Selling Your House: Should You Buy or Rent Next?

If you’re about to sell your house, one of the most important things to consider is where you’d like to live next. And beyond the basic characteristics of your home, you’ll also need to decide on an ownership model. More specifically, whether you’d like to buy or rent.

Just because you currently own your house, that doesn’t mean you’ll need to buy again. In fact, many people choose to rent in the short or even long term after they sell.

Both options have their pros and cons. You’ll want to think closely about your current circumstances and plans for the future before deciding which is right for you.

Let’s take a closer look

Why Are You Selling?

Deciding between buying and renting doesn’t always boil down to simple preference. Depending on your personal circumstances, one option may be far and away more pragmatic than the other. A helpful place to start is by unpacking your motivations for selling your house.

Lifestyle Changes

Most homeowners choose to sell due to changes in their lifestyle or everyday needs. You may be in a similar position. For example, maybe your kids are growing up quickly, and you need more room. Conversely, maybe you’re an empty nester who’s ready to downsize.

Thinking long term, you should consider if (or when) your needs will evolve once again. Will your family dynamic change in the next five years? Are you interested in a snowbird lifestyle down the line?

Buying and renting involve different degrees of commitment. Mulling over your next 5 to 10 years will give you clues as to what degree of investment or stability suits you best.

Financial Circumstances

Today, an increasing number of homeowners choose to sell in response to their personal economic circumstances. In addition to fluctuating interest rates making mortgage payments higher, other factors such as inflation, the rising costs of everyday expenses, and changes in employment status have created new financial realities for a lot of Canadians.

If you are selling your house because you are struggling with the carrying costs, buying next may not be the best move financially. At least not right away. That said, the equity you’ve built in your current home could lend itself to a healthy budget if you’re looking to downsize to a smaller, more affordable property.

Your accountant, financial advisor, or real estate agent can help you understand your financial picture and what your house may sell for in current market conditions.

Thinking about selling your house? Check out these related blogs for more advice.

What Are the Pros of Buying a House?

Let’s first make a case for buying your next house. If it’s an option for you, there are some serious perks to this route.

First and foremost, buying a house allows you to invest your money. You’re not just buying a place to live; you’re also securing a high value asset that can appreciate with time. As a renter, you don’t get this perk. While the monthly costs may be lower, you won’t be able to recuperate any of the money you put in when it’s time to move.

Speaking of finances, buying a house allows you to lock in your monthly costs for the duration of your mortgage term. As a result, you won’t have to worry about your monthly payments going up until it’s time for renewal. Renters, on the other hand, are usually subject to annual rate increases, which can be extra costly if your building isn’t rent-controlled.

When Might Renting Be Best?

Buying a house can offer a lot of stability. However, making a major financial and lifestyle commitment may not be the right move for you. That’s where renting can be a compelling option.

One of the top benefits of renting a house is flexibility. At most, you’re locking into a 12 month lease. If your circumstances change, you can move without taking on a significant financial loss.

In the same vein, renting is usually more affordable in the short term compared to buying. While rental rates can be high in specific markets or for high demand properties, average monthly costs are still much lower compared to ownership.

On the hunt for more home buying advice? Check out these blog posts next!

Sell Your Home With Bosley

If you’re thinking about buying or selling a home, work with us – Bosley Real Estate. Serving Canadians since the 1920s, our multigenerational team has perfected the real estate process, all while raising the bar of client support and satisfaction.