Buy or rent for four years? Doing the math
Last reviewed October 30, 2026
"We'll spend four years of rent anyway, so why not buy?" It's a fair question, but the answer depends on the costs people tend to leave out. Here's a framework for comparing the two options properly.
Side 1: The cost of renting
Add up four years of:
- Rent (12 months a year, since many student leases are 12-month, even if your child goes home in summer)
- Utilities if not included
- Tenant insurance
- Annual increases, or moves to new places
That total is money spent, with nothing returned at the end.
Side 2: The cost of owning
Money in
- Down payment: typically at least 20% if the borrower won't live there. Lender policies vary, so ask a broker.
- Closing costs: Ontario land transfer tax, legal fees, inspection.
- Furnishing if you'll rent rooms furnished.
Money out each month
- Mortgage interest (the principal portion is equity you keep)
- Property tax, insurance (landlord coverage if renting to roommates), utilities
- Condo fees, if any
- Maintenance and repairs
- City rental licensing costs, if applicable
Money back
- Roommate rent, after a vacancy allowance
- Equity: principal repaid over four years, plus your down payment
- Appreciation, if the property gains value (not guaranteed)
Money out at the end
- Selling costs: commission and legal fees
- Possible tax on any gain, depending on how the property is owned and used. See ownership & financing
A simplified example (hypothetical)
These numbers are made up to show the structure of the comparison, not to describe the market. Replace them with real figures.
| Over four years | Rent | Buy (2-bed condo, 1 roommate) |
|---|---|---|
| Rent paid by your student | $60,000 | n/a |
| Unrecoverable owning costs (interest, tax, insurance, fees, maintenance) | n/a | $85,000 |
| Less roommate rent received (after vacancy) | n/a | −$38,000 |
| Buying and selling costs | n/a | $28,000 |
| Net cost | $60,000 | $75,000 |
In this example, buying costs more than renting over four years, before any appreciation, and before counting what the down payment could have earned elsewhere. If the condo appreciates modestly, buying might come out ahead. If prices are flat, it won't. Change the inputs, such as a second roommate, a longer stay because a sibling follows, or lower buying costs, and the answer can flip.
The biggest levers: how many years you'll own it (a sibling following changes everything), how much roommate income you can reliably count on, and whether you'll keep it as a rental rather than selling straight after graduation, which avoids selling costs in the short term.
The opportunity cost
A down payment of, say, $100,000 or more could be invested instead. Over four years, that money would likely have earned something. Include a conservative return on the down payment as a cost of buying.
Beyond the numbers
- Quality and safety: you control maintenance, alarms and locks.
- Stability: no scrambling for next year's lease in October.
- Responsibility: some students thrive managing roommates, while others find it stressful.
- Family use: younger siblings, or a place to stay when you visit.
Get the real inputs
Ask a local agent for recent sale prices and typical rents for the type of property you'd buy near your student's campus, and ask a lender about financing for your specific ownership structure. Then rebuild this table with real numbers before you decide.
Questions to ask yourself
- How many years will a family member live there, realistically?
- Could we carry the full cost for a few months if roommates leave?
- Would we keep the property after graduation if the market is soft?
- Is the down payment money we'd otherwise invest for retirement?
- Who will handle repairs and roommate issues?
Buying from out of town? Have someone local on your side
Most parents buying a student home don't live in London. They're juggling viewings around move-in dates, tuition deadlines and their own jobs. A local agent can shortlist suitable condos and houses near campus, do video walkthroughs, and pull recent sales so you know what's fair. We recommend Rayna Elabed, a Sales Representative with CENTURY 21 First Canadian Corp., Brokerage in London.
Browse listings with Rayna