Should I Rent or Buy in Guelph?

If you have been keeping an eye on the market recently, you are likely asking the same question many are: Should I rent or buy in Guelph?

Not only is it a fair question, it’s an important one. Many have referred to the current market landscape as a “Buyer’s Market”, which is true to the fact that inventory is high and home prices are relatively stable.

However, understanding your options and how they fit into the Guelph market can help you put your best foot forward when it comes to either leasing or buying a house.

This blog post will go over: the market landscape in Guelph, the pros and cons of renting vs buying, the lifestyle factors and the Capstone strategy.

What’s Happening in Guelph Real Estate?

Over the past decade, Guelph has been growing rapidly, with many new build communities springing up as well as, changes to restrictions regarding Additional Dwelling Units and the ongoing sale of large land on the outskirts of Guelph, creating great building potential.

Guelph is known for many things– strong employment development, the vibrant arts community, mature-treelined streets, family-friendly neighbourhoods and proximity to its surrounding cities.

After a period of rapid appreciation, Guelph’s market has become relatively stable. Many families that have bought in the past five years are now in the process of looking once again for larger homes, or are eager to relocate closer to schools. There are still people who are moving to Guelph, but there are fewer inbound relocators compared to years passed.

In other cases, the aging demographic has also created a lot of new inventory, particularly for homes that have not been on the market in many years.

Closing the Gap

The biggest change in Guelph real estate is the closing of the cost gap between renting vs owning. In other words… if you are currently paying rent in Guelph and have been for the past few years now, you have likely put down enough in rent to put a down payment on a home!

When you start to add up the numbers, it becomes clear that home ownership, while it is a gradual process, is the best option long-term. In fact, there are even rent vs mortgage calculators to help you really see the long-term financial impact of both journeys.

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Renting in Guelph: Pros and Cons

Renting is best for those who need flexibility in their lifestyle. It requires little to no maintenance and allows you to make short-term commitments to the thought of settling down in a particular job or area.

What are the advantages of renting a house?

Some of the most common advantages renters speak to include:

Flexibility: for relocation travel, job transfer, changes to living situation, and so much more.

Lower Cost (Upfront): Unlike the large sum of a down payment, rent is processed in increments and allows you to live within a more advantageous budget.

Fewer Maintenance Fees and Requirements: Most condominium buildings charge a condo fee, which includes maintenance of the property. This means snow removal, garbage removal and ongoing indoor/outdoor maintenance of various kinds are often included.

Reasonable Utilities: If you are comparing a detached home to a condo/apartment building, you will see a difference in the cost of heat, hydro, air conditioning and other common household utilities because the general space you are living within is smaller in a condo. New build condos are also home to newer, more energy efficient technology, helping to cut the cost on some utilities.

Now what about the Drawbacks…

No Equity Growth: Your rent payments are likely going towards the payment of your landlord’s mortgage.

Limited Control of the Space: Tenants are allowed to make very minimal changes, with some apartments even preventing holes in the wall for picture frames and TV mounts. Other common restraints include no renovations or painting allowed. When you own a property, you have the ability to change and modify it however you desire.

Restrictions on Pets and Visitors: In condo/apartment buildings, pets are almost always not allowed (with the exception of service animals) because of the wear and tear, combined with the presence of allergies in accompanying units.

This can be difficult for renters who have furry friends. Visitor restrictions are also common. If you are renting out a one bedroom apartment, it is assumed from the landlord that only those on title for the rent are living in the unit. This situation can become difficult in apartments with more than tenants alike.

Less Stability: At any given point, with proper legal notice, a landlord can decide to end your lease term if they are choosing to move into the unit or sell the unit, forcing you to relocate before the home is SOLD. This can create uncertainty and hassle in your daily life.

For many, renting seems like the safest option short term. However, with time, renting can become expensive and is less financially rewarding than home ownership.

Buying in Guelph: Pros and Cons

Buying a home isn’t just about finding a place to live– it’s also about making a strategic financial move to build wealth and invest in the ongoing growth of the Guelph Real Estate Market.

When is it better to buy?

Let’s walk you through some of the biggest wins when it comes to buying in Guelph:

Equity Growth: Every mortgage payment you make puts you one step closer to owning your home in full!

Stability: YOU are in control of your space and get to dictate how you use it. This is one of the best parts of ownership. If you want to have a football night or a birthday party, you can be as loud and fun as you want!
Customization: Unlike rentals, if you don’t like something in your home, there is nothing stopping you from tearing it down and starting fresh! One of the beauties of home ownership is your ability to put any kind of personal touch on your space without having to worry about damage costs in the future.

Tax Benefits: First-time home buyers can benefit from many Tax Programs happening in Canada, helping to alleviate some of the costs of ownership right off the get-go.

Now, what about the challenges of buying?

Ongoing financial stability: When you enter into home ownership, ensuring you are in a relatively stable financial position is key long term. Job transfers and transitional life periods can affect your ability to maintain a mortgage on your home.

Responsibility: Your personal responsibilities will increase as a homeowner: one of them being financial stability.. Ensuring you are up to date on all utility payments as well as mortgage payments. Another key responsibility is ongoing maintenance. If something is broken, having it inspected and ensuring it is repaired is key to preventing future issues and maintaining the quality of the home.

Market Fluctuations: Your home will go up and down in value depending on a variety of factors and some of these factors can be unpredictable. Ensuring that the community and home you are investing in is one that remains relatively low risk is always wise.

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A Look at the Current Numbers

On average, a detached home for sale in the City of Guelph is currently priced at $778,000. This number is significantly more reasonable than some of the average numbers in 2021-2023, which fluctuated in the early $ 800,000 to mid $900,000’s, depending on a variety of factors. For a home in this price range, the common down payment is $20,000.

Compare this to the price of rent in Guelph. On average, a one-bedroom apartment in the city of Guelph can rent for anywhere from $2,000-$2,100, depending on location, amenities, age of condo development, etc. With this considered, 10 months’ rent in a $2,000 apartment is enough to make a down payment on a detached home!

Remember that part of the price of buying into a home is building equity. Equity that is no longer vanished into the pocket of your landlord.

Lifestyle Considerations

Beyond just the numbers, it is important to think about the lifestyle which makes the most sense for you. If you don’t have long-term plans of living in the place you currently reside, then ownership might create a burden in the future that you won’t want to bear.

Home ownership allows you to join a community, plant your roots and continue to establish yourself and or your family, all while learning and growing along the way. On the other hand, if you are in search of flexibility, travel frequently for work or are unsure where your professional career will take you, then renting may create more flexibility.

The common misconception with renting vs buying is that renting is only good for apartment and condo living. Renting is most common for these kinds of arrangements because it is cost-effective. However, for families who move frequently, have short-term plans before building a home or need flexibility, renting a detached home might be the right option.

Ask Yourself: Is it Time to Rent or Buy?

How long do I plan to stay?
Am I financially responsible at this time?
Am I financially ready, and if not, what steps need to be taken to get there?
What are some of my long-term goals?
Am I settled into my career?
Am I ready for the responsibilities that come with ownership, such as maintenance and bills?

This set of questions will really help you to dig deep and decide if ownership makes sense for you!

Stepping into Home Ownership Strategically with Capstone REPS

We believe in real estate decisions that are intentional. Sometimes, you find your dream home right away, and other times, it can take weeks, months and even years or searching to find the place that feels right for you. We are here to work for you no matter the length of the process, because we want to find a home and a community that invites you in.

With Capstone REPS, you can expect us to break down the local market conditions, work comprehensively to find you homes that match your search criteria, navigate issues with those homes along the way with ease and confidence, and then negotiate the sale with expertise.

Unlike other real estate teams, we don’t believe in pushing ownership on anyone; we believe in working together to figure out what makes the most sense for YOU and ensure that your needs are always a priority.

Wrapping Up

The bottom line is— monthly rent payments can be turned into equity with the transfer from renting to owning. The key features to think about are lifestyle, finances and market conditions when it comes to renting or owning and we are here it all makes sense.

Connect with Capstone Real Estate Professionals today to discuss your goals, explore the market, and discover whether renting or buying is the right step for you!

Buying a home? We can help! Reach us by email at info@capstonereps.com or call 519.824.9050.

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