Selling your home to buy another is a time-honoured tradition in real estate. When you’re young, you sell your starter house to move up to a larger space. When you become an empty-nester, you downsize to a smaller home that’s easier to manage and care for.

No matter what, we often avoid the topic of renting altogether. Many of us have had the perils of “not owning” drilled into our heads ever since we were old enough to talk. Chances are, you could rattle off the pitfalls in your sleep.

Renting doesn’t build equity, so you’re throwing your money away each month. It means you have no control and the landlord can evict you or raise your rent on short notice. Common wisdom is that buying is better in every single way.

So why on earth would anyone ever do anything different? For the answer, we’ll look to a group of people who you’d think would be the last people to part with this tradition.

Do you want to keep up with the latest trends and leading insights in Pickering real estate? Tune into our podcast right here.

The Unlikely Path of Real Estate Investors

We can’t tell you how many investor clients we have seen who own properties all over – but choose to rent a home themselves. For the most part, they’re not hard up for money, and they’re certainly not naive about the market. Their choice to rent is very well planned and thought out.

Consider the benefits and the drawbacks of both owning and renting.

• Owning lets you build equity as real estate prices rise. In fact, many people have built the bulk of their financial stability around the value of their homes.
• On the flip side, renting gives you more freedom to live where you want and pack up and leave when the spirit moves you (after giving appropriate notice to your landlord, of course).
• While you need to take care of a rental property, it doesn’t require the same level of commitment as a home you own.
• Renting also costs less upfront than buying a house since you typically only need first and last rather than a down payment.
• By renting, investors free up their capital, allowing them to make their acquisitions more strategically. For example, investing in Toronto might be out of reach or impractical, whereas buying a home in a smaller town or even out of province offers more profit potential (not to mention being more accessible in the first place.)

In addition, renting allows an investor to live where they want while still taking advantage of all of the benefits of home ownership.

Should you invest in Pickering real estate? The posts below will give you some food for thought:

• Long-Term Versus Short-Term Rentals: How They’re Different
• Is Buying an Assignment Sale in Pickering a Good Idea?
• How Team Rajpal Helps Investors

Who Else Prefers to Rent?

Investors may be a surprising demographic, but they are not the only ones who are cashing out of the equity of their homes. With housing prices as high as they are, more people from all backgrounds are seeing the virtues of renting instead. Here are just a few examples:

Commuters

Many people purchased homes outside of the major city centres during the pandemic when they were working remotely. Now that many companies are calling employees back to the office, they’re returning to the city. However, they are not always buying houses here. Often, they sell their existing home and find a place to rent. Or they may hold on and carry the property with a tenant of their own.

Are you counting on the best return when selling your home? The resources below will help you make an impact:

• What Are the Secrets of Selling for Top Dollar in Pickering?
• Is Staging the Ultimate Home Selling Secret?
• How to Make Your House Appeal to the Next Generation

Dual-Income Families

Think of how much real estate values have skyrocketed since 2020. Anyone who has owned a home since before then has seen very significant equity gains. Some couples stay in their homes until retirement age. Others decide to cash in on that equity and rent a home elsewhere. They understand that renting no longer builds equity. However, paying off your mortgage with potentially a hundred thousand dollars or more in profit will cover the cost of renting for a long time.

First-Time Home Buyers

Young professionals are facing a dilemma that many previous generations have never had to deal with. Houses of all types are more expensive than ever and the requirements for a mortgage have never been more stringent.

The only way into the market for many is to look to an area outside of the GTA. A starter house in a less expensive town allows them to start building equity, and renting it out can provide a source of income. In the meantime, they themselves rent in the GTA for the excitement and opportunities to advance their career.

Downsizers

Imagine buying a home years ago when prices were reasonable. Now, you’re mortgage-free, and you’ve built massive equity as real estate values went through the roof. Selling in today’s market provides a massive return on investment, and the funds from the transaction could cover your rent for the foreseeable future. This means a retirement lifestyle that is convenient and carefree, where you can drop everything at a moment’s notice and travel the world.

Renting can be ideal for some, but it’s not for everyone. If you plan to buy instead, the posts below can light the way:

• How NOT To Buy a House
• What to Consider When Buying a Pickering Home
• Pickering Vs Toronto: Where Should You Buy a Home?

Calculating the Rewards Versus the Risk

There are benefits whether you own or rent, and either path also has risks and downsides. Since everyone has different goals and resources, you’ll need to weigh the pros and cons carefully before making your decision. Start by asking yourself some of the following questions.

• How long have you owned your existing home and how much could you reasonably expect it to sell for? If you’re not sure, you can book a free home evaluation here.
• What is the rental market like in the area you’d like to live? Are there many vacancies? And how much is the average rent?
• Are you willing to give up the control that goes along with owning your own home, such as the freedom to renovate as you see fit?
• Will your future plans depend on the equity you can build by owning a house? Remember, it’s almost impossible to save money as fast as real estate values rise.
• A local real estate agent who also understands the rental market can help guide you toward the most rewarding path for your situation. If the thought of selling, buying, or renting a home has crossed your mind, it doesn’t hurt to reach out. Starting a conversation costs you nothing, and you never know what possibilities await.

Do you have questions about buying or selling a home in Pickering or the GTA? Our Pickering real estate agents can help you understand all of your options. Get in touch today at info@teamrajpal.com or call 647-875-8000 to take the next step.

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