Vancouver Condo Real Estate Video Blog #742 - December 17, 2012
The Difference Between Renting and Buying in Downtown Vancouver
Ian Watt video blogs about The Difference Between Renting and Buying in Downtown Vancouver and how the rent alone over five years can run you $120,000 in the hole. If you want to voice your opinion or if you don't care for Ian's comments please email your feedback to email@example.com and visit http://www.ianwatt.ca/RealEstateVideos for all the Ian Watt Real Estate Video Blogs. Please note that opinions, real estate practices, prices and data always changes over time, so please keep in mind the date when this video was published as the information could have become irrelevant over the past days, months and years. Copyright iWatt Media © All Rights Reserved 2012.
Ian Watt: Hi good afternoon it’s Ian Watt in Downtown Vancouver. In Downtown Vancouver we do have a healthy rental market and it’s very important that we do have a lot of renters in order to support the investor market as well as just support prices in general in Downtown Vancouver. Everybody goes to a certain face of their life where they rent in Downtown Vancouver because not everybody was born with very rich parents or not everyone is immediately established in their job or have a deposit to put down. But for the people who are renting that do have a deposit to put down. Think about this if you have say 5% you got a CMA sheet insured mortgage $20,000 dollar down on a $400,000 dollar place and what happens is if nothing changes over that 5 year period you’ve paid about $40,000 dollars of principal down of your mortgage so your $20,000 dollar investment has now become about $60,000 dollars that’s if nothing changes as far as your property value is concerned. However if it goes to 3% no let say if it goes 2% appreciation every year 2% that’s pretty modest. Then your property value over five years would become about $440,000 dollars so not only have you paid down $40,000 equity you have $40,000 dollars or sorry $40,000 dollars of principal you’ve also increase your equity about $40,000 dollars so the $20,000 dollars is getting up there we're looking about a hundred thousand dollars difference. On the other hand if you just stay in your rent for that five year period paying about the same amount say $2,000 dollars a month over five years you’ve paid a $120,000 dollars of somebody elses mortgage. It’s kinda crazy when you think about it, it’s a huge couple of a hundred thousand dollars swing you can either go this way or this way depending on how you want to spend that $20,000 dollars. Again even if nothing changes at least to $20,000 dollars was invested in to a property that you’re living in and you’ve paid about $40,000 dollars worth of principal over five years that alone should be enough to sell you on buying in Downtown Vancouver. Run this numbers, buyer investment, counselor or by your banker, your mortgage broker to see if I’m actually talking straight numbers because everybody knows I get numbers backward all the time. But nonetheless it goes to show you that paying somebody’s mortgage or paying your own mortgage can be a huge swing in your long term investments. My name is Ian Watt if you have any questions you can always email me at firstname.lastname@example.org. Thank you very much and have a great day!