buy or rent.

[R1CED`]

thanks for the input

sdubfid, yes before crunching the numbers and digging a bit deeper into my answering my question, renting does seem like a safer bet.

mark, I appreciate your feedback but I don't think i'm ready to meet with a realtor unless i know for sure i'm in the market to buy.

sonick, none of the intangible reasons you listed with the exception of paying someone else's mtg really applies to me. Maybe if I get a shitty landlord that'll kick me out for no apparent reason. I've no social pressure to own and forced savings isn't that crucial as I'm already dilligent in saving living at home all these years. If I do buy it comes down to how much hassle/difficult it is to sell in a few years and whether or not having equity vs savings affect future school loans.

is the spreadsheet you attached similar to the calculators on CMHC website? ive seen you post it before...detailed yet to the point..thanks.

[sonick]

As far as I know calculators on CMHC/bank websites mainly just calculate how much your mortgage payments would be depending on what your down payment. The spreadsheet I linked gives a fuller comparison of the two situations.

Savings is one thing but investing is another. The considerations between buying/renting should be the costs of buying (fees, commission, interest) and the property's potential of increasing in value (i.e. equity) vs. the monetary savings of renting and the potential of growing that amount saved through investing.

If you are renting but then putting the difference into a basic savings account, you are potentially wasting the financial benefits of renting.

Hence the 'forced investing/forced savings' aspect of buying is a 'pro' to many as they don't have the time or knowledge to look into options of investing their money, and instead expect or hope their property will increase and thus be an investment in and of itself.

However, as you probably are well aware, the future of local real estate is widely debated. You'd have to do research and make the decision yourself on whether or not you think you will come out better in the end if you buy or rent.

[sonick]

Mini bump, this article was on the front page of The Province and gave an ok balance of both sides of the argument, although it does still seems like it leans heavily towards buying: Buy or wait: The dilemma for first-time B.C. homebuyers

Including points I mentioned such as:

Some people argue that it makes more sense to rent and invest one’s savings in assets that deliver higher returns, he acknowledges.

“Not everyone is disciplined enough to do that,” Yu says.

Full disclosure though, due to some recent revelations, I am (unexpectedly) likely going to find myself buying in the next half year or so, due to the many intangible/inquantifiable reasons to owning; as I mentioned previously.

[sdubfid]

their credit union, Vancity, launched a promotion in which it contributes part of members’ down payment. The promotion convinced them the time was right to buy.

Anyone else find this scary?

[sonick]

^ Agreed it's pretty sketch; basically circumventing CMHC's minimum 5% down payment rules. Bank helping their clients live even FURTHER outside their means, pretty disconcerting.

Every bank is clamoring hand over fist to lock in buyers before rates go up and/or market corrects.

More info on the program: https://www.vancity.com/Mortgages/Ty...PaymentHelper/

[HondaCRZy]

Building Equity is awesome, that is why I prefer to buy

[4444]

Originally Posted by HondaCRZy

Building Equity is awesome, that is why I prefer to buy

Have u ever considered that your property value will go down and you will actually lose your equity value?

This thinking is heavily flawed, especially if renting is significantly cheaper (which it is) and when you can invest and obtain 7-9% returns elsewhere

[HondaCRZy]

Does anyone want to buy with me and rent out? Heres how it works.

We are looking to purchase investment properties where we will pay the homeowner 65% upfront the negotiated selling price and we will pay the homeowner the 35% after 5 years plus interest (In the form of a secure investment greater than inflation).

The benefits are:

The Seller has more liquidity of assets and money and will have more money to work with during the five years in partnership.

The buyer gets to purchase a property without money down.

This is a Win Win Situation.

My mother made millions with her ex husband doing this.

[HondaCRZy]

Originally Posted by 4444

Have u ever considered that your property value will go down and you will actually lose your equity value?

This thinking is heavily flawed, especially if renting is significantly cheaper (which it is) and when you can invest and obtain 7-9% returns elsewhere

It may stumble in the short run, but in the long run, property values normally always increase dont they?

Real estate is all long term.

[4444]

Originally Posted by HondaCRZy

It may stumble in the short run, but in the long run, property values normally always increase dont they?

Real estate is all long term.

i'm not even going to try to explain to you that you are right, but at the same time wrong.

the fact that you even question yourself says something (especially considering what was just written above)

[123654123]

Originally Posted by HondaCRZy

Does anyone want to buy with me and rent out? Heres how it works.

We are looking to purchase investment properties where we will pay the homeowner 65% upfront the negotiated selling price and we will pay the homeowner the 35% after 5 years plus interest (In the form of a secure investment greater than inflation).

The benefits are:

The Seller has more liquidity of assets and money and will have more money to work with during the five years in partnership.

The buyer gets to purchase a property without money down.

This is a Win Win Situation.

My mother made millions with her ex husband doing this.

family has millions doesn't have 10k to start a business...

[Marco.911]

Being a home owner is an acceptance piece in culture. This is the American dream, own your own home.

For many Asian cultures it is much the same. It is a sign of power and stability and wealth.

At the end of the day, what makes sense with dollars and cents may not make someone feel good at the end of the day.

This is a car forum. I'm pretty sure most people would be better off taking transit or driving a used piece of shit car in order to improve their financial picture and yet, so many of us know buying a car is a money pit but it makes us happy.

It's something that we enjoy and we want and it is also a status symbol as well.


After all is said and done, I make very good money and could afford to buy a home in Vancouver with no mortgage (yes I'm talking about a SDH, albeit not a high end example) and yet I decide to rent.


Look at my example

Residence: Rent
Rent: $2000 per month
SQ/FT 1300 2 bd 2 bth

Cost per year to live $24,000


If I wanted to live in the same place as an owner

Residence: $960,000 (similar unit just sold on the floor below)
Tax $4,000
Strata (per year) $9000
Assuming I had no mortgage the $960,000 can earn 2.5% in a GIC for $24,000

Total cost per year is $37,000 per year.


So to own where I live is 54% more expensive than renting. To make matters worse, I earn a lot more than 2.5% in a year on my money. This last year was a bit of an exception to the rule due to market activity but I can very safely average 10% per year making the choice blatantly obvious, even after taxes in the highest bracket.

The downside is that I'm not a home owner and I can't be a part of that group (which is ironic since I actually do own a small condo in White Rock that I rent out which has dropped in assessed value from last year.).


The only reason people have been so gaga over real estate is the capital appreciation on the property. Prices will no doubt go up over the long term and the crash that many of us thought would happen, may or may not happen. The point is if you buy expecting prices to double in a few years, don't buy.

Like the stock market, be well diversified, don't over-leverage, and keep investing over the long haul over a mix of asset classes.

I was bullish on real estate back in 2002 all the way up to 2008. I since said no thank-you.

Again up to you. Run the numbers but just remember something:

Vancouver is a real estate town.
Banks, mortgage brokers, realtors, builders, the media, Rennie marketing, and many others in construction need the constant fuel of people buying real estate otherwise they're out of work.

Keep that in mind. Too many people have a vested interest in keeping things as they are and encouraging home purchase that is unwarranted and bias.

If you like owning a home and it makes you happier, all the power to you!