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Old 10-25-2017, 11:41 AM   #3222
Wormius
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Quote:
Originally Posted by OMG!WTF! View Post
People don't seem to realize the financial disaster they subject themselves to in real estate and it always comes down to the falsehoods inherent with real estate. Real estate always goes up over time is likely the most costly "truism" I've ever heard.

In 2007 the average house price in Calgary touched 500k. Now it's 475k. Not a big deal but the time factor is absolutely devastating. Your 500k would be worth 900k now if invested at a below market average return of 6%. Your average 2007 house is now approaching a half million dollar hit on your potential net worth. And those numbers will just get worse over time as compound interest really kicks in.

I'm also willing to concede $500 a month to rent in the rent vs own debate. So 6k a year in rent premium for ten years. 60k in ownership savings. Certainly enough to pay the realtor when you go to sell.

Rent now. Buy later.
Is this about buying a house with cash vs. investing the money then? I would tend to agree that if I had $500k sitting in the bank right now and had the option of buying a house or investing it and renting, I would rent. I could probably even pay the rent with the interest off of a basic savings account. I doubt I could rent a $500k house though.

edit: Are you sure about the average house price in Calgary being $500k in 2007?

Quote:
2012 — 21,207, $428,655
2011 — 18,496, $414,391
2010 — 17,218, $409,885
2009 — 20,669, $394,064
2008 — 19,084, $413,293
2007 — 26,611, $423,770
2006 — 27,426, $358,326
2005 — 26,833, $256,327
2004 — 22,842, $227,269
2003 — 21,062, $215,838
2002 — 21,544, $203,203
2001 — 19,535, $186,586
2000 — 17,211, $180,420

Source: Calgary Real Estate Board

Last edited by Wormius; 10-25-2017 at 12:00 PM. Reason: Other thought.
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