People are always looking to jump into the world of real estate but don’t know how to begin. It can be overwhelming for many as they try to figure out what kind of property to buy, where they should look, and the questions they should ask.
James and Monica walk you through a buyer’s thought process to help bring clarity when purchasing a home by focusing on budget, real estate goals, and lifestyle.
This episode will cover how investment properties and rental income can help you qualify for a mortgage, how different real estate goals will determine the property type you should buy, the difference between a home that needs maintenance versus one that is move-in ready, how your work can influence where you want to live, the significance of kid and pet-friendly homes and neighborhoods, as well as the importance of living close to family, amenities, and public transit.
Read the Transcript Here
Hi everyone, I’m James Garbutt. And I’m Denny Dumas. And this is the Garbutt Dumas Real Estate Podcast.
James: Today we’re gonna talk about where to buy, what to buy, what questions to ask. It’s James Garbutt here and I’m with Monica Harmse and we want to just basically have a conversation about things to think about before buying your next home because oftentimes we are doing a little bit of an interview process when we meet a new client or buyer. And our goal with that is to help them bring clarity so that we can hopefully land them a great place that they don’t want to move from right away.
Monica: For sure, there’s so much advice from friends and family and everyone. Everyone loves to pitch in and give you their two cents when it comes to real estate. So we’re just going to give you a nice clear guidance on where to focus where to put your energy and it’s a very important part of our interview process when we even take on new buyers.
James: And let’s be clear, we’re not saying buy this right here at that price. Now, the whole point of this is to help you know everyone has a unique situation, and it’s just to help bring clarity.
Monica: Right. I think the most common issue that a lot of our first time homebuyers run into always boils down to budget.
James: I was just gonna bring that up. And it’s, it’s a cold approach, but there’s so many questions that follow a budget, but the you know, budget does narrow options. So like it might be a little bit blunt to say how much can you afford right out of the gates, but the reality is for a Realtor that limits options, you know, if you don’t have a budget for Vancouver proper, let’s rule that out right away.
Monica: Right. I think I get a lot of new families that have been renting. And they find themselves in situations where they’re just too big for their rental. And they want to jump right into a townhome like a three bed townhouse for their first time purchase. I think that that’s probably one of the biggest…
James: That’s an ambitious move. Some can do it. But most don’t work their way up.
Monica: Yes, Yeah, that’s hard. Yeah. So I think the process starts with a budget. Look around, find out exactly what you can afford and see how that might fit in with your family and way the balances of, am I going to actually live in my first property that I own.
James: Sometimes, it doesn’t make sense you know, if you need a three bedroom and you can only afford a one or two bedroom. That may be an argument to have the first property as an investment property just to get your foot in the door and hopefully build equity for another day. But or that could be moving further out or going for an older three bedroom.
Monica: It’s becoming increasingly more common for many first time homebuyers to buy an investment property before ever moving in.
James: Sometimes you have to. You know, sometimes you have it also helps your qualifications. You know, if you’re moving into a place the bank wants to ensure that you can make that payment but if you are, say renting out a place and that rent is good that helps your qualification. So just to add to that because the, the budget part is big and I think with right now we’re doing this podcast in August 2022. This is a year of a lot of change. So it’s good to highlight that, you know, part of knowing your budget involves getting a pre-approval from a mortgage specialist. That pre-approval in a changing market, which today is changing largely because of interest rates can change. So if you had a pre-approval done in February of this year, it may not, it may no longer be applicable and a lot of say you know I think a very common example of where we’re at today is maybe at the peak of lending of stretching out what you can get, which was let’s call it February, maybe January. I can’t remember the exact dates but earlier this year, it may have it’s probably reduced in the neighborhood of 10% over the last six months. So what you qualified for six months ago might be 10% higher than today. And if you find yourself in a multiple offer situation, which is less common today. It is really important to know your budget and not stress out about committing yourself to a property without you know, certainty of getting that mortgage.
Monica: So I think when we meet with buyers budget is the first thing and the second thing is just what are your goals? What are your real estate goals? All together? Not just today, not just with this purchase, but what are your goals and your timeline over time. So maybe you’re planning to buy a small apartment today but are you hoping to own a detached property someday? Are you hoping to take whatever property you buy now and turn that into an investment property in the future? So your real estate goals are really really important when making these decisions. And it’s actually really exciting to set a plan up because it’s, it’s you kind of like mitigate risk when you know where you’re headed.
James: And to some people that goal is finding the perfect one bedroom condo that they want to live in for the next 10 years and make it their home. Some it’s a family home it’s completely non it’s not a conversation around investment. For some it’s purely about living and home and family. Or if they’re on their own, their own place. And for others it’s about we know that this next place is not where we want to be. We want to see it as a stepping stone to get to the next one. Maybe in a case where say the budget and the location don’t always match up. That’s a very common instance where we suggest making sure that rentals allowed is, is part of the criteria just for flexibility because often times people are leaving a city or leaving an area that they’re familiar with and to help mitigate that risk rentals allowed.
Monica: Man rentals allowed is huge. If you’re just starting out in real estate rentals allowed make sure you have rentals a lot. It’s a big one. Unless, unless you are one of those buyers like James just mentioned that like you’re gonna hunker down, you’re gonna live there for 20 years, then who cares but if it’s if it’s a first stop for you rentals allowed.
James: In some areas like for example the New Westminster Quay a lot of the best apartments and condos have rental restrictions. So if you want to face the river and a lot of the buildings in the New Westminster Quay you’re gonna ,you’re not going to have rentals allowed. If you buy a pre-sale you’re grandfathered into allow rentals for as long as you own the property. If you buy a place that has no rental restrictions, but say it’s largely owner occupied, there is always a risk that rental bylaws could change and that could change the future outcome of you being able to rent your place. So just keep those things in mind.
Monica: Right. So budget, goals and the other thing is lifestyle, right?
James: This is a big one.
Monica: Very big.
James: So many questions that come around lifestyle.
Monica: I think where you work is the first thing. What, what do you what can you tolerate for commute?
James: Where do you work? How do you get there? What like understanding work in today’s day and age is crucial because to some people I mean I think the biggest thing is when we see someone that lives in Kits which is paradise in Vancouver in the West Side, you know settled, wants to get the first place and has to lookout to New Westminster or Port Moody. That commute can devastate them. It could be an hour and a half both ways in the car. And it might rule that out. Like it might rule an area out completely.
Monica: The lifestyle choice for commute is really, really important. I’ve had some buyers that buy close to family. They buy a condo, for example this one couple that I’m thinking of they bought a place in Pitt Meadows, their family lived nearby in Maple Ridge and they wanted to start a family so they head out to Pitt Meadows but one of them works at VGH, you know, and after ,after two years, they called me and they’re just like we, we’re selling this condo, we’re moving back to the city. You know, I don’t see my parents enough for it to matter. They’re gonna drive to see us no matter where we are. This was a terrible decision. And so faced with a choice between living 10 minutes from family and living an hour from work they’re like this is just not worth it. Gotta gotta move closer to work.
James: Trade off of size, to time in car you know, a 900 square foot place in Vancouver / Burnaby might translate to a 14 / 1500 square foot place with an extra bedroom, in Pitt Meadows…
Monica: But if never get to be there…
James: To some people the space matters more to others, the location matters more. I think that’s an important thing to ask yourself and not and recognize that what your needs today are might differ from your needs in three years, five years if you’re planning to have a family per se. It is frustrating. Not frustrating. I have sympathy for people that buy a place that’s too small and outgrow it too quickly and are forced to upgrade because they have a child on the way and the markets down. It’s you know there’s positives to upgrading when the markets down. But for a lot of people it’s, it’s often a frustrating experience because it takes longer to sell and it’s not as quick and easy as a hot market.
Monica: Right and it also depends on your frame of mind. Are you the type of buyer that you want to sell and just make a banging profit on this so you can tell all your friends “Look at my great investment”. I’m gonna show so much money on this. Like what kind of buyer are you? Or are you the kind that can dust your hand off and be like sweet I broke even, headed to the next place. So you need to know, who are you? What kind of buyer are you?
James: If you’re willing to take a hit on a sale and there’s a buy right after usually you get a better outcome especially if you’re buying up. So it’s always hard to take a hit on a sale because you want to see that profit and oftentimes need that down payment money too but down markets are a great time to upgrade. It’s up markets when you have that highest profit on your place and then you’re buying a house that was you know, gone up $200,000 in six months. Those are the tough ones. Location is what we’re getting at from a commute, transit, work. How important is that to your lifestyle? And if work from home is on your agenda and you don’t have to commute anywhere or if your say your commute is sporadic all over the Lower Mainland so it doesn’t really matter where you are and you’re location neutral. Then, then the next questions we ask is: “What is your lifestyle like? What are your interests? What are your hobbies? What are you doing in your spare time? Is it important for you to be close to outdoor amenities like parks and trails and beaches? Or are you more worried about or concerned about walkability and shopping?”
Monica: Right. This is really important. I mean, knowing yourself knowing what your lifestyle is like or visualizing how you want your lifestyle to be is a really, really important step. Also, if you already have a family, you know taking into consideration, you know, parks. Where parks nearby? What type of daycares and schools and things are nearby. If you’re the type of person that wants to stay long term in a community really, like sinking your teeth into a certain neighborhood and community and knowing exactly where you’re gonna go ahead of time is gonna save you the pain of trying to make that move later on.
James: I mean family questions are great. I have three kids myself and I have a lot of clients that have kids. And it’s really I mean, understanding the schools that are in the area that you’re thinking of. I mean, that’s important if, if flexibility is important to you. There are certain areas that have great public schools and only public schools and there’s certain areas that have great public schools and private options as well that aren’t going to you know, kill your daily commute. And then there’s just places that are just very central, you know, Burnaby North, Vancouver East that are close to the highway where you can get pretty much anywhere but you’re going to be living at commuting lifestyle, in a short period of time. But when it comes to family and kids, you know there’s there are certain parts of town where it is where their, their, their new schools are getting portables right away because there’s so many families go into those locations, and there’s other parts of town where they’re losing families. And you know, very obvious one is the West Side of Vancouver is losing families and Cloverdale and Langley is gaining families and, and they don’t make schools big enough. One thing that I kind of look at when you know, for me, active young kids, is an obvious one is when you get to these, narrow down these areas that are very family oriented. You know, I like driving the streets and counting basketball nets and hockey nets. You know, it’s a real obvious one that, if there’s no basketball hoops and hockey nets on the street, then there’s probably not many kids around.
Monica: For sure. That’s a big one. Yeah. In the summertime if you’re driving down the street and there’s not a single child squirting another child that screaming with a water gun then you don’t want to live there.
James: It’s you know, might come across a bit creepy but going around the neighborhood right after school’s out at three o’clock seeing how many kids are walking home from school and that is definitely creepy to do but you know…
Monica: It is creepy but it’s worthwhile.
James: It’s worth it.
Monica: I have both buyers. Like my sister in law is one of them. She didn’t want to live next to any kids but she wanted a townhouse and she didn’t want to live in an age restricted townhouse for investment purposes. And I was like “Well, yeah, this is exciting. This is gonna be really hard.” And we did just exactly what you’re saying. We spent time finding complexes that were, the complex itself is a little older and oftentimes when you find older complexes, it tends to steer away from young families unless of course it’s really affordable, in which case young families are there. And after driving through several complexes in the Tri Cities, we finally found one that was tame. The most tame, the fewest children outside and then that’s where she ended up landing. And then I do the opposite with other families go through, they want like a horde of neighborhood children to play with so it’s yeah.
James: There’s a huge benefit when you don’t have to entertain your kids all the time and they can just be self-entertained by neighborhood kids. Family. There’s specific questions around that that you know, North Shore is if you have a larger, if we’re talking suburbs specific you get more value in the Valley. Cloverdale, Langley, Surrey. Maple Ridge, Pitt Meadows. If you have, if you work Downtown and you have the budget for it, North Shore is often a popular option. I mean, those are the areas that we work. We don’t, I mean, South Surrey is loaded with options too, better sunnier weather. But every part of town has a different feature to offer. And I think urban versus suburb paradise versus family oriented versus walkability and shops, you’re gonna get a different vibe than say, Commercial than you are in a Mount Pleasant, Trout Lake. You know, so…
Monica: The good news is the city is expanding. SkyTrain reaches more communities than ever before. Of course, Port Moody has a West Coast Express, two Skytrains. Coquitlam has a SkyTrain now, it’s making it more available to people who want that suburban lifestyle but still need to get to the city. So really knowing these communities that have public transit is important and I think that’s obviously where Realtors come in. We kind of know the ins and outs, the secrets.
James: Ultimately, at the end of day we’re when we’re talking to a buyer or someone that’s you know, some buyers are very open to where they live. They’re just they could be in North Vancouver or Langley.
Monica: Sometimes they’re too open!
James: Too open you know so, the part of the process to narrow that down is the suggestion is when you see a property that’s in a neighborhood that you’re considering. If, if kids are important, go check it out before, after school. If whether the kids or not are on the list. I always recommend going there at rush hour and doing that commute. So get up extra early one morning drive to that property and drive that daily morning commute. A lot of people don’t do it, but it’s one or two hours of your life that will pay off or potentially help make you a much better or worse decision.
Monica: And I always make these little suggestions and the few buyers that actually do these things, find the search to be less painful, quicker, more focused. And the last really important thing I want to mention is pets. Pets is a big one. If you have pets, make sure sure you’re looking in pet friendly communities. I’m talking communities that allow the dogs to go to the beach with you. That allow the dogs to you know, go to some outdoor patios and things like that. There’s a lot of amazing places to live. White Rock is one that’s pretty restrictive when it comes to pets. So if you really want your pet to be your best friend, maybe steer clear of White Rock. But there’s certain areas that you need to know that if you have pets, if your fur babies are important to you like they’re important to me.
James: Well I mean we both have dogs. I have two Australian cattle dogs higher energy, high energy dogs in any urban setting it is a challenge to get them the exercise they need. And you know recently my family and I made the shift to the Seymour side of North Vancouver and it is a dog culture. There are some there’s far like 80% of the dogs are off leash and it’s not shunned upon…
Monica: That’s what I’m saying, people are okay with it.
James: Yeah, absolutely. I think Port Moody is very dog friendly. I mean, anywhere that’s on the outskirts seems to be more dog friendly. I think just people recognize that a dog’s on trail, let it be free. But if you’re an inner city, you know if you have a French Bulldog or you know a dog that doesn’t need that many exercise then you know they have a lot of options. Ultimately, oh yeah. Aside from location, you know, there is the other thing about maintenance versus non maintenance you know, if you’re looking for a family home and you end up buying 100 year old heritage home or a seven year old, call it mid century, bungalow that has old wiring and old pipes there’s maintenance that comes with those homes and you may not want to spend your time doing that. So there’s the argument for some that want a turnkey property that’s not going to take over their life because they can’t do any work and they don’t want to do any work and they don’t want to hire trades. That might be, that might lead you more towards a townhouse or a newer home that’s further out. You know say Burke Mountain has tons of new homes. And for the same price of say 2,000 square foot Burke Mountain home, you might be getting a 80 year old home that’s 2,000 square feet with an awkward layout in New Westminster that’s going to have a project every year.
Monica: Oh yeah. New drainage, new electrical, new plumbing, new roof. All of it.
James: The list can add up and this is where your Realtor comes in handy to help paint the picture of what your future summers and weekends are going to look like.
Monica: You’re absolutely right. The maintenance is a big one. And it’s not just the big ticket maintenance items. It’s the weekly little redundant maintenance items like the mowing the lawns, the pruning the trees, all those types of things. If you want a low maintenance lifestyle, there’s some really amazing stratas that I would look at. And I would probably steer clean of detached altogether.
James: And we’re, again, we’re doing this August 2022. The market is shifting, you have a little time to breathe now. It’s a great time to ask yourself some of these questions to think about where you might make your next purchase because you should get a better deal than you would have a few months ago.
Monica: You should.