helcat12

The rewards are certainly significant, I agree.

Given that I mentioned several variable factors that IMHO should be considered before you buy, the balance against buying can be tipped by two or three not being 100% there.
e.g. you might only have a smaller deposit, you might not be earning quite as much as you would like to have a decent cushion of cash for repairs, prices may be high in your preferred area and it might be debatable whether there will be much upward movement in the near future.

Risk is personal and I think it is good to be cautious in a country where you don't have the support mechanisms you might have had in the UK.

18 months is a decent time to make a decision, I agree, but if the factors don't add up then buying can be a disaster.

lwilli63

There is no such thing as "overpriced" whilst there is someone willing to pay

There is also no such thing as a "steady" job (unless you work in the public sector), companies have a nasty habit of "reorganising / downsizing" at the most inconvenient times.

Personally, I'd minimise my deposit and borrow more. You can get a 5-year fixed rate mortgage for 3.09%. 10-year Canadian bond yields are low which could be an indicator of low interest rates for the foreseeable future. Maybe even invest the rest of the deposit in investment property - provided of course that you are willing to take a punt on the value of property rising.

Aviator

and having to deal with renters!

Almost Canadian

How does rent get paid without this?

lwilli63

Not much a baseball bat couldn't sort out I'm sure

helcat12

It is about flexibility.
If you pay rent, you can move to somewhere cheaper, negotiate, crash with a friend for a while, whatever.

If you are a mortgagee, the mortgage has to be paid and if you default and the lender forecloses then it has financial implications for a long time.

You could try to sell, of course but then you can't choose the timing of that and if the market is slow and you are desperate you may still end up in negative numbers owing money and having no home.

The stress of that situation cannot be underestimated either.

R I C H

Regardless of speculative estimates of return, I couldn't stomach paying off someone else's mortgage. I find it difficult to imagine that I'd have been able to have the same amount of net worth by renting for the past 17 years, rather than paying off my mortgage.

For sure I've had overheads of buying/selling, mowing grass, renovating etc etc, but now I'm mortgage free I can choose how to spend my income rather than continue to have to hand a large part of my salary over to someone else to keep a roof over my head. That's surely a better position to be in for the next 40 years or so than paying rent.

Novocastrian

You look older.


But aside from that 100% +1 in agreement. If I hadn't invested $5K in my first house purchase (in Toronto, 1984) there's no way I'd now own a roughly $1M value house here and another roughly $250K place in France. (Both mortgage free).

Renting (in the long term) is for idiots.

Hawk13

R I C H - Just curious, I take it that your in the same house? Haven't sold and bought a bigger, better house? The changing of houses always moved me up the price chain but no way I could pay off the mortgage that fast (2 kids and an ex that didn't work didn't help). And cudos on not sucking the money out of your house to finance toys - I never did that but know a whole of people who did. Good on ya.

Novocastrian - Seriously dude you must have a really good income to pull that off since 1984. Good on ya. Again, just curious since you put out the house values, what kinda property tax would those run ya?

R I C H

I'm in my 8th house, similar value to Novo's I suppose. Seven houses (first in 1995) I renovated to varying degrees, one I built from scratch. I've sucked out money for toys over time too (though not until I had healthy equity, about 10 years in). No kids though, which makes a big difference. I purchased a 2nd property for rental return the winter before last, so am now concentrating on paying that one off.

Novocastrian

In Richmond Hill I pay about $6500 in property tax, in France about 1000 euros (~$1300).

Former Lancastrian

That seems pretty good and considering the value of the home. Im guessing around half or more is the school tax part or portion.

Hawk13

Now you guys have got my curiousity going.

R I C H I'm not bad at math so that's moving every 2.4 years, have they all been in 'Loops. I'd bet that you moved based on the housing cycle. I tried that early on and it was working until the, now ex, got tired of moving and then toss in kids. It's an awesome plan and nice to see someone that pulled it off.
is that before the recession say 3-4 years ago or now, 'cus with a million dollar house in the Okanagan you would have lost a few bucks in your equity. And, before you say it, you're right, you just have to ride the trend and it will come back up, may take 5 -10 years but it will. Good time to buy that investment property if you have the funds, though.

Novocastrian Don't think I could stomache paying that but hey to each their own.

So, back to the original question, rent/buy. If you have the funds and plan on staying for awhile, now is the time to get in. But if you're like me and aren't sure if you'll be in Canada next year don't bother, rent.

Oh, and on the subject of GOLD and capital gains, that only applies if you plan on staying here. And if you think the government wouldn't try and take their pound of flesh out of you with property, you're mistaken. Plus, isn't it more fun to buy a parrot, have a few gold coins lying around and pretend you're a pirate?

Aviator

The great thing about having a farm property - our property tax is $1200 a year

R I C H

5 houses in the UK, prior to emigrating in '05, 3 here in Kamloops. Yes, on the whole I've been lucky enough to buy sell at the right times, but I think more importantly bought houses at the right prices.

Valuation of where I reside now is based on current prices. The investment property is in Sun Peaks ski resort and I bought it at the lowest market point there in 10 years - as you say timing is everything. Five years ago I looked at property there and thought the opportunity had passed me by. The economic cycle worked nicely though.

Aviator makes a good point about rural property - I'm out of city limits, so yearly taxes are $2,500, approx half of an equivalent acreage/house a couple of kms closer to the city. If I wanted to get farm status they'd be similar to his.