Quote:
Originally Posted by Incinerator
How do you suppose the investor will still have $$ to pay his own mortgage if all his investment properties are being foreclosed?
Sure, interest rates could rise to 8-10% overnight, you could lose your $80K job, your house may burn down, your ex-girlfriend could win the lottery tomorrow and rub it in, YOU could win the lottery tomorrow & do the same. But why waste your time worrying about things not likely to happen? (That's what insurance is for) The likelihood of a economic downturn in Calgary for the foreseeable future is slim to none, and slim just left town. The fundamentals for growth & more growth are all there. So why would anyone worry about not having a job tomorrow? next year? next 5 years?
My crystal ball is as clear as yours or anyone elses, who knows if another NEP will come? But we can make reasonable forecasts. People all try to do whats necessary to attain desirable living standards & quality of life, it's human nature. Right now the times say roll with the ball or get left behind. Our choice is thus get on the bandwagon or ride the bicycle out of town. None of us make the rules, but it doesn't mean we don't have to play by them if we NEED to play.
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The point of my argument is that when an investor weighs his ability to finance a deal vs his ability to pay for it (as an individual homeowner will), they are not in a NEED situation, but a WANT situation. Do they NEED to go ahead and mortgage that next rental or flip? No, but they do it to turn a profit, because it is cheap money and are confident in their abilities.
An individual homeowner is looking at it as a basic need, therefore I would say that he has more on the line as compared to an investor.