A couple diligently does the math and decides to continue renting. -vreaa
“After diligently working to eliminate nearly $70K in student loans, my wife and I are beginning our third debt free year. Demographically we both hold graduate degrees and our household income fluctuates between $140 – 170K per year. We live below our means:
- rent a car when we need one
- remained in a one-bedroom apartment after our daughter was born
- brown bag lunch most days
- follow a simple, cash-only budget
- brew our own coffee in the morning
In the time since eliminating debt, we’ve saved almost $150K. We began looking to buy real estate. We wanted to maintain our faux bohemian lifestyle, and Vancouver West seemed the best option. We began looking, and our finding was that a ready-to-live-in single family home in Vancouver West (North of 16th) began around $1.1M. We looked and crunched and after three months decided that we didn’t want to make the sacrifices required to own a home, including:
- becoming landlords
- sacrificing professional mobility
- staying home during vacation
- paying consumption taxes
We are not bitter that the sacrifices of home ownership in Vancouver are greater than we wanted to make. For us, the benefits of flexibility outweighed the pride of homeownership.
We are moving to a larger rental space in the building we’ve lived in for seven years. It is a professionally managed rental tower downtown. We have a positive relationship with the supers. In negotiating the move, we wanted a number of updates made to the suite. Ownership didn’t want to expend the capital. As such, we offered to pay for the renovations for a reduction in rent. Ownership agreed. The break even works out to ~42 months, and we’ve picked out the styles we wanted.
I write this because we are now the second couple in our circle that have negotiated a similar arrangement. As a business person, I know when dealing with another business (read, not an individual), I am working with known strategies that dictate margin, capital and cash flow. Thus, I was able to negotiate a mutually beneficial arrangement that distributed the risk such that I (the tenant) and the owner were happy. On July 1, we will move into an updated 1050 sq ft, 2 bed, 2 bath, 2 balcony apartment on the 22nd floor with unobstructed views of English Bay. Rent = $1700. I’ve taken a few stabs at comparing the rent to the hypothetical cost if we were to buy. My amateur numbers validate we made a good decision for us.
What I often don’t understand is the venom with which homebuyers / marketers are often attacked on this blog. [vancouvercondo.info] From my perspective, they are making the best decision for them. I realize many of the comments speak out against the onslaught of homeownership messaging. Yet, I heard the messaging, searched and decided that renting was the best option for us. However, the numbers were less of a factor than the soft benefits. I believe the soft benefits trumping the numbers will become more pronounced as more first-time buyers begin choosing what they need over what they can afford.”