Quote:
Originally Posted by Red
What if it doesn't go up, but down instead?
What if you bought a year ago and are now "down" 40K or more? It'll take more than a few sleeps to get that money back. Plus ownership includes property taxes and upkeep which could easily add 2-3K a year.
Not direct questions to you, but a few points nonetheless.
Renting makes a lot of sense in certain markets.
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You need to buy in a market that has a good chance of properties going up in value. Alberta, and specifically Calgary, is a market that CMHC expects to rise in value. I wouldn't buy in a place like PEI right now, because their depressed economy doesn't look like it is going to improve any time soon, and therefore their properties may decrease in value.
I bet those who bought in Calgary at the height will be in good shape in a year or two. Over time, real estate increases in value in places where the economy is good. As long as we are driving gasoline powered engines, Calgary's economy will be good. With oil prices over $100/barrel, we are in good shape here. Our real estate blip will correct itself soon enough.
I do agree that renting makes sense in certain markets - like ones that have large vacancy rates on rentable units, which would drive down rents.
One thing that hasn't been brought up is the tax implications. Whatever increase in value on your principle residence is tax free. Any investment that you have, you will have to pay significantly more tax on your earnings.