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Vancouver Off-Topic / Current Events The off-topic forum for Vancouver, funnies, non-auto centered discussions, WORK SAFE. While the rules are more relaxed here, there are still rules. Please refer to sticky thread in this forum.

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Old 02-18-2014, 09:57 PM   #1976
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There's people who actually prefer to rent than to own. I know a few guys who have tons of money saved up but prefer to rent because they use their cash for investing opportunities. I had a friend that was making good money by lending cash out to business people and he told me the interest he charged paid for his rent. In some way these guys are probably in better financial shape than most home owners, they have no housing debt and investments that are giving them better returns than owning a home. On the other hand, someone might argue that they don't have a hard asset and real estate in Vancouver seems like a no brainier to invest in if you have the money.

At end of the day it's a personal choice. If you had to purchase a home in Vancouver today there would be a strong possibility of carrying a $500,000+ mortgage and in most parts of the world this wouldn't be a "good" financial move especially for a young couple. In Vancouver people justify having such a large mortgage because massive gains in real estate in Vancouver but this thread is now 79 pages long so I won't go into our real estate market been in a bubble or not.
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Old 02-18-2014, 10:44 PM   #1977
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not to be a cynic, but i think if you ask your average guy or gal off the street about the concept of time value of money or calculating a simple yield to maturity question they would have no idea what you are talking about.
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Old 02-18-2014, 10:58 PM   #1978
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^
not to be a cynic, but i think if you ask your average guy or gal off the street about the concept of time value of money or calculating a simple yield to maturity question they would have no idea what you are talking about.
I think that is 100%.... true.

Most people who did not study business or economics will have no concept of that unless they are into investments. Even those who do study such topics may not understand the meaning of it.

It drives me insane that people around me keep telling me to buy a place when I have no interest of doing so. Especially buying into a price stable at best condo market that will see negative gain compared to inflation.

Some people just can't seem to stand having a chunk of cash burning in their pockets/bank accounts and have to spend it on something. Makes absolutely zero sense to me.
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Old 02-18-2014, 11:09 PM   #1979
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I think that is 100%.... true.
Some people just can't seem to stand having a chunk of cash burning in their pockets/bank accounts and have to spend it on something. Makes absolutely zero sense to me.
Actually even people who have inherited property do that too.. Especially when they are looking for short term gain. eg I recently bought a lot from an acquaintance who are just desperate to unload his dead parents' portfolio.. 4 unit 300' townhouse lot in a C2C zoned area (so 6 stories building can be built without variance) he wanted 500k. I gladly gave him 600k and dealt the whole transaction via my lawyer's firm on my dime. I asked him why he is doing that, he said he just don't want to deal with it.. and he is in his early 50s working as a plumber. His parents originally bought it for 40k way back in the 60s.

I feel terrible for all the risks the parents took emigrating during WW2 with literally nothing in their pockets and ended up getting their hard earned savings squandered in the end. Their risk tolerance was huge compared with most people would consider normal these days, if they had lose their jobs, they lose their savings and house + whole family ends up on the streets. With more and more aging parents this become common especially in gentrified areas. I have seen parents rather have their rental properties foreclosed rather than showing "weakness" in front of their kids. However when those do show up at the courts they are usually tear downs.

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Old 02-19-2014, 12:01 AM   #1980
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This is EXACTLY why I choose to rent. I can have a new place for less then what they want for that old dump.
That's seem logical for short term. What about 10years, 20 years or 50 years? Would you be ok renting till the day your die or enter an old folks home? After 20years or so if you buy the unit will be yours (shorter too if you add to your principle payment every year). Just suggesting. I wouldn't want to rent all my life so I could stop pay someone else forever.

I am too lazy to do the calculations but after you paid off your mortgage your only expense is proptery tax and maintance fees if you purchase which should come to up less than $1400 per month while renting you are always paying at least $1000 every month.
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Old 02-19-2014, 12:27 AM   #1981
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Thats providing we will even need to worry about paying a mortgage in 20 years. Queue CiC.
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Old 02-19-2014, 07:47 AM   #1982
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The thing of rent vs owning is covered under a very simple economic term: opportunity cost.

Since the money one would make over time is a finite number, given the opportunities available, is paying off a house the best choice, financially speaking?

For me, it's not. The money spent on house can make me more money elsewhere. (factoring the rent and any potential appreciation/depreciation I could take into consideration) Hence, I decide to rent. Nevertheless, if one doesn't know jack about investing, and leaving the money sitting in saving is the best option one could do if one doesn't buy a place, then perhaps buying is a better choice.
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Old 02-19-2014, 10:32 AM   #1983
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The thing of rent vs owning is covered under a very simple economic term: opportunity cost.

Since the money one would make over time is a finite number, given the opportunities available, is paying off a house the best choice, financially speaking?

For me, it's not. The money spent on house can make me more money elsewhere. (factoring the rent and any potential appreciation/depreciation I could take into consideration) Hence, I decide to rent. Nevertheless, if one doesn't know jack about investing, and leaving the money sitting in saving is the best option one could do if one doesn't buy a place, then perhaps buying is a better choice.
I am not very good with investing so getting an apartment seems better for me. Maybe when I learn more about investing I will change my mind.
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Old 02-19-2014, 11:47 AM   #1984
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all i've got to add to this thread is that basements are awesome. we've got 2, 1 bedroom suites rented @ $600 each. mortgage is $1800/month. rough life living in the lower mainland having to pay $600 towards a mortgage every month living in a 5000 sqft house. not bragging, just sayin...
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Old 02-19-2014, 11:50 AM   #1985
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Renting works if you find a good home, can secure a long-term lease, and have a good landlord. More often than not, one of these things is missing, particularly when it comes to renting apartments.

People can crunch numbers all they want, but how many of you live with women, have families, and rent on a long-term basis? If you're poor, sure. If you're well off, well...
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Old 02-19-2014, 12:06 PM   #1986
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all i've got to add to this thread is that basements are awesome. we've got 2, 1 bedroom suites rented @ $600 each. mortgage is $1800/month. rough life living in the lower mainland having to pay $600 towards a mortgage every month living in a 5000 sqft house. not bragging, just sayin...
Some people don't want renters, I know I don't. I realize it's not a choice a lot of the time but given a choice fuck the headaches. I could rent out my basement, it's finished and everything is roughed in including a spot for separate washer/dryer would be very cheap for me to put a suite down there but I have no interest at all. I think I'm actually the only person on my street that doesn't have a suite.

$1,800 a month is a pretty cheap mortgage on a 5,000sf house anywhere in the lower mainland so unless you put a big down payment down or have a ton of equity from another property that would be a big stretch for most.
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Old 02-19-2014, 12:08 PM   #1987
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$1,800 a month is a pretty cheap mortgage on a 5,000sf house anywhere in the lower mainland

Damn that guy must have had a quarter million down!
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Old 02-19-2014, 12:12 PM   #1988
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That's seem logical for short term. What about 10years, 20 years or 50 years?

Life changes too fast to look that far ahead, at least for me anyways
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Old 02-19-2014, 12:16 PM   #1989
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Interesting, albeit bleak article: Gen Y is redefining home ownership - and the B.C. real estate market - The Globe and Mail

This guy owns a house but it just sounds like a terrible burden. Workaholic but still has to borrow money from parents & grand parents to afford a small east-side lot where they yet still have to rent out FOUR bedrooms in order to afford payments...

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Because he owns a house, James Griffiths, 34, is an outlier among his peers, he says. He and his wife own a modest house on a narrow lot on Vancouver’s east side. However, to cover their mortgage, they rent out four bedrooms, which means a constant turnover of tenants. Mr. Griffiths is a self-described workaholic. He obtained his masters while working a 40 to 50 hour work-week.
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Old 02-19-2014, 12:21 PM   #1990
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Owning a home:
Pros: Setting up residents where you can raise a family. Its mentally rewarding and having pride of owning a home as a Canadian.

Cons:Not having the freedom to leave and moving anywhere in the country. Paying front end loaded interest on your mortgage. 25-30 years old debt."TERMS!" The value of your home can swing with the market leaving you liable for underwater mortgage. Paying CMHC Premium if your down payment is under 19.99%. Property taxes. Tranfer tax. Lawyer fees. Strata fees or maintenance costs. Home insurance. Forclosure.

Best option for me would be to buy a place outright and avoid some of these cons.
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Old 02-19-2014, 12:22 PM   #1991
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Sounds like a dream, this home ownership.
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Old 02-19-2014, 12:32 PM   #1992
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Some people don't want renters, I know I don't. I realize it's not a choice a lot of the time but given a choice fuck the headaches. I could rent out my basement, it's finished and everything is roughed in including a spot for separate washer/dryer would be very cheap for me to put a suite down there but I have no interest at all. I think I'm actually the only person on my street that doesn't have a suite.

$1,800 a month is a pretty cheap mortgage on a 5,000sf house anywhere in the lower mainland so unless you put a big down payment down or have a ton of equity from another property that would be a big stretch for most.
funny thing is we were actually better off financially with the house we sold to buy this one. we sold it because it was right beside a high school and we always had kids from the school hanging around and coming back at night drinking etc. they even caused property damage at one point, threw a huge rock through our front window and even knocked off the mirror of our one tenants car. the first 3 years we lived there we never had a problem, then it just progressively got worse...

i feel bad for the people that bought the house though, first time home buyers and they're immigrants. paying around $2500/month for the mortgage. if interest rates hike or market goes south, they're completely fucked.
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Old 02-19-2014, 01:20 PM   #1993
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This guy owns a house but it just sounds like a terrible burden. Workaholic but still has to borrow money from parents & grand parents to afford a small east-side lot where they yet still have to rent out FOUR bedrooms in order to afford payments...
Not a lot of empathy from me, honestly. Pretty much everyone under the age of 35 needs to hustle these days. Pretty much anyone I know my age ($yself included) works 50+ hours per week, works on designations or degrees part-time, raises families, takes care of their parents, and makes mortgage payments on their shoeboxes in the sky. And before people chime in about renting, my peers were able to get into market several years ago.
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Old 02-19-2014, 08:32 PM   #1994
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Just to give this thread some numbers:
House on East 27th Ave and Rupert:
Assessed: 750k
Asking: 830k
Sold: 910k
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Old 02-19-2014, 09:00 PM   #1995
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That's my area
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Old 02-19-2014, 09:12 PM   #1996
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there's been No question that single family homes under $1m are still on the upswing.
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Old 02-23-2014, 09:05 AM   #1997
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Just to give this thread some numbers:
House on East 27th Ave and Rupert:
Assessed: 750k
Asking: 830k
Sold: 910k

910k... Jesus H tap-dancing Christ!!!
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Old 02-23-2014, 10:47 AM   #1998
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Its a sad reality. Makes you wonder why people in the US have such a hard time owning a 250k home. While people here are taking out 500k+ plus mortgages. Banks love us.
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Old 02-23-2014, 11:20 AM   #1999
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This thread imo is more of a real estate discussion thread, rather than a "bubble" thread.

Having said that, there's a shiet load of equity (at least on paper anyways) in Vancouver. When someone sells their home that they bought for 200K over a decade ago for a million. That owner now has $1 million dollars and are basically a millionaire.

Real estate has made many people millionaires in Vancouver in the last 5 years without doing anything really.

On the other side of the coin, there's now a lot of debt - from mostly the people that purchased in the last 5 years.
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Old 02-23-2014, 12:02 PM   #2000
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If you look at how much the average person makes here and how much the average house price is.. i really wonder how any homegrown British Columbian can survive here. It's time to move. A lot of people are bitter.. but I guess we shouldn't hate the player, but hate the game.
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