# Which way to turn in Kelowna?



## Rainyday (Apr 15, 2011)

I'll be concise:

50 yrs old, single, gross 80k per annum, 2 grown children.

Liquid assets: $48,000
Non liquid :$847,000 - vacation property, life insurance cash value, pension,
rrsp's

Personal assets: $585,000 - home, contents, vehicles

Total assets:$1,480,000 

Liabilities: NONE, no debt period.

Dilemma is this:

I live 50 miles from work each way. I could save a minimum of $300 a month in fuel and spend close to two hours less in the vehicle each day if I was to move closer to work. 

As detailed above, everything I have is owned outright. My thought is to buy a single family detached home in Kelowna, (no strata's of any sort for me) and my adult daughter will rent my current home located out of town at a fair rate to enable her to save some money .

Considering homes in the 500k range to live in for 5 to 7 yeras until I retire.

How would you finance this situation? Type of mortage? Smith Manoeuver? How to leverage assets in my favour?

I love this home as I have lived in it for 25 years, bought it twice  and it has a great view. Tired of throwing so much time and money into my vehicle just to go to work each day.

I think there are a few really bright investors on these pages and I would certianly appreciate your opinions.

Thanks, David.


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## I'm Howard (Oct 13, 2010)

I would rent, why take on the risk that you lose money on your investments, take a cautious approach, why add RE which you might have trouble selling in a few years.?

Do you really want the worry of stocks etc when you are a few years from hanging it up, Bad investments could really mess things up.

Bulls and Bears make money on the Stock Market, Pigs get slaughtered.

Brother in Salmon Arm, it is pretty country.


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## kcowan (Jul 1, 2010)

I would rent too. Let daughter payments cover it so you are whole. I thought RE in Kelowna was declining because of lack of demand from Alberta?


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## Berubeland (Sep 6, 2009)

Because of your short time horizon before retirement I would consider renting.

5-7 years will leave you with 25-23 years of mortgage to pay at a time when you probably would prefer not to. 

If RE values were to decline you don't have enough time to recover before selling.


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## Guest (Apr 15, 2011)

I would considering renting too ... a one bedroom or bachelor, and head home for the weekends. Why in my day ...  ... we'd rent a room for the work week ... 4 days on, 3 days off ... and then there were those 6 days a week, 12 hours a day work weeks ...


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## Rainyday (Apr 15, 2011)

Great perspective! Thanks.

Interesting how several bank associates, 2 RE agents and a property management officer all nodded their heads in agreement as I suggested my completely impulsive and un-educated plan to them. Perhaps they stood to gain? You think?

I suspect all these years of paying loans and mortages and support and bills and groceries and utilities has conditioned me to think that is how one gets ahead. Time to take a different approach.....right?

Instead of turning my world upside down with worry and moving and new expenses and you name it, perhaps I will sit tight. I can offer my daughter some financial help, buy a fuel efficient vehicle and use the driving time to appreciate how fortunate I am not to have a mortage.

Ps; great sense of humour rikk! uphill both ways right?

Thanks again to you four contributors. Interesting how four complete strangers put forth the same opinion which truly has my best interest in mind. Don't get me wrong, this comes as no surprise, it just re-affirms there are alot of sharks out there looking for a good feed.


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## dogcom (May 23, 2009)

Rent does sound like a no brainer here since you want to keep your property. So your re needs are already in place. Your daughter rents cheaper helping her and you save a large amount on car expenses and save a lot of commuting time.


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## ghostryder (Apr 5, 2009)

Rainyday said:


> Instead of turning my world upside down with worry and moving and new expenses and you name it, perhaps I will sit tight. I can offer my daughter some financial help, buy a fuel efficient vehicle and use the driving time to appreciate how fortunate I am not to have a mortage.



While no one likes "throwing money away" on fuel & vehicle maintenance, replacing the vehicle if/when necessary you should compare what this costs you vs. renting as others have suggested.

Commuting may be the cheaper option. You say you could save $300 by being closer to work. Could you rent a place for $300? Probably not.

I realize that your time is worth something too, but only you can put a value on that.


If you do choose to rent a place you can brag that you have a http://en.wikipedia.org/wiki/Pied_a_terre


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## kcowan (Jul 1, 2010)

I you decide to sit tight, you need to reframe the driving time. Get some lessons on CD that will teach you about something (like another language or investing or books on CD?)

I did this during a one hour commute in the GTA and I learned a great deal. In fact, when the commute went away due to a job change, I missed that commute time I had developed for so many interesting things.


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## financialnoob (Feb 26, 2011)

ghostryder said:


> While no one likes "throwing money away" on fuel & vehicle maintenance, replacing the vehicle if/when necessary you should compare what this costs you vs. renting as others have suggested.
> 
> Commuting may be the cheaper option. You say you could save $300 by being closer to work. Could you rent a place for $300? Probably not.
> 
> ...


The other side of the equation is that his daughter would be renting out the old place at a reasonable rate. So you have to factor that in as well.

I have no idea what real estate rates are like out west, but if it's close to Toronto, the equation looks pretty good. Say daughter rents out the house for $500/month, which is quite cheap. Then factor in the $300/month in gas, and you could find a place for $800 to $1,000/month to rent in the city. There could be savings in insurance premiums that may make it a cost-neutral solution while helping out his daughter and saving the time on the commute.


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