The comment sections of news websites are filled with cries about how unaffordable housing is in Vancouver. Many place the blame on foreign investment, immigration, or greedy sellers. None of that changes the market value of a home though, and so we are left with our current prices.
There is no question that detached house prices are on the rise and that many cannot afford to own their own North Vancouver homes. I speak with numerous renters on a regular basis and when asked if they have thought about buying a home they simply dismiss the idea and tell me they cannot afford to buy a home.
Many are looking to outlaying regions either out towards the Valley or up the Highway to Whistler to make their purchase. In an area like Langley, Abbotsford or Squamish you can easily get a detached home for under $500,000. However, others, and understandably so, are unwilling to take on the commute.
When it comes to North Vancouver real estate in the detached housing market, it’s difficult to find something below $800,000, with many properties selling well in excess of $1,000,000. That being said, there are options available in North Vancouver which can bring down the purchase price by a considerable amount.
$1,000,000 is a large number in the minds of most people. However, if we take that number and break it down into a monthly payment based on mortgage rates, it can become a much less intimidating number.
Furthermore, if we take that same monthly payment and cut off $1000 or $1500 per payment, it becomes even less intimidating.
Imagine your monthly payments were $3500 to cover your mortgage. Now reduce that number by $1500. All of a sudden the monthly payment is $2000, and I think most of us will agree for a detached property that seems like a pretty good price.
Supplementing monthly mortgage payments with a rental suite is a very real possibility for North Vancouver real estate. There are many detached houses on the North Shore of Vancouver that have basement suites, and since we know that rental vacancies in Greater Vancouver are low; filling those rental spaces is easy.
In very rough terms, borrowing $100,000 costs $450/mo. If you were able to rent out your basement for $1500/mo you would be offsetting $300,000 of the purchase price. If we assume a traditional 20% down situation, a $1,000,000 would require a mortgage of $800,000, less the $300,000 for the mortgage helper, and we’re left with $500,000 worth of mortgage payments.
If we look at mortgages this way, it seems so much more manageable. It’s a real possibility to buy a detached house with a suite and pay even less than current rental rates for newer condos or townhouses. Except this time you’re paying your own mortgage, instead of that of your landlord.
At the time of this blog entry there are 19 houses in North Vancouver with rental suites priced below $1,000,000. If this sounds like an option which might be of interest to you, let’s meet and talk about your options.