Own or not to own, that is the question! It is almost everyone’s dream to own a place to call home, your home. If you are young, you are probably debating if you should buy or rent. This is an interesting question, especially if you intend to live in a big city like Montreal for the next few years.

Should I be giving my money away to a landlord?

Good points to renting:

- You are not responsible for the maintenance (BUT you still have to clean).

- It requires less cash flow.

- You don’t have any maintenance costs to pay.

- You can move almost whenever you want (landlords’ rights are very limited!).

Bad points to renting:

- You will never see the color of your money.

- You can miss a great opportunity in the housing market.

- Instead of putting money aside (as you would be by paying down a mortgage), it is easy to simply spend it elsewhere and not build equity in a savings account.

- Your landlord can be a lousy dude that doesn’t care if your toilet leaks for days before dealing with it.

Upside of ownership

- You are building equity (beware; a principal residence is a poor investment in terms of absolute yield).

- You can modify / renovate as you want.

- You can always rent it in the future.

- It is easier to get credit because you have a tangible asset (don’t argue, I’m just saying that banks love to see property on a balance sheet!).

Downside of ownership

- Condo fees can increase over time.

- It is harder to move fast (time to sell, mortgage penalty, etc.).

- It obviously requires more cash flow (and it would be a good idea to have an emergency fund or a line of credit in case you need to repair something).

So, to the question of ownership, there is no obvious answer (as is the case for many personal finance questions!). One may prefer to enjoy freedom and rent an apartment where as someone else may choose to buy a condo in order to build equity faster (so they hope).

In my opinion, I would consider buying a condo if you think you will live there for more than 5 years. Your chances of benefiting from an increase in the housing market are pretty good and you would probably make a good deal selling it 5 years later.

Another interesting option if you don’t mind roommates would be to buy a condo and find a roommate to split the fees. In this fashion, you would pay the same thing as you would in an apartment but you would build equity (financed by the roommate) in the meantime. Foreign students may be an interesting type of clientele as they usually have the money to pay (financed by Mommy and Daddy) and they don’t stay more than 1 year.