Owning vs Renting: 8 Mistakes We Made as Homeowners
In 2017, my partner Colin and I bought our first home, a two bedroom condo in Surrey (just outside of Vancouver). In 2019, we left for Prague and became international landlords, renting out our home to three tenants. And in 2021 – less than four years after we bought it – we sold our home.
And we could not be happier to be renting again!
Millennials are told we’ll never be able to buy a home. And that would have been true for us if it had not been for our very generous parents who loaned and gifted us money, and our incredible privilege to have jobs and very little debt.
So many people told us how lucky we were to get into the housing market that we barely thought twice before buying our condo. But looking back, some mistakes were definitely made. We were so lucky to have been able to buy a home and I can’t quite say I regret it. But I can say I’m much happier renting now.
8 mistakes we made as homeowners:
1. We bought before we were ready
We jumped in too soon. Our house hunt was born out of my reckless internet scrolling and desire to dream big and go on an adventure. Except this wasn’t just a trip to Ireland on a great flight deal. This was a huge, six-figure, multi-year commitment. I so wish Colin and I had taken some time to sit down and figure out if this was really what we wanted, especially considering we had only lived together for six months when we bought our condo.
Of course, we did talk about the actual house. But we rushed. I rushed us and societal pressure rushed us. So many people told us we were lucky to get in when we did. We happened to buy when the market was slightly cooled and before everyone thought demand would return. So while it might have been an okay time for the market, it wasn’t the perfect time for us.
2. We didn’t consider location and lifestyle
Surrey was our choice because we could afford it. It’s also where Colin grew up, so it was comfortable for him. And while our condo was in a great spot – right next door to a skytrain station, grocery store, bank and grassy area for Ellie – it was also very far from the city.
Working from home, I felt so disconnected from other people. I wanted to be able to work from coffee shops, pick up takeout from restaurants, hang out in parks and not have to drive to get everywhere. It’s not like Surrey doesn’t have coffee shops, but it’s not a walkable city like Vancouver is. I remember feeling very isolated in Surrey. It was also difficult for Colin, who works at a downtown hospital. His commute was over an hour each way, meaning he’d be gone for 10-11 hours each day, making both of our days very long.
When we lived in Prague, we were much closer to the city centre with restaurants, shops, parks and transit all around us. We both loved that lifestyle and knew it was something we wanted in our next home back in Vancouver.
3. We forgot about our longterm plans
When we decided to move to Prague for a year, I remember asking Colin why we hadn’t thought to do that a year or two earlier – before we had adopted Ellie and bought a condo. It would have been so much easier to pack up and move abroad if we didn’t have a dog and a mortgage. I wish we had talked through more of our longterm plans before we bought. If moving abroad was a possibility, I think I would have held off on buying a house (and maybe even adopting a dog, though I certainly don’t regret having Ellie in our lives!).
4. We had to become landlords
When we moved to Prague, we decided to rent out our condo. In hindsight, I wish we would have just sold it. We never wanted to be landlords and we certainly didn’t want to be international landlords. It was a huge hassle to find tenants and deal with the issues that cropped up, including vandalism, roommate conflicts and broken appliances. I still remember being on the phone with Colin’s mom at 2:00am while she shopped for washing machines for our tenants in Vancouver while we were in Prague.
A lot of people think that landlords are greedy and trying to get rich by taking advantage of renters. But that certainly wasn’t our case. For most of the year and a half that we had our place rented out, the rent did not cover the costs of the home. Just a few months into us living in Prague, our strata decided to impose a special levy (more on that below) which essentially doubled our strata payments. Our insurance also went up because we had tenants. So we were paying about a quarter of the costs each month while the rent they paid covered the rest. We certainly were not making an income as landlords.
5. We didn’t do the math
Turns out owning a house doesn’t just mean you have to pay your mortgage! There’s also property taxes, home insurance, strata fees, repairs and maintenance. Who knew? Plus, all of those numbers go up every year (or more often) with no ceiling on just how high they can go.
We also had the pleasure of paying special levies – fees our strata would charge everyone in the building to pay for projects like a roof repair. In the three short years that we owned our condo, we were assessed two special levies, each costing us $200-400 more per month for a year per levy. And you just have to pay it! There’s no opting out or deferring the payment.
On top of that, we got to deal with rising insurance costs. In 2020, insurance companies in BC decided they had paid too much for water damage in recent years and were going to raise their rates. That meant that some strata buildings no longer qualified for complete coverage. And, of course, our building happened to be one of them. So we then had to get special insurance to make up for the fact that our strata was no longer fully covered. We were also paying more in insurance because we had tenants. So our insurance went from about $300/year in the first year to over $3000/year in our final year. It was a huge blow!
Oh and that mortgage payment? It’s not just money in your pocket. Your mortgage payment is made up of the principal (paying against your loan) and interest (paying the bank). In the beginning, your payments are more than 50% interest. Isn’t that wild? I feel like that’s something no one talks about! Over time, the percentage of interest goes down and you end up paying more towards the principal, but it can take years.
6. We didn’t have an emergency fund or back up plan
It probably isn’t surprising to learn that we didn’t have an emergency fund considering all of the expenses I just listed. Owning a home, and particularly a condo with a strata, was expensive enough. Luckily we’ve always been pretty good with money and our parents or a line of credit could help us out in a pinch, but we didn’t have any money set aside for home issues.
This was particularly concerning when we decided to become landlords. We didn’t have money put aside to fix repairs or to cover the expenses if our tenants decided to leave early or not pay rent. We would have been in trouble if something big had happened. Even when small things happened, like a broken washing machine or ceiling fan, we still felt stressed and unprepared. We didn’t have the money set aside and we didn’t have people on the ground in Vancouver who were able to help us. We relied on our moms to be pseudo property managers for us while we lived in Prague, which really wasn’t fair to them.
7. We sold at the wrong time
If I could go back in time, I would have wanted us to sell our condo before we left for Prague in June 2019. That way, we wouldn’t have had to be landlords or deal with all the problems that were around when we did decide to sell. But, at the time, we thought it made more sense to hold onto the condo. We wanted to continue building up the equity and we didn’t want to get stuck paying the mortgage while we were in Prague if it didn’t sell right away. We also thought we might want to move back into it one day.
Instead, we decided to sell in December 2020, after a year of being international landlords. We were selling a condo that no longer had full insurance coverage, just after Christmas (the slowest season for real estate) in the middle of a global pandemic. Suffice to say, it was not the ideal time to sell!
Luckily, we were able to get the place sold fairly quickly but I think we would have made more money, and had way less stress, if we had sold it before moving to Prague.
8. We felt stuck
This was probably our biggest issue with homeownership: We just felt stuck. We were tied to this condo in this location that didn’t support the lifestyle we wanted. It was hard for us to go after our big goals, like moving abroad. And every month we had to make these huge payments that seemed to go up all the time without our control.
Owning a house to us didn’t feel too different from renting. Every month we still had to send a huge chunk of money off somewhere – it didn’t matter that it was to the bank instead of a landlord. And living in a condo with a strata, it’s not like we could do much to our home. Sure, we painted and didn’t have to ask anyone’s permission to put nails in the walls. But we also had no say over the ugly carpeting in the hallways or what rules (and levies!) the strata lay down.
Now that we’ve been living in our rental for over a year, and almost half a year has passed since we sold our condo, I wanted to dive into the reasons why I prefer to rent.
A lot of people assume renting is just throwing away money or something people do because they can’t afford to buy. But there are a lot of pros to renting and great reasons to choose renting over owning.
8 reasons why I prefer renting to owning:
1. It’s easier
I don’t have to worry about strata meetings, changing home insurance rates, letters from our mortgage lender or anything like that. The only thing I have to do for my home each month is send an e-transfer to my landlord. Easy peasy! There’s no stress and nothing to think about. I underestimated how much owning a home and being a landlord weighed on my mind but by the length of this blog post, you can tell it was something that really bothered me!
2. I’m not responsible for anything
Something breaks? It’s not my problem! I don’t have to repair or pay for anything. I have someone I can call who will figure it all out for me. Our microwave and garbage disposal broke a few months ago and I didn’t pay a dime or lift a finger (though Colin did help out because he’s a handy person with a heart of gold). It’s very reassuring to know that I won’t be out thousands of dollars if something goes wrong.
3. I’m protected
BC tenancy laws offer a lot of protection for renters. I can’t be kicked out without notice, a good reason from my landlord, and a free month of rent. Even if I stopped paying rent (which I would never do!), it’s quite a bit of paperwork to kick me out.
4. My housing costs won’t change unexpectedly
One of the biggest headaches of owning was not knowing how much it would cost us each month with property taxes and strata fees going up, special levies being imposed and insurance rates skyrocketing. Our monthly payments changed drastically in just our three years of owning and all we could do was accept it and pay them.
As a renter, I know my rent will be the same for the year. And even when the year is up, my rent can only be raised by a set amount. In fact, in BC there is currently a rent freeze so my rent can’t be increased at all!
5. I’m not tied down
I’m a person who loves change. Colin and I have plans to travel long term again. By renting, we give ourselves flexibility. One of the hardest parts of moving to Prague for us was figuring out what to do with the apartment we owned in Surrey. We decided to rent it out and really did not enjoy being international landlords. Now as renters, if we want to go on a long trip or change to a new part of town or different size apartment, all we have to do is give our notice!
6. I get to live downtown
One of my biggest issues with our condo was that it was in Surrey. I hated being so far away from Vancouver and a more walkable way of life. But Surrey was the only place we could afford to buy. Luckily, rent prices are more reasonable (though, still expensive!) in Vancouver so we have more options. We also have the flexibility of choosing to live in a smaller place downtown, since we know it won’t be our permanent home.
Living downtown also means that Colin is closer to work. A commute that used to take him over an hour on the skytrain and a bus is now just a 15 minute walk. Plus, we have the perk of living very close to the beach, which has been amazing in the nicer weather.
7. I’m debt free!
With our house sold, we were able to use the profits to pay off the mortgage, return loaned money to our parents, and still have enough leftover to pay off Colin’s student loans, make an emergency savings account, and invest in our long-term goals (like travel and retirement). It is SUCH a nice feeling to not have any debt or anyone we owe money to. It’s very freeing and an accomplishment both Colin and I are very proud of.
We are also very privileged to have no debt. I had help paying for school, Colin lived at home and we’ve been fortunate to be able to pay off Colin’s old car loan and any credit card bills in full.
8. I’m actually enjoying building wealth
Owning a home is certainly a way to build wealth through equity and appreciation. It can even be an income maker if you rent it out, though that is very hard to do in the Vancouver market (most rents do not cover the costs of owning the home). When we were paying into our mortgage, it never felt like we were building wealth. I know we technically were, but it felt so intangible and out of our control. It was also very inaccessible, as the money was all tied up in the house and not ours to see or spend.
Now that we don’t have the house, we have money in various funds for emergencies, retirement and long-term travel. I actually enjoy opening up our online banking apps and seeing how our money is growing. It’s been fun to learn more about what to invest in and to get more involved in the personal finance community. I feel more confident about our money and what we’re doing with it, and am really enjoying the process of learning more and saving.
For fun the other night, I did a deep dive into RESPs and how much we could put into our savings and investments each month. For fun! That was certainly not something I was doing when we were struggling to afford our home.
But isn’t renting just throwing away money?
Absolutely not. People way smarter than me have debunked this. Whether it’s rent or a mortgage (and the associated homeownership fees that come with a mortgage), you’re paying for a place to live.
People love to say that renting is “throwing away money” or “paying someone else’s mortgage.” But if I break down what we were paying as homeowners (strata + special levy + insurance + taxes + repairs + mortgage interest + mortgage principal), only a very small portion of that was money back in our pockets (aka against the principal). I’m not saying owning a home is a bad financial decision. I’m just saying it’s not the only smart financial decision.
What about stability?
As I mentioned, I’m the kind of person who craves change. I hate monotony and love to mix up my routine – whether that’s changing the type of yogurt I buy or moving to a new city. I crave change way more than I value stability. And I realize that might be a time-dependent answer; I’m 28 with no children and no debt. But I think there will always be a big part of me that wants the freedom to make a change and doesn’t want to be tied down.
My parents moved around A LOT when I was a kid and I don’t believe I was negatively impacted. I don’t think there’s anything wrong with raising a family in a rental. You don’t need to buy a house in order to “settle down” and is settling down even all it’s cracked up to be?
What about building equity?
One of the big plusses of owning your home is the equity you build in it. You can use that equity to refinance or, when you sell, to make a profit. And in a market like Vancouver where housing prices are always on the rise, you’re almost guaranteed that your house will appreciate in value.
Without a doubt, there is opportunity to make money on a house in Vancouver. If we had held onto our condo for 3, 5 or 10 more years, maybe we would’ve made a ton of money on it. But also, maybe not. We were in a 20 year old condo in Surrey with insufficient insurance coverage and a roof that needed replacing. That was never going to appreciate as much as a single family home in Vancouver.
Now we’re able to build up equity and wealth through investing. It’s a lot more hands off and enjoyable for us, and it still prioritizes our long term goals. Even if owning and selling a home would have been more profitable for us than investing in the stock market, I don’t think we can discount how it makes us feel. Because investing isn’t stressful and I find it more enjoyable, I’m more interested in it and more likely to learn about it and invest more.
But what if we change our minds?
That’s the great thing about being young, debt-free and probably a little bit naive – we have time to change our minds! As much as I think renting is the right choice for us now, it might not always be. And even though we had a lot of struggles as homeowners, I don’t know if I regret it. We did learn a lot, not just about finances but also about what we value. And we did make a profit. We might not have been able to pay off debt and invest without having made money from our condo sale.
Will it be harder for us to get back into the housing market later on? Most likely. The Vancouver market is hot and only getting hotter. Deals are not likely to be had and I’m worried about inflation hurting our buying power. And now that we’ve gotten used to downtown living, it might be hard for us to move back out to suburbs where we could afford to buy.
But I think with the right motivation, a good amount in our savings, the perfect time for the market and willingness from our parents to help us out again, we could get back into the housing market. It’s definitely not something I want to do right now, but never say never! I could see a time in our lives when we might want to buy again.
But I also wouldn’t mind if we rented forever!
A final note: Now that I’ve ranted about housing for almost 4000 words, I just wanted to say that this is, of course, all my opinion and very subjective based on my own experience. I would never tell someone to not buy a home. But I don’t think “buy a home” should be a goal for everyone. There are lots of ways to be an adult, grow wealth, and feel stable and settled in your life without buying a home.
All right, where do you land on the owning vs renting debate?
Pin it!
I have both rented and owned several times and all that I read on your post was so familiar to me – the pros and cons, the missed opportunites and the hindsight trip. Your article sums it all up really well. Its a great reference work for thise who are thikig of doing either and need some sound in-depth advice. I enjoyed reading it!
Thanks for your insight, Barry! I really appreciate it.
This is such a refreshing take. We’re constantly told that owning is the “better” option but that is not the case for all. Great detailed post!
Thanks! Yes, I definitely think owning isn’t best for everyone.
You know when the universe sends you something at the exact right time you need to see it, that was your post for me. I have found great comfort in your words because of lately I’ve felt so much pressure to own a home or felt as though I’m not successful without owning a home. But I feel as you do, I don’t want to be tied down. I want to be free.
Aw thank you so much for this comment, Shireen! I wasn’t sure about posting this one as it’s outside of my regular topics and I know it’s a bit of a controversial take. But I’m so glad it resonated for you!
Wow, this was such an interesting read. I think things are very different in the UK, over here it’s all about getting onto the property ladder as rental costs have been so high. But house prices are artificially high over here too, although London property prices have been falling since the pandemic as more people want to escape to the country. It’s an interesting debate for sure, and one that will run and run. Glad you’re sorted now though – thank you for sharing your tips!
Thanks for checking it out, Lisa! It is interesting how this narrative differs from country to country.
This is a really detailed and honest post about your experience. I personally cannot wait to purchase my home. Just because mortgage payments can be much cheaper than renting.
Thank you for sharing.
Lauren
Thanks, Lauren! That’s awesome and I hope you can learn from the mistakes I made as a homeowner. All the best on your property journey!
I totally agree with all of this! I’m 25 and plan to continue renting for a long time. I live/grew up renting in Manhattan, where the real estate market is crazy and a decent one bedroom apartment starts at $750k and that doesn’t include taxes, maintenance fees, and all the other unexpected costs you mentioned!
Thanks, Dale! Yes, I think where you live and grew up totally affects your thoughts on this debate. I grew up in Toronto and live in Vancouver now, both very tough real estate markets, so can definitely relate to your experience in Manhattan.
This was a great comparison post. Both renting and buying have pros and cons and it’s good to get a picture of the two before making the next move.
Thanks, JoJo! Absolutely – no matter where you stand on the issue, it’s good to think through the pros and cons of both before you decide.
There are always pros and cons to every decision- it comes down to want we value and believe is the right decision for each of us personally. This is definitely on trend with the new wave of the future of not owning anything. We are becoming a highly personalized society that loves our subscriptions, even when it comes to ownership.
Thanks for your thoughts, Renee!
I found this blog post very interesting. Everyone’s talking about the plight of millennials not being able to afford to buy property. I totally wasn’t expecting to see one of those millennials write a pro-renting post.
You are making some valid points about the advantages of renting vs. owning. Here in the UK I am guessing it’s in some ways even less attractive to own, because in most cases you won’t own-own your house, you’ll just (as the official owner) have a lease on the property you bought. Sometimes that lease will last another 900 years or so. In many cases it will last just a few more years or decades. At some stage you’ll have to pay to renew your lease. Completely bonkers in my view.
I totally agree that it’s silly when home owners tell non home owners that they are paying someone else’s mortgage as if that would automatically discredit renting as a somewhat dumb thing to do.
Thanks so much, Stefan! I really appreciate your thoughts on this. And I think the debate definitely varies based on location. I know we have some of those lease-hold properties you’re talking about here in Vancouver too and yes, the system baffles me. Thanks again for checking out the post!
I just bought last year but had to move to Delta to do it. I definitely don’t regret it though and think out was the right time so that’s a really important point you made. I loved living downtown and still miss it, but I also now love that my money is going to me and not a landlord. It isn’t always easy getting on the property ladder and I don’t envy you being international landlords but glad you’re happy with your rental and can appreciate why it’s a great option
Congrats on your home in Delta! Definitely pros and cons to moving farther out of the city and whether or not you value home ownership. So glad you’re happy with your choice – that’s the main point, isn’t it?
I am glad we arent the only ones that feel like we cannot buy yet not due to the money alone but becuase of our lifestyle and future plans. Buying a house is not for everybody and there is no timeframe for it either. Love living downtown!
Ah so glad to hear you’re in the same boat. Downtown living is the best!