Quote:
Originally Posted by bizaro86
I can't see your sheet to verify the assumptions/math, but 60% over 15 years is less than a 3.2% compound growth rate. I think its pretty likely Calgary single family homes do better than that over the next 15 years from their current starting point.
I also think the stock market might do less than 7% over the next quarter years. The current market levels are pretty high, especially in the US. Thats generally the best predictor of future returns.
Edited to add: I think your pricing assumptions are a bit off as well. My house (location discussed above) wouldn't be worth $600k I don't think, probably ~10% less than that. But based on a rentfaster search the only things close to comparable (but not as nice) rent for ~10% more than that. Even small differences (which will obviously vary based on location/personal circumstances) will make a big difference to your results.
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Yeah I wish I could show you the spreadsheet... I've reduced the amount and so lets see if the following works... these are the default numbers (since my spreadsheet is about 20yrs old they made sense back then) I have in there so give me what you want me to use and I can share the output and then we see how that aligns with expectations and such:
Ownership Inputs Present Home Value $250,000
Down-payment Available $25,000 10.00% *Must be at least 5% Amortization (Years) 20 *Cannot exceed 35 years Mortgage Interest Rate 4.50%
Condo Fees (Monthly) $300 if applicable Property Taxes (Annual) $2,000
Maintenance/Other Expenses (Monthly) $500 Power, water, garbage, cable, parking, etc.. Rental Income (Monthly - After Tax) $0
Renting Inputs Rent (Monthly) $2,000 If YOU are renting Other Expenses (Monthly) $0
Other Inputs Opportunity Cost (After Tax) 7.00% ie Investment returns Comparison Period (Years) 10.0
Real Estate Appreciation Over Period 0.00% realistic for 2010-2015