I don't put too much faith in anyone's predictions, but Garth Turner's logic towards real estate valuations are pretty compelling.. good food for thought
I don't put too much faith in anyone's predictions, but Garth Turner's logic towards real estate valuations are pretty compelling.. good food for thought
I agree totally with you that anyone's opinions if there appears to be evidence behind it are good food for thought. Like most things in life, I find the more people who make good points will only strengthen my opinion.Originally Posted by MoneyMaker
Will my opinion be correct, who knows, but I can always justify it and in most cases give examples of why I disagree with the other side. There's nothing worse, in my opinion, than just taking at face value whatever some 'expert' says.
Garth Turner's ideas towards selling your own personal house to live in a rented apartment are retarded.
You need to live somewhere.
I say buy a modest house pay it off and live there. It doesn't matter if house prices go up or down you need one to keep you out of the cold. So your principal residence is pretty much revenue neutral. Also when you sell your property and put the money in the bank it ceases following the real estate market and you get crappy interest on it. So if I cashed in my house for example and put the money in the bank could i buy back my same house next year for the money plus the interest... I think not. To do so would require timing the real estate market.... oops that might be complicated i think
He also does not take into account a lot of negative things about renting.
Lack of maintenance
Cockroaches
Landlord sells the property
Rent increases
Neighbours
General lack of control
His arguments could apply to a second or other property because this is additional to where you sleep at night.
Statistically renters are much poorer than owners much much more. I think renter's average savings were $2000.
It's inevitable that the "you need to live somewhere" argument always pops up in any rent-vs-own discussion. But, I have a hard time following the logic. Is it saying renters don't have a roof over their head? If you rent a place, aren't you living somewhere?
It really depends. I live in a newer high-rise (~6years), and the strata is reponsible for the building maintenance. There are no biases for or against tenants or owners. Everyone is treated equally. If there's a problem with maintenance, cockroaches, or neighbours, it's a problem for everyone, owners included.He also does not take into account a lot of negative things about renting.
Lack of maintenance
Cockroaches
Landlord sells the property
Rent increases
Neighbours
General lack of control
As for landlord selling the property, that's something outside of the tenant's control, but there're cons for being an owner too. If you're laid off, and find a new job further away, it's pretty easy as a tenant to pack and move to a new home. As an owner, you'd have to list your place, and realtor fees, lawyer fees, and taxes. I think the whole notion of being forced to move because landlord is selling is a wash.
Finally, rent increases (at least in BC) are governed by the Residential Tenancy Act. The rule states that landlords can imposed a maximum yearly increases of inflation + 2%, or about 4%, but most landlords, including mine, don't even take full advantage of that. My cumulative rent increases over the past 2 years is 3.5%, or ~1.75% a year.
Ignore statistics. Just focus on your situation.Statistically renters are much poorer than owners much much more. I think renter's average savings were $2000.
Ignore statistics. Just focus on your situation.
Alright I will
I'm not selling my paid off house which is worth about $300K (i bought at $150K) so that I can put the money in the bank for 3% interest or about $750 per month so that I can go live in a basement apartment somewhere with my two dogs and my husband and my 2 year old. (which is what I could afford if my calculations are correct)
I think that is RETARDED.
What I am saying is the USE of the asset in the case of a primary residence is much more important than fluctuations in the Real Estate market.My house has doubled but even if it were worth half what I paid it it would keep me just as dry.
That's your situation. That's why there's no point in using statistics to generalize what everyone should do. I can give you some numbers in Vancouver where it's financially responsible for some homeowners to sell and rent.Ignore statistics. Just focus on your situation.
Alright I will
Uh. I don't think so. According to my daughter in Vancouver... Bidding Wars... 'they're baaack!'I can give you some numbers in Vancouver where it's financially responsible for some homeowners to sell and rent.
I'm not seeing above average bidding war activities here. Don't you know bidding wars aren't permanent?
The housing boom is primary driven by record low interest rates. I read that more people are opting for lower variable rate mortgages (as opposed to fixed) to keep up with the escalating prices. But variable rates can be fickle. Just check out how quickly they can swing in just a year:
http://www.ingdirect.ca/en/accounts-...alenmtgvar.jsp
The typical homes in Vancouver cost more (excluding principal payments) to own than to rent. To me, the risks of buying a home now at these bubbly prices are akin to buying stocks on margin.
1) Interest rates can go up, thus causing prices to plummet.
2) You might get laid off, thus cutting off your payment stream.
The worst-case-scenario is you're laid off while owing an upside-down mortgage - owe more on the house than what it's worth.
That's why buying an overpriced home in a fragile economy isn't always the brightest move.
You won't get me to disagree with that Financial Jungle BUT that is not what Garth Turner advocates. He says prices are going to fall sell your existing house and rent. That I do not agree with.
If you have managed to scrape up enough cash to buy already and are living there why on earth would you sell? People are doing exactly that selling their houses and renting for no other reason that Garth Turner said to. That I'm afraid is not a great idea.
I live in Toronto so not exactly the sanest real estate market. I bought small and in a pretty crappy neighborhood on a large lot. Thats what I could afford. If I won the lottery I would probably put a one room addition on to put my office in instead of being in the basement apartment. I wouldn't enjoy a bigger house it's just more cleaning and I don't like cleaning.
i'm pretty sure you could afford a maid if you won the lottery.
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