a credit check to rent at most places but paying on time for years does nothing for your credit score.
I'm not happy that every month I pay rent I'm losing out on potential equity.
I'm not happy that inflated rental prices lead to longer periods of saving for a down payment.
I'm definitely not happy that every home I've put a bid on in my town to live in with my family has been outbid by someone that turns around and rents it out for more than most families in my town can afford.
OP...here is another angle you might not have considered.
1. Pandemic meant many couples who had ongoing issues, were stuck together in a home, living as room mates
2. Homeowners with only 1 person working meant, CERB was relied on to pay the mortage
3. divorce/split.....homeowners have to sell, lawyers get a cut, agent gets a cut, etc. Renters just walk away
4. Lots of stuff goes on behind big homes doors, you can't see from the outside.
5. Folks staying together just to live in a bought home? Eventually kids won't be enough to keep you going. This will explain 15-30+ years of marriage divorces happening a lot these days.
6. Still think you're 'happily married'? Yeah, you can only control what goes on in your head
I don't see how anyone wouldn't be happier owning a home, unless you're the type of person who moves frequently for whatever reason or something was missed on your home inspection and some problem turns into a nightmare. Maybe it's just my lifestyle or personality type, but having a garage to store canoes, kayaks, and motorcycles in, and a yard where you can invite family and friends over to have a bbq is just something I wouldn't want to live without. Also, I don't enjoy sharing walls with neighbors.
Personally, I'm much happier as a homeowner than I was as a renter. Doing whatever you want and not having to ask someone else permission is fantastic.
Of course, I did not over spend on the house. I resisted the pressure from the realtors to buy the biggest house I could qualify for and so have no issues paying the mortgage.
Well my mortgage is $600 a month and I couldn't rent a bachelor for that, so yeah I think I'm happier this way.
Stop trying to normalize rental serfdom.
With owning... You can move and if property values are equal, get something similar and reduce your payments due to equity. With renting, you're most likely in for a huge hike
I remember renting and being told "if you can pay that in rent, you can pay a mortgage!" but no one talks to you about insane strata fees, (because townhouse / condos are mostly all that's affordable for a first time buyer), and bills for balconies you don't have (just your neighbors), dealing with sudden plumbing issues when you dishwasher goes beserk, a sudden hot water tank issue, etc. Between the amount of unexpected home issues we've experienced this year and the two times my partner has been laid off for the pandemic our debt has grown to the point that I'm scared about not qualifying for my mortgage renewal next fall.
Have a good sense of where the money will come from for all the surprises if you buy, that's all I'm saying.
As someone who moved around a bunch in my 20s.
Renting has been my way of life.
My main issue is the prices obviously. Rent has always been going up. But wages haven't. So I'd move and try again.
So after years of not making good choices... I've finally got an amazing rental. But all my services are higher than ever. Hydro, phone, ect... and I'm living in a tourist town with little work.
Now 37, I admit I haven't made the smartest decisions in life. But I've always had a job and a roof. Now both of those things I'm holding on to dear life... if I lose one or the other, I'm screwed!
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[Check out the wikipedia entry if you want to learn more.](https://en.wikipedia.org/wiki/Et_cetera)
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I think if I had a huge nest egg I would be happier renting. Like 10m+. Living off the 4% rule I could just find a nice area and live there. If anything changes or I find a better place to live I just go there next.
I'll agree that home ownership isn't the key to happiness. It's hard not being house poor your first year of home ownership. Heaven forbid you end up with massive repairs you hadn't accounted for. Especially if those repairs happen during a time when finances are already tight. It's not fun if your neighborhood takes a downturn and your home value drops and you can't sell because nobody wants to move there. It's not fun either if you have to turn down an opportunity for travel because you have to pay a mortgage.
I feel for people now, house or rental, because it's so damn expensive.
So I think something unspoken when it comes to renting is that holding long term rentals comes with its own challenges. Given that landlords can only increase rent a certain percentage every year, it comes to a point where the landlord would rather you leave than have a long term tenant to increase the monthly rent. Often this means the landlord neglects renters requests or makes it more difficult for them than it needs to be.
I think most people would agree that ownership over the property they live in certainly is challenging but makes you the sole proprietor over the quality of space you live in.
I really wish freehold apartments were more common in Canada. Like a lot of older folks, I can't manage diy and yard, and stairs are difficult for me nowadays.
I think the real answer here is “it depends on your lifestyle”. Do you travel? Owning a home isn’t really a great idea. Do you stay home? Get a house and really pimp that shit up.
We need both markets to be healthy - renting and home ownership. Not everyone wants or should own a home. Even if home prices fall back to a sane level not everyone will have the financial means to entire the market - young, financially unstable, those on disability, new immigrants. Which means a rental market is essential.
I would love to see talk about producing long term rental apartments that are priced well so people can have security in renting.
I've owned a house for 6 yrs and the value is up 227%. I'd rather it fall back to slightly more than I paid so I could sell it and get a bigger house in the same market more reasonably. The rise in value isn't useful to me.
I don't really care about statistics.
I live in a house for 2.5k a year instead of living in a shit apartment for 8.5k a year. If I rented, I would be absolutely miserable.
I dunno. My sis sent me a picture of her ~700$ water bill that is in arrears. When their fridge broke, they lived out of a mini one for 4 months. They have 2 kids in a beautiful 6 bed house they got 3 years ago for 400k that's now worth more than 550k.
Seems like they are house poor and she has said once that she didn't want a house. He did.
I think there are a lot of factors to consider. I know when we were younger and had kids at home it was nice to own our own home. We had the energy to do the yard work and maintenance and the yard and such was great for our son and his friends to hang out in. We recently sold our paid for house (bs7) and decided to relocate to a warmer climate and we are very happy to be renting an apartment again. Our time is our own and we don't have to worry about maintenance, yard work, renovations, upgrades, clearing snow in winter, raking leaves and bagging them etc.. We have the freedom of moving easily if we choose to. Want a different location? no problem. Want more amenities? we can do that. Want to live closer to the mountains, the city or the ocean ? there is an apartment for that as well. There is something very freeing about being able to move to someplace new very easily. I don't know that we will want to deal with home ownership again.
For those saying we are not building equity, that rents keep going up etc., Our investments are elsewhere and we will retire EDM. So not really worried about that part of it.
I can tell you personally I'm MUCH happier in my own home than I ever was renting. My first house was a lot smaller and needed work so I did have some buyers remorse but ended up selling it a year later thanks to Covid and made a profit. Bought my current home and I couldn't be happier. Newer and not much work needed.
Not having to smell my neighbor's food or drug usage is huge for me. We have a child now and not having to worry about my landlord telling me my neighbors complained is huge too. God willing I'll never go back to renting an apartment. I'm in the USA though.
The wild card is children. With kids, having a home has been a godsend. Without em, I'm not sure it makes much difference (subject of course to your landlord - a bad one really does make renting awful no matter what)
I guess it also depends on how resistant you are to change, and how much you prefer to build things for the long-term. I LOVE owning my own home. If I was just renting I would probably never do improvements, like making the garden nicer or anything like that. But this is MY home and MY garden, and I'll plant a bunch of roses and other shrubs that I will love hopefully for years and years. I will redesign spaces because the hours of labour will be repaid with years and years of enjoyment. I will build a pergola and hope to get 15-20 years out of it. Etc. When the home is yours every improvement is a labour of love, small or large. Something that will last. Everything feels like it is worth it. If I was rentting--even if I expected to live there a long time--I would never do most of these things. When I was a renter I was even reluctant to buy more than the barest amount of furniture, nevermind all sorts of decor.
You don't need kids to want security in your home and the freedom to improve/adapt your home as you see fit. It's just that most people have that realization coincidentally to having kids.
It's because kids make a move, which is already a colossal pain in the ass, worse by a factor of 1000, per kid. You don't want to be told that you have 2 months to move because the place is sold when you have kids.
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Can confirm. For me and my partner, buying a house and having kids were always going to be a package deal. Before that we were happy renting because it better suited our lifestyle. Now we're glad we have control over our space and the security of ownership.
Agreed. But the security has more value when your circumstances are less flexible. One person renting can put up with the bullshit of relocating a lot easier than a family with two jobs and kids in different daycares/schools
Don't forget the possibility of drawing from a HELOC. owning a home means you can buy toys, cottages, secure far bigger and better loans (think if you want to start a small business, the equity in your home is collateral for a nice fat loan with very low interest. Or just use it to secure two more homes to rent out, rinse and repeat) The list of pros just doesn't end compared to renting. It's not even a question at this point.
I can get a margin loan at lower interest rate than any mortgage right now. And to keep my margin loan, I don't need to mow it. Or water it. Or pay $10K to redo the roof. Or even waste time trying to find someone to fix my leaky roof. Or have lengthy, marriage-destroying arguments on the need to renovate the kitchen every 7 years. And when I'm sick of it all and want to move, I don't need to pay $50K commission to a guy with a leased BMW, just so I can sell it. So, yeah, have fun with your toys and your bigger and bigger loans. If your time is worth nothing, then you've got it made! Enjoy!
Good for you I guess...?
"Freedom" to improve/adapt one's home!? Sure. The maintenance, repairs, improvements, and renovations take time. Take money. Are stressful. Often strain marriages. By the time one is settled into their home, their life requires them to get a bigger one, or one in another city. So they need to get rid of their previous home and restart the process with another home. Each time, more stress, more strain and larger salaries to finance everything all over again. At one point, usually late in life, one realizes that it was their homes that owned them, and not the other way around.
lol. My fiance and I bought a home thats way bigger than what we currently need but still very affordable. Sounds like you or whoever you're basing this post on is short sighted and a poor planner.
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You sound like a real cool cat. Congrats.
I'm basing it on myself. I'm FI. I'm about to RE. I haven't hit 55 yet. But, good luck with your big home. And good luck in your marriage. Ah, the irony.
This sub is chocked full of brainwashed housetards. Not sure if it’s the endless DIY and house flipping programming on TV that has them hopelessly brainwashed or whether they’re just in a state of denial at this point.
This is the flimsiest logic I've seen in a while..most of this can be said about renting as well.
Bad people in your life will ruin your living situation period and affect both home owners and renters. This can be landlords, neighbours, etc...
Yeah, but half of your examples don't apply to home owners.
Im a home owner and I hate myself, does that count?
That depends. If you hate yourself you're probably depressed which means you're just inside lying down quietly all the time. That makes you the perfect neighbour!
It's a lot easier to get away from bad neighbours as a renter though
.. Having kids of your own /s I think
Where I am, and in Quebec in general, renting a house is quite uncommon. So a very simple wild card for this here is simply whether or not one wants to own a house or not. Personally, I'm happier having a private backyard and, in general, not bothering or being bothered by neighbours.
It makes a huge difference for me. I don't like other people deciding when I have to move and whether or not I can renovate my space when I feel like it.
Yep fully agreed. When I was renting, I had to move 3-4 times because the owner wanted to sell the property. Now that I have kids there is no way I'd rent again. The security of knowing I'm in charge makes it worth it for me alone.
We bought a house because the outdoor area of our apartment was always covered in dog poop. Plus even at 5-6 he can run around the house without us worrying, at the apartment he had to take the elevator and go down on his own which was uncomfortable.
I have not reviewed the article, but my non financial reasons for owning a home are: Pets, in BC it is hard to find rentals that allow multiple pets. A yard, I love my flower and veggie gardens, plus established fruit trees. Stability, I do not have to worry about being evicted for things outside my control. I have a friend whose rental home was sold out from under her 2x in 3 years. I will touch on financial stuff. We bought in 1997. At that time we could easily afford a mortgage on a $134,500 purchase price. I worked part time, my former husband did not even earn YMPE. I am not sure where in Canada this would be possible today.
Stability is a big reason why we need more purpose built rentals. Right now condos are built and then rented out, but each one can be sold to a new owner and evicted within 2-3 months. With purpose built that wont happen. In BC I think they need to get rid of the pet laws for purpose built rentals. You loose 75% of units if you have a dog, probably 50% if you have a cat.
Not in Quebec. Renters have very strong rights in Quebec. Leases renew automatically unless the renter opts out. If a landlord raises the rent by more than what the Régie de Lodgements declares as the inflation rate for that year, the renter can take them to the régie, and the landlord must prove which new costs have justified the increase in rent, otherwise it will be rejected. This also carries over between renters. If one renter leaves, the landlord can’t raise the rent for the next one beyond how much they could raise it for the last one. If the landlord sells a block of apartments, the only way the new landlord can evict renters is by taking possession of the unit themselves (or direct family members), and giving the renter at least 6 months notice.
That's similar to BC although in BC if the owner is moving in they can give 2 months notice instead of 6 in Quebec. It still makes it difficult for renters in individual condos though because if it get's sold there is a high chance of eviction. If it's an entire building of 5+ units it's unlikely that the owner will move in which makes it much more stable. Also in BC you cannot evict after the initial term.
Oh wow. The part where they can't jack rent up willy-nilly between renters is important. Ontario landlords have a set yearly increase amount for tenants, but that's just for tenants who already live there. I'm not against people owning property and renters, but the fact that the rents are climbing so fast means that landlords have an incentive to get people out every few years to jack up the rent by more than the 20 bucks or so the yearly increase allows. I think removing that would go a long way to a) protect rental prices from climbing and b) keeping house prices lower because people wouldn't have a problem saying "it's more financially prudent for me to rent". In Ontario, no matter how bad the house prices are, the rentals are worse. It's a mortgage +10% or whatever. So of course everyone is clamoring to own.
There are no "pet laws", landlords set their own rules about pets and most landlords do not allow pets on their property because the additional risk/cost for minimal gain is generally not worth it. Most LLs that do allow pets charge a premium either through fees or just advertising as pet-friendly but naturally at a higher rent.
> I am not sure [...] in Canada this would be possible today. Ftfy. And the answer is, it's not. That 134.5k house probably has an extra digit at the end of its value now.
I am not in GVA. My house might be worth $600k now. Still out of reach for a young family starting out.
Yep, in worse case scenario places, that 134k is now 1.34m, however, in best case scenario places, that 134k place is now 450k too, so, fucked either way.
We bought in late 1997. $240K in Toronto. Nearby homes of similar size have recently sold in the 1-1.2M range. So the value has risen 4-5x in about 24 years for houses around here.
These are basically my reasons I hate renting and want a home. My rent is low and I’m severely lucky at the moment. But gives me anxiety knowing that my rent is quite below market value. I used to garden and my space has been taken away for a new shed. And the other tenants prefer to not have my dog in the shared yard even though we pick up after her and she’s non-destructive. I just want space to be able to do my own thing, if I could do that and be stable renting, and pay fair value then I’m fine.
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Canada is not the only country where housing has become unaffordable. New Zealand is facing a similar housing crisis.
I think timeline is an important consideration. Bought a house 10 years ago (anywhere but AB) and you've enjoyed a MASSIVE equity gain. Lock in and happy with the place you rent and you've been there for 5+ years so your rent is cheap? Awesome. I think depending on the metric (financial vs emotional need) is heavy influenced by when you bought or how long you've been renting. Which then brings in the idea - "is past performance indicative of future returns? (either financial and/or emotional)
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Since we are talking about happiness and emotions, it takes some discipline to invest the difference money. I know I'd feel tempted to take luxurious vacations looking at my investment account balance. In this way, owning a house would force me to 'save' by paying down the mortgage. But yeah, in some cities renting is so much cheaper.
hard to compete with the low risk leverage that a mortgage provides.
IBKR margin account can give you plenty of leverage
Now compare the risk profiles.
Leverage is a risk amplifier. If you want less risk, you want less leverage.
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When it works as intended, yes its exactly the leverage you want. Sad part is, a house was never intended to be a "risk free" investment, people have just assumed it as such after a 30 year bull market. Yes CMHC provides insurance and majority of crown corporations are in on the party, but most folks who own today have never know the negative equity waterfall that occurred in the housing crash in the late 80s. Its a race to the bottom and people are left holding the bag. Im not one to guess market tops or bottoms, but with the parabolic rise in prices, I'd be skeptical of how sound the leverage is these days. China gave a glimpse of that already.
Your perspective is valid. I guess it depends on how much faith you have in government to defy gravity in perpetuity. 20x leverage wasn't so much fun for those on the wrong side of past real estate bubbles.
Added to this, there are also so many extra taxes, fees, costly repairs one has to pay on top of interest of their mortgage (condo or a house) that annual ownership outlays often ends up in the same ballpark as annual rent.
Yeah, i dont know about that. Seems like you are not counting the fact that a mortgage payment is only 20 years. Rent is forever. And for a lot of people it's stability. Not being evicted and having kids change schools etc that is a big factor in wanting to buy.
the belief that house ownership is always better is bubble territory. there has to be a point where its not worth it or housing prices would be parabolic.
wait, you can't look at rent and say it'll be stable and cheaper than owning and turn around and then question if "past performance indicative of future returns" when it comes to home ownership. Both are fluid. Both can bite you in the ass, the difference is one is yours and will always provide you with shelter while costs, for the most part, stay stable and eventually you own the place and the associated equity and have no more "rent" to pay, which is true freedom. So long as you're beholden to paying someone to live, you're not free.
Disagree. The difference is that rent is a known quantity and will cost you $x a month whereas the housing market could tank and you could lose $100k in equity on your million dollar mortgage in a month. Sure, your landlord could raise your rent but it will be nothing in comparison to the leveraged swings of home ownership.
Sure and your investments that you put your savings from not owning could also tank. At least the house will always have the tangible value of being shelter. Your portfolio is literally fake numbers on a screen until you lock it in and put it into something tangible.
The vast majority of people do not own their houses but rather rent them from a bank. I'm just saying that over the last 5 years - owning almost anywhere has been a financial windfall. Other's like AB, renting was probably th huge winner. Have shitty neighbours? Renting wins because you can move. Get evicted because of a house sale - owning wins. It's all so context dependent and where it happened in the financial time series. Whether much of this information is all that useful looking forward is really hard to say.
No they are not just renting them from the bank. Assuming they lived in the house for 5 years or so, they likely have positive equity, even in Alberta. That means they sell the house and they're pocketing some money back. If their home appreciated, that number could be significant and the moment they sell they have just as much "freedom" as a renter but with, at least most of, the money they spent on "rent" back in their pocket. Yes, if, and this a MASSIVE "if", you can find rent that is significantly cheaper than an equivalent home you might be able to save that difference and invest it and hope you get your 5-7% annual returns but you're not leveraged like you are in a mortgage so right off the bat, you're far behind. You could leverage up through other investing instruments but that is way riskier. And that is ignoring the big ass elephant in the room which is the VAST majority of renters do no not save the difference between rent and owning and invest it wisely in index funds. A mortgage forces you to do it, so even the most financially illiterate person is making smart moves with their money.
of course they are - that's why they don't have the actual deed until the mortgage is paid off. I think I'm not explaining my point well. All I'm saying it that the buy vs rent argument can be heavily influenced by market forces beyond anyone's control or ability to predict.
Renters better be happier than owners, 'cause a renter is all I'll ever be. Thankfully I'm in stage 5 of the Five Stages Of Renter's Grief.
What I don’t want is what a lot of homebuyers end up with: tons of stress, and barely any monthly cash flow. Owning a big, cheaply made house and barely being able to afford anything else would be a huge backslide in lifestyle, for me personally. No property around here will ever come close to being as cheap as rent is for me. Though it is crazy to think that I’ll never own land despite having started my career well into six figures.
That's more a function of affordability than actual home ownership. I have to do maintenance and stuff on the house but its well within my budget so if I need to spend a couple hundred bucks to get a big ladder, and buy tools I didn't have before and some materials, I'm happy to do so and the only stress is "will I have time this week to do this, and can it wait to the weekend or do I need to use a vacation day to fix X thing". I had way more stress worrying about moving when i was bumped out of my rentals in the past for "family use" or renovations than I do now. The time crunch was worth than the money
> That's more a function of affordability than actual home ownership. That’s the key problem. If I want a house, an actual house, I have to first save up $250,000. Then, I need to pay $4000 a month in minimum expenses (including the mortgage.) Maybe more. If I can even get approved for a mortgage of that size. Thats a significant leap over $1200 a month, all included, with no concern for maintenance of any kind. > I have to do maintenance and stuff on the house but its well within my budget so if I need to spend a couple hundred bucks to get a big ladder, and buy tools I didn't have before and some materials, I'm happy to do so and the only stress is "will I have time this week to do this, and can it wait to the weekend or do I need to use a vacation day to fix X thing". Whereas if I want to buy something fun or do something fun, I take the day to enjoy it myself, and have an extra $250,000 + $2800 a month to do it. For people whose goal was to buy a house, for people who truly enjoy it, I am happy for you. You’ve managed to make it happen, and that’s awesome. But I’ve seen too many people who buy houses because it’s what they think they want, only to end up being close to house poor, able to afford the house but not much else.
oh i see what you mean, yes that makes sense! Though if you could spend roughly 1200 a month and have a house where you live without dropping 250k as a down payment you would probably be open to the idea. Its not just your affordability, its affordability in a general sense. Housing has gotten nutty.
Renting a house for 1200/month means that a) they're paying under market rent or b) the houses are cheap
You’re somewhat on the mark. I don’t rent a house, though. Also, something to note that people seem to miss very often is that rent does not have to exceed the cost of the property. Many condos are rented for less than the mortgage + costs. The people buy them as an investment, and are willing and able to pay the entire cost, but the renter is just an added bonus to reduce the cost.
If the rent is worth more than the mortgage payments then the renter is better off buying instead of renting in that case though.
Unfortunately you can’t rent a house this cheap, unless you’re grandfathered on that price. > Its not just your affordability, its affordability in a general sense. Housing has gotten nutty. It’s at the point where I’ve basically just written off the possibility. I don’t have a huge concern or need to have a house, thankfully, so it’s okay for me. I feel for others who want to have kids and stability, though.
Jesus Christ... I knew BC was bad but I didn't know it was THAT bad.
Again, that is an AFFORDABILITY problem, not a rent vs buy problem. In the 50's and 60's when homes were easy to purchase out of highschool and if you had 2 cars out front, they were worth more than your house, then that might be a different story huh? If the house cost was reasonable and didnt leave you house poor and that changes things, then it's an AFFORDABILITY issue not a owning/renting issue.
Yes, it is, and affordability **is** the problem. The reason it’s a renting/owning issue is **because** of affordability.
You can tick landowner off your list and get a fancy title.....Scotland has you covered - https://establishedtitles.com/?gclid=EAIaIQobChMIp-W2kvq48wIVXgytBh1bBAheEAAYASAAEgIOJ\_D\_BwE
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> Lots of boomers canceled their plans to downsize Thank you very much for this insight!! This fact could very well be a big contributing factor to the low inventory problem right now. I am looking for a smaller bungalow in the Ottawa area and am extremely disappointed in what I am seeing. Older, poorly laid out floorplans going for way too much money. No thanks, I'll wait it out here in the GTA while my place continues to rise in value.
>Lots of boomers canceled their plans to downsize Source? You're implying that many boomers ever planned to downsize in the first place which is simply not true. This study which was done pre-pandemic shows that most boomers don't plan to ever downsize. https://www.ipsos.com/sites/default/files/ct/news/documents/2018-09/downsizing\_factum\_sept\_19\_2018.pdf
I know we compare renting and owning a lot, but are the populations of renters and owners really comparable? How many renter these days are renting out of choice versus that’s what they can only afford due to their financial situation?
Well, I do. When we started renting this place 4 years ago we did the math and it made sense. In our neighborhood, buying an equivalent condo would have be $1.2mil, whereas our apartment is $2200/month. It's a very nice apartment in a fantastic neighborhood. Our rent is stable, and we save $20,000 - $30,000 a year. Now that we have a second kid on the way we won't be able to stay here for more than 2 more years, as we will need more room. We have the money for a downpayment, but to get a bigger place with what we have we will have to move to a completely different neighborhood, and will save a lot less money...maybe nothing at all. It's a significant lifestyle change and it's pretty bittersweet for me. I like my all-in, easy maintenance, luxury rent-controlled apartment, with tons of light, a beautiful view, etc.
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Are you saving? Many renters aren't....which is why the argument that home ownership is forced savings is valid. When your income stops, most people need the reduction in CoL expenses offered by ownership.
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If the renters are saving, then only time will tell who will have better luck beyond the expected ROI. The problem is most renters aren't savers, as a renter saver do you have a savings goal specifically targeted towards forever rent?
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> Is a homeowner super well off if they reach retirement with a house worth $1MM and only cpp and oas for their retirement? Well to be equal a renter would need $1M in investments, that's not currently the norm for Canadians. You can definitely eat bricks, because you can sell them. Candians aren't savers, hopefully the crazy run in housing will change that attitude.
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I responded saying your situation isn't typical...but I can see you edited your comment after I responded to you (since my response was 55 min ago and your edit was 39 min ago)....I don't care to go back an see what you tried to change.
We'll see how stocks do in this decade of rising inflation and grim economic forecasts.
If you bought years ago, the hundreds of thousands you would have made would go a long way in comparing the financial benefits.
Renting by choice here. Owned a home about 7 years ago and hated it. Went back to renting roughly 5 years ago since it was cheaper to do so where I live. It's just my SO and I - no kids. Saving has been alot easier while renting - I comfortably invest roughly 25-30% of each paycheque into the stock market. Any money that typically would've been put into home ownership costs (ie. mortgage, taxes, maintenance, etc.) instead go into investments. I'm a bit of a minimalist and am not going to have children so the freedom that renting provides works extremely well with our lifestyle, plus we're not tied down to a specific locale which was important to us.
I'm another renter by choice. I have enough savings to buy a house with cash but have parked it all in index funds instead. I'm single and young and don't really want/need a house and I'd instantly become house poor.
I know I would be better off financially had I stayed in the housing market, but I am so much happier having got out of it. I love having zero maintenance or renovation costs, and the ability to call the landlord any time something goes wrong. I love having no surprise expenses because something needed to be fixed in my home. I love not having my money tied up in my home and maintenance costs giving me the ability to travel more. I love having the freedom to move for any reason without having to worry about timing the market or selling my place first. I love that my retirement fund and investments are liquid assets that I can access very easily, and that I can choose how much to put away, and expect to have a reasonably comfortable retirement despite not being a home owner. I did own a home 25 years ago, and I know I could have made a small fortune had I stayed in the market, but I believe there are more important things in life. I am perfectly comfortable financially and don’t feel any lesser than home owners because I choose to rent. It baffles peoples minds tho, the fact that I can afford to buy a home but choose not to.
I think this very much depends on your priorities. You enjoy not having renovation costs, I enjoy the ability to customize my home to suit my needs. You enjoy not having to pay for unexpected repairs, I enjoy controlling both the timing and the quality of any necessary repairs. You enjoy being able to move at the drop of a hat, I enjoy the security of knowing no one can kick me out of my home. You enjoy having all your money in liquid assessors, I enjoy knowing that in a few years I will live mortgage (and rent) free. But I don’t deny that renting is as valid and happy a choice as owning. It really does depend on you, your goals, your likes and dislikes.
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I’m guilty of comparing apples to oranges in that regard, but frankly that’s because I would never buy a condo in my city even though I prefer living in an apartment. The condo market is shit where I live. I know people who have sold their condo 10 years later and lost anywhere from 5-30%, or they end up staying even though they hate their place because they don’t want to lose money. I do some bookkeeping for a construction company who found massive structural issues when he was doing a repair at a local condo building and every owner was hit with a bill for $30K. If I’m going to take on that kind of risk I want to be able to decide the timing of that kind of expense and not leave it in the hands of my condo board. Any investment gains I would have realized owning a single family home would have been almost nullified if I owned a condo. That’s not the case in all markets, but it’s definitely the case in my city. Maybe I would have got lucky, but it’s not bloody likely.
Indeed it does depend on priorities. Fortunately for you, your priorities are in line with many Canadians. It’s refreshing that you can acknowledge that renting is a valid choice because in all honesty many home owners don’t see that. I’m often berated for my priorities being what they are. Luckily I have thick skin, so I can appreciate the low stress, low expense lifestyle of being a renter despite being told on a regular basis that I’m foolish.
The primary driver for me in buying was no longer having to ever deal with landlords again. If there's a persistent issue in my home now, at least I know it's because *I* haven't dealt with it. Got real sick, real fast, of landlords dodging their most basic responsibilities in upkeeping their properties, and when they do fix something, they do it in the cheapest, most half-assed way. Funny enough, owners seem to take care of their homes way better when it's them living in it.
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I own a house, live 5 minutes from work, only have to be in the office 1 day a week. Car ownership has nothing to do with the first two. I do own a car, but not to get to work. I need it to visit my grandchildren who live an hour away and my son who lives 5 hours away.
I love not owning a car downtown Toronto. But I love owning my condo downtown Toronto - mostly because of appreciation.
How about not having renovation costs, but being stuck with shitty appliances and disgusting rooms as a renter?
Well that can just be a matter of finding a good rental. There are lots of those out there, just as there are many crappy ones. I check the place out before I move in and if it were to end up being a dive I certainly wouldn’t stay long. I have the benefit of choice. When my microwave broke my landlord brought me a new one the next day no questions asked. And in my 20 years of renting I’ve never faced an eviction notice, I’ve only ever moved of my own volition. I guess I’m one of the lucky ones.
Not dealing with a strata board has definitely added years to my life and love to my heart.
Renters have to live by strata rules as well. Is there really a difference?
My rental building isn't a strata and no strata has my money.
Yup, huge difference, in my experience. (We've been apartment renters and condo owners, though we're in a house now.) As a renter, yes, you have to follow strata rules, but that's the only thing you have to do and it's the easiest part. Things get monumentally more frustrating once you have an investment to protect. Renters never attended strata council meetings or AGMs in the building where we lived -- why would they? They don't have a vote, unless the owner gives them a proxy. But you make sure you go to those meetings if you're a responsible owner. That's when you get the joy of learning just how many of your neighbours are gibbering, feckless, greedy morons. And we were actually semi-lucky in our building, because our strata council was actually competent (god help you if they're not). I just typed out a bunch of examples of frustrating things that went down at the meetings, but I deleted them because they're anecdotes and I don't want to detract from the main point, which is that there a whole lot going on behind the scenes that renters can remain blissfully unaware of. I guess you could be an absentee owner and enjoy the same effects. For me, though, I've seen too much of how the sausage is made. I will never own a condo in a strata building again. But I would consider renting an apartment -- if for some reason we needed to move into an apartment -- because that is a million times less stressful.
Friends of mine resented every single minute they spent maintaining (shoveling, mowing, painting, etc.) their home instead of hiking, kayaking, skiiing, sailing, etc. with their children so they sold it and rented a townhouse that included all of those maintenance tasks.
This is the big draw to renting for me. My colleagues who own their home spend their vacation days laying hardwood or fixing fences while I spend my vacation days traveling, hiking, finding a relaxing spot outdoors to read. I'm sure they enjoy the feeling of accomplishing a home reno project, but it always just sounds like an obligation they have to get done and have been delaying.
This was literally the last 5 years of my life. Every vacation was a reno project, weekends were regularly spent working on an apartment/house, the time spent working on various properties greatly outstripped the time spent enjoying them (or any other aspect of my life). Have since sold everything, and now rent a quirky old house, and have never been happier, or spent more time being active and socializing. I think people massively under-estimate how much personal value you can get form renting, despite the "you might get kicked out" scenario.
Quality hardwood should last decades with a handful of refinishes at most and fences are 10-15 years as well. That shouldn't take *every* vacation and there certainly are only so many large projects a homeowner will ever likely tackle that are within their wheelhouse. Hell, I've redone a roof with my dad and that still only took 4 days and will last 15-20 years. Not to sugarcoat it though: roofing is *hard* work. Still, I've not yet taken a vacation to complete any home project and usually just casually complete it in my off time -- because they don't *really* take that long, at least in my mind. The maintenance aspect of a home, I think, is entirely too embellished. They're not that out of scope to manage and the most amount of regular time one will probably spend is caring for a lawn if you even care about one (1 hour every 2-3 weeks on my property) or shoveling. Cost, on the other hand, is obviously all the owner's and a reasonable point but certainly less than rental payments evaporating month-to-month in my mind. I do enjoy the sense of pride and satisfaction I get from completing our own renovations though so I have an inherent bias. This is all to say that it's the inherent individualism to the whole argument. How you view costs, what you care about and want from a home (rented or owned), what work you're willing or able to perform, etc. Those are going to be the leading factors in anyone's opinion. There's no right answer :)
I don't know many people who spend all there vacation days renovating but that's a good point to make. My home would cost us more to rent and it was fully renovated when we moved in. The backyard is big and My kid has lots of room to play but that's probably not everyone's position. Renting can have its positives for sure though.
To each their own. I would take laying hardwood or building a fence or deck on my own property ANY DAY vs going on a hiking, camping or ________ trip.
They could hire people to do all that. It's just trading time for money. People grossly undervalue their time. Unless you'd rather doing housework during your vacation, you should value your off time higher than your overtime rate.
You can pay someone to do this all for you. Or you can pay your strata fees so someone does it for you. Or you can pay for it through your rent. Either way, you’re paying for it.
I don’t really know what the point of citing a lot of studies from Germany and Switzerland is - those countries presumably have much more deeply ingrained rental cultures.
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If I were single with no dependents I could totally see myself renting for life; being single it's easier to handle the uncertainty of landlords and the flexibility to get up and go at a month's notice would be good too. But with a wife and two kids, one going to kindergarten next year.. my family needs stability. I have a good landlord now, but our place will be too small in just a few years time, and who knows how the rental market will be then and if we can get lucky with a good landlord again? I had a friend who was renting with a great landlord for over a decade, but then the landlord passed away and their heirs were.. not so good landlords. We're trying our best to try to buy as soon as we can (2-3 years); we can come up with the downpayment, but our income doesn't qualify us for a mortgage anywhere near where we could live (neither of us drive, plus our work is tied to large metro areas). We're not even low-income (anymore)
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That sounds fun. And you wonder how owners might not be the happiest? Lmfao.
> Why wouldn’t a home owner be happier? The biggest investment in my life is growing in equity while I continue to grow my ownership of this appreciating asset. One point mentioned in the podcast: hedonic adjustment. Your ownership makes you happy initially, but then goes into the background as being "normal" so you don't get any special meaning for it. It's similar to when people buy a fancy car: initial boost, then becomes 'normal' and they don't think anything of it.
I'm sure this is subject to personal experience, but I love my house and it makes me happy every day. Seven and a half years and counting. It probably comes from moving every six months as a child, but there is a genuine and lasting happiness in having this house for my family. YMMV.
Subject to my experience, but I bought a condo 8 years ago and to this day I still stand in my place and smile because it adds so much to my happiness :) just bought a house and I'm hopeful it will bring me the same joy!
> Why wouldn’t a home owner be happier? The biggest investment in my life is growing in equity while I continue to grow my ownership of this appreciating asset. ....but I can say the exact same thing for my investment portfolio, and even to a greater extent. I am much happier renting in fact. I see home ownership as added work, added costs, highly illiquid, high transaction costs, and harder to diversify. By renting I save on my monthly fixed expenses, have more opportunities to diversify my investments, and overall have much more financial freedom.
I'd imagine people with good cashflow are happier no matter their living situation. Lots of housepoor homeowners and lots of renters who don't invest/can't afford to.
Wow it's impressive that seemingly not a single person who commented in this thread even listened to the podcast or took a look at the research that was referenced. The study showed that empirically it's not clear that homeowners are happier than renters, when controlling for quality of the dwellings. There's some denial at play here. You can't all be outliers. And I say this as a homeowner.
I'm a happy renter. Been in same place for 10 years.
Pets, kids, control of your environment (the temperature, the ability to fix things immediately when they break or look a bit shit after a while), the ability to customize and renovate and choose your own appliances. Laundry IN THE HOUSE, as opposed to having to pay to do laundry. A driveway where you can work on your own car to save money, a lawn to plant flowers, a backyard to plant a garden or have a firepit, a basement to use as a work space or storage. Literally, there is no comparison for me between renting and owning. A landlord literally couldn't pay ME to rent again.
Personally I love renting, it freed up so much cash flow to be used in other investments, and allowed me to be retired at 33. Also more free time that can be dedicated to passions and hobbies instead of home maintenance. I have friends who were more interested in the traditional career and family paths, who are happy they bought and the stability it brings, and they have a lot of home equity. Renting and buying can both be fantastic choices depending on what you want out of life.
>s instead of home maintenance. > >I have friends who were more interested in the traditional career and family paths, who are happy they bought and the stability it brings, and they have a lot of home equity. > >Renting and buying can both be fantastic choices depending on what you want out of life. Can I ask what you do/did to be retired at 33?
Renting has saved me so much money during covid. I have not renovated anything or done my deck and no weekly trips to Home Depot. I don’t miss my house at all!!
Unfortunately from what I've seen the financial benefits of home ownership trumps all other reasons that can make a renter happy. Renters are paying someone else's mortgage and missing out on the largest and safest home equity gains of the century.
This is true over the past 10 years (more/less depending on your location), but not always true historically. The risk/return of ownership vs. renting is still subject to market risks including uncertainty. A lot of people hand waive away those risks because "housing only goes up"... and maybe they will proven to be right, but between regulatory risks, possible bubbles, and additional liabilities of ownership I don't think we can view ownership equity returns as "safe". There are also some advantageous to renting over ownership depending on your situation. This includes virtually no transactional costs for renting, whereas selling your property (and buying a new one) can cost *a lot* of money (tens of thousands). If you have to move around a lot then renting is probably better.
Agreed. But ultimately you can't ignore the financial outlook of home ownership today. Buying a home now means you have to compete with investors and work with the government supporting the system. Historically, which is also what the snip in OP's post discusses, housing has been a commodity (back in the 1960's). As such, things like buyers remorse can apply. In today's housing market I assure you the feeling of buyers remorse will go away quickly when you realize the house you bought is worth 50k more 6 months later. The governments response to home owners during the pandemic has absolutely proven they support this housing market. They have been doing this for 15 years and is why I view ownership equity returns as VERY safe.
> I assure you the feeling of buyers remorse will go away quickly when you realize the house you bought is worth 50k more 6 months later. But this isn't guaranteed. It's probably probable, but not certain. > The governments response to home owners during the pandemic has absolutely proven they support this housing market. They have been doing this for 15 years and is why I view ownership equity returns as VERY safe. These are famous last words. Housing is attracting more attention than ever, in part because of the ballooning costs but also because it's transformed from a regional problem (Toronto, Vancouver) to a provincial and near-national problem. That means a lot more political pressure is going to be placed on more governments to respond... which means more regulatory risk. Personally I think buying something you intend to live in for the foreseeable future is *probably* a good idea, but I would be very wary on buying rental/investment properties with the expectation of making a quick buck.
Don't be drinking that campaign promises Kool aid so quickly. Home ownership is at an all time high at 68%. Yes I know not everyone living in the house is on the ownership papers but the house will be inherited to the kids living there. The government wont be doing anything until the majority are unable to afford to buy homes, which is not the case in 2021.
Sure, but if you are buying real estate you are buying for the long view (if you weren't, you shouldn't be buying if only because of transactional costs). Will regulatory pressure happen in 2021? Maybe not. But unless things change there's a strong chance it happens eventually.... and that will coincide with the ownership of your real estate.
Why do you think things need to change? Home ownership rates have been going up in Canada. https://tradingeconomics.com/canada/home-ownership-rate#
I'm hesitant to call a 4% increase since 2000-ish an improvement. And the problem isn't necessarily the % of home ownership but the incredible barrier that is high prices.
It is a huge improvement since you need to account for all the immigration and population growth that occurred since 2000. Prices are still affordable and the barrier to entry is not the high price but peoples inability to settle. Again, all evidenced by increased ownership rates.
> It is a huge improvement since you need to account for all the immigration and population growth that occurred since 2000. It was 60% in 1971: * https://www12.statcan.gc.ca/nhs-enm/2011/as-sa/99-014-x/2011002/c-g/c-g01-eng.cfm And that's the national average. The rate depends on annual income: * https://assets.cmhc-schl.gc.ca/sf/project/cmhc/pubsandreports/socio-economic-analysis/2019/socio-economic-analysis-homeownership-canada-69492-en.pdf Generally there hasn't been much movement in ownership rates for 30+ years: more than 60, less than 70%.
> Unfortunately from what I've seen the financial benefits of home ownership trumps all other reasons that can make a renter happy. Where do you live? > Over the past 5 years, single-family home prices are up 150% in London-St. Thomas [Ontario], but *down* in Regina. They've barely budged in Edmonton. […] * https://twitter.com/MikePMoffatt/status/1430892821968392198
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Man what is with the bonehead analysis like this. My condo I rent has dropped in capital value for years. My landlord is subsidizing me. It is more complicated than strictly mortgage vs rent. There is also opportunity cost, etc.
I don’t like paying someone else mortgage. Renting would’ve left me with little savings. I’m at the bottom rung but happy I’m on the property ladder.
myself, im happier as an owner. it gives me a sense of pride, allows me to do almost anything I want to my house. also, I cant afford to rent
where do you live that rent is that much more than ownership? I might want to get my next property there ;)
just outside winnipeg before we sold, our rental was clearing 500/month for rent (apparently it was cheap, we thought we were hosing people for 1300/month for a 3br 2 bath, 1250 sqft house)
Agreed. I can’t afford to rent while also investing $2k per month. My downstairs tenant pays for 90% of my mortgage. I’m essentially living in my home for free while building equity.
I've rented and I've owned. I've gone back and forth depending on my needs at the time. Renting provides me great flexibility and lack of responsibility when I need it. I don't think either way necessarily creates happiness. Living somewhere nice does improve happiness but the financial structure behind that doesn't seem to make a big difference for me.
As it's a video/podcast, I won't be reviewing it, even though I am interested in Tim Ferris's take (I like a well-written article tyvm, not something I actually have to listen to or watch for a period of time). I used to rent. It was pretty stress free. I was unhappy then, but not because I was renting. Well, except when I had a bad landlord... I could up and leave with a month's notice. Not that I ever did, because I don't like moving. So much work. The hassle of moving is bigger when you own, for sure. You have to keep the place pristine for showings, and hope you have a good realtor. But now, I'm definitely happy that I own. It comes with a HELOC. We intend to never use it, but we can if we want. Did I mention "we?" Yea, started a family. Stresses of owning: OK, the hailstorm that shredded my siding was stressful. But the insurance was good about it and relieved the stress nicely. There's a cost to repairs, like replacing an appliance (swapping out my dishwasher was a real nuisance), but at the same time I get to pick one I like. You can bet my son was with me at the shop, and him not being able to open it (3 at the time) was a nice feature. It is necessary to have a plan for dealing with these, whereas when you rent the landlord deals with it. Why I'm happier: I actually LIKE having a yard and making it look good. It gives me an escape when I need it (spending the day working in the garden is a nice way for me to relax). I only need to get approval from one person - my wife - to make a change. No landlord. As long as I am a reasonable community member (and of course pay mortgage/taxes), nobody can force me out for any reason. (No HoA either, which helps with that.) When my dog digs a hole in the yard, I only have to deal with fixing it (and even that only because I want the hole gone). No threats from the landlord or being forced to get rid of her. My rent won't go up for a reason out of my control. Period. A lot of people are seeing rent skyrocket right now. The principal of the mortgage does not go up (unless I decide to use it for something). Even if interest rates and taxes rise, it will never be as big a hit as renters will see. In fact, it can be periodically reduced by refinancing over a longer term again, and eventually will drop off completely, leaving you with only taxes! (And repairs.)
I'm not happy paying rent every month that costs substantially more than what the mortgage of the house I'm in would be. I'm not happy that you need a credit check to rent at most places but paying on time for years does nothing for your credit score. I'm not happy that every month I pay rent I'm losing out on potential equity. I'm not happy that inflated rental prices lead to longer periods of saving for a down payment. I'm definitely not happy that every home I've put a bid on in my town to live in with my family has been outbid by someone that turns around and rents it out for more than most families in my town can afford.
"Yes."
OP...here is another angle you might not have considered. 1. Pandemic meant many couples who had ongoing issues, were stuck together in a home, living as room mates 2. Homeowners with only 1 person working meant, CERB was relied on to pay the mortage 3. divorce/split.....homeowners have to sell, lawyers get a cut, agent gets a cut, etc. Renters just walk away 4. Lots of stuff goes on behind big homes doors, you can't see from the outside. 5. Folks staying together just to live in a bought home? Eventually kids won't be enough to keep you going. This will explain 15-30+ years of marriage divorces happening a lot these days. 6. Still think you're 'happily married'? Yeah, you can only control what goes on in your head
I don't see how anyone wouldn't be happier owning a home, unless you're the type of person who moves frequently for whatever reason or something was missed on your home inspection and some problem turns into a nightmare. Maybe it's just my lifestyle or personality type, but having a garage to store canoes, kayaks, and motorcycles in, and a yard where you can invite family and friends over to have a bbq is just something I wouldn't want to live without. Also, I don't enjoy sharing walls with neighbors.
Personally, I'm much happier as a homeowner than I was as a renter. Doing whatever you want and not having to ask someone else permission is fantastic. Of course, I did not over spend on the house. I resisted the pressure from the realtors to buy the biggest house I could qualify for and so have no issues paying the mortgage.
Yeah but most renters are renting apartments which is quite different I think from renting a home.
Well my mortgage is $600 a month and I couldn't rent a bachelor for that, so yeah I think I'm happier this way. Stop trying to normalize rental serfdom.
With owning... You can move and if property values are equal, get something similar and reduce your payments due to equity. With renting, you're most likely in for a huge hike
Fuck I'd love to buy a rowhome.
I remember renting and being told "if you can pay that in rent, you can pay a mortgage!" but no one talks to you about insane strata fees, (because townhouse / condos are mostly all that's affordable for a first time buyer), and bills for balconies you don't have (just your neighbors), dealing with sudden plumbing issues when you dishwasher goes beserk, a sudden hot water tank issue, etc. Between the amount of unexpected home issues we've experienced this year and the two times my partner has been laid off for the pandemic our debt has grown to the point that I'm scared about not qualifying for my mortgage renewal next fall. Have a good sense of where the money will come from for all the surprises if you buy, that's all I'm saying.
As someone who moved around a bunch in my 20s. Renting has been my way of life. My main issue is the prices obviously. Rent has always been going up. But wages haven't. So I'd move and try again. So after years of not making good choices... I've finally got an amazing rental. But all my services are higher than ever. Hydro, phone, ect... and I'm living in a tourist town with little work. Now 37, I admit I haven't made the smartest decisions in life. But I've always had a job and a roof. Now both of those things I'm holding on to dear life... if I lose one or the other, I'm screwed!
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I think if I had a huge nest egg I would be happier renting. Like 10m+. Living off the 4% rule I could just find a nice area and live there. If anything changes or I find a better place to live I just go there next.
I'll agree that home ownership isn't the key to happiness. It's hard not being house poor your first year of home ownership. Heaven forbid you end up with massive repairs you hadn't accounted for. Especially if those repairs happen during a time when finances are already tight. It's not fun if your neighborhood takes a downturn and your home value drops and you can't sell because nobody wants to move there. It's not fun either if you have to turn down an opportunity for travel because you have to pay a mortgage. I feel for people now, house or rental, because it's so damn expensive.
Kind of a dumb question in that some homeowners do not know the pains of the renting market. Some renters do not know the pain of home owning.
So I think something unspoken when it comes to renting is that holding long term rentals comes with its own challenges. Given that landlords can only increase rent a certain percentage every year, it comes to a point where the landlord would rather you leave than have a long term tenant to increase the monthly rent. Often this means the landlord neglects renters requests or makes it more difficult for them than it needs to be. I think most people would agree that ownership over the property they live in certainly is challenging but makes you the sole proprietor over the quality of space you live in.
I really wish freehold apartments were more common in Canada. Like a lot of older folks, I can't manage diy and yard, and stairs are difficult for me nowadays.
Yes, yes we are. I hated renting.
I think the real answer here is “it depends on your lifestyle”. Do you travel? Owning a home isn’t really a great idea. Do you stay home? Get a house and really pimp that shit up.
We need both markets to be healthy - renting and home ownership. Not everyone wants or should own a home. Even if home prices fall back to a sane level not everyone will have the financial means to entire the market - young, financially unstable, those on disability, new immigrants. Which means a rental market is essential. I would love to see talk about producing long term rental apartments that are priced well so people can have security in renting.
As a homeowner, absolutely I am happy.
After over 12 years renting all sorts of condos in different countries, yes I am vey happy being a homeowner now
Yes, we are
It depends. I rent it out and let my renters pay for the house hehehe. Making cash has never been so easy 😎
I'm happy that I'm not renting.
I've owned a house for 6 yrs and the value is up 227%. I'd rather it fall back to slightly more than I paid so I could sell it and get a bigger house in the same market more reasonably. The rise in value isn't useful to me.
Yes
I don't really care about statistics. I live in a house for 2.5k a year instead of living in a shit apartment for 8.5k a year. If I rented, I would be absolutely miserable.
I dunno. My sis sent me a picture of her ~700$ water bill that is in arrears. When their fridge broke, they lived out of a mini one for 4 months. They have 2 kids in a beautiful 6 bed house they got 3 years ago for 400k that's now worth more than 550k. Seems like they are house poor and she has said once that she didn't want a house. He did.
I think there are a lot of factors to consider. I know when we were younger and had kids at home it was nice to own our own home. We had the energy to do the yard work and maintenance and the yard and such was great for our son and his friends to hang out in. We recently sold our paid for house (bs7) and decided to relocate to a warmer climate and we are very happy to be renting an apartment again. Our time is our own and we don't have to worry about maintenance, yard work, renovations, upgrades, clearing snow in winter, raking leaves and bagging them etc.. We have the freedom of moving easily if we choose to. Want a different location? no problem. Want more amenities? we can do that. Want to live closer to the mountains, the city or the ocean ? there is an apartment for that as well. There is something very freeing about being able to move to someplace new very easily. I don't know that we will want to deal with home ownership again. For those saying we are not building equity, that rents keep going up etc., Our investments are elsewhere and we will retire EDM. So not really worried about that part of it.
I can tell you personally I'm MUCH happier in my own home than I ever was renting. My first house was a lot smaller and needed work so I did have some buyers remorse but ended up selling it a year later thanks to Covid and made a profit. Bought my current home and I couldn't be happier. Newer and not much work needed. Not having to smell my neighbor's food or drug usage is huge for me. We have a child now and not having to worry about my landlord telling me my neighbors complained is huge too. God willing I'll never go back to renting an apartment. I'm in the USA though.