Our first night in our new condo should have been a cause for celebration. We grabbed take-out, unpacked boxes, and went to bed exhausted after moving furniture around all day. But instead of a peaceful night’s sleep, we got a frantic knock at our door at 10pm. It was the building caretakers – there was water leaking in the suite directly below us!
Together with the caretaker, we looked over our bathrooms and found no water on the floor, or anything that would suggest a leak. So he left and said he would follow up in the morning. We were horrified! Talk about bad luck – the first showers we took on the first day of homeownership, and there was some sort of leak originating from our suite.
The next morning, strata called and informed us to coordinate with the owners downstairs and hire a plumber. It was a Thursday and were just going into the Canada Day long weekend, so we weren’t able to book anyone until the Tuesday. It was a pretty stressful long weekend to say the least.
But no matter how worked up we got, we realized that the most this issue would cost us was $1,000 because we have home insurance. Now, $1,000 is still a lot of money, but we already had more than that amount sitting in our joint account, and it was considerably less than the potential tens of thousands of dollars it might cost to repair whatever was wrong and fix the water damage!
I’ve had home insurance of varying coverage since I bought my first place, but I didn’t always have renters insurance when I was younger. Even if you are renting and don’t own the place where you’re living, you could still be liable for any damage you cause to the building, or unintentional harm caused to others who live (or visit) the property. Plus think of how much it would cost to replace all of your stuff! Most of the time a landlord will require you to have insurance as a rental condition. However I’ve definitely not had it before, and looking back that was pretty stupid of me. But for some reason the thought of paying $20/month for something invisible that I likely would never use seemed like too much to handle when I was already on a tight budget.
Here are a few things I’ve had to consider when buying home or tenant insurance:
There are different levels of insurance
Basic insurance is cheap but it doesn’t protect the contents of your home and the deductible is generally high. Standard insurance covers you for some perils, but not everything. Comprehensive insurance covers you for most things of varying maximums (except for earthquakes and floods, etc), but all insurance is different, so you’ll really want to ask a lot of questions or do your research online instead of assuming that you’re covered for something.
Bundle your insurance for a better rate
I used to get my tenant insurance with an insurer that also provided comprehensive auto insurance. By bundling these two together, I was able to save a few hundred dollars a year.
Make an inventory of your belongings
Usually a comprehensive policy includes contents insurance – which covers the cost of replacing your belongings. I found most are set at $25,000 but you can pay more if you want more coverage. When I first got tenant insurance, I thought all I needed was the $25,000 coverage, but when I actually took the time to create a complete list of the replacement cost of the items in my home, I realized my stuff more than exceeded the $25,000 coverage. Furniture, kitchen appliances, cookware, antiques, electronics, and all of the other items in your home can add up quickly! So I adjusted the policy amount to cover what I needed. You’re also able to insure stuff like artwork, jewelry, bikes, outdoor gear, etc. up to a certain maximum, but often times those require an additional endorsement to cover those items.
Be realistic with your deductible amount
Usually you can get your deductible amount down to $500, but in exchange your monthly rate will be higher. We chose to go with $1,000, but I’ve seen deductibles as high as $2,500.
If there is a potential problem in your home where you might need to use your home insurance, it’s best to call them as soon as possible to let them know what’s going on. That way they can tell you exactly what they need for the insurance process to go smoothly, because the last thing you want in an insurance claim situation is to feel unorganized.
Anyway, after finally getting a plumber in to check out our unit, the problem ended up originating from our bathtub faucet in the master bathroom (the shower diverter was pushing water into the wall). The plumber only cost $200 to come in and fix the problem, and there was very minimal damage to the unit below us – so we came in way under our insurance deductible. But the fear and panic was real, and I can’t imagine how someone would feel if they weren’t covered!
This is not a sponsored post, but for those interested, I used Square One Insurance – which offers insurance on both condo and tenant insurance. I used to be with CDI but switched over to Square One because the price was much better, the reviews online were better, and the user interface was really really nice to use.
Have you ever had to claim anything on your home/tenant insurance?
This will be the 12th time I’ve moved in my adult life. Some moves were temporary, and some were longer-term, but they all cost money. It kind of makes me sick knowing that I’ve spent thousands of dollars in my lifetime just on moving, but it’s obviously unavoidable. And in Metro Vancouver, where rent is expensive (and the vacancy rate is less than 1%), the cost of a move could be the reason you don’t move at all.
When we bought our home back in April, we decided to hold back $10,000 of the money we had saved for our down payment so that we could pay for moving expenses, closing costs, a small renovation, and furniture. And with the way the timing worked out with our rental and our condo financing, we don’t actually pay rent or a mortgage payment in July, which gives us a bit more breathing room to pile up some cash in our joint account (our ‘buffer’ money) instead of dipping into our savings.
Now that we are finally nearing the end of paying for all of our moving expenses for what I anticipate is my last move until I retire, so I thought I’d break down everything that we’ve spent so far on our move. I’m going to leave out closing costs, the renovation, and furniture, because they’re not really “moving” costs, and I’ll talk about them in another post anyway. :)
Move-in Fees – $75 + $250 damage deposit
Our condo building requires a $75 payment for a 2-hour window of time to block off one of the elevators for a move. They also need a $250 cash damage deposit (which we will get back at the end of the move, provided we – or the movers – didn’t ding up the common property).
Movers – $450 (estimated)
We decided to hire movers to save us the headache of moving everything out of our tiny two-storey laneway house, and into a high rise condo. Sure, we could have done it ourselves, but it would take us at least twice the amount of time and just so much unnecessary headache. This is the first time either of us has ever hired movers, so I’m kind of excited to have this luxury. Their quote was for $360 (4 hours), plus a $90 one-way travel fee. It could be less if we’re finished within 4 hours – which I think we will be.
Cleaners – $164.64 (includes tip)
When I sold my townhouse in 2015, I paid for professional cleaners to come in before the new owner took possession. So I was pretty choked to see that the person who previously lived in our condo didn’t bother cleaning anything. I mean, they didn’t have anything behind, but the place was just dirty. Like they had never taken a sponge to a single surface of the home, ever. There was a thick layer of dirt over all the windows (and the blinds were filthy), make-up smudges all over the bathroom, cat hair everywhere, and random dried food splashes on the doors and some of the walls. I started to clean the place myself, but it took me 6 hours to clean just the living room windows, and I still had the kitchen and both bedrooms to tackle … we just ran out of time.
Paint & Supplies – $210.71
We wanted to buy a condo that needed no updating except for painting … little did we know that painting was kind of a huge chore to tackle when we’re already tight on time. But it needed to be done, otherwise we’d be living in Taupe City.
After getting quotes from 4 different painters (ranging in price from $800 to $1,800), RD decided that since we were paying for movers and cleaners, he wanted to try to save money and tackle the painting himself since he had 2 days off work. Neither of us had ever painted a home before, but RD is pretty good with a paintbrush, so he was stoked to take on the project. Except that it took us so, so, so much longer than we thought. By the time RD had to leave for another work trip, I still had one bedroom and a cement pillar to paint. And after it was all said and done, it took us about 4o man hours total to paint the entire place. For reference, we have a 2 bed/2 bath condo of about 825 sq.ft.
Household Items – $229.42
There were a bunch of things we needed to get that I just hadn’t thought of. For example, going from one bathroom to now having two, meant I had to buy a bathmat, soap dispenser, shower curtain, toilet scrubber, etc. I also bought cupboard liners, a splash mat for wet/muddy shoes, a step ladder, closet organizer, and a small succulent plant because I couldn’t help myself.
Restaurants – $300 (estimated)
Long days painting and moving meant there hasn’t been any time to cook meals at home. I do not feel healthy eating in restaurants or getting Subway all the time, so I can’t wait until this is all over and we can get back to our normal routine.
Gas – $90 (estimated)
RD is currently on another work trip, so I’ve been shuttling boxes to the new place, as well as whatever I can fit easily into my car. This is in part to make our time with the movers go faster, but also because I want to at least be partially moved in by the time RD gets back. The more I can get done now, means less stress on us the closer we get to our move-in date. I’ve spent $41 on one tank of gas so far, and I’ll have to fill up again before we actually move in.
Condo insurance – $412.08
We’ll be getting back a portion of our renter’s insurance for 2017, but I haven’t included it against our condo insurance because who knows when we’ll actually receive the refund.
Before we started spending money on the move, I had hoped to keep our moving costs under $1,500 – but the added cost of hiring a professional cleaner, as well as paying for our condo insurance annually (when I had initially thought we’d pay monthly), put us over our budget. That leaves us with just over $8,000 left for closing costs, a small renovation project, and furniture. This should be doable, although I’m a bit concerned about how much the renovation project will cost. I have a few people coming over this week to give us quotes on the job, so fingers crossed!
How much did you spend on your last move?
I honestly cannot believe how fast the last two years have flown by. Life has changed so much, and back in the summer of 2015, I never would have guessed that I’d meet someone as amazing as RD, and that we’d be settling down and planning the rest of our lives together.
Before we decided we wanted to buy a home, we spent a few months going through all the possible scenarios that life could throw our way in the next 10-15 years. We thought about where we wanted to live, what kind of space we wanted, what our lives would look like, and whether we wanted kids or a pet (or maybe both). In the end, we agreed that Vancouver is where we’ll be until we retire. And because of that, we decided to make home ownership a goal with the idea that whatever we end up buying, we’ll be living there for the long-term.
I know, buying real estate in Vancouver in 2017 is crazy, right? Maybe, yeah. But we have good jobs and a nice amount of money saved, and we are both level-headed enough to not buy anything out of our comfort level. So even though we were pre-approved for a mortgage of about $850,000, we set a top end budget of $475,000.
We didn’t struggle at all on where we wanted to live. I’ve always been in love with New Westminster (where I owned my townhouse, and also where I rented an apartment years earlier). It’s just got a strong community vibe, and since our budget wasn’t going to buy us a 2-bedroom home where we currently live in Mount Pleasant (that would have cost us about $800,000), it was the obvious choice. Especially considering my commute would only increase by 10 min., and RD’s commute actually gets shorter.
We targeted a very specific area in New Westminster and started our home search by getting pre-approved for a mortgage in early March. We wanted to have our finances sorted out just in case something amazing came onto the market. Weeks went by. We saw a lot of bidding wars, condos that regularly went for $100,000 over asking … and we went to a lot of open houses, but most places just didn’t suit us for one reason or another. It’s not that we were being overly picky, we just knew exactly what we wanted.
Related: Thoughts on our open house tour
One day we went to view a 2 bed/2 bath condo in a high rise building. It had a great layout, floor-to-ceiling windows, and an amazing view from the gigantic balcony – but we’d have to do work just to move in (replace carpet, fix doors, etc), and that would have taken us over our budget. So we reluctantly passed. The following week, we saw another unit just a few floors down which required no updating, and the views were just as stunning. But that price point was at the very top of our self-imposed budget, and we just assumed everything was going to sell over asking (like all the other condos we had viewed). So we left the open house and didn’t consider it a contender.
The next week, I noticed the listing was still online, so I messaged my Realtor and asked if it was still available – and to our surprise, it was! So we snuck in a low ball offer, and after a bit of negotiating, we ended up getting it for about $10,000 less than list price.
We had a $125,000 down payment, and decided to use $115,000 towards the home, holding back $10,000 for closing and moving costs. So no, we didn’t end up meeting our original goal of $150,000 towards a home, but I really feel pleased with the amount we were able to save.
Our purchase price was $468,000. And after the down payment, our mortgage will be $353,000.
The mortgage amount represents 2.2x our combined gross annual salary, and all housing expenses come out to 23% of our combined net monthly income – this is based on our full-time jobs alone. Even though I have consistently made a nice chunk of freelance income every year, we decided to only get pre-approval (and create a budget) based on our secure income.
And what kind of PF blogger would I be if I didn’t include a mock budget? :) This time the chart below indicates our joint household expenses, and what we expect to put into our joint account every pay cheque. We’ve also built in a nice buffer each month which will serve as our household savings fund for emergencies and future large household expenses.
We pay $1,650/month for rent right now, and as you can see our base housing costs (mortgage/strata/property tax) is $2,045/month. While normally I would scoff at such a big increase to our living expenses, we are both absolutely ok with it because we knew we were going to move eventually (and that it would cost us more money), but also:
- We can still comfortably pursue our financial goals of early retirement and travelling every year.
- 2-bedroom apartments cost on average $2,500/month to rent in Vancouver, and about $2,000 in New Westminster (units for rent in our building are going for $2,200+).
- We will be able to sell RD’s car and go down to a one-car household.
- The building has a nice gym (eliminating the need to continue to pay drop-in fees at the rec centre).
- Crazy amount of natural light and a large patio (our current home has zero outdoor space and very minimal natural light).
- A little more space (we’re going from 680 sq.ft. to 825 sq.ft.).
- A usable second bedroom for guests, and RD can have a small art area.
- The ability to have a small garden on the patio.
- Pet-friendly, so we can finally get a cat.
Even though we have decided to buy a home, I am (and will always be) a fan of renting. For some, owning in Vancouver will never be an option, and there’s nothing wrong with that. What’s the point of stretching yourself to the limit just to buy a home? Renting is a fantastic choice for many people, because owning a home only makes sense if 1) your monthly housing expenses are on par with renting, 2) you’ve decided to settle down in one place for the long term, and 3) you aren’t stretching yourself to the point where your lifestyle and retirement savings are compromised.
We don’t take possession until mid-June when RD comes back from his annual 5-week field work trip, and we’ll officially be moved in by the end of June. But there’s a lot to do in the meantime! I’ll need to get quotes from painters and movers, change over our insurance, update addresses, as well as start to sort through our stuff for selling or donating.
Anyway, there you have it! I’m surprised but happy that we bought a home so quickly, and we are both looking forward to settling into our new home. :)