The appeal of creating wealth through owning real estate is as strong as ever. Building equity in a house or condo continues to be a prudent investment.

Is it time?

The transition to owning involves costs that don’t exist when you’re renting. Mortgage payments, property taxes, insurance, and condo fees have to be factored in. Still, while these expenses make the monthly cost of owning greater than that of renting, your growing equity in the property allows you to build wealth over the long-term.

What should you buy?

What kind of property is right for you? Prices of course depend on size and location.

Condo apartment
(Toronto average $320k)
Lower cost of entry but lower prospects for value appreciation.

Condo townhouse
(Toronto average $540k)
Middle-road cost of entry and better prospects for value appreciation than apartments, especially when 3+ bedrooms.

House
(Toronto average $860k)
Higher up front cost but higher prospects for value appreciation.

Multiplex
(Toronto average $1.5M)
Live in one of the units and have the tenants in the others pay your rent.

To own, or not to own

Can you afford to keep renting?

It goes without saying that renting is not in itself a path to wealth creation. Certainly owning real estate is not the only way to build wealth; a case can be made that renting frees up capital that can be put toward other investment vehicles.

Building wealth through real estate is attractive largely because everyone needs a place to live anyways. While ownership comes with its own expenses, your growing equity in the property over time offers a viable means to generate wealth.

The decision to own property is as much a decision to stop renting.

As easy as it is to rent, it’s worth considering how owning a property can help you set and achieve longer-term goals. The earlier you start, the more equity you can build.

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