Alberta's growth unprecedented

[ken0042]

Originally Posted by Mr.Coffee

I'm going to just assume you understand the time value of money and why being a millionaire isn't going to be all that and a bag of potato chips in 25 years.

And that assumption would be correct. My "yay" was slightly sarcastic.

[Shazam]

Originally Posted by Bobblehead

It depends upon what you are doing in IT.

I know a few senior developers (some Java, some .NET) who are doing very well. I 've been an Oracle DBA for a number of years. I should finish getting the official certifications (although after doing the job for 5 years, it feels more like a pita) and see what I can get on the open market.

There has a been a major excess supply of IT people in Calgary and in Canada in general for the past few years. Top end compensation in IT rarely moves (because it's really, really high). The bottom end hasn't been moving because of all the dot-com "IT" posers that got laid off and are just now reentering the market at cut rates. The mid end has moved up a bit, but it's not much, simply because there's a lot of IT people around and still not too much work.

[photon]

Originally Posted by ken0042

At least you doing something smart with the money; which does give you some breathing room. I just cringe when I hear people say that they took out half of the $100K they "made" on their house and bought a new SUV and paid "cash" for it.

Lol no kidding... buy a $75,000 SUV and finance it for 2.9% from the dealer amortized over 5 years, or refinance my house and pay whatever interest rate amortized over 25 years.

Me: "You realize that that SUV is going to end up costing you $150,000 by the time you finish paying for it."

Them: "..."

[V]

Well, I took that big lump of equity and bought a house. At least I'll be making money with that.

Salary reviews come up in October here. I'm going to push for 20%, and if they aren't willing to give it up I'll have to look somewhere else. This city is getting too expensive to live in at my piddly wage.

[Tron_fdc]

What we REALLY need is waiters. Good god the service industry is useless right now.... I'm getting pretty sick of the 15-20% tip expectation from waiters that couldn't figure out how to put together a happy meal.

[JimmytheT]

The Alberta economy is operating above full employment right now; this is not a good thing.

People are being very short sighted about this whole thing, and the fact that our provincial gov't has no plans with what to do with all the surplus money is astonishing.

All those helpwanted signs are not good; there is a labour shortage, which will lead to business going out of business, because they either will not have enough workers, or the cost of employing people in such a market is too high. Sure people are migrating into Alberta, but they are not coming in at a fast enough rate to fill all these vacant positions. Over the next couple of years don't be surprised to see this labour shortage kick everyone's ass with a massive market downturn.

[Bobblehead]

Originally Posted by Dominicwasalreadytaken

Well, I took that big lump of equity and bought a house. At least I'll be making money with that.

My wife and I went to a few open-houses on the weekend. The first real-estate agent said to use, "Don't sell your current house. Use the equity to buy this one and rent your current place out". I was surprised because I expected her to try to get a job selling our current place.

The payoff to the day was when my wife said, "OMG, I like our current house better than those $450K+ places."

[Aegypticus]

This is about the time my dad would be saying you should invest in liquor. It'll always be a good bet. Times are good, stress and celebration drives people to drink. Times are bad, well, you know...

[V]

Originally Posted by Bobblehead

"Don't sell your current house. Use the equity to buy this one and rent your current place out".

I wonder what the tax implications are when you sell that original house. Normally you'd have to pay 1/2 of the capital gains, but is that capital gains from when it turned into a rental property? Or when you first bought it? I wonder if you'd have to pay taxes on the appreciation, even while you were living there?

I've been thinking of doing the same thing, but I need to get this question answered first. Off to my accountant I go...

[photon]

If you live in a house for 6 months it counts as your principal residence I think so you can sell it without paying taxes. Some people do that, build, move in, sell the old one, live there for long enough and do it again. But check with your accountant first.

[V]

Yeah, I know that's correct. What I'm saying, is let's say I bought my house for 130k in 2002. Then in 2006 I move out of that house and buy a new house, but I keep that original house and rent it out. It's no longer considered my principal dwelling. So if I sell that original house for 350k in 2007, do I pay capital gains tax on 220k (350-130)? Or should I get my house appraised before I rent it out, and then the capital gains is based on that appraised value? Tricky stuff.

I'd love to do the ol' "flip every 6 months", but my wife isn't thrilled with the idea. I know some people that have done that for about 10 years now, and now they live in an 800k house mortgage free.

[photon]

AFAIK you pay capital gains on the increase in value while it's being rented only. I have a condo where this will eventually be the case.

As to what that value is at that time, that's a good question. Getting it appraised might be a good idea, I'm not sure what the govt will accept as record of market value at the time.

[Bobblehead]

Actually, I work in taxes (I'm the DBA now, but for 6 years I did the grunt work)

When the property becomes a rental property it undegoes a change of use, and the gains you pay tax on are from that time. You should try and get some sort of appraisal to verify the value you are assigning at that point. If you don't get an appraisal, you will need to look at similar sales to get the value, and CCRA may decide on a lower amount (meaning greater gain in the end). If you get some values when you move, it can prevent a whole lot of possible futuer headaches, and with the increase in provery values in Calgary, I'm positive there will a few cases that end up going to tax court.

[Superflyer]

I like my job here in Calgary but if I had the chance to take my job and move somewhere else I would in a heartbeat. Calgary used to be such a nice small\big city where everyone was nice to each other, now it is becoming just a large city where people would rather spit on you then say "Howdy" to you.
Also there are many jobs in Calgary but I would say that 75% of them are meaningless jobs, such as gas jockeys, retail sales etc. The problem with this is that kids today are learning that they can demand $12 an hour to pump gas or use a cash register and why do something good with your life when you can get paid semi well to do nothing.

[DementedReality]

Originally Posted by Superflyer

...can demand $12 an hour to pump gas or use a cash register and why do something good with your life when you can get paid semi well to do nothing.

1) why is working at a gas station or retail not doing something good with your life. not everyone has to be in the rat race.

2) $12 per hour is not being paid semi well. you can not raise a family, own a home or do anything but squeek by on that wage.

however, living a life with less material items and less work stress does not make anyone less of a person, simply taking a different path through life.

i think living on the beach and eatin ramman noodles all my life wouldnt be a bad idea, if i was single and didnt have kids and a wife to support.

[I-Hate-Hulse]

Originally Posted by Bobblehead

When the property becomes a rental property it undegoes a change of use, and the gains you pay tax on are from that time. You should try and get some sort of appraisal to verify the value you are assigning at that point. If you don't get an appraisal, you will need to look at similar sales to get the value, and CCRA may decide on a lower amount (meaning greater gain in the end). If you get some values when you move, it can prevent a whole lot of possible futuer headaches, and with the increase in provery values in Calgary, I'm positive there will a few cases that end up going to tax court.

Get the appraisal to save you a world of headaches.... $400 is what my guy just charged. Far more concrete than you pulling a bunch of comparables at your time of sale, and can potentially save you tons.

[Superflyer]

Originally Posted by DementedReality

1) why is working at a gas station or retail not doing something good with your life. not everyone has to be in the rat race.

2) $12 per hour is not being paid semi well. you can not raise a family, own a home or do anything but squeek by on that wage.

however, living a life with less material items and less work stress does not make anyone less of a person, simply taking a different path through life.

i think living on the beach and eatin ramman noodles all my life wouldnt be a bad idea, if i was single and didnt have kids and a wife to support.

1) You are right with your statement, that was crappy for me to say. I appologize especially for anyone that is in retail, gas jockey etc. I was comparing them to "rat race jobs".

2) $12 and hour is a semi good wage for a single person, as for a family then it sucks. I guess I am still old school (ie. 10 years ago) when $12 an hour was actually a decent wage.

[MagicallyAdept]

I wish i had your problems guys!

A one bedroom shoe box flat in London costs about CAD$500,000!

Property prices will double here in 5 years because we get more immigrants to London than any other city in the world, we had half a million Poles arrive over the last year but at least they work hard, teaching most of these stupid English people a lesson.

I have told all my friends that is they sell there condos and moved to Calgary they could afford a really nice property and greter standard of living. I might even be moving there too.

But now i feel i will be unwelcome if i did move to Calgary but its cool.

Calgary is one of the friendliest cities i have ever been too and i like the fact its not too big. The only problem is with success and growth you attract more people to your city therefore increasing population and inflating prices as supply is outweighed by demand.

Would you guys really prefer if the Alberta economy was stagnant and the city remained exactly the same for the next 10 years? You might immediately say yes to this but growth is much better and you can make good money from your property too. I know it sucks now with all these people arriving from out of state and 'stealing' your jobs, people getting busier and ruder all the time too. Its not that bad for you lot just yet to keep smiling, you have a great city and English is still the majority language. You do not have to pay $15 a day to drive in the city and have cameras watching every single move you make. That will not happen to Calgary as the government actually listen to the people over there and do what is best for them.

Hope to see you soon neighbours :P

[nfotiu]

Originally Posted by Bobblehead

My wife and I went to a few open-houses on the weekend. The first real-estate agent said to use, "Don't sell your current house. Use the equity to buy this one and rent your current place out". I was surprised because I expected her to try to get a job selling our current place.

It is a risky endeavour though. It's quite possible house prices in Calgary could correct a little bit. Maybe those houses that were 200,000 a couple years ago, that are now worth 400,000, could correct back down to 350,000 next year with even a slight downturn in the economy. Then you end up losing money on both places. A big downturn in prices, you could end up upside down on 2 houses.

It is kind of like buying stock on margin. You could be risking more money than you can afford to lose. I think it is irresponsible of a realtor to be recommending this type of strategy to all her clients.

[Sylvanfan]

^^^^
Fact is that housing in Canada and Calgary is still much more affordable than a lot of other city's in the world. Same goes for gas, food, utilities and other basic living. It seems expensive to us because we're not used to this boom. I used to think house prices in Alberta were stupid until my father in law came out to visit last year and said how cheap it seemed compared to B.C. In real estate you always take short term risks, but over a 10-15 year period you seldom if ever lose money. Alberta's economy will stay warm enough that anyone who buys a house today won't be losing money on it 20 years down the road if they keep the place in some type of condition.

Lets face it, the absolute worst you could do in real estate is buying a place that rents for $1500 a month but actually costs you $2000. Assuming you keep it for 25 years and pay that extra money every month it would cost you $150k. Even if the house didn't go up in value one cent you'd still have a $300k piece of property and you get to write off part of that 150k as a capital loss. How many other investments out there can keep the same price yet give you the chance to double your money? Not many that I know of.