Yeah, and pay rent for the rest of your life. Pay the other guy's mortgage and then when you're old and can't work any more you'll be out on your ear as opposed to living in a house which is (hopefully) paid off.
Condo owners in TO get poor return, compared to homeowners
- Thread starter stinkynuts
- Start date
1992, 1993, 1994, 1995, 1996.When was the last time the Canadian real estate market tanked for extended periods of time? Probably never.
10 years.
40 percent hair cut in Toronto and the GTA.
Remember it well.
Too bad I didn't buy about 10 houses in 95 or so. But I think I was making 18 bucks an hour.
As stupid as the housing prices are in Toronto, if you want to see fucking INSANE housing prices, go to San Francisco.
A house that is selling in Toronto for a million is selling for 3 million US in San Francisco.
It's nose bleed prices there.
A house that is selling in Toronto for a million is selling for 3 million US in San Francisco.
It's nose bleed prices there.
Thats not a recession since overall price was still up1992, 1993, 1994, 1995, 1996.
40 percent hair cut in Toronto and the GTA.
Remember it well.
Too bad I didn't buy about 10 houses in 95 or so. But I think I was making 18 bucks an hour.
The 40% number is "adjusted for inflation"
They increased 115% then decreased 23% (or 40% if you insist on using the adjustment for inflation)
There are many smart people on TERB, with lots of great and insightful posts with good arguments. This post is one of the most insightful I've read in a long time.I don't think you can say either renting or buying is "smartest" because it depends on many factors including your lifestyle, if you're single, have kids, sources of income, willingness to move for work, etc. There are millions of people in other countries that rent and are perfectly fine. Remember, that the global financial crisis was caused by the US housing market.
I think people confuse their home as an investment because of it's supposed market value. It is actually worth nothing if you have no desire to move. Even if you want to move to make a gain, you still have the switching costs of buying a new home, real estate and legal fees and land transfer tax. Then there's the ongoing maintenance of the home that you will be paying even when you're mortgage is paid off. Renters have fewer things to worry about i.e. if the roof falls or the pipes burst they call the building manager. A home owner has the fun and joy of dealing with that themselves. The problem of having so much of your net worth tied up in your home is how to get all that equity out. That's why someone invented reverse mortgages, which are a borderline scam IMO.
You can't really compare stocks and real estate equally as investments since they are very different things. Stocks can be traded instantly virtually anywhere. Real estate is not liquid in comparison. If you look at the very long term of 25 to 30 years, the stock market actually beats the housing market even with all the massive crashes.
http://www.investopedia.com/ask/ans...-historically-stock-market-or-real-estate.asp
I agree.There are many smart people on TERB, with lots of great and insightful posts with good arguments. This post is one of the most insightful I've read in a long time.
You really nailed it... I would send this to my friends/ family if it was not coming from an escort board, lolI don't think you can say either renting or buying is "smartest" because it depends on many factors including your lifestyle, if you're single, have kids, sources of income, willingness to move for work, etc. There are millions of people in other countries that rent and are perfectly fine. Remember, that the global financial crisis was caused by the US housing market.
I think people confuse their home as an investment because of it's supposed market value. It is actually worth nothing if you have no desire to move. Even if you want to move to make a gain, you still have the switching costs of buying a new home, real estate and legal fees and land transfer tax. Then there's the ongoing maintenance of the home that you will be paying even when you're mortgage is paid off. Renters have fewer things to worry about i.e. if the roof falls or the pipes burst they call the building manager. A home owner has the fun and joy of dealing with that themselves. The problem of having so much of your net worth tied up in your home is how to get all that equity out. That's why someone invented reverse mortgages, which are a borderline scam IMO.
You can't really compare stocks and real estate equally as investments since they are very different things. Stocks can be traded instantly virtually anywhere. Real estate is not liquid in comparison. If you look at the very long term of 25 to 30 years, the stock market actually beats the housing market even with all the massive crashes.
http://www.investopedia.com/ask/ans...-historically-stock-market-or-real-estate.asp
Home ownership is expensive (especially if you own an old home). I have a leak in a house I'm leasing and it needs a new roof. Condos are even more expensive due to the monthly fees however both can be used as income property investments. But finding value in Toronto for investment purposes is very difficult now because prices have far outpaced rents. To get decent positive cash flow you need an enormous down payment. Older gents tell me there was a time when you were allowed to put zero money down on an investment property in Toronto and could still make money off it - an opportunity my generation doesn't have.
Most people that rent don't invest, so the suggestion that renting is better only applies to a select few. Most people don't know how to invest, don't want to, or don't have any money left to after paying the rent. Real estate acts as a savings account that at least appreciates at the rate of inflation. Although real estate is not liquid like stocks, you can refinance to access equity. Yes, loans suck no matter what they're called so invest that money wisely.
Everybody pays rent. Homeowners pay "rent" in the form of property taxes (which pay for all the services that make owning worthwhile). If you don't pay it, Big Brother will kick you out of your own house. Can never get away from some life expenses, but you can ease the burden by having others pay for it on your behalf.
Stocks have a higher return if you're talking strictly about the S&P500 however many people don't invest in indexes and lose their shirt trying to beat the market. Just as with real estate, stock investors need to be prepared for periods of decline, sometimes lengthy (though the S&P500 has never lost money over a 15 year period, 15 years is still a long time in life).
Toronto is going to turn into a renter society (like most major international cities) in the near future as property prices become out of reach, so most of this debate will become moot. Stock investing will have to become the default strategy for those that want to build wealth.
Most people that rent don't invest, so the suggestion that renting is better only applies to a select few. Most people don't know how to invest, don't want to, or don't have any money left to after paying the rent. Real estate acts as a savings account that at least appreciates at the rate of inflation. Although real estate is not liquid like stocks, you can refinance to access equity. Yes, loans suck no matter what they're called so invest that money wisely.
Everybody pays rent. Homeowners pay "rent" in the form of property taxes (which pay for all the services that make owning worthwhile). If you don't pay it, Big Brother will kick you out of your own house. Can never get away from some life expenses, but you can ease the burden by having others pay for it on your behalf.
Stocks have a higher return if you're talking strictly about the S&P500 however many people don't invest in indexes and lose their shirt trying to beat the market. Just as with real estate, stock investors need to be prepared for periods of decline, sometimes lengthy (though the S&P500 has never lost money over a 15 year period, 15 years is still a long time in life).
Toronto is going to turn into a renter society (like most major international cities) in the near future as property prices become out of reach, so most of this debate will become moot. Stock investing will have to become the default strategy for those that want to build wealth.
Having previously lived in a condo. and now living in a house, my experience has been that home ownership is a lot more expensive than condo living, even when considering the condo fees.Home ownership is expensive (especially if you own an old home). I have a leak in a house I'm leasing and it needs a new roof. Condos are even more expensive due to the monthly fees however both can be used as income property investments
I got the in before the market took off.
My plan is on retirement to sell and move to a much cheaper area. The plan is to get about 60% of the value out while still owning a downsized place.
So far my friends in financial and real estate all say this is a realistic goal. Obviously timing will be huge but it works both ways.
It should add about 30-40 thousand in income invested safely. Add in my pensions and rrsp/tfsa saving and it should be good.
And in the mean time I'm in toronto, so ttc works alone to save about 7-10 thousand per year in transport costs. Property taxes are half the outlier cities due to density. And I have better quality of life.
That's worth something. It isn't always just about the bucks.
My plan is on retirement to sell and move to a much cheaper area. The plan is to get about 60% of the value out while still owning a downsized place.
So far my friends in financial and real estate all say this is a realistic goal. Obviously timing will be huge but it works both ways.
It should add about 30-40 thousand in income invested safely. Add in my pensions and rrsp/tfsa saving and it should be good.
And in the mean time I'm in toronto, so ttc works alone to save about 7-10 thousand per year in transport costs. Property taxes are half the outlier cities due to density. And I have better quality of life.
That's worth something. It isn't always just about the bucks.
Could be but you need to consider square footage. Your house is likely much larger than your condo, so while you may be paying more for the house, in absolute terms the condo may be much more expensive.Having previously lived in a condo. and now living in a house, my experience has been that home ownership is a lot more expensive than condo living, even when considering the condo fees.
Thanks for this! There is a lot of emotion tied up in the home so people can make bad decisions about it. People get emotionally tied up to the stock market too and either hold on too long or panic sell.There are many smart people on TERB, with lots of great and insightful posts with good arguments. This post is one of the most insightful I've read in a long time.
LOL. You could send out the link to the article to them.You really nailed it... I would send this to my friends/ family if it was not coming from an escort board, lol
You have to be investing regardless if you are a home owner or a renter. You cannot leave all of your net worth tied up in one thing. Don't put all your eggs in one basket.Home ownership is expensive (especially if you own an old home). I have a leak in a house I'm leasing and it needs a new roof. Condos are even more expensive due to the monthly fees however both can be used as income property investments. But finding value in Toronto for investment purposes is very difficult now because prices have far outpaced rents. To get decent positive cash flow you need an enormous down payment. Older gents tell me there was a time when you were allowed to put zero money down on an investment property in Toronto and could still make money off it - an opportunity my generation doesn't have.
Most people that rent don't invest, so the suggestion that renting is better only applies to a select few. Most people don't know how to invest, don't want to, or don't have any money left to after paying the rent. Real estate acts as a savings account that at least appreciates at the rate of inflation. Although real estate is not liquid like stocks, you can refinance to access equity. Yes, loans suck no matter what they're called so invest that money wisely.
Everybody pays rent. Homeowners pay "rent" in the form of property taxes (which pay for all the services that make owning worthwhile). If you don't pay it, Big Brother will kick you out of your own house. Can never get away from some life expenses, but you can ease the burden by having others pay for it on your behalf.
Stocks have a higher return if you're talking strictly about the S&P500 however many people don't invest in indexes and lose their shirt trying to beat the market. Just as with real estate, stock investors need to be prepared for periods of decline, sometimes lengthy (though the S&P500 has never lost money over a 15 year period, 15 years is still a long time in life).
Toronto is going to turn into a renter society (like most major international cities) in the near future as property prices become out of reach, so most of this debate will become moot. Stock investing will have to become the default strategy for those that want to build wealth.
To me, "beating the market" equates to buying low and sell high or capital gains.. You can definitely make money that way, but then you have to time the market. Most people rely on hot tips from friends, tv, etc. and end up buying high and selling low in a panic. I'd rather buy great companies that pay dividends forever and never sell them. Even if a stock tanks, you are still getting the cash flow from dividend to soften the blow until it recovers.
Great strategy. Simple, effective, with little risk.Most people rely on hot tips from friends, tv, etc. and end up buying high and selling low in a panic. I'd rather buy great companies that pay dividends forever and never sell them. Even if a stock tanks, you are still getting the cash flow from dividend to soften the blow until it recovers.
At the same time I think that even this strategy is a hard sell for most people, not just because routinely investing and holding requires discipline but because cash flow from dividends is a pittance unless you have a portfolio worth several hundred thousand dollars (for arguments sake let's agree that a decent portfolio of $300k pays around $1k/month in dividends) Most people struggle to pay their bills, live paycheck to paycheck. This means that most people would have to 1) start investing as soon as they can (as a teenager if possible), and 2) strongly budget for expenses throughout their 20s and 30s to live below their means and invest the difference. I honestly don't know if most people can do this or are even capable of doing it.
I think most people can save and it's really not that "hard"; it's just a habit that people can learn. You have to make a choice to do so and being active (instead of passive) on how we spend money. We even have apps like Mint that will track all of that spending. I think that most people are spending far too much on television; sometimes over $100 a month and most aren't even home to watch it during the week. I know someone that was jobless for almost 2 years, but refused to even reduce the cable package down to the basics. He should have taken that money and picked up new job skills, or even learned how to invest.Great strategy. Simple, effective, with little risk.
At the same time I think that even this strategy is a hard sell for most people, not just because routinely investing and holding requires discipline but because cash flow from dividends is a pittance unless you have a portfolio worth several hundred thousand dollars (for arguments sake let's agree that a decent portfolio of $300k pays around $1k/month in dividends) Most people struggle to pay their bills, live paycheck to paycheck. This means that most people would have to 1) start investing as soon as they can (as a teenager if possible), and 2) strongly budget for expenses throughout their 20s and 30s to live below their means and invest the difference. I honestly don't know if most people can do this or are even capable of doing it.
You're right that a lot of people do not have the discipline to save. We've never been taught to save money at from a young age and you are also right that it's important to start then even with very small amounts. It's definitely a lot harder today because credit cards are being pushed to younger kids and home equity lines of credit are being pushed to adults.
We've all been told for decades to "pay yourself first" or take a chunk of your income (be it 5, 10% or more) and put it away in an account you cannot touch. That in of itself will not make you wealthy, but it is an important step. Everyone poor and wealthy need to do that.
You have it wrong. The straight up higher cost of a house is an absolute. Comparing price as a function of sq. ft. is relative terms.Could be but you need to consider square footage. Your house is likely much larger than your condo, so while you may be paying more for the house, in absolute terms the condo may be much more expensive.
You're right, I mixed up the terms.You have it wrong. The straight up higher cost of a house is an absolute. Comparing price as a function of sq. ft. is relative terms.
If you start worrying about extra costs like taxes and cost of transit/car houses look way more expensive
And you do not "make money" since once you sell unless you move out somewhere like Thunder Bay you pay just as much for the new house as you sold your old house for
And you do not "make money" since once you sell unless you move out somewhere like Thunder Bay you pay just as much for the new house as you sold your old house for
this is interesting....
http://www.theglobeandmail.com/repo...-spark-a-property-tax-revolt/article33672975/
http://www.theglobeandmail.com/repo...-spark-a-property-tax-revolt/article33672975/
