Buying v/s Renting
#46
Re: Buying v/s Renting
The Op has been here 18 months. Long enough to decide
I disagree in the long term. But see above, renting for a year or so when you first arrive makes perfect sense.
Yes, yes, yes, hmm, bolded bit... fairly sure? Or willing to take the risk? The rewards are significant.
I disagree in the long term. But see above, renting for a year or so when you first arrive makes perfect sense.
Yes, yes, yes, hmm, bolded bit... fairly sure? Or willing to take the risk? The rewards are significant.
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.
#47
Nil Desperandum Illegitim
Thread Starter
Joined: Jul 2009
Posts: 71
Re: Buying v/s Renting
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.
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.
#51
Re: Buying v/s Renting
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.
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.
#52
Re: Buying v/s Renting
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.
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.
#53
Re: Buying v/s Renting
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.
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.
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.
Last edited by Novocastrian; Apr 20th 2012 at 2:40 am.
#54
Re: Buying v/s Renting
past 17 years
there's no way I'd now own a roughly $1M value house here and another roughly $250K place in France. (Both mortgage free)
#55
Re: Buying v/s Renting
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.
Last edited by R I C H; Apr 20th 2012 at 3:43 am.
#56
Re: Buying v/s Renting
In Richmond Hill I pay about $6500 in property tax, in France about 1000 euros (~$1300).
#57
Lost in BE Cyberspace
Joined: Nov 2011
Location: Somewhere between Vancouver & St Johns
Posts: 19,851
#58
Re: Buying v/s Renting
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?
R I C H
Seven houses (first in 1995)
similar value to Novo's I suppose
Novocastrian
$6500 in property tax
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?
#59
Joined: Sep 2008
Posts: 12,830
Re: Buying v/s Renting
The great thing about having a farm property - our property tax is $1200 a year
#60
Re: Buying v/s Renting
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.
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.
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.