Personal Finance

Impossible to own a house, start a family, and save for retirement in Vancouver. What should we do? 30 yo, 100K combined

  • Last Updated:
  • Nov 19th, 2017 10:59 am
Deal Addict
Dec 16, 2012
1578 posts
151 upvotes
Vancouver
ttrevor wrote:
Nov 12th, 2017 6:09 pm
My wife and I are 30 years old with a combined income of $100K. We rent a 1 bedroom apartment in Kitsilano for $2000 per month and save approximately $1500 each month. Our combined savings is approximately $100K.

We want to buy a place and start a family. Since a two bedroom in Vancouver starts at 1 million we would need to double our income so that's out of the question.

With our income we can afford a $500K place, which would mean moving 30 minutes outside of the city for two bedrooms.
Also, a 20% down payment would eat up our entire savings ($100K) and the $1500 per month that we are currently saving would have to go towards the extra cost of mortgage and of raising the kid(s).

Sacrificing our entire retirement fund in order to start a family seems risky and we enjoy living in Vancouver but we also want to be property owners and have children.

What would you do in our situation?
First what I am trying to understand is why did you decide to start looking now for a place when the market is so red hot and not like 2-3 years ago. This is what still baffles me and I am trying to understand, I knew I wanted to own a home for a very long time and all my goals where around saving up for it and as soon as I saved up enough money and had enough proof of my self employed income I went for it.

I would have loved to live in Vancouver somewhere as like 90% of all my future jobs will be in DT and would cut down on my commute but I would never be able to afford it(well I probably could but it would been pay check to pay check and would never be able to do anything fun for the next 25 years).

You have to set realistic exceptions and understand that you have to make scarifies, heck having in-suit laundry was on my nice to have list. I ended up buying a 2 bedroom/1 bath apartment in a 40 year old wood frame building in Coquitlam. I ended up getting in-suit laundry but it was super getto, the dryer was in the second bedroom closet and washer was in the kitchen pantry. It was not ideal but I was happy to have it in-suit.

You have to start from somewhere and work you way up, back in our parents days they had to start in a "starter house" and work they way up to a nice house, for us we got to start in 40 year old wood frame buildings and work our way up.

The reason why in the beginning I said, why I don't understand people seemed to be holding off buying something years ago baffled me is shorty after I bought my place, we were approached to sell the entire building to developers(this was totally unexpected I knew it would happen one day but I thought like 10 years from the time I bought it....but after I bought the condo market went crazy so I guess developers sped up their plans), so I had to go look for a new place and I just could not understand the people I saw going to open houses, they had like kids 14-16 year old range and I was like "where have they been living all this time? why did they start looking at the hottest time ever".

I also joke with people today people would literally kill for my old place that I paid 210K for back in 2016, and no one would care that it was beside a funeral home(before 2016, when I bought people would walk into that complex see the funeral home across the street and walk out). Which I could never understand again as if the place looks good and is maintained well , why does it matter if it is by a funeral home or a 40 year old building, but I guess people just had in that mind set they need to have the best of the best and have to show off to everyone(I know people they had to buy brand new in Vancouver, have to drive Audi's and now complain to me how they have no money, the place is so much smaller than my old place and they can't stand the DT noise)

So if you really want to buy a place here, you have to be prepared that your not going to get half of what you want on your wish list, your going to have to buy a old condo somewhere far from Vancouver(think Coqutilam or Surrey) and you still will be unfortunately be paying a lot of money for it now in this super crazy market.

If that does not sound like something you want to do then you go to continue living in rent and forget the idea of owning here. The other flip side I guess what you could do if it is for you, is try to buy a place in there areas and rent it out and stay where you are now. At least your in the market and if you want to move further out one day you got a place, that you can move into or sell (probably for a profit)
DDHLeigh wrote:
Nov 13th, 2017 2:26 am

A 400k mortgage will not be 3 grand a month... More like 1500 - 1600 as a guestimate plus a strata fee of say 325 - 350 bucks.
I think it will be closer to like $1900 a month based on 400k @ 3% over 25 years. Then probably around what you said for strata, but you also have to factor in utilities and property tax what will and probably another $200 on top of it. Then there is all the other things like condo insurance to consider and possibly hydro(that depending on what you rent you may not have to pay) it all adds up.
Deal Addict
Jun 29, 2007
3669 posts
799 upvotes
ttrevor wrote:
Nov 13th, 2017 2:03 am
Thanks for the replies.

Just to clarify, we are happy to own an apartment or condo rather than a house. Sorry for any confusion.

I understand that moving away from the city is our best option.
However, the problem remains that even a 2 bedroom condo or apartment 30 minutes outside Vancouver will cost $500K with a $100K down payment and $3K+ mortgage. This, combined with child costs will eat up all of our current and future savings.

It just feels like it's impossible to own, start a family AND save for retirement ANYWHERE in the lower mainland.
I think you may want to rethink your finances or hire a good financial planner.

You can rent a very livable decent 3 bedroom suite in a decent Coquitlam location (say close to new skytrain) for about $1,600 to $1,700. Cheaper than what you are currently paying plus big enough space you can raise a family. One of my rental suites is just like that and I rented it out 4 months ago.

Kits is beautiful but also quite expensive.
Penalty Box
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Mar 23, 2016
753 posts
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madhater wrote:
Nov 13th, 2017 8:28 am
Nobody has suggested the obvious. You guys need to both quit your jobs and aim for having 10 kids and live on social assistance with everything covered.

You will be able to afford a house and both have new vehicles and you can laugh at the people scraping by trying to raise 1 kid.

Don't worry about retirement either. The government is trying to make everyone equal in retirement, so you end up having people that saved lots of $$$ getting all their savings drained for
retirement care while the people that don't save get the same care, only for free.
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Last edited by springdays on Nov 13th, 2017 3:57 pm, edited 1 time in total.
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Penalty Box
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Mar 23, 2016
753 posts
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Good luck OP, we're in a similar situation although just thinking of moving back to Alberta. Even houses in the places people have mentioned here - Surrey Burnaby Coquitlam seem to be over $1m!
"Obama is the quintessence of all that is wrong with America today.. people looking at the superficial which is skin color and ignoring idiotic behavior." - the poster AndySixx 😲 :facepalm:
Sr. Member
User avatar
Mar 12, 2006
508 posts
16 upvotes
Similar position/age.

But single just because, most women that age want to settle/have kids. How can you do any of that if you aren't from a well-off family? I don't want my kid to live the shitty childhood I had, in poverty/lack of hobbies/etc.

I'm starting to look at moving. As other people have stated - prob best to relocate if you can.
Deal Addict
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Jul 13, 2014
1714 posts
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Toronto
1 bedroom for 2k. You should probably think about moving.

Which is not easy but it's either that or earn more money which is definitely harder.
This message have been approved by the Office of the Mayor of Toronto.
Newbie
Nov 20, 2006
72 posts
37 upvotes
Toronto
You are burning a lot of money on rent.
Maybe get a 1+1 first, a 30 year amortization mortgage will probably be cheaper than ur current rent.
Deal Addict
Feb 29, 2012
2662 posts
1392 upvotes
Richmond
You have to put this problem in perspective. People haven't expected to live in a nice house in London, New York, Tokyo, or Hong Kong on an average working income for a long time. These days you shouldn't expect it in cities like Toronto, Vancouver, or Sydney either. Time moves on, the world population is on its way to 10 billion, and the affordable places to live are different and further out. There are abandoned company mining and forestry towns in the northern BC interior where they are giving away property with nice houses to get anyone to live there (but you do have to go live there, in case you were thinking of picking one up just for the heck of it).
Deal Addict
Jan 2, 2015
1113 posts
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Toronto, ON
Faith24 wrote:
Nov 13th, 2017 6:22 pm
There are abandoned company mining and forestry towns in the northern BC interior where they are giving away property with nice houses to get anyone to live there (but you do have to go live there, in case you were thinking of picking one up just for the heck of it).
Do these places have jobs that pay as well as what the OP makes?
Deal Addict
Feb 29, 2012
2662 posts
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Richmond
FoFai2015 wrote:
Nov 13th, 2017 6:32 pm
Do these places have jobs that pay as well as what the OP makes?
The issue with they dying company towns is that they have no jobs. They are hoping that outsiders will come in, buy homes, and create jobs.
Deal Addict
Jan 2, 2015
1113 posts
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Toronto, ON
Faith24 wrote:
Nov 13th, 2017 7:51 pm
The issue with they dying company towns is that they have no jobs. They are hoping that outsiders will come in, buy homes, and create jobs.
I think there's a host of issues there.

Not everyone is cut out to be an entrepreneur. The city shrank for a reason, and once you get too small, it's hard to develop enough of an economic base. You could easily end up with a "one business" town (although that's not necessarily a bad thing compared to the alternative of "no business" town).
Deal Addict
Nov 2, 2013
4798 posts
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Edmonton, AB
Faith24 wrote:
Nov 13th, 2017 7:51 pm
The issue with they dying company towns is that they have no jobs. They are hoping that outsiders will come in, buy homes, and create jobs.
FoFai2015 wrote:
Nov 13th, 2017 6:32 pm
Do these places have jobs that pay as well as what the OP makes?
Yes, BC is an extreme economic wasteland once you head out of GVA or Ft. St John areas... If you meet BC migrant workers in other provinces, most of them are from smaller towns, and GVA migrants are rarer.

In some BC towns, tourism and service sector is almost all that exist. Without those, they would die off.
madhater wrote:
Nov 13th, 2017 8:28 am
Nobody has suggested the obvious. You guys need to both quit your jobs and aim for having 10 kids and live on social assistance with everything covered.

You will be able to afford a house and both have new vehicles and you can laugh at the people scraping by trying to raise 1 kid.

Don't worry about retirement either. The government is trying to make everyone equal in retirement, so you end up having people that saved lots of $$$ getting all their savings drained for
retirement care while the people that don't save get the same care, only for free.
You're trolling, but that actually happens. There is a lot of that in Alberta. The legal system is favoured to women with kids much more so than other provinces as well. We have no "common law" here so word on the street is women "trap" men into relationships by forcing them to have children. Women get child support based on the man's tax bracket, plus generous government subsidies and tax treatment.

To OP: Another idea is to move to somewhere with lower living costs, and higher income. Invest aggressively. Once you've become very wealthy, THEN move and retire back to Vancouver. Edmonton isn't as liveable as Vancouver, but average household income is >40% higher, and for $500,000, you can find a very nice 2000 sq ft.+ home in a newer neighbourhood.
Sr. Member
User avatar
Sep 19, 2013
944 posts
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Winnipeg
I'm sure hardcore RFDers have seen this, but just something for the OP on a lighter note...no offense intended.

Newbie
Aug 12, 2017
43 posts
3 upvotes
[quote=Speedy1 post_id=28458415 time=1510556550 user_id=103237]
Different strokes for different folks.

It all depends on what your priorities are.

For me, I am quite well off (I own multiple houses) but I don't feel I can afford to live in Kitsilano. We also drive a 4.5 yr old Hyundai and a 14 yr old Toyota.

There are lots of people renting and driving a nicer car than me.

One time I was showing my rental suite to a potential renter and he came in a newer bmw while I came in a 15 yr old car.
[/quote]

There is so much wisdom in this reply. That BMW was probably leased or bought new devaluing with the dollars just dripping off it faster than the rain is drenching it.
The OP lives in one of the most expensive areas of Canada spending a fortune in rent. First you need to move out of Kits. Its absurd there. Find a decent area of the city that isn't so far from your work. Hopefully you don't walk to work in Kits. Rent is high so use that to your advantage and share a house. Rent a house and share part of it for more than your share. Most people never think of this yet it makes so much sense. Sure you need to hunt down a good deal but once you have that house that is renting a little under market value you can profit on that by renting out most of the house to others. Do short term rentals and really pull in the money. The key is to live in a different part of the house so you don't have to see them if you don't want to. Usually this means the top floor or the bottom but it could be either if others have their own entrance. Isolate yourself in the house for your sanity. But if problems arise you can deal with them immediately. This is vital. The longer a problem festers the harder it is to deal with. If they share they don't have tenant rights which means you can evict them in an instant. This is key. If they don't go they are trespassing and you call the police who will remove them. This kind of power over your tenants ensures they abide by your rules that you both agreed to at the beginning. Sign nothing for legal protection.
In various areas look at rental prices of homes then at rental prices for rooms. Combine them with resourcefulness and you will be living VERY cheap. If you want to have any money you have to think very differently from the masses. This is one just example.

Transportation: Always be selling. Have 2 cars or 3 if necessary and have 2 for sale at all times for a high price. Find popular models. Do this for a few years and you'll have a free car worth tens of thousands AND know a lot about the car market.

Remember that the price of something is not the initial cost. Its the difference between the buying and selling amounts. Every time you do something like eat in a restaurant you are flushing your future $ down the drain. Just stop these kinds of expenditures. Find fun things that don't involve those kinds of expenses. Seek and ye shall find. Be determined and you will persevere. Treasure your family. That is worth more than any house. And all these things learned can be passed to your children so they don't waste most of their life paying interest to a bank.

When you are ready to buy a house look at costs like mortgage insurance, total mortgage interest paid (which for many is more than the price of the house!), city taxes and other things that don't build equity and declare war on them. And when you buy look at it as a revenue property. Because, with the right design, it can really help you pay down that mortgage fast so the bank gets almost no interest from you if you rent out MOST of the house. 5 year max should be the max a mortgage takes to pay off. That is within the realm of many people yet they foolishly waste their money and end up paying a fortune to the bank for decades because of it. Sacrifice now for long term gain later. Its worth it. And once you own that house put it on the market and realize if you sell it, all the profits are tax free because its your personal residence. Then do it again and again.

The bottom line is never be attached to your possessions. Just your family and friends. They pay better. :) Your possessions should serve you both functionally and economically. Ignore the masses. Most are not thinking at all. The blind leading the blind.

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