May is going to be an expensive month for me. There’s lots of fun things being planned, and I’m excited for good weather so that I can get outside and explore! Here are a few highlights of what I’ve planned so far:
- A weekend camping trip with Cait. We planned a trip to the Sunshine Coast for 2 nights!
- Two day hikes. I’ve got a separate hiking trip planned with Cait, as well as one in the works with Nic. I suspect the hike with Nic will be a long day, as we tend to try hikes that really test our (well, my) limits.
- Home for the long weekend. I’ve planned a 3-day trip home over the long weekend. It’ll be my first time home since the beginning of February, so it’ll be nice to see friends and family.
- My sister’s birthday. Her birthday was back in March, but I promised to take her to the spa the next time I was in town. I splurged and got us a 3-hour spa package, which was actually reasonably priced at $400 total (before tax and tip of course).
Although if I’m being honest, I’ve been dreading the month of May since RD and I first started dating, because it means he’s gone for the entire month for work. He’ll be in a very remote part of the province where there is absolutely no chance of cell reception or internet – meaning no communication unless he’s able to call me on the satellite phone (which will be rare). May is shaping up to be really busy for me, so I’m happy about that … but it’s still going to be hard. We spend almost all of our spare time together, and it will be weird not talk at all.
Now onto the budget I’ve prepared for the month. There are three increases to my normal budget – Travel, Car & Transportation, and Gifts. Life is a bit more expensive with RD gone – I’ll pay more for gas (as we usually take turns driving), and we usually split ferry costs. Gifts is a new category I’m introducing this month. I usually put gifts in Miscellaneous, but I feel like I spend enough on gifts throughout the year that it deserves it’s own category.
May 2016 Goals:
- Be diligent with cooking meals at home. Because cooking for one isn’t much fun, I feel like it’s going to be so easy to slip into the habit of getting take-out for dinner. I want to really eat healthy this month, batch cook a bunch of meals for the freezer, and make most of my meals at home.
- Workout 5x/week. My climbing pass is good until May 22nd, and I’m signing up for YYoga’s newbie promotion: a 30-day unlimited pass for $40. What I love about YYoga is that they offer a lot more than just yoga classes – I can’t wait to try out their spin classes too!
- No alcohol or coffee. Now that I’m brewing kombucha, and RD isn’t around to keep the fridge stocked with my favourite beer, I want to cut out alcohol and coffee for the month.
- Be creative with freelancing opportunities. I haven’t sought out any sort of freelance work in a very long time – but I’ve got a few good ideas that I think could turn into some pretty fun projects if I can find the right partners. I’d also like to try something outside of personal finance and over into travel/outdoors. It’s a more competitive space, but I’ve done it before with some pretty successful travel sponsorships and writing opportunities.
- Save $2,500 towards retirement. I’m set to get a few cheques from clients this month, so I’m earmarking a portion of that cash to put towards retirement.
We lovingly refer to our laneway house as the servant’s quarters, as it sits on top of a garage in the alley behind what is essentially a $3 million home. I’ve never been inside the main house, which looks very big and lovely from where we are. But we’ll never buy a home like that in Vancouver.
That’s why when we saw a piece of property in our neighbourhood being developed into multiple units, we were intrigued. I pass it every day on my way to work, so it’s been interesting to see the progress and speculate on how much it would cost to buy. From what I can tell, the property is divided into one stand alone unit (the laneway), and the main house is being sold as four separate units (two 1-bed units, and two 3-bed units). This is the only way in Vancouver to actually buy a laneway house – you’re essentially buying into a small strata, where you have to pay monthly maintenance fees towards the upkeep of the common property. You can’t buy a laneway house outright.
Related: I live in a Vancouver laneway house
Anyway, I was mostly interested in how much the laneway house would cost, as it’s the kind of place we are living in now. And since neither of us are interested in a big house or a big mortgage, we both agreed that the perfect sized house for us in the future would be about 900-1000 sq.ft.
— Krystal Yee (@krystalatwork) April 26, 2016
Okay, so the new laneway house is nicer than ours. It’s 2 bed + den/2.5 bath and 1,077 sq.ft. Ours is 2 bed/1 bath and just under 700 sq.ft. Our home is nice, but their offering is bigger, has a secure parking spot, and comes with a second floor balcony (which I wish we had). But is it worth $1,400,000?
Even if you scraped together a 20% down payment of $280k, your monthly mortgage payment would be over $5k! How can anyone afford this?
— Krystal Yee (@krystalatwork) April 26, 2016
I’ve thought about this a lot, and I can’t figure out how anyone could afford to pay $1.4m for a laneway house (and that’s not even considering a multiple offer or bidding war scenario which would drive the price up). It’s not like you have a basement suite to rent out to help offset the cost of the mortgage! If you were to estimate monthly costs at $5,800 ($5,000 mortgage + $50 hydro + $350 maintenance + $400 taxes), you’d need monthly net income of about $16,500 to stay within a 30% housing cost budget. Ha!
So then I ran the numbers through a mortgage calculator using the list price of $1,398,000 and a 20% down payment of $279,600 to see how much interest you’d pay in the first 5 years of ownership.
The interest alone is more than then $19,800 we pay per year for our place. And that doesn’t even take into consideration the $4,080 in maintenance fees (which can only go up), or the $4,900 in property tax – which would mean whoever buys that home would see $36,425 disappear in the first year alone … and pay $128,794 in interest over 5 years. Which makes me wonder – why would anyone buy real estate in Vancouver when you can rent a similar home in a similar neighbourhood for a fraction of the price?
Related: From home ownership to renting
It seems crazy to invest so much money into one single asset – an “asset” in a market that is so unstable. But I’m pretty sure that all 5 units of this property will sell this weekend when they have their first open house (they’ve probably already received offers!).
I’ve always loved following the real estate market in Vancouver because it’s so fascinating. Even now that I’m renting and even though I know we’ll never buy a house in Vancouver, it’s still so interesting to me. I’ll be keeping an eye out on more multi-unit houses going up for sale in my neighbourhood, as well as other laneways. And in the meantime, we’ve both been looking online at vacant land on Vancouver Island, as well as the cost of pre-fab houses, tiny homes, and even yurts. :) It’s a fantasy for now, but could become reality in the future since the money we’re saving from renting could potentially pay for land and/or a home outright elsewhere in the province.
For RD’s birthday, I rented us a cabin about an hour north of Vancouver in the Upper Squamish Valley (and about 25km off the main Sea-to-Sky highway) through AirBnB.
We brought our own groceries with us and made most of our own meals in the cabin. This saved a ton – but also we were about a 25 min. drive from any store, so it made sense to bring everything with us anyway.
Friday after work, we left Vancouver and headed into Squamish for dinner at the Howe Sound Brew Pub. Cait happened to be in town at the same time, as well as a few Toronto gals I knew who were there for a conference, so it was nice to run into them and have a bit of a catch up!
We didn’t stay too long at the pub though, because we wanted to get to our cabin before it got dark. The cabin itself was super cute and did not disappoint. It was located on a small hobby farm very close to Cloudburst Mountain, and just a short walk down to the Squamish River. This was probably one of my favourite AirBnB stays because the hosts were super nice people, and the area is so beautiful. Plus the tiny cabin was perfect – and it made us start thinking about what kind of cabin we’d like to own in the future. (If you’re ever thinking of staying in the area and would like more info on this listing, send me a message!)
The next morning we went for a walk and explored Anderson Beach. I love places like this where there’s no one else around, and you can just relax. We spent a couple hours at the beach without seeing a single person, but as we were walking back to the cabin, the parade of cars started rolling in. It’s always worth getting up a little early! :)
In the afternoon, we hopped in the car and headed up a few logging roads to explore the area a little more. There are a bunch of great hikes I’ve always wanted to do in the area (and we even found a couple local trails neither of us had heard of before), so it was nice to check out the roads we’d have to take to get there this summer.
Sunday morning we had a leisurely morning as we sipped coffee on the porch.
Then it was off to meet Cait for a walk around Alice and Stump Lake – and then lunch at a cute restaurant in Brackendale.
This was a really nice weekend break from city life, and even though poor RD was sick the entire time, we made the best of the time we had. :) This year of local travel has been pretty successful so far, and we’ll definitely be back this summer to get into the mountains and explore.