# What Would you do in my Situation?



## Abii (Jun 22, 2017)

Guys (and gals), please be gentle. It's my first day on this forum. 

*Context*: 29 years old; finishing undergrad in exactly 2 days; own a 1 bedroom condo in Vancouver (mortgaged); will almost certainly be going to law school in Edmonton (start date: Sept. 2018); less than 20k in student loans. 

I've owned the condo exactly 1.5 years and it's appreciated quite nicely during this short period (that's Van. for you). It's currently rented out and I'm living rent free elsewhere. Basically my annual cost for the condo is 0 (renting it furnished for 2200 a month). If I sell in the next few months, I can realistically walk with 170-200k in my pocket.

*My question/concern*: interest rates are starting to finally go up. I think July 12th is when we'll know if the Bank of Canada will raise its rates (first time in 7 years I believe). This isn't an immediate concern. I'm fixed at my rate until Nov. 2020. But it's something to think about b/c it will have an affect on the market (in theory at least). At the same time the Vancouver market is starting to stress me out. At first I was happy about my investment. I was in school and every month my net worth (yes, I know, it's all on paper until I sell) was increasing by quite a bit while my peers were happy with their min. wage jobs. But now I don't know how sustainable it all is. Basically I'm not the biggest risk taker in the world and this is hurting my conservative brain. This is concern 1. 

My second concern is regarding life after I start law school (summer of 2018). I've lived in Edmonton for extended periods of time in my mid-twenties. I can tolerate the city. After law school I might realistically live there indefinitely, so I'm fine with buying property there. I've done some math and the cost of rent for 46 months in Edmonton for me will be around 55k. I could sell my place in Vancouver and either buy a condo there cash (a not very nice one) or try my hardest to get a small mortgage and get something nicer. That would erase the rent I'd be dishing out every month while in law school. Alternatively, I could keep my Vancouver condo and not worry about rent at all b/c the appreciation during the 46 months will be crazy, *AS LONG* as the market doesn't **** itself and continues like it has since I've bought it. 

I've also thought about the stock market, but it's not something that I understand. I'm reading about ETF's and Mutual Funds. I know the returns won't be anywhere near Vancouver real estate returns, but that's also an option while I'm at law school. Until I graduate and figure things out. 

One last thing. Law school and medical school students can get very favorable student loans from major banks and that's what I'm hoping for. There is no money saved up for tuition. It will be borrowed money. Rates are usually prime + 0 to prime + 0.5/1. Scotia for example, was offering prime + zero for some time depending on the program of study. 


> The Scotia Professional® Student Plan is a customized banking package designed to help students studying medicine, dentistry, optometry, law and other professional programs achieve their financial goals now and in the future.


If you were in my shoes, what would you do?

1) Keep the condo as is and not worry about it. Continue to rent it out and enjoy the paper gains. Re-evaluate in a couple of years from now. 

2) Sell, pocket the 150-200k and: 

a) get into the stock market and invest passively while in school for 3 years (starting in 2018);
b) buy a place in Edmonton and live rent free throughout school (*I will qualify as a first time buyer b/c I didn't use the credit the first time around)*
c) pay for law school out of pocket (~55k for rent, ~40k for tuition, books, misc education costs)

3) I'm open to suggestions for number 3. 

Thanks everyone.


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## mark0f0 (Oct 1, 2016)

1) Very unlikely that your condo has actually appreciated. What you see written in newspapers, the numbers, aren't adjusted for the dramatically shifted sales mix over the past few years.

2) Why would you want to mess around with a rental especially at such nosebleed valuations? Be glad you can get out without a loss.

3) Throwing it into a balanced ETF portfolio seems quite prudent.


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## Daniel A. (Mar 20, 2011)

Well we keep hearing about a market correction that never seems to happen, even if it did the rental market is not likely to change with such low vacancy rates.
I'd say keep it and continue renting it the fact your locked in till 2020 provides some relief.

In the early 80s we had a market correction that took several years to recover from, again in the late nineties property was moving slow nothing really started going again till around 2005 and has not slowed since. There really is only a limited amount of land for housing I'm sure you can also see the traffic coming in from the valley every day.


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## Eder (Feb 16, 2011)

Lol @ a student that owns a mortgaged condo signing up for more years of education. I'd ask for my money back!


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## Abii (Jun 22, 2017)

Eder said:


> Lol @ a student that owns a mortgaged condo signing up for more years of education. I'd ask for my money back!


sigh... there's always one.

How do you think I got the mortgage? I was out of school for 3-4 years before I went back in Jan. 2016. I was working in the oil industry as a tradesman and that's when I purchased the condo. Money was good, life was not. So I decided to chase my dream of becoming a lawyer. I am here asking for advice, but I also think I've made a lot of good choices. Not many people my age, in BC or ON, are in the position I am now. Also, what's odd about a student owning a mortgaged condo? As I said, normally I rent the place for 2200 a month, but if it's short term (3-4 months) it goes for 2500 a month. Mortgage payments are 1750. 

@ mark0f0 
What's a realistic interest rate on a "balanced ETF portfolio"?

@ Daniel A.
The only reason I'm even entertaining the idea of selling is the pace of growth. Otherwise I agree with you completely. Over the past 6 months, units in my building have gone from selling for slightly less than assessed value to 30-40k over assessed value, easy! Every unit that goes on the market is scooped up immediately. I wish it would increase at a calm 10-15% a year.


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## Abii (Jun 22, 2017)

> 1) Very unlikely that your condo has actually appreciated. What you see written in newspapers, the numbers, aren't adjusted for the dramatically shifted sales mix over the past few years.


Could you elaborate please? Totally not understanding you. What do you mean it hasn't appreciated?


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## tygrus (Mar 13, 2012)

Abii said:


> Could you elaborate please? Totally not understanding you. What do you mean it hasn't appreciated?


He means that valuation magically disappears into the air when you list it. Probably be like half what you think especially when there are other nicer units available in your building.

Sell it pocket what you can, live rent free where you are at until your career is established then use the money for downpayment. You dont own any land. Own land.


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## OnlyMyOpinion (Sep 1, 2013)

First Abii, welcome to the CMF. Some days only a notch up from reddit , but still a good place to come and get a helpful range of opinions.
A very good summary of your situation by the way.

Re/ your Vanc rental condo, you haven't mentioned how you would manage it as a distant landlord. Seems to me that could be a pita unless you have someone local who will respond to issues, clean between tenants (it sound like you have had a few?), etc.
Your concerns about RE prices, the impact of int rate increase are valid. Nobody can really know if they will affect your condo price. 

It sounds like your gut is telling you to take the money with you when you leave. Having owned a few distant non-revenue properties, that would be my inclination as well. Particularly in a year when your income is low and tax on the capital gains will be low.

Then, one thing at a time, move, find a convenient rental, check out a student loan, etc. No big hurry to invest the money in the market. You mention passive investing, so read up on the couch potato etf style of investing here: http://canadiancouchpotato.com/about/. Also make sure you have yor TSFA max'd out to shelter as much as you can.

If you end up staying and working in Edmn you'll already have a good chunk for your dream home, but I suspect you might find that you will never need that money and it can stay invested, growing for you in your TSFA and RRSP towards early financial freedom.

On other comments:
Mark seems to be of the opinion that the rise in real estate prices (bubble) we read about will not translate into a higher price for an individual's property. That hasn't been my experience and I suspect it won't be yours.
Tygrus is of the opinion that you should own land (such as a detached property), not a condo because of the horror stories around some and the lack of control over your property. I agree with Tygrus, except I also recognize that thousands choose condo living, it works for them and they don't all end in financial disaster.
I think Eder is just expressing what does seem to be a growing problem - the number of graduates with no place to work based on their degree, and up to their eyeballs in debt. That clearly doesn't seem to apply here.

You asked about returns in the market. If you look at the couch potato model portfolio performance, you'll see about 5% over the last 10 years and nearly 10% over the last 5 years (to last Dec 31) is typical for a balanced portfolio.


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## Just a Guy (Mar 27, 2012)

First off, realize that you have been a good investor, you've been lucky. The odds of repeating your current success are low. You walked into a casino, but all your money on black, and got a hit.

Smart gamblers know when to cash out and take their winnings, foolish gamblers "let it ride", and get blinded by believing they are gambling masters.

Owning real estate long term is rarely about appraised values, it's all about cash flow. If I look at your paper profits of $150-200k alone (forget the value of your actual property), I could buy 2-3 rental properties for that money, each of which would generate around $1000/month cash flow. Last year, for example, I bought two 2 bedroom condos for $70k each (currently rented at $1250/month) and a three bedroom condo for $95k (currently rented at $1300/month). The two bedrooms appraised at just over $100k and the three bedroom appraised at $140k, allowing me to get all my personal money back out of the properties, while still producing a couple hundred dollars each every month.

Now, these are not typical results in today's market but you should be able to find some quality rentals for a reasonable price of around $100k/door (as you can see by my rents, I'm not a slum landlord either, but I work hard to find deals and negotiate them, so you can't expect to match my years of experience out of the gate). 

So, I'd suggest "option 3", cash out and learn to be a true real estate investor. A good beginner's primer can be found on www.easysafemoney.com. Take your profits and buy a real rental unit, in Edmonton so you can manage it locally yourself for cash. Find a renter, then go to the bank and get a mortgage on it (maybe fix it up a bit if needed). With a signed lease, and a fixed up property you should get most of your money back with an 80% LTV mortgage (even if you didn't, you'd only be eating up around $20k/door of your winnings). Take your mortgage money, rinse and repeat a couple of times. In a little while, not sure what deals you can find or how fast as this market is high almost everywhere, you should be generating some cash flow while still maintaining a good chunk of your original cash.

Now you can pay for your schooling out of your original winnings, plus have a steady income from the rents, while maybe growing equity in a couple of properties instead of just one in a hot market.


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## tygrus (Mar 13, 2012)

IMO, most condo buildings will become low income housing or slum properties over time. Very few are well maintained for their life. Look at some of the condos in TO built in the 60s/70s. They are pretty scary. There could easily be a Grenfell tower repeat in one of those.

The problem is that the strata fees are often wasted and dont go to keeping the building up. Individual owners arent allowed to improve their property and wont because everyone else wont do it, so nobody does it. And a developer is not likely to take on a building that has low income tenants, evict them and refurbish the property because they would face a huge backlash in the community. So they find new properties and build new.

Condo ownership is a path to depreciation.

But a SFH can be improved a lot and maintained no matter what others in the neighborhood are doing. You are in control of the value to a degree. You can always knock it down and build another. And if rented, you only have one tenant to evict to do it, not hundreds.


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## Mukhang pera (Feb 26, 2016)

Have you read the thread here on AI? If you were an old timer, you'd recognize that as part of "King's Regulations and Admiralty Instructions", which is what I long understood the term to mean. See: https://archive.org/stream/kingsregulations01greaiala#page/n5/mode/2up

But now, AI means "artificial intelligence". There are dire predictions of mass unemployment due to burgeoning AI. On the flipside, we might all get to enjoy lives of leisure unimagined heretofore, with robots serving our every whim. Even thinking for us.

So, it might be prudent to consider carefully the whole law school idea. But, if you persist, let's say you become a criminal lawyer. 

Lots of stuff to learn just about that subject area alone. It can be a minefield. More than 30 years out and the courts are still trying to figure out how to apply the Charter of Rights and Freedoms in the criminal law context. Those at the bar must struggle to keep up with the latest pronouncements from the bench. AI to the rescue!

It might be that by the time you graduate with that sheepskin (or “licence to hunt” as my Secured Transactions prof used to call it), you might already be rendered obsolete. 

Let’s suppose a man is charged with first degree murder. A heavy, high octane charge. He comes to you. The factual matrix is complex and bristles with legal issues. You right away envision the prospect of endless voir dires and pre-trial motions dealing with things such as voluntariness and admissibility of statements to police, validity of search warrants and the fruits of search. And let’s not forget about the whole vexing matter of “interception of private communications”. Days can be spent arguing about the admissibility of wiretap evidence, voice recognition evidence, etc. Lots of law to review and make sure you are up-to-date on. That’s before you even get near trial.

But do you think a lawyer robot will be at all rattled? That lawyer will be self-assured, with endless gigs of memory and a high speed processor that can call up case law from all over the world, if need be, including decisions rendered only this morning. What an advantage!

Another advantage is that the robot will not be put off by unsavoury facts. This is murder after all. Sometimes just the forensic photos and evidence are enough to give a hyena the dry heaves. Do you think the robot attorney will be repulsed?

I can see where the defence robot and the Crown robot will deftly handle all preliminary inquiry and pre-trial matters and have the matter ready for trial in a few days, not months. We’ll see an end to (now common) applications under s. 11(d) of the Charter, where the accused seeks a stay of proceedings for lack of a trial within a reasonable time.

At trial opening, the accused will be escorted to the prisoner’s dock by robot sheriffs. Defence and prosecutor robots will be ready at the counsel table; perhaps not seated; not sure if that’s what robots do. The robot judge will be on the bench. I would expect judge and counsel to be appropriately gowned, even if robots. Naked robots have no place in a courtroom.

Twelve robot jurors will file in, in solemn fashion. Poker-faced. Unflustered by the gruesome facts about to be placed before them. They won’t render a judgment based on emotion if told of the murder and sexual abuse of a child. Jury room deliberations will be brief and orderly. There should be no such thing as a hung jury. The application of the law to the facts, when done by robots, can never produce error. That goes as well for evidentiary and procedural rulings during trial. There won’t be much need. The robot judge and lawyers will all have all the relevant law immediately to hand and will view it in the same, unerring fashion. Appeals will be seen as a quaint bit of history. The only way there could be a court of appeal would be if it were manned by the next generation of robots. Then an appeal robot might be heard to say something like: “The learned trial judge robot made a palpable and overriding error in ruling as it did. Had the judge been upgraded with the new Kaby Lake chips, Thunderbolt 3, and faster storage options, its ruling would have been different. The appeal is allowed, the conviction quashed and an acquittal entered.”

Perhaps law school will be useful for lawyer robot programmers. But then, they might pass along some of their own flawed thinking to the robots. Perhaps better for other robots to do the programming. Humans will just mess things up.


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## Just a Guy (Mar 27, 2012)

tygrus said:


> IMO, most condo buildings will become low income housing or slum properties over time. Very few are well maintained for their life. Look at some of the condos in TO built in the 60s/70s. They are pretty scary. There could easily be a Grenfell tower repeat in one of those.
> 
> The problem is that the strata fees are often wasted and dont go to keeping the building up. Individual owners arent allowed to improve their property and wont because everyone else wont do it, so nobody does it. And a developer is not likely to take on a building that has low income tenants, evict them and refurbish the property because they would face a huge backlash in the community. So they find new properties and build new.
> 
> ...


Somewhat true.

In my experience, most condo owners are cheap. They don't want their strata fees to be high, so they cut back on maintenance and the building gets run down.

That's usually the point where I come in. I get on the condo board, explain that their property, once worth a small fortune, is heading towards zero value and that they need to smarten up and save their investments. Usually, I convince them to do some major cash calls, get a proper property manager, and we collectively bring the building back up to snuff.

For the owners, who initially spend hundreds of thousands of dollars to purchase their property, it makes sense as it returns their holdings to positive equity, for me, who bought in near the bottom, I get well rewarded despite the cash call.

Building take time to turn around, but they can be quite profitable and real estate investing is all about time. Neighbourhood renewal has become quite popular. Many formerly bad areas are now trendy locations...if you get in early, and help with the renewal, you can be rewarded. 

No successful investor ever said real estate investing isn't work.


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## humble_pie (Jun 7, 2009)

^^


@MP - very entertaining. Can you tell us a story about how it will be when they have robot judges. Robo prosecutors, robo defending attorneys, robo tribunals.


@Abii - it seems to me you have a bit too much student debt for a newly minted bachelor's degree. This business of going to school in edmonton for several years while spinning the real estate roulette wheel in vancouver doesn't sound all that grounded to me.

if it were myself i believe i'd sell the vancouver condo, pay down existing student debt to zero, figure out my edmonton housing when i get there, or at least when i get approved for the professional student bank loan that will make everything possible.


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## Just a Guy (Mar 27, 2012)

Mukhang pera,

Why go through all the outdated, human, melodrama?

Heck, with the speed of computers, we could just whisk people straight to jail as they come out of the womb. Computers could calculate the likelihood of you committing a crime (nearly 100% if you actually wanted to enforce every law dispassionately) and levy up fines or terms at birth to make things truely efficient. 

While robots and AI may seem to make things simpler, imagine the hackers who figure out ways to stage the crime scenes...that fake blood, now becomes human blood matching the victims with a few deft keystrokes. Computers none the wiser, innocent victim off to jail for life...

As usual, our panacea solution, designed to bring about utopia, will once again fall upon its own sword. A whole new group of humans will be employed to fix the problems created by the latest solution...


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## Mukhang pera (Feb 26, 2016)

Abii said:


> As I said, normally I rent the place for 2200 a month, but if it's short term (3-4 months) it goes for 2500 a month. Mortgage payments are 1750.
> 
> I wish it would increase at a calm 10-15% a year.


Leaving aside the reference to AI, I am with HP and those who counsel selling in Vancouver. For one thing, your cash flow does not look all that rich. The mortgage is $1,750 and the rent is $2,200. But there must be some condo fees and property tax to pay, or does the $1,750 cover p.i.t., leaving only strata fees to think about? Even then, if the place ends up vacant for a month or two, which can happen even in a robust rental market, that wipes out your profit for months.

I too wish that all of my investments would appreciate at a "calm" 10-15% a year.


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## Mukhang pera (Feb 26, 2016)

Just a Guy said:


> Mukhang pera,
> 
> Why go through all the outdated, human, melodrama?
> 
> Heck, with the speed of computers, we could just whisk people straight to jail as they come out of the womb. Computers could calculate the likelihood of you committing a crime (nearly 100% if you actually wanted to enforce every law dispassionately) and levy up fines or terms at birth to make things truely efficient.


You have a point there JAG. Maybe robots could conduct an assessment of all humans at birth and sort them into appropriate piles, including some who will always be trouble. They can go straight to Her Majesty's Guesthouse.


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## humble_pie (Jun 7, 2009)

Abii said:


> ... normally I rent the place for 2200 a month, but if it's short term (3-4 months) it goes for 2500 a month. Mortgage payments are 1750.



$450/month does not seem like enough margin to pay the condo fees + property taxes. What if they assess a new roof at $5-10k per owner?


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## Mukhang pera (Feb 26, 2016)

humble_pie said:


> $450/month does not seem like enough margin to pay the condo fees + property taxes. What if they assess a new roof at $5-10k per owner?


Vancouver is famous for its "leaky condos". I have not been there for awhile, but not long ago, one could not go a block in the West End without passing a condo project completely enveloped in scaffolding and netting while undergoing "rainscreen" and "building envelope" remediation. Those projects were always funded by "special levies" imposed by the strata corporation, typically in the tens of thousands of dollars. I know of one condo owner on Harwood St. assessed $13,000 on a 500-square-foot unit just for the cost of repairs to a leaky underground parkade. She was at the time renting the unit for $1,200/mo., furnished, utilities included.


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## Pluto (Sep 12, 2013)

One of your concerns is interest rates. Rising rates are usually to fight inflation which is supposed to rear its ugly head around the time of "full employment". We are at or near full employment yet inflation is anemic, so one would expect any rate changes to be minimal. this line of reasoning would seem to suggest keeping the condo, but I'd sell it. I'd find it way too distracting. I'm recalling the euphoiric late 1980's when home owners had great gains on their property. They anticipated further gains. Suddenly the market turned, and in a short time dropped 20%. All the late comers were wiped out. 

Take the money and run. And if the market keeps going up, don't regret selling too soon. Selling is buying peace of mind while in a demanding course of study. Your real investment at this time is in yourself so don't do anything to draw your attention away from that.


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## Daniel A. (Mar 20, 2011)

One other factor is student loans are at a lower interest rate than others.


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## Jaberwock (Aug 22, 2012)

Sell the condo and rent a place in Edmonton until you have finished your law degree. You don't know where you will end up once you graduate.

Invest the proceeds in blue chip dividend paying stocks, with an emphasis on stocks that regularly increase their dividends.


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## Just a Guy (Mar 27, 2012)

The problem, even with small interest rate increases, is that double edged sword of leverage. Sure, a small quarter point increase each year doesn't sound like much but, in 5 years when your mortgage comes up for renewal that's 1.25% higher. Still doesn't sound like much until you realize that your mortgage payment will increase by about $65 for every $100k you've borrowed. On an "average" Canadian home (valued at $450k) that would be nearly $300 more each month someone (who is probably already living paycheque to paycheque) would have to pay, on a Vancouver property it would be even worse.

That's only with a .25% increase every year, now imagine what happens with .5%, or even a low 1%. People will try to sell, but buyers can't afford those payments any more than sellers, so prices will have to tumble. Foreclosures will be very common. Exactly what happened in the USA in 2007.


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## Mukhang pera (Feb 26, 2016)

Pluto said:


> Take the money and run. And if the market keeps going up, don't regret selling too soon. Selling is buying peace of mind while in a demanding course of study. Your real investment at this time is in yourself so don't do anything to draw your attention away from that.


That advice has a certain common sense appeal. Having done the paper chase myself, I would say the fewer distractions the better.


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## Sm5 (Nov 2, 2014)

Mukhang pera said:


> That advice has a certain common sense appeal. Having done the paper chase myself, I would say the fewer distractions the better.


Agreed. At least for 1L (from what I recall of it) you are going to be preoccupied with a heavy course load, lots of groups trying to get you to commit to extracurricular activities, and a lot of other demands on your time. 2L and 3L a bit less but you probably are not going to want to have to worry about your condo in Vancouver etc. on top of all of that. Sell, rent (or buy) something close to campus - Windsor Park Plaza was popular when I was at U of A Law as a rental, or Grandin McKernin/Belgravia areas (buy or rent) would be my recommendation as being close greatly improves the law school experience when you aren't commuting from the 'burbs (from what I've heard from those who did).

Spend your time networking with classmates and firms, traveling (if you want to, you'll be constrained after graduation for a number of years) not worrying about tenants. It can be a far greater financial and professional benefit than any Vancouver condo rental income ever will over the long term.

Also, from those who did PSLOCs, Scotia and TD were the popular banks for law students and rates were negotiable to prime + 0 to prime - 0.5 with mandatory payment deferrals that could be negotiated to after completion of articling (default was completion of the degree). With 200k cash kicking around probably not necessary, but it wouldn't hurt to set one up even if you don't use it. I regretted not doing that when still in school as it was much more involved when in practice after graduation.

PS: if you need any info on U of A Law or the legal market in Edmonton from someone who went there (admittedly a few years ago), feel free to direct message me.


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## Abii (Jun 22, 2017)

lol I feel so bad for not answering all you folks individually. This thread has FAR exceeded my expectations. I was half venting/thinking aloud. But now I'm saving all the links/posts for later review. 

I replied to the thread yesterday, but for some reason it said it has to be approved by mods (please don't approve the old one if you're reading this, I'll just recap here). 

*@Sm5*: didn't expect to find a recent law student here, let alone one from U of A. I still haven't applied, but my last 60 GPA is over 3.9/4 so I'm confident that I can get in (still have to write the LSAT in Sept., but I really have to fudge that up to not get accepted with a 3.9X). I'll definitely be spamming you one of these days with questions :witless:

I used to live on Whyte and 99th for a couple of years. I love that area. Anything I buy in Edm. will be around that area for sure. One thing about Edm. is that there's no traffic (not that I would buy in the burbs) so the commute would be doable, but an unnecessary headache for sure. 

The other day I spent an hour watching the Dean's Welcome video on YT. Can't wait to be sitting there in the audience next year!

*@OnlyMyOpinion:* Thanks for the welcome. I'm with a management company here. That's why I wasn't worried with being a long distant landlord. They take 100 bucks a month to manage the place + a fee to find me tenants etc... I lose roughly 3k a year by being with them, but I like it this way. I haven't even walked past the tower in 1.5 years lol. 

*@Just a Guy:* What city did you buy those in? Those deals seem crazy! 2 and 3 bedroom condos less than 100k?! Thanks for tips. Your post is definitely going in my word folder. I'll check out that website you mentioned after this post. 

*@Mukhang pera*: haha that was an interesting read. I've certainly thought about the issue of AI and how it'll impact the law profession. But not to the extent you have. I first started thinking about it when I read about the guy in New York who made the parking ticket app. I also had a teacher that was always preaching about AI and how law and accounting will both become obsolete in the future. The thing is, a case can be made for every profession. When I was working in the trades, I met an old operator in the KinderMorgan Terminal in Sherwood Park (Edmonton). The guy was complaining about how they're cutting his salary and when he complained, they told him it's either a cut or layoff. Apparently the whole control room in the plant had gone through a retrofit and they no longer needed as many operators. He even mentioned how one control room could now manage two different plants that are in close proximity. White collar, blue collar and everything in between is eventually gonna get hit by AI. There are probably professions that are more or less AI proof, but I also have to be able to do those things and find them somewhat interesting (at least). 

Financially, law probably doesn't make sense. Nor did my exit from the trades. I was making near 6 figures as a 25 year old. But I was miserable. Hated my work environment etc... I always looked at the 9-5 people and imagined my life outside the oil patch. I might never make much money in law and the profession might slowly fall from grace. But when I look at my alternatives, I see things that I either hate, or professions that are just as in danger of being taken over by computers. At least law is interesting  

*@humble_pie*: you're right, the student loans I've accumulated right now need to be paid off regardless of what I do. My plan is to go back to the oil patch around September (I'm already in contact with my old company for a job) and try to pay that all off before Summer of 2018. 

Regarding assessments and levies, I've had a couple actually. My building is a skyscraper with over 200 units (I forgot how many exactly). So far they've all been averaged down so much that I haven't really lost any sleep over them. The reserve also has 300-400k built up so that should limit any catastrophic levies. 

*Jaberwock * I wish I had started buying stocks when I was younger. I remember just after high school I opened a Questrade account and pretty much gambled a few thousand dollars on penny stocks. I lost it all (obviously) and never looked at stocks again... lol I remember there was a penny stock guy named Tim Psykes. I watched one of his videos and I thought I need to get on this. Investing is obviously the way to go, not gambling like an idiot (which I was back then, and not just for this reason).


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## Abii (Jun 22, 2017)

So just an update:

I've made a decision to sell the place next summer, around July. I just could not bring myself to sell in this market. Just last week a unit on the same floor as mine went for 575K. According to BC Assessment's website the unit was assessed last July for 490k (mine is assessed nearly 50k more). All the realtors I've talked to say the market downtown is growing by 2.2-3% a month!!! That's a ton of growth to be saying no to for now. Of course all the risks we've all mentioned so far in this thread are valid and that's why I want to get rid of the place next summer. Something we didn't mention is the BC political climate. Who knows what the Green/NDP coalition might do to cool the market. A decision can come next month and make me regret not selling. We'll see. 

So my plan for the money is to invest it in a fund of some sort and ride out law school without buying a place (mostly because I can't qualify for a mortgage and I don't want to buy a cheap place cash). I came across this thread and noticed a couple of familiar names (from this thread). OnlyMyOpinion mentioned Mawer so I'm looking into that right now. 

Coincidentally, yesterday I received the annual performance report from my pension and noticed that the fund has grown by another 10% (just over 10). I only worked for a unionized company for a couple of years (my last year in Alberta was spent jumping around between non-union companies that paid no pension), so there's not much in the account (only 28K), but the growth in that fund has been great in my novice eyes. 

question: In the picture below, are the growth rates before or after the MER?


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## WGZ (Feb 3, 2017)

Reasonably cheap to rent in Edmonton right now, another bonus for you. Say 900 a month for a decent enough place of your own right by the LRT even, no roommates required. Need to rent for 3 years = ~$33 so even lower than your budgeted $55k for total rent during the remainder of your schooling here.

I'm definitely done considering condos, in Edmonton at least. Condo fees being close to 500 which is ridiculous given a lot of the crappy condos here in poor locations...that would add up to $18k thrown away over 3 years on just "fees". Rather do the above renting for that 3 years while saving for a detached house/other living arrangement. Or in your case, paying off loans etc. much faster.


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## Just a Guy (Mar 27, 2012)

Those fees should be used to maintain the property, or bring it back up to par, thus increasing the value of the property. It shouldn't be viewed as wasted, any more than fixing a hole in the roof of your house.

Hat being said, not all condos are properly run, nor are they properly maintained. So, get on the board and help spend the money wisely and to your benefit.


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## Just a Guy (Mar 27, 2012)

> @Just a Guy: What city did you buy those in? Those deals seem crazy! 2 and 3 bedroom condos less than 100k?! Thanks for tips. Your post is definitely going in my word folder. I'll check out that website you mentioned after this post.


There are properties available right across Canada, maybe not in GTA or downtown Vancouver, but Canada is a lot bigger than those two cities, despite what their residents think. 

Now, there aren't a lot of such properties, and they don't come up often, not to mention you need to be ready to purchase them when they do come up, but they are out there if you bother to look.


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## Abii (Jun 22, 2017)

WGZ said:


> *Reasonably cheap to rent in Edmonton right now, another bonus for you. Say 900 a month for a decent enough place of your own right by the LRT even, no roommates required*. Need to rent for 3 years = ~$33 so even lower than your budgeted $55k for total rent during the remainder of your schooling here.
> 
> I'm definitely done considering condos, in Edmonton at least. Condo fees being close to 500 which is ridiculous given a lot of the crappy condos here in poor locations...that would add up to $18k thrown away over 3 years on just "fees". Rather do the above renting for that 3 years while saving for a detached house/other living arrangement. Or in your case, paying off loans etc. much faster.


That's good to hear. My 55k budget was based on more months, but I also figured I'd be paying over 1000. I was paying over 1000 a few years back on 99th and 81st. Man what a dump that building was :dread:
I was renting from Rentex. 

I agree with Just a Guy. I don't look at those fees as money being thrown away (maybe if it wasn't growing so much I'd have a different attitude :indecisiveness. But on the flip side having a house and being able to choose what gets "fixed" and what doesn't does sound pretty sweet.


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## Just a Guy (Mar 27, 2012)

Get on the condo board and you'll probably have a good say in where the money is being spent. Most condo boards have trouble recruiting people to help out. Rather silly when you think about it, for most people it's their biggest investment, but they can't be bothered to look after it, then they get annoyed when it gets run into the ground by others.

Of course, most owners complain about condo fees, so many condos are underfunded and thus degrade (at least cosmetically). This is usually where I step in, get on the board, do a couple of cash calls, get the building back on track and make a good return on investment. The owners are usually much happier as well since their building is now worth more. It helps to treat the condo as a business, which it is. Usually a million dollar plus corporation, run by people who don't know what they are doing.


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## Abii (Jun 22, 2017)

Just a Guy said:


> Get on the condo board and you'll probably have a good say in where the money is being spent. Most condo boards have trouble recruiting people to help out. Rather silly when you think about it, for most people it's their biggest investment, but they can't be bothered to look after it, then they get annoyed when it gets run into the ground by others.
> 
> Of course, most owners complain about condo fees, so many condos are underfunded and thus degrade (at least cosmetically). This is usually where I step in, get on the board, do a couple of cash calls, get the building back on track and make a good return on investment. The owners are usually much happier as well since their building is now worth more. It helps to treat the condo as a business, which it is. Usually a million dollar plus corporation, run by people who don't know what they are doing.


 Would you say that this is mostly a problem in low-rises? It's not something I've looked into, but I would imagine that 100+ meter concrete condos would have less problems with funding. Just because when you have 200-300 people in the building, it's easier to divide costs between people. Of course, the variable costs in a taller building are more, but when it comes to certain fixed costs (maintaining the pool, fixing a 20000 dollar pool pump, new roof etc.) they are much more tolerable. Also, a small increase in condo fees goes a long way when you multiply it by a few hundred every month. 

I don't know if these thoughts are grounded in reality, but when I was originally buying my place it was on my mind.


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## Mukhang pera (Feb 26, 2016)

Just a Guy said:


> There are properties available right across Canada, maybe not in GTA or downtown Vancouver, but Canada is a lot bigger than those two cities, despite what their residents think.
> 
> Now, there aren't a lot of such properties, and they don't come up often, not to mention you need to be ready to purchase them when they do come up, but they are out there if you bother to look.





Just a Guy said:


> Get on the condo board and you'll probably have a good say in where the money is being spent. Most condo boards have trouble recruiting people to help out. Rather silly when you think about it, for most people it's their biggest investment, but they can't be bothered to look after it, then they get annoyed when it gets run into the ground by others.
> 
> Of course, most owners complain about condo fees, so many condos are underfunded and thus degrade (at least cosmetically). This is usually where I step in, get on the board, do a couple of cash calls, get the building back on track and make a good return on investment. The owners are usually much happier as well since their building is now worth more. It helps to treat the condo as a business, which it is. Usually a million dollar plus corporation, run by people who don't know what they are doing.



JAG, while you dodged the question about the location of your properties, from your divers posts on this board one gets the impression that you own an extensive collection of both single family dwellings, single condo units in larger projects, as well as some apartment buildings. One also gets the impression that they are not concentrated in one city. If such be the case, do you sit on strata councils or many strata corporations across Canada? Do you spend a lot of time travelling to attend council meetings? Or is your m.o. to locate rundown buildings, get yourself a seat on the strata council, persuade your fellow councillors to approve a levy on all owners sufficient to restore building to its former glory, stick around to see that the project is executed properly, then resign from council? Even then, I would expect you must spend a lot of time on the road.


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## nobleea (Oct 11, 2013)

Sell the place in Vancouver. Despite what realtors tell you, it's unlikely to keep on going up. If demand goes down and interest rates go up, your future purchasers are not going to be willing (or able) to pay as much.

I would recommend living downtown in Edmonton. It has changed substantially in the past 2 years, all for the better. It will continue to improve over the next 2 years. The LRT offers a short ride to campus, and most of the firms you would be articling and working at are located downtown. While there is still nightlife on Whyte, the hub has moved downtown as well. It's shocking what the new arena has done for us, and the full impact hasn't even been felt yet.

There's no way you're going to get a quality place for under $1K a month in a nice building around whyte or downtown though. Rental rates are certainly soft, but I think you'll be paying 1000-1300 for a nice, quiet place.


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## humble_pie (Jun 7, 2009)

Abii said:


> question: In the picture below, are the growth rates before or after the MER?
> 
> View attachment 15553



after, i would assume. Management & other fees are silently paid out, in pro-rated amounts, each & every business day, all year long.

ie the day portion has already been subtracted before the NAV is calculated each afternoon after markets close.


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## Just a Guy (Mar 27, 2012)

Abii said:


> Would you say that this is mostly a problem in low-rises? It's not something I've looked into, but I would imagine that 100+ meter concrete condos would have less problems with funding. Just because when you have 200-300 people in the building, it's easier to divide costs between people. Of course, the variable costs in a taller building are more, but when it comes to certain fixed costs (maintaining the pool, fixing a 20000 dollar pool pump, new roof etc.) they are much more tolerable. Also, a small increase in condo fees goes a long way when you multiply it by a few hundred every month.
> 
> I don't know if these thoughts are grounded in reality, but when I was originally buying my place it was on my mind.


Bigger projects have higher costs. If you have a 1000 sq ft apartment in a low rise, it still costs nearly the same to maintain as a 1000 sq.ft apartment in a larger complex. True, replacing a roof my be cheaper, but every floor is the roof of the lower units and still needs some maintenance. It doesn't cost as much, but carpets need replacing, same with sub flooring. 

Other expenses such as windows and doors may be a little cheaper because of bulk, but it's not really that significant of a savings, it certainly doesn't offset the costs of the better facilities in larger complexes like pools, gyms, etc.


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## Just a Guy (Mar 27, 2012)

Mukhang pera said:


> JAG, while you dodged the question about the location of your properties, from your divers posts on this board one gets the impression that you own an extensive collection of both single family dwellings, single condo units in larger projects, as well as some apartment buildings. One also gets the impression that they are not concentrated in one city. If such be the case, do you sit on strata councils or many strata corporations across Canada? Do you spend a lot of time travelling to attend council meetings? Or is your m.o. to locate rundown buildings, get yourself a seat on the strata council, persuade your fellow councillors to approve a levy on all owners sufficient to restore building to its former glory, stick around to see that the project is executed properly, then resign from council? Even then, I would expect you must spend a lot of time on the road.


I hold my properties in a corporation, I have people I've trained to represent me (property managers, realtors, lawyers, etc.). I don't need to be on every board personally, but I try to have representatives on them. I was a lot more hands on in the beginning but, once you develop a system and the infrastructure, you can delegate some of the more mundane stuff. 

I still tend to look at the listing sent from my realtors and pick out ones of interest, but that's all done over email. Same with contract negotiations. I like playing monopoly with real houses still.


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## Abii (Jun 22, 2017)

Didn't want to open a new thread about this, so I'll just ask it here. 

Is it possible to get a mortgage with a large down payment (over 50%) and no recent income? Just to recap, I'm selling my Van. condo next summer and moving to Edmonton for school. I spent all day today on MLS looking at Edmonton condos. I'm seeing very decent units for around 300k and below. So it might make sense to just buy outright. I've heard that with >50% you can get a mortgage without income verification. Any truth to this? As far as tuition goes, I'm thinking of going back to Fort Mac in October and staying up there until I have my 40k cash (I can go back and work for my old company). I also talked to my bank and a student LoC should be no problem (100k @ prime).
A sub 100k mortgage payment at 2.89 is less than 500 bucks. That's less than half of what I would pay for rent! This new plan makes a lot more sense.... as long as banks are willing to pay a mortgage without income verification. New immigrants have no Canadian credit or income and a lot of them get mortgages. So there has to be a way.


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## getliquid (Mar 2, 2014)

Abii said:


> sigh... there's always one.
> 
> How do you think I got the mortgage? I was out of school for 3-4 years before I went back in Jan. 2016. I was working in the oil industry as a tradesman and that's when I purchased the condo. Money was good, life was not. So I decided to chase my dream of becoming a lawyer. I am here asking for advice, but I also think I've made a lot of good choices. *Not many people my age, in BC or ON, are in the position I am now*. Also, what's odd about a student owning a mortgaged condo? As I said, normally I rent the place for 2200 a month, but if it's short term (3-4 months) it goes for 2500 a month. Mortgage payments are 1750.


really? doing hard physical demanding job that will shorten your life span in a drug infested environment is hardly making a good choice vs finishing school at 22 married at 25 sign a mortgage, the paper gain on real estate would have been the same in ON or BC. Why would you ever think your in a better position then a lot of 29 yr olds, just because of 170-200K of paper gain??


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## Karlhungus (Oct 4, 2013)

Theres a couple options for you. In either one i would sell the Vancouver condo. But then...

1) Rent a place in Edmonton. You dont really know for sure where you'll be after law school or even if it will work out 100%. Rent, and invest the rest of the money in some index funds. Look at the Couch potato portfolio mentioned earlier. Dont invest in individual stocks unless you are willing to read over financial statements and analyze fundamentals (most people are not willing). 

2) The riskier option but potentially more profitable one is to buy a place. You are aiming for 300k for a condo i believe but there are plenty of really nice condos in Edmonton for far less then that. My brand new in 2008 1 bedroom condo with AC, stainless steel appliances, nice view etc has dropped in value from 225k to 175k. That should tell you what investing in a condo in Edmonton can be like. One of the best financial decisions I made was scrap together a down payment for a house in 2004 when i was 22 and rent out the basement to a friend. Worked out great. I would suggest doing that. Buy a house, and rent out some rooms. Riskier, but you can significantly lower your monthly housing expenses.


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## Just a Guy (Mar 27, 2012)

Abii said:


> Didn't want to open a new thread about this, so I'll just ask it here.
> 
> Is it possible to get a mortgage with a large down payment (over 50%) and no recent income? Just to recap, I'm selling my Van. condo next summer and moving to Edmonton for school. I spent all day today on MLS looking at Edmonton condos. I'm seeing very decent units for around 300k and below. So it might make sense to just buy outright. I've heard that with >50% you can get a mortgage without income verification. Any truth to this? As far as tuition goes, I'm thinking of going back to Fort Mac in October and staying up there until I have my 40k cash (I can go back and work for my old company). I also talked to my bank and a student LoC should be no problem (100k @ prime).
> A sub 100k mortgage payment at 2.89 is less than 500 bucks. That's less than half of what I would pay for rent! This new plan makes a lot more sense.... as long as banks are willing to pay a mortgage without income verification. New immigrants have no Canadian credit or income and a lot of them get mortgages. So there has to be a way.


As usual, the answer to your question is "it depends". There was a time when you could get a 50% LTV mortgage basically no questions asked, but that's not true anymore. The rules for qualification change all the time, and banks can reject you for any reason, it doesn't even have to make any sense.

All that being said, just because one bank says no, or even several, that doesn't mean you can't get the mortgage you are looking for. I've been told "no" so many times in my life that I just think of it as the bank's way of saying hello. I've been rejected on a 50% LTV mortgage before on a clear title only to get an 80% LTV mortgage on the same property a few weeks later with a different bank, or maybe even a different division within the same bank that rejected me.

I was once told that, in my particular case, it's just easier for most brokers to say no than to go through all the work required for such a small commission. Mortgage qualification is based on a number of factors, personal income is only one of them (a big easy one), to qualify without it takes a lot more supporting documentation (my application usually involves a foot high stack of papers at least all verified). It also requires a broker who knows how to talk to the underwriters (basically the broker's job is to sell the underwriter on you being a good risk). 

Long story short, yes you can probably get the mortgage you want, but it won't be as easy as it used to be. It would be easier if you had a good job, but going to law school is a bonus (since it shows a large potential income in the future). 

As for buying a place right off, I'd suggest you rent for the first year. I know you said you've lived in Edmonton before, but cities and areas change all the time. What may have been a "good" part of town may now be on the decline and formerly "bad" areas may be becoming "trendy". There may be good reasons why you're seeing what you think of as "deals". It's hard to know when you don't live in a city, heck it's even hard to know when you live in the city as there are often biases for people who live there (southsiders who'd never live on the north side and vice versa kind of thing).


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## Abii (Jun 22, 2017)

getliquid said:


> really? doing hard physical demanding job that will shorten your life span in a drug infested environment is hardly making a good choice vs finishing school at 22 married at 25 sign a mortgage, the paper gain on real estate would have been the same in ON or BC. Why would you ever think your in a better position then a lot of 29 yr olds, just because of 170-200K of paper gain??


1) The phrase lmao is overused, but I genuinely had to laugh at this one. My lifespan not only didn't get hurt by working outdoors, it improved. That's like saying sports shorten your lifespan because they are physically demanding activities. I wasn't in a very physically demanding trade anyway (don't want to give out too much info here). If I modify your argument and try to make it a bit more logical, I can say that people who work in trades that deal with fumes (welders for example) and chemicals etc... are damaging their long-term health. But you're saying "physically demanding" activities/jobs shorten one's lifespan. That's, frankly, stupid. I was far healthier 2-3 years ago when I spent my time outdoors everyday than I am now. I think that's just common sense. 

Data does show a lower life expectancy for tradesmen, but those are because of workplace accidents. *Not because* tradesmen as a general rule are more unhealthy. That's, again, obvious.

2) What does marriage have to do with anything? When did marriage become a standard of success? We're not in the 1940's Bob. Personally I think marriage is actually a huge mistake in your 20's and early 30's. In any case, the issue of marriage is entirely irrelevant. 

3) Last week I had an offer for my unit (that came out of nowhere), from the president of my strata company. It's not on paper. Plus, we're talking about Downtown Vancouver. It doesn't get more liquid then this market. 

As far as the scenario you set up about graduating at 22, marriage, mortgage at 25 etc... That's a pretty picture, but completely out of touch. I'm sure there are people that do this, but as I said, not many. You've already claimed that working in a physically demanding trade damages your health! This is another outrageous comment. The majority of university students don't graduate in 4 years. A study in the US showed that "only 19 percent of full-time students earn a bachelor’s degree in four year."
https://www.nytimes.com/2014/12/02/...rn-degree-in-4-years-study-finds.html?mcubz=0

Here in Canada, I'm sure the numbers are healthier, but the vast majority still don't graduate in four years. I can't think of a single friend or family member that graduated in 4 years flat. None. So that's the first part of your scenario that needs improvement. Now let's talk about the expenses involved with marriage. The average couple spends 30,000 dollars on marriage + honeymoon. 
http://www.cbc.ca/news/business/wedding-costs-can-be-trimmed-with-a-few-simple-tricks-1.2718135

Let's say I had graduated at 23 or 24 (a likely graduation age for the majority of Canadians) and had married at 25 like your scenario asks for. Let's say I had secured an entry level white-collar job at 24, making 30-40k in the first year. I would have gone in the hole to pay for marriage costs and the cost of living would also increase dramatically now that I'd be married (even considering a dual, entry-level, income). As a couple, there would also be student loans to deal with. Let's say that we each brought 20k worth of loans to the marriage. That's 40k. Let's throw in another 20k as the cost of marriage. That's already 60 in the red before cost of living increases. Even with promotions, I wouldn't have been able to afford a place until 28-29. I bought my condo at 27. At the time I had 0 credit card/student loan debt. 

No matter how I spin your scenario, I go back to my original comment about being in a better place than most people my age here in Vancouver/Ontario. I'm not saying I've made the right choices. The choices I've made in the past decade have often been reactionary and could have happened a lot different. But I don't think I've come out worse off. My original comment (which you have a problem with), was in response to a dude that said I'm an idiot for wanting to go to law school and that I've put myself in a bad position already. If I'm in a bad position, then 90% of my peers must be in a horrible position. Collect 100 people in their late 20's here in Vancouver and filter out people that have come from money or have had school/down payments paid to them by parents (of course if I had my parents paying for my college and giving me 60k for a down payment I would be in a far better position). Out of every 100, maybe less than 10 have a net worth of 200k. If that. Regardless of how early they finished college, how early the married or what subject they studied. Your scenario might work in Canada's less cutthroat cities, but not in Vancouver and Toronto like I said originally.

Show me proof of your claims and I will say you're right.



Karlhungus said:


> Theres a couple options for you. In either one i would sell the Vancouver condo. But then...
> 
> 1) Rent a place in Edmonton. You dont really know for sure where you'll be after law school or even if it will work out 100%. Rent, and invest the rest of the money in some index funds. Look at the Couch potato portfolio mentioned earlier. Dont invest in individual stocks unless you are willing to read over financial statements and analyze fundamentals (most people are not willing).
> 
> 2) The riskier option but potentially more profitable one is to buy a place. You are aiming for 300k for a condo i believe but there are plenty of really nice condos in Edmonton for far less then that. My brand new in 2008 1 bedroom condo with AC, stainless steel appliances, nice view etc has dropped in value from 225k to 175k. That should tell you what investing in a condo in Edmonton can be like. One of the best financial decisions I made was scrap together a down payment for a house in 2004 when i was 22 and rent out the basement to a friend. Worked out great. I would suggest doing that. Buy a house, and rent out some rooms. Riskier, but you can significantly lower your monthly housing expenses.


1) Thanks for the advice 
I've been reading a lot about investing since I opened this thread. I've looked at data that shows buying individual shares make no sense etc... So far, Mawer funds (MAW104) have caught my eye. I'm also reading about buying ETF's and bonds myself (couch potato idea). I have a 30000 dollar company pension account that's invested in a bunch of different funds and bonds. When I quit my union job I didn't even know how much was in the account (maybe 20k). I looked at it last month and it had risen to 30k. I love the invest and forget aspect of these funds (of course, with a larger position I would pay closer attention).

2) I have a friend in Edm. that's been buying a condo a year. He also mentioned that condo prices haven't gone up. His condos are all on Whyte though, so I do expect at least 1-2 percent growth. I was looking at real estate sales data in Edm. the other day and houses went up by 5% last year. considering it was a slow year (oil prices etc...), that's very decent. May I ask where your condo is roughly (I understand if you don't want to share  ). I've been drooling over the Ice District recently. Frankly I would much rather live in a high rise myself (not at all a house person) and the Stantec building is exactly what I need in my life. Across the street, units in Ultima are selling for 279 to 330 (for 2 bedroom units). I'm sure they can be negotiated down as well. 

A house, however, is definitely the prudent choice financially.



Just a Guy said:


> ...
> 
> Long story short, yes you can probably get the mortgage you want, but it won't be as easy as it used to be. It would be easier if you had a good job, but going to law school is a bonus (since it shows a large potential income in the future).
> 
> As for buying a place right off, I'd suggest you rent for the first year. I know you said you've lived in Edmonton before, but cities and areas change all the time. What may have been a "good" part of town may now be on the decline and formerly "bad" areas may be becoming "trendy". There may be good reasons why you're seeing what you think of as "deals". It's hard to know when you don't live in a city, heck it's even hard to know when you live in the city as there are often biases for people who live there (southsiders who'd never live on the north side and vice versa kind of thing).


Thanks a lot for the detailed answer. This was exactly what I was looking for. Just a background on what the LTV mortgage is even about.

You're right about the final part of your post as well. I guess the reason why I'm so antsy all of a sudden is that when I was in Edmonton last time, I always felt there was a massive shortage of modern condos. The Ice District has completely changed that, but I don't know how fast buildings will sell out. Prices are also very fair (maybe I'm too used to Vancouver prices). Stantec will be ready in mid-2019 however. That would give me time.

On a side-note, I hope people in Edmonton respond to the Ice District and invest there. Edmontonians, and Albertans in general, like their detached homes and general sprawl. But that's a recipe for disaster. The lack of a decent public transportation system in the city is a direct result of having too few tax payers in the core of the city. Downtown Edmonton and Calgary always felt like dead zones to me. Hopefully this new project changes things for the better (I think it will).


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## peterk (May 16, 2010)

Just a Guy said:


> The problem, even with small interest rate increases, is that double edged sword of leverage. Sure, a small quarter point increase each year doesn't sound like much but, in 5 years when your mortgage comes up for renewal that's 1.25% higher. Still doesn't sound like much until you realize that your mortgage payment will increase by about $65 for every $100k you've borrowed. On an "average" Canadian home (valued at $450k) that would be nearly $300 more each month someone (who is probably already living paycheque to paycheque) would have to pay, on a Vancouver property it would be even worse.
> 
> That's only with a .25% increase every year, now imagine what happens with .5%, or even a low 1%. People will try to sell, but buyers can't afford those payments any more than sellers, so prices will have to tumble. Foreclosures will be very common. Exactly what happened in the USA in 2007.


Out of curiosity, if the BOC interest rate goes up starts creeping up, say 1.25% in 5 years, mortgages rates will surely rise more than that won't they?

The variable rate and locked in 5-year mortgage spreads have been very small the last many years... if some increments of consist rate bumps occur over the next couple year, the 5 year locked rate will skyrocket much faster than the BOC rate, no?


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## Just a Guy (Mar 27, 2012)

I'm not a banker, so I don't know but even if they don't that equates to more than $60/month extra for every 100k borrowed. With the average house price is around $450k, that's not exactly chump change for most people.


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## AltaRed (Jun 8, 2009)

Bank of Canada bond yields primarily set the framework for mortgage rates, e.g. the GOC5 (5 year bond yield) more so than short term overnight rates. The bond yield curve moves with market sentiment. The GOC5 has gone up almost 1 full percentage point from its low last year and that has to translate into higher mortgage rates. It's not a linear relationship because GIC rates factor into this too and that depends on how much FIs must offer to attract sufficient money.


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## james4beach (Nov 15, 2012)

The relationship between the Bank of Canada overnight rate and bond yields is pretty loose. I would say they should move in the same direction (+ or -) but wouldn't go farther than that.

It's impossible to predict the bond market, just like it's impossible to predict the stock market.


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## Karlhungus (Oct 4, 2013)

Abii said:


> 1) The phrase lmao is overused, but I genuinely had to laugh at this one. My lifespan not only didn't get hurt by working outdoors, it improved. That's like saying sports shorten your lifespan because they are physically demanding activities. I wasn't in a very physically demanding trade anyway (don't want to give out too much info here). If I modify your argument and try to make it a bit more logical, I can say that people who work in trades that deal with fumes (welders for example) and chemicals etc... are damaging their long-term health. But you're saying "physically demanding" activities/jobs shorten one's lifespan. That's, frankly, stupid. I was far healthier 2-3 years ago when I spent my time outdoors everyday than I am now. I think that's just common sense.
> 
> Data does show a lower life expectancy for tradesmen, but those are because of workplace accidents. *Not because* tradesmen as a general rule are more unhealthy. That's, again, obvious.
> 
> ...


My condo is in a new area south west just off henday - so maybe not the greatest area for potential appreciation. You would probably fare better in the Ice District. Careful with "average" prices. Very misleading. The average price can go up 5% but the average house can go down due to ever increasing size of houses. http://www.livrealestate.ca/blog/20...s-reach-record-price-in-edmonton-in-june.html


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## nobleea (Oct 11, 2013)

Karlhungus said:


> My condo is in a new area south west just off henday - so maybe not the greatest area for potential appreciation. You would probably fare better in the Ice District. Careful with "average" prices. Very misleading. The average price can go up 5% but the average house can go down due to ever increasing size of houses. http://www.livrealestate.ca/blog/20...s-reach-record-price-in-edmonton-in-june.html


The Ice district is expensive. It's large now, but this is only phase I, there's like 3 more phases. Ultima would be a good place to look. Nice amenities area and balcony. The same developer has the Encore under construction now, same area. Grandin is close to the mix, but still very quiet and close to the river valley. Right on the LRT.


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## CrazyEights (May 17, 2016)

Would agree with nobleea in that ICE district is expensive. However, i think there are better developers than those that developed the Ultima (Westrich). Unless they finally subcontracted out their build to Ledcor, Pagnotta or other construction companies, the in-house quality of work is a bit iffy. They developed the massive Windermere Condo complex where they built it themselves, and its known within the construction circles and some RE circles the work done within that complex was subpar (granted it was their first development). But would concur Grandin is a solid spot if you were to come back to Edmonton.


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## Abii (Jun 22, 2017)

nobleea said:


> The Ice district is expensive. It's large now, but this is only phase I, there's like 3 more phases. Ultima would be a good place to look. Nice amenities area and balcony. The same developer has the Encore under construction now, same area. Grandin is close to the mix, but still very quiet and close to the river valley. Right on the LRT.





CrazyEights said:


> Would agree with nobleea in that ICE district is expensive. However, i think there are better developers than those that developed the Ultima (Westrich). Unless they finally subcontracted out their build to Ledcor, Pagnotta or other construction companies, the in-house quality of work is a bit iffy. They developed the massive Windermere Condo complex where they built it themselves, and its known within the construction circles and some RE circles the work done within that complex was subpar (granted it was their first development). But would concur Grandin is a solid spot if you were to come back to Edmonton.


tbh, my opinion of Edmonton changed completely once the plans for the Ice District were released 3-4 years back. During my time there I always looked at Edmonton as a bigger Red Deer (unfair, I know). But since then the city has actually tried/done/in the process of doing so many things I hoped the city would do. The question is, will these developments continue? Yeah, Edmonton will never be a port city with jaw dropping architecture and a progressive culture. But that doesn't mean it can't be the best it can be. 

Sky Residences (residential portion of Stantec from floor 30 to 69) released it pricing and floor plans. It looks expensive at first, but I think they're on point. First of all they are adjusted for market price in 2 year's time and you also have to consider that units start from floor 30. So the starting prices are probably higher due to that fact as well (normally you pay a premium to be higher up). 

https://photos.google.com/share/AF1...?key=Tll2azd1UWRxV1ktYWNON2tsMVBQYm1EV1JNS3d3

One-bedrooms range from 304k-454 (starting prices for their respective floor plans). 
Two bedroom plans start from the high 600s.

I checked Grandin and there are some really nicely renovated units on the market. Good views, good location, large floor plans etc... Problem is they're all in those 1980's era fugly commie blocks. Even though you get more square footage in these towers, I'd much rather have something in a proper tower (proper being glass). I'll definitely look into that area for renting though. Lots of decent units. Thanks.


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## nobleea (Oct 11, 2013)

Abii said:


> The question is, will these developments continue? Yeah, Edmonton will never be a port city with jaw dropping architecture and a progressive culture.


In the last 5 years, there's been quite a shift in the thinking of local developers in terms of what Edmonton expects and what the market can afford. Some of them take more prodding than others. It's generally the new entrants or out of town developers (Lamb has Jasper house planned) that are pushing the bar up.

It's easily the most progressive place in the province. They don't call it Redmonton for nothing. There are neighbourhoods that have elected NDP at the prov and fed level for decades now. Its also referred to as festival city. I'm biased but I think it's going to be a bit of a 'sleeper hit'. Even many people here still subscribe to the 'yeah but it's edmonton' train of thought, but the change is happening with or without them.


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## Abii (Jun 22, 2017)

nobleea said:


> In the last 5 years, there's been quite a shift in the thinking of local developers in terms of what Edmonton expects and what the market can afford. Some of them take more prodding than others. It's generally the new entrants or out of town developers (Lamb has Jasper house planned) that are pushing the bar up.
> 
> It's easily the most progressive place in the province. They don't call it Redmonton for nothing. There are neighbourhoods that have elected NDP at the prov and fed level for decades now. Its also referred to as festival city. I'm biased but I think it's going to be a bit of a 'sleeper hit'. Even many people here still subscribe to the 'yeah but it's Edmonton' train of thought, but the change is happening with or without them.


Edmonton has always been kind to me. When I was struggling in school and eventually dropped out, I managed to find a really decent paying job (and what I thought at the time would be my career) in Edmonton. Eventually I went to Fort Mac and finally ended up moving back to Vancouver to finish my degree. When I started looking at which law schools I would be competitive at, out of nowhere Edmonton came to the rescue again. University of Alberta's admission requirements/policy matched my situation to the letter (I'm applying in later September/early October, but I'm definitely a shoe in already). 

Edmonton has a lot going for it, but the same conservative mentality that has spurred growth (pro oil, low taxes, conservative ideology etc...) will be its downfall if change doesn't come. Thankfully, change seems to be coming. People really underestimate how powerful a development like the Ice District can be. People need to be able to envision themselves in a city. If you want to attract tech workers or spur new industries, you need to offer a lifestyle that's appealing to that audience. Look at Dubai. Its main industry used to be pearl diving!! My uncle went there in the 80's and he said they had just built 2 hotels with a 4 lane highway through the desert. Barely any people anywhere (in 1960 the population of Dubai was 90k!!!). I went there in the late 90's with my parents and mind was blown. Went there again in 2007 and it was like a different city!!! The whole of UAE was different. UAE's population is now close to 10 million and Dubai's share is close to 3 million. No, Edmonton isn't Dubai nor is Dubai a place that one should aspire to be. My point is that if you build it and have a vision for the future, good things will happen. You can't sell a city with slogans. 

If a desert port with pearl diving as its main industry (remember, Dubai doesn't even have much oil) can go from zero to a mega city (population wise they're not there yet, but they're on their way) then Edmonton can achieve good things too with a vision and taking risks with developments like the Ice District. Also look at Vancouver. Before Expo 88 nobody in the US had even heard of Vancouver. Today, Americans can probably name 3-4 Canadian cities and Vancouver is always second after Toronto. 

I read on C2E that the project is being heavily advertised in Asia. I'm hoping a little bit of Asian money is sprinkled on Edmonton. The city needs it. Both Toronto and Vancouver have all sorts of taxes to reduce Asian investment. Edmonton needs to take advantage. Naturally the city won't be invaded because it's not a grade A city (which is a good thing in this case) so the city won't have to worry much. Just attract enough investment to keep the momentum going.


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