Author Topic: Student looking to buy first house, please give me tips (northern BC)  (Read 586 times)

Healthie

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Hi everyone,

looking for some feedback on my situation. I recently moved to Prince George in Northern BC (~8 hours Northeast of Vancouver) and I want to buy a house. I have about $95k liquid, I'm 26 and I'm a full time student for the next 4 years. I intend on working full time over the summers. Houses range from 200-260k up here. In the winters it can get to -30 degrees celsius out.

I'd like to find property with some rental value; ideally I'd be living upstairs with roommates and have a separate basement suite to rent out, or at least, a basement that is capable to turn into a rental suite (i.e., already has a bathroom, is possible to install a kitchen). Ideally I would keep the house as a rental unit, if not my own home, after I finish my degree.


I have a gang of questions:
How do I go about finding a house like this?  Real estate agent, mortgage broker, etc?
what qualities should I be looking for in the house? In addition, what qualities in the location, etc., should I be looking for to attract good tenants?
What renovations would you say are feasible for someone with little experience? I have built fences before. I have a fairly light semester in the Spring and could put time into renovating.
Anything else, really, for a first time home buyer. Online articles, that kind of thing would be great, too.

Cwadda

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Re: Student looking to buy first house, please give me tips (northern BC)
« Reply #1 on: October 06, 2017, 08:51:29 AM »
Quote
How do I go about finding a house like this?  Real estate agent, mortgage broker, etc?
I'd recommend interviewing a few realtors and determining which one understands your needs best.  Many realtors do not understand real estate investing.  You also want a solid mortgage broker who understands your goals and gets you into the right financing situation.  Mortgage brokers usually do not source deals.

Quote
what qualities should I be looking for in the house? In addition, what qualities in the location, etc., should I be looking for to attract good tenants?
I think the more important part is location.

Quote
What renovations would you say are feasible for someone with little experience? I have built fences before. I have a fairly light semester in the Spring and could put time into renovating.
A lot of things you just learn as you go (Youtube is great).  Or when you hire a contractor, hire one that lets you watch what they're doing.


jooniFLORisploo

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Re: Student looking to buy first house, please give me tips (northern BC)
« Reply #2 on: October 06, 2017, 09:00:28 AM »
You can go to realtor.ca and choose the options that are critical to you, e.g. city name, max price, etc.

Also ask any one realtor to set up 'Private Client Service' for you, so that every time a new place meeting your criteria comes up, it will arrive to you in an email.

Also, be aware that in BC the roommates (people sharing kitchen and bathroom) will have no tenant rights or responsibilities (and you will not have landlord rights and responsibilities), while a person in a self-contained unit (e.g., basement suite with own bathroom, kitchen) will bring those. Be very aware of the landlord/tenant laws in BC, so that that you can abide by them. Knowing the laws will make a massive difference in how well you succeed as a landlord, including financially.

jooniFLORisploo

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Re: Student looking to buy first house, please give me tips (northern BC)
« Reply #3 on: October 06, 2017, 09:13:28 AM »
Buying...

Start looking now for an inspector you trust. Ask around. Read reviews on Yelp. Make sure the inspector will check for mould, and for signs of a grow-op, etc.

When you make an offer on a place, make it subject to you having and approving the inspection report, make this for your sole benefit. What is written in the offer -and how- will be critical for your protection. An inspection just cost me $400 but showed irredeemable, serious issues. That was a very cheap escape.

Ask to see all utility bills for the past year: hydro, city water, etc.

Ask two insurance agencies for a quote, as though you already own the property. Any of its questions you don't know, require this information from the place you're offering on. If one says $800 and another says $3000, the first one's going to be jacking it up soon.

Renovations...

Many of them you can choose to make simple/doable or choose to make complex. I did exactly as you are aiming to do, and did lots of simple renos. One of the smartest was removing some crappy, broken (lino tile) flooring and simply paint the plywood underneath. Suddenly, the place had a nice, clean, cheery floor that was moppable and also easy to maintain/refurbish between tenants. Done! A tenant could put rugs on.

Paint is easy and cheap, and makes a big difference.

Many things can be cleaned well instead of tossed and replaced. The most horrific looking shower stall? Don't chuck and replace. Go to a janitorial supply shop and get an awesome chemical cleaner. That stuff's awful, but is still less chemical than required for a factory to build a new stall.

If there's one there, check out ReStore for supplies.

tralfamadorian

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Re: Student looking to buy first house, please give me tips (northern BC)
« Reply #4 on: October 06, 2017, 02:26:54 PM »
...I want to buy a house...I'm a full time student for the next 4 years...

So you didn't ask this but do you have your funding figured out?  Where I live, a full time student cannot obtain conventional mortgage loans. 

Goldielocks

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Re: Student looking to buy first house, please give me tips (northern BC)
« Reply #5 on: October 06, 2017, 02:57:33 PM »
...I want to buy a house...I'm a full time student for the next 4 years...

So you didn't ask this but do you have your funding figured out?  Where I live, a full time student cannot obtain conventional mortgage loans.

+1..  This is the main issue I see.  Friends bought recently in PG, and the properties you seek are there, for certain.

I think you have two options:

1)  Get a co signer
2) Look for "rent to own"' -- northern BC, this can be a common way for people to sell property (at least just outside of Quesnel it is quite common).   Often the owners have trouble attracting a large enough qualified group of potential buyers, so go "lease to own" to increase the odds of selling, and is quite common on (small) farm property.   This does not happen in a hot market, but PG is not often a hot market.

For "Rent to own', I would put an ad in a local paper, or on craig's list stating that you are seeking a "rent to own" property where the vendor will carry 50% financing.  If you are outside of city limits, I would post a note on a community bulletin board, too.

The final option is to find an alternative lender, but they may charge a lot more than MMM's would recommend.

Healthie

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Re: Student looking to buy first house, please give me tips (northern BC)
« Reply #6 on: October 06, 2017, 06:13:37 PM »
Good advice. I have the next 5 days off and I'm going to do some research.

There's a good probability of me having a cosigner. Otherwise, I'm hoping the amount of $ I have/working full-time in the summer/having tenants bringing in income is useful in getting the loan I need.

I didn't know about the rent to own idea. I'll have to look it up and see how it all works.

So far I'm seeing 4 people I need to get in touch with
Mortgage Broker
Realtor
Insurance Agent (for house insurance)
Inspector


I'm still figuring out who does what in the process of buying a place; is there any thing I've missed?

jooniFLORisploo

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Re: Student looking to buy first house, please give me tips (northern BC)
« Reply #7 on: October 06, 2017, 06:36:02 PM »
Also, I think it's half of the upcoming rental income that can count in your mortgage application. That may only include income from self-contained suites vs roommates, though. When I bought that exact scenario, my realtor had to remind my mortgage broker of that.

Healthie

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Re: Student looking to buy first house, please give me tips (northern BC)
« Reply #8 on: October 14, 2017, 12:58:36 PM »
This is also good to know.

I had a look today and I'm going to my first open house tomorrow - hoping to pick some brains while I'm here. It isn't too far from where I live currently, either.

I've seen a number of shockingly cheap townhouses ($70kish), Does anyone have an opinion of living with a strata?

jooniFLORisploo

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Re: Student looking to buy first house, please give me tips (northern BC)
« Reply #9 on: October 14, 2017, 01:22:13 PM »
A strata townhouse can work, but be aware of these things:

*Strata fees can easily be $400/mo or more (though I imagine not in PG); this is on top of taxes, utilities, etc
*Strata fees can be increased
*Some stratas charge a fee too low for major maintenance needs, and will require each owner to pay a big amount at once
*Request two years of strata and AGM minutes; read through them - you'll see if there are issues, plans, etc
*Some do not allow a roommate, a child, a housesitter
*Subject to a few laws, stratas can increase fees or create further restrictions at any point in your ownership

Renting It Out In Its Entirety
*Some stratas do not allow rentals, or say they allow rentals but actually only allow those in a percentage of units. If that percentage is already filled, you cannot rent yours. If you get yours into the rental pool, but your tenant moves out, you may lost that spot and not be able to rent out again for a long time.
*If you cannot rent it out, and your circumstances do not allow you to live in it, you have to be able to carry its costs or sell even at a low point in the market.

backyardfeast

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Re: Student looking to buy first house, please give me tips (northern BC)
« Reply #10 on: October 14, 2017, 09:25:31 PM »
Hi Healthie,
Welcome to the forums, and I hope you really enjoy your time at UNBC! We have really good friends in PG and know the area well.

I'm not clear from your post whether you are new to PG, and whether you are--for now--looking for a place for ONLY the 4 years while you'll be in school, or whether you intend to settle there for good?

Although it looks like you are in great financial shape, and while it's an awesome idea in theory to reduce your own housing costs while in school by having roommates pay for a big chunk, especially in a city where real estate is (relatively) cheap and may outcompete rents, I would still go cautiously.

If you're looking for something to flip in 4 years, I would be really cautious.  Buying is cheap.  Selling is expensive.  Your realtor will collect his/her commission from the seller.  So that's great when you buy your first place, but sucks when you have to sell and thousands are going to the realtor.  Beyond the purchase price, there will also be lawyers fees, a property transfer tax, and a land title fee.  And that's not counting the inspections costs. All of these have to be paid again when you sell/buy the next time. 

When you get your mortgage, the bank will need that mortgage to be insured in some way against your death.  So, even though you are young and single, you will either have to pay for mortgage insurance or get a life insurance policy for the value of the mortgage.  It goes on...and it's a major hassle and downer.

As the homeowner, you will now be responsible for the strata fees (if you're looking at condos or townhouses) property taxes, garbage pickup, water and other bills beyond just the utility bills that you have to worry about as a renter.  And you will be monitoring your roommates' use of utilities and trying to enforce limits because you're the one who has to pay for all of it (even if split 3 ways or whatever you decide).

All of this can be totally worth it in lots of scenarios.  I LOVE being a homeowner! (we just bought and moved again this year)  But I would never advise buying if my plan was to live somewhere for 4 years and then sell and move, potentially to another part of the province or country.  Be aware that, provincially, there is a First Time Homebuyers tax credit which is really helpful, but you can only use it once, so again, if this is a short term thing, it may not be worth using that credit on this--likely your least expensive in your lifetime--purchase.

In the short term, I'd also be nervous about buying in PG right now.  The city's real estate market, from what I understand, has been on a tear over the last number of years.  But personally I see that as dependent on an oil and gas market boom that's unstable at the moment and fueled by speculative investment in a prospective LNG economy that I don't believe will get off the ground.  I, personally, do not expect the momentum to continue indefinitely, especially with the pipeline debates coming to a head, Site C in question, the new government, and the pullouts from Petronas and others from LNG development.  So again, if I was looking at a 4 year timeline, and hoping to flip something after I finished school, I'd keep renting.

All that said, if PG is home and you're planning on staying, then go for it! :)