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Renting vs. Buying a Pre-Construction Condo

Renting vs Buying

How to Decide If You Should Rent or Buy a Condominium Unit

If you’ve ever rented a dismal apartment, followed Toronto real estate, or felt like you’ve spent too much time in your parents’ basement, chances are you’ve asked yourself the question: Should I rent or buy a pre-construction condo?

This is a decision most people face, and it’s not one to be taken lightly. The good news is that while the answer is different for everybody, it’s not a decision you have to make alone. At GTA-Homes, we’ve helped countless people evaluate their options and come to a solution that’s right for them.

If you own a condominium, you can reasonably expect the equity in your condominium unit to increase over time, which can be a rewarding way to increase your net worth. In contrast, people renting for that same period of time will be left with no property investment, but may have enjoyed lower living expenses and the opportunity to invest in other properties.

There are many advantages and disadvantages when it comes to renting or buying a condominium unit. Let us break down some of these advantages and disadvantages of both setups for you. This way, you’ll be able to make a more informed decision on whether renting or buying is the right choice for you.

What Are the Advantages to Renting a Condo Unit?

Renting offers a no-risk option with generally fewer maintenance hassles. There are many more advantages to renting a condominium unit and it can be a suitable option for many lifestyles. Some of these advantages include:

Enjoying a single, stable monthly payment

Generally, as a renter you can count on a predictable monthly rent, that may or may not include utilities. Owning a condo involves other monthly carrying costs besides your mortgage payment, like property taxes, condo fees, utilities and insurance.

You’re not on the hook for maintenance

Fridge broken? Toilet leaking? If you’re renting, all of that responsibility belongs to your landlord. Granted, some landlords are more fun to work with than others when it comes to maintenance requests, but ultimately it’s their obligation, not yours.

Freedom to move

If it turns out your new neighbourhood has too much traffic, has a long commute, or not close enough to the city’s hotspots, you’re free to move every year if you want. If you can’t decide on an area in which you want to live long-term, you might be better off biding your time in the rental market. Additionally, the moving process is significantly cheaper and less complicated for a renter because buyers are on the hook for land transfer tax upon purchasing and commission when selling.  Not to mention the selling process itself, which is a significant undertaking.

Sometimes it’s cheaper to rent

Looking strictly at your monthly payments, your overall costs may be cheaper when renting. This is particularly true if you don’t have a significant down payment.  If you’re able to be a savvy budgeter while renting, it may make a good option while you’re busy saving up for a down payment, giving you more freedom when it comes to where and what you decide to purchase in the future.

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What Are the Advantages to Buying a Condo Unit?

Besides the pride of homeownership, which you can’t really express in monetary values, there are a number of concrete reasons why purchasing a condominium may be advantageous over renting. Some of these benefits include:

Every payment goes toward your own mortgage

Not someone else’s. Instead of helping your landlord pay their own loans and never reaping any rewards from your hard-earned income, your mortgage payments go toward equity, which is a huge bonus for you. Additionally, when property prices increase, you stand to earn those profits not your landlord.

The space is yours to do with as you please

You have the freedom and luxury of owning your own space. Have as many friends over as you want, swap out your appliances, renovate your bathroom, or paint your walls in dramatic colours - it’s all up to you. You may still have to abide by condo committee rules, but overall it’s your home and you call the shots.

It’s a solid investment plan

Real estate investment is a popular option, largely because GTA real estate has long yielded better and more predictable results than many investing alternatives, but with that being said, any reward comes with risk. Paying off a mortgage is kind of like being forced to have a savings plan. If you’re saving money by renting, yet blowing those savings on too much takeout, buying might be a better financial plan in the long term.

Buying may be a more secure option

You’ve probably noticed that navigating the GTA’s rental market isn’t always an easy process, the prices tend to fluctuate, nor is it cheap, especially if you’re looking to rent in neighbourhoods like Yorkville or Downtown Toronto. If you've managed to save up a significant down payment, it might be in your best interest to buy a condominium unit and pay a fixed mortgage rate. This way, you know that you are always paying the same price each month and every payment goes toward your mortgage which is a big personal investment.

Renting vs. Buying

Let's break it down even further - Look at the points below to see which ones apply to you more. This way, you will be able to decide which option makes more sense for you.


  • No need for a down payment
  • You’re not sure where you’ll be in the near future
  • You prefer a setup with no risk
  • You can’t afford to buy in the neighbourhood where you’d like to live


  • You want your income/savings to go towards paying down your own home - building equity.
  • Your finances allow you to afford a condo in a desirable location.
  • Increasing your assets with an investment is just a bonus.
  • You have control over your own property and the investment is seen as a capital gain.

There are advantages to both kinds of situations and the decision to rent or buy depends on many variables, including your income, savings, monthly costs and your personal values.

A Deeper Look Into Renting and Buying

A Deeper Look Into Renting and Buying

Here is a more in-depth look at why you would want to consider renting:

  • You don’t have a down payment. A down payment is usually between 10 and 20 percent of the total purchase and is a critical part of the equation when calculating how much you can afford when it comes to condo shopping.
  • You aren’t sure where you’ll be in the near future. The longer you live in your condo, the more money you’ll make on it. If there’s a chance you might accept a job in another part of the country or not sure where to live or spend a few years travelling abroad, it might make more sense to stay in the rental market.
  • You prefer a setup with no risk. No reward comes without risk, but it’s never possible to guarantee that real estate prices will go up. If you would rather have one, low-maintenance predictable monthly cost and not worry about property taxes, maintenance fees or utilities going up and affecting your budget (although naturally property prices and demand can affect rental rates too), renting is probably the way to go.
  • You can’t afford a place or neighbourhood you want to live in or you’re not sure which neighbourhood you want to live in. If you have your heart set on a condominium in Yorkville or you absolutely want a three-bedroom loft space, it makes sense to bide your time and save up for a significant down payment rather than rushing into the purchase market and settling for a unit you don’t love.

Why you would want to consider buying:

  • You want your income and savings to go towards paying your own mortgage, not someone else’s. Many of our buyers have told us investing in themselves was the best financial strategy they’ve ever made.
  • Your finances will allow you to afford a condo in a desirable location and you’ll still have enough money left over to live comfortably. It’s true that sometimes owning a home means making sacrifices, but you should never feel like you’re stretched beyond your limits. Use our mortgage calculator to see what kind of monthly payments you’ll be looking at if you decide to buy.
  • To you, increasing your assets with an investment is just a bonus. If you believe the real value of owning a home or condo lies in laying down roots and living your best life, you’ll likely find meaning in the decision to purchase.
  • When you have control over your property you can add more value to it by renovating or making some improvements to your home which will benefit you in the long-term. Buying a condominium unit is a great investment that is seen as a capital gain because when it is time to sell, you will see a high return on your investment. Investing in real estate is one of the fastest and most secure ways to grow your equity.

At GTA-Homes, we’ve helped hundreds of people evaluate their options and guided many first-time buyers through the process of purchasing their first pre-construction home or condominium. Find out how we can help you. Give us a call or drop us a line!

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