Q&A: Is It a Good Idea to Buy a House in Vancouver?
Financial advisor Graham Bodel of Chalten Advisors gives it to us straight.
May 29, 2017
Q: Is buying a house in Vancouver a good investment?
Bubble or not, it’s always a good investment to buy a place to live. Having a mortgage is putting money back in your own pocket instead of paying someone else’s mortgage. But for a person in their 20s with a decent income, even condos are extremely expensive, so make sure not to overstretch yourself: it’s not a good investment if you can’t afford it. If you’re paying more than one-third of your income to housing costs, it becomes harder to save money for other things.
Q: Are there any financial benefits to renting?
If someone is going to stretch themselves so much for a down payment and high mortgage payments, it might be better to use that money for something different. Depending on your budget, it’s either buying a house or saving.
Q: How should renters save for the future?
It’s best to save a minimum of 10 percent of your gross income toward a tax-free savings account earlier in life, when you’re in a lower tax bracket. Then when you’re in a more mature stage of your career you can contribute to your TFSA and RRSP: if you do more than one, there’s a better cushion for the future.
Check back for more from our How We Live Now package, where we dive into the who, the where and the how of Vancouver’s renting scene.