Brooke and I have had the whole “renting versus buying” discussion several (dozen) times over the past few years, and I’ve never been convinced of the value of owning real estate. But last weekend, I let myself be talked into going to look at some condos that are being built very close to our (rented) apartment.
Surprisingly, after checking out the floor plans and prices, I was interested. We live in a pricier section of the most expensive city in Canada, so $200,000 for a one-bedroom condo, slightly larger than our current place, actually seemed reasonable. We currently pay almost $1100 in rent each month. I figured that if we could get away with paying no more than $1600-$1800/month, it might make sense for us.
What I didn’t count on was the deposit/down payment. The condo isn’t built yet, and expected occupancy isn’t until the spring of 2005, at the earliest. But they still want a $30,000 deposit, spread over eight months. I don’t know about you, but I just don’t have that sort of cash laying around. Even if we were able to borrow it, paying it back over two years (before we’d have to start paying our mortgage) would be more expensive than the mortgage, since we’d still have to pay our rent at the same time. What’s worse, I found out that upon moving in to the finished condo, we have to pay another $20,000. Where is this money supposed to come from? We’d be first-time home buyers, and we don’t own any assets at all. Our credit history is exemplary, but somehow, the idea of trying to put $50,000 on our lines of credit seems insane.
People talk about how rent is just like throwing your money away. But after looking at interest rates, amortization periods, and condominium “maintenence fees,” I’m pretty convinced that we’d be throwing away at least as much money each month as we do now. All this hasn’t helped to console my wife, though…