ulsterman at vancouvercondo.info January 29th, 2011 at 1:45 pm – “The intangible benefits to owning brought into sharp focus: This morning I got the break-up call from my landlord. He’s just sold his house in East Van and wants to move in. He had his place on the market just to see what he could get and in his words, “Wow! the market has really picked up.” He’s smart enough to be extracting capital from his home and moving into his mortgage-free, inherited family home – life’s pretty rosy for some.
So now me, wife and two kids (one whom is 4 months) have two months to find a home. Isn’t renting just wonderful. And no, with a family to raise, i was not like the majority of people [on vancouvercondo.info] – i was not stuffing thousands a month into 10-bagger stock picks and getting rich while renting.
OK, gotta go start searching the delightful supply of “no cats” rental homes on Craigslist. Did i mention it’s a shitty, grey Vancouver day?”
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- LadyInWaiting on “My neighbours, in their late 60s, just put their house on the market. They had said they would die in that house, but now they are worried that with the housing market going south they may be losing a lot of equity and they better sell now before it gets worse.”
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- Advice Regarding Renting In Vancouver, Please – “Unfortunately, the Vancouver rental stock is absolutely atrocious. It just seems like every landlord is looking for someone to pay 100% of their mortgage on a crappy place through rental income.”
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- “Rent for $2,200 a month or buy and have a mortgage of $4,310 per month. Why would anyone buy?”
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- “One of my old high school buddies finally got her mother to sell the family home in Kitsilano – sold for over $1M, monies realized after debt paid off $185K.”
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There are downsides of renting. But there are downsides of owning too.
I am (for better or for worse) moving to Vancouver from Ontario this summer. So I had to sell my house. This took 6 months of renovating, painting, cleaning, etc. I definitely spent hundreds of hours and thousands of dollars preparing for this sale. I learned what an illiquid asset is.
My guess would be that a couple of evenings cruising Craigslist and a couple of weekends looking at places should be enough for you to find a new rental. Then a thousand or two for the moving company. This is an expense, but I would try to view it as the cost of hedging against the downside risk in the real estate market.
Perhaps you can keep us updated on how many hours it takes you to find a new place, and how much money it costs you. (I.e., paying for movers, etc.)
Best wishes ulsterman. You’re living my worst nightmare. Hope it doesn’t take too long to find a new home.
MarKoz
Perhaps you are being a little over dramatic. If moving is your worst nightmare you don’t have a very vivid imagination.
I wish you luck Ulsterman. Remember this too will pass.
Yes, good luck. I sure hope it turns out, I know what a hassle it is to find a place to rent. But there are some gems out there, hopefully you find one!
I feel for you bud. But as Unagi Don has already pointed out there are downsides to owning too. Let me give you an example, we recently had twins in April, when they were a month old we discovered that our beautifully built (at least cosmetically) 5 year old house we were living in had a leaky roof (amazing the leak started literally 2 months after our 5 year building envelope warranty expired). Long story short the more we dug into it, the worse it got, 6 months of living in a construction zone (dust, dirt, noise, paint and chemicals) and $65,000 later, the roof is finally fixed. Besides the massive cash hit, trust me I’d trade 6 months of construction for a single move any day. Moving may suck (and it does) but in the realms of housing disasters that can happen to you, all of the big ones happen when you an owner. Think of it this way, just about the worst thing that can happen to you when you are renting just did happen. I giggle a little when people use the “armeggedon” scenario of being forced to move as a huge argument against renting, when if you ask me, that’s one of the advantages!
One other observation, although what happened to me seems to be pretty extreme, I tend to think that owners in general don’t really fess up or take into account the amount of costs inherent in ownership. Leaky roofs and subsiding floors, mold etc… seem to be dirty little secrets that no one wants to talk about. Ah if only I could have a penny for every time I heard the words “rent is just throwing your money away”.
I don’t think you had the worst case scenario. A friend who owns a house (one of those town house developments where they “string” five or six together at a time) first had his boiler blow up and flood the entire ground floor, requiring not only the replacement of the boiler but also of all the hardwood on the ground floor.
Then a few weeks later apparently they learned that the fans they though they had on the house in order to pull out moisture etc. were just cosmetic, a closer inspection apparently found mould in one of the neighbouring units which necessitated apparently a complete clean up of the entire roof space for all six units.
Then of course there are the thousand little things that you constantly have to deal with that renters don’t.
Dunno, but the more I look at it, the less and less I even want to own a house “build in BC(TM)”.
Take Renting’s advice on VCI: start applying to cooperatives and ask seriously about longer-term leases. I don’t know if signing a longer-term lease warrants a premium or a discount, but if moving is such a pain in the @ss, pay a premium for stability with a rental surcharge.
Pro tip: sign an agreement before February 3rd if your landlord is Chinese. Many believe clearing away outstanding business before Chinese New Year is important. (I don’t know; it’s just what I heard!)
I can hear it now: you pay $50/month more for a 3 year lease. Some landlord can’t believe his luck you’re willing to pay MORE to rent his place than what was offered. He’ll go back to his wife shaking his head, telling her how crazy renters are in this city.
Great post Jesse, one thing to add from my experience living in London and New York, in big cities it is common practice to charge more for a longer lease, an implicit recognition that the landlord is granting the renter a valuable option, and even more weirdly enough renters are willing to pay it! Perhaps not such a crazy idea after all…
As John Templeton stated in 2003, EVERY Real Estate market country in the world will drop 90%, some may take 20 years. We are in the world of deflation on hard assets, inflation for food, gas, water including all commodities. For the past 30 years the sheeple have been trained to buy a house as an ASSET. We know no better. Nowhere is it “different”, or land is scarce, or immigration shall keep real estate booming. Miami, LA, Phoenix all have little land and immigration, weather etc. All are collapsing. If you learn of the 50 Greatest bubbles since the tulip faze you would be OUT of real estate and renting. The coming MASSIVE taxes, heat, hydro and climate change will eat up all your gains in real estate.
This is unfortunate for the individual in question but my favourite part of the quote is this:
“And no, with a family to raise, i was not like the majority of people [on vancouvercondo.info] – i was not stuffing thousands a month into 10-bagger stock picks and getting rich while renting.”
Apparently, VRE bear blog posters are collectively the top 1% of stock investors able to extract fortunes from the Market while waiting for Rome to burn. Believe me caller, the majority of commenters on that blog are not making a fortune on the Market. If they are making modest gains, most of them will give it all back.
This is true blammo, the vast majority of people are mediocre investors at best. All the more reason not to apply huge amounts of leverage to ANY investment.
It’s different here. All the women are strong, all the men are good looking, and everyone is an above-average investor.
You don’t have to be the smartest cookie in the room to be a decent investor, you just need to use your common sense. I put 55% of my investments (in RRSP) in fixed income, 15% in large Canadian cap. equity and 30% in small Canadian cap. equity. A balanced portfolio, nothing complicated, nothing fancy, nothing magical. In fact, I just follow the advices from Garth Turner (I bought his book Money Road). I’m not at all a speculator, I just save what I can every month in my company’s RRSP program (with Manulife) and don’t think about it. My 2010 returns for 2010, are below:
Fixed Income (55% of total)
4131 ML Canadian Bond Fund d4 7.3%
4141 ML Fidelity Cdn Bond c7 7.4%
4161 ML MB Fixed Income d8 6.9%
4162 ML MB Long Term Fixed Incm b3 12.8%
4191 ML MFC Pld Cdn Bond Index d7 6.7%
4192 ML Fixed Income Plus (AB) b9 9.0%
4271 ML PH&N Bond Fund e8 7.5%
4401 ML Bond (Addenda) b7 5.4%
Canadian Large Cap Eqty (15% of total)
7141 ML Fidelity Cdn Large Cap c7 20.2%
Cdn Small/Mid Cap Eqty (30% of total)
7122 ML MMF Growth Opportunities d4 32.7%
7381 ML FGP Small Cap Cdn Equity d4 22.6%
Any average investor could fetch that kind of return this year… As long as you don’t speculate, you’ll be fine!
thank you, ulsterman, for sharing your story; wish you best of luck.
thank you blammo for pointing that out. the common stories around are that professional couples with 150k-200k salaries, have enough cash to flush but dont want to buy or cannot afford to buy…blah blah blah…
And if you had a mortgage your boiler could have blown up or your roof could have started leaking.
There are always (expensive) uncertainties in life.
I agree with Eric on many points. Having rented and now being a homeowner and a landlord, I can honestly say there are days I would rather rent – no worry about repairs, unexpected costs, maintenance etc. Renting can be nice if you have heat, electricity included and not paying condo fees.(although landlords can include it in the rent) Being a landlord can be huge headaches – getting good tenants, again having to deal with “stuff” (hot water tank going, maintenance, tenants rights) I wonder how many “leaky” houses we could get from all the construction during the last number of years.
Sorry to hear about move but check yiur lease. Landlord probably has to give you one month rent free as compensation. Also you can follow up later to be sure he moved in within 6 months. If not he probably has to pay a penalty or pay you more. See RTO website in BC for rlues . Also see ‘how to vultch a rental’ on financialinsights blog. Good luck and sorry for Nook typos.
Ulsterman found a place!
“ulsterman on vancouver condo
February 4th, 2011 at 10:13 pm”
“By fluke i found a house that is bigger, better, and 2 blocks from my kid’s school. The landlord is letting me have it 2 weeks early without rent. Nice leisurely move. I did the math using the 3.75 5 year fixed with 5% down and my rent is almost exactly 1/3 of a 35 year mortgage+tax+$100/month maintenance. ”
Also, I get one month of rent as compensation from my previous landlord. Right now life is good. Did i mention that i’m skiing tomorrow at Whistler? Go renting go!