I'm looking for advice as I'm a first time home-buyer and I feel like I've made a mistake. My girlfriend and I are about to close on a townhome and I'm having trouble deciding whether I should back out or buy the property.
Details: We've negotiated up to 640k from an asking price of 628k (argh), two bedroom, 928sqft, and the place allows rentals but only for 12months +, 16 minute walk to the skytrain. At the moment we're paying $700 + bills for rent.
Our options are to try and back out, move in immediately after closing date, or rent it out for a year and move in. We're deciding on a year because we're about to start a family within that time.
Appreciate any advice! Thanks,
Hi @Alfredo Young , from an investment standpoint I would go into buying this home with the following in mind. Under the assumption you are moving into an owner occupied home I think the key is to insure if you had to move out of it, you wouldn't be forced to sell and you could rent it out more for what you have to pay via loans, maintenance, hoa, insurance, and management fees. The key is to not get "stuck" into a place that keeps you handcuffed in case better a job prospect comes along somewhere else or a life event takes you somewhere else. Bottom line, only buy it if you could rent it out and make money on it every month.
Hi @Alfredo Young is this property in Vancouver, B.C.? If it is, the $689.65 per square foot is a darn good price. Take the variable rate - today is 2.36% for 5 years and if you're looking for a lower monthly payment, a 30-year amortization instead of 25 years.
Skytrain must mean Vancouver, Canada. Sounds like you're having alittle buyers remorse. Remove the emotions and ask yourself about the numbers if it's an investment. If it isn't an investment but a home then that's a whole other can of personal fish.
assuming it's investing, How will you make out based on appreciation and rent? What is your exit strategy (ideally two such as rent or sell as per Uwe's comments). And with a kid on the way having a place you own is always a good fallback should you get renovicted.
Your sweat rental deal could still be a fall back. For instance you can move into the townhouse and sublet the rental. Tenancy laws in BC say landlords have to have a credible reason to refuse a short term qualified sublet so you could feel things out knowing you could always move back into the rental and rent the townhouse.
my 2 cents
@Alfredo Young If you want to turn it into an investment instead of moving in yourself you shouldn't have much trouble selling it on a 2 year agreement for sale (AFS) for $700k with around $1,200/month positive cash flow. That's assuming you get the low variable rate @Julie Toh mentioned. The AFS should bypass the rental provision since it is an actual sale not a lease.
Or you can rent it out (at a loss?) and hope it appreciates.
@Nathan Chase 'Skytrain' could mean as far as Coquitlam where the price per square footage is the $680 - $700 range and a more spacious home.
Was just in Vancouver and am going back in a couple months I REALLY like the place as well as the people they are great.
I still can’t comprehend how the average person can afford to pay rent or buy a house there