|
Quote:
Quote:
|
Quote:
|
Quote:
|
Quote:
For the basis of this thread your idea is pretty out of place. |
Quote:
|
Quote:
|
"Warren measured affordability by comparing mortgage payments to rents, and found that owning a home in Edmonton costs on average $590 more per month.
The gap is $899 in Toronto, $952 in Calgary and $1,794 in Vancouver. On balance, Warren rated Edmonton homes as relatively affordable." http://www.canada.com/edmontonjourna...93da38&k=66871 |
Quote:
"The Scotiabank Group report released Tuesday said the difference between the typical monthly mortgage payment on an average resale home in Canada and the average rent on a two-bedroom apartment is currently over $800 -- up from about $575 last year and as low as $250 per month in 1997" |
Quote:
That means you can then sell these at $100k-$125k easily with basic revamping. Cost: 6x$75k = $450k - Resell @ 6x$110k = $660k one year later for $210k profit on a $112k cashdown investment. (187% profit) Knowledge is power. |
Quote:
|
Quote:
You are in the same bandwagon, just the opposite. |
Quote:
|
Quote:
|
Quote:
|
Problem is that people see Real Estate as very long term investment.
Most of the time, it's not. You can make 100-300% in 2-3 years on one project and move on. If this thread is all about buying a "standard" home in a "standard" location at a given "standard" timing, spending thousands on worthless in-home stuff to impress your friends, you won't make any profit in the long run. I live in a condo... I bought it because it was in pre-construction (low-price / high 1st year appreciation), very unique waterfront location (long term appreciation) and it's located in a region where all babyboomers will want to retire in the next 5-10 years, near to all services. I bought for these reasons. Not based on my feelings. It is an investment to me. Bottomline is: don't pretend that your home is an investment if you did not bought based on economic reasons, but only from your feelings. Quote:
|
Quote:
|
Quote:
You can get a $800/month rent from a $80,000 appartment. The monthly rental rate should be around 1% of the unit value. It will cover all expenses (mortgage, taxes and inflation...) If you can get better than 1%, it's even better. Owner of that $400,000 unit is renting at only $1,200/month because it's a high class market. At 0,3% per month he better did not consider that unit as an investment at first.... |
I'm posting too muhc
|
Quote:
|
Quote:
All this talk regarding appriciation differentials is rather silly anyway. The real boom in real estate is fairly recent (last 30-40 years) prior to that it tended to appreciate in line with inflation (which was for all intents and purposes non-existant on the kenshin\gold standards). All people keep doing in this thread is using ancedotal evidence to support their opinion. Yes you CAN make money in real estate yes you CAN make money in stocks. As an overall investment stocks TEND to average out to a better overall return over MOST timelines in which you own them. That said you have to live somewhere, and you'll either end up owning or renting. There's actually an index out there that tells you given the region in which you live which is a better fiscal investment once you figure in taxes, upkeep, average rental prices, cost of aquiring capital etc. FIN. :2 cents: PS: People really need to figure out how ammortization schedules work. You realize how long it takes for you to start paying any significant $ into your home on a 30-year? Most people never 'build euity' they're just paying interest. |
Quote:
|
Quote:
|
Quote:
You keep trying to compare houses to apartments. Are apartments going to be a lower gap than houses? Of course. But some families needs houses and not apartments. Some singles or couples don't need space and like apartments over houses. But you percieved reality over hard facts from a major lending bank in Canada says it all. The average gap for a 2 bedroom home "IS" $1700 a month over renting in Vancouver right now. Whether you choose to believe it or not. But if you want to buy in Windsor, Ontario you are paying even if not a bit cheaper to buy a house or a condo over renting there. All depends on the area you want to live and if you want to do renovations are not. In that market you are better off buying since there is no gap. Again its all moot if you dont use that difference in rent vs mortgage payments to invest in other things. |
Ok I did some research on this and basically it depends on what housing market you live in.
With the overheated housing market of last few years, the cost of buying versus renting has inverted substantially. Basically home prices jumped through the roof, and people being the sheep they are flocked to buy these homes at outrageous prices. With low interest mortgage and lax lending requirements this has created a shortage of renters in these markets which means landlords aren't able to hike rents. So in some areas it may temporarily be true that renting is better than buying I don't see that being the case long term. Eventually alot of the idiots who took adjustable rate mortgages will get foreclosed, which will simultaneously put reasonably priced homes back on the market and flood the rental market with prospective tenants. This should put rents vs mortgages back into proper balance. Long term however, owning your own home is still the way to go for financial security. Depending on what housing market you live in, this may not be the best time to buy though. Obviously if you're renting a place for $1000 a month, and buying the same place would cost you $2000 a month, then renting is the way to go. In most markets that isn't the case though, which is why this whole topic is making most of us shake our heads in disbelief. |
Quote:
|
Quote:
He's taking making (simple numbers) a 100k investment when he doesn't actually HAVE 100k. That's great if the house appreciates ahead of his additional expenses as he generates a return on money he 'doesn't have', but you seem to be ignoring the downside. Only difference is a bank will give you a loan to buy a house, but is far less likely to issue that same loan against a stock cert for the average person. Problem with leveraging is that it can cut both ways, if the house depreciates you can get stuck with a loan you can't buy yourself out of because you can no longer sell the house untill you can service the lien. Leveraging IN ITSELF isn't good or bad, it's just a powerful tool. You can use a chainsaw to cut down a tree or to cut off your arm depending how you apply it. Homes in my opinion are actually far riskier for the average person because in essence they're investing money they don't have and crossing their fingers, even if most choose not to look at it that way. |
You're also failing to take into account liquidity and the discounting that you SHOULD be doing to your cash flows in your equasions.
|
I bought a new house and made $40K in two years. I read this thread because I thought you figured a better way to invest this money.
|
Quote:
Having a paid for house is the only reason most people are even able to quit working when they're old. A renter will always have that expense. |
Quote:
We don't have 12-18% interest rates anymore... Maybe it applys with a 10% cashdown, but otherwise it's not a valid argument. The only personal amount you need to consider is the cashdown. Everything else is backed up by the bank. It's not even your money. Let's say you buy a $200k unit with 25% deposit. (I always put 30-35%) Investment = $50k Mortgage = $150k Unit Value = $200k Mortgage is 6% per year. Inflation is 2% per year. Appreciation is 8% per year. First year, you pay 6% + 2% inflation interests on the $150k = $12k First year, appreciation is 8% on the $200k = $16k There you have a $4k profit before other expenses. That is $4k on the initial $50k (8%). You should be able to break even after paying taxes, insurance, etc. That is great for the first year. No win, no loss. In 10 years, the mortgage will be lower and the unit value will be higher. The same 6% - 8% rates will apply but in the profit zone. Mortgage = $120k Unit Value = $420k 11th Year, you pay 6% + 2% inflation interests on the $120k = $9.6k 11th Year, appreciation is 8% on the $420k = $33.6k $24k profit before other expenses. And the taxman won't charge you anything on profit when you sell. |
Quote:
I don't see the real estate market going anywhere but UP... except in USA and some high class place in Canada. Would I buy a condo in Florida? Hell NO! |
Gee, real estate is a great investment when the Fed drops interest rates to 1% and mortgage lenders hand out money without confirming the borrower's credentials.
|
Quote:
If the average wage earner can't afford the average home in the area, then there's a bubble and it will eventually pop. Wages aren't rising at 8% a year, and that will never happen because if it did we'd have massive inflation and your appreciation would be worthless anyways. |
Quote:
|
where i live houses are going for 250 to 350$ a square, the bubble is about to burst. :321GFY
|
Interesting article on the Global Propert Housing Boom:
http://www.globalpropertyguide.com/a...cle_id=68&cid= |
In the end, for most people real estate is almost a kind of "forced" savings account. they buy a house, live it for a long time and then sell it. They sell it for more than they paid for it and have some money in their pockets. When everything is factored in, they didn't make a much of a profit, but they do have cash that they wouldn't have had otherwise.
Here are two examples: example 1 If you are going to rent a house for $1200 month and live there for 15 years even if your rent never goes up at the end of that 15 years you move out and you get nothing from the landlord except maybe a cleaning deposit. If you buy a house and pay $1200 a month after 15 years the house will have gone up in value and you've paid down the mortgage, you sell it and when you move out you get a nice chunk of change in your pocket. So in the end at least some of the money you have been paying in house payments you get back. example #2 You buy a house for 150K and live in it until you are ready to retire. When you retire the house is paid off and is now worth 250K. you can sell it and put that money in your pocket or you can live there and your only housing cost is insurance and taxes. If you have rented all this time, you still pay rent and you have nothing of value. The only way to make a lot of money in real estate is to either buy it and sell it relatively quickly or to buy it and rent it out. |
interesting discussion, anyone buy real estate in nyc area with some tips
|
Quote:
Apparently, you missed the disclaimer that I was trying to simplify the example. Apparently you also missed the part where I said the only ADVANTAGE of buying vs renting is taking advantage of leverage. The assumption that you sheep keep making is that real estate always appreciates (more specifically appreciates at a rate greater than your interest rate). Apparently that's to much to wrap your head around. Sure if we're all just going to make up numbers we can come up with examples that show one is better than the other both ways. I never said real estate is ALWAYS a bad choice relative to renting, I said the idea that it's ALWAYS better than renting is fucking retarded as it tends to go either depending on the region you live in. |
Quote:
Quote:
Freezing prices and wages (inflation) is chosing to disgregard one of the fundamental blocks of the rent vs own debate. You admitted yourself that it ultimatly breaks down to a region by region analysis and there is no universal 'right' answer which is all I said in the first place. What exactly are you arguing now? The irony of course being that I was just pointing out your analysis was over simplistic and your response was to simplify it even more to defend a point you'd already conceded lol |
| All times are GMT -7. The time now is 02:47 PM. |
Powered by vBulletin® Version 3.8.8
Copyright ©2000 - 2025, vBulletin Solutions, Inc.
©2000-, AI Media Network Inc123