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Thread: Would you buy a condo right now?

  1. #41
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    I wouldnt, the unemployment trends are going to push the prices down for a while. IF you found something you really liked and were ok losing money on it and staying put for a long time. yes go for it

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    Quote Originally Posted by Xtrema View Post
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    Yeah, even with losing value, increasing tax, insurance and reno cost, it's still cheaper to own my home then rent one of equal size.
    Have you factored in the equity in your home? Whatever equity you have there's a lost opportunity cost to it in the range of 3 to 5%...maybe more depending on your time horizon. When I make this calculation its cheaper to rent. Say you have a long time horizon and assume 5% cost of capital on a $500K house. That's around 2 grand monthly on cost of capital before figuring in property tax, maintenance, fees to sell, etc. Meanwhile lots of $500K homes renting for under 2 grand.

    Quote Originally Posted by Xtrema View Post
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    But what's market value?
    I think he means today's price level. I'd want to see prices fall at least 20% from current levels to be tempted.

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    Quote Originally Posted by Manhattan View Post
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    Have you factored in the equity in your home? Whatever equity you have there's a lost opportunity cost to it in the range of 3 to 5%...maybe more depending on your time horizon. When I make this calculation its cheaper to rent. Say you have a long time horizon and assume 5% cost of capital on a $500K house. That's around 2 grand monthly on cost of capital before figuring in property tax, maintenance, fees to sell, etc. Meanwhile lots of $500K homes renting for under 2 grand.
    $24K of rent vs $10K of tax and insurance. Now I know it's unfair comparison that I don't have a mortgage. Much like Flipstah, there is emotional and illogical component behind it that I really want to own my home and do whatever I want to it and will never risk it on the market.

    I think he means today's price level. I'd want to see prices fall at least 20% from current levels to be tempted.
    Yeah I know. I don't think Calgary got 20% to give but I could be proven wrong.

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    Quote Originally Posted by Xtrema View Post
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    $24K of rent vs $10K of tax and insurance. Now I know it's unfair comparison that I don't have a mortgage. Much like Flipstah, there is emotional and illogical component behind it that I really want to own my home and do whatever I want to it and will never risk it on the market.



    Yeah I know. I don't think Calgary got 20% to give but I could be proven wrong.
    Agreed on this part - a lot of rentals are pretty hardcore slumlord with $5 home depot light fixtures, $40 toilets and the window coverings might as well be made of newspaper. Rofl. I find in the condo rental inventory there's enough new build rentals that it's less of an issue.

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    Quote Originally Posted by Manhattan View Post
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    Have you factored in the equity in your home? Whatever equity you have there's a lost opportunity cost to it in the range of 3 to 5%...maybe more depending on your time horizon. When I make this calculation its cheaper to rent. Say you have a long time horizon and assume 5% cost of capital on a $500K house. That's around 2 grand monthly on cost of capital before figuring in property tax, maintenance, fees to sell, etc. Meanwhile lots of $500K homes renting for under 2 grand.



    I think he means today's price level. I'd want to see prices fall at least 20% from current levels to be tempted.
    3-5% opportunity cost is more like -20% if you currently invest in stocks and mutual funds though. A lot of the fantasy high gains use this recent unprecedented bull run to show incredible returns. The thing about owning is even if you miss out on gains, you are hedged better against market crashes.

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    Quote Originally Posted by pheoxs View Post
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    3-5% opportunity cost is more like -20% if you currently invest in stocks and mutual funds though. A lot of the fantasy high gains use this recent unprecedented bull run to show incredible returns. The thing about owning is even if you miss out on gains, you are hedged better against market crashes.
    Yes minus 20% if you sold your investments immediately after every stock price drawdown. And yes the market on average drops 1 out of every 3 years. 3 to 5% is conservative if you consider the entire history of both the S&P500 and TSX returns is more than double my assumption. Time horizons...

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