This is a cross-post from reddit. I’d love to hear some thoughts around here.
Link to the original thread:
https://www.reddit.com/r/PersonalFinanceCanada/comments/8cfet0/stuck_between_options_for_living_downtown/dxfrizs/?context=3I’ve seen Mr Money Moustache’s post about rent vs. buy, but we still essentially have three options.
(Here’s the original post:
Thanks in advanced for any advice!
Partner and I both work downtown Vancouver now, combined salary is about 100k-110k. No student loans etc. i can bring in an extra 12k with a small freelance gig that i enjoy, but have almost no time for it due to commute now.
EQUITY: Own a 1970's 2bd 1ba condo in the suburbs with ~90k left to pay. Told we can sell it for 400k or so (mom's partner is a realtor). The location is great if you're going to school/college or working in the suburbs.
COMMUTE: the commute to vancouver from here sucks with our hours (yeah i know, boo hoo, first world problem, but we have important personal goals). We are left with very little time for our health, relationship, personal goals to help move our careers along, etc. His commute can be up to 2-3 hours a day, and same with mine. We basically wake up at 5, go to work, come home by 6 or 7, cook dinner/chores/errands/maybe exercise, sleep by 9.30-10.
GOALS: Have definitely decided to move closer to our work places. Our goals are to further our careers and increase our incomes, which will require maximizing our time outside of work--completely possible if we are 15 min from work. Partner's health is also impacted by the long drive. we've found rentals like, right across from one of our work places and 10 min skytrain from mine.
If you are unfamiliar with Vancouver's market, it's est 800k for 2br 1ba. 1mil if we want something splashy. Maybe a 2br 2ba if we go with something old. Rentals are like 1500-1800 for a 1bd. 2br 1ba would be like 3k. (would prefer 2 bed cause i have a freelance gig which is nice to have some studio space for, but i think we'll just try to squeeze in a 1bd for affordability).
OPTION A: Sell condo, buy downtown. Mom is pro-buying--- she's one of those people that have done really well in Vancouver's market. So she wants us to either sell current condo and buy dt, or sell current condo and invest the money while renting downtown and see what happens in the market. NDP might cool things off a bit, i agree on this point. but by how much? hard to say.
OPTION B: Rent out current condo, rent downtown. If i can rent out my current place for ~1700, it can give us almost 1k off our rent downtown. So, if we take a rental for $2k or less, we'd be in a great spot. I don't think renting out my place will be an issue, as it's near a major college and transit. The negative is that, well, we could have months where we are paying both mortage and rent. That worries me a bit, but I'm leaning towards this option the most. I can't justify spending almost 1million on a tiny condo. We also don't know if we want to be 'stuck' downtown, in case of job changes. interestingly enough, my mom's realtor partner actually admitted this probably isn't a bad idea.
OPTION C: Sell, invest what's left, rent downtown.... and see what happens in the next year or two?
Thoughts? i'm trying to avoid traps like getting a huge mortgage that leaves us with very little money to travel and save. Option B seems good to me since we'd still have equity, and would be able to live downtown.