Quote:
Originally Posted by OMG!WTF!
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.
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If you are going to attack the "truism" that real estate always goes up, then I would argue that "the market always goes up" is also a truism. The ability for the market to crash is just as possible as real estate crashing. Easy to look in hindsight and say the market went up 6% per year so you would have been better to invest in the market than real estate. Maybe over the next 10 years the market will remain flat and housing prices increase by 20% - then which one was the better investment?