Holy fack. Sold in six days for double the 2018 price. They did hardwood on the main floor and stairs. That's the only change. We had it listed for 75 days with 70+ showings and one offer.
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COVID and the housing market
- Thread starter mimico_polak
- Start date
Sochi
Well-known member
One lucky new owner. Now will it be x2 or \2 price in 2-3 years - need somebody with crystal ball here
*Hopefully all knives lovers will migrate to their own thread created today and we keep enjoying stories about "reasonable" and "totally justified" real estate prices in canada LOL
I slightly considered keeping it as a rental but that would have meant seven figure mortgage which is a very tenuous place to be. In hindsight a no-brainer, at the time, good for cashflow and health.One lucky new owner. Now will it be x2 or \2 price in 2-3 years - need somebody with crystal ball here
*Hopefully all knives lovers will migrate to their own thread created today and we keep enjoying stories about "reasonable" and "totally justified" real estate prices in canada LOL
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DarR
Active member
On that note, very few houses are investments.
The word investment or investor is now used so loosely that it has lost its meaning.
Most people don't know the difference between an investment, a speculation and gambling. Even the media.
The consensus opinion is that the latter is riskier than the former which is totally false. You could have gambling bets that are less risky than some investments.
For example, say you turn-over all but one card in a 52 card deck and the ace of spades was not one of them. The next card has to be the ace of spades. It's a 100% sure bet.
On to the definitions:
An investment is a capital outlay to produce a cash-flow.
A speculation is a capital outlay to produce a gain, based on recognizing geo/social-political anomalies.
Gambling is a capital outlay to also produces a gain, based on probabilities.
Consequently, if a capital expenditure does not produce a cash-flow, it's not an investment.
On that note, we often hear that a house is a good investment. It's not.
A house cannot be an investment unless you rent it out to produce a cash-flow. It can however, be a speculation.
A home is a commodity. It's a component of the Holly Commodity Trinity: Food, Shelter and Clothing.
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Where do those definitions come from? They seem pretty rigid.
Stocks that don't pay a dividend and don't produce a fixed-schedule cash-flow are still investments. All a dividend is, is breaking off a piece of the company on a fixed schedule. The stock market treats it as such after a company goes ex-dividend, and the market cap goes down accordingly.
If you live in your asset, like a primary residence, although it's not producing an income on a fixed schedule, it does co-opt the cost of rent. Penny saved is a penny earned, yadda yadda yadda. Whether you make money from a stock that pays you a dividend so you make a rent payment, or that equity goes into an asset that saves you a rent payment, it's just six of one or half-dozen of the other. You are still coming out ahead either way than putting that equity/cash in a mattress where it's being eaten up by inflation... and bed bugs.
A house is not a good investment not because it doesn't yield an income, it's because historically, the yield is still less than stocks minus the cost of rent.
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I consider my house an investment , I used to rent it from the bank, now its mine. I hope it goes up in value enough that when I'm done here it will either pay for a rental place i cant own, or make my kids rich (ish) .
To be in the nieghborhood I'm in , it is cheaper to own this house than to rent a similar property. I could rent a lesser place , but I don't wanna.
The only thing I can say for sure , as an employer, I like home owners , with 2 kids and a car loan. Buy a cottage I will love you more because you need to make payments , be responsible and work hard to get ahead. My favorite employee owes 6-800k. Dig in deep lads !
To be in the nieghborhood I'm in , it is cheaper to own this house than to rent a similar property. I could rent a lesser place , but I don't wanna.
The only thing I can say for sure , as an employer, I like home owners , with 2 kids and a car loan. Buy a cottage I will love you more because you need to make payments , be responsible and work hard to get ahead. My favorite employee owes 6-800k. Dig in deep lads !
Nothing like debt motivation to keep you at a job longer than you wanted to be at. My boss loved it when his employees would show up to work in vehicles costing 6-figures. He didn't know anything about motorcycles but when he found out how much mine cost, he was also happy about that.
... or is it just ?I remember you were super happy when your employees were making a killing earlier this year with lumber prices through the roof.
Something along the lines ‘love it when they keep buying these toys! They’ll work here forever to pay em off when lumber comes back down to reality.’
When it’s time I’ll keep the Volt for appearances. And buy a Civic for special occasionsNothing like debt motivation to keep you at a job longer than you wanted to be at. My boss loved it when his employees would show up to work in vehicles costing 6-figures. He didn't know anything about motorcycles but when he found out how much mine cost, he was also happy about that.
When it’s time I’ll keep the Volt for appearances. And buy a Civic for special occasions
$15 knives FTW!
Although the boss loved it when his employees buy expensive toys, he didn't like it as much when I told him I pay for mine in cash.
Conversely, what affects the employees also affects the business as well.
There's been a big boom in recreational products the last couple of years. Was talking to a motorcycle salesguy the other day and he told me he'd rather have steady business than have a blowout year (or years), because as soon as soon as this crisis passes, there'll be a glut of lightly used products on the marketplace dragging down prices and # of units moved. The once regular and predictable upgrade cycle now becomes highly skewed, and that cycle remains skewed for years.
Difficult to plan for the long-term growth, much less the survival of a business when sales become so peaky and irregular.
AllistonGT
Well-known member
When I was an employee, I made sure my employers knew that I had paid off my house. It places the power in the employees hands. As an employer I like to see staff that are motivated to work as many are not self motivated. Sad but true.
I worked just as hard after I was debt free. Probably why I'm a partner now.
Different story when you're in sales.
Everybody's coin-operated in that profession, regardless of whether their toys/house are paid off or not. Also, don't want to sound too desperate to make your car payments when you're in front of customers - cards are in the customer's hands if they know they're sitting in front of a starving salesguy.
DarR
Active member
Like I previously wrote, the word investment or investor is now used so loosely that it has lost its meaning.
If a capital outlay does not produce a cash-flow, it not an investment. It's a speculation. It is what it is , like it or not.
BTW, a dividend is a return of profit to shareholders and thus constitutes an investment as it's a cash-flow.
The distinctions are very clear cut.
An investment is a capital outlay to produce a cash-flow.
A speculation is a capital outlay to produce a gain, based on recognizing geo/social-political anomalies.
Gambling is a capital outlay to also produces a gain, based on probabilities.
25 years on Bay street and past chair of the Toronto CFA derivatives committee. When I hear a realtor saying that a new bathroom is a good investment, I just feel like vomiting from the ignorance.
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I don't disagree with that. I disagree with the definitions you laid out.
Of course it's a cash flow. This was never disputed. You need to re-read what I wrote. I said:
I am disputing your claim that:
Stocks that don't pay dividends, ergo do not produce cash-flow ARE STILL considered investments. This is widely accepted, contrary to your definition. Fundamentally, there is NO DIFFERENCE between a dividend-paying stock and a non-dividend-paying stock. They are BOTH considered investments.
DarR
Active member
The distinctions are very clear cut as I have previously stated.
However, what's your definition and distinctions between an Investment, Speculation and Gambling?
Please enlightens us.
So... stocks that don't pay a dividend are not an investment and stocks that pay a dividend are...?
Yikes. I don't think anything productive can come of this conversation, if we can't even agree on this fundamental point.
Double Yikes.
Soooo.... Berkshire Hathaway... no dividend. No cashflow. Not an investment:
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Why Doesn’t Berkshire Hathaway Pay a Dividend?
Berkshire Hathaway is sitting on $144 billion, but CEO Warren Buffett believes there are better ways to use the spare cash than paying dividends.
Oracle of Omaha... Not an investor.
Got it.
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Mad Mike
Well-known member
I think what we have here is geek speek, or an academic or industry definition, not an English language definition.
An investment is not limited to cash or financial instruments, it could be donkeys, time, political capital etc. The goal of investing is simply a meaningful return as defined by the investor. More cashflow, more donkeys, more votes, more time, faster lap time, etc are all reasonable investment goals.
Sometimes finance & economic geeks need their own definitions for scholarly papers and discussions - everyone else can use the English language definition.
Mad Mike
Well-known member
I think what we have here is geek speek, or an academic or industry definition, not an English language definition.
An investment is not limited to cash or financial instruments, it could be donkeys, time, political capital etc. The goal of investing is simply a meaningful return as defined by the investor. More cashflow, more donkeys, more votes, more time, faster lap time, etc are all reasonable investment goals.
Sometimes finance & economic geeks need their own definitions for scholarly papers and discussions - everyone else can use the English language definition.
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