Quote:
Originally Posted by Rutuu
I've been checking in and out of this thread for a bit. On my snooping I haven't seen to many folks break the purchase of a detached property into land value and home value. Land typically goes up in a growing city, the house itself is a bit of a depreciating asset that needs maintenance and renovation over time. My buddy in Houston was the same way when he was purchasing his latest place...it was all about the total price, not about maximizing land size.
On the condo side. The best real estate guys I follow talk about the cost of supply. If they can build it cheaper than you bought it for, then you're in trouble. If you bought it cheaper than the rebuild costs, you're in the clear for a capital return.
Anyway...property chats are always great fun.  |
Great post. I think cost inflation (ie, price of lumber is up huge) will start to impact the Calgary condo market at some point. Right now lots of condos are selling below replacement cost, but once the market turns replacement cost will become the best metric. If land appreciates, and building costs increase that has the potential to be a pretty big double whammy for condo prices.
On the house side you're right as well, imo. I sort of think of it as owning a house is a consumer good, while owning the land under it is an appreciating investment. I bought too much house relative to the value of the land I own for my personal residence, but that was a conscious consumer choice, and I save money on other things (ie buying economy vehicles and driving them for a decade+)
Everyone craps on condo fees, but they often include a variety of utilities, plus insurance, plus replacement/repair. I did the windows/patio doors in my house and it was ~25k. If you figure a 30 year lifespan that's ~$70/month in windows alone.