Rental rates and low vacancy getting you down?

Make over $40,000 in 4 years?! Go to school for free?! Travel?

I was chatting with one of my girlfriends the other day who was trying to find somewhere to rent in Kelowna. She has been looking for MONTHS and has not found anything even livable. Finally she came across a place in a popular building right downtown that was about to become available and it was only $1200/month... a STEAL for this particular complex.

This got me thinking... $1200 a month is quite a bit of money to spend on a 2 bed, 2 bath condo for rent.

A little over a month ago I purchased another property for myself. It is also 2 beds and 2 baths, in a super central location, fully updated, and the complex allows pets (including my extremely large dog) and rentals.

My mortgage is $615 a month.

Yes, $615 a month. Quite affordable for a single gal Id say.

To take it a little further I thought I would see what I am saving by purchasing instead of renting.

Here's some numbers for you, that are quite frankly a little scary.

For my friend to rent that downtown apartment for the next 4 years while she finishes school is going to cost $57,600. That's going right towards the owners mortgage.
If she gets a roommate (for $600 a month) she will pay $28,800

In 4 years I will have spent $29,520 paying off my mortgage.
If I get a roommate for the same $600 a month, it will have only cost me $720 bucks to OWN my own home for 4 years.

Currently the market is improving by about 2.2% a year. That means if I paid $200,000 for my condo today, in 2018 its going to be worth about $218,232.

You might be wondering how I got to a profit of over $40,000 in 4 years....

If I bought a $200,000 home today, with a 5% down payment, at an interest rate of 2.89% I would owe about $173,261at the end of 4 years.


If the market continues to increase by 2.2% a year, It will be worth $218,232

Market value ($218,232) - Owed ($173,261) = $44,971

I would be able to sell and walk away from the property with a check for $44,971 bucks.

Not bad considering you have to live somewhere right?!

Sometimes I think we just assume buying may never be possible because we are going to school, only working part time, or don't have much saved but that's not always the case.

I'm not sure there is an easier way to make over 40 grand in 4 years?

Hopefully this has opened some eyes up to the idea that you might actually be able to buy, and live for a LOT less than what you are spending now on rent.

Not only can you save money on rent today, but potentially making a stack of cash when you are ready to sell in a few years.

If anyone has any questions at all about getting into the market please don't hesitate to get in touch with me! I am happy to help you to learn more about buying and becoming a home owner... its a lot easier than you may think, trust me!

Thanks for taking the time to read this. Feel free to pass it onto friends or family who might be in the same boat.

-Taylor

Mortgage insurance calculator

Mortgage payment calculator

2 Comments

  1. Shyla 11/21/2014 at 4:36 PM Hi Taylor,
    I just read your article about rent vs. owning. I had a question regarding how it works if you are going to University. If you have student loans are you unable to put that towards your mortgage payment each month? For example, I pay $500 dollars a month on rent yet student loans is granting me the money to pay that, would owning disqualify me for student loans and is it legal to pay your mortgage with your student loans? I have been wondering this for awhile and when I came across your article I saw an opportunity to ask, hopefully you can help answer my questions!
    Thank you,
    Shyla
  2. Layton 11/26/2014 at 12:45 AM You forgot to mention that $45,000 is also tax free so compared to any other income it is worth considerably more. I bought my first house at your age, best thing I ever did and now (many years later) I have had a considerable monthly income from all the rentals I have bought since and in fact ended up retiring the first time at 46. Keep up the good advice Taylor.

Thank you! Your comment has been submitted and is awaiting approval.

Taylor Musseau

Taylor Musseau

Sales Representative
CENTURY 21 Assurance Realty Ltd.
Contact Me

Blog Archives