# Would You Do It?



## dogcom (May 23, 2009)

Everyone including me thinks real estate will drop in price. So it is simple then you just sell your house wait for the drop and then cash in Garth Turner style.

For me I couldn't do it, I don't want to rent, sell or move around because I enjoy owning my house and having barbeques, working outside and on my house. I also want to own my house for years enjoy the seasons and holidays.


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## Eder (Feb 16, 2011)

I sold mine in February.I am really happy not to worry about my house/taxes/upkeep etc. I put the proceeds of the sale into div stocks and a couple HISA's. I don't know when/if I'll own another property. I'm currently living in my rv on a trout lake in the Cariboo BC. Beats the hell out of where my house was.


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## Potato (Apr 3, 2009)

It's also a very different set of risks if you've ridden the bubble up from the bottom. You could lose out on some big paper gains, maybe improve your financial life, but that's about it; you also locked in your housing prices when they were low, likely comparable to or less than rents. If you're a first time buyer in this market though, you could face not only financial loss, but all the stresses and lack of mobility that being underwater entails, and you'd be locking in your costs while they're high. So if you're not already in the market, there are more reasons to stay out and continue to rent for a few more years than for someone who's been in to shift out.

Though you can still have BBQs as a renter -- had one earlier in the spring, probably will again now that baby is settling down. You can still work outside (the tomatoes are just turning red this week). Renting doesn't mean moving to some soviet apartment concrete nightmare. You also don't need to change your religion (unless you're an all-caps realtor). Moving sucks, but if someone wrote me a 6-figure cheque I'd get over that reluctance awful quick. And if you're lucky, you may not even have to move if you find an investor willing to do a lease-back.

Nonetheless, I can appreciate the point-of-view. My parents have had several conversations about it -- my dad's almost as big a bear as I am (he is 100% certain a correction is coming, but he doesn't think it will be any bigger than 1989). They're already retired and don't need the money, but they also don't need the space they have with two kids moved out and the third packing her things. The end result is that my mom has sentimental feelings about the house and they can afford the luxury of emotion, so they'll stay in it.


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## Jungle (Feb 17, 2010)

Depends on your situation, but I agree with you. What happens to your lifestyle and family if you sell now, (like they've been saying a crash for 3 years+) and you are wrong? Whoops there's a bad bet. You sit with your family in your rented place you can't fix up, make your own, etc. When is the right time? Should you try and time the market with your family and home? I say no. BUT.. if you are retiring, etc and don't need the place for your family and sitting on a high 6-7 figure place you bought for 1-2/5 of the price, then selling to cash out _could_ makes sense, depending on your financial situation and retirement goals. You could use the money to invest for retirment income and rent a real nice place with the money. 

Another note.. they say vancouver prices are down to 2010 highs and the crash is starting. How easy do you think it is to sell your property when prices are crashing down and confidence is lowering? I think it will be really hard. First, you have to price your property under the falling market price. Easier said then done. Then you must find someone to buy it.


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## Plugging Along (Jan 3, 2011)

Interesting discussion. For me, when we bought our house, I was a lifestyle choice first, investment second.

We wanted a certain area of the city, based on school and amenities. We wanted a place our kids cold call one which was ours. Obviously we wanted tops as little as possible, but the investment was a secondary consideration. 

In our case, our mortgage is paid off, our oldest will be starting a community school, there at not a lot of rentals in our area, and the rents for a smaller Ouse would be a lot more than our taxes, and insurance. I would consider this a gamble with my families standard of living, and wold not do it even for a six figure check.

I know of two people the did this, the first, sold her great apartment for what she thought was a great price and waited for the correction. She ended up unsettled, and eventually bought a crappy place in a worst area for more than what she got. Not the biggest deal because she was single. Our other friend did it with a pregnany wife and waited I out and made a killing. So I guess it depends if you feel lucky or not.


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## mind_business (Sep 24, 2011)

We don't see our house as an investment. To us it's an asset that we may have to sell to fund our much later retirement, however for the next 40 years it's simply our home. We may, however, upgrade a bit if prices drop far enough, taking advantage of a situation to get us onto an acreage.


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## FrugalTrader (Oct 13, 2008)

Definitely depends on the situation. With young kids, moving and renting for the sake of speculation is out of the question.


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## Spudd (Oct 11, 2011)

We seriously considered doing this, but after getting estimates from realtors we decided the hassle wasn't worth the price we'd get. If prices are still high in the spring we might consider it again.


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## dogcom (May 23, 2009)

I am in the same position as Plugging Along and for me it is a lifestyle choice first and investment second as Plugging Along had written. 

Going back a number of years I had a mortgage, the kids and speculation was out of the question in my mind. As it turned out I had numerous opportunities to cash in over the years and corrections to boot along the way and I never went for the money like many did where I live. Most who went for the gold that I know regretted it years later and live in much worse areas or have been stuck renting for years.

As far as being able to sell I have no problem there as there are buyers for my area but that may dry up for a few years.

Looking back in 1997 I could have got just over $300,000 for my house if I had sold it knowing a correction was coming. My house dropped to about $240,000 after and I could have been renting and laughing or whatever in my rental but then if I didn't buy at the bottom I would be crying as my house went to over a million last year. In 2008 it dropped from $750,000 to about $500,000 in a year and then shot to over a million a few years later. To me trying to time it right while dragging around my family is just not worth it especially when I live in such a nice area.

The way I see it for me anyway on the speculation front is that many of those people buying endless condo's in Vancouver and probably Toronto will get sick of living there and will want the life of BBQ, gardening, a place their dog can run around and so on in a house of their own. Or they won't want to big a yard but still have the house without being attached to all those other people in a condo.


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## doctrine (Sep 30, 2011)

I rent a house. The cost is about 40% less per month than owning. And with the price of real estate, I don't put myself at risk of a 10-20% correction, which could wipe out $50-100k of wealth instantly. Better to be saving that extra $1000-1500 a month.


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## Four Pillars (Apr 5, 2009)

Here's my take:
http://www.moneysmartsblog.com/should-you-sell-your-house-and-avoid-the-market-crash/

I did a very simple model and from what I can see, it's very difficult to do.


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## dogcom (May 23, 2009)

Doctrine I am not to sure of where you are at but if you haven't owned yet and looking then I think you are making the right choice. For those in condo's who have sold for good money I think have also made the right choice at this time.

I think a better risk for those who own but are afraid of a correction or want to cash in somewhat is to sell and buy an underpriced fixer upper and then sell that and repeat. It seems to me even in a buyers market that people looking to buy want everything done and move in ready. Of course you don't want to put in crazy colors or anything and make the reno appealing to many buyers.

On this note has anyone ever thought of buying a fixer upper and doing all the work like drywall, electrical and plumbing but leaving out the finished product. This way buyer gets the home and just has to shop for the kitchen and colors they want to finish the home. I think this would be appealing to buyers to able to do the fun stuff without the mess of major construction and drywall.


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## Toronto.gal (Jan 8, 2010)

What happened with the 1st incomplete post?

I guess we won't sell anytime soon as our property has increased 160% in value since we purchased in 1999. Unless we sold and moved to another province. 

Even if our property had only increased by 30%, we would not sell; I rather keep trading stocks instead as I can double/triple my money much easier/faster given current prices.


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## dogcom (May 23, 2009)

Four Pillars said:


> Here's my take:
> http://www.moneysmartsblog.com/should-you-sell-your-house-and-avoid-the-market-crash/
> 
> I did a very simple model and from what I can see, it's very difficult to do.


Thanks for that piece Four Pillars and you are spot on, that is exactly how I have looked at it when I went through the possible exercise of selling my house waiting and buying back in. The costs of moving are just to great to take the risk in my opinion and that is why I have never done it besides the timing and life altering issues. In the stock market with low fees and easy trading you can move in and out of stocks if you are a good market timer but that is simply not true or even remotely true in real estate.


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## dogcom (May 23, 2009)

Toronto.gal said:


> What happened with the 1st incomplete post?
> 
> I guess we won't sell anytime soon as our property has increased 160% in value since we purchased in 1999. Unless we sold and moved to another province.
> 
> Even if our property had only increased by 30%, we would not sell; I rather keep trading stocks instead as I can double/triple my money much easier/faster given current prices.


Are you sure T.Gal that the given prices are cheap in the stock market. If we get a royal round of deflation they can get a lot cheaper and we could also being going into a recession. The double and triple may not come so easily as you think.


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## Toronto.gal (Jan 8, 2010)

I'm not discounting the valid points you mentioned dogcom, not at all, but I'm fairly confident that some of my holdings [which could buy me a property now], will at least double in the next decade or two. BUT, as you know me well by now, in the interim, I won't just be sitting & waiting around.


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## dogcom (May 23, 2009)

Thats better T.Gal because the first quote sounded far to overconfident.


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## piano mom (Jan 18, 2012)

Use home equity to invest for dividend while still enjoy your own home - that way you can have the best of both worlds! Double dip


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## Toronto.gal (Jan 8, 2010)

dogcom said:


> Thats better T.Gal because the first quote sounded far to overconfident.


I meant that it took 13 years for our property to increase 160% and that I could probably make some of my undervalued stocks go up by same or more in same period of time: ie: 13 years [but my time horizon for such a wish to double/triple is closer to 20 years; if sooner, that would be a bonus, but not necessarily an expectation]. I'm no couch potatoe, but I'm realistic!


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## Rusty O'Toole (Feb 1, 2012)

There isn't going to be any crash. I thought there was too, back in 2008 when the US hit the skids, I thought our market would follow suit. So I sold some nice rental houses. Wish I could buy them back now for what I sold them for, or even $50,000 more. The market dipped all right, for about 2 months, to the tune of 10% or so, then bounced right back.

I don't see any reason for a real estate crash. In fact we are in an inflationary period right now. I know no one is talking about it in the media, but if you keep tabs on what you are paying for groceries, insurance, heating oil etc. you know it is a much bigger factor than most people believe. An inflation rate of just 5% causes prices to double in 12 years.

The last real crash we had was in 1990. That was following 8 years of wild speculation when prices double and redoubled in a few years. Interest rates were higher, rental properties were selling with bad, bad negative cash flow, everyone was talking about real estate, and jumping into speculations even though they had no idea what they were doing. New real estate offices, and new agents, all over the place.

None of those things apply today. Prices have been rising slowly and steadily. Interest rates are low. Inflation is rising. Nobody is speculating, or talking about or encouraging speculation. 

To me this is a better time to buy than to sell, especially if you can lock in a long term mortgage at today's cheap rates and enjoy a monthly payment that is cheaper than rent.


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## Rusty O'Toole (Feb 1, 2012)

As far as deflation goes... there WAS a danger of deflation in 2008 due to the mortgage crisis, possible bank failures and real estate crash in the US. But the government stepped in with bailouts, low interest rates and free and easy monetary policy to prevent it.

The crisis is now over. The next thing to deal with is the inflationary effects of the above policies, which of course, are inflationary for real estate along with everything else.


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## Rusty O'Toole (Feb 1, 2012)

Garth Turner is a fool. He doesn't even know how a mortgage works. I know, I have read some of his stuff. Don't go by what he says.


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## HaroldCrump (Jun 10, 2009)

I agree with Rusty O'Toole.
There is no crash, no apparent signs of one, and very slim chances of one occuring.

The govt. is doing whatever it can to keep the RE market fully inflated and pumped up.
The recent changes are a magician's manœuvre of keeping everyone focused on the right hand, while the left hand is doing the real "magic".
At the slightest signs of a crash, they will do whatever it takes to re-inflate the bubble.


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## Ihatetaxes (May 5, 2010)

Love my (paid for) house, my neighbourhood and my neighbours! Just spent $20k on some projects around the house (new roof, etc.) and the place looks great. Love my pool and swimming with my kids every day. We have a very private yard that backs onto a nice deep ravine and nobody on my street sells (most are original owners from when they were built 10-12 years ago). I think the house is probably worth $800-850k or so but I wouldn't sell it even if someone offered me $900k.

Good neighbours are a huge part of it all. We have a lot of fun with the families around us, there are no evil rude neighbours and that is worth a lot more than a bag of cash to me.


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## Eder (Feb 16, 2011)

Good neighbors are hard to find...I miss my one neighbor but am happy to be far away from the rest.


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## Toronto.gal (Jan 8, 2010)

Eder said:


> I miss my one neighbor but am happy to be far away from the rest.


Were they [licensed] marijuana growers/smokers? 
http://www.cbc.ca/news/canada/toronto/story/2012/07/04/medical-marijuana-grower-health-canada.html


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## Butters (Apr 20, 2012)

What about the person living with mom, or renting, who landed their dream job, unionized, and ready to take the big step to buy a new house?
Would you recommend, they stay with mom for another long year, and take a risk, that the prices will go up or down?

It also depends which part of the country you're in...
Vancouver and Toronto condos could decrease
but in the prairies we aren't moving 

All the fees associated with moving, I don't think it would be a smart move, unless you were planning a big change in your life, ie you have a 200k house, but looking to get a 500k house
sell the 200k rent for *a couple years ++* then buy the 500k house at 400k(assuming bubble bursts)

As one person said, real estate is just a long long long stock market

People will always need roofs to be under

Everything eventually goes up, including wages


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## dogcom (May 23, 2009)

The position you speak of sheabutters has the luxury of not worrying about many of the decisions and costs Four Pillars pointed out so they can wait awhile and save more money. The only risk they take is prices rising and at this time I don't think they will go up a lot in Vancouver or Toronto so the risk of waiting seems to be the better risk right now.


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## Chad (Jan 30, 2011)

Wow some people are in serious denial ie. Rusty O'Fool.

I would sell, heres why to name a few...

-Historically low interest rates will not stay historically low forever. 
-Amortizations have been reduced to 25 years to qualify for CHMC insurance, this will affect first time home buyers the most.
-The bombardement of bubble talk in the media which was not present 1 to 2 years ago, is affecting sentiment/perception. Take this thread for example.
-I would rather have a higher interest rate than a higher principle.
-Demographics, lots of old people in this country looking to finance retirement with the equity in their houses.

There was a story on the National the other day saying in 2002 the average house price was in the $188000 range in Canada with household incomes averaging $75,000. Today average household incomes have risen to $83,250, 11% in 10 years. Meanwhile average price houses have risen to around $350,000 around 90% in the same time period. Interestingly Canadian household debt is at a all time high, see the connection? Inflationary yes, for incomes no. No bubble here no sir. Can't see any reason for a real estate crash :hopelessness:.


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## Financial Cents (Jul 22, 2010)

Huge corrections will not happen as long as our unemployment rate stays relatively constant. You start getting 10% or more unemployment, I predict some fireworks. As long as folks have jobs, they will keep spending; on houses included.


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## kcowan (Jul 1, 2010)

Rusty O'Toole said:


> Prices have been rising slowly and steadily. Interest rates are low. Inflation is rising. Nobody is speculating, or talking about or encouraging speculation...


I agree with much of what you say. But you must not be living in a major centre to claim lack of speculation. And what about bidding over the asking price? Especially without conditions!


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## blin10 (Jun 27, 2011)

i was thinking about it as well... let's say you have a house worth $800000, you can invest that and get let's say 6% (on a safer side) dividend that's 48000, after taxes around 44000, that's around $3700/month... around my area you can rent same house for around $3000/month so you're making around $700/month while having same house... now, you don't need to pay property tax which is around $500/month, don't need to pay insurance $100/month, any type of maintenance (not sure how much monthly but let's do 100$/month average).. so in reality you have same house and make around 1400$ monthly AND you're fully protected if houses sink hard, sounds like a good deal to me... not to mention that $800k investment might raise dividend over long period of time or do a split or whatever if you stick with blue chip companies obviously (not some $5/share or penny stocks)... or if you want to let's say take some more risk and get some 7-8% dividends (like let's say CPG/PWT/etc) you'd be making over 2500 monthly that you could easily live off with and not do jack ****...


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## Causalien (Apr 4, 2009)

blin10 said:


> i was thinking about it as well... let's say you have a house worth $800000, you can invest that and get let's say 6% (on a safer side) dividend that's 48000, after taxes around 44000, that's around $3700/month... around my area you can rent same house for around $3000/month so you're making around $700/month while having same house... now, you don't need to pay property tax which is around $500/month, don't need to pay insurance $100/month, any type of maintenance (not sure how much monthly but let's do 100$/month average).. so in reality you have same house and make around 1400$ monthly AND you're fully protected if houses sink hard, sounds like a good deal to me... not to mention that $800k investment might raise dividend over long period of time or do a split or whatever if you stick with blue chip companies obviously (not some $5/share or penny stocks)... or if you want to let's say take some more risk and get some 7-8% dividends (like let's say CPG/PWT/etc) you'd be making over 2500 monthly that you could easily live off with and not do jack ****...


I agree with your view currently blin0, however, I have to point out that blue chip also have downside risk and they do have the possibilities of getting their dividends cut. Nothing is completely safe as europeans suddenly found out about their government bond. All risks are relative and currently, bond and housing prices in Canada are at at a historical high and thus at a bigger risk of falling. Not to say that the trend cannot continue either. Who would've thought that interest rate can go below 5% 5 years ago? In all events, you are betting that you know more than the market and that it will go the direction you want to go. Please properly allocate the capital vs the risks.


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## dogcom (May 23, 2009)

Another way to put it.

1A. Sell my mortgage free house and have $800,000 cash in my hand and then rent for $3,000 a month.

1B. Buy the dividend stocks and watch them drop by half in bear market and now I have half the money and still pay $3,000 a month rent .


2A. Stay put and do nothing.

2B. House price drops in half but still mortgage free and no rent to pay.


There is always a risk and no one knows for sure that dividends will continue like causalien said.


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## kcowan (Jul 1, 2010)

dogcom said:


> 1B. Buy the dividend stocks and watch them drop by half in bear market and now I have half the money and still pay $3,000 a month rent


Blue chips drop in half and all other things remain equal? In that event, I would want to be in gold and have no equity holdings.


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## blin10 (Jun 27, 2011)

sure they can drop but they would still pay divi, take BCE for example in 09 markets sink on the worst possible scenario and they keep raising divi... and if markets drop that bad to loose half of the value your house would loose a good chunk as well...



dogcom said:


> Another way to put it.
> 
> 1A. Sell my mortgage free house and have $800,000 cash in my hand and then rent for $3,000 a month.
> 
> ...


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## Jay (May 9, 2012)

Rusty O'Toole said:


> To me this is a better time to buy than to sell, especially if you can lock in a long term mortgage at today's cheap rates and enjoy a monthly payment that is cheaper than rent.


It really depends on where you live... In downtown Ottawa (a moderate market according to most real estate boosters), you would have a hard time finding a condo where mortgage interest + condo fees + property taxes alone (assuming less than 50% downpayment) were less than a comparable rental unit. I have to imagine it's not even close in Toronto, Vancouver and other urban centres... renting is just so much cheaper. The only way owning becomes cheaper is if you have a significant downpayment and real estate prices continue to skyrocket (something I'm not betting on at the moment).

Having said that, I am not sure if I believe in a "crash" or not either... at a minimum, I see a period of price stagnation...whether that turns into a big drop in prices is another question. If I had a home I was comfortable in and not house rich/cash poor, I would probably stay put... As someone who has yet to enter the housing market, it looks like there'd be significantly more risking entering it at this time than continuing to rent and saving > $1000/month.


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## dogcom (May 23, 2009)

blin10 said:


> sure they can drop but they would still pay divi, take BCE for example in 09 markets sink on the worst possible scenario and they keep raising divi... and if markets drop that bad to loose half of the value your house would loose a good chunk as well...


Very true but in my example I was mortgage free so if they did both drop by half you still have to pay $3,000 in rent and the dividends may decline or disappear. Not saying one shouldn't do the dividend strategy it is just that losing 50 percent in the stock market seems much harder to take then your mortgage free house dropping by half.


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## Berubeland (Sep 6, 2009)

The way I look at it, a house is not really an investment, it's a place to live. Especially once it's paid off. You have security of tenure that you'll never enjoy in a rental or a house co owned with a bank. Your cost of existing on this planet just went down to 0$ (plus property tax & maintenance) and that is something that's really nice if you want to have a child or start a business. 

Stocks are a piece of paper that you cannot live in that exist to make money for you. So you are comparing apples to oranges. What's wrong with both. A modest house and a lot of dividend stocks (if that's your cup of tea)?

Now if you had a bunch of rental property, sell those as many many landlords have done during the last 10 years.


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## blin10 (Jun 27, 2011)

same with stocks, they drop by half you stay put it's a paper loss just like if house looses half you don't sell... if there is a scenario where stocks loose half and houses tank i'm sure rent will go down big as well... if you stick with big companies divis will not disappear 



dogcom said:


> Very true but in my example I was mortgage free so if they did both drop by half you still have to pay $3,000 in rent and the dividends may decline or disappear. Not saying one shouldn't do the dividend strategy it is just that losing 50 percent in the stock market seems much harder to take then your mortgage free house dropping by half.


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## blin10 (Jun 27, 2011)

why you can't enjoy same place if it's rented? it's a bogus state of mind... you might not be able to renovate or whatever but you can rent already decked out place that doesn't need fixing



Berubeland said:


> The way I look at it, a house is not really an investment, it's a place to live. *Especially once it's paid off. You have security of tenure that you'll never enjoy in a rental or a house co owned with a bank.* Your cost of existing on this planet just went down to 0$ (plus property tax & maintenance) and that is something that's really nice if you want to have a child or start a business.
> 
> Stocks are a piece of paper that you cannot live in that exist to make money for you. So you are comparing apples to oranges. What's wrong with both. A modest house and a lot of dividend stocks (if that's your cup of tea)?
> 
> Now if you had a bunch of rental property, sell those as many many landlords have done during the last 10 years.


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## Spudd (Oct 11, 2011)

She said security of tenure that you'll never enjoy... meaning nobody can kick you out. Not that you wouldn't enjoy living in the rental.


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## blin10 (Jun 27, 2011)

yah that's a big downside


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## Plugging Along (Jan 3, 2011)

blin10 said:


> why you can't enjoy same place if it's rented? it's a bogus state of mind... you might not be able to renovate or whatever but you can rent already decked out place that doesn't need fixing


I agree with Bebureland. It is not a bogus state of mind. Having your own home should be looked as a lifestyle choice, that may happen to appreciate or be an investment. The first priority should be a lifestyle, the second is investment. 

Owning your own home (free and clear), gives you a lot more security than having the equivalent in stocks for that same amount. Here's my logic why. As said earlier, if you have a mortgage free home, then you have more control in terms of your living expenses. If you are renting, that control is by someone else. In the case of an economic downturn, your cashflow will still be less in a paid off home. While renting, the cashflow requirements stay the same. 

A paid for home is different than a rental home. In terms of control, and lifestyle. I see nothing wrong with someone wanting to buy a home for their lifestyle. There is a difference when you have kids and a family. When I was without kids, I didn't mind renting, however, it was an absolute must for us to have the stability of our own home before we started a family.


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## blin10 (Jun 27, 2011)

*In the case of an economic downturn, your cashflow will still be less in a paid off home <--* that's a fouls statement because low cashflow in a paid home is a psychological fantasy, reason for that is it's lower due to your 800k being stuck earning you nothing while house is loosing value so it's exactly same thing as if your stocks loose value on paper while earning you more money... that's like saying if I have a car lease I put down $20k and my monthly payment is lower then $0 down, where in reality it's same thing since with 0 down i'll pay more monthly but i'm having 20k in the account


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## Sampson (Apr 3, 2009)

What happens if you are a renter, and during this fore-coming crash everyone is so certain about, your landlord sells the place?

You might be out on the street.

The reality is that personal real estate returns are marginally above inflation (from data going back hundreds and hundreds of years in all sorts of markets all over the World). The question is one about timing. If you bought at a high, and sell upon death, is that 30-40-50 years going to be long enough to make up for the downturn.

Is real estate the best investment? Maybe not, but I'm happy putting away money that will keep up with inflation and force me to save.


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## blin10 (Jun 27, 2011)

you go rent another house even cheaper down the street, not to mention you sign a contract you can't be on a street, you will know far in advance... unless you live god knows where with 10000 population there are a ton of houses around my area for rent...


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## Sampson (Apr 3, 2009)

blin10 said:


> you go rent another house even cheaper down the street


Why do you assume this exists? Vacancy rates in Calgary are around 1.5%. Back a few years ago, they were below 0.9%.

If you have 2-3 school aged children, do you move to a different community? Pull the kids out of their schools? Suffer a 1.5 hour long commute to keep them in the same school?

These are but a few 'challenges' that people would face.

Sure buying a house is a premium, but so is buying a luxury car. If you can afford it, maintain a good lifestyle and not over reach, who cares if you end up paying more than renting. You can't take it all to your grave.


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## blin10 (Jun 27, 2011)

because if house prices sink renting should be a little cheaper... why commute 1.5 hours, did you read where I said rent another house in same area?.. why is buying a house a premium? if you are renting exact same house it's not a premium, it's like you buy a bmw and I rent exact same bmw while getting paid money to drive it, we both have same car while I'm getting paid and you not because you want to call it your own... I own a house as well, but i'm trying to think without a bias here, renting does make a lot of sense if you got your money invested right


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## kcowan (Jul 1, 2010)

For most people, owning their home is an emotional decision based on "lifestyle". As a result, there is no point in presenting economic arguments. They have no place in emotional decisions.


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## Square Root (Jan 30, 2010)

Agree that owning vs renting is a lifestyle decision. The RE market is very illiquid and getting in and out and in again would be very expensive. For most people ,myself included ownership feels better than renting. That's why it is usually cheaper to rent. But to each their own.


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## blin10 (Jun 27, 2011)

for most people they don't know wtf investing is and been tought since day one how getting a house is what you need to do, as well as getting stuck with a mortgage their whole life living pay check to paycheck... there's a huge point to presenting economic argument because we are all here trying to make money, same as some buy stocks on emotional basis... but anyways enough from me, was trying to make conversation 



kcowan said:


> *For most people, owning their home is an emotional decision* based on "lifestyle". As a result, there is no point in presenting economic arguments. They have no place in emotional decisions.


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## dogcom (May 23, 2009)

This is where people get into trouble is that they try to time the housing market or sell invest and rent. This kind of action turns your family home into stock investment thinking instead of what it should be and that is the roof over the head of your family.


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## Sampson (Apr 3, 2009)

blin10 said:


> because if house prices sink renting should be a little cheaper... why commute 1.5 hours, did you read where I said rent another house in same area?.. why is buying a house a premium?


You assume that one can rent in the same area and cheaper than owning. There is plenty of reason to believe, in my example, that this is simply not possible. The rental market here is just too tight, and it isn't a certainty.

A second issue I have with your suggestion, sell, rent, then earn money elsewhere. Well that isn't a certainty either. First, do you time the housing market properly? Second, are you going to actually earn money on the rental vs. owning differential? My guess is just like most common people cannot time the housing market properly, they probably do not invest their money properly either. Many studies have shown that real returns from other investments are pitifully low.

Sure, if you could time the housing market properly, and invest the extra cash flow in something with high, positive real returns, great. The question is what percentage of people can do this?

This avoids all the issues of moving. Have you ever moved after accumulating crap for 20 years, with a town of children running around etc?

The question and freedom of tenure cannot be ignored.


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## cuppycake (Apr 10, 2012)

We recently purchased a home and we didn't do it with real estate investment in mind. For us it was a lifestyle choice. 

One of the first things we said after moving out of our apartment and into our new home was "I'm so glad we're not renting anymore." My house feels like mine. I don't have to worry about paying increasing rental fees, parking fees, dealing with cranky management, etc. I guess if your apartment manager is really kind and doesn't want to squeeze you for every penny you have, you probably wouldn't mind renting. Mine seemed to hold a grudge against us since I order almost everything online and packages always show up when I'm at work. I guess she didn't like signing for my packages (even though she could have just sent them away and I would have picked them up at the postal depot near the apartment.) I also had issues with work orders. When we moved in we asked if the locks would be changed -- they said it would and that they would do it in the next week. 1 year later and I was still waiting on them to replace it. I would keep getting brushed off by "they're coming in next week to do it".

For us, we are so happy to have a place of our own. We get to fill it with our own stuff, paint it, renovate it to our liking. We plan on staying in this home for at least 5-10 years. 

I honestly don't know if I would even consider renting again. We've rented at over 4 different apartment buildings and overall, it was too much of a headache dealing with management. It definitely feels more expensive owning a home but for us, it's worth it.


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## kcowan (Jul 1, 2010)

dogcom said:


> This is where people get into trouble is that they try to time the housing market or sell invest and rent. This kind of action turns your family home into stock investment thinking instead of what it should be and that is the roof over the head of your family.


A neighbour took advantage of the high prices in Markham (Cachet estates) during the last boom(1990). They sold their cape code bungalow for $1.05 million and bought a condo in Unionville, a condo on the lake and a B&B in Niagara-on-the-lake. But they had become empty nesters so it made sense for them. 

When I talked to him about how it went years later, he said that he should have just bought one place and rented the others as needed. The benefit of hindsight. That cape cod was worth about $600k 7 years later.


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## Plugging Along (Jan 3, 2011)

blin10 said:


> *In the case of an economic downturn, your cash flow will still be less in a paid off home <--* that's a fouls statement because low cashflow in a paid home is a psychological fantasy, reason for that is it's lower due to *your 800k being stuck earning you nothing while house is loosing value so it's exactly same thing as if your stocks loose value on paper while earning you more money*... that's like saying if I have a car lease I put down $20k and my monthly payment is lower then $0 down, where in reality it's same thing since with 0 down i'll pay more monthly but i'm having 20k in the account


Actually a car and a house are two totally different classes of purchases. A car is not necessarily a need, and everyone NEEDS to live somewhere, I am assuming homelessness is not a viable option. 

You have made a few incorrect assumptions. If you rent a $800K home, your rent will be about $5K a month as least where I live. Factoring in taxes, and maintenance that you don't have to pay, it would be net $4K. That's $48K a year that you would have to pay out for rent for the equivalent. You can't say I will rent a one bed room apartment instead of the house. You have to compare the same type, location, size, etc. $48K/year on an $800K house is about a 6% return AFTER tax guaranteed a year. In order to make that in none real estate you would need at least 8% return yearly after tax guaranteed. 

I can do a similar calculation with my ‘modest’ home (which really is in my market). $500K home (free and clear), can rent for $2800 month, when I factor in what costs I would have to pay for as a landlord such as tax insurance and maintenance, it’s about $2000k/month net. That’s a 4.8% return tax free, risk free, guaranteed. I would need about a 7% return on my investments. 

You also can’t say that you would put it in your registered accounts, as the RRSP you would be taxed, as you need to money to live right away, and the TSFA couldn’t hold $500k right now. 

The other piece missed, is that over time, there will be some appreciation that will match at least inflation. This is the area that just like stocks, can drop. The cycles in real estate are much larger so it takes longer for recoveries and corrections. Hence, for me, like equities, I don’t try to time my real estate, and they are very long term holdings. 





blin10 said:


> because if house prices sink renting should be a little cheaper... why commute 1.5 hours, did you read where I said rent another house in same area?.. why is buying a house a premium? if you are renting exact same house it's not a premium, it's like you buy a bmw and I rent exact same bmw while getting paid money to drive it, we both have same car while I'm getting paid and you not because you want to call it your own... I own a house as well, but i'm trying to think without a bias here, renting does make a lot of sense if you got your money invested right


You make many assumptions here. First, in my area, it’s a highly desirable area, and there a very few rentals. There 5 right now in the whole community. All of the ones with similar specs are actually renting for much more than $2800. One is less than that, but is a much smaller home. Just like your leased car example, there is a break even point, and a point where owning becomes much more advantageous. I think the problem as you eluded to, when a house is first bought, the costs are very high, people get over their heads, and never pay it off. However, if one is smart about it, and thinks of it long term, the owner will most likely do better than the renter over time. 



blin10 said:


> for most people they don't know wtf investing is and been tought since day one how getting a house is what you need to do, as well as getting stuck with a mortgage their whole life living pay check to paycheck... there's a huge point to presenting economic argument because we are all here trying to make money, same as some buy stocks on emotional basis... but anyways enough from me, was trying to make conversation




Good conversations =). I can’t speak for others, but only by my own experience and paradigm of the people I know well. I may not know wtf investing is, but I think I’ve done okay. I think your point about there are generally no emotions to investing is right. However, a home is something a little different. When I looked at my home, I looked at it in terms of the lifestyle that I want. My theory is, though I do like making money, I understand the purpose for making money is not the money itself, but rather the lifestyle and security it can provide. It makes no sense to have a lot of money in the bank and feel no control over your living situation (that’s important to me). I do think we need to balance money with life.


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## blin10 (Jun 27, 2011)

again did you read my numbers? i don't know where you are but here 700-800k houses listed 3000$/month and probably can be negotiated to 2800 and i am comparing apples to apples... why would I put anything in rrsp? you don't make sense, whole point is to make enough cashflow... who says anything about timing real estate ? i'm just talking about paid off house... your appreciation that matches inflation will be exact same with stocks since they will appreciate as well.. and as i stated above I'm not talking about area with 5 houses, dude do you even read what I write?


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## Sampson (Apr 3, 2009)

I think I live in the same City as Plugging Along, but her numbers match what I see around here.

$500k-$600k rent for $2800-$3500.

We have had similar conversations in the past blin, the problem is your statements are absolute and don't make sense for everyone nor in every market. As mentioned by kcowan above there is a math component and a human component.

The math component doesn't always side in the favor of renting. Combine that with the other factors. I'd easily pay the premium of home ownership simply to not have to move on 2 months notice. The thought of moving with toddlers is frightening. We also haven't discussed in any detail how most people do VERY poorly investing their money so it isn't as cut and dry as you describe. Studies have also shown that people who have extra cash flow after paying off their house don't even save that money, they spend it. Far too many complications to make this a simple "Renting is always better than owning" conversation.


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## Plugging Along (Jan 3, 2011)

blin10 said:


> again did you read my numbers? i don't know where you are but here 700-800k houses listed 3000$/month and probably can be negotiated to 2800 and i am comparing apples to apples... why would I put anything in rrsp? you don't make sense, whole point is to make enough cashflow... who says anything about timing real estate ? i'm just talking about paid off house... your appreciation that matches inflation will be exact same with stocks since they will appreciate as well.. and as i stated above I'm not talking about area with 5 houses, dude do you even read what I write?


Yep dude, I read your numbers and reread your posts, and have requoted many of them to make sure I wasn't misreading. 

I am stating that YOUR numbers are just for YOUR little area. Every little area will have a different market. In MY area, a $500-600K house goes for $2800, and that was WITH negotation. Many are much more than that. I was being conservative because I didn't want to go with extreme cases that cannot be replicated. I think you put way too many assumptions in that make your statements uncalled for. 

BTW - I didn't realize that there was same inflation correlation with stocks. That's new to me. 



blin10 said:


> because if house prices sink renting should be a little cheaper... *why commute 1.5 hours, did you read where I said rent another house in same area?*.. why is buying a house a premium? if you are *renting exact same house *it's not a premium, it's like you buy a bmw and I rent exact same bmw while getting paid money to drive it, we both have same car while I'm getting paid and you not because you want to call it your own... I own a house as well, but i'm trying to think without a bias here, renting does make a lot of sense if you got your money invested right


Here you said rent the exact same house in the same area down the street... yet



blin10 said:


> and as i stated above I'm not talking about area with 5 houses, dude do you even read what I write?


Dude, read what you wrote. The first post said that one can rent in the exact same house in the same area for less. In order to this, in MY area, I would have to rent for closer to $3500 one of only 5 houses available. This is a fact. 




blin10 said:


> you go rent another house even cheaper down the street, not to mention you sign a contract you can't be on a street, you will know far in advance... unless you live god knows where with 10000 population there are a ton of houses around my area for rent...


Read this again, nope, not a single house cheaper down the street available for under $2800. You only need one month notice from the lease expiry here in AB. Try moving a young family from all their schools and area in a month. Population 1000000+, however, I know there are more places to rent than five in my whole city, but I have picked my house for very specific criteria that would be difficult to find in rentals. 



blin10 said:


> *In the case of an economic downturn, your cashflow will still be less in a paid off home <--* that's a fouls statement because low cashflow in a paid home is a psychological fantasy, reason for that is it's lower due to your 800k being stuck earning you nothing while house is loosing value so it's exactly same thing as if your stocks loose value on paper while earning you more money... that's like saying if I have a car lease I put down $20k and my monthly payment is lower then $0 down, where in reality it's same thing since with 0 down i'll pay more monthly but i'm having 20k in the account


My cashflow is much higher without paying $3500 rent, and I have full control. I showed my numbers, which you ignored. 




blin10 said:


> same with stocks, they drop by half you stay put it's a paper loss just like if house looses half you don't sell... if there is a scenario where stocks loose half and houses tank i'm sure rent will go down big as well... if you stick with big companies divis will not disappear


So if you stocks tank by half, I am sure the dividends will also be cut by half or none at all. Rents will not neccessarily go down by the same amount. Plus, you still need to find a way to pay the rent. 


Really, my comments were a reply to your remarks that people are essentially 'stupid' (my words, not yours) to think that it's better financially to own a house than to rent. I think you said they 'don't know wtf investing', it's a 'bogus state of mind', 'psychological fantasy', etc. This implies that it's black and white that renting is just financially more sound in terms of cash flow for everyone. Perhaps take an open view that for some it is actually a much better decision financially.


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## Vitalogy80 (Apr 12, 2009)

Plugging Along said:


> Actually a car and a house are two totally different classes of purchases. A car is not necessarily a need, and everyone NEEDS to live somewhere, I am assuming homelessness is not a viable option.
> 
> You have made a few incorrect assumptions. If you rent a $800K home, your rent will be about $5K a month as least where I live. Factoring in taxes, and maintenance that you don't have to pay, it would be net $4K. That's $48K a year that you would have to pay out for rent for the equivalent. You can't say I will rent a one bed room apartment instead of the house. You have to compare the same type, location, size, etc. $48K/year on an $800K house is about a 6% return AFTER tax guaranteed a year. In order to make that in none real estate you would need at least 8% return yearly after tax guaranteed.
> 
> I can do a similar calculation with my ‘modest’ home (which really is in my market). $500K home (free and clear), can rent for $2800 month, when I factor in what costs I would have to pay for as a landlord such as tax insurance and maintenance, it’s about $2000k/month net. That’s a 4.8% return tax free, risk free, guaranteed. I would need about a 7% return on my investments.


Tax free? You have to pay taxes on all rental income you bring in. Also, Risk Free??? What if someone turns your place into a growop or a methlab? Sure you have their "damage deposit", but I highly doubt one month of rent will cover the required repairs. What if the tenant refuses to leave and stops paying rent? I don't know where you live, but there are tons of problems in BC with trying to evict renters...they seem to have a lot more rights than landlords and it can be months before you're able to actually get some people to leave.

Renting your house out can cause a ton of headaches and in my opinion, there are a lot better ways to earn money almost risk free. Invest in a Canadian Bank for example...yes the stock might go up and down, but many of them are paying around 4% dividend and they increase that yearly. The Canadian Banks haven't decreased their dividends in over 100 years. You also get tax breaks from investing in Canadian Dividend paying companies...sounds like a much better deal than me. Plus if you have a personal emergency, it's a lot easier to sell stock to finance it than trying to sell your house and paying tens of thousands in legal and real estate fees.


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## blin10 (Jun 27, 2011)

plugging alone, you seem a little angry and loosing your concentration lol... you're trying to prove something that don't make sense and is not even the point of conversation, i don't care what area you in, my example is based on my area so obviously it does not apply to you (although I want to know what area you're in that tops vaughan/richmond hill/thornhill/markham rent prices by a huge amount)...


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## Sampson (Apr 3, 2009)

blin10 said:


> you're trying to prove something that don't make sense and is not even the point of conversation,


As are you.

I highly doubt you had $800,000 in the market during 08/09. Most of the companies you list as examples of 'dividend' payers (most you list were income trusts) not only experienced huge declines in stock prices, some haven't recovered, but dividends were cut severely.

I'm not even sure what anyone is discussing anymore. 

I thought the original conversation was about selling your house now to capture gains that might not be there if the housing market crashes. From what I've read of P_A's posts, she suggests no, because it doesn't make sense financially, and there are a crap load of reasons not too (e.g. uprooting a family, possibility of not being able to live in the same community, risk the financial side doesn't work out etc).


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## Plugging Along (Jan 3, 2011)

Vitalogy80 said:


> Tax free? You have to pay taxes on all rental income you bring in. Also, Risk Free??? What if someone turns your place into a growop or a methlab? Sure you have their "damage deposit", but I highly doubt one month of rent will cover the required repairs. What if the tenant refuses to leave and stops paying rent? I don't know where you live, but there are tons of problems in BC with trying to evict renters...they seem to have a lot more rights than landlords and it can be months before you're able to actually get some people to leave.
> 
> Renting your house out can cause a ton of headaches and in my opinion, there are a lot better ways to earn money almost risk free. Invest in a Canadian Bank for example...yes the stock might go up and down, but many of them are paying around 4% dividend and they increase that yearly. The Canadian Banks haven't decreased their dividends in over 100 years. You also get tax breaks from investing in Canadian Dividend paying companies...sounds like a much better deal than me. Plus if you have a personal emergency, it's a lot easier to sell stock to finance it than trying to sell your house and paying tens of thousands in legal and real estate fees.


We weren't taking about a house for a rental, at least I wasn't. I was replying to the comments that it makes more financial sense to rent a house rather than to buy your own house. The comparisons were that the opportunity cost to own your house does not provide a Bette cash flow than invested the same amount dividend paying investments. You have to pay tax on your investments, and if you rent, you are paying rents in after tax dollars. 

The comparison was is it better from a cash flow perspective to live in a home which you at mortgage free vs just rent the equilvalent home.



blin10 said:


> plugging alone, you seem a little angry and loosing your concentration lol... you're trying to prove something that don't make sense and is not even the point of conversation, i don't care what area you in, my example is based on my area so obviously it does not apply to you (although I want to know what area you're in that tops vaughan/richmond hill/thornhill/markham rent prices by a huge amount)...


Probably losing my concentration. It was late, had been working, then out, with kids, cleaning, prepping for the next day, doing invoicing. I agree to that.

Angry no, just stating the facts and attempting to match your 'tone' dude, 

My area is Calgary. I think Sampson validated what I said about the rents. I was going to post the five listing, but there were a little too close to home for the Internet. I rent my $200k condo for $1200/month, and that is considered low. The other houses in my family all go for $1200 to $1700 for $300/400k places. All different are areas of the city. They are all the lowest prices in the neighborhoods. 

P


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## marina628 (Dec 14, 2010)

Can somebody send me the Cole's notes for this thread?lol


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## Berubeland (Sep 6, 2009)

Here's the unvarnished truth. I paid $156K for my house. That's all. 

I'm self employed I like thinking that if I fire a customer or don't take on the new project sent my way I can live for $800 per month. I had a company before that did 25K per month gross and it all got frittered away on overhead, bullshit and Tin Horton's coffee. I had five vehicles and payroll and taxes and HST and mortgage and rent on a shop. I used to break out in hives if payday and rent and mortgage day fell in the same week. I used credit cards to fill fill the gaps and when the entire operation stopped it took me years to pay off the credit cards. 

I have two cars, they are both mine, I can set them on fire if I want. 

I have one house, I can set it on fire too, it's mine. No one can tell me what I can and can't do here. I don't rent an office, it's here too. 

I don't work like a dog so that I can give my money away or be hassled by some dipshit landlord. I already get hassled all day long by dipshit landlords :biggrin: 

I wouldn't buy my house at today's prices. Lots of people who are commenting on here wouldn't buy their house at today's prices either. Almost everyone on Canadian Money Forum is frugal and saves their money and invests. 

For me, the freedom of not having the overhead of being lean and mean in business is priceless. You know if I decided not to go to work tomorrow I could do that for a good long time. When I'm stressed out or negotiating contracts that just feels good. 

When I bought my house it paid me to do so, I didn't have to make double payments. I was paying $850 per month in rent and the house mortgage was $750 and the basement was rented for $750. Now it doesn't pay. In a balanced sane market it costs more to rent than to buy. It has to! Being a landlord has to pay just like any other business. Any business that sells 1$ bills for 90 cents isn't going to be in business long unless it's this insane speculative roller coaster. 

I bought this warrant on an arbitrage play one time. One day out of the blue this warrant spiked up to 37 cents, I thought it was worth 45 cents and didn't sell that day even though I only paid 15 cents. I sold it almost a year later for 20 cents. At the end of the day that warrant was worth 20 cents because that's the money I sold it for. Before I sold it it was worth .15 cents because that was what I paid for it. 

That's like if someone walks up to you on the street and says hey give me your shirt I'll pay you $50 bucks. Even if I only paid $20 for the shirt a couple years before, I'd tell them no, sorry man, I need the shirt. After all what am I gonna do walk around naked all day? That's kind of how I feel about my house. When I'm done *USING IT* I'll sell it. It's not worth a lick more than the money I paid to buy it. That potential is not realized until the sale. 

If I buy a lottery ticket for 1$ it's a potential $1,000,000. Until the draw. Then it's worth 0 or $10 or $1,000,000 even then unless you cash it in, it's worth 0. Lots of us who bought houses years ago and are sitting in our paid off houses see the market going up and up, really like it. When my neighbour down the street sold his crappy house for $380,000 I was like wow that's nice, I'm a financial genius, my crappy house is worth $380,000 too. Who doesn't like thinking about winning the lottery, it's freeking fun. Yeah! I'm awesome! I made a great investment in the $1 ticket. Except for, the draw is coming. Did you use your grocery money or retirement money to fund that ticket? Did you cash it in? Nope? Too bad then, better luck next time


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## Plugging Along (Jan 3, 2011)

marina628 said:


> Can somebody send me the Cole's notes for this thread?lol


Sell house at high, to maybe buy low?

Some say yes, owning house stupid, make more money renting
Some say no, renting house stupid, make more cash low owning

Some say people just stupid :biggrin:


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## donald (Apr 18, 2011)

I sold my house last yr(may 2011,winnipeg market)& i am currently renting(i made about 123k,built the house myself)and in the course of the last yr have invested half of the proceeds(along with some other funds,but it got nicely beefed up in a non reg acct,canadian dividends stocks mainly)and am pondering what im going to do(im a 33yr old batchlor,no kids ect so there is no "heat").
Garth turner might even give me props lol.
My positives so far-No yard/snow shoveling-the BIG one,no 4900 hundred property tax i was paying(which is almost 5 mths of rent payments),If untouched(which is the plan)i will have a nice stake(growing and compounding,i obvioulsy would'nt have that if not for the sale,going to be reinvesting all divs,and lastly i now have 3 portfolio's in place a non reg(maxed rsp/tfsa.-feel very healthy right now with paper assets.

Negitives-emotionally,not easy going from a home to a rental-can't entertain anymore really(not that **** hot for dating either "the slight stigma of a early/middle 30's in a appartment(ironically im in great shape,but it does'nt look like it perhaps to women intially,and truth be told i don't feel as complete either-a house centers you imo)-Parking,no garage!that hurts and a big one.......frozen(im in no man's land)real estate is really hot in winnipeg and im caught in a bull market.(i don't know if were going to catch the big drop)wpg ans sask are in the best shape-according to recent stats.(not close to overvauled like to/van

I won't know if it was the right choice(i likely will know in a few yrs)I'm the only person i know that sold a house and planned to go the rental route(people talk about about it but few do it),and invest @least half of it(even thou im always looking)Most people can't/won't pull the trigger-It's easier on paper(sell your home high and rent)-Your lifestyle and way of life changes alot from the shift.

I have made money on my investments so far(beating inflation)+


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## dogcom (May 23, 2009)

Donald with your expertise I would think you would be the ideal candidate for the get a great deal and fix and flip. If I had what you have by the sounds of it in skill I would have done 10 times better in real estate then any stock investments.


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## donald (Apr 18, 2011)

Hey dog-I' am on the sidelines right-now(i am a ideal candidate for fix/flip or new builds!that's the irony)i've done it once(the house i sold)There are a few reasons.
-trying to find a perfect flip is Hard(i bought the perfect lot/tear down in 08,for 30k in the outskirts of the city)
-New lots here are now over 100k(usually the prime one's where you could spend the money and get it back-120-145k
-I'm running a roofing company/in the midst of building up a business(it's growing)my time and energy is maxed!(im spending 60-75h a week running it,hence my late night posts.
-The real estate bubble(im abit scared to take out 300k + right now,if i was to build)i work with builder's in my city and houses have been sitting longer(even though winnipeg is really strong right now!diverse economy,there is a slight change in the wind(i don't know if im reading into real estate to much ie:media and im getting cold feet to move on something
-If i was to do what i did in 08-it will take me about 8/9 mths for the build and then a yr to occupy(so i don't pay the capital gains,which would bring me into 2014 market(again it scares me,the market)
-It alot of work to build

My reasons for paper assets over re
-The market of stocks is filled with terror right-now as you know(being a layman,i do believe RIGHT NOW is a generational buying time(esp in the us)*i believe goldman sachs is correct calling this*
-I have a strong desire to build passive income

I'm always looking dogcom for opportunities i just have'nt found one in re
I kinda have a tri factor going on right now with my business,ports-i have cash waiting....i know that sounds crazy because im a carpenter/roofer by trade and im on the other side ie:stocks.It does'nt make sense i know.


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## donald (Apr 18, 2011)

I should add(if your interested)during the same time i was selling was the same time i dumped my rbc mutal fund salesman(went self direct with the rsp,tfsa)believe it or not i have actually made some decent gains during the last year(over 8k on aapl,2k on pm,some soild gains on bce,cnr,enb,t and just recently toll brothers*us builder*(i bought 100 shs @ 23 just in the springs)I hold a few decent loses thou-esp on my cat holding and td(bought @ a bad time)but im up overall 8k on over 200k in stock/rsp inc-so i guess about 4% but i got the stream going/happening on my large cap divs.Plus i find the stock market fascinating(i can read all night on companies,look through the globe/new york times/forbes/even twitter on the pros look through links ect ect-I got the bug!No sure if im a sucker and a idiot lol.....i will know as my investment life unfolds.(im conservative though,no pennies,only 1 or 2 small caps,and what i believe a soild asset allocation with correct weighting ect)

I still have some money for a flip/build in the future(the downpayment for a construction loan or for a flip/fix.


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## dogcom (May 23, 2009)

Good thinking and looking ahead donald.

In the end however with your skill, know how and people you can probably call on, you can make a killing buying, living in, renovating at leisure and selling houses. 

We certainly need a correction in Vancouver and Toronto but once that settles down there is huge potential for money making for someone like you. Looking down south those flippers seem to be doing well buying very cheap homes in good areas. I think today we are seeing better flip shows because they can't really on always rising markets to buy and sell in.


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## gtprince (Jun 14, 2012)

Chad said:


> Wow some people are in serious denial ie. Rusty O'Fool.
> 
> I would sell, heres why to name a few...
> 
> ...



I'm not sure if you realize it or not, but he's just trying to contribute and I believe amongst others that no-one really appreciates your putdowns.


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## Berubeland (Sep 6, 2009)

The problem right now with this market is that it's so overheated that it doesn't seem to matter if the place is a dump, people figure the house could sell for $300K the renos will cost 20K and it gets listed for $290K. 

In the past it was not unusual for people in the trades to buy properties and maintain them and rent them out as a retirement income, figuring they would piddle around and have a few places. 

There are some contractors who renovate homes but basically just employ themselves and a few workers. They've done alright but they get killed when the market goes down.


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## Chad (Jan 30, 2011)

gtprince said:


> I'm not sure if you realize it or not, but he's just trying to contribute and I believe amongst others that no-one really appreciates your putdowns.


I calls it the ways I sees it gtprince. Seriously anyone who claims that they don't see any reason for a real estate crash and states there is no speculation in todays real estate market either:

1. Has the same intellectual capacity of a turnip or,
2. Has a vested interest in keeping the current real estate bubble going. Hmm who could that be?

If anyone has felt offended by the above comment or any others for that matter, please call
1-800-EAT-SH!T to file a formal complaint.


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## dogcom (May 23, 2009)

Reading Chad's comments I would say they are fine other then the name calling which we could do without. The one I agree the most with is higher interest rates. Buying after high interest rates has kicked everyone on the edge to the curb is the usually the best time to buy a house and yes at lower principle which is far better then lower rates.


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## dogcom (May 23, 2009)

Rusty O'Toole said:


> There isn't going to be any crash. I thought there was too, back in 2008 when the US hit the skids, I thought our market would follow suit. So I sold some nice rental houses. Wish I could buy them back now for what I sold them for, or even $50,000 more. The market dipped all right, for about 2 months, to the tune of 10% or so, then bounced right back.
> 
> I don't see any reason for a real estate crash. In fact we are in an inflationary period right now. I know no one is talking about it in the media, but if you keep tabs on what you are paying for groceries, insurance, heating oil etc. you know it is a much bigger factor than most people believe. An inflation rate of just 5% causes prices to double in 12 years.
> 
> ...


Reading over Rusty O'Toole's comments I would say they give us a good difference of opinion or argument which is much needed on the forum whether we agree or not. While I don't agree that this is a better time to buy I do think speculation is lower and Canadians are being conditioned not to expect price increases to bail them out and are thus not willing to pay just about any amount to get in. Inflation is higher in certain areas and could get out of hand if central banks decide to fight deflation to the point their money printing sends the velocity of money out of control. I would also not be over confident that prices can't rise as Garth Turner knows all to well.


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## Berubeland (Sep 6, 2009)

Chad said:


> I calls it the ways I sees it gtprince. Seriously anyone who claims that they don't see any reason for a real estate crash and states there is no speculation in todays real estate market either:
> 
> 1. Has the same intellectual capacity of a turnip or,
> 2. Has a vested interest in keeping the current real estate bubble going. Hmm who could that be?
> ...


Dialing 1-800-EAT ****.

You have reached a forum where ad hominem attacks will get you banned. Frankly I agree with your position and I will state this. This is not a space where you let your inner monologue run wild. You don't get to make fun of people's names or use them in derogatory fashion. You don't get to insult their intellectual capacity. 

This is because even when people have wildly differing and opposing viewpoints they may introduce you to an idea that makes sense to you and causes you to reverse your position. I personally would like to have my bearish stance on real estate changed. The idea that inflation is going to moderate the real estate market is a welcome one and not stupid. 

I have been wrong about many things and events in my life but there are two things I have really appreciated, people who do not rub it in my face when I have been proven wrong and people allow me the dignity of having my own opinions until the dust has settled. 

Despite the bearish bent on this forum, all the bears have been wrong me included for 20 years with a few minor blips. In any case regardless is I am wrong or right, I quite enjoy that this forum is, with a few minor exceptions, a safe place to be and discuss issues. And in that we all win, because if we continue to be wrong...Rusty isn't allowed to call us losers or turnips six months from now when the entire "crash thing" blows over just like it did in 2008 (Not that I think it will...this time) each:


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## sags (May 15, 2010)

See..........that's the thing about real estate, as Garth Turner has repeated endlessly.

It evokes very emotional responses from people.

Lean over the backyard fence, and tell your neighbor that your home is worth more than theirs, because you have (nicer fence, wider driveway, ceramic tile.......whatever) and watch the response. It is like you told them their baby is the ugliest one you ever saw.

It is these emotional ties to home ownership that fuels a market where normally rational people will line up outside an office and spend 600,000 in 10 minutes, without much discussion about the actual home.

It is these emotional ties that apply pressure on young couples to buy that first home.......and become "established" lest they remain..............dare I say it...........lifetime renters...........(something akin to hobos and gypsies)

Oh my goodness..........what are they like.........those renters? Is it true they smell funny and can't read?

Emotions.......when people know they "should" sell because they are way over their financial heads......but won't because they just "love their home".

I know..........I have the disease too.

We owned many homes over the years.........rent now. It doesn't make financial sense for us to own. It doesn't make sense for us to own because we can't maintain the property as we used to. But...........I still feel less worthy.

The lenders, realtors, Sunday papers.............have really done a number on us.

We should sue.

Bottom line..........as I see it.

If you can afford to buy....really afford to buy, and you want to buy..........why care where the future price is going?

Buy a home you love and stay in for a long time..........and avoid divorce.

Good luck............and peace everyone.


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