The Rent vs Buy Debate – what’s a young lawyer to do?

Everyone knows that it’s expensive to live in big cities. The cost of living in Toronto is 52% higher, for example, than in Winnipeg By far the greatest difference in cost of living is the amount for rent and/or home ownership.

If you’re a lawyer, chances are good that you live in one of the expensive urban environments (although my hats off to those that made their way to Winnipeg or Edmonton – I’m now meeting a lot of lawyers who intentionally picked Biglaw markets based on the cost of living).?Once you’ve landed your position, the question becomes where to live.?With that, you may be faced with the decision of whether to rent or buy your first property. While there are pros and cons to both options, the decision ultimately depends on your personal financial situation and goals.

Renting offers flexibility, as you can easily move around as your circumstances change. It also involves fewer upfront costs, as you typically only need to pay a security deposit and first and last month's rent (which, these days, can still be several thousand dollars). Additionally, as a tenant, you're not responsible for the costs of maintenance and repairs, as these are usually the landlord's responsibility.

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However, renting also means that you're not building equity in a property, and you may face rent increases over time. Furthermore, as a tenant, you're limited in terms of how you can customize and decorate the property.

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On the other hand, buying a property allows you to build equity over time and potentially benefit from property appreciation. You also have the freedom to customize and decorate the property as you wish. Additionally, as a homeowner, you may be eligible for tax deductions related to the work you do on the property.

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However, buying a property requires a significant upfront cost in the form of a down payment, which can be a barrier for many young lawyers. Owning a property also comes with ongoing costs, such as property taxes, homeowners insurance, and maintenance expenses.

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When deciding whether to rent or buy a property, it's important to consider your personal financial situation and long-term goals. You should take a look at your income, savings, and debt to determine what you can afford. You should also consider your long-term plans - if you're unsure of where you want to settle down or if you plan on moving frequently, renting may be the more flexible option.

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It's also important to consider the housing market conditions in your area. In some markets, it may be more affordable to rent than to buy, while in others, buying may be the more affordable option. You should also take a look at the housing market trends in your area - if home prices are increasing rapidly (I mean, really, they’re pretty much sky-rocketing everywhere these days), it may be a good time to buy as you could see a return on your investment over time.

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Ultimately, there is no one answer to decision to rent or buy a property as a young lawyer.?The answer is a personal one, as it depends on your personal financial situation, market conditions, long-term goals, and flexibility (especially with respect to dealing with changing interest rates). With careful planning and consideration, you will make the best decision for your financial future.

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If you're unsure of where to start, please reach out to us; we can help you give some thought and help you navigate the decision-making process. Remember, your first property doesn't have to be your forever home - it's important to choose an option that aligns with your current goals and financial situation.