Buying or renting a condo is one decision that is predicated upon a few factors. Finances are indeed an integral part of the decision-making process, however, they are not the only factor you should have at the back of your mind. If you are still not sure of which side of the divide you should pitch your tent, the following should help you out.

Consider the rent to price ratio

Rent to price ration is one criterion that helps you ascertain which of the options make more sense fiscally. It basically has to do with basic maths and is usually simpler than it actually appears. All you need to do is locate a condo in your neighbourhood that for rent or sale. Ensure that they have the same features like the similar bathroom and bedroom numbers and square footage.

For instance, you may be able to get a $200,000 condo for sale in a really good environment in Vancouver, while you may get that same type of condo for rent in the same block at about $1,000 monthly which means that you will be paying about $12,000 yearly. Mathematically speaking the rent to price ratio will be 7:16. A rent ratio that exceeds 20 will imply the monthly condo cost will be more than what it would cost to rent something similar.

What is your budget for the year?

one aspect you may need to factor in when you are about making the choice of whether to rent or purchase you’re a condo is your earnings. In the event that the price of purchasing a condo in your area is more than what you are able to make between now and the next three years, this may be a clear sign that you are in the wrong neighbourhood. If that is the situation, you may opt to rent, you can also choose to take a look at some of the houses in some other neighbourhood if you are really desperate to buy one.

What exactly are your needs?

Do you have any plans to increase your family? As far as purchasing a condo is concerned, having a new room constructed is always a possibility. By renting, you have to make do with space you find there. However, being the owner of your own condo gives you the liberty to bring about some modifications in line with your preferences such as having your kitchen remodeled or even having the master bedroom expanded, the majority of condo owners do not permit tenants to make changes to the home.

What is your projected length of stay?

One other major determining factor you will need to put into perspective would be on just how long you intend staying in a particular environment. You need to be sure of your job stability or otherwise, do you picture yourself taking up a new job at some point in the future? If you are yet to get married and staying quite far from your parents, you may decide to get closer to them when you begin raising a family.

In such a scenario, renting a condo may appear to be the best choice especially if you do not intend to get settled in the area. It gives you increased flexibility as far as moving is concerned when the need comes. If you buy a condo, you may find yourself glued in the area until you are able to pay off the loan or till when you are able to get someone who is willing to buy the property at its value.

Consider the rules of renting

The fact is that there are a couple of rules to abide by as far as buying or renting is concerned. A number of landlords are known to be against their tenants owning pets or carrying out businesses outside their houses in addition to some rather strict rules. It, therefore, suffices to say that if you are able to live by these rules, then renting may well be the perfect choice for you. If however, you are the sort of individual who doesn’t like being told what and what not to do in your house, then purchasing your own condo may well be the best choice for you.

The maintenance factor

One cool thing about renting a condo is the fact that in the event of things such as damage to the pipe, electricity issues, or any other issue, you can simply place a call through to the appropriate quarters to come and have the challenge remediated. As an owner of a home, it is your responsibility to have a plumber hired, as well as an electrician or any other person to come fix any challenge. Even in the event that the association of condo owners make available provision for maintenance services, it would still come at a high rate for condo owners when compared with renters.

Consider what the upfront costs would be

The choice of whether to purchase or have a condo rented is not all predicated on the cash, however, it still all boils down to it. Consider what the implication in terms of cost would be as a far as renting or buying a condo is concerned. When renting, you are expected to pay up for both the first and last month as a form of security deposit. If it is rented for about $1,000 each month, it implies that you will need to have about $2,000 before you can think of moving into the house. When you buy a condo, you usually have to pay about 10% of the total cost of an upfront payment. There are also closing costs which should total to about $5,000.

What are the long-term costs?

If you have the desire to stay in a particular area for a number of years, ownership may begin to be of benefit when your equity begins to build. Usually, people who have their homes leased do not really get to see any of their rent again.

2018 housing outlook

For people who don’t own homes, the year 2018 looks a little grim, it is bound to feature higher rental rates, stricter rules for mortgage qualification as well as extremely high home prices. However, regardless of the high rates of the mortgage as well as a reduction in investors from overseas as well as stricter lending restrictions, the residential market is bound to have a record-breaking year delivered for the year 2018. However, for the 30 percent who do not own houses, the year may not be all that pleasant.

Landlords do not need to be afraid of the new rental properties springing up as it will not have an effect on the rates of vacancies.

Conclusion

The choice of rental or outright home ownership is not one that can be determined on the basis of a certain universal rule owing to the fact that there are diverse peculiar situations which may necessitate different approaches. It is therefore important that you consider the aforementioned points with a view to ascertaining which one suits you best