Quote:
Originally Posted by stacey
Do the math, the place they are staying in would be valued around $400,000.00
If they say their mortgage payments would be around $2500.00/month before property tax's, I doubt there is much equity there...
"They pay $1,700 per month for a 1,600-square-foot, three-bedroom home in Rocky Ridge in the city’s northwest. To buy the equivalent home, they figure they would need to spend about $2,500 per month on a mortgage plus property taxes"
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I might be missing something and I don't rent or rent out a property, but why would I rent out a place flr $1700/mo if its costing me $2500+/mo ? I don't think the rental market is that bad in Calgary.
There's another factor here as well though. Lets say you can save $500 a month by renting instead of buying. (I'm not convinced that is the case, but just bear with me). If you're like most people that money is wasted and not actually saved anywhere. I know that there are exceptions, but seriously it can't be a huge number percentage wise who are that disciplined. So when/if the market rises this is where the renter's are caught. The guy who has been putting money into a property now has a smaller debt against a rising asset, whereas the renter had a few years of hookers and blow. Sure, if the market tanks then the renter comes out ahead, but that doesn't appear imminent either.