Vancouver is expensive.
Okay, yes, stating the obvious. I’ve known this for years, yet I never really understood it until I started looking for a place to live close to downtown Vancouver. I’ve always lived in the suburbs – whether it was Burnaby, New Westminster, or Port Coquitlam. Rent and housing is cheaper out here – not by much – but definitely manageable.
Now that I’m about three weeks into my search for a new place to live, I finally understand what people are talking about when they describe how horrible the rental and real estate market is in Vancouver. For $1,300 to $1,400 in rent, I could get a small outdated apartment – that is if I can snap it up fast enough off of Craigslist. It seems like as soon as they are posted, they’re taken down. So after a while, I started increasing the amount I was willing to pay in rent. Because, the lifestyle is worth not having the commute, right? For $1,500 to $1,600 I’ll get a more modern (but definitely smaller) apartment.
And it was at that moment – when I briefly considered spending $1,500+ on rent – that I decided to look at potentially buying a home in Vancouver. With a budget of around what my current home is worth, I got to work with my Realtor to look at my options. I realized right away I wouldn’t get everything on my checklist. Every place I looked at had something wrong with it – no in-suite laundry, too far away from my preferred neighbourhood, sky high condo fees, or needed a ton of work I just wasn’t willing to take on. There are some things I’m willing to overlook (like no parking – I can park on the street, and I’d be willing to do some renovations), but location and monthly condo fees are deal breakers for me.
So now I feel a bit stuck. I don’t want to live in the suburbs. I don’t want a roommate. I don’t want to pay $1,500/month in rent. And I don’t want to buy another condo if I can’t find what I’m looking for.
The good thing is that I have time. I’m in no rush to sell my place. The bad news is that the thought of trying to find a new place to live is making me a bit stressed out at the moment. :)
P.S. I am sorry for coming back to the blog and then disappearing again. Things got crazy for a while with work (summer holidays means a way bigger workload for me) as well as in my personal life, but it has all settled down now.
Over the last few days I started calculating how much it would cost me to sell my home in the suburbs and move downtown. After a feeble attempt at finding a condo in Vancouver within my price range (that wasn’t a complete dump), I’ve come to the (obvious) realization that I’ll be a renter once I move. And I’m okay with that, because there are actually a lot of options for me to choose from.
So in order to see how much I would save by moving downtown, I decided to take a typical monthly budget with my mortgage and compare it to what I would be paying if I were renting instead:
Note: Rent in the area I want can vary in price from $750/month micro-lofts to $6000/month luxury oceanfront condos. While I actually do find the idea of living in a micro-loft appealing, for the purposes of this exercise, I went with $1,200/month rent – which is slightly lower than the average of around $1,400 that I was finding.
So based on the numbers above, I’d be saving $400 month. Huge money to me. Not only that, but I’d be cutting down on my commute (most places I looked at I could walk to work), and I’d be within walking distance to a lot of the things that I love to do in this city.
There are drawbacks though. First of all, according to my mortgage terms, I’d have to pay approximately $1,900 to back out of my mortgage. Not as much as I thought I’d have to pay, but still a significant amount. And for field hockey and visiting my friends, I’d have a longer commute from downtown because obviously I’d be farther away. But I know I’d be happier moving, so I think the positives outweigh the negatives.
$400 extra in my budget means that I could bring my retirement contributions up towards the $1,200-$1,300/month range with no real effort, and I find that extremely appealing. It then becomes feasible to start looking at potentially being able to put away closer to 50% of my income from my full-time job towards retirement, but one step at a time I suppose. :)
I’ve made a lot of financial mistakes over the years (which is kinda why this blog exists in the first place), but I never thought I’d consider anything related to buying my first home to be a mistake.
Let me backtrack a little bit.
Just over four years ago, I found myself single, with a good job (plus lots of freelance work), and a $50,000 down payment. I had always imagined buying my first home with a partner, but when I was ready to buy and found no man by my side, I thought: why should that stop me? I worked so hard the previous 6 years to get out of $20,000 worth of debt, save up a $10,000 Emergency Fund, as well as a large enough down payment, I knew I could do it on my own. So that’s what I did. :)
I found myself a Realtor and went house hunting. Within a few weeks, I found exactly what I was looking for: a cute 1-bedroom townhouse in a great neighbourhood. After a few rounds of negotiation, we settled on a price which was well under the mortgage amount I was approved for (and the budget I had set for myself), even before my down payment.
Things moved quickly, and soon I was in my new home. I was making extra payments towards the mortgage, saving money, and having fun exploring my new neighbourhood with my new friends. My office moved to a new location, and all of a sudden, my commute to work was 15 minutes. Life was good.
Little did I know that by the end of that year (8 months after moving in), I’d be quitting my job and moving to Europe.
Moving to Europe was one of the best experiences of my life. I learned how to hustle as a full-time freelancer, and I got to explore so many different countries. However, it wasn’t good on my finances, as I had to continue paying my mortgage while I was away, and had to significantly scale back on my retirement contributions.
Now that I’ve had my home for 4+ years, I’m finally starting to think about selling it. My home, as lovely as it is, just doesn’t fit my lifestyle anymore. My plan had always been to re-evaluate my living situation after my 5-year mortgage is up, but now that I’m almost there, I find myself wondering if it was all worth it.
I spoke with my Realtor just a few weeks ago, and based on recent sales history in my area, he thinks I’ll be able to sell for more than what I paid for it. After running my own numbers, I’ll likely come out ahead over renting during the same period of time. So, that makes me happy. But I wish I had considered whether my life was really settled by the time I was ready to buy. I thought it was, but clearly it wasn’t.
That being said, I really do love my home, and I’ve had a lot of great home ownership experiences so far:
- I borrowed a manageable amount of money for my mortgage
- I kept early retirement goals in check
- I kept savings in the bank
- I’ve met a lot of really great people in my neighbourhood
- I learned how to deal with a strata council (pros and cons)
- I learned how to be happy living on my own
- I went through a successful renovation project
Thankfully this “mistake” (likely) will end up as a positive outcome for me financially, but it certainly has made me re-evaluate where I want to live going forward, and that as a single female living in an insanely expensive city like Vancouver, renting is probably what’s in my future.