When discussing the differences between renting a property and investing in one, the argument commonly swing in favour of the other depending on when the property is needed, and how much of a budget is available. Renting is commonly most favourable when there is an immediate need for a place to stay and the individual’s finances does not allow for any form of real estate purchase.
Investing in a property on the other hand, may be more costly up front, but when done right, is proven to be more advantageous in the long run. Considering the Vancouver real estate market status, investing may be the optimum choice, even for those who are looking to “just” rent. As stated in an article by Tara Perkins on The Globe and Mail’s Real Estate Beat:
Rents are poised to grow faster than home prices in Vancouver, rating agency DBRS predicts.
In the long run, the rental market should move along with the housing market in any given city, DBRS suggests.
The report also detailed how in the past decade, it was Vancouver, BC real estate prices that increased faster than rental rates, and how a similar occurrence happened at the same time in the United States, before their market eventually crashed. However:
But DBRS does not foresee a crash occurring in Vancouver. Rather, it expects that a growing number of people will choose to rent rather than buy, driving rents up and softening the outlook for house prices. “It is more than likely that rental rates will increase at a faster rate than that of home prices going forward,” the rating agency says in a report. “Furthermore, a major correction seems unlikely given the long-term stability of the Vancouver market.”
As most road point towards an increase in rental prices, this will be an opportune time for individuals who plan to get past renting and finally have a property to call their own. As the report indicated, a major correction of the market is unlikely, so a sudden drop in rental rates after one takes on a mortgage and begins the investment process does not have a significant chance of happening.
Granted, it is recommended that interested investors consult with experienced real estate professionals like those from Vancouver Canada Homes, to best ensure that the real estate investments they make are the most advantageous for them and provides the best possible value. Working with a professional ensures that the investor will find the property that best suits his needs, and allows him to arrange payment terms that suits their finances.
(Source: Vancouver rents seen rising faster than home prices, The Globe and Mail, July 31, 2014)