Regular readers might recall that Brian and I were in the condo buying market. We had been saving up money for a while and with current interest rates and prices, we wanted to add a second condo to our burgeoning collection. We did announce it on one of our weekly updates, but I never wrote a blog about it. We just finished signing the mortgage papers this week, so it seemed like as good a time as any. ;)
When purchasing any home, you’re going to be playing a tug of war between different requirements and constraints. Unless money is not a problem at all, you’re not going to be able to get the perfect home at the perfect price. Buying a home becomes a compromise of sorts – you do the best you can and try to ensure that you are happy with your decision. The main issues for us were: Money, Location, and the Home itself.
Going into it, we knew we wanted to pay less than $1500 a month in total mortgage payments. This was based on my knowledge of the Vancouver rental market, the budget that Brian and I follow, and our future goals.
We knew that for the lifestyle and amenities we wanted, we could rent a nice one bedroom for around $1200-$1300 a month. Therefore, any mortgage that we took on would have to be similar in price. Sure we’d be building equity, but if the monthly mortgage was too high (eg. $1800-$2000), then the interest paid would be too high, and I’d be better off renting for $1200 a month and putting the remainder into investments. Budget wise, having a monthly mortgage payment of less than $1500 ensured that Brian and I would be paying less than 20% of our gross monthly income (about 25% of our net monthly income) towards housing, fees and property taxes. It also means that even if one of us loses our jobs, the other can cover the entire mortgage payment easily. Finally, we also wanted to be sure that the mortgage payment was low enough that we could later rent out the unit and not lose money.
Location is very important to both Brian and I. We don’t own a car
The neighbourhood was also an important consideration. With our first condo in East Vancouver, I did not like the neighbourhood at all. The people were not the sort that Brian and I would tend to socialize with. Don’t get me wrong, it was safe and such, but it was not our “type” of neighbourhood. Even if you’re not the type of person who wants to get to know their neighbours, future buyers might be! Don’t consign yourself to a shady neighbourhood because you don’t mind – you might not be able to easily sell a few years down the road.
No one wants to live in an ugly, falling apart building. But similarly, you need to be sure that you don’t live in a beautiful building that will soon need massive, unseen repairs. In Vancouver, you especially need to be wary of buildings which are not rainscreened. Over time, these buildings degrade and the repairs are usually astronomical.
The main considerations include the building itself (age, upkeep and rainscreening), the piping (how old is it and how long till it needs to be replaced) and the roof (again, how old it is and how long till it needs to be replaced). These repairs run into the tens of thousands of dollars while other repairs and replacements (windows, siding, painting, etc) tend to be cheaper and less worrisome.
The inside of the building is less concerning but certainly still an important factor. If you are handy, you may be keep on remodelling and doing your own design. If you are less handy, you may want to look for a unit that is “move-in ready”. I feel like the internal appearance is the least important factor. As long as it doesn’t involve any major walls, anything on the inside can be improved over time.
With our first condo, we achieved two out of those three points. We got the price point that we wanted and a building that was absolutely solid and a unit that was modestly renovated. All we needed to do was repaint (they had chosen an angry red for the bedroom…) and move in. After a year, we also remodelled the bathroom. However, we sacrificed an incredible amount with the neighbourhood. The location was physically good because it was close to transit, a college and shops, but we did not like the neighbourhood. I hardly ever left the condo after returning home in the evening – there was no where nearby that I wanted to go. Brian and I both had a long commute to get where we needed to go each day.
With our second condo, we were less willing to sacrifice on location and had a larger budget to work with. We ended up meeting almost all of our points! The new condo is located in a very trendy area of Vancouver, affectionately labelled as “Hipster Central”. It is close to transit, lots of awesome shops and a community center. Brian can even continue walking to work! It’s a good location for both rentals and future sales. Structurally, the building is in good shape. It has been partially rainscreened, and the part that isn’t rainscreened has held up. The inside of the condo is beautifully renovated and will not need any work at all. We even have a laundry machine! (It plays music…) Finally, price wise, we hit the upper end of our target. I would have liked to get something cheaper and older, but a lot of the older suites we looked at had expensive repairs upcoming.
Where we did sacrifice was space. The new condo is only 500 square feet in size, a full 150 square feet smaller than our first condo and smaller than our current rental unit. Part of this was deliberate on my part – I wanted a chance to live small for once and my old bulky furniture didn’t permit that. It also gives me a reason to pare down on my possessions and organize the mounds of paperwork that I seem to accumulate. Part of it was practical – to get anything larger would cost more money than I was willing to spend or would force us to sacrifice lifestyle for space, both things that I wanted to avoid. I felt like it was a good compromise, but at times, I do feel uncertain and doubtful. But, it’s too late now! :)
So there you have it – in two short weeks, we will be the proud owners of a teeny tiny condo, surrounded by hipsters and coffee shops.
Bring on the Pabst and the convertible, multi-purpose furniture!