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I decided to take a different view on the home ownership/ renter discussion taking place. Try to put it in the context of those that do a a proper analysis of buying a rental and doing a cost analysis on cash flow. I have seen this discussed on several real estate threads here and elsewhere. Some do this with their other investments as well. If we factor out the non financial considerations (a home not an investment, preferring a certain location over another despite it being not as beneficial financially etc.) each property would provide a different cash flow percentage. Some owners will foolishly own property that provides negative cashflow with the speculation that the property will appreciate enough to compensate for that loss. If a tenant is able to find such a place it definitely would be cheaper than owning. Many landlords forget to include the time cost of being a landlord which is what I believe Keith is alluding to above. It is difficult to calculate the cost of one's time if it is not their regular job that their time is being allocated to. If I make $100 an hour at my place of employment does that mean an hour spent elsewhere is $100 as well? One typically prices it at what it would cost to have another person do that same task.
When we owned an acreage north of Toronto, most owners hired gardiners to keep things nice while they drove to the Gym. We did the work but were well-aware that we were working well below our hourly rate. But we were getting exercise without gym fees. Same with electrical, drywall and plumbing.
 

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The study was commissioned by Royal LePage, LOL
It was commissioned by Royal Lepage. Why not? It is their business to know these things.

The study was carried out by a professional - economist and housing market analyst Will Dunning of Will Dunning Inc. Which specific parts of his study did you find inaccurate? Or are you implying that he was influenced?

Not sure why anyone would question the findings. Findings are what most Canadians would have expected.

Here are two links to the report findings:


 

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Enjoying the new highs... Well, I have lost quite a good amount of money during November. And I guess I'll lose more during December.

But that's just a healthy correction due to news. No crash in sight.
 

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It was commissioned by Royal Lepage. Why not? It is their business to know these things.

The study was carried out by a professional - economist and housing market analyst Will Dunning of Will Dunning Inc. Which specific parts of his study did you find inaccurate? Or are you implying that he was influenced?

Not sure why anyone would question the findings. Findings are what most Canadians would have expected.

Here are two links to the report findings:


The part that seems iffy to me is the $60/month on maintenance/repairs. Some years you might be able to get away with that, but others, not so much.

In general with the way the housing market has been, it would have been hard for renting to come out ahead. But just because the past has been that way is no guarantee that the future will be as well.
 

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The part that seems iffy to me is the $60/month on maintenance/repairs.
I noticed that in the Globe report. I first guessed it may have been a mistake, but no, that is what he used. Maybe because it is an average, it includes homes that don't get maintained much over the 10yr period he studied? I know that today, we spend that much just on lawn care, bug spraying and snow removal. But, on the other hand, thinking back to our first home. It was 3yrs old when we moved in and almost as-new. Lawn & basic garden was in. We stayed there for about 10 years and can't recall having to do any maintenance other than lawn & garden and a bit of painting that we did ourselves. The maintenance number may be low, but even if it was $160, it wouldn't change the outcome.

The other thing to bear in mind about the report, was that it is strictly financial. It does not try to factor in other consideration such as location, schools, commuting etc that can affect living costs as well as enjoyment of lifestyle a home enables.

Perhaps the full report cover this better? I have only scanned the details:

 

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When I owned a home I probably spent 20k/year on various things outside of mortgage,taxes,insurance. Now I spend more than that each year on my sailboat lol. No free rides.
 

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Yes, 60.00/month isn’t accurate for a lot of people, i don’t think. I spent 15000 2 years ago on a special assessment for windows. I am sure there is a range. I wish my cost was that much. What i wonder is if they are including the cost of renovations. My understanding is that canadians spend an enormous amount on this and renters don’t have that cost at all.
 

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It was commissioned by Royal Lepage. Why not? It is their business to know these things.

The study was carried out by a professional - economist and housing market analyst Will Dunning of Will Dunning Inc. Which specific parts of his study did you find inaccurate? Or are you implying that he was influenced?

Not sure why anyone would question the findings. Findings are what most Canadians would have expected.

Here are two links to the report findings:


The main issue for me is the study doesn’t seem to analyse opportunity cost of the down payment and other principal payments, but that’s based on a quick scan.

I do think that the study could be influenced by the company commissioning it, yes
 

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Enjoying the new highs... Well, I have lost quite a good amount of money during November. And I guess I'll lose more during December.

But that's just a healthy correction due to news. No crash in sight.
Some March 2020 PTSD seems to be surfacing on social media. if Omicron is a big one I wonder if we get doom in markets or if participants will ‘discount’ the policy response and skip straight to melt up. Interesting times.
 

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Yes, 60.00/month isn’t accurate for a lot of people, i don’t think. I spent 15000 2 years ago on a special assessment for windows. I am sure there is a range. I wish my cost was that much. What i wonder is if they are including the cost of renovations. My understanding is that canadians spend an enormous amount on this and renters don’t have that cost at all.
That's assuming they rent the same place for 25 years and the landlord never renovates, or doesn't increase the rent to recapture the cost of renovations. Each time a renter moves, they pay a new rent which is based partly on whatever renovations have been done by the landlord.
 

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FWIW, we probably spend somewhere between $20k per year on home upgrades/replacement, perhaps more, over the past 10 years (our house was built in 2000) and that is likely on the low end of average for our neighbourhood. Our next door neighbours have probably spent $300k in the same time period. Houses date very fast if not 'renewed' every 10-15 years or so. Kitchens, bathrooms, door and cabinet hardware, light fixtures, window coverings, decks, roofs, landscaping, paint, pool equipment/liner, etc. A landlord wouldn't do anything other than what is necessary from a replacement perspective.

That is why with the exception of high cost locations like the GTA, GVR and maybe a few other places, 3% of FMV per year is not out of range for ongoing operating costs, maintenance and renovations for owned housing. Any study that claims otherwise, such as the linked one by Royal LePage is highly self-serving and skewed towards investment real estate. It is like the wolf asking to be the shepherd.
 

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Some March 2020 PTSD seems to be surfacing on social media. if Omicron is a big one I wonder if we get doom in markets or if participants will ‘discount’ the policy response and skip straight to melt up. Interesting times.
I doubt Omicron is the "big one". Beta, gamma, lambda, mu are all variants that did not stick in almost any country other than the original.

Of course, there is no counting on psychology. But I would not be surprised to see a big bounce back this week, and all time highs again before year end. Melt up is more likely than melt down.

Between the vaccines and the infections, this is becoming less of a 'novel' disease, and you can see that in the lower death rates with each subsequent wave or variant.
 

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Not only that, but people are just over it.
Nobody cares anymore except for a select few.
Everyone just wants to live their life and forget about COVID.
 

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I am not sure about this one. I think the travel restrictions and possible European shutdowns will depress the market this coming month to correction territory. Not like March 2020 but a pullback for sure. it will depend a lot on transmissibility and the shutdowns that go along with it.
 

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By “big one” I really just meant to refer to whether it results in govt imposed lockdowns and the like. That is all I care about from a trading / investment point of view. Whether those measures make sense is a different question.
 

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When we owned an acreage north of Toronto, most owners hired gardiners to keep things nice while they drove to the Gym. We did the work but were well-aware that we were working well below our hourly rate. But we were getting exercise without gym fees. Same with electrical, drywall and plumbing.
Where we are, most home owners just choose to have someone else do the work. Reason - many are aging and have money to spend. On the other hand, we often walk in a nearby subdivision where many young families families live when starting out. There, they seem do their own maintenance. As we did back when we bought our first home! I can't recall paying anyone to do anything on our first home in the 10 yrs or so we were there.

The amount of money spent on maintenance no doubt varies all over the map. Upgrades and renovations are not maintenance. These are discretional costs that hopefully add to the capital value of the home. Choosing to pay others to cut lawn etc is also discretionary and those with deeper pockets no doubt have more of what they consider maintenance.

Basically when quoting maintenance costs here not everyone is talking about the same thing.

Having said all that, I still think the $60/month seems way low! But looking at the kind of poor summary table, the cost of ownership also included a condo fee of $147/month. Normally that would include all exterior maintenance such as grounds, windows, roof etc. The $60 would just be for interior maintenance. $207/month would be $2485/yr. Still likely on low side. Trying to include all types of dwellings in one summary table adds confusion and just doesn't work.

I noticed that home owner's insurance was included, but not tennant's insurance. That could be about $20-25/month for rentals.

The Table I referred to,
Font Material property Parallel Number Pattern
 

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There's really no limit to what you could spend. I was raised lower middle class, so my idea of what is necessary probably differs greatly from that of someone who is upper middle class. We never had expensive renovations or high end finishes when I was growing up. Most "renovations" we did were just flooring, paint, and maybe a few very basic/cheap upgrades. My parents generally only replaced things that couldn't be repaired, cleaned up, or improved to an acceptable standard. I'm not quite as thrifty as my parents were, but my DIY skills are also far superior to theirs, so I can do a lot more with less money. That certainly is not the case for everyone. The individual needs to understand their own personality, needs, wants and capability. Some can't live with anything that is below a certain standard of repair/appearance. People who are extremely particular and want "modern" everything are bound to spend tons of money on renovations, as are those who are trying to keep up with peers. These are the ones who redo their kitchen/bath every 10-15 years just because it looks "dated". Whatever makes you happy.

I think $250 a month ($3000 a year) would be a reasonable estimate for general maintenance & repair for someone who can handle doing some things themselves.

$1800 for deferred major expenses (roof, windows, flooring)
$600 for regular maintenance (repair/replacement of appliances, plumbing, paint & supplies, etc).
$600 for seasonal expenses (lawn care, lawnmower gas, yard tools, snow/ice removal, furnace filter, pest control, etc.)

All of this assumes DIY for most basic things (such as painting, mowing the lawn, shovelling snow) and hiring a pro for anything technical. Many years will have no major expenses since appliances rarely break down -- maybe just a furnace tune-up every other year. Roof/windows should last 25 years, and don't all need to be replaced at the same time.
 

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As waywardson pointed out they don't include the downpayment you can invest. I think with these huge down payments they have to make on million dollar homes to invest that money would make a difference. Condo fees of 147 are very low too. Mine is 400/month. Maybe the report should only be used if your situation matches the figures they give. Just to add lets not forget the interest being paidbon renovations as most are using helocs.
 
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