Everyone coming to Canada will also start a new life. When you come to Canada, you actually have a very important decision to make. Should you buy a property or rent? I believe everyone has a lot of doubts about this matter. But don't worry. Today, we will analyze it for everyone. Is it better to buy a property or to rent? Hello, everyone. Welcome to the Novelle Wealth financial channel. I am Kinson. I am Edmond. Today, we are very happy to discuss in a conversational manner the question of whether to rent or buy a property. Should you buy a property first or rent first? This is also very important to me. Because when everyone immigrates to Canada, they all hope to establish their new life in this place. So, in this episode of Novelle Wealth and Your Plan, we will delve into the pros and cons of renting and buying a property. Speaking as experienced individuals, and with our over thirty years of experience, we will explain to you what's worth noting. We hope you can make a more informed decision. Before we begin today, we'd like to express our gratitude to Trove for providing us with this location for our filming. I'd like to give some background about our channel. Novella Wealth is located in Richmond, British Columbia, Canada. We are a brokerage firm specializing in investment, insurance, and wealth management. We've created this YouTube channel with the aim of providing simple and clear as well as professional financial education and tax knowledge to Canadians. Whether you're a returning resident or a new immigrant, or someone like us who has been moved to Canada for many years, we hope to provide you with a high-quality financial life. Enriching Your Financial Goals in Canada. If you're interested in this type of content, I sincerely invite you to Like, Subscribe, and Share our videos with your friends as well. That would be a great encouragement to us and enable us to keep creating even better content for you. Without further ado, Let's get started. Actually, I believe there is no right or wrong choice between renting and owning a house. I think it should depend on your individual circumstances. If today our goal is to decide whether to buy or rent, if you're considering starting with the housing market, will the high prices be the deciding factor in whether to buy or not? I think the timing is always uncertain. But if your purpose in renting today is to try living in certain areas, to see if it suits you, whether it's convenient for you and your children, then I would recommend renting first. And for some people who may have lived here in the past and are returning now, they are already familiar with the environment. They may already have a specific area in mind where they want to live, and they go ahead and buy in that area as soon as they arrive. That's not a bad thing either. You remember, you also told me earlier that it's advisable to explore the area before deciding to buy a property. To see what the environment is like there. So even when we first arrived in Canada and hadn't decided on the area to buy in, we rented temporarily. Later, when we actually decided on the area we wanted to live in, that's when we went to explore that neighbourhood. It's also a good approach. In Canada, residential buildings are divided into several categories. The first category is condos or high-rises, which means we see a tall building, perhaps ten to twenty stories high, or even thirty stories high, made of concrete. Another type is apartments. Apartments are generally three to four stories high, with about ten to twenty units per floor. Another type is townhouses. Townhouses are usually only two stories high, and more likely each unit is closely attached to another, or it's called "Detached." Detached means individual houses. In many cases, when we start choosing different types of housing, what we need to be aware of is that, for example, when we live in a detached house, we are responsible for many things ourselves. Property taxes may also be relatively high. In addition, matters like lawn care and maintenance require us to take care of them ourselves. But on the flip side, you'd have full control of everything. I can arrange on my own time schedule and decide by myself. On the contrary, for townhouses, condos, or apartments, there will be a strata council, They are responsible for making decisions on behalf of homeowners, such as roof repairs. This means that as homeowners, you will have less say in the matter. Decisions are typically voted and arranged by the strata council. When renting, we usually sign a Tenancy Agreement. I consider this agreement to be a safeguard for both the tenant and the landlord, as it outlines what you can do, the duration of your lease, whether pets are allowed, and it also records your deposit and previous rent. It's a protection for you as well. Typically, we sign these lease agreements for one year and then renew them annually. Actually, landlords have the right to increase rent each year, but there is a maximum limit to the rent increase, and the government sets the rental increase limit each year. If you're willing to pay the new rent, in simple terms, the landlord cannot evict you, unless the landlord is taking back the unit for their own or family's residence. That's when they have the right to ask you to leave. In addition, in this Tenancy Agreement, besides the one-year term, there is also a Month-to-Month option that gives us more flexibility without locking us in for a full year. It can also transition to Month-to-Month after the initial year. In the Tenancy Agreement, we also hope to provide clear details regarding the deposit, such as how it will be calculated and deducted for damages upon moving out. We hope all of these can be clearly stated. This is why, even when renting, we want to find a rental representative to help us find suitable rental places. Sometimes, we can find listings online, see prices, locations, and other details, but there are still many details that ordinary people may not be aware of. So, having an agent is quite beneficial. Just now, Edmond also mentioned that if you live in an apartment or townhouse, there will be a strata council and monthly management fees to pay. If you're renting, these fees are fully covered by the landlord, and property taxes are also the landlord's responsibility. So, you don't have to worry about these costs. However, when you move into a unit, we would also recommend getting tenant insurance, which protects the property you're renting and provides coverage if you accidentally damage the unit or affect the building in any way. This insurance provides peace of mind for everyone. Some landlords may also include internet fees, as well as hydro and electricity bills, which can be quite beneficial if you find such good landlords. When you're renting, generally, you don't need to pay a broker's commission because, like buying property, the agent's commission is paid by the landlord. If you want to learn more about tenant rights and protections, you can find a link in the video description with additional information for everyone. When we're buying property, we need to plan our budget first, consider the property's location and potential for appreciation, and assess the mortgage stress test. These are all things we need to prepare for before buying a property. Additionally, we should also think about the safety of the area where we want to live. And you can gather information about the property's potential for appreciation by doing your own research and looking up the past appreciation rates in that area. There are many factors to consider. In our previous video about buying property, we also discussed different expenses that require different budgeting and preparations. You can watch that video if you haven't yet. Some might wonder, if a property is used for living, is its appreciation still important? In fact, it's equally important. Consider this: When a growing family gradually realizes they need more space, they may desire a change of residence. If the property has the potential to appreciate, the opportunity to resell it also increases. We should also pay attention to our own goals. What is your objective in buying a property today? We should understand that for owner-occupied properties, the value appreciation is exempt from capital gains tax. This is essential for property transactions. In simple terms, in British Columbia, Vancouver, condominiums in the city center are more convenient, so they have a greater appreciation potential. However, the quality of life may not necessarily be the same. Some people believe they need to live farther away, such as in Langley or Chilliwack, where the appreciation potential may be lower. But there is more space for the price, more greenery, which can't necessarily be measured or calculated in numbers. Regarding the pros and cons of buying new or old properties, we find it quite simple. Everyone likes new properties, but they tend to be relatively more expensive, and the strata fees aren't usually low. In general, old properties have lower prices, but they may require more maintenance, so you need to factor that into your budget. Now, what are the benefits of buying presale properties? One advantage of presale properties is that you have some time before taking possession of the property. For example, if you buy a presale property today, the completion might be three to five years from now. This means your payment period can be extended gradually. Typically, when you decide to buy a presale property, you'll need to make an initial deposit of around 10%, and then subsequent payments of 5% each, until the completion. This can help with budgeting. However, what are the downsides of buying presale properties? In recent years, in Canada, it has often been challenging to complete presale properties on time. Delays are common. This can lead to budget and schedule issues and possibly difficulties finding a place to live if you planned to move in at that time. There's also a saying that with new buildings, while the new technology and security systems are better, because everything is new, your ability to customize the space is reduced because you won't be altering the original design. On the flip side, with older buildings, once you move in, you can make design changes according to your preferences. I think the advantage of buying existing properties is that you see the actual property; you buy what you see. I can't say that presale properties are bad, but imagine if, when buying a property, you're basing it solely on a 3D model Or a floorpan, You might find differences between your imagination and reality. So, buying existing properties means you're getting exactly what you see. Regarding insurance, as we mentioned earlier, when it comes to townhouses, apartments, or high-rises, because some facilities might be relatively new, insurance premiums may not necessarily be too high. This is because many features, such as security, are better. For example, a friend of ours dealt with a management company that had increased their insurance premiums due to a past insurance claim involving the property. Also, if you purchase an older property that has items like asbestos in the roof, pipes, or walls, your insurance premiums may be relatively higher. And when you buy an older property, such as an apartment or townhouse, just when it's time for significant repairs, like roof replacement, fence work, or window updates, you'll need to pool resources and take responsibility which could mean an additional lump sum or increased monthly management fees. You mentioned insurance earlier. Actually, everyone should understand the definition of insurance. Simply put, the cost of insurance, whether high or low, is based on the amount of coverage. The more coverage the higher the premiums. But it doesn't necessarily mean if you buy an older building, your insurance costs will be exorbitant. It also depends on the building and its past insurance claims. If there were multiple claims, even in a new property, your insurance premiums could be high, and in some cases, some insurance companies might not even cover it. We would need to find other ways to insure ourselves And seek protection in these circumstances. That's why, as we mentioned in our previous video, when looking for a property to buy, having a reputable real estate agent is crucial. These agents can help you gather information
298 Basically, whether you're buying a property, be it an apartment or a high-rise, basically, all your expenses are your responsibility. For example, property tax, internet fees, and electricity bills are all your responsibility. The only slight difference is the difference between living in a high-rise here is that living in a high-rise here, you may have the opportunity for heating, cooling, and hot water costs to be included in your maintenance fees. Speaking of where to buy or rent, there are many factors to consider. For example, if you have elderly family members, you need to consider their ease of access to upper floors. Or whether they will still be able to access upper floors easily in the next five to ten years. All of these are important. For example, when considering some apartments or high-rises, we pay attention to whether the building has an elevator, or if it's on the ground floor. Or when we're buying a property, whether there's already a room on the lower floor, or if there's a suite in it. And when we have children, we consider the school district. Is this school district good? Is it safe? We can gather information, such as the crime rate in the area. Finally, we also look at how many facilities are in that area, such as medical facilities. Whether there are hospitals or police stations. We consider many different factors. Furthermore, many times, new immigrants or returning residents may not immediately have a car. We consider whether the transportation in the area we're going to live in is convenient. Like if it's within walking distance to restaurants whether public transportation is convenient for commuting or going to the supermarket. Traveling from point A to point B, And whether it's possible to walk to the community center. Whether you have seniors or children at home, the convenience of these facilities is actually equally important. Or maybe someone might even consider: why not just build a house from scratch myself? Is this something that people who have been in Canada for a long time should decide? Or is it a decision that new immigrants can also make? There's no one better to answer this question than Kinson because he is in the process of building his own house currently. Why did I decide to build a house, actually? The main reason is that I've been living at this address for ten years now. I really like this area. I know that if I were to renovate, it wouldn't address some underlying issues. But I don't want to move to another place because I genuinely love the community I currently live in. As I mentioned earlier, whether it's my workplace, the convenience of my kids going to school, or easy access to different places, since I can't find a better place to move to, after discussing with my family, we decided it's best to demolish the house and build a new one. Because you can also imagine that in one's lifetime, there may not be many opportunities to build the house you idealize or dream of. And speaking in broader terms, building a house yourself in Hong Kong is genuinely more difficult. I believe that living in Canada gives me this advantage to attempt this. As I mentioned earlier, we talked about many factors to consider when it comes to buying or renting a property. But whether you're buying or renting It's important to find a Qualified financial advisor to create a comprehensive financial plan. Like yesterday, I successfully helped a client rearrange their finances when they were preparing to buy a home, saving them over $60,000 in taxes, which really helped them out a lot. Our role can really help everyone in situations like this. For example, if you're relatively new to Canada, and you're unfamiliar with many things, we can assist you in understanding more About your rights and available resources, can help you make fewer mistakes. We can also help when you're returning to Canada, When you sell your property in Hong Kong, and have a lump sum of cash you'll have to decide whether to rent or buy when you come to Canada We can provide you with a professional analysis And tell you what to do next. Speaking of which, if you're planning to come to Canada soon, we may not necessarily recommend that everyone should rush into buying a property so perhaps we suggest you scan this QR code on the screen and schedule a complimentary consultation and discuss with us. So we can share more of our experiences with you for your consideration. In today's video, we discussed many aspects of the pros and cons of renting or buying, whether it's a detached house, an apartment, or a high-rise. I believe there's no right or wrong answer. The most important thing is whether the property suits you. Let us know if you are deciding to rent or buy, leave a comment down below. If you haven't already, please go watch our last video: "A Complete Guide to Home Purchase in Canada 2023" You can also watch our previous videos. Before you go we invite you to like, subscribe, and share our channel. Show us some support to make more videos for you. Goodbye.
