Lauren Arnold and her partner, David Pilat, are all too aware that when Ontario reopens, their work life won’t look quite as it has since the onslaught of COVID-19.
Like so many others, Arnold, a business director, and Pilat, an e-commerce manager, began working from home more than a year ago. As the months wore on, enticed by greener pastures and low mortgage rates, they decided to make the leap, moving out of the city where their offices are located.
With the knowledge that their jobs would likely be more flexible going forward, “we were re-evaluating what the future of work would look like for us,” said Arnold.
So a month ago, they bought a home in Pickering and moved in. Going from renting to owning is a big jump, but the couple was prepared.
“We were really able to map out all of the extra costs of what living outside of the city would entail,” said Arnold.
“I think we really did our due diligence to prepare ourselves before moving,” added Pilat.
Now, Ontario is beginning to reopen, with vaccination rates climbing and patios welcoming patrons again.
Arnold and Pilat both know that their workplaces are planning to be flexible, but they’ll still be expected in the office two or three days a week.
So while they managed to mitigate many financial surprises by doing their research on property taxes and more, there’s one unknown in their near future: their commute from the suburbs back to downtown.
With one car between them and potentially different work days, they’ll have to figure out how to make it work.
“We haven’t decided how we’re going to handle the commute,” said Arnold. “There’s a lot of unknowns … we could drive into the city, or we could take the GO train.
“We’ll do some trial and error once we get back to the office.”
Arnold and Pilat are just one of many couples who saw COVID-19 and the necessary rise in flexible work situations as an opportunity to move somewhere with a little more breathing room.
Statistics Canada has reported that between July 1, 2019, and July 1, 2020, 50,375 more people moved out of Toronto than arrived from other parts of Ontario.
But as things open back up, those couples may be in for some financial surprises, especially if they’re unprepared (unlike Arnold and Pilat, who made the leap with spreadsheet in hand).
The Star spoke with financial experts to get the scoop on some of the biggest money surprises one might face by jumping on the bandwagon out of the city, and how to mitigate them.
Your property taxes will go up
Rubina Ahmed-Haq, a personal finance expert and journalist, said one of the most unexpected financial realities many face when heading to the suburbs is the rise in property taxes, which can be double what they are downtown.
For those who were previously renting, the surprise is even greater, she added, as they aren’t used to paying property taxes at all (though of course they are factored into rent).
“It’s a part of the home-buying process that needs to be better addressed,” she said.
When you calculate and apply for your mortgage, this is often not taken into account, said Ahmed-Haq.
The information is readily available, she added, so if couples like Arnold and Pilat do their research, they can mitigate that surprise.
Your utility and maintenance costs will go up, too
Another heightened cost when you move into a house in the suburbs are the utilities, said Ahmed-Haq. Not only are you likely dealing with a larger space, you also aren’t surrounded the way you are in an apartment building, which means less insulation.
“We moved from a townhouse to a detached home two years ago, and I didn’t really take into consideration how much you save on heating and cooling by having people on either side of you,” she said.
The best way to plan for this is to ask the previous owner of your new house about their utility bills, recommended Ahmed-Haq.
There are also the costs of maintaining a home, she added, which renters may not realize can add up over time.
Janet Gray, an Ottawa-based certified financial planner with national firm Money Coaches Canada, noted that not only are you paying to maintain your property, there can be a lot of initial one-time costs, such as buying a lawn mower or other equipment.
The same can be said of furniture. Gray recommends not furnishing your whole house at once, but adding to it over time, to avoid taking on a mountain of debt all at once.
About that commute …
And then there’s that question Arnold and Pilat are facing: the dreaded commute.
People are often surprised by how long their commute takes, said Ahmed-Haq; they may have visited their new neighbourhood on the weekend or in the evening, and haven’t factored in rush hour.
Added to that are the costs of commuting by car, which aren’t always apparent: not only gas and insurance, but maintenance costs, as well as the possibility of needing a second car.
Some might not even have a car, added Gray, and will have to purchase one for the commute. Or, even if you’re taking the train to work, you may need a car to get to the transit hubs.
“Often you’re not just buying a house, you’re buying a car,” she said.
Ahmed-Haq noted that while many companies have said they’ll be flexible upon reopening, employees shouldn’t assume that will last forever.
Commuting for your social life
While our social lives have become mostly virtual during the pandemic, it’s important to think about that aspect of your life from a financial perspective, said Ahmed-Haq.
You’ll no longer be able to meet friends for drinks downtown so easily, she said, and social excursions may require more planning if most of your social life pre-pandemic was downtown.
“If you move to the suburbs, you have to sort of resign to the idea that you are going to change your social life to a certain degree,” said Ahmed-Haq.
“If you’re going to be living your old life in your new suburban home, it’s going to cost you.”
Of course, you can find a social life in your new neighbourhood, she said, especially if you have friends who live nearby — and those can and should be factors when you’re searching for a house.
Arnold said she is planning to kill two proverbial birds with one stone, by visiting friends after work on the days she commutes into Toronto.
“Instead of just going into the city for one social get-together, we’re really trying to get all of our get-togethers in the days that we’re in there for work.”
Correction — June 14, 2021: This article was edited to correct the relationship between Lauren Arnold and David Pilat.