VANCOUVER (NEWS 1130) – With young families often having to make a choice between buying a home in the suburbs or renting one in the city, some are choosing to do both at the same time.
It’s an unusual solution to the prohibitive price of housing in Metro Vancouver, but more people are becoming landlord-renters, holding onto that tiny entry level condo to keep a foothold in the market, renting it out and then renting a larger space in the city themselves for that growing family.
Journalist Frances Bula recently wrote about the practice for her blog and says she has since heard from many people forced into that situation.
“A number of people have written to me or responded on my blog. It always has been a bit of a strategy that some people have used through the years but I think we are seeing more of it,” she tells NEWS 1130.
“It does mean becoming a landlord and having to take care of things while renting somewhere else. That means being a bit more vulnerable yourself to the place you are renting being sold or redeveloped. It’s not what a lot of younger people would like to do but they feel it’s their only option to get a foothold in the market while having a place to live in where they aren’t all on top of each other.”
Of course, to make it work you need to find an affordable, larger rental home in Vancouver.
“There are actually quite a few places to rent where it’s far more reasonable than what what it would cost to buy the place. Because people have bought houses as investment properties, they’d rather rent to a stable family than 17 students,” she says.
For many homeowners, it’s the only way they can hold onto leverage in Vancouver’s hot housing market.
“They thought they were going to move up the property ladder and then found they couldn’t. Others are doing it as a deliberate strategy saying they will buy in Squamish or a little place in Gastown but there’s no way they’ll live there. It will remain an investment property.”
While the rent collected may not always completely cover the cost of the investment, Bula says some people see it as “forced savings.”
“The rent covers everything but the principal payment, they make that principal payment and it’s like putting hundreds of dollars in the bank and gaining that equity every month.”