Buyer on a Budget? Read this.

Houses aren’t something that every first time buyer can afford these days. There are still some houses under 250k, sure but every one of them is very small and/or in need of lots of work. In fact under 280k is where I currently telling people to expect fixer uppers in a medium sized home. And don’t forget, the costs of the house are beyond the price tag and closing costs. You have to maintain it too, and not just when things need to be repaired but also preventatively. This should be obvious, but I’m speaking mainly to first time buyer on a budget here who may not have thought about such things much before.

If after speaking to a mortgage broker, you find out that houses are out of your price range, there are of course other options. And these options are the crux of this article, what your options are when you can’t afford a house but want to buy. There are some decent small houses under 250k in Nanaimo, but if you have a family, and want a quiet location, the pickings are slim. The other options are condos, townhomes and trailers… oh sorry, we’re supposed to call them "mobiles" these days aren’t we?

Trailers/Mobiles have a bad rep for being in a neighbourhood of debauchery, but this isn’t typically the case in this area. In fact most of the trailer parks, er… mobile home parks in this area are actually pretty pleasant neighbourhoods and the mobiles themselves are typically surprisingly roomy, clean, and comfortable. Like any type of home, there are cheap ones that aren’t so pleasant but the average mobile home is much more livable than what that (hilarious) TV show, "The Trailer Park Boys", suggests. Some buyers who are trying to save money think of buying a trailer/mobile but what they don’t know is that behind that low asking price is a high monthly fee for pad rent. Typically $300/mo and sometimes more. Remember that you’re going to sell your real estate one day, and the more your money goes into the mortgage rather than a monthly fee, the more you’ll get back when you sell the place and use that money to buy something else. With a mobile, you’re going to be paying a small mortgage (or loan depending on the mobile) plus rent, and then all those maintenance fees to boot. What I’m getting at is that this means that less money will be going into your investment in a way that pays back later. What you end up doing is paying cheap rent as well as a cheap mortgage at the same time. And yes, you still have to pay taxes. Having said all this the plus of a mobile is that you get a bit of a yard and no one is living above or below you, or sharing walls. Typically you have a bit more space than your average condo too.

Conversely, you could look at townhomes and condos. The strata fee varies wildly on them depending on a lot of things, but in terms of the cheaper than a basic house price range, most of the monthly fees are between $115 and $200 per month. The good news about these fees, is that part of that money goes towards maintenance of the exterior of the complex. The bad news is that once in a while, extra fees are charged when it turns out that the complex has a leak. However, typically, that extra fee can be gotten back in the resale value once the work has been done.

Of course, in terms of money back for your investment, a house is more likely to deliver. But when on a budget and houses are out of reach, let’s face it, the world is changing. It always has been, and those who live gracefully are able and willing to change with it whatever direction it may take. Others wait for the world to go their way, which it may, or it may not. In a world that is approaching a population of seven billion people, space is becoming an ever precious thing. And that’s something they say often about real estate, "Land is the one thing they’re not making more of."

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