The City of Vancouver leads the way in premiering the lane-way housing bylaw. It's taken a while for this to really catch on, but the possibilities the bylaw presents are no- brainers. The lane-way home can house your parents, it can house your adult kids, it can provide positive cash flow as a rental, or you can move in the newly renovated space and rent the old house.
At under $300,000 all in, for many one and 3 bedroom apartments downtown Vancouver models, it provides way more flexibility than an investment condo. But how does this help someone that doesn't have a property to put it on? How can this help you get noticed in the housing market?
When you buy a home with a spouse, you generally hold a title as "joint tenants.” This means the right of survivor ship goes from one name on title to the other. So, if a wife is hit by a bus, her husband gets the house etc. But there are other ways to place your name on title.
Take a home on the West side for instance. Assume there is a cute three story house on a decent lot, in an area you like, but its $1.6 million. You have been approved to go shopping for a house for under $700 thousand. You grab some close friends to join you in taking a second look at the house.
Together, you agree the house has a fabulous walkout basement suite but it could use some updating. Your landscaper friend says he loves the space and the third friend points out that they would rather live in a detached lane way then suite or condo rentals Vancouver.
Now we do the math. You write a contract with your two friends where you agree to divide the home. If one person takes main space of the home, the other takes a suite, the third can take the lane way. The three of you buy this home for $1.6 million (or less if you have a good negotiator). You call a company like Small works studio or Lane way Housing Inc., to pick a preapproved design -spend under $300,000 and you will have a home ready for move-in day within 16 weeks. You throw $60,000 into making that basement gorgeous. Add in a little extra for closing costs.
You are now at about $675,000 each. The price could probably be divided by square footage, or by some reasonable three way split that reflected the different units, but I split it equally just to make the point here. You have now created your own co-ownership or shared equity arrangement. Make sure you have a contract/ agreement in writing in place. A co-ownership agreement can be very detailed and typically includes each co-ownerships’ interest in the property, as in percentage 25/25/50; and what each co-owner will pay for the Property Transfer Tax, property taxes, property insurance, water and sewer fees, repairs, improvements, maintenance and legal fees.
For most people, this is better than commuting to the suburbs, and it is better for our environment to keep people living where they work and need to be.