Secondary suites the way to affordability

No longer looking shared a link to this story in the Vancouver Sun over the weekend – The Bank of Montreal has just discovered the secret to affordable real estate in Vancouver: secondary suites.  Simply rent out parts of your home to others to help cover the mortgage.  You may have to wait to use the bathroom, but you’ll have enough money left over at the end of the month to buy some groceries!

Heaney said that on a $580,000 mortgage, which is fairly typical for Vancouver, a buyer would need a family income of around $100,000 a year to carry the payments.

However, throw in rental income of about $1,500 for a suite, and Heaney said the employment income a family would need to support that mortgage would drop below $60,000.

Ulsterman asks the obvious question:

BOM will lend almost 6 times family income? Is this normal?

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Al
Al
10 years ago

Nice rant.

also thanks for clearing up that bit about the ownership %. I too was confused.

space889
space889
10 years ago

In my area which is Fairview, not really posh west side like Dunbar, Point Grey, Kits. The average asking price around my current place is $1.3M to $1.5M. So even with 1/3 downpayment you would be looking at $800K+ mortgages. When I ask the realtor at opening houses, all of them said 1 bedroom rental suite would be $1100 to $1200/month while 2 bedrooms are $1500 to $1800/month. Most of the basements are newly renovated but even the lousy ones realtors are saying $1K/month for 1 bedroom. So $1500/month is not out of the question here. However for me personally, if I'm going to be spending $1200/month on rent I would rather go above ground in an apartment or condo building like say Langara Gardens on Cambie & 57th and get the swimming pool, whirlpool, gym, library, rec area, etc.… Read more »

No Longer Looking
No Longer Looking
10 years ago

BTW I just did a search for apartments in the City of Vancouver on Craigslist, and the second item on the first page was this:

http://vancouver.en.craigslist.ca/van/apa/1423985

Two seconds of looking and I found a basement suite for $700 (utilities included) at Victoria Drive and 49th. So much for ranging from $900 to $2500.

No Longer Looking
No Longer Looking
10 years ago

@logic: Yes, but they would have about double the "typical" $580K mortgage.

It says this in the story: "In Vancouver, suite rents can range from under $900 to $2,500 or more depending on the suite’s size, age and quality."

No way, $1500 is the high end (as you indicate) not the average. The story is all lies.

OK maybe, just maybe, if the "owning" family lived in a Kits basement and rented out the main part of the house, they could get more. But that's not really renting out "the suite"…and what a way to live while carrying a million dollar mortgage. 🙁

logic
logic
10 years ago

lots of westside basements (kits, point grey, etc) go for 1500.

Steevee
Steevee
10 years ago

As for the article, $1500 for a rental suite?! Who the frak gets $1500 for their basement? My girlfriend and I rent a nice, 3 bedroom main floor of a house in central Burnaby for $1300. The couple in the basement below us pay $900. $1500, what a crock.

Steevee
Steevee
10 years ago

Space 889,

I'm not sure exactly what you were trying to say in your second paragraph but otherwise well said, I enjoyed your rant. I too refuse to believe the the highlight of my working life should be the prospect of owning a house in Vancouver. I get closer and closer to leaving this city every day.

space889
space889
10 years ago

no I think the average income went up while the median dropped. Maybe it's because the higher income households paid off their mortgage?? I did a quick look in the afternoon and it seems the % of high income households (> 80K) is extremely high, maybe even 80%+? The ownership level for those above the median household income is also quite high. So unless a LOT of those households below the median income households are rich asians, Europeans, US, Albertans households who don't have to work anymore….seems like the pool of potential buyers who can afford Vancouver is pretty low. Now I'm Chinese and read the Chinese forums and websites on occassion and apparently Canada, and Vancouver in particular, are well known among the rich Chinese and is a popular destination for moving their family or kids here. Something about… Read more »

Arwen
Arwen
10 years ago

@skiff72: Isn't that the average? The median in Vancouver is lower than average; that dropped too.

Disbelief
Disbelief
10 years ago

I drove on w pender yesterday and was surprised to see so many Asians in the soup line.

I thought there were only rich Asians or are these rich ones hoarding there money allowing for increased wealth. Saving on a lunch and dinner here and there.

pricedoutfornow
pricedoutfornow
10 years ago

@skiff72:

Why is interesting? People don't need income to buy houses! Of course not! All you need is your bank to tell you "You're richer than you think!" Forget income….we have CREDIT!!!

skiff72
skiff72
10 years ago

For Vancouver, I should add.

skiff72
skiff72
10 years ago

#71 @space:

What's also interesting with that statscan data is that among households with mortgages, median income between 2000 and 2005 has DROPPED from $79k to $76k. And that during a significant upswing in prices. Hmmmm.

Hype-o-potomous
Hype-o-potomous
10 years ago

I'm holding out for the wealthy moon-men, I hear they wear hats made out of solid gold and sneeze diamond dust. They'll pay anything for a house in vancouver once they discover that everyone wants to live here!

Rich Europeans
Rich Europeans
10 years ago

The Scottish are coming too. I just sold my place to a rich Scotsman. My neighbour just sold his place to a rich German. Oh, and my cousin sold his place to some rich people from Luxembourg.

Now Europe, there is a continent with rich people that can outright afford Vancouver real estate. Of course, they came by their wealth legally…

Supraboy
Supraboy
10 years ago

You people are clearly in denial. Housing sales are up. More Chinese are coming over.

oldslappy
oldslappy
10 years ago

Global TV @ 5 announces that the IOC/Vanoc show is bringing in 'thousands' of private security contractors to work the crowd 'out of uniform' at the Olympics. Now usually these persons are called MERCENARIES ( like in IRAQ and EL SALVADOR)but for Canada we'll call them guest workers or some lame excuse like that.

THOUSANDS OF MERCENARIES IN PLAINCLOTHES in the streets of Vancouver , armed and dangerous one has to assume!!!! Body count pool anyone????

That new friend or co worker that shows up suddenly is probably not your friend.

SD92129
SD92129
10 years ago

Gorky,

Clearly you are not aware that canadian car seats are more expensive in Canada because of the CMVSS sticker and the fact that Canadian car seats have expiration dates.

Wannabe
Wannabe
10 years ago

Who actually buy's Supraboy's monopoly houses? Are the Chinese really that desperate to own that they buy those little plastic houses from him?

Superlittleboy
Superlittleboy
10 years ago

Hey Superlittleboy is back!

The friendly family basement dweller is back! Did your mommy and daddy restrict your computer privileges for the last little while? Have your parents finally willed you the family house so that you can move upstairs now and claim ownership?

You are always amusing superlittleboy!

PorkyFlu
PorkyFlu
10 years ago

@gorky:

It's called taxes. Every dollar the guberment sucks out of the economy drives up prices and drives down wages. If you want to see the effect in a more pronounced way move to Europe.

Supraboy
Supraboy
10 years ago

Look at all you fools bickering. I put up my third house for sale today and there are so many chinese lined up looking at my house. Listed for 1.8 million. You morons who can't afford a house in Vancouver, get ready for a Chinese invasion.

space
space
10 years ago

To post #2, this link has the data you are looking for:
http://www12.statcan.gc.ca/english/census06/data/

Select Vancouver from the dropdown list on top (cities NOT sorted in alphabetical order) and the measure you want. The measures are total household income, household # and income of owners, household # and income of owners with mortgage, household # and income of owners without mortgage, household # and income of renters.

Roughly 60% of households in Vancouver are considered to be owners. Didn't really check % owners with mortgage vs % owner without mortgage.

I was a bit surprised @ the uptick in the number of households with $150K+ income.

gorky
gorky
10 years ago

talking about PC shopping in the states… another mystery i haven't been able to solve after living in Canada for 5 years is why TF is everything so expensive in Canada when compared to the US?

It was really noticeable when shopping for a car seat for the 6 months old: Canada 95$, right across the Border the *exact* same model at the *same* store chain is 45$. What's the deal with that?

anyone?

Braveone
Braveone
10 years ago

@Copswife2:

58, this student punk getting beaten will make you wet then

http://www.winnipegsun.com/news/canada/2009/10/15