False Creek Residential Leases: should you buy one?

False Creek Residential Leases: should you buy one?

It depends.

The land is owned by the city and stretches from the Burrard Street Bridge to the Cambie Street Bridge. The properties are all strata, (condos and townhouses) varying in size and quality. And more importantly, varying in lease status.

Reasons to Buy:

Some are waterfront properties with spectacular views of downtown and the mountains. Some are just steps to Granville Island or a quick ferry ride to downtown. Many of the buildings have been rainscreened with new siding, windows and balconies. As well, some of the leases are pre-paid for a specific period of time with an option to extend for a price (Eg.One property has a lease until to 2036 with an option to extend 20 years for a cost of $134,000). In False Creek, lease expirations run from 2036 to 2046.

If you are not worried about resale value because you are retired or not wanting to move again, this is a great option to buy something affordable in a great location where you can easliy walk to many amenities.

Reasons not to Buy:

If you are a first time buyer looking to upsize in the future, the increase in value over time may not be enough to make that move. 

Not all financial institutions will lend you money to purchase on leased land, and if the lease length is too short, you cannot get a mortgage at all so you have to buy with all cash. When the end of the lease approaches, the value of the property goes down due to lack of certainty around renewal and if it can be renewed, you will have to pay for the extension.

If it is important for you to own "land" then a residential lease may not be for you. Before considering this type of property, consulting your mortgage broker is really important - to see if you qualify for a mortgage for leased properties, can pay the monthly fees and potentially pay for an extension.

False Creek leased properties can be a great lifestyle choice if it makes financial sense. 

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