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What I like is to hear that house prices in Toronto hit an all time high last month.
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That translates to me as, prices outside of the GTA will also go up as more people look outside the GTA for a price they can afford.

We have no intention of selling our present home but it's always nice to know prices are rising.
 

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Typical question.
I recommend checking out Ben Felix on Youtube as he (PWL Capital) has several videos about buying vs renting.

One interesting thing I recently learned myself is that even though people talk a lot about how great an "investment" real estate in places like Vancouver have been, the long term CAGR is actually not very high. For Vancouver condo type of housing, it has apparently appreciated at 5% to 6% CAGR which is very much in line with conservative stock/bond investments like balanced funds. And this is supposed to be one of the hottest RE markets in the world!

Just not impressive returns, IMO especially once you consider all the fees, hassle, maintenace, not to mention the illiquidity. Yeesh.

I'm almost 40 and have never owned a house or RE. Instead, I've accumulated the wealth in my stocks/bonds/gold and that has been working out alright.

The one thing I would say in favour of owning a home (I don't really like the term owning, since you don't really own it until the mortgage is paid off) .... having a mortgage forces you to "save", because you need to make the mortgage payments.

The one risk of renting, and investing the spare cash yourself, is that you might not have the discipline to regularly save and invest. However if you are a disciplined saver, there should be no problem.
 

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Just a Guy....

Isn't a bit condescending and self serving to boast about vast wealth built on dozens, and dozens of properties paid for by renters, while telling people they should rent and not own?

Sorry, but that had to be called out.


15 years ago I did this same math and soul searching about owning vs renting. 15 years later, I thank my old self for deciding to buy. I'll tell you guys and gals one major glaring problem with all the math discussed here. In the next 15 years, nothing, absolutely nothing is going to follow a nice linear trajectory. Don't be surprised if house prices spike exponentially again, and don't be surprised if rents triple in 10 years. Pre-covid, lots of people were getting priced out of the rental market, who's to say that won't return?

Is owning for everyone? Most certainly not. If you want to stay mobile and travel the world, then you should own as few material goods as possible, and a house is a major no-no. If you want to settle, raise a family and grow roots in a community, renting will be a loosing proposition. Some people grow their net worth quicker by renting and investing in the market, but that's certainly not typical of the average family. If you're single, want to remain mobile, and know how to invest, then you certainly should rent as cheaply as possible.

Staying mobile wasn't my thing 15 years ago. I bought, attacked the mortgage hard, and invested whatever was left over. Once the mortgage was paid off, I increased my investing tremendously, and let's just say I have been very happy with the results so far. Down the road, when child free again, the plan is to move to a place with lower cost of living. The dividends from the investment accounts will sustain us, and the dividends from the house sale will pay for all of our yearly travel expenses. Not a plan for everyone, but like I said, extremely happy I stopped renting.
 

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I bought my first home when I was 25. It provided 80% leverage, forced saving, pride of ownership, a better neighborhood, something to do every weekend during the summer and optional projects in the winter. That lead to owning 4 other homes before deciding to rent 27 years later. I turned a $6k investment into $535k, ignoring all the other costs of ownership and churn.

Would I do it again? Sure if I were 25.

Then for 10 years I had no ownership in RE. Now I am back and just upgraded to my second condo after 10 years.

There was a structural change that took place in the markets in 2008. Money became cheap permanently and bonds have been poor performers making stocks more preferrable. So we bought again. It is cheap to own and money in equities will be safer long-term (post pandemic).

Is this the right strategy? It has worked out OK for us and it remains to be seen what will happen in the next few years.
 

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I thought @Just a Guy was pretty clear in his reasoning, since he opened with: "Most Canadians move every 7 years"

The friction of buying & selling houses is immense. The fees, but also the work involved. I am so glad that I did not buy a house. I've moved between cities several times, and I'm not the only Canadian who has to constantly move for work.

After I left Toronto, I kept in touch with ex coworkers who owned homes in the GTA. They were stuck with them. For some of them, that meant being anchored down to the GTA where none of us could find work during those years. Another couple of friends had properties in Kitchener-Waterloo, and after the RIM collapse, had trouble selling them (they didn't want to lower their prices). So they moved elsewhere, leaving the house in KW, trying to rent it out from a distance. Huge pain in the behind.
 

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STech, not really. How I make money has little to do with lifestyle choices. The two are unrelated. The ability to move quickly without having to worry about selling a house, being able to make more money for yourself by investing the difference between a mortgage and rent, etc. pare all legitimate benefits which has nothing to do with how I make money. If you can’t see beyond your own actions, you are doomed to make mistakes.

my son, for example, is still going to school. I advised him to buy a rental, not a house while he was in school. the profits he makes pays most of his rent, he is much better off not owning a home, regardless of how I make money. It’s the smarter choice for him to rent at this stage in his life. I also don’t own the place my son rents as it doesn’t fit my model. I make decisions based on logic, not just on cash.
 

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I bought my first home when I was 25. It provided 80% leverage, forced saving, pride of ownership, a better neighborhood, something to do every weekend during the summer and optional projects in the winter.

...

Is this the right strategy? It has worked out OK for us and it remains to be seen what will happen in the next few years.
Similar experience. Bought first house at age 26 in Kitsilano in Vancouver.

I have lived in rentals once in awhile since. Although, even when living in a rental, always owned other real estate, including owning at least one rental at all times. I have long thought it important to own some real estate. Not so much for investment even, but, at least in part, for the "pride of ownership" to which you refer. The rentals I have owned were always places I thought I would not mind living in myself. I have always owned some recreational property, even if just raw land.

In more recent years, I have learned about buying forest lands. I wish I had learned about that sooner. Although it helps to live close to the location of such lands. Not sure I would have ventured into forestry while living in Toronto, or Los Angeles, or Manila, or a few other places I have called home. There are forests all over Canada, but the timber they produce, the growing conditions, how long it takes the grow, the species, the harvesting methods (which have already changed a lot where I am, since I became involved) the grades, the markets, all very different.

Maybe, had I lived in the Philippines earlier, investing in mahogany and a few other native hardwoods would have served well. At least if one can protect it from poachers. Anyone here recall Grew lapstrake boats, built in Penetang, Ontario? Always touted as be built from 100% Philippine mahogany. They were good boats. Sorry that fibreglass killed them. Along with Peterborough cedar strip boats.

I hope LTA is not watching this thread. I'll get my butt kicked for straying off topic. I'll be told to start a new thread if I want to talk about boats. Sorry LTA, I'll go to my room now.
 

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As others have said, I think it's best to look at a home as a place to live, as opposed to an investment. What kind of lifestyle do you want? I rented for 6 years, but it prevented me from doing a lot of things I enjoy doing (I play a very loud musical instrument, which I had to go somewhere other than the place I was renting to practice), I like having a dog, I like woodworking, etc. The advantage of it was that I could take off and go for a trip whenever I wanted, never had to worry about paying for unexpected repairs/maintenance etc. I now own a house for about the same monthly expense as I would be paying to rent a similar property. I bought a relatively cheap older bungalow, it is well within our affordability, and should last us for years to come. I get to do all of the hobbies I enjoy, I can personalize the space however I want, and I really like the house. Will I come out financially further ahead this way? Probably not, considering I've had to redo the roof, install a fence, will be replacing the siding on the garage, bought a new fridge, and will be replacing the furnace, washer and dryer in the near future, but these were expenses I budgeted for and was willing to accept with home ownership. If I sell the house 5-10 years from now for more than I paid, it doesn't really benefit me that much, because all of the other houses I would consider upgrading to would have gone up in value as well, unless I were considering moving to a smaller town, which is unlikely. I would say I spend an average of $2500/year on home maintenance, my annual mortgage payments and property tax adds up to $16 320, utilities are $1615/year, and insurance is $960/year. Works out to $1782/month. Not sure about the city you live in, but I think the cost of rent for a 3 bedroom bungalow and a 2 car garage in my city (Winnipeg) would be approximately the same amount.
 

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What all of this should tell anyone reading through the thread is that there is no right or wrong answer, only an answer that suits the needs and goals of an individual at a given point in time.

Mukhang pera, if you ever have the opportunity, I would suggest you visit the Muskoka Discovery Centre. There are a number of classic boats there that will probably have you salivating.
There's a decent Marriot Residence Inn right next door where you can stay.
 

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You are probably right about those boats LTA.

My first wife's family had a place on Lake Rosseau and they had one of those gleaming wooden inboard vessels. Seems they were a sine qua non of life on Lakes Rosseau and Joseph.

I also used to spend time in summers at Mountain Trout House on Lake Kawagama near Dorset. It was then owned by George Mackessy and his wife (whose name escapes me for the moment). As a teenager, I felt privileged to be entrusted with their beautiful wooden boat of the sort now seen in the Discovery Centre you mention. They referred to it as "the launch", as in "Mukhang pera, would you be so kind as to take the launch and run these good people out to their cottage in Minden Bay?" Heck, I would have paid for the honour, although in that time and place, "the launch" was regarded as not much more than a work boat. All cottages (the few that there were) on Kawagama were water access only then. I think there's a lot of road access now, more's the pity.

There were a number of small, custom boatworks in the Muskoka and Haliburton region making fine vessels in them days. Nice to see some of their craftsmanship preserved. Or is that now craftspersonship?
 

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Home prices generally go up in % terms, so a more expensive home in a desired area will gain higher capital gains that a less expensive home in a less desirable area.

All you have to do is look at price rises in the GTA, Vancouver and some other select cities to see examples of that.

There are nice homes available for sale in New Brunswick today for $170,000, but the price is low because people don't want to move there.
 

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As to rent versus buying........in Ontario we have rent controls and anyone who has a rent controlled unit is laughing all the way to the bank.

Our rent is $1100 a month plus $80 hydro and $20 a month for renter insurance. That is it......and we get free membership to a private club with pools and a gym.

No mortgage, condo fees, municipal taxes, maintenance costs, water or sewer, heat, or home insurance.

Where someone else may pay $2,500 a month for a similar newer unit that isn't rent controlled, it may tilt the factors towards buying.

We have a 3 bedroom townhouse in a nice area. Park right behind us. For us it is a no brainer. We will keep renting until we croak.
 

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I bought an old 1960s boat from a guy and spent all winter in the garage restoring it. Took it up north to our trailer spot and docked it there.

It was a nice boat, steel with a Volvo Penta inboard engine. The exhaust was above the water so it roared pretty good.

I went up a few weeks later with 3 other guys for a weekend.

On Sunday, another trailer crew decided to start building a deck and they were sawing and hammering away.

One of the guys I had brought woke up hung over and all cranky and said he was going down to the boat to sleep due to all the noise.

A couple hours later we pack up and leave. I didn't think to check my boat because I hadn't used it that day.

I get home and a couple days later the marina owner calls and says......."I got good news and bad news, which do you want to hear first ?"

I said it doesn't matter and he says....."we got a torrential downpour on Monday and your boat sank at the dock. It tore the cleats right out of the dock. It was sunk to the bottom and blocking the way so we had a crane pick it up and unfortunately the chains crushed the side of your boat. I said "what's the good news" and he said "you got insurance, right"

I had insurance, but as it turns out the guy that went down to sleep in my boat dropped the cover over the side and it sank because it filled up with water.

He didn't bother to tell me about it. If he had off I could have fished it out. It was only down in about 8 feet of water.

Lessons learned......don't let people hang around your boat, always check to make sure the cover is secure before you leave, and old boats have very little built in flotation. When they fill up with water they sink like a rock.
 

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As to rent versus buying........in Ontario we have rent controls and anyone who has a rent controlled unit is laughing all the way to the bank.

Our rent is $1100 a month plus $80 hydro and $20 a month for renter insurance. That is it......and we get free membership to a private club with pools and a gym.

No mortgage, condo fees, municipal taxes, maintenance costs, water or sewer, heat, or home insurance.

Where someone else may pay $2,500 a month for a similar newer unit that isn't rent controlled, it may tilt the factors towards buying.

We have a 3 bedroom townhouse in a nice area. Park right behind us. For us it is a no brainer. We will keep renting until we croak.
No wonder you love socialist leaning governments...they punish landlords to reward people like you.
 

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No wonder you love socialist leaning governments...they punish landlords to reward people like you.
The landlord built the units in 1967. They probably paid less than $15,000 for them. They are making lots of money at the current rent.

That is what rent controls do. The landlords get a fair rent for what they paid for the property. They don't get to charge 2020 rents for a 1967 unit.
 

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You are probably right about those boats LTA.

My first wife's family had a place on Lake Rosseau and they had one of those gleaming wooden inboard vessels. Seems they were a sine qua non of life on Lakes Rosseau and Joseph.

I also used to spend time in summers at Mountain Trout House on Lake Kawagama near Dorset. It was then owned by George Mackessy and his wife (whose name escapes me for the moment). As a teenager, I felt privileged to be entrusted with their beautiful wooden boat of the sort now seen in the Discovery Centre you mention. They referred to it as "the launch", as in "Mukhang pera, would you be so kind as to take the launch and run these good people out to their cottage in Minden Bay?" Heck, I would have paid for the honour, although in that time and place, "the launch" was regarded as not much more than a work boat. All cottages (the few that there were) on Kawagama were water access only then. I think there's a lot of road access now, more's the pity.

There were a number of small, custom boatworks in the Muskoka and Haliburton region making fine vessels in them days. Nice to see some of their craftsmanship preserved. Or is that now craftspersonship?
You might be surprised to see how many are still around and how relatively inexpensive it can be to own one.
 

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The landlord built the units in 1967. They probably paid less than $15,000 for them. They are making lots of money at the current rent.
So you're jealous because they're making money...typical socialist.

That is what rent controls do. The landlords get a fair rent for what they paid for the property. They don't get to charge 2020 rents for a 1967 unit.
You charge rent in 2020 based on the 2020 rate, not what rent was in 1967. Would you work for a 1967 salary?[/QUOTE]
 

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So you're jealous because they're making money...typical socialist.

No, I am happy they are making lots of money. It keeps my rent payment down.

You charge rent in 2020 based on the 2020 rate, not what rent was in 1967. Would you work for a 1967 salary?

Did they pay the same for the rental unit in 1967 as a new one would cost today ? This affects the landlord's competitors........not me.
 

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Too bad we don’t still have 1967 expenses or property taxes. Sags is so blinded to reality.
 
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