# To buy or rent when "owning" equals rental payment



## adrienne (Mar 27, 2015)

Hello all, 

I've posted in an adjoining forum related to renting vs. buying. I've heard the common sense response of "when it is cheaper to rent than buy, rent." But what about when renting and owning a similar property (including additional costs such as utilities, condo fees if applicable, etc.) are pretty much equal and the property is looked at as a home rather than an investment, with the intent to raise a family there long term? 

Fiance and I are in a sweet spot with a chunk of money saved, no debt and low overhead. We have a small family and are looking to rent a place in a community in which we want to send our children to school, that is more suitable to having a family; rather than a unit with neighbors above or below. Turns out that the type of property we would consider is pretty much in line for what we would pay if we were paying our own mortgage rather than the mortgage of some else. I feel like we have been humming and hawing the whole year as we already know the general areas/communities we'd love to live long term. We saved all of this money on our own and were given no handouts, not provided a lot of financial guidance from family; and so it just feels as if there is more risk involved if that makes sense. 

Any insight is much appreciated.


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## andrewf (Mar 1, 2010)

If you are looking at it as a home, this becomes a consumption decision, not an investment decision.


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## Just a Guy (Mar 27, 2012)

Depends on the area. 

In most of Canada, the market is overpriced. As stated in other threads, Calgary is probably on the verge of a major correction as oil prices have fallen and people are beginning to realize that they are stuck with a house they can't afford and can't sell at the price they believe it's worth. If oil doesn't recover soon, which doesn't look likely to happen, you'll start to see people being forced to sell and prices could tumble significantly. So, if you rent a few years in Calgary, the price of the home you want could drop significantly.

If the interest rates rise, real estate across Canada will crash as well, as the payment increases which come up at the renewal time outpace the ability to pay for it. Of course, that depends on which government gets elected probably...I don't see interest rates increasing, but it has to happen eventually. When it does, there will be blood in the water. 

Long ramble short, the market is overpriced and built on shaky ground, unexpected events could start a local correction which would make renting short term more beneficial than owning. Of course, places like Vancouver, and maybe the GTA have other factors which allow them to buck the trend.


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## tkirk62 (Jul 1, 2015)

You also need to account for the opportunity cost of the down payment. If you buy a $250K house with a down payment, that is $50K that you can't have working for you. Invested at 5% annual return, that means owning instead of renting "costs" an additional $200ish dollars a month ($2500 in the first year). Then keep in mind that the next year it will be a little bit more with compounding, etc. 

It sounds like you know the kind of place you want to live for the long term, so maybe the opportunity cost is worth it.


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## rikk (May 28, 2012)

adrienne said:


> Hello all,
> 
> I've posted in an adjoining forum related to renting vs. buying. I've heard the common sense response of "when it is cheaper to rent than buy, rent." But what about when renting and owning a similar property (including additional costs such as utilities, condo fees if applicable, etc.) are pretty much equal and the property is looked at as a home rather than an investment, with the intent to raise a family there long term?


Too easy ... if the home is long term, then the ups and downs of the market are not a concern. Funny ... to me anyway ... how investors will say that about investing in equities, but the exact opposite when it comes to buying a home. A home, if you're the least bit handy, can be renovated, modified to better suit your family with time as your family grows. I've watched the couple move in across the street about 6 years ago, patch, paint, renovate, then came the 2 boys, learning to ride bikes, then the hockey nets/basketball hoops in the yard ... well, you get the picture. Home ownerships has it's advantages over renting, especially for a family, my opinion.


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## Emjay85 (Nov 9, 2014)

andrewf said:


> If you are looking at it as a home, this becomes a consumption decision, not an investment decision.


Agreed.


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## Just a Guy (Mar 27, 2012)

rikk said:


> Too easy ... if the home is long term, then the ups and downs of the market are not a concern. Funny ... to me anyway ... how investors will say that about investing in equities, but the exact opposite when it comes to buying a home.


I don't know many real equity investors who'd recommend buying at the top of a bull market either. Ask people who invested in Japanese stocks 20 years ago just before their crash how the recovery is going with the ebbs and flows...they're still underwater.


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## Butters (Apr 20, 2012)

What I'm hearing is....
A. If we buy we pay $1000 a month
B. If we rent we pay $1000 a month


The difference is with A you need to have a down payment, and have lawyer, land transfer fees and real estate fees. So for the first few years, you won't actually be gaining any capital, but rather just paying these fees and interest.

with B. you can invest your money in the market, and have the flexibility to change houses(could be a disadvantage too), and not have to pay for maintenance to the house (roof, furnace, repairs, etc...).

like tkirk62 said, if you like the area, option A. would be worth checking into if you wish to stay there for more than 5 years (preferably 10+)


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## besmartrich (Jan 11, 2015)

Just a Guy said:


> Depends on the area.
> 
> In most of Canada, the market is overpriced. As stated in other threads, Calgary is probably on the verge of a major correction as oil prices have fallen and people are beginning to realize that they are stuck with a house they can't afford and can't sell at the price they believe it's worth. If oil doesn't recover soon, which doesn't look likely to happen, you'll start to see people being forced to sell and prices could tumble significantly. So, if you rent a few years in Calgary, the price of the home you want could drop significantly.
> 
> ...


Well said! I am with you on this. Canadian Real Estate is overpriced especially Vancouver, Toronto and Calgary. Things will happen sooner or later and it would be worthwhile to wait a couple more years that will save 100K or higher depending on what we are buying!


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## londoncalling (Sep 17, 2011)

andrewf said:


> If you are looking at it as a home, this becomes a consumption decision, not an investment decision.


From what OP gave for info Andrew's post is the only reply that needs to be considered. 7 years ago when we bought our family home I had the same worries. People keep saying when interest rates rise we are all in trouble. |This kept me out of the market for 2 years. A small rate hike will not bankrupt you if you don't buy more home than you can afford. Lock in to a long term mortgage when rates start to rise. It is unlikely rates will rise dramatically in the short term. If your family are savers and you have 0 debt you should be able to crush that mortgage in a hurry. If you plan to be in that home long term 10+ years it is a no brainer. There is data to support either side of this argument from an investing standpoint. What are you going to remember in 20 years? the extra $ you (possibly) saved buy waiting or your kids playing in their own back yard. If you can afford the house with a reserve fund for emergencies purchasing seems to be the right choice in this case. What's to say rent won't keep rising while you wait.

Cheers


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## PrairieGal (Apr 2, 2011)

If you buy, eventually that house will be paid for, and you will be "home free". My house is paid for, and it only costs me taxes, insurance and maintenance. Plus, I have an asset that is worth a considerable amount should I ever decide to sell.

Not the case if you rent.


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## sags (May 15, 2010)

I find the concept of micro-condos interesting.

Efficiently designed for living........and shared ownership of multi-million dollar amenities, located in the centre of activity..........is a compelling proposition.

Smaller spaces, lower taxes, lower condo fees, lower prices.............

Buying versus renting those may be a more compelling proposition than for a single family home.


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## OnlyMyOpinion (Sep 1, 2013)

sags said:


> I find the concept of micro-condos interesting....Buying versus renting those may be a more compelling proposition than for a single family home.


But likely not a good fit if you have a young, growing family?


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## lost in space (Aug 31, 2015)

When it comes to owning as Garth often says a house is the most emotional of investments and to be honest I tend to agree. Many times renting may make more sense than buying but the heart says buy. That’s because a house is different . There’s an intangible to owing that you don’t get with renting. Plus renting can be a real pain in the ***, pardon my French. My brother in law, 4 kids, one disabled, sold their place just before the big run up in prices and then spent the last 15 years renting. It seemed every two to three years they had to move again, twice back into the same place. Eventually with some help from us and her parents they bought the place they were renting and said never rent. Now having said that we bought two places one in a bidding wars and the other with 100% financing. In the end it worked out but it was rough for a while.

So the question of whether to rent or buy will come down to several things.


How comfortable do you feel investing? Is all your money sitting in the orange guys shorts or are you an investor with a track record. 

How good are you at savings? We’re in a bear market right now and loads of great stocks and some not so great ones are one sale

Do you mind renting and getting the “oh yeah you’re throwing your money away” look?

What about rental properties? This is what the wife and I do, we rent and own several rental properties. Best of both worlds

Finally, depending on the place you rent are you willing to fight the landlord (force him to get an eviction order) if he decides to kick you out in two years. 

Ultimately all things being equal I’m with Londoncalling, unless you’re buying in Vancouver you can’t really go wrong buying a house with a good down payment. Real Estate is all about location location location, so skip a condo and buy a house. 

do up date us at some point.


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## none (Jan 15, 2013)

lost in space said:


> There’s an intangible to owing that you don’t get with renting.


I always find this line of thinking. I know VERY few people who actually own their places. Most of them just rent them from banks.


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## none (Jan 15, 2013)

PrairieGal said:


> If you buy, eventually that house will be paid for, and you will be "home free". My house is paid for, and it only costs me taxes, insurance and maintenance. Plus, I have an asset that is worth a considerable amount should I ever decide to sell.
> 
> Not the case if you rent.


That's not the case. The house costs you handsomely in opportunity costs. Fro example, a 500K house costs you about 35K a year in opportunity costs. Then there's taxes, maintenance, insurance etc etc which likely pushes it close to 50K a year or the equivalent of 3000-4000 a month in rent.

Owning a house is almost exactly like renting in so many ways it's almost silly to differentiate.


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## none (Jan 15, 2013)

adrienne said:


> Any insight is much appreciated.


Here's a great rent vs buy calc i put in another thread. It's always hard to compare 'apples to apples'. Lots of people simply compare a 25 year mortgage payment to that rental rate and consider those to be equivalent. This is simply not true.

For example, if you are considering a 500K house that will effectively average out with 2% growth over the next 25 years (we'll go with the 'soft landing hypothesis', 7% return in the market (historical average) the equivalent rent is $2350 per month. I don't know about you but most places i know $2350 rents a MUCH nice place than a 500K house!


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## Eclectic12 (Oct 20, 2010)

none said:


> lost in space said:
> 
> 
> > When it comes to owning as Garth often says a house is the most emotional of investments and to be honest I tend to agree ...
> ...


True ... though at the same time, I know few who rent who have allocated anything close to similar amounts into their investment portfolio. That's where IMO, part of the situation is to know oneself.


As for the intangibles to buying, there's also the opportunity to remake, landscape etc. to what one wants ... which one if far more limited in a rental. Bottom line IMO is that $$$ is only part of a complex picture.



Cheers


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## none (Jan 15, 2013)

Yeah but telling someone to buy a house because they're dumb I don''t think is very helpful either. Start with the cold calculated math then move onto the warm fuzzies.

I like renting for the exact opposite. When I owned I always had a list of renos i wanted to do. Now I don't have that list so it isn't always hanging over my head and killing me weekends. 

Anyway, I was just showing the math - warm fuzzies and cleaning gutters are personal choices.


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## OnlyMyOpinion (Sep 1, 2013)

Eclectic12 said:


> True ... though at the same time, I know few who rent who have allocated anything close to similar amounts into their investment portfolio. That's where IMO, part of the situation is to know oneself.


^+1 
As others have noted, this is firstly a lifestyle decision, not a dollars and cents decision. In this case the OP has a young family, is looking for a 'home' and to settle in a neighbourhood they favour. Someone else might be motivated by not being 'tied down' and by saving as much as possible.

Preet's spreadsheet is noted above. His conclusion is that _"I also believe that most people would be better off as owners." _...
_"If you just want my opinion on what the average person should do, it’s this: Save up a healthy downpayment, make sure you find a place you don’t reasonably expect to move from for AT LEAST 10 years, buy a house that’s about 2/3 of the size of the mortgage you’re pre-approved for so you can be an owner and have money left over to invest in the stock/bond markets as well."_

http://wheredoesallmymoneygo.com/rent-versus-buy-calculator )


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## none (Jan 15, 2013)

OnlyMyOpinion said:


> ^+1
> As others have noted, this is firstly a lifestyle decision, not a dollars and cents decision. In this case the OP has a young family, is looking for a 'home' and to settle in a neighbourhood they favour. Someone else might be motivated by not being 'tied down' and by saving as much as possible.


I say the lifestyle decision comes second. For example, I want a new Tesla - for my lifestyle - should I just go buy it then? That really depends on how much money I have and how much I make -- THEN -- you decide if you can afford it and if the opportunity cost is acceptable to justify its purchase.

use the calculator - if it turns out that a house will cost you 400K more than renting over the next 25 years and you consider it worth it then that's fine - have at 'er. To simply ignore the math and chalk it up to fulfilling an emotional need without understanding it's costs is foolish and juvenile.


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## OnlyMyOpinion (Sep 1, 2013)

But the OP indicated they had sufficient downpayment saved and that monthly costs were comparable, i.e. they had already determined they could afford it. We are past that decision point.
As Preet himself notes, the assumptions you make to compare owning a house over 25 yrs versus renting and investing are fraught with uncertainty. Either may come out ahead in pure dollar terms. 
So at this point what determines your decision if it is not what I call a 'lifestyle choice'?


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## none (Jan 15, 2013)

Well i don't think the costs are comparable - as he was likely comparing mortgage payment to rent which is plane wrong. Rather he should (as I said) see that owning will most likely cost him 400K more amortized over 25 years (for example) and then decide whether he can afford it.

Yes preet says that but the calculator has an MCMC algorithm to quantify this uncertainty - again more information to make that decision.

Lifestyle choices are not necessities but based on whether you can afford it or not. Hit the number first and go from there.


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## peterk (May 16, 2010)

One of the few subjects I can agree with none on 

It's pretty easy to convince ones self of whatever he wants and that buying a house is a "common sense rule"... after a 35 year bull run in bonds and housing prices, that is. What happens when the party ends and rates start to rise?

Check out this chart explaining how the generation Y/echo boom buyers have been fueling the past 10 years in housing growth, and how they're numbers are about to drop off. significantly.








Look at that scary drop in birth rate for the under 20s (Gen X's kids). Who exactly is going to be buying the those townhouses from Gen Y when it's time for them to move into grandma's Mcmansion in the suburbs?

http://business.financialpost.com/personal-finance/mortgages-real-estate/why-canadas-housing-boom-could-be-in-for-a-big-echo


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## none (Jan 15, 2013)

We agree? Yikes. Interesting read.

I do find the whole house thing so very very strange. 

There's a bit of an irony in that you are supposed to be an adult to buy a house but seemingly you do it more to fullfill an emotional need more than anything else which I think is more of a hallmark of a child. Super weird.


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## OnlyMyOpinion (Sep 1, 2013)

Peterk, thanks for that article link. Demographics is interesting stuff.
You ask _"What happens when the party ends and rates start to rise?"_ I'd say you finish paying off your mortgage asap. Presumably that is already part of your plan. 
_"Who exactly is going to be buying the those townhouses?"_ I have to admit my bias here. As a long-term home for raising my family and ultimately retiring in, I would only purchase a single detached property. What it is worth is moot and will likely only be realized by the executor of our estate. 
In the meantime it is the roof over our head, where we raised a family, sleep, cook, work-out, renovate, relax, garden, woodwork, and entertain family & friends. All super weird, childish pursuits apparently?
That is the challenge with this thread subject. We can't offer the OP a yes-no answer. All we can do is offer our opinion based on our own experiences and situation.


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## Just a Guy (Mar 27, 2012)

You know, everyone talks about "paying off the mortgage"...yet many people continually refinance their homes to pay off other debts, tap the "equity", pay for a vacation, children's education, etc. Then there are those who "upgrade" their houses either by moving or renovating. Most of the people I know are still
Making mortgage payments long after 25 years of home ownership...I don't know many people who are actually mortgage free.


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## OnlyMyOpinion (Sep 1, 2013)

Just a Guy said:


> You know, everyone talks about "paying off the mortgage"...yet many people continually refinance their homes to pay off other debts, tap the "equity", pay for a vacation, children's education, etc. Then there are those who "upgrade" their houses either by moving or renovating. Most of the people I know are still making mortgage payments long after 25 years of home ownership...I don't know many people who are actually mortgage free.


Interesting, I can't think of anyone we know who still has a mortgage, and no one took anywhere near 25 yrs to pay it off. That goes for our vintage as well as our kids and younger nieces & nephews.


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## adrienne (Mar 27, 2015)

Hey everyone

Thanks so much for all of the input and advice. Trust me when I say that if we ever decide to buy into a mortgage, it will not be a decision made for the wrong reasons. We are not the kind of people who need to own; we are rational, thoughtful and extremely cautious. So much so, we may just never take the 'plunge.'

I loved the comment made by another poster who said most people he knows don't 'own' their homes, they just rent from the bank. Isn't that the truth? My fiance looks at mortgages in the exact same way and he has expressed this exact sentiment. 

I realize that perhaps I am trivializing the costs to rent vs. the costs to own. I suppose I am just thinking in generalities in terms of fixed costs, with maintenance costs being occasional rather than month to month recurrent obligations, if that makes sense. 

I've done a bit of reading, looked at mortgage calculators and even increased interest amounts significantly to see how those month to month numbers add up. Regardless of the fact that there is no exact number I can obtain in this kind of an example, I still feel good about our financial situation even now. Even though I am working a fraction of what I was before we had our daughter, (I am home with her full-time and work only about 6 shifts per month around her dad's schedule). We currently save a decent percentage of our family's monthly income; plus, I am able to work more and make more when it suits our needs as a family; receive a promotion at work and still work as little or as much as desired, etc. 

I really just want to say thanks for all of the input provided. It's great to get advice from people who know about the market and all its variables, while still being upfront and honest about it all.


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## none (Jan 15, 2013)

adrienne said:


> I loved the comment made by another poster who said most people he knows don't 'own' their homes, they just rent from the bank. Isn't that the truth? My fiance looks at mortgages in the exact same way and he has expressed this exact sentiment.


Oh stop it, you'll only encourage me. :watermelon::watermelon::watermelon:


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## lost in space (Aug 31, 2015)

*397*



OnlyMyOpinion said:


> Interesting, I can't think of anyone we know who still has a mortgage, and no one took anywhere near 25 yrs to pay it off. That goes for our vintage as well as our kids and younger nieces & nephews.


But ask them if they have a line of credit, pretty much everyone does. 



adrienne said:


> Hey everyone
> 
> My fiance looks at mortgages in the exact same way and he has expressed this exact sentiment.


I don't think I need to tell you that you're very unusual (in that you're both on the same page)

Here's a quote from Bankers Anonymous I just love. 


I


> think wealthy means not so much having “**** You Money,” or reaching your “Number,” but rather having the option to choose work that you would do regardless of the level of compensation.
> 
> So here it is, my definition of wealthy: If you have enough assets plus passive income to cover your personal lifestyle expenses for the rest of your life, and that money allows you to work at something you love – without concern for the amount of compensation – then you are wealthy.


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## Eclectic12 (Oct 20, 2010)

lost in space said:


> OnlyMyOpinion said:
> 
> 
> > Interesting, I can't think of anyone we know who still has a mortgage, and no one took anywhere near 25 yrs to pay it off. That goes for our vintage as well as our kids and younger nieces & nephews.
> ...


That's where knowing oneself and having objective numbers comes into play.

I know people who have a mortgage, HELOC, LOC and multiple CC's ... the CC's are the only one's that regularly are used where it's paid off every month. The mortgage has been $0 for years and the HELOC was used something like five years ago where it was paid off in three months.

It is clear from the debt numbers that this is not the average situation ... but where one is not average - who cares?


It's the same as the idea of "renting allows more income to be used for investing". The numbers will prove it on paper but unless one is going to follow through - does it make any difference?


The math clearly proves that starting early to invest ... particularly when one is young, has disposable income and few constraints yet it seems pretty clear that few are doing so.


Cheers


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## fraser (May 15, 2010)

Is this decision not based on, among other things, the projected real estate market in your area AND you investment time horizon?

We sold our house in Calgary 3 years ago. Put the proceeds in the market and did very well. We did not buy because everyone else was buying, then oil crashed. Maybe we will buy in the New Year now that people are selling and fewer are buying. 

Had we been in Vancouver or Toronto this may not have worked out so well for us. One size does not fit everyone.


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## sags (May 15, 2010)

Home ownership is emotional and it is a little irrational.

We always owned homes when our son was growing up. A while ago, one of his friends where we live now (different city than he grew up in) commented that he had never lived in a house.

He said he always lived in a townhouse that his parents rented. He said it with such regret that I asked him if he had a bedroom..........and he said yes. I asked him if they had a Christmas tree and he said yes. I asked him if they had television and he said yes. Then I told him he lived exactly the same as our son did in our homes with backyards. Our son agreed with me.

I can agree with the "raising a family in a house" if the only other option is a high rise apartment, but people can rent single family homes or townhouses today.

Our grandson comes to visit and has access to the private community centre included in our rent. He takes swimming lessons in the indoor pool, and enjoyed the outdoor pool and kids splash pad area in the summer. They organize events for the kids at Easter and Christmas and have karate and other classes for them to take.

He has more things to do in our rented townhouse than our son did living in a single family home in a new subdivision and nothing to do.

It also depends on where the home is located. Is it better to rent a home in a prime area or own a home in a worse area ?

Not to say owning a home isn't a good idea, and give full kudos to those who pay off their homes in short order and save for retirement.

But those people are rare. Most of the people I knew with homes, and I worked with a lot of them, continually refinanced their homes to subsidize their lifestyles.

There were a handful who owned their homes, but the vast majority were buying furniture at Leons and trying to scrape up the money to pay for it a year later.

For those who paid off their homes it is a blessing. For those who have been paying all those years and have spent all the equity...........it is a ball and chain.

The banks love home ownership though, as they post record profits year after year.

We have considered buying a home again, but are getting a little too old for that now, and wouldn't find a similar place for equal rent.

The kinds of homes we would feel comfortable buying............aren't the homes I would want to buy.

I have come to accept that I want to buy a home that we can't afford.

This is the kind of home I want............but don't have $3 million to spend...............

http://www.soprovich.com/listings/6008-eagleridge-drive/

My wife's cousin is a neighbour, but she bought in 1967 when prices were normal.

It looks like a pretty nice place to live. I can see why people are willing to spend that kind of money for homes like this, if they have the money just sitting around.

Maybe an NHL hockey player.........my son's friend earns $4 million a year but he plays in LA.


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## fraser (May 15, 2010)

Sometimes you do not realize how much a house is costing you to simply turn the key. We found out when we sold and travelled for an extended period. No more property tax,($500 month), no more large utility bills ($250 month), no more house insurance ($150 month), no more mtce ($400 month est), etc. Plus the opportunity cost of not investing in alternate assets AND the ability to sell those assets quickly.

After renting for two-three years the picture is different for us. Spouse wants her own walls, her own home but after watching the market decline for a year and more choice come on the market she is not as anxious to buy as she previously was. Maybe it is a 'homing' instinct... she hails from a small town where everyone owns their own home. 

When I started looking at buying a condo in cold hard financial terms it became very apparent that where we live, at that point in time, buying a condo made poor financial sense. But our time horizon is different than say, someone with two or three small children. So we are still renting. I am enjoying it very much. Renting has been a financially rewarding experience for us.


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## none (Jan 15, 2013)

I found a great deal on a used BBQ (it was a very high end one - I own one already) and I sent the craiglist add to all of my friend (who are home owners). All of them couldn't afford it even though it was only $500. There are A LOT of flat broke home bank-renters.


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## sags (May 15, 2010)

Our last home was in a new subdivision and we had neighbour homes that sold 3 times during the 12 years we lived there.

Some of them didn't get curtains up on the windows.

Buying a home is great.........but you have to be able to afford it.

People are stretching themselves way too thin these days financially.

Selling your home can be a difficult choice emotionally at any time. Having the bank take it from you would be very traumatic.


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## Mechanic (Oct 29, 2013)

Home equity can also have many benefits. We, like many others, tapped our equity a few times and refinanced along the way. Also used our equity as collateral for business ventures. Then as time progressed we paid off the mortgage. Then at a later date used savings and a heloc on the paid off home to purchase another property. Now we find ourselves retired with two paid off properties that we can sell and use the proceeds as we see fit. Renting is fine if you are new to an area and/or can't find a suitable property. I read a comment earlier about putting a $50k down payment in investments and getting a 5 or 7% return but I think that is more of a dream than reality.


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## none (Jan 15, 2013)

Mechanic said:


> Home equity can also have many benefits. We, like many others, tapped our equity a few times and refinanced along the way. Also used our equity as collateral for business ventures. Then as time progressed we paid off the mortgage. Then at a later date used savings and a heloc on the paid off home to purchase another property. Now we find ourselves retired with two paid off properties that we can sell and use the proceeds as we see fit. Renting is fine if you are new to an area and/or can't find a suitable property. I read a comment earlier about putting a $50k down payment in investments and getting a 5 or 7% return but I think that is more of a dream than reality.


The long term average (20 year) of an index portfolio is 7%.

Yes buying houses over the last 10 years has resulted in at least 2 generations of gains extraction from the market


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## Emjay85 (Nov 9, 2014)

none said:


> I found a great deal on a used BBQ (it was a very high end one - I own one already) and I sent the craiglist add to all of my friend (who are home owners). All of them couldn't afford it even though it was only $500. There are A LOT of flat broke home bank-renters.


Or maybe they just didn't want that bbq.


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## none (Jan 15, 2013)

Emjay85 said:


> Or maybe they just didn't want that bbq.


No, they wanted it. Trust me, if you have any foodie in you and you can pick up a championship level BBQ fro $500 you go for it.

I do know quite a few families with 150K+ incomes and are living paycheck to paycheck because of over buying housing. I think it's nuts.


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## OnlyMyOpinion (Sep 1, 2013)

Then you know a lot of families with no financial sense. Maybe it is because they are buying expensive used barbeques when they already have a perfectly good one  
If they rented instead, it is likely they would be in the same boat. A number of posts have noted homeowners with refinanced mortgages, hloc's, credit card debt, etc. That has nothing to do with owning a house though, that has to do with living beyond your means. I'll grant that purchasing more house than they should can be part of that problem, but that doesn't give renting the edge to buying a house. 
If we are talking about the pricey housing market and whether people should be renting rather than buying and over-extending themselves that is a different issue.


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## none (Jan 15, 2013)

OnlyMyOpinion said:


> Then you know a lot of families with no financial sense.


I do - I know a lot of average Canadians who have fallen into the 'buy as much as you can because RE only goes up!". _<head-shake>_


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## Just a Guy (Mar 27, 2012)

I don't know many Canadians who have any financial sense. People on this board are the anomaly not the norm. Don't get me wrong, I know many wealthy people, but they are still the minority by far. Heck, most people think a paycheque is the only way to make money...unless you count government money (ei, welfare, etc.) or benefits.


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## none (Jan 15, 2013)

Just a Guy said:


> I don't know many Canadians who have any financial sense. People on this board are the anomaly not the norm.



You give people here too much credit. Just read through this thread...... :/


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## fraser (May 15, 2010)

Depending on the situation, there may be a strong argument for renting.

The issue then becomes does/will the individual have the discipline to take the difference between rent and what otherwise would have been spent on mortgage, insurance, mtce, etc and actually save it. Or would the delta be spent on cars, vacations, consumer items. I strongly suspect the latter. So in once sense for many, owning a home/paying a mortgage may in fact be a way of forced savings. Even if it is an inefficient method.


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## none (Jan 15, 2013)

I just think that's another lame argument to support buying. Someone who takes the time to actually ask that question - certainly has the foresight to not go hog wild renovating their kitchens, getting a HELOC and buying new cars etc stc.. oh wait, i got mixed up there for a minute...


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## Emjay85 (Nov 9, 2014)

none said:


> You give people here too much credit. Just read through this thread...... :/


Too much credit? Because their opinions differ from yours?


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## Just a Guy (Mar 27, 2012)

Probably more the ones who are asking the questions...at least they are smart enough to realize they don't know things and want to change.


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## adrienne (Mar 27, 2015)

I've definitely heard the term "house poor," and that is not the situation we want to be in, nor will we be in. Honestly, I have helped save a mere fraction of the money for our "down payment," as it's mostly been saved due by him. Regardless I would never want to proceed with this kind of a decision if my fiance was not 100% on board. Quite frankly, I would say his decision trumps in this regard. 

Him and I grew up drastically different. He was an upper middle class kid living in owned homes in the 80s and 90s, and I was a girl living in a rented 6-plex or (at best) a duplex. Suffice it to say that I had everything I needed growing up, and yes we were poor by a rich person's standards, but not in actuality. My fiance has struggled with a bit of status anxiety and he mentioned to me that he feels like if we had another child he would want to own first. I reminded him that we will own if it's right for us and not because we "should" in order to fulfill someone else's standards or perceptions about our family. He mentioned he has been coming out of the status anxiety mindset and I'm really grateful. Honestly. We joke about how much of a home we could buy if we were a full-time "dink" couple (dual income/no kids) though to afford it we could never have kids in the first place, (without affording extra daycare costs--non parental care always a non negotiable); nor would we require the space without children in the first place. It's so ridiculous how things have become. 

He affords me to stay home with our daughter without having to work the crazy hours or two jobs like I was doing for a while; we don't have our daughter in a daycare just like we wanted and planned for; and we are still saving every month. We have money to do things as a family, vacation in or around our city, province to province, without dipping into savings, etc. Now we are going to be renting a larger space (next month) because we need a bit more room. Things are well. I think we should just stay this trajectory and save, save, save. Maybe when I am back in the workforce full-time (years from now), we can consider buying. Then we will have a large down payment, adequate emergency funds, etc. I guess time will tell.


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## OnlyMyOpinion (Sep 1, 2013)

Adrienne, thanks for the update. You sound like a couple who talk things over, and think things through. 
That is great to hear and is no small accomplishment these days.


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