Calgary apartments nation's priciest

[jammies]

Originally Posted by calf

I have never met anyone who made a capital gain when they moved out of their rental property.

And I never met anyone who decided to go live on the street after selling their house so they could spend that capital gain on something other than another (usually even more expensive) house.

Don't get me wrong, I'm not saying buying is never an option until you have enough cash to purchase your home outright. However, if you can save up to a 25-30% down payment by renting for a few years (IF you have the fiscal discipline), you will save more money than you lose out on by renting. If you end up renting for the next 25 years, well, yah, you're going to lose out in the end.

[Wookie]

Originally Posted by jammies

And I never met anyone who decided to go live on the street after selling their house so they could spend that capital gain on something other than another (usually even more expensive) house.

Don't get me wrong, I'm not saying buying is never an option until you have enough cash to purchase your home outright. However, if you can save up to a 25-30% down payment by renting for a few years (IF you have the fiscal discipline), you will save more money than you lose out on by renting. If you end up renting for the next 25 years, well, yah, you're going to lose out in the end.

Eh, it's kinda a crapshoot.

Try to explain that theory to the poeple who were deabting renting vs. ownership in 2005. Those who continued renting are in comparison a whole lot worse off. Those who aren't built up some amazing capital in their current homes.

As well if you get a roommate you can substantially reduce your debt.

That said, you are right - there are times when renting can be better. To bad no one has a time machine to go check in advance what's going to have been the better option 20 years down the road.

You do what you think is best without trying to break the bank and have a miserable time making the bills.

I'm on the cusp, took out a long mortgage, but went to bi-weekly payments which substantially reduced the amortization period. Right now someone else lives there for the short time being renting it. When I move in I'll need a roommate. But I wanted a house in calgary. I want somewhere close to where I work, close to friends and family, close the the area of the city I love - and the security that my payments aren't going to change, I'm not going to be booted, and if I want to leave the city for awhile it'll be there when I return. How do those variable fit into the value of what I'm paying in interest vs. rent?

[GreenTeaFrapp]

Originally Posted by kipperfan

Why on earth would I want to pay $500000 here for a house, when I could get the same one for half that in the GTA, or even in Montreal.

You get one for half that in the GTA, you'll be looking at an outer suburb that's an hour away from downtown TO with traffic that will make Calgary seem like a small town.

You probably wouldn't have the same problem in Montreal but good luck getting a job that will pay you what you could find in Calgary. And then the government will tax at twice the rate you'd be taxed at in Alberta.

[Dion]

Originally Posted by kipperfan

I find it funny the housing prices in this city, probably one of the most out of whack real estate markets in the world. Ussually when people pay big money to buy a house in a certain region, they pay for things like climate, conviencence, living close to water(lake or ocean), arts and culture of that area....yeah Calgary has none of that. Why on earth would I want to pay $500000 here for a house, when I could get the same one for half that in the GTA, or even in Montreal. This just in.....nothing great about Calgary(aside from the hockey team).

Then why are you here?

Do you enjoy paying sky high rents?

If house prices are cheaper in GTA and Montreal, why aren't you living in one of those places working and paying off a mortgage?

Calgary has more to offer than either GTA or Montreal. I have firends out east who would love to live close to the mountains. Plus the fact they wouldn't have to deal with the humidity that easterners have to deal with each summer. Or the smog alerts and traffic problems.

[kipperfan]

Originally Posted by GreenTeaFrapp

You get one for half that in the GTA, you'll be looking at an outer suburb that's an hour away from downtown TO with traffic that will make Calgary seem like a small town.

You probably wouldn't have the same problem in Montreal but good luck getting a job that will pay you what you could find in Calgary. And then the government will tax at twice the rate you'd be taxed at in Alberta.

Way off. 3 bedroom house, 2 bath, attached garage, large backyard 1600 sq feet - 50 minutes from downtown TO. And that happens to be right next to a go train station, guess I wouldnt have to worry about that traffic would I? Bradford and surrounding area is where I am thinking about - and it is a great place to live also. Montreal would be alot easier to find a nice place for a quarter million - go on MLS and take a peak - you can get an amazing shack in outlying areas on Montreal for less then $250,000.

As for the job thing...think again. I dont work in the oil industry, I work in the insurance industry and my salary(which is pretty decent) if I transferred to Montreal or Toronto wouldnt change 1 cent.

And now taxes...wow your wrong again. I would pay LESS income tax living in Ontario(I dont know about PQ, I cannot find the tax formula they use online right now). If your talking about property taxes, well thats a moot point. I might pay less property tax in Alberta, but for the fact it will take me another 10 years to afford a bloody house in Alberta, so the extra $1000 or whatever I have to pay a year will pretty easily be worth it.

[kipperfan]

Originally Posted by Dion

Then why are you here?

There is more to life then housing prices, getting a transfer and packing up and moving across the country isnt something one does on a whim. Not to mention the relationships that I have built over 20+ years of living in this city.

Originally Posted by Dion

Do you enjoy paying sky high rents?

Nope. Dont really have I choice though do I ?

Originally Posted by Dion

If house prices are cheaper in GTA and Montreal, why aren't you living in one of those places working and paying off a mortgage?

See above.

Originally Posted by Dion

Calgary has more to offer than either GTA or Montreal.

Oh yeah right I pray your joking because that is simply one of the single dumbest things I have heard uttered on this board for a while. What does Calgary have to offer other then being close to Mountains? Whatever you say(other then the Flames) I will reply that TO or Montreal has it, and its better there then here. Calgary has a crap climate, no culture, not close to any water, not close to any other major hubs, urban sprawl(despite the fact we only have 1 million people)...yeah a real gem.

Originally Posted by Dion

I have firends out east who would love to live close to the mountains. Plus the fact they wouldn't have to deal with the humidity that easterners have to deal with each summer. Or the smog alerts and traffic problems.

But they arent here are they? They are still out East. Might wanna think that one through a couple more times bub.

[Dion]

Originally Posted by kipperfan

There is more to life then housing prices, getting a transfer and packing up and moving across the country isnt something one does on a whim. Not to mention the relationships that I have built over 20+ years of living in this city.


Nope. Dont really have I choice though do I ?

You do have choices actually. I lived for a number of years in Edmonton and established relationships there too. Decided that I didn't like the city and all and up and moved to a place I liked. Also quit a job and found one here. If I was in my 20's and looking to get into real estate i'd probably move somewhere where it's more affordable.

Oh yeah right I pray your joking because that is simply one of the single dumbest things I have heard uttered on this board for a while. What does Calgary have to offer other then being close to Mountains? Whatever you say(other then the Flames) I will reply that TO or Montreal has it, and its better there then here. Calgary has a crap climate, no culture, not close to any water, not close to any other major hubs, urban sprawl(despite the fact we only have 1 million people)...yeah a real gem.

It's dumb because I offer a different opinion. You need to lay off the insults.

But they arent here are they? They are still out East. Might wanna think that one through a couple more times bub.

Moving here this summer.

[kipperfan]

Originally Posted by Dion

It's dumb because I offer a different opinion. You need to lay off the insults.

Did I say you were dumb? No I didnt, thanks for putting words in my wouth though, that I always appreciate.

But I wont retract my orginal statement, that is one of the dumbest things I have heard on this board for a while. Clearly you agree as you took 30 minutes and couldnt come up with a single thing Calgary has to offer other then the large rocky hills to the west. Not a very convincing argument, sorry.

[Dion]

[quote=kipperfan;1110597]Did I say you were dumb? No I didnt, thanks for putting words in my wouth though, that I always appreciate.[quote]

This is what you said; "I pray your joking because that is simply one of the single dumbest things I have heard uttered on this board for a while."

But I wont retract my orginal statement, that is one of the dumbest things I have heard on this board for a while. Clearly you agree as you took 30 minutes and couldnt come up with a single thing Calgary has to offer other then the large rocky hills to the west. Not a very convincing argument, sorry.

Clearly you can't debate without resprting to personal remarks.

I'm done here.

[kipperfan]

Originally Posted by Dion

I'm done here.

Your done here because I am right and you cannot think of anything else to ad. I never called you dumb, I said something you said was dumb, if you cannot handle that, which is the truth IMO, well then I am sorry for you I guess.

[4X4]

And Calgary is the land of opportunity to boot. Go ahead and start a business. Pretty much any tradesman can start a business out here and have a very good chance of success. You can't say that for GTA and MTL where things are established and no longer growing.


There was a comment above about suckers that have long mortgages. That is just not true. There is nothing wrong with a 25, 30 or even 40 year mortgage. It may sound stupid when you don;'t think about it. But let me give you an example:

Say you make $4,000 per month. You buy a house for $350,000 (I wont bother taking out DP for primary residence). So you owe 350k and your rate is 6.5%.
On a 15 year amortization, your payments are $3030/mo
on a 25 year amortization your payments are $2340
on a 40 year am your paymentrs are $2025

With the money you are not paying into your mortgage, you can (theoretically) save up to $1000 per month. You put this money aside for a DP on a 2nd property. This is a grey area as you're supposed to have 25%... When you're married or you have a trusted companion, this is easily circumvented. But even if you were to actually save the 25%, it would take around 5 years to do so assuming you're acually putting away the grand that your neighbour Mr "I'm gonna pay off my mortgage is 15 years so that I don't ahve payments each month" is paying.

And note here that even if you didn't save that money, at this point in time your house has increased in value at a modest rate of 7% per year and is now worth $490,000. You have $140,000 of equity in your house. Don't kid yourself about the mortgage. You've been paying pure interest there, and you've paid $120,000 in mortgage payments.

After 5 years you buy your first revenue property. $250,000 for a 2bdr revenue property. You put 25% down (either cash or leveraged out of your home equity). Assuming cash, you'll have a $188,000 mortgage at 6.5% equals payments of $1100 monthly. Add you property tax for $125/month and your condo fees of $200. You're looking at $1425 per mobnth.
Assuming that you're taking some equity out of your house, say, $40,000 at a rate of 8%, tack on another ~$280 per month.

So your revenue property costs you a max of $1700 per month.
Now, how much was rental rates around here? As far as I know, $1200 per month is a pretty decent figure for a 2bdr in a decent neighbourhood. You can get into the beltline and sunalta and lower mount royal in the 250-300 range. EAsily rented.

So, you have your primary residence payment of $2025 and your revenue property costing you 125-500 per month. So $2150-$2525. And what is Mr. 15 year mortgage guy paying? $3030. And how much equity does he have at year 10?

$350k + 7% for 10 years = $688,500. Assuming he's paid off half the principle on his house, he owes $175 on a $690 property. He has $515k equity.

You have primary residence at 10 years 7% increase=$688,500. You've only paid 10% on your principle, so your equity is $373,500. But you also have 5 years and an initial down payment of 25% on your revenue property. So 250k+ 7% 5 years=$350,500. Minus your principle of $188k=$162k equity in property B.
Property A 373k
Property B 162k
Total equity equals $535,000


Now, the first rule of investment real estate is positive cash flow. My example has a negative cash flow, but there are way too many factors to explain and so many different ways to turn that cash flow positive. I just wanted to illustrate how to make your money work for you.

This is a very crude example, but add on a third property here at year 10, and by year 15, buddy who paid off his mortgage will have close to a million dollars equity, while 40 year am guy will have double that. And his principle owing will be around $500k. So he could liquidate a property, pay off his other two and live mortgage free on his primary residence and have an income from the revenue property, plus have an extra half million in the bank AND all the while pay less in mortgage payments for those same 15 years.

So yeah. Just an example from your friendly neighbourhood investment realtor.

[kipperfan]

Originally Posted by 4X4

And Calgary is the land of opportunity to boot. Go ahead and start a business. Pretty much any tradesman can start a business out here and have a very good chance of success. You can't say that for GTA and MTL where things are established and no longer growing.

Great for tradespeople and other such folks I guess. But I dont think I am going to start up a new insurance company any time soon so for me that really doesnt enter the equation. I see your point though.

[GreenTeaFrapp]

Originally Posted by kipperfan

Way off. 3 bedroom house, 2 bath, attached garage, large backyard 1600 sq feet - 50 minutes from downtown TO. And that happens to be right next to a go train station, guess I wouldnt have to worry about that traffic would I? Bradford and surrounding area is where I am thinking about - and it is a great place to live also. Montreal would be alot easier to find a nice place for a quarter million - go on MLS and take a peak - you can get an amazing shack in outlying areas on Montreal for less then $250,000.

I'm off by your estimate by 10 minutes. That's way off? Oh, and your GO Train would take more then an hour to get to Union Station. What makes Bradford a good place to live?

I know Montreal is cheap to live. I said as much in my earlier post.

As for the job thing...think again. I dont work in the oil industry, I work in the insurance industry and my salary(which is pretty decent) if I transferred to Montreal or Toronto wouldnt change 1 cent.

I never claimed anything tough about getting a job in the GTA.

Parlez vous francais? Have fun in Montreal.

And now taxes...wow your wrong again. I would pay LESS income tax living in Ontario(I dont know about PQ, I cannot find the tax formula they use online right now). If your talking about property taxes, well thats a moot point. I might pay less property tax in Alberta, but for the fact it will take me another 10 years to afford a bloody house in Alberta, so the extra $1000 or whatever I have to pay a year will pretty easily be worth it.

Nice reply. I mention the tax situation in Quebec and you babble on about Ontario while admitting you don't know jack about PQ.

I live in Ottawa and know full well that for most people living on the north side of the Ottawa River is a lot more expensive. That's why housing is close to half price if you're willing to send your taxes to Quebec.

[jammies]

Originally Posted by 4X4

With the money you are not paying into your mortgage, you can (theoretically) save up to $1000 per month. You put this money aside for a DP on a 2nd property. This is a grey area as you're supposed to have 25%... When you're married or you have a trusted companion, this is easily circumvented. But even if you were to actually save the 25%, it would take around 5 years to do so assuming you're acually putting away the grand that your neighbour Mr "I'm gonna pay off my mortgage is 15 years so that I don't ahve payments each month" is paying.

Or if I was just renting I could save $2000 a month, buy a property with 25% down in 2 1/2 years, buy a 2nd property in 6 years, and be a slum landlord by the 25th year - as long as everything goes according to the best-case scenario. I'm not sure how this argument for having extra cash to spend on investing into real estate transforms a long-term mortgage in your place of residence into a good move considering you want cash to leverage; if that is your main focus, you want to live as cheaply as possible, as you make a lot more money on your investments than you ever will in appreciation of your home.

Most people get long-term mortgages because they can't afford shorter terms - that's why they get raped on the interest. The main reason they can't afford a shorter term is because they spend all their discretionary income, which means any potential savings aren't invested in anything other than big-screen TVs, cars and vacations. Sure it'd be great if they would invest it in real estate - but they won't.

[MelBridgeman]

Originally Posted by MacDougalbry

What Vancouver has going for it to keep prices is down is a massive, massive supply of illegal basement suites. Largely because people can't afford to buy unless they are able to rent out their basements. If real estate prices stay high in Calgary, I expect you will see this happen here as well.

I lived in a basement suite in Vancouver near UBC....just about every house on the block had basement tenants..although i didnt think they were illegal..

[MelBridgeman]

Originally Posted by kipperfan

Thats the problem, when housing prices are as high as they are it is hard as hell to stop being a sucker!

I find it funny the housing prices in this city, probably one of the most out of whack real estate markets in the world. Ussually when people pay big money to buy a house in a certain region, they pay for things like climate, conviencence, living close to water(lake or ocean), arts and culture of that area....yeah Calgary has none of that. Why on earth would I want to pay $500000 here for a house, when I could get the same one for half that in the GTA, or even in Montreal. This just in.....nothing great about Calgary(aside from the hockey team).

Lots of jobs and high paying ones...and for most people that would first on their list....Vancouver for example..lots for foreign or out of province investment in there realestate market...lots of revenue property in that city..which for the most part prices your average person out of the city...but makes renting cheaper....