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There has been alot of discussion about buying vs. renting, but what about buying land and building a house? It is obviously not an immediate solution but Vancouver has many sorrounding areas including beautiful islands (Bowen, Galiano etc) relatively close by. There are also areas right outside Vancouver that seems untouched. Could someone explain to me the land policies in BC? From what I understand 94% of land is Crown land owned by the province. didnt there used to be a homestead act where you could build on a crown parcel and own it over time? Is that still a possibility? Why is land so price inflated considering the amounts available?
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Jul 12, 2013 05:19
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iv46vi posted:It wasn't. At least I now know the lower bound of SA financial literacy. Thanks. Now what is your value add contribution to the thread ? I assure you, the post gave him in step by step form 1.) where to go for info., 2.) how to calculate the information, 3.) after he has an outlook of how the economy will affect his local home prices and what sort of outlook his purchase will give him, 4.) how to estimate the inflation and market froth in his locale. Second, I provided him with a bit of explanation what and where each tool could be found, plus a helpful guide or registered advisory at each location who could get him up the financial literacy curve. Stepping off the thread now. Goodluck. On another note, the big short went through a well researched explanation on how most of the stars like Falcone & Paulson & Co. got into the trades. Paulson did not really build or structure the trade. He did, as we say in industry 'coat tailed' the trade and faded it. PCC learned of the arb in MBS posted by FannieMae at the time and had Goldman Sachs inc. make him a custom tailored series of tranche issues with sufficient duration that he could profit after the first wave of defaults hit. In english: He didn't speculate on subprime, he just knew everyone else was betting on something big in real estate and had guys smarter than him cook up a product to take advantage of the most likely debt to default whenever that happened. He could have went either way, and currently he is down about 68% 3-years later; so he likely did not cook that idea up on his own.
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Jul 12, 2013 05:22
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Kombotron posted:There has been alot of discussion about buying vs. renting, but what about buying land and building a house? It is obviously not an immediate solution but Vancouver has many sorrounding areas including beautiful islands (Bowen, Galiano etc) relatively close by. There are also areas right outside Vancouver that seems untouched. Land is the thing that is actually "bubbling", the cost of construction has not changed in any major way (it's gone up a bit just because of the surge in demand, but it is not a significant component of whacky real estate price increases). Land is expensive because of what you can do on it. "Land", generically speaking, as in "solid ground with breathable atmosphere" is, as you point out, plentiful and not actually that expensive. The difference between land a 3 hour drive inland from Gibson and land in Yaletown by the skytrain station is all the stuff you can do from one but not the other: go to some job that pays money (this is a big one), buy food, see a doctor, visit other human beings. These are kind of important. Notice also that they are all things you travel to, so how accessible these destinations are from the piece of land we are discussing is extremely important. You obviously want to be close to existing destinations, so this provides a fair amount of pressure to build within or very near to the existing city. Moreover, when you move to a city, you yourself become a destination: people want to visit you, and do business you, etc. Even more pressure. It's very self-perpetuating. So since everything wants to get to everywhere else as effectively as possible prices can't help but shoot up the more people want join these concentrated balls of awesome that are cities. The only way to release that upwards pressure on prices is to make more land available that is still "accessible" to/from existing destinations. This means that it is not enough to simply build outwards without providing transportation links that make the existing city accessible. Same story for building upward: simply increasing density without also increasing transportation capacity can't work because all that extra traffic can make previously accessible destinations no longer accessible. Now to bring all this back to land value in Vancouver specifically: all these transportation links are all very expensive (highways, skytrains, all that stuff) and become much more expensive when dealing with difficult terrain - e.g. rivers need bridges, mountains need tunnels and much more expensive construction in general. Vancouver is bounded by open sea, rivers and mountains on all sides, so this definitely plays a large in why it's a fairly expensive city. You also see this with say Hong Kong which is bound by some heavy duty mountains (and previously also, you know, The People's Republic of China), and Manhattan which is an island. The geographical constraints means that as long as more people want to live in those places there really is no upper limit on land value there, which is why both are world record holders in cost of living. Right so anyway, should you build a house in the boonies? Sure, now is as good (or bad) a time as any - they are not particularly affected by the current nuttyness. It is probably cheaper to buy an existing place rather than build a new one just because of the aforementioned demand pressure on construction companies (and workers) in the city, which does affect the interior as well. So yeah, if you don't need a job or easy access to food, medical aid and human contact, go nuts.
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Jul 12, 2013 06:00
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Hal_2005 posted:
Will/can someone do the same in Canada? Because holy moly edit: given that we know mortgage rates have just increased, there'd be a way to find out who's just been issued a new mortgage before the rate increase. I'm willing to bet there's a good chance all these mortgage holders are gonna get hosed when they have to renew in 3-5 years. namaste friends fucked around with this message at 06:21 on Jul 12, 2013 |
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Jul 12, 2013 06:19
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Cultural Imperial posted:Will/can someone do the same in Canada? Because holy moly The key to the whole scam is that when the "loser" counterparty can't pay up, the government bails them out. Unless you yourself are literally John Paulson or Goldman Sachs it's not been a great thing public policy-wise.
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Jul 12, 2013 07:24
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Hal_2005 posted:The APR rates are quoted differently in the US and in Canada. You will need to adjust for that. My suggestion would be to check investopedia on how to adjust annuity rates or download one of the apps that can help you do rates. CHMA I think has a link on their homepage to a java app. I know you're just trying to be helpful, but  at the idea of me installing a loving CMHC-coded java app. I'd probably be more likely to get into the condo flipping game.
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Jul 12, 2013 13:06
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I could get or build a house in some lovely middle-of-nowhere place up island if I really wanted to. I could probably build my absolute dream HOUSE for about the cost of a condo in the city. The problem is of course rarely with the building, but with the land. No jobs, no transit, no friends, no shops, nothing. But some people don't care about any of that poo poo. They're self employed or an "artist" or retired, they hate the city, they're totally fine living in the middle of nowhere in a big house that has everything they need. My friend lives in a poo poo town in Michigan and you can buy a reasonably ok house for 30k. Construction prices aren't that much lower there, they're a bit lower, but not that much. Like said, it's the land. Location location location. Bowen island and such might have cheaper land than Victoria or Vancouver, most of the islands do but they're still a bit inflated due to rich idiots from said cities buying vacation properties there. But the main thing that will get you is the "island tax". It costs more to get everything over there, and it can be pretty expensive to build anything depending on where and what island. And of course at the end of the day you're living on a remote an isolated island where the only jobs are "building vacation houses for rich people" and "pouring beers for rich people" and maybe "putting gas in rich people's boats". Also, hope you don't mind the power going off for days at a time. Baronjutter fucked around with this message at 15:41 on Jul 12, 2013 |
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Jul 12, 2013 15:35
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What do you tell people that keep saying that renting is just throwing your money away vs investing in a house. When you are living in a lovely one bedroom apartment and paying 1k a month, buying and paying a bit more to actually live somewhere decent seems really tempting. Edit: Pretty sure Calgary is a special snowflake though, I think the vacancy rate is less then 1%. And what's mostly available is people renting their condos for $1500 a month. Demon_Corsair fucked around with this message at 16:56 on Jul 12, 2013 |
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Jul 12, 2013 16:53
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Demon_Corsair posted:What do you tell people that keep saying that renting is just throwing your money away vs investing in a house. You tell them a) a mortgage is just renting money from a bank, you're still "losing" money, and b) it's not "paying a bit more", it's probably paying twice as much per month for the same size and location when you factor in all the other elements (taxes, condo fees, closing costs, opportunity costs, etc). "Renting is just throwing money away" is a piece of conventional wisdom so stupid that it is barely worth responding to. It's like saying 'beer before liquor, never been sicker' and then making the largest purchase of your life based on that.
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Jul 12, 2013 17:08
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Fine-able Offense posted:"Renting is just throwing money away" is a piece of conventional wisdom so stupid that it is barely worth responding to. It's like saying 'beer before liquor, never been sicker' and then making the largest purchase of your life based on that. Yeah plus due to math the first few years of a mortgage are mainly interest payments so money is being "thrown away" on interest payments. Condo fees can also balloon out of control over time adding even more monthly cost.
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Jul 12, 2013 17:25
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Where are you getting "twice as much" in renting vs buying. For comparable units to buy would be about $1300 a month (mortgage + condo fees) while a similar rental unit would be anywhere between $1100 and $1600. Most of those include hot water but it's 50/50 for power included. So far it's looking pretty comparable. Of course there's the actual transaction costs and legal fees and poo poo for buying, but those are trivial after a few years. What other costs am I missing and how would that break down monthly. I know there's tax and insurance, which I'm guessing are an extra thousand each a year or so? So let's just say owning is now $1500 a month. That's still getting me a better unit than most $1500 a year rentals, and then if I do ever sell I'll at least get something back. And this is at bubble prices, if/when the bubble pops or deflates those numbers will get even better. I'd love to buy some idiot's rental investment after the bubble pops. I'm sure I'm missing something though. Is it not the actual monthly costs but the risks for major surprise costs? Like the roof catching on fire or the old lady on the top floor falling asleep with the bath running? That sort of thing SHOULD be covered by a good condo council with a healthy contingency fund and insurance. Most of the units I've looked at brag about their million dollar contingency funds and long-term upkeep plans. I've certainly heard horror stories about idiotic condo councils that just try to keep the fees as low as possible and have barely any funds on hand. They know it will need a new roof in 20 years but they don't start saving now, nah, they'll just demand 10k from everyone when the roof finally dies. Those buildings tend to be full of renters though, who's owners just want a monthly profit and most likely plan to sell their "investment" before the building needs work. Another reason to avoid buildings without rental restrictions. A good condo charts out all the needs of the building way into the future and sets their fees accordingly, so it doesn't matter when you live in the building, everyone's paying their fair share for the upkeep, rather than the people who happen to live there at the moment of a disaster or major replacement.
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Jul 12, 2013 17:41
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Baronjutter posted:Where are you getting "twice as much" in renting vs buying. Also, it's all good and fine to talk about how good your condo board is NOW, but this is your 1200 sqft dream home (seriously?). What happens when the condo board changes completely over the next 15 years and all of a sudden it's run like poo poo, the contingency is gone and they need $10k to replace all the balconies?
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Jul 12, 2013 18:18
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Baronjutter posted:Where are you getting "twice as much" in renting vs buying. Since you apparently can't do math without somebody holding your hand, here you go: Let's take this property as a proxy because I'm not going to be arsed to work on your behalf and will instead settle for the first place I can find in Victoria that's got the rental price explicitly listed. Let's assume the price/rent ratio is roughly equivalent for condos, and then we'll tack on a monthly strata fee. So, it's selling for $530,000, and rents for $2600 a month. Let's assume a down payment for $100,000 for easy math's sake, giving us a mortgage of $430,000. At 5.2% interest (which I think is a reasonable figure for the full 25 year duration, even perhaps a bit generous), we end up with a monthly mortgage of... right around $2600 a month. Fancy that. So, now we get on with the fees. Let's assume that on a property of this value (a high-end condo), the fees would be $400 a month, which honestly isn't even that bad. Property tax is usually 1/12th of your mortgage payments (roughly), so that's another $200-250 a month. Since you are the owner and not renter, you are solely responsible for repairs, including special assessments, you need to save the standard 1-1.5% a year. Let's be super generous and say that it'll be only $300 a month and pray that your strata is well-managed (it won't be); in reality you should be closer to $400 for when those roofing and envelope and boiler assessments come due, which they will. So let's see where we are: $2600 a month mortgage; $400 a month condo fees; $200 a month property tax; $300 a month repair costs; So we're up to $3500 a month and we haven't even touched transaction costs. This is where it gets fun. Statistically speaking, you're likely to sell your condo after around five years, especially since a condo is not a long-term solution for a young couple. So now we have to calculate these costs on a five-year horizon, and amortize those into your monthly payments. If that sounds like it's unfair to the homebuyer vs. the renter, bear in mind it's also sparing the homebuyer the cost of renewing the mortgage at the end of the five-year fixed term we're working with; if interest rates have changed, or the principle has been written down, those costs can be substantial. So we'll act like the statistical likelyhood of moving is a given. So now we add on these and amortize over five years: PTT of $8600; GST of $26500; Misc. fees (appraisal etc.) of $2000; ...which adds up to roughly $600 a month over five years. So now we're at $4100 a month based on some reasonable, fairly conservative ballparky numbers. And we aren't done yet! Next, we have our friend Mr. Opportunity Cost, aka that $100,000 down payment you made. Even at a fairly conservative 5% RoI, you're passing up on $400 a month in interest, bringing the total cost of ownership + opportunity cost to a whopping $4500 a month. So yeah, it's not quite 'twice', you sure got me there! Maybe you can spot me the difference in recognition that none of these stats take into account loss of principle. 
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Jul 12, 2013 18:20
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That's pretty brutal, although those numbers for for some suburban monster mansion with a huge property and not a little condo in town, but I'm sure the numbers more or less scale down. I'll have to get someone to run all those numbers for us based on our specifics, but yeah, that's pretty bad. Everyone keeps saying people in condos move every 5 years and they aren't good for young couples. Maybe rich tech workers starting out in their career will "trade up" but like I said, I'm looking for something for at least the next 10 years, possibly till retirement, heck maybe even something I could retire in as well. I will never ever ever own a house, it's a financial impossibility even after a bubble pop so a condo is our only option. I know there's some pretty rich and privileged people in this thread but it seems more than a bit classist to say a condo isn't "suitable" for a young couple (is early 30's still even a young couple?) Tell me it's an idiotic time to buy, tell me I'm financially ignorant over and over, but don't tell me my life long dream of owning a little 2br condo is unsuitable and laughable. PS Who the gently caress wold be stupid enough to buy that house as a "turn key" rental opportunity when the rent only barely covers the mortgage and nothing else? Are there people that are some how even more financially ignorant than I am yet some how filthy rich? Could I go up to them and say "Hey I got a great opportunity, you give me $4000 a month and I'll give you $2600 back" ? Baronjutter fucked around with this message at 18:52 on Jul 12, 2013 |
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Jul 12, 2013 18:43
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Jesus, stop being so butthurt over an offhand, and demographically-accurate-in-general comment. You're clearly absolutely chomping at the bit to buy into this risky, illiquid and overpriced asset class, despite copious advice to the contrary and your own admission of innumeracy. So why not just go ahead and pull the trigger, and you can serve as the thread's resident 'cautionary tale' in a few years.
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Jul 12, 2013 19:06
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Baronjutter posted:That's pretty brutal, although those numbers for for some suburban monster mansion with a huge property and not a little condo in town, but I'm sure the numbers more or less scale down. I'll have to get someone to run all those numbers for us based on our specifics, but yeah, that's pretty bad. Everyone keeps saying people in condos move every 5 years and they aren't good for young couples. Maybe rich tech workers starting out in their career will "trade up" but like I said, I'm looking for something for at least the next 10 years, possibly till retirement, heck maybe even something I could retire in as well. I will never ever ever own a house, it's a financial impossibility even after a bubble pop so a condo is our only option. I know there's some pretty rich and privileged people in this thread but it seems more than a bit classist to say a condo isn't "suitable" for a young couple (is early 30's still even a young couple?) Tell me it's an idiotic time to buy, tell me I'm financially ignorant over and over, but don't tell me my life long dream of owning a little 2br condo is unsuitable and laughable. Considering three posts earlier you were saying how owning was comparable, if not cheaper, than renting I think you probably can look in a mirror and see who those people are.
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Jul 12, 2013 19:13
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Lexicon posted:You're clearly absolutely chomping at the bit to buy into this risky, illiquid and overpriced asset class, despite copious advice to the contrary and your own admission of innumeracy. So why not just go ahead and pull the trigger, and you can serve as the thread's resident 'cautionary tale' in a few years. Yeah, I've got to say, my bladder is full and this well looks mighty appealing right now.
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Jul 12, 2013 19:17
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My favourite bit is how he thinks property taxes and home insurance will total $1000 a year, combined.
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Jul 12, 2013 19:47
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Oh man I forgot home insurance! Which is pretty much the dictionary definition of home ownership: "Oh man, I forgot to account for X cost!"
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Jul 12, 2013 19:51
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Like I said I don't make any purchase until I feel confident I understand all the costs and benefits. I mostly trust the "don't loving buy" advice here but I've never understood the why's beyond "it's a bubble, poo poo's too expensive". I'm trying to understand all the numbers, but when I get my math wrong some of you act like I'm trying to argue a side or debate the issue. I know it's fun to jump at the chance to be an adversarial know it all, but maybe some of us uneducated poors wouldn't get into such idiotic financial situations if the only sources of financial information and advice weren't predatory banks, hungry realestate agents and the entire media on one side and snarky dudes on the internet on the other. I know my numbers are wrong, I know all my assumptions are wrong, I know the media has a massive agenda to keep the bubble inflating. I'm not presenting counter-arguments, I'm trying to learn where I've gone wrong so I have the ability to finally know when it's the right time. Like you guys understand that ever single thing I post isn't a counter argument but assumed "with my own faulty math and misinformation-fueled numbers these are the clearly wrong conclusions I've come too" ? I don't need to be told I'm wrong, I know I'm wrong, I want to learn why so I can figure this out my self in the future. It's a very hard subject to research your self because there's so much disinformation out there. When I went to the bank to really talk about the realities of buying none of this stuff ever came up despite asking if there's any other major costs we're not calculating. Nope it's just "Renting will be 1500, your mortgage will will only be 800 plus condo fees! Time to buy!". I know for you guys all this stuff is "common sense" or the "basics" but for a vast amount of people, probably the majority, we were never taught this stuff in school, our parents didn't know any of this stuff, none of our peers know any of this stuff, and the only authority figures who claim to be experts are constantly trying to mislead us. Baronjutter fucked around with this message at 19:58 on Jul 12, 2013 |
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Jul 12, 2013 19:53
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Well the bank is only interested in selling you a mortgage (maybe some GICs) so it is not really in their best interest to tell you how bad of a deal what they are selling is. Similarly with real estate agents and developers. If the condo king of Toronto, Brad Lamb wants to tell people that they can make guaranteed 20K per annum profits buying his condo units, there is a certain expectation that you should ask why is he selling them to you in the first place. (It doesn't help that they are legally allowed to mislead people about it either.) Now I may be a rich tech worker, but I just have to look at things like this to know not to buy. I mean, I don't make police department money or anything. If you need more compelling evidence that things be stinky in Denmark, Fineable has run the numbers for you (and yes they pretty much scale). Just spit balling my situation, but the townhouse I purchased pre-bubble is costing me somewhere in the ball park of a 1000 bucks more than it would to rent an identical place down the street. And yes, I am for sure forgetting to include something that makes that number worse. I cannot even fathom a reason why anyone would buy it from me at the moment other than being mathematically challenged. e: And I wish I could sell it, but my wife is in full "home ownership mystique is worth more than all the money in the world" mode. Frankly, that attitude is idiocy and is a major component to how things have managed to get so bad. ocrumsprug fucked around with this message at 20:28 on Jul 12, 2013 |
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Jul 12, 2013 20:19
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Baronjutter posted:I could get or build a house in some lovely middle-of-nowhere place up island if I really wanted to. I could probably build my absolute dream HOUSE for about the cost of a condo in the city. The Vancouver area has alot of pretty accessible islands and not necessarily in the middle of nowhere. The key is to have a small boat, which is basically a second car. I on and off visit Gabriola island, which is 40 minutes from Nanaimo by ferry and vancouver itself is about an hour. Bowen island is 8 nautical miles from west vancouver. So access wise you are still close to the city. quote:The problem is of course rarely with the building, but with the land. No jobs, no transit, no friends, no shops, nothing. But some people don't care about any of that poo poo. They're self employed or an "artist" or retired, they hate the city, they're totally fine living in the middle of nowhere in a big house that has everything they need. I cant disagree with that. It can be boring but you can commute for work with that little boat and visit friends all you want. enjoy the city without going into debt doing it. For me the boredom is outweighed by the freedom. There are only 3 police officers on the whole island and the city is still there when you need it. quote:Bowen island and such might have cheaper land than Victoria or Vancouver, most of the islands do but they're still a bit inflated due to rich idiots from said cities buying vacation properties there. Albertan retirees are everywhere... quote:But the main thing that will get you is the "island tax".It costs more to get everything over there, and it can be pretty expensive to build anything depending on where and what island. That is true. biggest pitfall is the 50% 100% building material markup because you have to use BC ferry for near everything. quote:And of course at the end of the day you're living on a remote an isolated island where the only jobs are "building vacation houses for rich people" and "pouring beers for rich people" and maybe "putting gas in rich people's boats". Also, hope you don't mind the power going off for days at a time. It has to be an island and piece of land thats accessible to the outside for work because island jobs are poo poo. I personally think that its an untapped area that will catch on like the plague soon. 15 years ago a 2 acre plot on gabriola went for 25000. Today that same area goes for a quarter mil. Kombotron fucked around with this message at 21:20 on Jul 12, 2013 |
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Jul 12, 2013 21:15
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Baronjutter posted:It's a very hard subject to research your self because there's so much disinformation out there. When I went to the bank to really talk about the realities of buying none of this stuff ever came up despite asking if there's any other major costs we're not calculating. Nope it's just "Renting will be 1500, your mortgage will will only be 800 plus condo fees! Time to buy!". I know for you guys all this stuff is "common sense" or the "basics" but for a vast amount of people, probably the majority, we were never taught this stuff in school, our parents didn't know any of this stuff, none of our peers know any of this stuff, and the only authority figures who claim to be experts are constantly trying to mislead us. The world is essentially a big gauntlet run organized by people highly focused extract money from you. You'll generally do well by never forgetting this. I'm not sure why you'd go to a bank expecting anything other than misinformation that's contrary to your best interests. ocrumsprug posted:e: And I wish I could sell it, but my wife is in full "home ownership mystique is worth more than all the money in the world" mode. Frankly, that attitude is idiocy and is a major component to how things have managed to get so bad. This whole thing is a very 'Anglo' phenomenon (a bit less so these days in the USA, perhaps). I just visited Switzerland where the social norm is to rent and property is frequently owned by large pension funds and REITs and the like. Walking around the streets of Zurich, it was rather difficult to argue that they're worse off than we are...
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Jul 12, 2013 21:33
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Lexicon posted:This whole thing is a very 'Anglo' phenomenon (a bit less so these days in the USA, perhaps). I just visited Switzerland where the social norm is to rent and property is frequently owned by large pension funds and REITs and the like. Walking around the streets of Zurich, it was rather difficult to argue that they're worse off than we are... Most Berliners rent. But I guess Berlin isn't a world-class city like Vancouver. 
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Jul 12, 2013 21:35
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Any advice on what to do while I wait for the bubble to stop doing what ever the gently caress it's doing? I'm currently in a very unique situation of having a place that I personally find very cozy and comfortable for $300 a month. A 400 sqft basement suite that stays nice and cool in the summer, plus a shared laundry and workshop. The whole "shared" part doesn't bother me at all because it's my folks and despite living in the same building I rarely even see them and our units are totally separate with their own doors and such. If it wasn't for this living situation there's no way we could save up. The only reason we were able to save up 60k in like 4 years is because of this. It's not exactly my dream home but as a hobbit I love it. My wife on the other hand does not. She wants big windows and sun and a little more space. She wants to not be so close to her in-laws even though they don't really interact with us, it's more just the principle. She also works in insurance (how the gently caress doesn't this guy know about condo insurance eh?) and every day she's writing policies for people beaming about their brand new house or condo. She also works with people who recently bought, or have ties to real-estate so all she hears is that we're not in a bubble, that the bubble will never burst because *best place on earth*, and that as a young couple we NEED to buy a "starter home" to start building equity (this is the hugest bullshit). All I have to counter is "well see some people on something awful said... no honey we can't they'll pee on me... no your co-workers realtor husband is wrong and these goons are right because they just are, they like know math and all these financial terms I don't understand, trust me!" So if you got the impression I'm desperately looking for a gotcha or excuse to buy a condo now I'm sorry if I came across that way, I'm more playing devil's ignorant advocate thinking about what my wife or all the other people saying to buy now would probably say. Since the start of this thread I've been totally in the "bubble, do never buy" camp, I just try to learn by exposing my ignorance and hope I can be corrected. Once again I apologize if that's been annoying in both style/tone and the sheer level of ignorance. But I actually trust you guys, and pretty much only you guys, for fairly unbiased and brutally real information on the subject. My ideal plan is to just bunker down in this suite putting away 15-20k a year in savings (which for a couple making 30k and 40k is NOT bad) until the bubble is done and then buy with like a 30-40% downpayment and have the most minimal mortgage so in the long term we're sitting pretty. Not matter how much we save up we're only going to get a ~250k place so any extra savings just means a bigger downpayment, not a bigger home. She feels like we need to do something NOW, either buy a condo or go rent something. BUT she wants in-suite laundry and a bunch of other perks that are going to stretch our finances to the point that instead of putting away 20k a year we're putting away a few thousand tops. There's also a big problem of the "missing middle" in the rental market here. It's either kinda lovely old 60-70's apartments with shared laundry for $1200, or $2000+ a month houses and condos in brand new buildings clearly advertised for short-term high-income professionals. Am I being a greedy lazy hobbit or is my long term planning sound? PS What is the main difference between renting here and in europe? When we stay in europe we'll just rent an apartment for a month or what ever, everyone we know there rents, it's the norm but their places are nothing like the rentals here. They're basically just condos that they happen to be renting, but they seem to have much of the freedoms of a condo along with a lot of the benefits of an apartment. They could renovate rooms, install new kitchens, paint, and they felt very secure they could live there pretty much forever without worrying about the building falling into disrepair or the owner suddenly kicking everyone out to convert to condos. If you say, upgrade your kitchen do you and the ownership agree to share costs or they give you a discount on your rent for X months to pay you for the value you added? If I lived in europe I wouldn't even be THINKING of buying, regardless of prices (although prices in Prague and Berlin are fuckin' nice) Baronjutter fucked around with this message at 21:49 on Jul 12, 2013 |
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Jul 12, 2013 21:37
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Baronjutter, the main difference is that in Europe, people rented because they were never as heavily subsidized to buy property as we are in North America. I'm too lazy to google but if you want to be bothered to look up home ownership rates in the UK prior to the 80s vs today, it will blow your mind. What happened? Thatcher gave everyone the right to buy their lovely council flats and that started the Tsunami of real estate trading. I have family friends who bought homes in the early 80s in London who are now multi millionaires. The husband is a retired actuary. The bulk of his wealth definitely didn't come from his salary. I'm sure Fineable Offence will be able to give you a better idea of how distorted the Canadian housing market is due to government policies compared to most European countries. That said, FO, what do you think when people go on about how housing is the 'engine of the economy'? Is it possible to fulfill peoples' desires to own property without loving the market to hell? edit: I think I've mentioned earlier in this thread that I sat my g/f down in front of a spreadsheet and worked out the cost of owning a home in Vancouver at 5% interest rates and it blew her mind. You should do the same BJ.
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Jul 12, 2013 22:39
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Baronjutter posted:
It's really foolish to do money stretching just buy into things such as a real estate agent trying to sell you on the new house/condo thrill. It much more important to leave within your means in terms of monthly house cost, have actual leftover money each month for savings and the fighting will be much much worse if you run into a money problem with your better half after buying a bubble property. Home ownership tends to be less in the high cost European countries such as Germany with only 40%, even though it's not consistent some of the southern EU countries have pretty high rates. Somewhat off-topic but my favorite model for non-sucking renting is the Vienna mode: http://www.huffingtonpost.com/2013/04/11/vienna-model-public-housing-presented-by-austrian-cultural-forum_n_3054446.html It's heavily subsidized by the government but has many great features such as being able to do home improvement on the rental. The whole economic model also produce reasonably priced good looking class A quality buildings with reasonable rents, with lots of other extras such as family members being able to "inherit" the same rental terms if they so desire. etalian fucked around with this message at 22:47 on Jul 12, 2013 |
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Jul 12, 2013 22:41
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Solution: Stay put! At $300 a month rent, you've got a very unique opportunity to sock away *loads* of cash. Use some of it to take the wife to Italy or Spain for a month every year, and go for a nice dinner every other week - both of which should keep her sweet (you can easily afford this with all your savings on housing). Once you start thinking in terms of opportunity cost, it's impossible to stop.
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Jul 12, 2013 22:45
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Lexicon posted:Solution: Stay put! At $300 a month rent, you've got a very unique opportunity to sock away *loads* of cash. Use some of it to take the wife to Italy or Spain for a month every year, and go for a nice dinner every other week - both of which should keep her sweet (you can easily afford this with all your savings on housing). She has family over-seas and loves europe, I've told her if we buy or rent now we won't be able to afford that sort of lifestyle. Yes the basement suite doesn't have huge windows, but we can both eat out for lunch and dinner often, travel, afford toilet paper. All things we'd have trouble doing renting at market rates let alone buying.
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Jul 12, 2013 22:49
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It's more E/N than real estate really. His wife's desire to get out is the primary driving force. No adult woman wants to live within an earshot of her parents in law and be indebted to them. She might not phrase it directly and use other reasons that she thinks might appeal to him to convince him. He's perfectly happy to live as is and resistant to change. As a defence mechanism he constructed a one true condo dream that has to fit all the parameters of a perfect place before he even considers to move. Deep down it bothers him so he seeks validation of his choice by repeatedly asking this same question on SA about his "special unique situation". A solution here is to figure out how much you can afford to spend on rent and start looking at good condos in that range. In the worst case you'll make her happy, in the best case you'll find something that you both like.
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Jul 12, 2013 23:00
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iv46vi posted:It's more E/N than real estate really. This is a questionable and thoroughly western assumption. As you noted, this isn't E/N, so keep the amateur psychology where it belongs.
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Jul 12, 2013 23:06
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You can get "portable" laundry AND dishwasher by the by. I'm very understanding of that as a "deal breaker". The only silly thing is they will become worthless when you move out to a proper place, but considering how much you are putting away net, that is probably a-ok. You could also buy them used from people that just did this... I'm actually pretty sympathetic to your situation all in all, it sucks to live so far below what you expect given your income just because the property market decided to poo poo into the ceiling fan. And I do think you will have to reconcile your priorities with that of your wife's. Just rent a better place though, for god's sake, don't buy one. Rent something reasonably livable. A 40% down payment may be overdoing it, especially if it's straining your relationship and day-to-day wellbeing.
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Jul 12, 2013 23:07
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Pretty much. No one (or very few people) are actually that interested in the petty details of their interior paint or the size of their windows or any of that House Hunters bullshit, not even women. They love houses because they see other successful and socially acceptable people buy houses so they must have one too and it helps that these other people are (so they say) actually making money off their house. Wait until prices go down and try to talk to people about drywall or whatever, and the response will be what the gently caress am I, a construction worker? Who gives a poo poo?
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Jul 12, 2013 23:12
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Throatwarbler posted:Pretty much. No one (or very few people) are actually that interested in the petty details of their interior paint or the size of their windows or any of that House Hunters bullshit, not even women. They love houses because they see other successful and socially acceptable people buy houses so they must have one too and it helps that these other people are (so they say) actually making money off their house. Wait until prices go down and try to talk to people about drywall or whatever, and the response will be what the gently caress am I, a construction worker? Who gives a poo poo? This post is hilarious and I've just put it into Evernote with a reminder so I can have the lulz at this prescience again in two years time 
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Jul 12, 2013 23:16
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Throatwarbler posted:Pretty much. No one (or very few people) are actually that interested in the petty details of their interior paint or the size of their windows or any of that House Hunters bullshit, not even women. Bullshit, I am extremely interested  .And I really think one of the biggest casualties of this whole slow motion trainwreck are all these homes and condos that are built with absolutely no thought given whatsoever to utility or livability or personal preference or anything else. Buyers are only looking at how resellable the property looks, not what it would actually be like to live in it, either because they don't actually plan on living in them that long or because the narrative of "home ownership" is full of idyllic fictions from the 50s and leaves little room for day to day considerations like how a dining room separate from a kitchen separate from the living room is the dumbest loving idea ever, or how 2 pocket door closets and a 1x1 meter locker are not enough storage space for 2 adults not currently on vacation.
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Jul 12, 2013 23:19
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I guess I commute from a victoria condo to vancouver isn't bad if you have the right transportation: http://www.delib.net/dblog/the-most-epic-commute-in-the-world-vancouver-to-victoria/
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Jul 12, 2013 23:26
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Mr. Wynand posted:
"live so far below what you expect"? Did you sign a contract coming out of high school that guarantees you a certain sq ft of gypsum board and granite countertops? There will always be some other guy who makes more money than you, and unless you start making his money you'll never be able to afford his house and your wife will never be as happy as his wife. It doesn't really matter if prices come down or go up, your relative position will be the same. Lexicon posted:This post is hilarious and I've just put it into Evernote with a reminder so I can have the lulz at this prescience again in two years time  20 years ago German lux cars were much more expensive relatively than they are now, and driving a Mercedes or Porsche was actually a Big Deal. Today anyone can lease an entry level Mercedes for $300/month. Note that this *hasn't* actually made anyone happier or improved their lives, because what they actually wanted wasn't a shoddily built uggo car, they wanted to be "like" those people who drove a Merc 20 years ago. Bringing down the prices of cars/condos/university education will never change anything. TL;DR Buy the loving condo. Throatwarbler fucked around with this message at 23:45 on Jul 12, 2013 |
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Jul 12, 2013 23:43
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Throatwarbler posted:"live so far below what you expect"? Did you sign a contract coming out of high school that guarantees you a certain sq ft of gypsum board and granite countertops? Oh well excuse me Mr. Insightful Hard Life Lessons, you're right, just because someone went to the same school and worked just as hard as every age cohort before them down to the post-war era does not mean that they'll be able to afford to live in a place that has a dishwasher, in suite laundry, proper heating and other such luxuries from turn of the century as everyone else that is older than them. gently caress those whiners, they just need to get real! Like you. You my friend. You keep it real. 
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Jul 13, 2013 01:30
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http://www.nytimes.com/2013/07/14/business/owning-a-home-isnt-always-a-virtue.html?ref=business&_r=1& Robert Shiller tells us why subsidizing home ownership is stupid.
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Jul 15, 2013 04:32
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Cultural Imperial posted:http://www.nytimes.com/2013/07/14/business/owning-a-home-isnt-always-a-virtue.html?ref=business&_r=1& It's more pro to subsidize home rental such as in the Vienna model. Encouraging home ownership is basically giving people a good reason to place all the eggs in one basket, ruins labor mobility and also encourages the accumulation of debt through equity lines of credit.
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Jul 15, 2013 04:51
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