Quote:
Originally Posted by Cowboy89
The rent vs. buy is completely an individual circumstances / one's own housing market argument every time rather than a blanket 'renting's fine for single people' statement or other throw away statement.
My circumstances: I have a family of 4, and the biggest contributing decision positively impacting my net worth over the past decade has been my decision to rent in Calgary rather than buy. I live in a detached home in the burbs for $1800/mo. Buying a similar house 10 years ago would have cost me ~$3600/mo in mortgage payments plus property taxes and maintenance.
The 'if I rented, I'd have nothing to show for it argument' is plain wrong. Had I bought, essentially the interest portion of my mortgage payment would have equaled my rent payment and by not buying, the difference for me was invested in the markets at my annual avg return of 10% rather than as dead money in home equity earning a negative return in a declining / dying housing market.
With regards to the 'you'd have to pay rent for the rest of your life' argument. Technically that's true, but with the net worth I've amassed I can generate enough passive income from investments to pay my rent. So that argument is really one that only looks at the housing leger of one's finances and doesn't take into account one's finances holistically.
Now of course had I made the same decision in Toronto or Vancouver I probably would have been behind by renting instead of buying. So again it goes back to personal circumstances and the market you're in. And with regards to the market you're in comment, unless you can predict the future, you probably can't set your watch to the kind of housing/rent appreciation that's occurred in the frothiest markets nor count on Calgary's market being dead for almost a decade or count on the equity market's returns we have seen over the last decade. My point is that if you're being honest with yourself you can't generically with any confidence proclaim that buying or renting is the optimal decision.
|
I don't disagree with this at all. The main driving factor, economically, is that you are talking about buying at some kind of peak in the Calgary market. Obviously, it's not a good buy if you are buying right before a long term drop in the oil market in Calgary. It affects both purchase price and rents.
Here's a question. Don't you think the decision is different right now? You can buy a nice place in the burbs for $600k, with 20% down, that's a mortgage of $1,723 at 1.79%. Now let's look at how an uptick in the economic market might affect rents. Your landlord evicts you, you are forced to pay $3,000 for rent. The math changes again.
I also think you're very lucky to find a rental property that provides everything you need, is long term, and is that cheap.
You're basically comparing the ideal renting situation to the worst case buying situation (buying right at the peak).