Renting vs. Buying in Victoria BC
If you’re considering a move to Victoria, buying your first home, or simply looking to relocate, you may be asking yourself.. is it the right move to rent or buy?
The first and most obvious consideration when it comes to relocating is - how long are you planning on staying?
The rule of thumb is, if you are planning on staying any longer than two or three years, buying may be the better option. In the span of two to three years, there is a good chance your property may gain enough equity to make a profit when it comes time to sell.
That being said, renting does tend to come with lower carrying costs.
As a renter, you may only have to worry about, rent (clearly), and utilities in terms of expenses.
As a buyer, your expenses include home inspection fees, deposits, appraisals, lands survey feeds, legal fees, mortgage fees, and home insurance (just to name a few) (RatesDotCa, 2020)
However, being the buyer, there is a good chance you will be able to get these costly expenses back out of your home when it comes time to sell.
Renting versus buying might be slightly different depending on what type of market you are in. (Victoria Homes and Properties, 2019)
“Overall, buying a home is typically 30% cheaper than renting, but that’s not the case in Victoria. Use this method to determine which is better financially. Take the house price and divide it by what it costs to rent for a year to get the price-to-rent ratio: Price divided by (Monthly rent x 12) = X.
If the number is higher than 15, it’s generally not a good time to buy.
If the ratio is less than 15, buying is a better deal than renting, if you plan on living there for at least five years to offset moving and closing costs.
By the time the number hits 20, renting is apparently the way to go” (Should We Buy or Rent in Victoria?, 2019)
For a quick briefing on Renting vs. Buying, follow this guideline below:
When to Rent
Your long term plans do not include setting down in one city. (eg. you may take a job promotion elsewhere, you are going back to school, you aren’t currently close to family/friends.)
You can’t afford the monthly carrying costs of being a homeowner
You are in the midst of paying off a current debt
When to Buy
Your plans are to stay in your location for a minimum of 3-5 years.
You are in the financial position to become a homeowner
You are ready to make financial sacrifices
If you are on the hunt for the perfect rental property, you may not have to look any further!
Here at Urban Core, we are currently renting out our most recent Cook Street project, as well as the picturesque condos at Southgate!
Check out our current residential and commercial leasing opportunities - https://www.urbancoreventures.com/