04-27-2012, 03:23 PM
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#1
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Franchise Player
Join Date: Feb 2011
Location: Somewhere down the crazy river.
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After the mortgage.
So...
We are almost done paying off our mortgage, and the question I am pondering now is... what next?
Some ideas I had were:
1) take a break from any large financial commitments for a year or two and just kind of relax, not worry too much just spend the money on travelling, or splurging on something.
2) Buy a property, and rent it out to cover the costs so it would have a neutral effect on our outgoing cash flow.
3) Buy a vacation property, probably around Gulf Islands or in that region of BC - have it ready for retirement.
4) Upgrade to another house, possibly inner city, and then take on another mortgage to make up the difference.
(2) and (3) aren't mutually exclusive of (1). (4) is one that would be questionable. The nice thing about having our house paid off is a relief of owning it and we could lose our jobs and we'd still be alright with minimum wage jobs if it ever came to that. If we upgraded to a better house, we'd be back to that fear of losing our primary residence if we couldn't make payments.
One friend I talked to who has enough money to retire on now, albeit not comfortably, said he felt a certain sense of relief to be able to now have the choice to do what he wanted. he didn't necessarily need to have a high paying job anymore if he didn't want it, he could do what he enjoys.
So I guess I am kind of curious what other people would do in the situation if they've got their primary residence paid for and are now contemplating what to do next.
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04-27-2012, 03:29 PM
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#2
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Unfrozen Caveman Lawyer
Join Date: Oct 2002
Location: Winebar Kensington
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Are you married? Children? How old are you?
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04-27-2012, 03:30 PM
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#3
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NOT Chris Butler
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Bragger!
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04-27-2012, 03:31 PM
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#4
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Franchise Player
Join Date: Mar 2005
Location: Van City - Main St.
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If you're happy with your current house, I'd say go with 1&2.
It's secondary properties that really start giving you investments, so having your primary paid off and being able to maybe make some money off others is an amazing place to be in.
If you do #2, and have someone covering all of your costs you can still do lots of #1 with your wages, while someone else is paying off your investment.
By the time you need #3, you'll hopefully have 2 properties largely paid off and can always sell 1 then and get your vacation home.
If you don't need your vacation home yet I don't see the point in getting it now, as the investment property in the city has a better chance of little/no carrying costs and investment upside. Let it work for you, and swap it for the vacation home when the time is right.
my 2 cents.
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04-27-2012, 03:31 PM
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#5
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Franchise Player
Join Date: Dec 2007
Location: CGY
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Hookers and blow.
__________________
So far, this is the oldest I've been.
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04-27-2012, 03:34 PM
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#6
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Franchise Player
Join Date: Feb 2011
Location: Somewhere down the crazy river.
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Quote:
Originally Posted by troutman
Are you married? Children? How old are you?
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Yes, married.. 37.. children, etc. Why?
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04-27-2012, 03:37 PM
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#7
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Lifetime Suspension
Join Date: Oct 2011
Location: Cool Ville
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optiions 2 and 4 at the same time!
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04-27-2012, 03:39 PM
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#8
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Powerplay Quarterback
Join Date: Jan 2009
Location: Calgary
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You could renovate all or a portion of your property. Make it worth even more than what it is now. You could build a garage/better garage, or a guest house.
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04-27-2012, 03:41 PM
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#9
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Lifetime Suspension
Join Date: Sep 2005
Location: The Void between Darkness and Light
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Quote:
Originally Posted by Wormius
Yes, married.. 37.. children, etc. Why?
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Just that, it makes a difference.
If you have a family, something like a recreation property might make more sense.
The more vague details you include, the better advice you'll get.
Not from me though, I don't know anything about this stuff.
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04-27-2012, 03:41 PM
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#10
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Ate 100 Treadmills
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Renting out a property is always a great way to build equity. Be aware that it can be a pain in the ass dealing with tenants though. You're also leaving yourself to the whims of the real estate market. In this case you've already one egg in that basket (your house) and would be adding a second.
Have you maxed out your TFSA and RRSP deductions yet? Those are also great options if plan on earning income for the foreseeable future.
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04-27-2012, 03:41 PM
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#11
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Franchise Player
Join Date: May 2004
Location: Calgary
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The smartest thing to do (although perhaps the least fun) is take whatever you were paying for your mortgage and invest it in an RRSP or TFSA instead, assuming you're not capped out on both of those already. Since you have children, maybe contribute to an RESP for them?
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04-27-2012, 03:43 PM
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#12
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Lifetime Suspension
Join Date: Sep 2011
Location: Calgary
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Personally, my plan is to Smith Manoeuvre it once my mortgage is done.
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04-27-2012, 03:44 PM
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#13
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Norm!
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Quit your job and go work in a bowling alley
__________________
My name is Ozymandias, King of Kings;
Look on my Works, ye Mighty, and despair!
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04-27-2012, 03:44 PM
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#14
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Franchise Player
Join Date: Mar 2007
Location: Income Tax Central
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I take contributions.
Or donate it to CP.
__________________
The Beatings Shall Continue Until Morale Improves!
This Post Has Been Distilled for the Eradication of Seemingly Incurable Sadness.
If you are flammable and have legs, you are never blocking a Fire Exit. - Mitch Hedberg
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04-27-2012, 03:45 PM
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#15
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My face is a bum!
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I'm so jealous of all you #######s.
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04-27-2012, 03:46 PM
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#16
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Franchise Player
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Quote:
Originally Posted by Traditional_Ale
Hookers and blow.
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Quote:
Originally Posted by HELPNEEDED
optiions 2 and 4 at the same time!
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Some kind of mash up of the above! Congrats sir!
(I went the way of getting more Apple stock myself.)
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04-27-2012, 03:46 PM
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#17
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Franchise Player
Join Date: Feb 2011
Location: Somewhere down the crazy river.
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Quote:
Originally Posted by fotze
I' have pondered all of those things and still haven't done any of them.
The day I handed them the final check, I thought I would get a nice certificate or something. The guy at the bank just said 'thats it', nothing in the mail, just thats it.
Also thought this wonderful feeling of a huge load off my shoulders would come. No.
Rec property seems like a collosal crappy investment, unless you are renting it out. One of those good ideas but when you look into it, not really good.
One thing to do is right away have that mortgage amount deducted from your paycheck and put some in some sort of account.
You could put it in mutual funds, boring and has the added bonus of making you less money than putting it under your bed.
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It seems like on one hand, it will be nice, but I also get this doomed feeling that house prices will take a dive once interest rates go back up or if Alberta becomes a have-not province.
My fear is probably irrational, but that is partly my desire to move to a more desireable neighbourhood where house prices might weather poor economic times a bit better and be easier to sell if things got really tough. I am only hypothesizing, but I think it would be easier to sell a house in the inner city than in the NW suburbs.
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04-27-2012, 03:47 PM
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#18
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Franchise Player
Join Date: Feb 2011
Location: Somewhere down the crazy river.
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Quote:
Originally Posted by Canehdianman
Personally, my plan is to Smith Manoeuvre it once my mortgage is done.
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I thought you did that before the mortgage was done?
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04-27-2012, 03:53 PM
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#19
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Franchise Player
Join Date: Dec 2005
Location: Moscow
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Quote:
Originally Posted by Wormius
Yes, married.. 37.. children, etc. Why?
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37? That's amazing. Fata me, I'm 34 and still haven't even bought my first house yet.
__________________
"Life of Russian hockey veterans is very hard," said Soviet hockey star Sergei Makarov. "Most of them don't have enough to eat these days. These old players are Russian legends."
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04-27-2012, 03:53 PM
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#20
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Franchise Player
Join Date: Nov 2006
Location: Supporting Urban Sprawl
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I always said I would snag a rental property or 3 in that situation. Enough that as long as 2 of them were rented at a reasonable rate, I wouldn't be behind on what my (previous) mortgage payment was.
Quote:
Originally Posted by Makarov
37? That's amazing. Fata me, I'm 34 and still haven't even bought my first house yet.
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I agree, 36 here and given the crash, I might as well not even bought yet...
__________________
"Wake up, Luigi! The only time plumbers sleep on the job is when we're working by the hour."
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