After the mortgage.

[Wormius]

So...

We are almost done paying off our mortgage, and the question I am pondering now is... what next?

Some ideas I had were:

1) take a break from any large financial commitments for a year or two and just kind of relax, not worry too much just spend the money on travelling, or splurging on something.

2) Buy a property, and rent it out to cover the costs so it would have a neutral effect on our outgoing cash flow.

3) Buy a vacation property, probably around Gulf Islands or in that region of BC - have it ready for retirement.

4) Upgrade to another house, possibly inner city, and then take on another mortgage to make up the difference.

(2) and (3) aren't mutually exclusive of (1). (4) is one that would be questionable. The nice thing about having our house paid off is a relief of owning it and we could lose our jobs and we'd still be alright with minimum wage jobs if it ever came to that. If we upgraded to a better house, we'd be back to that fear of losing our primary residence if we couldn't make payments.

One friend I talked to who has enough money to retire on now, albeit not comfortably, said he felt a certain sense of relief to be able to now have the choice to do what he wanted. he didn't necessarily need to have a high paying job anymore if he didn't want it, he could do what he enjoys.

So I guess I am kind of curious what other people would do in the situation if they've got their primary residence paid for and are now contemplating what to do next.

[troutman]

Are you married? Children? How old are you?

[pylon]

Bragger!

[Winsor_Pilates]

If you're happy with your current house, I'd say go with 1&2.

It's secondary properties that really start giving you investments, so having your primary paid off and being able to maybe make some money off others is an amazing place to be in.
If you do #2, and have someone covering all of your costs you can still do lots of #1 with your wages, while someone else is paying off your investment.

By the time you need #3, you'll hopefully have 2 properties largely paid off and can always sell 1 then and get your vacation home.

If you don't need your vacation home yet I don't see the point in getting it now, as the investment property in the city has a better chance of little/no carrying costs and investment upside. Let it work for you, and swap it for the vacation home when the time is right.

my 2 cents.

[Traditional_Ale]

Hookers and blow.

[Wormius]

Originally Posted by troutman

Are you married? Children? How old are you?

Yes, married.. 37.. children, etc. Why?

[HELPNEEDED]

optiions 2 and 4 at the same time!

[Knalus]

You could renovate all or a portion of your property. Make it worth even more than what it is now. You could build a garage/better garage, or a guest house.

[Flash Walken]

Originally Posted by Wormius

Yes, married.. 37.. children, etc. Why?

Just that, it makes a difference.

If you have a family, something like a recreation property might make more sense.

The more vague details you include, the better advice you'll get.

Not from me though, I don't know anything about this stuff.

[blankall]

Renting out a property is always a great way to build equity. Be aware that it can be a pain in the ass dealing with tenants though. You're also leaving yourself to the whims of the real estate market. In this case you've already one egg in that basket (your house) and would be adding a second.

Have you maxed out your TFSA and RRSP deductions yet? Those are also great options if plan on earning income for the foreseeable future.

[MarchHare]

The smartest thing to do (although perhaps the least fun) is take whatever you were paying for your mortgage and invest it in an RRSP or TFSA instead, assuming you're not capped out on both of those already. Since you have children, maybe contribute to an RESP for them?

[Canehdianman]

Personally, my plan is to Smith Manoeuvre it once my mortgage is done.

[CaptainCrunch]

Quit your job and go work in a bowling alley

[Locke]

I take contributions.

Or donate it to CP.

[Bill Bumface]

I'm so jealous of all you #######s.

[chemgear]

Originally Posted by Traditional_Ale

Hookers and blow.

Originally Posted by HELPNEEDED

optiions 2 and 4 at the same time!

Some kind of mash up of the above! Congrats sir!

(I went the way of getting more Apple stock myself.)

[Wormius]

Originally Posted by fotze

I' have pondered all of those things and still haven't done any of them.

The day I handed them the final check, I thought I would get a nice certificate or something. The guy at the bank just said 'thats it', nothing in the mail, just thats it.

Also thought this wonderful feeling of a huge load off my shoulders would come. No.

Rec property seems like a collosal crappy investment, unless you are renting it out. One of those good ideas but when you look into it, not really good.

One thing to do is right away have that mortgage amount deducted from your paycheck and put some in some sort of account.

You could put it in mutual funds, boring and has the added bonus of making you less money than putting it under your bed.

It seems like on one hand, it will be nice, but I also get this doomed feeling that house prices will take a dive once interest rates go back up or if Alberta becomes a have-not province.

My fear is probably irrational, but that is partly my desire to move to a more desireable neighbourhood where house prices might weather poor economic times a bit better and be easier to sell if things got really tough. I am only hypothesizing, but I think it would be easier to sell a house in the inner city than in the NW suburbs.

[Wormius]

Originally Posted by Canehdianman

Personally, my plan is to Smith Manoeuvre it once my mortgage is done.

I thought you did that before the mortgage was done?

[Makarov]

Originally Posted by Wormius

Yes, married.. 37.. children, etc. Why?

37? That's amazing. Fata me, I'm 34 and still haven't even bought my first house yet.

[Rathji]

I always said I would snag a rental property or 3 in that situation. Enough that as long as 2 of them were rented at a reasonable rate, I wouldn't be behind on what my (previous) mortgage payment was.

Originally Posted by Makarov

37? That's amazing. Fata me, I'm 34 and still haven't even bought my first house yet.

I agree, 36 here and given the crash, I might as well not even bought yet...