Renting vs Buying A Toronto Condo | Full Cost Breakdown [2024]

Рет қаралды 6,026

Күн бұрын

In this video Jason breaks downs the cost differences between renting and buying a one bedroom condo in downtown Toronto.
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Three questions answered in this video:
1. What are the upfront costs?
2. What are the ongoing monthly costs?
3. What would your financial position be after 5 years of renting vs owning?
Jason answers these questions by covering the following:
- Analysis of condo sales and rental data from April 2024.
- Detailed calculation of upfront costs for buying versus renting.
- Breakdown of ongoing monthly costs for both scenarios.
- Projection of your financial position after 5 years, including mortgage payments, property taxes, maintenance fees, insurance, and utilities.
- Insight into equity build-up through mortgage principal paydown and property value appreciation.
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🤝 Jason & Danielle Bondy-Sawyer are a husband & wife real estate team in the city of Toronto.
🏠 Selling homes & advising clients since 2006.
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TIME STAMPS:
00:00 - Intro
00:31 - The Numbers
01:23 - Upfront Costs
03:58 - Ongoing Monthly Costs
05:47 - Financial Position After 5 Years
09:21 - Renting vs Buying: Which Is Best?
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The opinions and observations expressed herein are solely those of Jason Bondy-Sawyer, and not those of Royal LePage Signature or the Toronto Real Estate Board. The opinions and observations expressed herein should not be misconstrued as financial advice or an attempt to solicit anyone currently under contract. Please consult a professional and complete your own due diligence prior to taking action on any decisions relating to the matters discussed in this or any of our videos. This communication is not intended to cause or induce breach of an existing agency agreement, nor is it financial advice.

Пікірлер: 28

@professorchaos9 25 күн бұрын

With the current crisis its hard to see a scenario of 5% per year for the next 5 years. Fair to say its a buyers market, and that can't raise the prices, specially considering the inventory sitting there. I have a condo for sale in Montreal, 475 sqft and only 2 visits in the last month with no offers, and the price is 278K, which seems like a fair deal to me when I study the area of current listings and those sold. A buyer could easily negotiate this price down.

@eloquent-code Ай бұрын

Totally misleading analysis. There is 90,000 CAD differential which renter was saving why you are not adding that to an investment. The simplest thing you can do is put that in an ETF. 10% growth on a minimum. Second part buying a home means you have to stay at one place meaning job losses is a problems for you now. Second if somewhere there is better opportunity you can not go. Consideration - You have super stable job owning seems to good idea - You will not get more money if you move owning seems to be a good idea. - Kids Then definitely you don't want shitty shoeboxes . Its better to rent and move where you can raise your children. - Real estate is very illiquid - You are not diversified. All you money is put in one city. What is it goes the Texas way. Investment is all about risk. - Renting your house is not passive income Dividend from stock is. - You have 10 millions dollars and like to waste money owning house makes sense.

@Bondy-Sawyer_RealEstateTeam Ай бұрын

Thanks for taking the time to comment @leetcse In the video I do acknowledge the question, "What if I were to just rent instead, and take all of that extra money that I would've otherwise spent on owning and invest that elsewhere?" And I go on to say that, for some people, that actually might be the better path forward! I do plan on doing another video that compares buying VS renting & investing in the S & P 500. - Ultimately, this video is not a comparison between someone who buys VS someone who rents and invests the saved money elsewhere; it's a breakdown showing where you'd be if you bought (and spent the $90,000 extra over 5 years) VS someone who just rents.

@peterbanh1364 12 күн бұрын

500-599 sqf with no parking at the price of $575k? That is outrageous price. Even if I have the cash, I rather buy GIC to collect interest. It is better to rent.

@samben8915 Ай бұрын

Thanks for sharing this insightful comparison. Could you please do the same comparison for two bedrooms condo?

@Bondy-Sawyer_RealEstateTeam Ай бұрын

Thanks for watching @samben8915 That’s a great idea for a future video.

@masterphotog4131 Ай бұрын

Thank you for this great educational video. Keep up the good work!

@Bondy-Sawyer_RealEstateTeam Ай бұрын

Will do. Thanks for watching!

@aman4u18 26 күн бұрын

But how do we know, it will go up 5% per year i next 5 years? There been a scenario like Lost Decade in the past.

@Bondy-Sawyer_RealEstateTeam 25 күн бұрын

Good question @aman4u18 The answer is, we can't know for sure how much values will actually go up (or down). No one has a crystal ball! In the video I propose 2 scenarios (both of which are below the 40 year average): - one where values appreciate 3% per year - one where values appreciate 5% per year It's of course possible that neither of those numbers are accurate, and that values will appreciate at a lower (or higher) rate for the next few years. Feel free to take the numbers I used in the video and run a few other value-appreciation scenarios for yourself to see how those would play out. Thanks for watching!

@SusanHenderson-jf7oi Ай бұрын

What a great comparison - thank you so much !

@Bondy-Sawyer_RealEstateTeam Ай бұрын

Glad you liked it!

@CassiusJohnAdams Ай бұрын

Does the land transfer tax rebate for first-timers happen immediately, or is it paid up-front and then returned the next year?

@Bondy-Sawyer_RealEstateTeam Ай бұрын

@CassiusJohnAdams Great question! It's typically applied immediately at the time of closing. This means that eligible first-time homebuyers do not need to pay the full amount of land transfer tax upfront and then wait for a rebate. Instead, the rebate is deducted from the total land transfer tax payable at closing, reducing the amount the buyer needs to pay directly.

@TheFlatEarthChannelcom 13 күн бұрын

right now and I pay $5000 a month like living alone DT Toronto. Been there for 8 years moving out in end of Aug to a property I own cash out at in a 4.5 star hote room. My month cost will be about $800 now. I never had a mortgage before because I bought that property 100% down. So would I qualify got first time home buyer? My monthly income is 20,000 a month take home.

@Bondy-Sawyer_RealEstateTeam 12 күн бұрын

To qualify as a first time homebuyer for Land Transfer Tax rebates, you cannot have owned a home or interest in a home anywhere in the world, at any time. It down't matter whether or not you had a mortgage on the property. And the method of acquiring the home (e.g., purchase, gift or through an inheritance) is not relevant.

@paulshealthfitness7922 Ай бұрын

why didn't you just do it based off a condo bought 5 years ago today, we have the interest rates and prices and rental costs of the past. and then compared it vs just renting and buying s & p 500 with the difference

@Bondy-Sawyer_RealEstateTeam Ай бұрын

@paulshealthfitness7922 Great question, Paul. I wanted the video to appeal to someone who is CURRENTLY looking at whether they should buy or rent. I thought that using current sale/rental values and current mortgage rates would be the best approach. You're right though, if I would've used a condo bought/rented 5 years ago I wouldn't have to speculate about what MIGHT happen with future value appreciation :-) And yes, I'm planning on doing another video that compares buying VS just renting and investing in the S & P 500!

@eloquent-code Ай бұрын

He either forgot it or trying to mislead us. 90K CAD plus growth on it assuming S&P 500 was missing from entire calculation.

@howy3333 Ай бұрын

Great video! Only thing you forgot is selling costs!

@Bondy-Sawyer_RealEstateTeam Ай бұрын

@howy333 Thanks for watching, Howard! I didn't cover selling the condo in this video. I'm thinking of doing another video that compares: i) selling the condo to buy a larger property versus ii) keeping the condo and putting the equity towards buying a larger property (or an investment property).

@vikingvancouver9832 Ай бұрын

Nice summary. What about 1.) out of pocket costs for repair/maintenance issues in the unit? Sink/toilet leak? 2.) shitty renter - misses a payment? 3.) special assessments from condo board for bigger repairs over time? It seems to me your P/L should include some estimates for those three items. For the renter, with so many tax free accounts (FHSA, TFSA, RRSP) and index funds like VOO (earn 7% on average doing nothing) savings options have never been better. Now that interest rates have normalized ‘investing’ in real estate looks an awful lot like a speculation (not an investment) - singularly hoping bubble prices go ever higher. Could happen. But if prices go sideways for 5 years the investor will lose a boatload of money. If prices actually go lower the investor will be bleeding cash. Eyes wide open…

@Bondy-Sawyer_RealEstateTeam Ай бұрын

Thanks for watching & commenting @vikingvancouver9832 These are all fair points! For point #2 (“shitty renter”) I would say that my comparison is focusing on renting a condo vs owning a condo as your PRIMARY RESIDENCE (as opposed to owning a condo as an investment property to be rented out). - You're right though, when looking at a condo as an investment to rent out, you definitely need to factor in vacancy rate (or unpaid rent from a bad tenant). - And yes, if the value does not appreciate at the rates I used in the video (or if they don't appreciate at all, or even go down in value!) then your financial position would be quite different.

@robocop581 29 күн бұрын

@@Bondy-Sawyer_RealEstateTeam He also assumes 2008 or Dotcom crash will never happen again. Also never mentioned eviction as vacancy rate in major places like Vancouver is less than 1%. There's also leverage which I can't do for stocks unless I trade on margin which is extremely risky. I own seven properties, six of which are rentals. The income from those properties are now getting piled into my Dividend Portfolio while the equity in those properties is used to buy more properties so I have a double edge sword. Try using stocks as collateral to buy properties.