From Renting to Owning: Pros and Cons

Vancouver Rent_or_Buy

Switching your status from tenant to owner can bring its own challenges. So before you decide whether homeownership is your next step, take a glance at this list of some pros and cons below.

Pro: You can customize anything
Paint the walls. Tear out the carpet. Install a trash compactor. When you own a property, you don’t have to wait for a management company to decide when, and how, a unit will be remodeled.

Con: You pay for the upgrades
If the dishwasher breaks down in your rental, you can simply call maintenance to get the issue fixed, often within a day. When you own a home, not only do you have the headache of finding a reliable repairman available at a convenient time, but you also have to cover the cost of all repairs (and heaven forbid, replacements).

Pro: You can finally have a yard
When you upgrade from renting to owning a home, chances are you’ll be able to find a patch of grass to call your own. Think of the all the barbeques and birthdays you’ll finally have room to host! Your dog will also be grateful for the extra space to roam.

Con: You’re in charge of yard work
This one may be a matter of perspective. Some people enjoy working outside and keeping their lawn looking greener than their neighbors. Others tire easily of the mowing, weeding and fertilizing needed as just the basic steps of lawn care. You can always hire someone to help, but that’s an added cost you didn’t have while renting.

Pro: You establish roots
You needn’t worry about your rent going up next year (depending on your mortgage). If you plan to stay put for a while, you’ll build long-term relationships with your neighbors and can feel free to finally unpack that box from high school you’ve been carting around. Go ahead and grow a garden of perennials – you’ll still be around the next time they bloom.

Con: You lack mobility
When renting, it’s easy to make a change when the lease is up or even, in dire circumstances, break a lease if you have to relocate right away. If you suddenly need to relocate as a homeowner, you’ll remain responsible for the monthly mortgage until your home sells. In hot markets this isn’t a problem, but it’s not unheard of for homes to remain on the market for months until their owners have to consider a credit-damaging short-sale.

Pro: You build equity
When you sign your rent check each month you’re handing off money you will never see again. In comparison, as a homeowner your check is going toward paying down the overall price of the home. Ideally, when it’s time to move on you’ll be able to sell your home for at least as much as you paid for it.

Con: You’re at the whim of unpredictable markets
Ideally you’ll be able to sell your home for the same price you bought it for, if not more. Unfortunately, the housing market can be volatile. Some homeowners end up underwater on their home, owing more on their original loan that the property is worth.

The bottom line? When you’re ready, there are many great benefits to home ownership, but it’s not a decision to be made lightly.

Using my knowledge of the market and learning more about your personal situation, I can help you decide when the time is right to make your next move. Contact me anytime.

What’s hot in Vancouver?

Regardless of declining prices in Vancouver, the hype that Vancouver is too expensive will still continue. This is what I call the “real estate market lag” This lag is from the time the market shifts until buyers and sellers actually believe it’s happened.

That being said, buyers are currently searching for homes in Metro Vancouver and just outside. The most popular area right now is; Delta & Richmond for detached homes, and Condos priced between $350,000 to $400,000 in Burnaby as well as Vancouver.

The following are links to the noted properties and areas.

delta
richmond, bc
featured-listings
burnaby, BC : 350000 to 400000 : 1br
vancouver, bc : 350000 to 400000 : 1br

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Building without Professionals

Buyer Beware! This poor woman was ripped off for $80,000.

Buyer Beware! This poor woman was ripped off for $80,000. Check out our interview on how to protect yourself from unlicensed and unscrupulous builders.

A Surrey woman is fighting to get some of her money back after discovering the builder she hired isn’t licensed as a new home builder in British Columbia.

Queency Marfa says she didn’t learn this critical information until after she signed the deal, and now she’s discovered there are a whole lot of things she should have done differently.

For example, she should have checked the licensing of the builder, as well as had an expert or real estate lawyer take a look at her contract before she signed it.

The Home Builders Association says there’s a lot more to being a good home builder than knowing how to swing a hammer and use a saw – you need business skills too. The company you hire needs to meet regulations and provide up to date paperwork and invoicing.

Larry Clay, VP of the Greater Vancouver Home Builders’ Association, took a closer look at Marfa’s contract and immediately saw a red flag with the warranty the builder was offering. “This is not a licensed builder providing a 2-5-10 warranty,” Clay said, nothing this means a two-year warranty on labour and materials, five on the building envelope, and 10 years on the structure.

The 2-5-10 warranty is the strongest defect insurance you can get on a new home in Canada, but not every builder can offer one. Only a licensed residential builder can offer a warranty, and it needs to be registered with BC’s Home Protection Office and held by a third-party company – not just the builder.

Clay was also concerned about the 40 per cent down payment required in the contract, given that 10 per cent is the industry standard. He says a home building contract should be very specific, laying out a project schedule and terms of payment. Once construction beings, the consumer should be provided detailed job cost reports and expect weekly project status updates along with receipts for money spent.

Marfa says she’s paid about $80,000 to Steel Dragon Construction Ltd., which is not a licensed builder. Her old house has been demolished, and plans were purchased and submitted for permitting of the new home, but Marfa has been given no receipts for the work that has been done.

“I have no proof of anything of what [the company] has paid and what [the company] has done with the money,” Marfa said.

“If you look at my scope, my scope is going to be hundreds of pages,” says Clay. He offers homebuyers, signed agreements to make sure that workers are paid. Ten percent of the money is held back from subcontractors and kept in trust to protect the consumers from liens. He says only 10 percent of builders offer holdback accounts, but it’s worth requesting.

As for Marfa, she will likely have to go to court to get out of the contract and recover any used funds.

That’s why real estate lawyer Paul Roxburgh highly recommends that anyone building a new home get their own representation before entering into a contract. “It’s, I think, dangerous for the unsophisticated non-lawyer public to be signing documents like this without some form of representation,” Roxburgh added.

In addition to checking out a builder’s license, check how long they’ve been in business and ask about their background and try to verify their credentials. You should also follow-up with references and ask whether they allow onsite inspections of the project.

Story courtesy of Ross McLaughlin on your side CTV

For more information, visit www.clayconstruction.ca

Get access to resources, property info, news & updates via electronic messaging. You may withdraw consent anytime. We take your privacy seriously. For market stats specific to your home and area call Tom Ikonomou direct at 778.879.8366 or reach out to us here