30s Grind #5 – “We own a house in Vancouver partly because we got into the market elsewhere about ten years ago & leveraged our way up to a house (with basement suites).”

“We own a house in Vancouver partly because we got into the market elsewhere about ten years ago & leveraged our way up to a house (with basement suites). However, another big reason we can afford to live where we do is that we have a frugal lifestyle: no expectations of a huge house with a designer kitchen & a bathroom per person; we don’t buy a lot of electronics & other consumer goods or eat out at expensive restaurants; plus, we have no car–bikes, walking, bus & Modo are all really easy in East Van. We do spend more money that some people might on some things–we eat mainly organic food (I actually shop at ‘Whole Paycheque’ every few weeks), we go out for coffee/lunch/dinner fairly regularly at cheaper places & we enjoy our craft beer; we take trips in BC a few times a year & to Europe every few years.”
Lisa C at thethirtiesgrind.com 1 Jun 2012 2:23pm

This couple are playing the role of building superintendents in their own home, overseeing their tenants in the basement suites (plural, note). Would they choose to purchase a rooming house if they knew that prices will remain static in real terms (rise with headline inflation, currently at about 1-2% pa), or possibly even drop?  We don’t think they would have seen it as worth their trouble: They are speculating that future housing price gains will make it all worthwhile.
– vreaa

28 responses to “30s Grind #5 – “We own a house in Vancouver partly because we got into the market elsewhere about ten years ago & leveraged our way up to a house (with basement suites).”

  1. pricedoutfornow

    Funny how you should mention rooming houses. I know a guy who rents out about 80% of his property in order to meet his monthly mortgage payments on his $950,000 house. This is crazy! Shows you how far people have been willing to go to “own” real estate. Well, it’s all about to come crashing down…..

    • Hasn’t it always been done that way in Vancouver though. I can still recall a Slavic lady in Kits who had broken her basement in 6 or 8 small rooms and was charging an outrageous price for each. She got away with it because her highest rate was still just a little below the cost of a bachelor pad and so most of her tenants were folks who could not pass muster with the commercial landlords. All unsavoury. Any UBC student looking for cheap digs in the early eighties almost certainly crossed paths with her in their search for a bargain. I hear she was quite a drill seargent but made a killing through the illegal basement suite business.

  2. Nothing says underemployment better than amateur property management operations on a grand city-wide scale. In my experience describing “what’s done” to afford detached property in Vancouver by the masses to an unfortunate outsider elicits head cocking followed quickly by brow furrowing.

    • Renters Revenge

      I’ve been there, trying to explain basement suites and grow opps to some New Englanders once. Utter disbelief.

      • In England the mansion blocks are adequately subdivided to provide separate owned dwellings. Here the concept of dividing properties is, apparently, an enigma.

        What really hits home with this series is the plethora of tangible reasons why so many families are leaving the City of Vancouver for other locales.

      • “What really hits home with this series is the plethora of tangible reasons why so many families are leaving the City of Vancouver for other locales.”

        Well, I guess I have to make my “outing”: I’ve just accepted (today) an offer to relocate in another part of Canada where skeeters will be my new friends… It’s been a hard decision to make since we really like Vancouver, but Vancouver doesn’t like us as much…

        We managed to compensate high housing cost by not owning a car and getting around with public transit and zipcar/budget rental. This way of life has been working for us so far. The real killer for us has been day care. 15 months on waitlist and still nothing. If we had ever gotten the “privilege” to get a spot, it’d have eaten up a very large chunk of my wife’s salary (in downtown, day care is around $1,300/ month).

        We want to have another kid but we’ve been holding on because of daycare and housing options. In downtown, it’s impossible to find a 3-bedroom or a large 2-bedroom at a reasonable cost. So having a second child would have forced us to move outside downtown and probably to buy a car as well, and therefore increase significantly our overall cost of living and reduce our ability to save.

        By living way under our means, and even with my wife out of work, we manage to save 25% of my net income. Pretty good but far from being enough for a 20% downpayment if we ever want to own a SFH in a not too distant neighbourhood within a reasonable timeframe.

        And then came this opportunity to move to the prairies, where day care is a third of the price and easily available, where renting cost half of what it does in Vancouver, buying real estate cost a third to a quarter of what it costs here, and where pretty much everything else is cheaper than here. My salary will remain the same (it’s a transfer within the same company), and I’ll have much better opportunity to “climb the ladder” over there. My wife will finally be able to get back to work and get her sanity back. All in all, higher income and much lower expenses than here… What’s not to like?

        It’s with sadness that we’re leaving Vancouver because we like it here (we’re leaving at the end of the summer), but at some point, I have to do what’s right for my family, which means leaving Vancouver. This city might be ranked one of the most livable cities in the world, and it truly is for some aspects of it, but it is definitely not friendly to families with young kids.

        Once RE prices come back to earth, we might consider coming back. That won’t be in the next 5 years I think, and in the meantime, our family will expand and our savings grow substantially.

      • You’ll be missed, Makaya… BonneChance!

      • @Nem, don’t worry, I’ll stick around on Vancouver housing bear blogs. I’ve heard they have internet there as well 🙂

      • Makaya the one thing about Winnipeg that stuck with me was that neighbourhoods felt like neighbourhoods. You’ll know what I mean after spending a few months there.

      • best wishes – meilleures sentiments, m 🙂 … and then there were 2,313,325 … ps. top secret work continues on unsinkable, no-touch bottom indicator -> whenbullsarefunnyagain

      • Makaya -> Sorry to hear this; at the same time, all the very best with the move.
        Your contributions here and on other sites have been appreciated, we hope you will stay in touch.

      • @Vreaa, I’ve noticed they have their own little bubble going on over there and no housing bear blog 🙂 I’ve learnt so much on your blog and other Vancouver bear blogs that I’m thinking of “educating” people over there 🙂

        What I’ve noticed on mls is that Realtors are as bad as they are here, trying to set up bidding wars on pretty much every property for sale. Well, it’s about time to have somebody to expose their shenanigans…

      • reality check

        Why not just move to the valley instead of all the way to the prairies. God I hope it’s not Regina for your sake.

      • Congratulations Makaya. You will come to love the prairies and never look back once you see firsthand how much your personal circumstances will improve with lower shelter and living costs. I blog from out on the flat lands actually and even though I am originally from Vancouver I have no desire to return. So are you really heading for Winnipeg? It is a good bet. Try looking at housing within an hours commute of town for an eye opening perspective on reality. Good small town homes of two and three bedrooms can still be had for under 30 thousand dollars. Shocking isn’t it? Imagine, a paid off house in 12 or 24 months with yard and shed and garage and almost no crime whatsoever. And what is the difference really between commuting 45 minutes from New West to downtown or commuting the same amount of time along a prairie highway (except there is not much shopping along the path and the odds of hitting a moose go way up!).

      • Dear Makaya,

        Congratulations! Deciding not to have kids or postponing kids in order to live in Vancouver strikes me as about the worst decision one could make. I’m pleased you are following your destiny and not letting the BPoE ruin your family’s life.

        My only recommendation: eat as much sushi as you can before you leave!

  3. So in the end it’s “We own a house in Vancouver… but there are strangers living in it too.”

  4. Good day fellow doomers. As bearish as I am about RE, I really want to let you guys know that RE won’t tank 65% in any neighborhoods. 65% is not going to HAPPEN! That’s crazy talk!

    • Okay. How about 69%? A far sexier figure.

      Over at VCI, the 19K party has begun. No sight of Cam Good yet.

    • 61.8% sounds more reasonable. IF that number doesn’t hold, then a full retrace to the value before RE went parabolic.

    • I feel you may be right B@D@$$ but that’s not based on analysis – just gut feeling. What about you? Then again, right now I find it easier to believe we’ll have a 65% decrease than the equivalent increase.

  5. “Makaya” – you have nailed it on a couple of points – “we like Vancouver, but Vancouver does not like us as much” , and “it is definitely not friendly to families with young kids” Very similar sentiments. Although now in Calgary, I actually could care less about the housing costs, I care more about the community my kids grow up in. I have personally seen and have heard stories from friends in Vancouver about the lack of community feeling and people not knowing neighbours. Sorry but I think it is better for my family here right now. I love Vancouver and am very proud of it, but I am also a bit upset and worried about the way it has changed so dramatically in the last ten years.

  6. Where on the prairies are you moving to, Makaya?

    My goodness, there’s so many professional ex-Vancouverites about, it will amaze you.

    Welcome! Vancouver’s loss.

    • I’m moving to Winnipeg. Not quite sure what to expect yet. Some people love it, some people not so much. My philosophy is “a city is as good as what you make out of it”. I’m really looking forward to meeting new people over there and discover what the city has to offer. My new colleagues are very welcoming and that will make the transition easier.

      I’ve also heard it has a more developed cultural scene than Vancouver, which is pretty attractive to me.

      • Dude, Garnet Amps and The Guess Who! And I hear they have NHL hockey now too. 🙂

        Don’t forget us out here.

      • The Peg is awesome. I love the place. Honestly I don’t know why it doesn’t get better press but you really have to spend time there to see its charms (and it is NOT Toronto….thank God!)

    • Astrologically, it makes sense for many Vancouver residents to relocate to Winnipeg specifically. The energy of the May 20 Annular Solar Eclipse, which was particularly strong, presented Vancouver (4:47pm) with massive energy in the 8th House, the house of death, rebirth, regeneration. Conversely, in Winnipeg, the energy was in the 7th House of Partnerships and Relationships. Without getting into the nitty gritty details, Vancouver is presented the next 6 months (and longer) with Libra qualities to strive for.. a Rebalancing.. (remember the Scales of LIbra). Winnipeg one sign ahead has Scorpio on the Ascendant, .. the Scorpio energy in this position, directs the individual strive to secure his home and his place in it, before he can go out and give generously to others…

      Remember the VREAA post the other day, mentioning the Radio Jock and his urge to move to the Prairies? The same eclipse energy was having the same marked effect on him, and likely many other Vancouverites. Winnipeg! Brace yourself for many new West Coast refugees.

  7. Good luck Makaya.

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