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The Pros and Cons of Renting vs. Buying

When it comes to looking for a place to live, there are many considerations, including things like location, home size, access to necessities like groceries and schools, and amenities like entertainment and shopping.
50A _ The Pros and Cons
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The housing market is an especially tricky place right now, with prices up in many parts of the Canada making it an expensive proposition to buy a home. However, rents are also up in most places, meaning that there’s no clear-cut answer for which one of these routes is more affordable or better for your budget.

Deciding whether to rent or buy is a complex decision with several factors at play. Find out the pros and cons of both buying and renting so that you can make the most informed decision.

Home-Buying Pros

Building Equity

Owning a home is the best way to build equity – investing in a property with tangible value that you can hold or capitalize on as you see fit. Building equity is often considered the most basic way to build your wealth and opens the door to making more or more significant investments down the road. Generally, the overarching wisdom on this subject says that by owning a home, you’re investing in your assets instead of paying for a property that someone else owns.

Tax Breaks

One of the most well-known benefits of home ownership is the tax breaks available to Canadians. Deductions for mortgage interest, first-time home buyer credits, and home-office expense deduction are just some of the potential tax benefits that you can access by buying a home.

Home-Buying Cons

Down Payments

One of the first steps to buying a home is saving up enough to make a down payment. Conventional wisdom says that you will generally need 20% of the home’s purchase price, which can take a lot of time, depending on your general financial situation. Like those offered by the U.S. Federal Housing Administration, some programs provide the chance to use a smaller down payment. However, in most cases, you must save up tens of thousands of dollars before you can even consider buying a home.

Maintenance and Repairs

If you own a home, you are responsible for maintaining it and performing necessary repairs or hiring someone to take care of repairs for you. Unlike with a rented property, you’re entirely responsible for all issues with the home, including damage that could be caused by natural disasters or common issues like burst pipes. If taking care of repairs isn’t something you’re interested in, you might want to reconsider buying a home.

50B _ The Pros and Cons
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Renting Pros


Unlike with buying a home, you can sign a lease for just months at a time. Mortgages usually take between 10-30 years to pay off. If you need to move, you have to go through the home selling process, which can cause logistical complications. Renters have the freedom to simply move to a new place whenever their lease is up or even find a sub-lessor if their lease allows it.

Maintenance Delegation

In a rental, you’re able to simply place a phone call or even submit an online request to get something fixed in your home. Leaky pipes, electrical issues, or plumbing trouble are common problems that renters can ask their landlords to handle. Landlords are also responsible for routine maintenance, relieving renters of that burden.

Renting Cons

Less Control

When you give up a certain amount of responsibility for your home by renting, you also give up some control. Your landlord can sell the property whenever they please (within the bounds of your lease) or raise the rent. Additionally, they can access your home any time to perform maintenance or even show the home to others who might be seeking to buy it or rent it when you move out.

Lack of Equity

On the flip side of home-buying, renting means that you miss out on building equity over time through property ownership. By renting, you forgo the opportunity to create a future nest egg by investing in your home. But, not all of the money spent on a home goes to equity. Money spent on things like repairs, mortgage insurance, and property taxes – required for homeowners – are expenses not directly paid by renters.

Overall, the decision about whether to buy or rent a home is a personal one largely dependent on your individual preferences and financial situation. Both have positives and negatives you should consider. Think about your priorities and goals, and take stock of your finances before deciding how to move forward.

CPC-logoThis story was made possible by our Community Partners Program. The editorial content and views expressed in the articles are not those of and the Alberta Securities Commission. Learn more.
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