There comes a time in the lives of many urbanites when they’ve outgrown their teensy condos but are not yet ready for a family-sized home—and wouldn’t know where to plant roots, even if they were.
This year in particular, I’ve noticed a spike in clientele who’ve elected to “bridge the gap” between condo and freehold home life by renting for a year—not exactly a novel concept in itself, but I think it’s a fantastic short-term solution that allows people to explore all possible options in the current housing market. (Think of these folks as high-school seniors, paralyzed by choice, but with less acne.)
For instance, maybe two people got married, and, suddenly, they are cohabitating in a 600-square-foot condo at King and Bathurst, living on top of one another, but they’re not financially sound enough to make the jump to a three-bedroom, three-bathroom detached property in the more family-friendly Roncesvalles.
A rental gap year, whether spent in a larger condo, townhouse, or freehold property, helps aspiring buyers avoid the risk of investing in a property or neighbourhood without sufficient research, then regretting it down the line. After all, not every buyer lives and breathes HGTV and MLS 24/7.
Also, a down payment on a freehold residence in Toronto isn’t always something those in their 20s can scrape together. From a financial standpoint, renting isn’t as daunting as one might think. I recently rented a two-storey, 1,400-square-foot brick-and-beam loft to a couple in their late-20s who were interested in a serious upgrade from their 610-square-foot condo on King Street. The lease on the new place was $3,000 per month—a bit steep for many, no doubt—but at their original condo, their monthly mortgage cost $1,520, maintenance fees were $420, taxes added $170, and hydro tacked on an extra $60 per month. All in, it amounted to $2,170 per month, so the $3,000 lease wasn’t exactly a massive jump. For that extra $830 per month, the couple more than doubled their space, gaining an extra bathroom, bedroom, his-and-hers closets, an outdoor terrace (with BBQ), and a chef’s kitchen—for the next year or so, they will be living in the luxe surroundings of an MTV reality show star.
Looking solely at the lease total ($3,000) in the calculations above would spook anyone. You have to evaluate the difference between your existing monthly expenses and the cost of a significant living upgrade.
Some say renting is tantamount to throwing money away, and many of those naysayers are my own colleagues. Hey, whether that extra monthly expenditure is blown on a few new pairs of shoes and jeans or an upgraded home is each buyer’s choice. Pick your poison, but I’d rather put my money into where I live and spend most of my time. And if the recent gap-year trend is any indication, I’d say a lot of downtown Toronto condo-dwellers agree. Cash aside, others aren’t sure about the style of property they want to move into. Renting a stacked townhouse for a year, for example, could help you decide if three sets of stairs and narrow rooms are something you can live with for the next decade.
Many clients come to me with endless photos of kitchens they admire and names of streets they want to live on. These keeners may not need the buffer, but those who are uncertain (for a multitude of reasons) can consider the cost of a one-year lease an investment in their future and a safeguard against picking the wrong location or style. By renting temporarily, they’ll help ensure that they don’t inadvertently take a sledgehammer to their white-picket-fenced future.