Buy or Rent: Who Will Have More Money After 25 Years?

Buy or Rent: Who Will Have More Money After 25 Years?

The timeless dilemma between buying or renting a property often comes down to one key question: which of these two options helps you build more long-term wealth?

To answer this concretely, we analyzed a real-life scenario over a 25-year period. The result might just surprise you…

Analyzed Scenario: Townhouse in Candiac

• Property type: Townhouse
• Location: Candiac, South Shore of Montreal
• Size: 1,200 sq. ft.
• Bedrooms: 3
• Bathrooms: 2
• Purchase price: $545,000
• Equivalent rent: $2,350/month

Scenario 1: Buying the Property

Initial Costs

• Notary fees: $2,000
• Home inspection: $1,000
• Welcome tax (land transfer tax): $7,003.50
• ➡️ Total upfront costs: $10,003.50

Recurring Annual Expenses

• Home insurance: $2,000
• Municipal and school taxes: $3,000
• Maintenance: $2,000
• Condo fees: $3,200
• ➡️ Total annual expenses: $10,200 (indexed at 3% inflation)

Mortgage

• Down payment (10%): $54,500
• Financed amount: $490,500
• 25-year mortgage at 4%: $2,580.13/month
• ➡️ Annual mortgage payments: $30,961.56

Total Cost Over 25 Years

Including inflation on annual expenses and mortgage payments:

➡️ $1,210,413

Estimated Property Value After 25 Years

Assuming a 2% annual increase in value:

➡️ $894,130.27

Scenario 2: Renting and Investing the Difference

Rental Cost

• Monthly rent: $2,350
• ➡️ Annual rent: $28,200

Annual Savings Compared to Owning

• Owner’s annual cost: $30,961.56 (mortgage) + $10,200 (expenses)
• Minus rent: $28,200
• ➡️ Annual savings: $12,961.56

Investment Strategy

• Initial investment (avoided down payment + purchase fees): $64,503.50 in a TFSA
• Annual savings: $12,961.56 invested in an RRSP
• Tax refund (36%) reinvested in the TFSA

Total Value After 25 Years

• RRSP value: $728,130.14
• TFSA value: $550,133.05
• ➡️ Total accumulated: $1,278,263.19
• ➡️ Even after taxes, this amount remains higher than the owner’s net worth.

Buy or Rent: What’s the Better Option?

In this specific scenario, renting and investing strategically could result in approximately $67,850 more in accumulated wealth after 25 years.

But be careful! This isn’t a one-size-fits-all answer. The best choice depends on several factors:

• Your ability to save and invest consistently
• Your risk tolerance
• Your long-term financial goals
• Real estate market conditions
• Your life horizon (e.g., retirement, moving often, flexibility)

Renting in Retirement: A Smart Strategy?

Renting can be especially beneficial for retirees. Instead of having capital tied up in a property, you maintain liquid assets to cover daily expenses—without worrying about maintenance or unexpected costs.

Make the Right Choice for YOUR Situation

Every case is different. The key is to make an informed decision based on your actual financial needs and life goals.

👉 Book a personalized consultation with our team and discover the best strategy for your financial future.

💬 Let’s build a plan that fits your reality—together.