Posted by: Daryl & Wendy Ashby | July 3, 2011

No Need to Apologize

For some people, when they admit to someone they live in a rental apartment, it always sounds like a confession.

Today, it seems there must be something amiss if you’re not a homeowner. The lucky ones have trained themselves not to immediately give a guilty explanation of why they are renting because it’s too much information, especially for people they have just been introduced to and are trying to make conversation by posing the “Where do you live?” question.

For a small number, they now rent because they’ve sold their city and country properties and haven’t found what they want in the city yet. This is a story they can rely on with their head held high.

If pressed, some will admit to having lived in a rental about 20 years ago so the experience is not totally unfamiliar with them. It could have been for a few weeks during what might politely be called a divorce. Out of necessity, it was a furnished rental and at the expense of their sanity, everyone in the building was in turmoil. There was always some distraught soul sobbing in the elevator.

Many people still hear the echo of their parents’ stern warnings about the profligates who rent and how they come to a bad end. As it turns out, some do. They own no house or condo they can liquidate to keep them comfortable in old age. Even the prudent who don’t own can be at a disadvantage compared with homeowners. What they make in the stock market doesn’t come close to the appreciation of a house or condo over 20 or 30 years.

It’s because of their parents’ admonishment that they worry every year they rent that they miss out on the 8% appreciation a house or condo gained last year. Cash stuffed away in a savings account waiting to buy a home is getting a little more than 1% at the bank. Of course, these same people are not paying property taxes or heating and they don’t have gardens to maintain and so on, but if they stay in a rental for too many years, the reality is, the right to experience these aspects of home ownership will never be theirs.

Thirty-two percent of all households in Toronto today (579,010) to be specific, rent. The average monthly rent for a two bedroom apartment in what used to be the City of Toronto, in the fall of 2010, was $1,395. The vacancy rate then was 1.8% and has, apparently, decreased, frustrating those on the hunt for new digs and encouraging Landlords to push their rents skyward.

It’s difficult to appreciate that a third of Toronto rents, but the general population of Greater Vancouver and Victoria is not all that different. Quite simply, if you didn’t purchase prior to 2008 (when prices nearly doubled), it is unlikely you will ever see home ownership, that is unless you are adventurous or creative with your income and lifestyle.

If you have a dream to own real estate, do yourself a favour and drop us a line. If we cannot answer any of your questions, we will definitely steer you to who can. If there is any way possible to help you into the market, we will find it.

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