Although the City of Vancouver has launched a number of initiatives to increase density and housing stock – including the approval of laneway houses – the average Vancouverite needs more options in finding a great place to live for a great price.
We’ve taken a quick look at some choices that could become more popular in this city, and possibly in laneway house situations:
1) Rent to own.
Why pay rent to a landlord when you can make the same payments which would go towards the property purchase price? “Renting to own” is a popular scheme in the UK where it is supported by the government. In this situation, a buyer agrees with a seller to buy a property at a certain price and at a future date. The buyer lives on the property as a tenant during this period and makes payments to the seller – these payments are credited to the purchase price. It is, however, a very uncommon way of buying property in Canada and anyone entering this type of agreement would need active assistance from a lawyer and accountant. Click here for a Canadian opinion on the potential benefits and pitfalls of rent-to-own agreements.
If you’re unmarried and can’t afford a place of your own, consider banding with your buddies for a property purchase. Now that some properties can have a total of three units in a single family lot (main house, basement suite, laneway house), you can conceivably divide interest and expenses on properties into three. Vancity, RBC Royal Bank, Scotiabank, and TD Canada Trust all have “co-borrower mortgages” for friends and family to buy property together. More information here at the Real Estate Board of Greater Vancouver.
3) Equity sharing of existing property
Akua Schatz and Brendon Purdy are an example of one couple who decided to share equity with their parents by building a laneway house onto their backyard. Before the concrete was poured, they worked out a legal agreement clearly dividing the property – stating the land value belonged to the parents and the actual laneway house was owned by the couple. In addition, every possible worst case scenario was factored into their contract. In preparation for the agreement, Schatz separately tracked the value of the land and the improvements (i.e. structures on the property) for the past 20 years. She found that the improvements, even without land value, increased in value by 4-5% every year and proved to be a solid investment. To read more about the Schatz – Purdy experience, visit their blog about laneway house living.