Quote:
Originally Posted by Bend it like Bourgeois
Over 3 years maybe. 30, not a chance. That defies experience. Unless you figure we're all going to be living in pods or something.
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Try this rent vs. buy calculator:
http://www.ic.gc.ca/epic/site/oca-bc.../ca01821e.html
Also, here is a rental yield calculation for a two bedroom condo in Calgary:
December 2007 Calgary Condo Price =
$304,719
Residential Tax Rate =
0.0054614
Annual Taxes = $1,664
2007 Calgary Two Bedroom Condo Rent =
$1089/month
Condominium Fees = ~$150/month
Calgary Rental Yields = (1089*12-150*12-1664)/304719 = 3.15%
That yield is less than many safe investments like savings accounts, long term bonds or GIC's that can earn up to 5.00%.
Rental yields are only marginally above inflation (2%). And if you were to consider that Calgary inflation is likely 3 or 4% you would be looking at a rental property that is actually a loss in wealth.
That is why there is a financial advantage of renting vs. owning even over an extremely long time horizon.