Should We Rent or Own in the City (Vancouver)?

Should We Rent or Own in the City (Vancouver)?

Regina Yunghans
Feb 15, 2015
(Image credit: Julia Brenner)

Q: My husband and I are in the midst of a never-ending conversation. Looking at our financial future, do we buy a home or do we rent and invest?

Here are the facts:

  • both 26 years old
  • live in Vancouver, Canada which has been labeled as the most expensive city to live in North America (yes, beating out New York and Los Angeles)
  • the average cost of a home is $733,335 which will buy you a 2 bed/3 bath condo...- currently have a combined income of about 83,000/year (hopefully in a few years, we would be able to bring that up significantly, but that's where we sit right now)
  • that's a monthly income on average of 5500/mth
  • currently we could probably afford a 1 bedroom condo at 350,000, the down payment would be 70,000 and an average housing cost (mortgage, property tax, strata, etc.) of $1800 a month
  • we currently rent a 550 sq ft apartment for 1050/mth; plus utilities ($20/mth), we have no cable or other home-related expenses; our monthly expenses are about $2700 (insurance, gas, groceries, etc)
  • we'd like to have kids within the next 3 years, thus would need to move in to something bigger than a one bedroom
  • renting a two bedroom condo or home would probably cost about $1800
  • we have significant savings which could allow us to buy a condo in 2016

So! The big question is, in a city with the cost of living so high, do we save like crazy to build up a down payment for a home where we would be tied the mortgage for 25 years OR do we continue to rent (and pay someone else's mortgage) and invest the extra money to build our assets and potentially even buy a home in cash in 25 years anyways? How important, really, is it to own a home? How much do you think it changes things with the potential that his parents might be able to lend us the down payment towards something bigger?

Thoughts? Help!

Sent by Ashley

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