Reader Mail: Owning Your House vs Renting

Hi, I saw your article and it was a pleasant read. I just have one question for you. I agree with you completely with renting a house being cheaper (saving more money) than buying. But everybody I speak with thinks I’m nuts. That buying is the only way to go. Do you have any tips or advice. – Eugene

Hi Eugene,

Not only is renting cheaper than buying in terms of rent cost vs mortgage, but I personally have found it great when it comes to curbing that built-in desire to renovate a perfectly good apartment or house. That alone can save you thousands. Or when it comes time to replace faulty appliances or, even more massively, rain screen a building (as often happens in Vancouver), us renters don’t have to pay a dime of that. We don’t even have to pay condo fees!

In years past, Vancouver condo owners have been hit with rain screening bills in the tens of thousands.

In years past, Vancouver condo owners have been hit with rain screening bills in the tens of thousands.

Never mind the savings from walking everywhere – i.e. if you don’t need a car, not only are you saving, on average $8K/year per car – but you can also rent out the parking spot in your condo for $100-150/month (Vancouver prices). You can also ditch your gym membership (say, $50/month) and use your condo’s gym and pool.

Yup.

Yup.

Then factor in all the time you’ll save by not being stuck in traffic, if you’re living in a condo near your work. Or time saved from not mowing your lawn. Icing your sidewalk. Cleaning your gutters. And so forth.

Finally, owning anything valuable has a cognitive and real load on your life. You have to evaluate how worth it it is to carry that. If owning a house is truly worth all the mental and physical overhead it will take for you to maintain it, then go ahead. But I don’t like to worry about maintaining material things, which is why I love just being able to lock the door of our condo and walk away when we go on vacations – I don’t worry about being broken into or about the place being compromised somehow.

Our oldest poses in front of a much cooler car than ours (the blue van behind).

Our oldest poses in front of a much cooler car than ours (the blue van behind).

I also avoid the psychological tyranny of ownership when it comes to our vehicle – a necessary evil, for now – by owning a 2003 Dodge Grand Caravan. It runs well, but I don’t waste any of my precious time worrying about scratches or dents or tiny noises. If it runs, I’m happy. I know so many people who burn weeks going back and forth with the repair shop over scratches or dents or noises. Add all that time up and ask yourself if it’s worth it.

In cities like New York, the number of 30 year old renters outpace 30 year old owners, 4:1. And while there are affordability issues around renting in that city, it’s clearly a choice that many are willing to make to live the life they want to live in one of the most “alive” cities on earth.

And at the end of my life, will I wish I’d spent more time renovating my ensuite or fixing a dent in my car? Or will I wish I had those days back to spend with my loved ones?

My daughter gave me this painting on Father's Day. A great reminder of what she values (my time, not my stuff).

My daughter gave me this painting on Father’s Day. A great reminder of what she values (my time, not my stuff).

Anyway, that’s enough of my ranting! I hope you get what you want, whatever you decide it is.

– Adrian

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Adrian Crook is a father of five living in beautiful downtown Vancouver, Canada. When he's not mobbed by his brood, he runs a successful videogame design consulting business.
  • garryself

    The link below is based in New Westminster and refers to buying vs renting for townhouses and the article author found out you end up at the same place in the end. Neither is the cheaper option.

    http://canspice.org/2015/07/28/buy-vs-rent-new-westminster-townhouse-edition/

    In the type of calculations that favour renting, there is always the assumption that the renter will invest the money they are saving on fees that owners would have, such as down payments, insurance, strata fees etc. In real life, few people are that disciplined and may be tempted to spend that money on entertainment instead.

    There are pros and cons to both. The problems I see most are long term renters who are given notice by their landlord to move out. The landlord wants to renovate and get new tenants in at higher market rates. They then have to find a new place to live, no longer enjoying rent control, so have to move out into the suburbs to find something in their price bracket. For buyers, we have rising strata fees and unexpected repair costs, such as building envelope leaks, which can find condo owners looking for $30k to pay their special levy.

    • Absolutely. Well said. In reality, I don’t “save” the $2K a month difference between owning and renting my place, I just don’t have to pay it. Saving implies I’m socking it away somewhere, building up a nest egg… I wish! In reality, we’re just getting by like most middle class people in this city.

  • kmc

    Owning a house became so important, socially, because it was a widely accessible, achievable vehicle for wealth investment and transference from generation to generation. But there are many things that are different now, and it’s hard for us to readjust our attitude towards the relative value of owning a house. When people have to take out 100-year mortgages and in other situations where you’re no longer talking about paying off a mortgage within a single lifetime, it’s clearly time to reevaluate whether that’s the right way to plan your lifetime budget.