SHOULD I BUY OR RENT A HOME?
Are you torn between buying renting a home in Vancouver? Do you have a fear that you may not be able to get into the Vancouver Real Estate Market? Or maybe you are just having a difficult time finding the right property at the right price?
Recently a client wanted to either buy or rent in Vancouver. He had $100,000 saved in RRSPs that he was willing to potentially put towards a down payment.
The first property he looked at renting was in English Bay. The unit advertised was a 450 Sq. ft studio with a monthly rent of $2000 plus utilities. The second property he looked at was located in Yaletown and was similarly priced.
He then decided to look at property options. This young man started researching Vancouver Realtors because he felt the need for guidance in the Real Estate Market. He came across our website and decided to give Vancouver’s Top Agents a shot. We determined his criteria, which included easy access to transportation if the property was located outside of the downtown core. He also wanted a space that would be spacious enough for two people to live comfortably. After looking at his budget, we advised him to look at East Vancouver; a desirable yet still affordable area especially for young adults and young families.
We secured property for $500,000 near the PNE with transit just out the door. His new home was a 1 bedroom plus den with over 750 square feet of living space on the top floor with a beautiful view of the North Shore mountains.
With interest rates still historically low, his mortgage payment (with a 20% down payment) came to $1,800 plus strata fees of $365 per month for a total of $2,165 – just slightly higher than the rental place!
Why did he choose to own over renting when he could have saved $165?
- First off, he owns his property and while property values have fluctuated in the past as with any real estate market, over time they have significantly increased.
- He is currently paying down his mortgage and building up equity.
- With a spacious den, he decided to rent it out to a friend for $600 to further reduce his expenses.
- With transit being so accessible, he saves costs on monthly parking downtown
Unlike owning, renting puts you at the mercy of the landlord. Your rent can be increased, you may not be allowed to have any pets and you don’t have much freedom when it comes to wanting to make a few changes to the property and your landlord legally can kick you out of the property for it to be sold. Owning your own property gives you all control over every decision you make.
You can budget. Choosing a fixed rate mortgage allows you to better budget over the term of the mortgage and not worry about year-over-year rental increases.
Your home becomes your savings account. When you rent and move out, you have nothing. When you sell when values are up, you not only get your down payment back, but you get the difference between the purchase price and the selling price, less the principal amount you have been paying on your mortgage.
When you have enough equity in your property i.e. you have paid down your mortgage significantly or property values have greatly increased, you have options. Options to buy another property using the equity in your existing one, which leaves you with 2 properties. Or, you can sell and upgrade into a bigger property with a larger down payment.
If you are concerned with coming up with a downpayment, read out the latest blog post which touches on ways to secure funds. There are many programs as well to help you get into the market and become a homeowner or ask your parents to help with a gift towards the downpayment or co-signing the mortgage.
Don’t shy away from the Real Estate Market, there are plenty of ways to find the right place for you. We, at Lee and Pete Vancouver Real Estate Group love to sit down with you and go over your options and criteria to find a home that allows you to be in charge instead of the landlord and sets you up for building equity in the long run.
Our team consists of the best Vancouver Realtors with years of experience who will help you save time & make more money! Who wouldn’t want that?
Reach out, we love a coffee date with you. Get in touch now & contact us at [email protected] or 604- 729-5646