Rent or Buy in Calgary

[asp integra]

Rent a place downtown for a few months and see how you like it. You already know what its like to live in a house far from downtown. Be actively looking for something to buy at the same time. If you don't like renting you can either move into a house you just bought or back with the rents.

I voted buy strictly because when you rent all you are doing is paying someone else's mortgage instead of paying down your own. You physically have something with ownership that hopefully appreciates over time vs living some place and paying rent for years that doesn't get you anything.

[Manhattan]

^

When you rent you get:

- a place to live
- property tax and all maintenance paid
- financial flexibility and cash flow to invest towards higher yielding investments (equity markets will beat housing markets)
- geographic mobility (don't like the neighborhood? need to move for work? pay a month deposit or less and you're out of there)
- EDIT: Missed a big one: you don't pay interest on the mortgage to a bank which will likely be more than half of your total payment in the first few years

Disregard the 3rd point if you're a dummy with your money because a huge mortgage will become a forced savings account for you.

[Swank]

The sooner you buy, the sooner you're done with your mortgage. You might also consider a townhouse with a 2 car garage. Lots around Westhills/Signal Hill, Glamorgan, etc. Pretty close to downtown and can easily be found in the $400K range. Prices are low now, that won't last.

[Manhattan]

Also consider that your situation will change given you're a new grad. You will probably want to upgrade in a few years or less because of a girlfriend or wife and/or you're bringing in a lot more money and you want to live in a nicer place than the one you bought when you were a new grad and hardly had a down payment, the transaction costs of a realtor, lawyer, etc will outweigh any potential appreciation in the home.

[The BMW Guy]

Originally posted by Manhattan
If rent is money is sunken so is everything else you buy. For the price of rent you get a ROOF OVER YOUR DAMN HEAD. Sure it costs money compared to living at home but it's a lot of fun having your own place as a 20 something and having your friends over.

I see your point. What I meant by a sunk cost is that when buying, I get a roof over my head and also own a little bit of the roof. When renting, I just get the roof but it won't be mine.

With rental rates so attractive right now, I think it might make sense to rent. Especially with me having never moved out, I have no idea what I would want in a home either than a heated double garage.

[taemo]

first, do you want to move out of your parents place and get your own place?
then next you can ask whether buying or renting.

now buying vs renting, IMO you should ask your goal 5 years and 10 years for now.
single or in a relationship?
live by yourself or do you want to have roommates?
want a bachelor lifestyle and party it up every weekend?

create a spreadsheet and on top of a mortgage, add other expenses like transportation, food, utilities, taxes, etc.

TBH if I could do it all over again, I wish we stayed at my parents home and used our money on building more equity.

[msommers]

Another point to consider is to rent a place with a roommate and just try out that whole lifestyle. Most places are 6 month leases, which should be sufficient time to decide what works for you.

When I moved out I lived with 3 other guys and it was a fucking nightmare in the end. So I rented my own place and liked it much more, at a greater cost and then eventually bought a place for myself.

If I had to do it all over again, I'd rent a place with a buddy for awhile until the right house came along. Unless of course there is a good place you can find now and it fits, the prices are definitely right.

[jwslam]

Originally posted by The BMW Guy
with me having never moved out, I have no idea what I would want

I would suggest to definitely find a rental place with a roommate then. It'll help you decide whether you can stand roommates at all, and that'll determine what you can afford to buy in the future. You may end up in something significantly cheaper because you can't stand to have roommates.

[flipstah]

If you plan to move out of the city/country, rent.

If you're Calgarian for life, buy and then sublet for ease of the wallet.

If you hate roommates, sacrifice the garage and buy a shoebox condo.

I do miss not paying for a mortgage.

[88CRX]

The only way renting saves you money is if your monthly costs are less than purchasing your own place (mortgage, property tax, upkeep, etc) AND you actually save that difference. I have several friends that had that attitude 10+ years ago when we started real full time jobs, they’re still renting and have made little to no impact to their savings account and might never be able to afford to buy. I’m sure everyone knows someone in that exact same scenario.

One thing a mortgage does is force savings through paying your mortgage down. Lots of people underestimate that fact when they pitch how awesome renting is.

[HiTempguy1]

Buying can really cut down on your fun-money.

Its why I waited so long (wasn't willing to give up my lifestyle) and why I still only have a rinky-dink condo. Another thing to consider is that with the rental market in the renters favour, you don't get nearly the bang for the buck if you rent out a room.

$500/month would be great to have in my pocket, but to have somebody else live in my condo? Hell no!

As an entrepreneur, a mortgage is also a huge weight around your neck (if you ever decide to be your own boss). I appreciate the fact I could work at mcdonalds and still make my monthly payments on everything.

If you've never moved out, you definitely should. Fair warning though, most roommates (including friends) suck to live with. I'd suggest getting a 1br place cheap enough for yourself.

Everything changes when you start talking garages. If a garage is your primary focus out of anything, buy the cheapest house you can the furthest you are willing to be from whatever area kids these days care about.

But be honest with yourself, unless you are wrenching every weekend, I wouldn't make the decision solely on the garage.

I personally feel now is the time to buy with oil having stabilized. Can't imagine prices are very far from the bottom.

Edit-
What he said

Originally posted by flipstah
If you plan to move out of the city/country, rent.

If you're Calgarian for life, buy and then sublet for ease of the wallet.

If you hate roommates, sacrifice the garage and buy a shoebox condo.

I do miss not paying for a mortgage.

[The BMW Guy]

^ Good points. I don't think I'd move from Calgary (not permanently, anyway). I have too much family here and have close ties with many of them.

So my current train of thought: ideally I'd buy a place near the universities or LRT line for under $400k with a double garage and rent out the basement/rooms....but there's nothing under $400 that satisfies those. Hence staying at home and continuing to save for a down payment is a viable option in the polls too. (unless there are other attractive rental locations for under $400k)

But also with rent being so cheap, if I can split a 2 bedroom condo downtown with someone I'd be paying $700-$800 including downtown parking. A 5 minute walk to work and the condo/downtown living would be something special as well, for a cost of ~$10k/year of rent.

[mr2mike]

If you want to travel too, plan to do that before a mortgage. Otherwise, It'll be just that tougher to be taking mortgage payments and wanting to go on a large trip.

What I seem to see. People who rent spend most money on travel.

As well, don't discount yardwork. You have a house, buddies in condo's have endless weekends in the summer while a few of yours will be spent on yardwork.

[A790]

Originally posted by mr2mike
As well, don't discount yardwork. You have a house, buddies in condo's have endless weekends in the summer while a few of yours will be spent on yardwork.

This x 100.

Mower? $300.

Trimmer? $150.

Time spent mowing/trimming? 1.5 hours every week to ten days during spring/summer.

[Xtrema]

If you know what you are doing and ready to settle, buy.

If you don't know and may leave town, rent.

Either is a good idea right with renting may have a bit more bang for bucks.

But buying is also good as prices is at bottom so most of the risks are gone now and mortgage will go nowhere but up, so if you can lock down a 5 yr mortgage now, it may cost you less than buying a few years down the road when interest is higher.

[ercchry]

A lot of you guys are missing the true trump card of buying young... revenue stream.

Buy an attractive to the rental crowd place (close to transit, low maintenance, etc) live in it with roommates (who cover all of your sunken costs)... save up money, to either travel, buy a car, or... for when you meet that special someone and buy a big boy house together... while converting your old home to full time rental, since it's got a bunch of equity in it by then and will cash flow well, helping with the new mortgage and meaning you don't even need roommates once you're in your later 20s

It works, even in an environment where house prices are stagnant. If you're not planning to ever leave the city it's miles better than renting

[HiTempguy1]

Originally posted by The BMW Guy

So my current train of thought: ideally I'd buy a place near the universities or LRT line for under $400k with a double garage and rent out the basement/rooms....but there's nothing under $400 that satisfies those. Hence staying at home and continuing to save for a down payment is a viable option in the polls too. (unless there are other attractive rental locations for under $400k)

This would be the most financially prudent option, but requires long term thinking. You would hold onto this property for 20 years, and make bank when someone wanted to tear it down to put up a townhouse/condo/duplex.

Pretty long play for someone your age though. In my experience, the earlier you get in the housing market (just like the earlier you start retirement savings), the better off/more lucrative it is. That's just my opinion though, everyone is different!

Edit-
Shit, once again beat to the punch haha

Originally posted by ercchry
A lot of you guys are missing the true trump card of buying young... revenue stream.

Buy an attractive to the rental crowd place (close to transit, low maintenance, etc) live in it with roommates (who cover all of your sunken costs)... save up money, to either travel, buy a car, or... for when you meet that special someone and buy a big boy house together... while converting your old home to full time rental, since it's got a bunch of equity in it by then and will cash flow well, helping with the new mortgage and meaning you don't even need roommates once you're in your later 20s

It works, even in an environment where house prices are stagnant. If you're not planning to ever leave the city it's miles better than renting

The only concern I have with this is that it still severely limits you cash flow wise for a couple years. He says he is earning great money, which I place at $70k to $80k per year. I wouldn't feel comfortable floating a $500k place on that, even with renters. But if he could make the couple of years, he'd be laughing.

[msommers]

Originally posted by ercchry
A lot of you guys are missing the true trump card of buying young... revenue stream.

Buy an attractive to the rental crowd place (close to transit, low maintenance, etc) live in it with roommates (who cover all of your sunken costs)... save up money, to either travel, buy a car, or... for when you meet that special someone and buy a big boy house together... while converting your old home to full time rental, since it's got a bunch of equity in it by then and will cash flow well, helping with the new mortgage and meaning you don't even need roommates once you're in your later 20s

It works, even in an environment where house prices are stagnant. If you're not planning to ever leave the city it's miles better than renting

Yep, it's just that easy

[NoPulp]

I'm in the same sort of situation right now too.
My opinion right now:

Home - EXTRA MONEY while at the same time putting money away for down payment. Not very cool though and have to deal with mildly annoying parents (they're probably pretty good compared to most room mates though).

Rent - Expensive with very little benefit over living at home (depending if you pay rent at home or not). Even more expensive if I want storage for current toys. Waste of money.

Buying - Cool status. Broke AF. Would be super lame to have to rent out... such a headache, but cool to have other people pay your mortgage. You can't rely on renters though, have friends that did that and they're so house broke because they can't keep renters.

I don't see a need to rush into buying a house right now. Seems like everyone's mindset is they want the "perfect" life right now - married, house, dream car. It just screws you IMO. Nothing wrong with waiting until life settles down and it makes sense.

I'm pretty happy with how things are. My plan is to continue enjoying the extra money while saving and looking for a fixer-up house in a nice neighborhood.

[ercchry]

Originally posted by msommers


Yep, it's just that easy

No one told you to move to Edmonton during a recession!