u/JJC129

Good morning everyone,

Looking for advice on my rent vs buy comparison below. Thank you in advance to everyone reading.

I currently live in Toronto with my parents and am getting married next summer. I'm now looking for a place to live with my future wife, aiming for a move in date this fall (fiancee needs to leave her current home).

Due to family and friends influence, I've always been in the buy a home before marriage mindset, but I've been running the below numbers and considering my lifestyle and have instead decided that renting is the right option for us.

Just want to make sure I'm not missing anything.

Combined, we make 190K pre-tax so we qualify for up to 700K for a mortgage. We have 130K to put towards a down payment and I understand the benefits of 20% down so we're limiting our buy budget to 650K.

That being said, my work is fairly volatile in terms of lifestyle, which means by summer next year, there is a 50/50 chance of us moving cities within Ontario, with the intention to return to Toronto by 2029.

All factors considered, my rent vs. buy comparison has shaped out to the below points:

Payments & Savings:

- Rent: 1750-2000/month for a one-to two-bedroom equals 24,000 max rent yearly (excluding utilities and fees) with up to 3000/month = 36K/year of savings in investments (Monthly calculation: 9000 combined after tax income less 2000 rent less living expenses @ high estimate of 4000 = 3000 committed to savings)

- Mortgage: 650K mortgage w/ 20% down works to $2600/month (3 year 4.64%) with 70,000 interest paid over 3 years / 23k yearly and only 8K/year / 26K overall towards my principal/equity

Rent and Mortgage are comparable in terms of unrecoverable costs (Rent to Interest) but I save more equity (i.e. 36K / year through renting vs. 8K / year through buying) through renting.

Capital Appreciation:

- Rent : None on property but Investments+ downpayment would gain up to 10% yearly (currently 40% up but I would rather lowball this estimate)

- Buy: Through historicals on HouseSigma, 650K townhome may sell for 750K by 2035 (assuming we keep it and live in it when we move back in 2029) meaning 100K gain = 15% over 9 years

Renting would allow my assets to appreciate more but my buy figures may be understated.

Lifestyle:

- Rent: If we were forced to move next year, renting would allow us to move easily.

- Buy: If we were forced to move next year, lack of capital appreciation would likely not make selling an attractive option so we would push to have a tenant rent our property until moving back in 2029. Our parents could likely help with property management and the debt already leveraged would likely force us to rent in the new city too.

Lifestyle would fit better with renting, the only attractive option to buying is the potential of capital appreciation (seeming to be low) and having a tenant pay us rent.

Overall, renting seems like the pragmatic option for this year, but I would appreciate if I was advised on anything I'm missing.