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Baby, we got a bubble!?

cdr108 said:
I have to agree, some people are just financially illiterate and house horny brain-washed to believe owning is the only option.

example: I have a friend who was renting in the south annex (between Harbord and College).
it was the 3rd floor of a house - 1 bedroom unit with utilities (heat, hydro, cable tv) included for only $550/m.
instead, he bought a 1 bedroom condo (similar sq ft) and that same $550/m only covers his maintenance fees, property taxes and some of his utilities.
he's paying almost an additional $1400 just to pay the mortgage for the 'privilege' of saying he owns something.
so almost $2,000/m to rent from the bank for 25 years for a 1 bedroom condo :rolleyes:
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Whats to say that 550/month would stay the same in 5 years? where his condo went up 50k in 5 years? You're saving pennies.

not saying all condos are the best investment. But ask him if his quality of life has gotten better?
 
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RZ12 said:
Whats to say that 550/month would stay the same in 5 years? where his condo went up 50k in 5 years? You're saving pennies.
Click to expand...

what's to say that condo won't go down $50K in 5 years?
his mortgage and additional costs for maintenances fees, property taxes and utilities are guaranteed to go up also.

he was saving $1,400 PER month = $16,800 per year;
in 5 years X $16,800 = $84,000

for argument sake, let's say his rent does go up $100/m (which would be 18% increase and illegal to do) annually, the additional amount would = $18,000:

year 1 = $1,200
year 2 = $2,400
year 3 = $3,600
year 4 = $4,800
year 5 = $6,000
-------------------
5 years total = $18,000


$84,000 - $18,000 = $68,000
so he'd still be ahead by $68,000 had he continued to rent and saved that money instead in simple bank account
 
RZ12 said:
Whats to say that 550/month would stay the same in 5 years? where his condo went up 50k in 5 years? You're saving pennies.

not saying all condos are the best investment. But ask him if his quality of life has gotten better?
Click to expand...


I must have edited my last post before you replied.
NO, his quality of life has NOT gotten better. he's now more stressed because of the added costs
 
cdr108 said:
what's to say that condo won't go down $50K in 5 years?
his mortgage and additional costs for maintenances fees, property taxes and utilities are guaranteed to go up also.

he was saving $1,400 PER month = $16,800 per year;
in 5 years X $16,800 = $84,000

for argument sake, let's say his rent does go up $100/m (which would be 18% increase and illegal to do) annually, the additional amount would = $18,000:

year 1 = $1,200
year 2 = $2,400
year 3 = $3,600
year 4 = $4,800
year 5 = $6,000
-------------------
5 years total = $18,000


$84,000 - $18,000 = $68,000
so he'd still be ahead by $68,000 had he continued to rent and saved that money instead in simple bank account
Click to expand...

But you didn't add the equity he putting down every month on his mortgage? :S
 
RZ12 said:
But you didn't add the equity he putting down every month on his mortgage? :S
Click to expand...


during the first 5-year term he will pay almost $78K = $39K in interest and $39K towards the principal.

if mortgage rates go up 200 basis points when he's up for renewal, he'll pay almost $1,600/m to service that mortgage (even with the reduced outstanding principal) for the next 5 years/20 year amortization remaining:
$93K = $54K in interest and $39K towards principal
 
We need to accept that renting is a viable, socially acceptable and financially intelligent option. Toronto is a fairly transient city, with people migrating in from not just all over the world, but from the immediate suburbs and other parts of the province. The ones coming in from other parts of the world where renting in the city core is widely accepted probably don't have as much of an issue with renting. I suspect that most of the anti-rental sentiment is coming from people migrating in from smaller cities in North America where owning a house with a white picket fence is the norm.
 
RZ12 said:
The east end blows my mind how over priced this area is. Guess people really don't wanna live in a condo. The backyard was the huge selling point.
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Thing about this house is at that price you'd think it has new kitchen, bathroom, etc. Still need to do some work on that house. Blows my mind.
 
TheKingEast said:
Thing about this house is at that price you'd think it has new kitchen, bathroom, etc. Still need to do some work on that house. Blows my mind.
Click to expand...

But that's just cosmetic upgrades, clearly the person buying this is looking to be a long time owner and he/she rather much customize to his/her own desires. I know the agent tells the owners that you don't need to do any upgrades or dump anymore money into the house. The lot/location sells itself now easily.
 
RZ12 said:
But that's just cosmetic upgrades, clearly the person buying this is looking to be a long time owner and he/she rather much customize to his/her own desires. I know the agent tells the owners that you don't need to do any upgrades or dump anymore money into the house. The lot/location sells itself now easily.
Click to expand...

It's still a very narrow house/lot with and IMO those upgrades should figure into the price of the home. So you pay close to $1M for it then sink more into it. Personally I just think it's too much.
 
cdr108 said:
I have to agree, some people are just financially illiterate and house horny brain-washed to believe owning is the only option.

example:
I have a friend who was renting in the south annex (between Harbord and College).
it was the top floor of a house - 1 bedroom unit with utilities (heat, hydro, cable tv) included for only $550/m.
instead, he bought a 1 bedroom condo (similar sq ft) and that same $550/m only covers his maintenance fees, property taxes and some of his utilities.
he's paying almost an additional $1400 just to pay the mortgage for the 'privilege' of saying he owns something.
so almost $1,400/m to rent from the bank for 25 years for a 1 bedroom condo :rolleyes:

forgot to mention, now he's financially stressed out compared to before
Click to expand...

How many $500 (utilities included) rentals exist? Lets be honest here. I can easily find condos for much less than $1400 month if we're looking at bottom of the barrel stuff. Not a fair comparison IMO at all.

It's hard enough to even find a room for rent for $500 yet alone a 1 bedroom unit.

Lost in this whole renting vs buying discussion is some people don't mind living in a rooming house in the Annex for $500 month....while some people do. I sure as hell wouldn't live where your friend's living. $500/month is great but I would be miserable so what's the point? There's a standard of living that some people will pay a lot for while others will not. I can easily eat macn cheese every day and save a bunch of money. But why? It all boils down to what works for the individual.
 
There are better options nearby. That is quite a lot for this area, but people are buying them. The east end is the only available option that still remains "affordable", and still close to downtown. Prices will continue to get out of control here.
 
TheKingEast said:
How many $500 (utilities included) rentals exist? Lets be honest here. I can easily find condos for much less than $1400 month if we're looking at bottom of the barrel stuff. Not a fair comparison IMO at all.

It's hard enough to even find a room for rent for $500 yet alone a 1 bedroom unit.

Lost in this whole renting vs buying discussion is some people don't mind living in a rooming house in the Annex for $500 month....while some people do. I sure as hell wouldn't live where your friend's living. $500/month is great but I would be miserable so what's the point? There's a standard of living that some people will pay a lot for while others will not. I can easily eat macn cheese every day and save a bunch of money. But why? It all boils down to what works for the individual.
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Agreed! Basement apartments that are roach motels will be close to 1000 a month. I doubt anything like this exists to level that makes life enjoyable.
 
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