I’m Finally Saving for a Question Mark

After I made my final debt repayment in May 2013, it took a couple months for me to decide what my first big savings goal would be. I knew I wanted an Emergency Fund, but I wasn’t immediately confident I would be able to save five figures. Up until that point, the most I’d managed to save (and eventually spent) was somewhere in the $3,000 range, so $10,000 seemed like a stretch. It took 17 months,  but I finally topped it up to $10,000 in November 2014.

For the past two months, I’ve found myself back in that state of limbo re: deciding what my next savings goal should be. I’ve been standoffish about the topic of saving a down payment and buying a home, for years, which I can see now is probably because it has never been tangible. It’s still not within my reach, nor is it at the forefront of my thoughts, but I think I’m finally ready to at least start talking about (and saving for) it… here goes.

My Thoughts on Homeownership

Here are my honest and personal thoughts on homeownership (for me!). Remember, this isn’t advice; it’s just where my head is at, right now.

The Facts

First, let’s look at the facts. I’m turning 30 this year, I’m single and I don’t have any kids. I make decent money and could likely get approved for a $350-375,000 mortgage, but I’ve done the math enough times to know I’d only be comfortable taking on a $250-275,000 mortgage by myself (plus the condo fees, property taxes and maintenance costs that would go along with that). In Greater Vancouver, I’d be lucky if that could buy the 1-bedroom condo I’m currently renting.

This brings me to another fact – or, an opinion I’ve had for years: 1-bedroom condos are a bad investment. Unless you’re prepared to rent it out after, and be a landlord for years, the resale value on them isn’t great. In big cities, especially, where the prices of townhouses and detached homes continue to go (way) up, more families are looking for 2-bed, 2-bath condos (which are not in my price range). Nobody wants a 1-bedroom condo – including me.

I want the first place I buy to at least be a 5-year home, if not a 10-year home. (Closing costs are expensive, and you only get first-time homebuyer credits/rebates once!) I also want to have kids. Tack those onto the list of reasons why I don’t want a 1-bedroom condo, and it’s safe to say that I don’t think I’ll be buying a place in Greater Vancouver anytime soon. The stats on lack of affordable housing in many parts of the country are true, but especially here. So, for now, I’m happy renting.

The Variables

For almost all the facts listed above, there are variables that could change things. The single factor is the first variable. If I met someone and we decided to buy a place together, our combined incomes would give us so many more options. I’d honestly prefer to never buy into a condo building (stratas, am I right?), but I’d much rather buy a 2-bed, 2-bath condo than a 1-bed. So, a second person + second income would at least open more doors for long-term housing options.

As great as it would be to find someone and buy a place together, the biggest variable for me, personally, is still location. I have no idea where I want to live long-term. I don’t think I’d ever move back to Toronto, but sometimes I think about moving back to Victoria or further up island. I’m happy in Vancouver right now, but homeownership here feels like a pipedream. Maybe I’ll stay. Maybe I’ll go. Or maybe I’ll meet someone who lives somewhere else and move yet again. Who knows!

The Dream

Whenever someone asks if I’m saving for a down payment yet, or pressures me to become a homeowner sooner than later, I feel my teenage-like defense walls come up. Like all things finance-related, decisions we make around homeownership are extremely personal. Your ideal home/location won’t match up with the ideals of everyone else in your life, and that’s ok! It’s taken growing up on an island and moving to two big cities for me to realize what I want…

In my dreams, I’d buy or build something small (not tiny house small, but not 2,000+ square feet big either) near mountains and close to a body of water. I don’t need a lot of space inside, but a big deck and/or a backyard with a firepit would be amazing. My friends who moved up island to Shawnigan Lake first inspired this, but then the Frugalwoods‘ posts about it confirm that’s what I want. Again, maybe it’s just a pipedream, but I’m allowed to voice it!

The Reality

The reality, of course, is that I’m starting with nothing. I thought swiping for useless crap was more important in my early 20s, had to pay it off in my mid-to-late 20s and am now approaching 30 with nothing in the bank. Ok, not nothing… I have $36,000+ in my RRSPs, after transferring my old pension over. But I don’t plan on using the Home Buyers’ Plan (where I could pull $25,000 tax-free from that) because my RRSPs are strictly for retirement – no ifs, ands or buts. (Again, a personal decision.)

So, I’m starting at $0. I’d like to save $30,000 before I even begin to consider buying a place, which would give me a 10% down payment on something in my single-person price range (because I can’t assume I’ll have a partner). Canadians strive to save 20%, so we can avoid having to get mortgage default insurance, but that could be yet another pipedream for me. I’d like to save $30,000 in 3.5 years, so we’ll see where I’m at in life then… maybe I’ll take the time to save more and buy later.

The Question Mark Account

Now that my Emergency Fund is topped up, this + retirement are really the only two big savings goals I see myself working towards for a while. I love to travel, so that’ll always be part of my budget, too… but the big money needs to get thrown at these two causes. My goal for 2015 is to set aside at least 13% of my income for both (26% total), then throw anything extra into this new account. I should be able to save $6,750 no problem, but set a stretch goal of $8,000. (Hopefully freelance can help!)

All of this is to say that I opened another tax-free investment fund and named it “Question Mark”. Of course, the goal is homeownership, but something about “Question Mark” makes saving for it feel so much more exciting. I do want to buy a home. I want real estate to be part of my investment portfolio. But I don’t know when, or where it’ll be located, or what it’ll look like or if I’ll buy it with anyone else. I just know it’ll happen one day; until then, I’m saving for one big question mark!

I’m curious to hear everyone’s thoughts about/journeys into homeownership. Are you a homeowner? Do you want to be? How long did it take to save up a down payment? And tell me about your first home!

  • Hi Cait,

    This has been a constant internal struggle I go through myself. Just this morning on my drive in to work I was thinking how great it would be to meet someone so I/we can afford that house I saw. I reminded myself to not depend on someone else and if that is the case I will probably never be able to buy in Toronto proper (I am not a fan of the suburbs). I love your idea of having that question mark account. I think if I labelled it house it would scare me and make me feel trapped. Over the Christmas holidays I had an argument/discussion with my brother about home ownership. He bought a condo and I am still on the fence about home ownership. He then started saying how renting is a waste of money and I completely lost it. I was yelling that was his personal opinion and not always true. I have been reading so much about the whole North American mentality of the home ownership dream. It would be great if I could own a home and still be able to travel and save for retirement but I know that I can’t have it all. Honestly Cait, I think dreams and objectives change with age and so I commend your question mark account, this year it may be for a house in a few years it may be for a one year trip around the world, i just love having those choices, finally making a decision is where I fail.

    • I love that you were the first to comment and you seemed to know exactly what I meant by labelling it the “Question Mark” account. It might be for a home, it might be for travel, it might be for retirement… who knows! I don’t. But I want money in the bank for whatever life holds for me.

      Homeownership is definitely a personal decision, and I don’t think renting is an entire waste of money. It gives us a lot of freedom, especially to explore where it is we might actually want to settle down one day. Just keep doing your thing. :)

      • I see now reading most of the other comments, this is a dilemma most of us face, to buy or not to buy. I like knowing there are so many out there.
        It’s weird even you writing down, “settle down” makes me nervous, how about we call it when I “decide.”


  • I think you’re very wise to consider all of your options so carefully–a lot of folks rush into buying a place and it just doesn’t always make financial sense.

    We didn’t want to buy into a condo building either (which is the majority of the housing stock in our region) and so we bided our time until a single-family in our price range came on the market 2 years ago. I’m really glad we waited to buy!

    Also, I’m (of course) in love with your dream of a home near mountains and water :)! Thank you so much for mentioning my homestead post–I really appreciate that.

    • Of course! I remember reading that post for the first time and thinking… Yes! If I ever become a homeowner, THIS is what I want. Yes, yes, YES. So, thank you for being open and honest about your journey. :)

  • I’m in the process of looking for / potentially buying a condo in the next year. I think part of the impetus for me has been buying a place before the Fed increases rate (in the US, which I gather has different mortgage rules from Canada, you can lock in an interest rate for the life of the loan which is typically 30 years). Waiting beyond that will mean, depending on the increase, paying a LOT more for the same house which I’d rather not do since 1. I have the money now, 2. I’m pretty sure I want to stay in my current city for 7-10+ years, and 3. mortgage over rent will start me saving at day 0.

    I think it’s great that you are considering your options early. Expect that, over time, your opinions on what you want will probably change, but that having money ready and on-hand will give you choices.

    • Mortgage rates work the same here! We have two different rate types: fixed and variable. So “fixed” is what you’re talking about, except we can only lock-in rates for 1-10 years (the average is 5). It’d be incredible to lock-in at a low rate for the entire duration of your mortgage! I’m a tad jealous. Anyway, unfortunately, that’s another thing to consider here: when the Fed raises rates down there, the Bank of Canada will follow. Just another reason to save + put down more money, so your mortgage payment is actually affordable! Good luck in your hunt. :)

  • I’m not a homeowner, but like you I hope to be when the time, location, and house are right. I’m still paying off my debt, and when I’m done and my emergency fund is full, I know I’ll start saving for a home even if it really is a question mark at that time , just like yours. I think it’ll make home buying less stressful to have a fair chunk of money saved by the time I know what Im looking for…at least that’s the plan for now :)

  • :) I have to smile — it sounds a bit like me when I bought my first house.. especially about what I needed and thinking about the future.
    I actually ended up getting a small three bedroom home because I wanted room to grow- -and kept thinking about what if I got married and had children — well the truth is that I hadn’t even met that person yet when I bought the house and he wasn’t even on the horizon until years after I bought the house (and after six years, we still have no children yet). I kinda wish I would have bought something more for where I was in my life. Whenever another person enters the picture, you have to do that whole assessment again now that there are two of you. A few years later when I did meet “my person” he ended up moving in but he hated my house and my decor — well maybe “hate” is a strong word, but its not what we would have selected to meet both of our needs.
    I love the fact that I was able to get a place of my own and do whatever I wanted to do with it — it was truly me when it came to style and design — some people never get to do that. But if you’re goal is to get one house with your sig-o/husband and raise your family in that one house – I might suggest just saving the money and then waiting to buy until you’re at that life moment.
    .. but no matter the way you cut it or what you consider, deciding to buy over renting is a complicated decision — but good to have the money put aside to do what you want to do whenever you decide to actually do it.

    • I just want to say “yes” to all of this, Andi. I love that you bought a place of your own first! I think I’m less concerned about that because I’ve lived alone for a long time and rent is more affordable than a mortgage payment would be. So I’ve built up a nice little life, but I’m not putting equity into anything. That kind of sucks, but doesn’t stress me out. It just gives me more incentive to finally start saving. :)

  • Howdy Cait!

    From everything that I read, unless you are flush with $$$, right now is definitely not the time to buy into Real Estate, regardless of the hype from the Real Estate industry (which right now has way too many members). It’s a known fact (internationally, if not always here locally) that the RE markets in Canada as well as in Australia are highly over priced and headed for a strong correction – downwards (if not in 2015 then certainly in 2016). So I would recommend that you continue to save, invest and build up that “Question Mark” fund of yours.

    Keep your options open. You like to travel so you may one day discover another locale (either in Canada or abroad) more to your liking to settle down instead of where you are now. It may not be in a big city but perhaps in a small town. Some of my B-I-Ls migrated out of TO into smaller towns in Ontario (and never regretted it). As you know, with current technology, one can work for practically any employer remotely from one’s home. Our son has worked for years for a major IT employer remotely from his home in a suburb of TO.

    I read the other day of another blogger (whom I’ve mentioned to you in the past) who is strongly against Canadian home ownership and prefers to rent. He posted that currently he lives in a nice home in TO and that, with the money he saves in renting over buying / maintaining that home, he is able to earn 4 times the amount in his diversified investments over his cost in renting. Also he (correctly) states that he has the option of easily leaving and living elsewhere should future circumstances dictate (like getting a company transfer or a biker gang moving in next door – lol).

    Of course, all this is very dependent on one’s situation in life. Years back it was very different. When we first got married we rented in Montreal for 3 years before we could afford to make a down payment on our first house (which btw was a resale – I would never buy a new one – let the first owner pay to get the builder’s mistakes fixed is my view). Well luck was with us because our house increased in value over time and, along with housing assistance from my employer (at that time), we were able to afford to move to TO and buy an equivalent sized house (which in turn has appreciated significantly over the years).

    So it’s an issue that everyone must consider, based on many factors. My major advice – ask others (who have no vested interest) for their advice before deciding and then act one way or the other, don’t hesitate.

    • Yea, I didn’t dive into our overvalued market, because that’s a topic in and of itself… but it’s absolutely another reason why I have zero interest in buying anytime soon. (Coupled with the fact that I have no money to do so anyway, of course, haha.) I don’t know that I see a “strong” correction in our future, but we should absolutely be prepared for *at least* a 10% decline. If I only put down 5-10% on something today… well, you know how that would go. Trouble! So I’m happy to steer clear.

      My dad also mentioned that I should continue to keep my options open re: locale, as I like to hop around from place-to-place, and I will. I’ll just hope that I’ve figured out where I want to live, by the time I can actually afford to buy, haha. (Oh, and I’d never buy brand new either! Also a bad investment.)

      Thanks for the stories!

  • I’m renting. Over the last 2 years, a lot of my friends bought houses and I had personal turmoil about it, but I wasn’t ready. It took me a long time to realize the best time to buy a house is when I am ready to buy a house, not when the market is good (even though that helps) or when its the cool thing all your friends are doing.

    2015 brings in a new push for homeownership. After all this debt, I’m starting to feel more adult and ready to tackle more adult milestones…. and I’m sick of renting. My best case scenario is to have the money for a down payment saved in 2 years. That’s a lot of saving. Eek!

    • It’s tough when your friends reach milestones before you, eh? Many of my friends are married, have kids, own homes, etc. And then there’s me, lol. Anyway, sounds like a good goal for you, Kate! Have you mapped out a savings plan to make it happen? :)

  • I flip flop so often on home ownership. A big part of that is my single person income. Right now I can’t afford anything nice nor would I have the money for renovations or repairs. But I know that my salary will likely go up and maybe I won’t always be single. This year, I’m splitting my savings between RRSP (to help with my tax bill) and my emergency fund. If I do decide to buy down the road, I am planning to use the Home Buyer’s Plan as I have a pretty good pension at work. So the RRSP helps me today with my tax bill but also helps me grow what could later be my down payment.

    • That’s awesome, Trista! Still sounds like you have a plan ready, for when you are able to buy. Just keep contributing. :)

  • I lived in New York City where literally everyone rents at least through their early 30s, and many rent for life. I was barely making it (and getting into a little debt) so owning was never, ever an option. I’ve recently concluded that barring unforeseen circumstances, I’m likely going to be a renter for a very long time and possibly forever — single, lower income (teacher salaries!), high-COL preferred locations. And while there are downsides (I worry about rent increases in retirement) there are also upsides: I still love turning over all major problems to my landlord :) And I like the flexibility of being able to easily change locations. When I move, I work hard to find a rental that I actually *like* and am quite picky about them, and it’s been OK.

    All that said, even if you never buy a place, there’s nothing wrong with having $30K sitting around in an investment account :) No matter what you decide about homeownership, that will be useful for something eventually!

    • Haha, amen to handing over the tough jobs to a landlord, eh? “My washer is broken.” “Ok, we’ll replace it.” SWEET! I could happily stay in my current place for a while longer. I’ve been here nearly 18 months now and absolutely love it. After a million moves, it’s home! For now, anyway. And no, there’ll be nothing wrong with having $30K in the bank… for whatever, whenever, wherever!

  • Hi Cait! Awesome post! I always say I’m not scared of getting married or having kids… I’m scared of buying a house!

    I’m nowhere near ready for home ownership. My boyfriend and I have a question mark savings account together, but that’s it. I haven’t labelled it for a particular thing, but its nice to get into the habit of saving together.

    It’s important to think of all the extra costs home ownership brings to the table. Like Gail says you should save about 4% of your home’s value EVERY YEAR for things like maintenance, appliances breaking, pipes leaking, roof replacing, etc. These are all costs that you don’t occur while renting. Stuff I know my budget can’t handle right now.

    For those having debates on which is cheaper, (home ownership vs. lifetime renting) it all depends on if you bite off more than you can chew mortgage-wise. You can end up in a situation where you can’t make mortgage payments (think disability, divorce, addiction) and if you think these things will never apply, think again. I’ve seen it happen more than once to friends and family.

    All this is why home ownership terrifies me. One of my first posts was about my love/hate relationship with renting. :)

    • Haha, I like the title of your post! But you’re absolutely right. I’m quite happy to rent right now (not that I have any other choice) as it gives me so much freedom and flexibility. It’s also cheaper than a mortgage payment would be. But I do think it’d be nice to have a home that’s my own, one day… in whatever capacity it may be.

      Anyway, thanks for all the tips to readers. Happy renting!

  • I like keeping the option open – if you don’t end up using it for a down payment you can always use it for something else (retirement, EF, or something fun).

    I never really thought about saving for home ownership because I just paid off my debt a year ago and I always figured that as a single person in Toronto, that wasn’t possible – even a condo, which I wouldn’t want anyway. And I was ok with that; there are nice places to rent in great neighbourhoods. Better than a house in the suburbs. So I would rent and invest money for retirement.

    Now I have a partner and we live in his house…in the suburbs. Ugh. The things you do for love! But financially it didn’t make sense to sell his place and get an even bigger mortgage (among other reasons).

    • I’m pretty sure I’m the only person who actually *likes* the suburbs, hehe. I mean, I still need the area to have some culture, a library, all the stores I need, etc. But city life just ain’t for me. Anyway, is the plan to stay out there for a while? It’ll be ok! :)

  • Hey Cait! You are so smart for realizing that home ownership is not something you want now and you want to wait until you are “settled.” My husband and I bought our first home nearly 4 years ago… we were 27 & 29 years old… but definitely not smart. LOL. We had 20% down payment on a $155K house. However, my husband is in the military, meaning we move ever 3-5 years. Sure enough, we moved 2 years after buying our first home. We are now landlords, living in England, while my sister rents our home in WA state… It was quite silly of us to purchase when we knew we weren’t “settled.” Many people will say that it is “cheaper” to buy rather than rent and that is rarely the case. They forget to consider closing costs with purchase and sell of the home, the many repairs and the extra bills you have with home ownership that you don’t have with renting. Definitely wait until you are 100% ready and have a good down payment! :) I LOVE that you have labeled your savings “The ? Fund” :)

    • Aww. Thank goodness you can rent to your sister, not a total stranger! At least that way you know family is taking care of your space. But yes, that does sound like a tough situation to be in. If you have to move every 3-5 years, is homeownership (again) ever going to be in the cards for you guys? Just curious! I’ve never really thought about what that would be like…

  • Hi Cait,
    I think you’re familiar with a lot of my story, but I’ll post a bit anyway, maybe some of the other readers would like to know :)

    I was married and subsequently divorced fairly young, and we did own a house together. For the purpose of my comments here however, I’ll focus on my current house that I own. When we bought that house together I’d say we saved for 1-2 years and used money from the wedding towards the down payment. We only put the minimum 5% down, and I had saved inside my RRSP so I used the HBP that first time. When we split, the money that I received in exchange for him keeping the house went into the bank and became the down payment for my current house. Even still, I again only put down 5%. In hind sight I so wish I’d been smarter and saved up the 20%. Anyway…moving right along!

    I rented for 1.5 years before I decided to jump into home ownership again, this time by myself. I bought a 3 bedroom semi-detached house with a good size yard for about $175K. Prices are MUCH more reasonable in the suburbs east of Toronto where I live. As I mentioned, I put down 5%, tacked the CMHC insurance onto my mortgage, and moved right on in. I have lived here for almost 4 years now, and thanks to super low interest rates and increasing my bi-weekly payments by an extra $250, I have paid down nearly $30K of principal and reduced my amortization to less than 12 years, where it currently sits. In the meantime, my little house has gone up in value about $75K and so I’m now sitting on a sizable chunk of equity.

    I know that the “owning is cheaper than renting” scenario is often not true…but I also think there are some times where it is. At least right now, that might have been true for me. Without the extra amounts on my payments, my mortgage only required me to pay $289 bi-weekly. Of course I have property tax, insurance, utilities, maintenance, etc… but I would pay more than all those combined to rent a similar sized home. But I also probably wouldn’t rent a 3 bedroom home, so I digress.

    If I ever buy another home, I will be putting down at least 20%, no questions asked! Hopefully a lot more, actually! My story will likely be taking a twist this spring as I start to work on selling my little house and moving in with my SO. I look forward to writing more about this process in my blogs.

    • Dayle, I knew your story but I had no idea the value of your house had gone up by so much. Congrats! That’s fantastic – and great news for when it comes time to sell this spring. Thanks for sharing your story here for everyone else.

  • I’ve read your blog for awhile now but never commented before!

    I think you’re really smart to be examining the costs and values associated with home ownership – I’m about your age and I feel like so many people I know have bought houses simply because it seemed like the next logical step to take in life.

    Just wanted to add two things: first, that home ownership is a very North American goal, which isn’t to say that it’s not worthwhile but that it’s not a necessity for life. You need shelter, and you need investments, but whether you combine the two is another matter. If you’re good at saving and investing, and you aren’t yet settled as far as where you plan to live long-term, I don’t think it makes a lot of sense to buy a home, at least theoretically.

    Second, my grandparents sold their house and moved into a two-bedroom, two-bathroom condo about 10 years ago. My grandmother is a very savvy shopper and this wasn’t an impulse buy by any means, but even still, there have been lots of problems and expenses that they didn’t anticipate. Two or three years ago now, it became clear that the building had some major structural problems that needed to be remedied, and the company that had built it had since folded, so it was left to the residents to fund the repairs themselves – $30,000 per unit on top of their regular condo expenses.

    Apart from that, though, my grandmother says that including condo fees, etc., they pay about $500 a month – and they don’t have a mortgage, since they paid for the condo with the proceeds from the sale of their house. She considers that for them, $500 a month is pretty good rent, so they’re content with that, but I feel that a lot of these costs could sneak by a lot of buyers who will be more focused on how much their mortgages, closing costs, etc. will cost them. And my grandparents live in a city in Atlantic Canada, so I presume that all of these costs would be steeper in Toronto, Vancouver, and larger cities.

    (My husband and I just watched a CBC documentary about the Toronto condo construction market, too, so I’m extra leery about condos in general now!)

    • First-time comment! Woo hoo! Hello :)

      I agree with all your points. For a while there, I honestly thought I had zero interest in owning a home. Heck, maybe that’ll never be in the cards for me – I don’t know! I just know I want to have money saved *in case* I want to buy one day.

      The Toronto condo market scares me. That’s really all I can say about that. I would never buy a condo there…

  • Such a wonderful post! Thank you for sharing. I spent years and years on the fence about buying/renting. I watched so many of my friends buy homes in their mid-twenties, and then I’d hear, over and over again, “Oh, I can’t go out for that drink. I own a house.” I didn’t want to be one of those people.

    We (my partner and I, so double income) finally decided to buy about this time last year, and spent a few months searching before we found the perfect one, and are so happy. That said, we’re in Hamilton, where for under $300,000 you can get a two-story century-home that’s been completely renovated. If we weren’t where we are, it would have been a pipe dream for us, too.

    I so wish this post existed a year ago when we first started looking, or a few years ago when we first started saving. It will be an excellent resource for people thinking of taking the plunge!

    • I’m so glad you liked the post, Jessica! It’s funny, I didn’t intend for it to be a resource of any kind… but I guess I can see how it might be. If nothing else, I hope it shows that homeownership is a personal decision for us all, and we should try to save before jumping into anything. Sounds like you’re very happy in your home. :)

  • Hi Cait, I’ve written pretty extensively on renting vs owning — including the rent vs buy calculator — so I like the “question mark” account.

    I rent a nice house, with a kid, and I started off wanting to own but choosing not to because of the crazy bubble in Toronto (I’m better off renting and investing the difference). But it’s been so great to pawn off responsibility for mowing the lawn and interviewing roofing contractors to the landlords!

    Anyway, I like the “question mark” account. I may use my investments to buy a place one day (if the bubble deflates and the math makes sense, which may not be until my forties), but until then I don’t know if it’s a house fund or a retirement fund (or if she gets ensnared in higher education like her daddy, an education fund for Blueberry), but either way it’s invested for the long term in some diversified equities (and mostly accessible in a TFSA and non-registered).

    • I agree that you are better off renting and saving the difference there – saving the difference being the key part, which I know you’re doing but isn’t something many people commit to.

      Question Mark accounts for everyone!

  • I was always brought up with the mentality that owning is better than renting. Whether or not that is true is all a matter of situation and opinion, but that upbringing caused me to buy a condo as soon as I was done school and starting in the work force.

    I was lucky that I had 10% down payment from savings and a generous inheritance from my grandfather, and entered in to a market that was affordable enough to me at the time. Since then I have moved twice, moving from a 2 bedroom condo to a 2 bedroom townhouse, and then from a townhouse to a single family home, selling the previous place and buying a new one each time. The sales weren’t always the most profitable, but since I was staying in the same market, the fact that one didn’t sell as high as I would have liked means that the one I’m buying is lower than it could have been.

    I have never regretted buying, as I have loved each place I’ve lived in, and my finances have always allowed for the ownership. But I know it is not for everyone, and I know the real estate market in Vancouver today is especially tough to get in to. Whatever you decide to do with your “? fund” will be the right thing for you. You can never go wrong with spending less and saving more, right?

    • “You can never go wrong with spending less and saving more, right?” Exactly! Thanks for sharing your story here. Entering the world of homeownership is so personal, as made evident by all the comments here. I appreciate that everyone’s been open about their experiences!

  • I remember having a similar thought process after I had saved up a six month emergency fund and bought my car. Everyone thought I should save to buy a house, but I didn’t want a house! Houses were for old people. (Well mostly, I didn’t want to live in a house as a single woman for safety reasons.) I didn’t realize at the time that you could buy condos/apartments – I’d only heard of buying houses before. So I decided to max out all of my retirement accounts and throw whatever was leftover into a savings account for a house and when it got bigger, then I would do something with it. I initially thought it would take several years to save up a down payment, but I had one within a year since my income went up.

    tl;dr: My advice is to just save towards a down payment and buy when you’re ready and your account balance is high enough. It would suck to be ready personally and not have the funds!

    • I like the way you think, Leigh! Yes, the whole point of this account really is to just save for… who the heck knows! I may not become a homeowner until I’m 35, but wouldn’t it be amazing to have a huge down payment saved up for when I’m ready to buy!? And if I never bought, throw it all into retirement? No, you can never have too much money in savings. :)

  • FWIW…I have a friend who was single and felt she should buy something instead of renting. Two years later, she moved in with her boyfriend (who was not in the picture at time of purchase), and has been subletting her place for the past two years. She is losing money each month and she is on the hook for any repairs. She is planning on selling it this year but will likely lose money since now she will have to pay seller commissions (US).

    I applaud your strength of not getting pressured into anything. My friend was trying to create stability but now regrets all the time buying a place that created permanence when she wasn’t ready for it.

    • Oh man, I feel for your friend. The thought of losing money each month makes me sad. I’m sorry she’s in that situation. :(

  • Just THINKING about the home buying process makes me squirm uncomfortably. My dream home situation looks pretty much the same as yours. I’m also turning 30 this year but I’m further behind than you are (still paying off the last of my debts with not nearly enough in savings). My partner and I would like to move back west in the near future but if we end up in Vancouver like we’ve been discussing it feels like we can pretty much kiss the home-ownership idea goodbye. I know people are always harping about how a home is a “good” investment but sometimes I really have to wonder… Ugh :(

  • I’ve got 8+ years on you Cait, I will be 40 in 2016 and I’ve yet to own my own property. I moved a lot in my 20’s so I rented and currently I live with my boyfriend in his house that he owns. My goal is to have my own rental property in five years for the income and to accomplish my goal of home ownership.

    I think there are +’s and -‘s to owning and renting but I do believe it is a good investment overall and considering how successful your financial life is now, I think you’d be very successful and happy with ownership. That’s my two cents! ;-)

    • Thanks, Cari! I definitely don’t see myself jumping into it anytime soon, but want to be prepared for if/when the day finally comes. :)

  • I also had a ‘question mark’ account for all of my 20s. I lived in the city and didn’t know what my future held, but I just saved and saved for some future necessity. I didn’t know if I’d buy a condo with it, pay off my student loans, use it to move to a place that didn’t physically punish me every winter, or just blow it all at the gambling boat one night, but I knew I’d need it.

    My now-husband bought our house when we were still dating with the general agreement that I would be paying for a large share of an eventual wedding. Trust – those things are not cheap (even small ones!). If you’re thinking about getting married eventually, definitely work those costs/dreams into your ‘question mark’ account so you’re not caught off guard. I’m so glad we were prepared to pay for the wedding we wanted and didn’t have to cut things we really loved to save the budget.

    • I don’t plan on having a wedding at all – mostly because I see how expensive they are! But yes, I imagine the Question Mark account will be used for a couple different “future” investments. Thanks for sharing your story!

  • I’d stay away from a condo, they are a money suck. I’ve been looking for the past year in Toronto and it just doesn’t seem like a worthwhile venture. I guess I’m not a fan of the maintenance fees and as one commenter mentioned, getting dinged with a bill for whatever might have to be repaired in the building. New garage doors for underground parking? Yep, that’s $60,000 divided by whatever factor they choose to determine your share. No thanks.
    For $300K which is the top of my budget, I can only get 400-450 sq ft with one parking space. NOT WORTH IT.
    I’m deciding to forgo home ownership again until I have ample money in the bank. It’ll be renting for the foreseeable future.
    When I did own a home, all I can say is have a good downpayment, we didn’t and it was a disaster for our budget and CMHC fees.

    • Those special assessments worry me. One of my friends got hit with a $6000 bill for repairs to the grounds. She decided to take it out of her savings, but some of her neighbours were forced to take out loans.

    • Yep, I’d rather avoid condos altogether. I’ve seen condo owners in BC get hit with $20K+ bills for massive renovation projects that needed to be completed (look up “leaky condos in BC”); that’s not so much an issue anymore, but it was brutal.

  • It is great to know that I am not alone…I struggled with this for a few years, I had a realtor and looked at several houses but was always scared to buy. I am going to be 26 soon and I have a 20% downpayment saved but a house seems like such a huge commitment. Currently I have a roommate in a fully furnished house which means that I can pack myself up in my car and move if I have to. I like having that flexibility but most of my friends tell me that I should look to buy a place. I find that many people do not realize that buying is not just a mortgage, there is property mortgage insurance, homeowners insurance, property taxes, condo/HOA fees, maintenance, and utilities for a larger space.

    A good friend of mine told me one day, at this time in your life, while you are single and without children I believe that investing in other areas like the stock market may give you a better return on your investment. A decent sized house in a good neighborhood near Washington DC where I live can easily cost upward of $400,000. After hearing this, I have switched my focus to learning more about the stock market and investing on my own. I feel great to know that anytime the dryer stops working or the heater goes out I could text my roommate :). No headaches for me.

    • Renting is certainly convenient (and less expensive in re: to maintenance)! Although I have a tough time getting a hold of my landlord, so my garburator hasn’t worked since… well, since I moved in, lol. Anyway, sounds like you’re making the right decision for you, at this time. Grow your money and use it whenever you’re ready. :)

      • That’ s tough situation. You could go to the landlord-tenant board (or BC equivalent) to try to force a repair, but who needs the hassle and antagonism? You could just pay out of pocket, send the receipt to your landlord and hope for the best — not ideal, and not the deal you signed up for as a renter, but if it’s not too much and you really like garurating things, then just paying it and moving on is an option…

        FWIW, we paid for a dishwasher at a our last place (it was without one when we moved in), with the landlord paying for the plumber to install it.

  • I didn’t read any comments because I didn’t want to be swayed either way. :) My initial thought when I was reading this is, “but grrrrrl you travel SO much,” so it seems to make most sense to me to kind of rent for awhile, which I guess you would be anyway since you actually have to save up quite a bit. I guess there are so many factors here about what YOU want. I will say that there was a period of my life where I thought I HAD to buy or else I wasn’t an adult or something, but after seeing so many situations go south for homeowners, I realized that I was perfectly happy renting and no longer felt that pressure to buy. And I don’t have that added debt! Of course there are downsides, but I think too many people think that renting is this evil thing when I don’t think of it that way at all. I think of it as freedom to move about without being attached if I don’t want to. I’ll be curious to see what you do!

    • I travelled a lot last year, but that’s not sustainable going forward (hence cutting back in 2015). I want to save for the “what if”? What if I settle down and want to buy in 3, 5, 7 years? I don’t want to be starting at $0 then, so I need to start saving now. If I never buy, I’ll throw it into my retirement savings. (And I’m not opposed to renting long-term either, but it’s nice to think if I did buy and eventually paid off my mortgage, one day I wouldn’t have to pay for anything but property taxes + maintenance.)

  • If you’re thinking of buying in Vancouver, read Garth Turner’s blog for a couple of weeks. Seriously. The good news if that if you start socking away the money now, you could dbe in a good position to buy when the market corrects itself.

    I’ve got a down payment, but I’m still holding off buying because renting suits me right now. Where I live, it’s cheaper to rent than to buy the equivalent space (2 bedroom) and I can invest the difference. I like not worrying about surprise expenses and having someone to call if there are problems. I also like the security of a larger building, and I don’t really care if I can’t paint or renovate the space.

    Still, society seems to equate success with home ownership and it’s really tough to beat that pressure. You won’t go wrong saving money though!

    • Ha! His blog scares me. But yes, since I won’t be buying anytime soon, there’s a good chance the market will be at a better place when I am, in fact, ready to dive in.

      Renting IS great, for the time being. I love that you’re investing the difference you’re saving by doing so. :)

  • Been a home owner for almost 15 years. Are on home two – the house we will live in until the upkeep is too much. It is in the foothills, near a lake, but is anything but tiny. I would be happy not to be a homeowner (not that I am unhappy being one), it was far more important to my hubby. If I was single, I would rent or have a condo – the upkeep of the house would be too much for me alone.

    We took 5 years to save for the down payment of house 1. It was only 5%. We lived there for 12 years and when we sold we had the 20% plus all the other moving costs for house 2. It is funny that we planned using the equity from house 1 for house 2 but when planning our retirement we never count equity from house 2.

    If you decide down the road you don’t want a house, you could take a leave and travel around the world. I see it as a win/win!

    • You don’t count the equity in your house as part of your retirement planning? Do you include it in your net worth at all? I suppose that’s smart, as many experts say you can’t count on it. But when your mortgage is fully paid off, it’ll always be worth something!

      Oh, and travel around the world you say? Sounds good to me. ;)

      • While I assume the house values will go up, I don’t like to count on it. When we are calculating our net worth (and my financial planner does this once a year or so), we base it on what we paid for the house and what we have paid off from that. We don’t assume the house is worth a penny more then when we bought it. Does that make sense? That being said, we are working hard to pay the house off (without leaving us house poor or unable to do maintenance etc), I do assume if we owe nothing down the road, we will make some money. It will be bonus money to add to our retirement. I also have life insurance that will pay me a dividend when I turn 65 (I am self employed so no pension in my future). We don’t count that in the money we will have either. We also are rumoured to have some inheritance money in the future, we don’t count that. Our retirement is based solely on my husband’s pension and the RSPs and other savings we are making for me. If anything we are under estimating what we will have, but working hard to make sure that the pension and the other savings will give us the life we need (which right now we are assuming will cost us about $80 000- $100 000 a year in the earlier parts of retirement when we can travel etc. My husband is retiring at 55 so we expect to have a lot “healthy” time).

  • I’ve lived in the Greater Vancouver area for more than 15 years & have been a renter the whole time. Older building in a convenient location. I used to beat myself up for not being able to afford to buy.

    Now? I’m so glad I didn’t buy a teeny-tiny one bedroom condo that I’d regret. I’m much happier knowing that money is in my bank account.

  • Good for you for thinking home ownership through so thoroughly. Nothing worse than rushing into something. Eight years ago, just 5 weeks after getting married, our landlady said she was selling the one-brdro condo we were renting. In a panic, we decided to buy a place with only 5% down and still at the height of the boom in Calgary. We got a 2-bdrm, one bathroom for $267K. At least we are still living here so our place is worth more than we paid for it. But in retrospect we should have found another place to rent and saved a 20% downpayment. Hindsight is 20/20! Byw we are now 34 and 36 with two kids. Place is a bit tight but we’re not rushing into another hasty purchase.

    • I like stories about people making life work in small spaces. Even if 3 or 4 bedrooms sounds nice, kids don’t need the extra space until they’re older and you want to give them more privacy. Like you said, don’t rush. Life is better when you slow down anyway. :)

  • I think at some point, once things are ticked off and you’re happy with where your finances are, it’s the perfect time to get that shift in how you’re saving. You’re saving in general, and eventually it might be used for something (like the down payment at some point), but it’s a good habit to sock away money either way.

    I think I could have waited longer to get into the real estate game, and I’m now being hit with some of the issues of jumping the gun. It seemed like a good idea at the time, but right now it doesn’t feel like it was the right idea unless I could see myself living there forever – which, by the way, I could… but the job prospects took me elsewhere :)

    • Yep. I figure there’s no harm in trying to max out my TFSA investment funds for this. And if I don’t end up buying, well… I’ll never regret having maxed out my TFSAs, haha.

  • For us in our 30’s, a maxed out TFSA invested in Canadian Couch Potato style ETFs, slanted a little more toward the risk/equities side will turn out to be a better investment in the long run than a house. The federal government will raise the amount to $10,000, so in 2016 you will be able to put in $41,000 which can grow tax free, not only from interest, but from dividends and capital gains. No closing costs. No insurance. No strata fees. No risk if you have to move or need an extra bedroom.

    • I’m with you, Mike. If the only thing I accomplish w/ this savings goal is maxing out my TFSA – and I never buy a place – I’ll still be happy.

    • I’m glad to see your comment :) I’m working on maxing out my TFSA, thanks in part to renting rather than buying. I’m hoping to build a tax-free income stream for retirement. We’ll see what happens!

  • My journey into home-buying took 2 years. Beyond the Financial aspects and the flow of contradictory information from “experts of all sorts”, home-buying has to feel “right”.

    Back in 2011, when I first got pre-approved for a mortgage, I couldn’t find anything that was within my price range and criteria. I am also single and live in the Lower Mainland, so no small task for sure! I also had some reservations about my down payment and my consumer debt was higher than now.
    Something felt “off” so instead of insisting and forcing, I let it go.

    Fast forward to 2013, the idea resurfaced again. I didn’t qualify for a higher mortgage but my financial situation was more stable which made me feel more confident about home-buying. It actually felt “right”. I found -and bought- a condo that was both in my price range and criteria.

    2 years later, I don’t regret buying. It certainly is added Financial responsibilities but it also made me feel more secure financially and I like the fact that I am paying for myself rather than for someone else. Maybe I wouldn’t feel that way if I had bought in 2011.

  • You finally posted about this!! I loved our convo over Thai food. I agree with you in MANY ways – and I live in NYC, so the housing prices here are absurd and I also don’t feel like I’ll be here for the long-term since it’s just not affordable. (Home ownership seriously scares me. I would be the person who would buy a place, it would pass inspection and then a month or so later the pipes would burst or central air would die…you know the drill. Then all those costs would be on me!)

  • While I totally understand the desire to own real estate from an investment perspective, I hate that there’s this ”need” in our culture to OWN. I like that it’s a ?? account, maybe you’ll meet someone and within a few years decide to plan a (cash) wedding instead, I appreciate that you’re not restricting yourself. Go cait!

  • I totally get your thoughts on homeownership. I’m 32 and single and do aim to be a homeowner by 40. But I don’t think it’s for everyone, and it’s not something I want to rush into. I want to have enough saved to have a significant down payment/upgrades fund before then as well as some time to firm up what I really want.

    And I named an account “Freedom,” so I get the drive of the name.

  • I think it’s really interesting that you’re considering your first home to be “at least a five or ten year home”. I’m from Germany and over here you don’t usually buy a house, you build it (not sure if that makes it any cheaper though) and you build it for life. Meaning, no one would take a loan out to buy something that big only to sell it again after a few years. You literally settle and unless you get a divorce, you stay put. If you know you’re going to live in different places for your career, you probably wouldn’t buy a house even if you stayed for a few years.

    Isn’t it so funny/weird/interesting how much the culture we live in determines what we think we should be spending our money on? Even “buying a house” which seems fairly straight forward can mean something different between two cultures – owning a house you’re going to grow old in or owning a house that you will potentially get rid off if it doesn’t suit you anymore.

    I’m a life coach so I often work with people on the inner stuff, the assumptions they have about how life works or who they need to be to reach their goals. There are few things more fascinating than seeing someone’s perspective shift – that moment when you check your assumptions about how life works with the facts of what you really MUST do – and usually it takes away the should’s and allows them to do what they really want to do.

    So my question to you would be: Why a five or ten year home -why buy something and take a loan out for it if you’re going to sell it again? Why would it feel better to buy the house for 5-10 years vs. renting and staying for 5-10 years? Like with shopping for items, how does buying a house make you feel thinking about it – what’s the emotional payoff?

    Food for thought :)

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