Living life just a little bit differently
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.
Photo Credit: Nemo’s great uncle via Flickr
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 and we try to use our car co-op as little as possible. So, we needed a location that would be close to at least one of our workplaces and close to amenities like grocery markets, coffee shops and transit. In terms of future value, it’s also good if the location is close to major employers or schools.
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!
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Congrats! This is exciting! I must have missed the post where you mentioned it. Neighborhood is of extreme importance to us to when we look for a home because someday, we’ll want kids and we won’t want to have to move. So I see where you are coming from!
Thanks Daisy! We only mentioned it in passing so that’s why we wanted to do a full post.
500 square feet?! Good for you… my spouse and I would kill each other in that amount of space! Glad to hear everything came together You have sweet access to transit in Hipster Central.
We may still kill each other. We nearly did when an apt fire forced us to live in a hotel room for a few weeks. Stay tuned
500 square feet isn’t enough for 2 people? This is just unbelievable.. are you riding bicycles in your home?
Sometimes, yes. We have a road bike trainer. In the summer, we usually have to store 4 bicycles inside, as we are not allowed to keep them on the balcony and the bike storage area in our building is extremely not secure.
It all depends on your lifestyle choices. Ours happen to include lots of dinner parties and sporting goods.
I really dislike inane rules like that – we’ve lived in places that restricted what you could store in your parking spot / balcony as well.
Ya, it was all cuz the president didn’t like the look of all the bikes. (We thought it looked cool, mtn bikes everywhere!) We fought long and hard at the AGM to be able to keep bikes in units (skis aren’t allowed, to avoid damaging the hallways). No way I want to keep $5000 bikes in the parkade!
Congrats! This is great. We are also big on neighbourhoods. We have to like the atmosphere, the access, and the landscaping. We also wanted to live somewhere close to lots of schools. I know we took neighbourhood into account when we bought our house.
Thanks!! We didn’t have a lot of options for neighbourhood with our first condo, so I was glad that we made it a priority this time around.
That’s awesome! Good luck- and have fun picking out paint colors and pulling it all together. That is the best part, I think!
I’m really looking forward to decorating. I’ve the same used/gifted furniture for nearly ten years. It’s held up great, don’t get me wrong. Some of the pieces, like my kitchen table, I will be sad to part with. But I can’t wait to buy stuff (with cash – haha) to actually fit the space!
CONGRATS! Sometimes it’s worth sacrificing the space to have the experience of living in a big city…especially a trendy part when you’re young and have nothing tying you down.
And we enjoy the city a lot. I hoping the space will be a non-issue, at least for a few years.
Sounds like a good add to your real estate empire. What kind of condo dues do you get socked with?
Thanks! It’s $190 a month for strata fees, blehhhh. I would have liked lower, of course, but most of the places we looked at seemed to have fees of at least $150. Many had fees over $300!
500 square feet done well is not bad. My current apartment is less than 700 square feet but it feels huge, everything is in an open layout. Congrats on the purchase!
Thank you! The layout is pretty good at this condo. The only thing I would have wished for was a front closet. Who builds a condo without a front closet?!
Congratulations on your new purchase, how exciting. I’ve always wondered what the difference was between an apartment and a condo besides the fact that you would own the condo. What differences can you tell me about. I’ve never been inside a condo before unless it is similar to my flat in the UK that I bought. Mr.CBB
Thanks! Truthfully, I’m not sure myself what the difference is. Rentals are generally considered “apartments” here while condos are generally purchased to own. But you might rent a condo directly from an owner. :S
Condos are usually built with higher quality material given that someone is going to buy it outright. You don’t have thin walls where you can hear your neighours like in apartments. Also if you are buying a brand new condo, you get upgrades just like buying a new house from the builder. Congratulations CF on your purchase, I can’t wait till when I buy my first property. It must be an exciting time, usually for me, when I thin of a new place all I can think of is the fun in decorating and setting up the place with your things.
Wow…it’s crazy to think what $1200-$1400 costs you up there! 500 square feet?! That’s craaaaazy. Here in the midwest you could easily get a 2000 square foot house for that price.
Congrats on finding something that fits your budget and other desires though! The sacrifice on space might be tough, but it sounds like the location will make up for it. Congrats again!
Oh I know… It makes me cringe to think of the lower housing prices every where else. I’m not sure that I would be able to find a job in the mid-west, but it’s certainly something to mull over!
Congrats! Your new condo sounds wonderful. Are the pics above your actual new building? If so, it looks very nice.
I have to say that I have never lived in a neighbourhood where I was close enough to walk to work or all kinds of amenities, but it sounds so nice. As a kid I could walk to the 7/11, and school, but that was it.
I always look for quiet, safe and secure neighbourhoods that I know will always hold a good resale value.
It actually wasn’t until I started watching a lot of Househunters that I heard people saying that one of their priorities was being able to walk to stuff.
No, the photo is just a creative commons photo I don’t actually have any photos of the condo yet, but I’m sure we’ll take a bunch once we move in.
I’ve gotten used to being able to go for a quick walk, have a coffee, pick up milk, etc. so it’s a bit priority for us!
Wow this is so exciting! Also, welcome to small space living! I live in a 400 sq. ft. house so I understand what it’s like to live with less.
Nice! It’s always good to know that you are not the only one – might have to bug you for style tips, haha.
Congrats! That’s so awesome! And I know exactly what you mean about East Van. I lived there for over a year and ya I didn’t really leave my house at night. And there were several drug busts that occurred near our place and it was a relatively nice residential area too!
Yeah, it’s weird. It’s not that I ever felt unsafe or afraid, but the neighbourhood just wasn’t very welcoming or interesting to me.
Congratulations! Since the location is great, have you considered renting it short term to tourists when you guys are on holiday? Via Airbnb or similar, you can get a good chunk of money. You have to be willing to have strangers at your place though.
We have considered doing that before. I’m just not sure how willing we are to have strangers in the house while we’re not there. I would have much rather had a spare room to rent.
Whoo congrats! I can’t believe the cost of housing in Vancouver (vs east coast), you pay more for your mortgage on a 500sqft condo than I do on a 1600sq foot house with land in Halifax. Ces’t la vie I guess. Congrats and enjoy
Haha… yeah, we have friends living just outside of Halifax and we have been reminded of the cost inequity many times. Sigh. Not much work out there for our fields though!
Congrats on the purchase. Glad you guys were able to hit so many purchase priorities.
Hipster Central, sounds like a neat place. You’ll be the first person I contact if I ever head up to Vancouver. Congrats on the purchase.
Congrats on the purchase! As Jason said, I can’t imagine spending that much on 500 square feet. I guess it just goes to show you the difference in different markets. Our first apartment was 576 square feet, we had no room but we loved it.
Congrats guys!! I can’t wait to get to the stage where I am in a position to buy extra property! In the meantime I will read your experiences!
Congratulations on the growth of your real estate empire. It’s great that you’ve got public transportation so close. It’s one of the tradeoffs for living in the suburbs, we have no public transit. Have fun decorating your new place.
Hey, congrats! It’s nice to see other people getting around without a vehicle. Here I thought I was all on my own
We haven’t had a car for a number of years. It’s been great! We’ll have a post on this topic in a few days actually.
I love that you work around the high cost of housing to have investment properties. Many people in high cost area would use that as an excuse and not pursue it. I don’t think I could live in 500 sq feet now, but probably would have been fine when were younger and childless.
It’s harder, I won’t deny it. There is not an easy profit but I think it’s worthwhile nonetheless.
We’ve been moving the last two weeks (hence the late replies and comments) and so far, 500 sq ft isn’t so bad!
Awesome! That’s so exciting, especially given that your city, like mine, has such a crazy housing market.
We are really excited and so far, the new condo has been great
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