Is buying a home a good idea in Vancouver? Or should you rent? 



I will discuss 5 reasons for renting a home and 5 reasons for buying a home.


First lets talk about the reasons you should rent


1. You don't have stable employment - renting can be a great alternative as many lenders won't lend to you until you are gainfully employed full time and can provide pay stubs.


2. You don't have a downpayment of more than 5 percent down. Renting is a great option as buying a home comes with a lot more expenses. It is recommended that you save up for a large enough down payment so when it is the right time to buy you are not struggling to meet your monthly payments.


3. Prices are too high for what you can purchase versus what you can rent.  If you really need a 3 bedroom home with 3 baths, and it costs only $2300 to rent versus 1 million to buy. I would consider renting. For example with 20 percent down on a 1 million dollar home with a interest rate at about 3.5% your monthly mortgage payment would be about $4000 per month, thats not even including maintenance fee and property taxes.


4. You are able to find investments that yield a greater return than real estate. Looking at dividend stocks, you can get paid dividends as much as 6% per year on top of any equity gains.


5. You are a good saver. For every dollar you save from renting versus buying you are able to invest it diligently.


Now lets talk about the reasons to buy real estate


1. You have strong employment   Nowadays the only way to get approved for a mortgage these days is if you have employment, or some sort of income proof.


2. You have a large downpayment  another reason to buy a home. If you have a larger downpayment your mortgage payments maybe less than your rental payments.


3. The numbers work - If its an investment that you can receive greater rental income than your total expenses. Think Airbnb, Simi Furnished Short Term Rentals over 30 days, or renting to international students.


4. Overall real estate has yielded strong returns over the last 10 years and this trend should continue for the foreseeable future as Vancouver has strong population growth, low inventory and strong government intervention.


5. Buying a home with a mortgage is a forced savings account. With each mortgage payment you are paying interest plus principle. In 25 -30 years the home will be paid off, and hopefully the asset has more than doubled.

So there you have it the pros and cons of renting or buying a home in Vancouver.


If you have any questions please reach out to me. 


Question of the day, would you consider buying or renting? Please leave it in the comments below. I will try my best to personally answer all comments myself.



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Pros and Cons of Condo Living


 What are the pros and cons of condo living?  Thats what I am going to talk about right now.  


Pro #1, Amenities:  Imagine living like you travel.  New Condos, have outdoor spaces to walk your dog, swimming pool, sauna, gym and party room.  Plus most new condos are build by rapid transit, shopping and recreation centres.  


Pro #2, Low Maintenance:  If you are not a handyman, and the thought of picking up a hammer or using power tools is something you dread, condo living maybe your thing. Just think about the last time your tried to assemble something bought from Ikea.  Oh goodness you know what I am talking about. The strata will maintain everything on the exterior of the building including the landscaping all you need to do is to maintain whats inside your unit and pay your strata fees.  


Pro #3 Affordability - Condos are priced for much less than a house.  I am talking about average prices here.  The price gap between a condo and a single detached home in Vancouver is about $750,000.  For the price of a house you can buy two condos.   


Con #1 Strata Fees are out of your control - Strata fees are fixed by your strata council, and you have no control.  Each year the strata council will create a yearly budget and in that budget they will determine the amount strata fees you need to pay.  


Con #2 Really Bad Bylaws -  when you are living in a condo, you are living with a community of residents.  You will be living with all types of people.  Thats where the strata comes in and develops a set of bylaws.  You are truly at the mercy of the strata council.  Imagine living in a building and being forced to leave when you realize you a pregnant.  Bingo some buildings have age restrictions.   So if you plan in buying a condo make sure to read those bylaws.


Con #3 Noisy Neighbours - when you are living in a condo you literally are living beside, above or below someone.   If the walls are thin enough you may hear them singing karaoke at 11:00 at night.   I mean karaoke is ok, but please sing only if you are good at it.           



Question of the day, would you consider living in a condo?  Yes or No  Please leave it in the comments below. I will try my best to personally answer all comments myself.     


As always please like, share and subscribe and become smart savvy consumer.  I make educational videos every Tuesday and videos every Friday.  

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Just saw this article from CNBC saying that 1 and 3 Millennials are making a big mistake withdrawing there retirement accounts to fund real estate purchases.  I think that article is wrong.  Millennials are our future and super smart.  They where practically born with an iPad in there hands.

In this video I will show you the 5 reasons why you should consider using your RRSP as your downpayment to purchase your home now. 


#1. High Tax Rates In Canada -  With our current tax rate I would says its very difficult to even save $1000 per month.  I mean our tax brackets here in Canada are excessive, plus you are also taxed again GST and PST on everyday purchases.   Your RRSP have been growing yearly because its the only tax savings vehicle we have aside from your TFSA’s.  


#2 Rental Rates are constantly rising.  This year, what we consider as affordable in vancouver west is $3,700 per month for a 3 bedroom, $2,700 for a two-bedroom and $1,900 for a one bedroom.


#3 You can borrow up to 25k tax free and if you have a spouse who is also a first time buyer he or she can borrow an additional 25k making that 50k.  


#4 Investment growth in the housing market is greater versus the returns you would receive from an RRSP.  On typical RRSP investments you can be lucky to earn 5% per year but that is only on the RRSP amount.   Condos in vancouver or have double in price over the last 10 years so its a smarter to use the RRSP funds to get into the market now versus later. 


#5 Payback time -  You will have 15 years to repay your RRSP loan with the first year being an exemption.  For example if you borrowed 25 thousand dollars that would be divided by 15, making that $1666 per year or $138 per month.  If you are not able to make the payments you would need to add this as your yearly income.   



Question of the day, would you consider using your RRSP to purchase a home?  Yes or No  Please leave it in the comments below. I will try my best to personally answer all comments myself.     


As always please like, share and subscribe and become smart savvy consumer.  I make educational videos every Tuesday and videos every Friday.  This is Alex from Vancouver and Thank you so much for watching this video.

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