Yeah, that's one of the reasons we're renting right now. The current 'value' of the house we live in is ~40 times our annual rent. No thanks.

hmm. here's finally some data from CMHC:

CMHC Says Investors Own 17% of Toronto, Vancouver Condos

CMHC says investors own 17% of condos in Toronto and Vancouver - BNN News



CMHC Says Investors Own 17% of Toronto, Vancouver Condos - Bloomberg

does having a rental suite as a mortgage helper affect/change the 15x rule of thumb, or not so much since it's extra income, not rent?

be aware that a rule of thumb is just that, it is not a primary valuation metric, but a quick 'this sounds a tad pricey' or 'this seems reasonable' - there are many factors...

now, onto your question, you'd look at it like this:

what is the value of your part of the house (annual rent that you could get from it x15) plus the value of the rental suite (annual rent x15).

Of course you'd pay more for a place with a rental suite, as it offsets your cost - having said that, would you give it a full 15x metric? I personally wouldn't as i don't want someone living 'in' my house, but i'm a bit odd like that.

the simplest answer is take all cash flows associated with the house (incoming rents, that is) x15 = value of total house.

"survey"

interesting use of that word. I would have thought CMHC would be able to give us the factual numbers, not the results of a survey.

wrong thread :P

UDI/FortisBC Index: Four people, four incomes, yet one house remains an elusive target

wow, just wow!!!

4 30 something people TOGETHER can only put together a 5% deposit, and one just sold a condo (maybe the story isn't fair and they could have put down more, but chose not to).

i just couldn't fathom this type of situation, it screams risk to me. people fall out, with friends, with wives, almost 1/2 of marriages end... statistically this won't end well.

i just can't believe the stupidity of some in the name of 'owning' (the bank owns the house, not these 4) a piece of crappy wood house.

crazy!

I wouldn't even buy a house with my sister's name attach to it. This is just asking for trouble. Sure your friendship with the other couple is great now, but what about in the future? When you have kids and is screaming all day long, you think your friends are going to ok with that?

My sister is getting marry this year and she have her own duplex and her husband have his own apartment. Just makes thing easier if things don't work out.

I dated the girl Austyn for a while last year, kinda did a double take when I read that article, then saw her facebook post and how literally everyone was giving her props... Not one person out of 50 was questioning the logic. I hope it turns out OK for them but geez... %5 down on an 800k house?! I just don't understand how this makes any sense!

They did their due diligence and they assume the risks. There are now mortgages that allow co ownership eg from Vancity, so I don't think it is that horrible. As for the 5% down payment, their insurance premium ultimately benefits CMHC, which as a taxpayer I don't mind.

If things do go south, there will be others in line to pick up some great bargains. It is Darwin's theory, there has to be people doing risky things in order for the society to ultimately benefit.

My problem with the article is when did personal financial decisions became newsworthy?

Yeah, I read that thinking "uhhh, if you can only scrounge 10k each, perhaps maybe an 800k house is not the greatest idea?"

Why would they still allow a 5% dp? That's just trouble waiting to happen.

wait, what, you dated one of them... so she's only in a relationship with this dude for a year or less, and is buying a house with him, and two other friends...

i just don't understand the thinking.

and to godwin, i'm not quite sure if i'm reading what you wrote correctly, but the risk here is that one of them falls our, has kids, wants/needs to move away, turns into a drug user/dealer, defaults (they're all liable for the whole mortgage, by the way), and then decides to move, sell, or whatever... as for there being a line of ppl to take over, for the whole house perhaps (though it will be now two separate homes in one, but that seems to appeal to some), but for half a house, i'm not so sure, it's not a true duplex... also, this could happen with RE prices 10% lower, so they've now lost, after realtor fees/mortgage release fees, and others, about $25K each.

now, if these people put 20%+ down, i'd get it, they've made a bit more of a sane decision based on wanting more land, a bigger place, etc. but the fact that they only put 5% down is just mind blowing. 4 ppl, $40K total... if 1 person doesn't have $100K as a downpayment in vancouver, i just don't think it's a wise choice to buy (partially bc of diversification, though).

i don't mind admitting that i will feel little empathy for those with negative equity if and when things turn sour. home ownership is a privilege, not a right. leverage is a double edge sword, but most people see leverage as a financially smart thing to use.

The matter is do we know their balance sheet, income, life/ investment experience? no. There are a multitude of ways I can think of it can be a win.. maybe each individual had invested in high yield stocks?.. The last few months everyone who had invested any ETF would have gain at least 10-15% (Finally the US stock market is gaining quicker than housing in Canada) or maybe they have got another apartment as a mortgage helper? or the smart one (if any) is using the dumb ones, so if they crack early the smart ones go in for a steal? If I remember correctly Vancity's Mixer mortgage I think is tailored for such co ownership.. heck they even include life insurance for each mortgage holder just in case. I get it, you think people by any property in Canada is stupid because they are not like you, but there are so much of the story we don't know, it is hard to make a concrete judgement.

AS for the 5%.. 5% mortgages is not available from CMHC anymore, but they are available by others.. only 2/3 of all Canadian mortgages are handled via CMHC anyways. If you use a mortgage broker chances are they would recommended a non CMHC one because they offer a bit better rate vs equivalent CMHC.

There are just way too much unknown for us to tell how the story will end, other than "Four 30 somethings chip in to for 5% down payment for a 800k house".

U give them too much credit. From what I remember, the article said they had pretty shitty jobs and one had just sold their condo, so chances are no excess investments. Also the avg cdn won't have much in net assets, that's just based on numbers

And no 5% CMHC loans? Where u getting that from?

And 2/3 mortgages have CMHC insurance, again, where is that coming from? I read somewhere that it was 80%.

I don't care that they're different than me, I just know, in my heart of hearts, that ppl like this are the average sheeple, financially illiterate idiots that have allowed an irresponsible financial institution to give them an idea of getting into loads of debt with other ppl.

I like the rule "don't buy real estate with ppl u don't sleep with", that includes family, friends, it will end badly, but that story will never be in the papers

I don't want to expose too much of her personal life, but yeah she got engaged to the guy after a few months of dating...But hey when you know, you know, right? No investments or anything, and as far as I know they were previously renting.

I just think there's a crap ton of risk, and zero upside aside from the illusion of "Oh there's four of us, that gives us a break on the cost." Maybe I shouldn't talk though, I bought my own place on my own. I'm waiting for 4444 to call me a dum dum, haha.

Shita, same here, and with only 10% down. However, the price I paid was about 12x what a comparable place would rent for (per year, at that time). It was bad but not horrendous.

buying doesn't make you dumb. making dumb decisions based on bad advice (i.e. 4 person mortgage), or by getting into the whole 'real estate goes up forever' bandwagon makes you dumb.

if you can afford the place you bought, have no desire or plans to move, will stay there for a while, etc. how can i call you dumb. it may not be the best financial decision, but what gets me is the ppl who don't realize how risky some decisions are.

if you know the risks, are level headed about it, then go for it :)

it's like a billionaire putting $10M on black or red, s/he likely knows the risks, manages them, still could win or lose $10M.

if the billionaire is smart, he'd listen to wesley snipes and "always bet on black" :accepted:

Realtor fact: “Buying land in B.C. right now? It’s one of the best investments there possibly is.”

For sale: A B.C. ghost town near Whistler for under a million dollars

i really wish realtors were regulated so that they can't say stupid shit like this.

Let the oversea buyers buy it lol. Teach them a lesson so they learn not to buy real estate without ACTUALLY visiting the place.

Just so people are aware a lot of the hotels and land along Vancouver to Harrison Hot spring are being purchase by Chinese companies and Chinese investors. Simply because there are more and more Chinese visiting Harrison Hot Spring every year, yet the infractures along the way (IE hotel, restaurant) don't really hit with what these Chinese tourist needs or wants. So what these Chinese companies are doing is trying to create a tour route from China to Vancouver and then to Harrison Hot Spring. Along the way they will built Mega hotels and other type of restaurants to fit these tourist.

I am happy and sad at the same time. i mean yes along Harrison Hot spring there isn't much to eat and the hotel isn't the best till you get to Harrison Hot spring. But this would mean a lot of the local/family owned restaurant, bed and breakfast will most likely shut down.

^ sounds like rhetoric, where is this information from (and you aren't allowed to say 'someone i know' or equivalent)

that's what 'they' say :troll:

Chinese buyers target B.C. hotels and resorts | Hospitality and Tourism | Business in Vancouver

Chinese investors scoop up Okanagan resort near Kelowna | Peter Mitham | Business in Vancouver

there are better news about this on the Internet but mostly is in Chinese

There are way more where this came from. If you have the time try digging or looking for commercial/business properties sales. That's where the wealthy Chinese are investing in. Of course there are other wealthy people from other countries too but right now Chinese is the number 1 (I think for the last few years it was the Russians, Europeans and maybe Duhai)

Biv is a shit news source.

I don't doubt there are some purchasing by foreigners, as there are in the world generally. And they're welcome to it, shit returns. Commercial real estate is all about yield... In a time of impending rate raises, I hope to god they can do something about the returns on it.

They're also welcome to make mega hotels on the route, there's nothing else there, and it won't make any money. And those locals who lose their businesses, they can just vote in new politicians that may actually do a better job representing them vs their own economic benefits, but I wouldn't hold my breath on that.