Post # 1
- Wedding: July 2015 - Golf Course
I need some opinions! We won’t be seriously considering any moves until after our wedding next year, but I’ve begun mulling over where we want to live. I grew up always thinking I would buy a place, why pay someone else’s mortgage, etc. However, housing in Vancouver is so friggin expensive. Not even just to live in the city of Vancouver either, but suberbs (1 hour drive in rush hour) is still quite costly compared so some places.
So here’s my dilemma. I’m looking to spend no more than $1500/mo on either rent or mortgage + strata fees. Would you rather rent and live closer to the city, or own a condo/townhouse and have to drive further?
Another confounding factor is that while I work in town, FI works in the suburbs (but could be transferred in town at any time). So one of us will have a crappy commute!
Post # 2
FutureFong: If you want to spend $1500 and choose to live in the suburbs, you will need to budget for gas, parking and possible bridge tolls in addition to yor mortgage. Keep in mind that if you live near a station, you could commute by skytrain and save the gas, tolls and parking.
Post # 3
I’d rather own, hands down. Like you, I think paying for someone else’s mortgage and equity isn’t fun. To me, personally, a longer commute would be worth the trade-off.
Post # 4
If you’re planning to stay in the area awhile I would buy. I currently drive an hour + rush hour because that’s where we bought a house. It would be significantly more expensive to live in the city, but then again I have no desire to live in the city. I can’t justify renting because our mortgage is much more affordable than any rent. I would compare the average rent to mortgage payments. If you have enough for a downpayment I would buy.
Post # 5
FutureFong: Well, what really matters is how long you intend to live there. Without knowing that it’s impossible to know that the smarter investment is.
Post # 6
Also keep in mind that most people underestimate the amout of money they’ll spend on home repair and updates when they own. It really only makes sense to won if you’re going to be there for a long time. I hate commutes, so I’d probably rent.
Post # 7
If I’m living in a condo, I’d rather rent. No way in hell would I ever buy a condo.
Post # 8
FutureFong: Are you planning on having children? Because if you are you should consider what that will mean in terms of rent/buy costs, future employment (will you or your SO be staying home to look after the kids), schools etc etc. it gets harder to switch to buying a home once you have children because of the increase expenses.
Post # 9
I prefer to own than rent, except I can’t imagine buying in Vancouver. If I lived there, I would be seriously looking to move elsewhere.
Post # 10
There are times that I am very jealous of renters. In my area it is most logical to purchase VS rent. You will pay upwards of 1500 dollars per month for a home like mine and the mortgage payment is 950 with taxes and insurance. That being said I’ve been lucky and have had very few major repairs since I have lived in this home. However, my last house was a slab and I had a water pipe burst underground. Needless to say it nearly turned me off to home ownership all together. It was awful. Make sure you can afford the mortgage plus emergency fund. That is the largest mistake I see in my line of work…people who over extend themselves because a mortgage broker, real estate agent or they themselves were convinced that because they were approved for 500K that is what they could afford.
Post # 11
FutureFong: Can you purchase the condo/townhome for the time being and rent it out when you purchase a home in the city?
Post # 12
FutureFong: Can you reaslitically find a place to buy for $1500 a month with strata fees? You can’t in Toronto and Vancouver is even worse housing wise. And what about property taxes, utlities, home insurance, mortgage insurance/life insurance, etc.? Are they included in your 1500 budget (some are required for a home but not for a rental) or are they extras you’re willing to pay ontop of the mortgage? What kind of condo/townhouse can you get for that? Is it somewhere you’re able to stay for 5 – 10 years? Or will you out grow it quickly? How soon are you planning to have children (if you are planning to have them?)
You can rent a decent place in TO for that amount. But you’d be hard pressed to buy anything. Even a 1 hr commute houses are WAY more than that, unless you have a massive down payment. My best friend owns a 1 bedroom, 560 sq foot condo in the city. Even with her down payment her condo fees and mortgage are more than double your budget. She lives down town, and condos do get cheaper as you get further from the city, but the size doesn’t increase much.
If that’s the budget, I’d rent, personally. I’d save the commuting costs and buy when the budget better reflects the going rate of properties.
There’s nothing wrong with renting. Especially if it means you can live affordably and save to buy a home. I, personally, would rather rent for a couple of years and save as much as I could to be able to purchase a family home.
Post # 13
- Wedding: July 2015 - Golf Course
Thanks for all your replies!
sostobe: I thought I’d reply to your comment in particular because of how thorough it is! In the suburb I live in, I believe it would be possible to buy a small 2b2b condo/townhouse, although I must admit I don’t know the cost of insurance, taxes, etc. I have been looking quite a bit online and there are places in the range of 200-250k. I’m warming up a bit to the idea of renting, but my FI is still pretty set on owning.
I’d like to have kids fairly soon after we move into our own place (finances permitting), so I’d like to get the most our money can buy. However, even renting is expensive, and a 2 bed 1 bath is $900-1500. Oh Vancouver, why does your housing market have to be so expensive! Also, moving is not an option, our families are all here and I’ve tried to casually bring it up but FI will never go for it. In reality, I don’t want to leave my mom either.
Post # 14
I dream of being able to buy! It means your money is going towards an asset, rather than effectively just paying someone else’s mortgage.
In the UK I see owning as really important as (I don’t know how it works elsewhere) but pension funds are a lot better if you own a house in full and don’t have to worry about paying rent when you’re retired!
Post # 15
FutureFong: We had this dilemma. Our solution was we bought in an up and coming neighborhood close to town and DH got transferred. Now we both have reasonable commutes and a little townhouse we love in an area we love.
For me, living in my county (think specific, innermost suburb) was a deal breaker. For DH, owning was a deal breaker. We figured out our minimum requirements for a house and searched until we found something. It isn’t our dream house, but I have no interest living in my dream house in the suburbs.
Before you go and say that there’s nothing you can afford close in, look closely. One bedrooms in my county start around $1700 and go up to $2500. We were able to buy for less than rent costs and have more space.