Quote:
Originally Posted by fundmark19
well my cost is 1000 on my condo and I rent it for 1350. they lose 350
But I am also investing that is the thing. My RSP was maxed till last year and still do regular contributions to RSP and tax savings account. I just don't see how anyone is saving renting. For a comparable house I would be paying the same and coming out with nothing.
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There is no way the cost on your condo is 1000. Perhaps you're screwing them, and your $200,000 mortgage home that is only worth $1000 in rent and they're paying you $1350, that's good. However, even on a $200,000 mortgage, you'll probably have a monthly payment of ~$1000, then $100 on property tax, $200 on condo fees, $100 in utilities, and probably $50 a month on maintenance. You have a really good deal there if your mortgage cost is only $1000, so yes, in your case it'd be much better to buy.
However, let's say you rented your place out for market value and they're only paying you $1000 (in calgary, a $200000 home would probably only get you $800-$900 frankly). You'd be $450 in the hole right off the bat, and you're probably getting some $450 in equity for easy math. So every month you'll get $450 + the home appreciation as a return.
However, if you rent out this place for $1000, and spend the $450 on an investment, if you are a skilled investor that can get an 8 or 9% return on that $450, you will have saved money as a renter.