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Did you buy a house in Canada before you moved over instead of renting.

Did you buy a house in Canada before you moved over instead of renting.

Old Apr 20th 2011, 6:22 pm
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Default Re: Did you buy a house in Canada before you moved over instead of renting.

Originally Posted by iaink View Post
Even if you have 50% equity a large amount of your mortgage payment is interest isnt it? My mortgage payment is modest, but 2/3 is interest!
Yes but mortgage interest plays no part in your Net Worth, i.e. if you died tomorrow, what would your estate be worth (presuming life insurance paid off the mortgage)? For most folks having a home is the biggest component of their net worth.

But I agree with other posters, it's not just the financials to look at. IF you can rent over just a few months it works (especially if you have a tonne of money in the bank).
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Old Apr 20th 2011, 6:36 pm
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Default Re: Did you buy a house in Canada before you moved over instead of renting.

Originally Posted by ChrisBoar View Post
Yes but mortgage interest plays no part in your Net Worth, i.e. if you died tomorrow, what would your estate be worth (presuming life insurance paid off the mortgage)? For most folks having a home is the biggest component of their net worth.

But I agree with other posters, it's not just the financials to look at. IF you can rent over just a few months it works (especially if you have a tonne of money in the bank).
Renting makes little financial sense if you are eating into your savings to pay the rent - not a problem if it's for a few months whilst finding a job, but nothing beyond that start up phase. If you are using income then there isn't really much of problem that I can see. Sure you won't be building up equity in your home, but a year or two's worth of that isn't a great deal in the scheme of things.
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Old Apr 20th 2011, 6:42 pm
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Default Re: Did you buy a house in Canada before you moved over instead of renting.

We're renting for at least the first year as we are on a TWP, so buying a house straight away would have been crazy.

Renting suits us at the moment. Having sold our property 2 years ago in the UK we'd rented there before coming out to Canada. I know some people can't possibly bear to rent and have to have their own place immediately, I think there is still a stigma over renting amongst Brits, both at home and abroad.

We could have gone mad and got a huge place but decided on a " just big enough house". The townhouse we're renting isn't perfect for us but for now does just fine, plus being in a condo means no snow clearing or grass cutting!

We are now checking out the local areas in town and finding out where we would like to buy when the time comes. We hope to have a house built and are now looking more subjectively at what features we would really like or need in a Canadian house when the time comes, having had a test run first.

The other big advantage to renting initially is you get to see the local area in all 4 seasons, OK maybe not Spring in Alberta!

Each to their own but for us this is home for now.
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Old Apr 20th 2011, 7:07 pm
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Default Re: Did you buy a house in Canada before you moved over instead of renting.

Originally Posted by ChrisBoar View Post
Yes but mortgage interest plays no part in your Net Worth, i.e. if you died tomorrow, what would your estate be worth (presuming life insurance paid off the mortgage)? For most folks having a home is the biggest component of their net worth.

But I agree with other posters, it's not just the financials to look at. IF you can rent over just a few months it works (especially if you have a tonne of money in the bank).
If I rented and died tomorrow my life insurance would not have to pay off the mortgage Or else I would not have to pay for so much insurance to cover the mortgage.

I figure by the time I pay for all the ongoing maintainence and repair and replacement, property taxes, mortgage interest etc etc etc my house is probably costing me about 7 or 800 a month more than my rent and associated costs did. Thats a lot of money that could be invested elsewhere over the life of the mortgage. Really its a toss up whether its worth buying property rather than renting and investing the difference elsewhere unless you can do it with either a very short mortgage payback, or better yet buy outright. I dont think the average property in Canada increase in value in excess of other investment options. Depends on the marked though of course. Its certainly not clear cut from an inverstment net worth perspective.

Not that has anything in particular with the situation that a new arrival has in trying to avoid buying the wrong place and the associated profit/ loss of offloading it

Last edited by iaink; Apr 20th 2011 at 7:47 pm.
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Old Apr 20th 2011, 8:05 pm
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Default Re: Did you buy a house in Canada before you moved over instead of renting.

Originally Posted by iaink View Post

Thats a lot of money that could be invested elsewhere over the life of the mortgage. Really its a toss up whether its worth buying property rather than renting and investing the difference elsewhere
Well that's a completely different discussion. The biggest advantage to investing in a home is any growth is tax free, unlike just about all other forms of investment growth which are subject to capital gains tax on 50% of the growth. In addition a primary residence passes tax free to a spouse on the other spouses death, unlike unregistered investments.

Our home has increased in value by 87% over 7 years, all tax free should I choose to realise those gains.

Plus you really want to rent somewhere your entire life?
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Old Apr 20th 2011, 8:14 pm
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Default Re: Did you buy a house in Canada before you moved over instead of renting.

Originally Posted by ChrisBoar View Post
Well that's a completely different discussion. The biggest advantage to investing in a home is any growth is tax free, unlike just about all other forms of investment growth which are subject to capital gains tax on 50% of the growth. In addition a primary residence passes tax free to a spouse on the other spouses death, unlike unregistered investments.

Our home has increased in value by 87% over 7 years, all tax free should I choose to realise those gains.

Plus you really want to rent somewhere your entire life?
Although to realise the gains you do lose a home, and the rest of the market increases with you.
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Old Apr 20th 2011, 8:26 pm
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Default Re: Did you buy a house in Canada before you moved over instead of renting.

In a market like Vancouver the rent you pay is usually less than the mortgage payments to buy the equivalent house. Given that you pay about threepence ha'penny off the mortgage principal in the first year this makes renting the cheaper option.
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Old Apr 20th 2011, 8:30 pm
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Default Re: Did you buy a house in Canada before you moved over instead of renting.

Originally Posted by BTJ View Post
Although to realise the gains you do lose a home,
So? I was just pointing out the tax free advantages of growth in your primary residence over investing elsewhere. 'Realising' that tax free growth for most folks means downsizing and putting the balance in the bank when the kids have left home and you are approaching retirement.
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Old Apr 20th 2011, 8:32 pm
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Default Re: Did you buy a house in Canada before you moved over instead of renting.

Originally Posted by JonboyE View Post
In a market like Vancouver the rent you pay is usually less than the mortgage payments to buy the equivalent house.
Well that depends on the amount of your mortgage? We only have small mortgage on our property, cost us $300/month. Our property would cost $1600/month to rent.
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Old Apr 20th 2011, 8:50 pm
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Default Re: Did you buy a house in Canada before you moved over instead of renting.

Originally Posted by ChrisBoar View Post
Plus you really want to rent somewhere your entire life?
I dont, but I know people that do. Their RRSP portfolio is a lot healthier than mine.


Theres an argument for it if you invest the difference in sheltered funds and dont want the bother of either doing home maintainence yourself or the financial burden of paying someone else to do it.

It would be nice to get close to maxing out RRSP and RESP contribution limits. I might stand a chance if it wasnt for my home ownership costs.
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Old Apr 20th 2011, 9:13 pm
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Default Re: Did you buy a house in Canada before you moved over instead of renting.

I think the extremes of views on this thread alone tell me that the decision is purely a personal one. I rather hoped there would be some cookie-cutter solution, a bit like the immigration process where you move from one step to the next .

After taking account of all the common sense stuff like researching areas, finding a reliable realtor and basic maths etc, the other things to consider are personal preference and aversion to risk, as someone else has mentioned.
I have a particular worry about realtors taking advantage of newcomers' lack of local knowledge, and I know I would prefer getting to know areas myself first rather than allowing someone else who has a vested interested in selling, to have such a major input or influence on our first home in canada. That said - we hate renting as you know it's temporary and very unsettling.

I think if we can find somewhere to rent for a few months that would suit us better. Just fingers crossed that we can!

Thank you for all your input and stories - they are an immense help.
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Old Apr 20th 2011, 10:12 pm
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Default Re: Did you buy a house in Canada before you moved over instead of renting.

Originally Posted by BTJ View Post
Although to realise the gains you do lose a home, and the rest of the market increases with you.
Except those days are over unless you live somewhere that crazy chinese people like.
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Old Apr 20th 2011, 10:32 pm
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Default Re: Did you buy a house in Canada before you moved over instead of renting.

Originally Posted by Alan2005 View Post
Except those days are over unless you live somewhere that crazy chinese people like.
But surely a place at particular risk of liquefaction during an Earthquake is a sound investment?
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Old Apr 20th 2011, 11:40 pm
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Default Re: Did you buy a house in Canada before you moved over instead of renting.

I am chuckling at the fellow who knows that his house is worth exactly 87% more than when he bought it.

I bet you're a hoot in the pub.
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Old Apr 20th 2011, 11:44 pm
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Default Re: Did you buy a house in Canada before you moved over instead of renting.

Originally Posted by Jingsamichty View Post
I am chuckling at the fellow who knows that his house is worth exactly 87% more than when he bought it.
Well it was professionally valued at the start of the year as I was taking out a line of credit. What's so strange about knowing the value of your home?
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