Should I rent or buy a condo?

We’ve all heard it from our parents and our friends … “You’re throwing away your money when you rent”  or “Pay your mortgage instead of someone else’s”

So, how much money are you throwing away?  

Let’s say you are looking to rent a 1 bedroom condo about 550 sqft in Liberty Village.  

This on average will be about $300,000.  Let’s assume you can get a 2.6% interestrate and the amortization is 25 years.  It’s probably safe to say that there will be an increase of 4% per year.  This is a very conservative number as it’s 7%+ for condos this year.  That would mean after paying down your mortgage and taking into consideration the increase in value, if you sell, you will have $125,774 in equity!  Talk about instance easy saving! 

The equivalent condo will lease for on average $1,500.  After 5 years you would have paid $90,000!  That means there is a $215,774 difference!!!

How about if you wanted a 2 bedroom condo?  Your mortgage, property taxes and maintenance based on a $435,000 purchase price will be $2,521 per month TOTAL carrying cost.  To rent the equivalent condo will cost you $2,300.  The total equity that you would have built after 5 years will be $181,727!!  Try saving that in 5 years!  The amount you would have thrown away in rent would have been $138,000.  That’s a $319,727 difference!! 

 

This is only for 5 years!  Imagine you rented for the rest of your life?

Call us today to see how we can help you not throw money away each month!