COVID and the housing market | Page 59 | GTAMotorcycle.com

COVID and the housing market

GreyGhost said:
That's more like where my relatives are. It's a nice intermediate step between owning and doing/organizing all the maintenance on your own house and a hi-density retirement apartment. Depending on expected timeframe in that style of living though, renting may make more sense than buying (although most discourage that approach as they want lots of turnover and liquidity for their owners).
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My aunt and uncle moved into a nice low rise rental apartment six or seven years ago and with them being in their 80's I think a good idea. They had owned a number of different sized places over the years and could have afforded anything reasonable but one has to look at flexibility when age / health is factored in.

If a person loses an ability and needs a different setting it's easier to move out of an apartment than sell a house.

Unfortunately my aunt passed away and my uncle is on his own. His daughters drop in and keep an eye on him but Covid has him cooped up. He was a carpenter / cabinet maker all his life but now he doesn't even have a workbench to build a birdhouse. The building is mostly seniors.
 
what a horrible existence to be forced into an apt. / condo/ transitional retirement home when you are not yet that person. Not having access to tools, machines and a place to 'do stuff' would be my end.
I'm pretty limited here at this house, with a 12x12 shop , but I can build bigger things in the garage if needed.
My F-I-L was forced by his wife into a condo ( he was caught screwing around thus had zero bartering power) , what a miserable time for a guy that was used to having a pool, workshop, two car garage.
 
crankcall said:
what a horrible existence to be forced into an apt. / condo/ transitional retirement home when you are not yet that person. Not having access to tools, machines and a place to 'do stuff' would be my end.
I'm pretty limited here at this house, with a 12x12 shop , but I can build bigger things in the garage if needed.
My F-I-L was forced by his wife into a condo ( he was caught screwing around thus had zero bartering power) , what a miserable time for a guy that was used to having a pool, workshop, two car garage.
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My life.
 
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SVeezy said:
Well as you’ve mentioned previously you can have tenants for one.

Work hard, sacrifice a lot of enjoyment now for the long term benefits, save as much as you can. Start in a smaller or older dwelling (or both).

Again I’m not saying it’s easy, and it’s only getting harder. It is still doable.


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Finding tenants is easy, entry into the market is the difficult part

Working hard has nothing to do with bidding wars and giant mortgages
 
bigpoppa said:
Finding tenants is easy, entry into the market is the difficult part

Working hard has nothing to do with bidding wars and giant mortgages
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Two guys I grew up with bought a house together in High Park. The down payment was raised by each of them owning a condo and living in these for a couple of years and then selling for a mild profit.

The house in High Park was divided up into 3 apartments - a 1bdrm basement, a large 1bdrm main floor and a 3bdrm upstairs. The whole house could use some updating, so this was the plan to renovate it on the cheap and flip it after a few years.

Over 3 years they lived in the upper units, rented out the basement, while myself and another buddy lived there too and paid them rent to help pay down the mortgage. The group of us did all the reno’s to the house and significantly relandscaped the front and back yards.
After a few years, they sold the house for a respectable profit and now each one had enough money banked to go out and buy their own houses.

In today’s market, I think what they did is a way that might work, but still requires a good size down payment.

Or just rent and invest wisely.
 
POWERMAN said:
Is 100k even sufficient for a family of 4 to live properly, these days?
If I'm not mistaken, families who are below a certain income bracket get additional assistance for each kid they have - correct?
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Yes you are correct. 100k right now with a mortgage is tough. Add in daycare at 1200$ per month and you’re basically right on the edge. Throw in financing on cars, insurance etc etc

we qualified for the baby bonus monthly, until I worked FIFO. Then it disappeared as we were over the threshold. Now that I’m back we are expecting it again for the 2021 season.

100k is about $4700/month take home...give or take depending on benefits.
 
Using BS numbers, lets assume a couple, a tradesperson and a secretary would make $125 K to $150 K combined. Take home would be $6500 - $8000 a month. A million dollar mortgage would be $4000 to $5000 a month. On top of the mortgage would be taxes and utilities so air sandwiches for dinner.

I haven't verified any numbers or checked tax tables.

If they rented out a flat or rented out the house and took a cheap apartment for themselves they might pull it off.

It would have to be a solid marriage because at least five years of extreme austerity is hard on the nerves. Biological clocks tick as well so start young.

Based on the increases in house prices continuing, the couple could build equity but cash flow would still not be great in five years as wages don't follow the house price curve. Ten years to a financial relaxation?

Living in a cheap apartments and saving like church mice the couple might save $60000 a year. Will that keep up with the house price increases?

Not impossible but not for the faint of heart.

Feel free to adjust / comment on the numbers
 
No different than the rent v buy argument @nobbie48 .... sure renting may come out ahead in some instances against buying a property. But it ONLY works if the money you save on renting is invested and beats the equity appreciation of the property. Not many people are able/willing/capable to be that disciplined. I sure am not.

currently I’m putting an extra $150/biweekly on the mortgage, down from $500 last year.

Once the eldest finishes daycare, which can’t come soon enough, I have about 2 years to put away for the second one to start. So I’ll increase my prepayments to $300/biweekly while I put away an extra $500/month into baby #2 daycare account, and then into RRSP. Cash flow doesn’t change....but really helps out to have a separate account for the daycare payments to be paid ahead of time.

I’m so far behind on TFSA it’s not even funny....but life gets in the way.
 
mimico_polak said:
No different than the rent v buy argument @nobbie48 .... sure renting may come out ahead in some instances against buying a property. But it ONLY works if the money you save on renting is invested and beats the equity appreciation of the property. Not many people are able/willing/capable to be that disciplined. I sure am not.

currently I’m putting an extra $150/biweekly on the mortgage, down from $500 last year.

Once the eldest finishes daycare, which can’t come soon enough, I have about 2 years to put away for the second one to start. So I’ll increase my prepayments to $300/biweekly while I put away an extra $500/month into baby #2 daycare account, and then into RRSP. Cash flow doesn’t change....but really helps out to have a separate account for the daycare payments to be paid ahead of time.

I’m so far behind on TFSA it’s not even funny....but life gets in the way.
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The discipline part is important and I'm not sure how many people understand how hard it is. It means saying no when friends say "Let's all go to dinner" or "We should all go on vacation together". It is very likely that you will lose some of those friends.

Kids and financial discipline......................If an advertiser brainwashes a kid they bankrupt the father. The list of "Dad I need XXX because every single child in the world has them and I won't have any friends" is endless. Five hundred dollar running shoes, pre ripped jeans, stretch limo grade eight graduation parties and "Every single person under the age of 20, all one billion of them, is going to Florida for March break and I'm the only one that won't get in trouble", is endless. Times 2 for girls. (Sexism)

A puppy, the gift that keeps on taking.

Do you say NO to the ripped jean look and your kid doesn't fit in at school? Or do you give in and become a sheep?

IMO if you're building equity and enjoying life you're on the right road. Life is a tour, not a race.

My TFSA is behind a couple of years but a lot depends where your TFSA money is invested. If it's a simple interest account there isn't a lot being lost.
 
POWERMAN said:
Is 100k even sufficient for a family of 4 to live properly, these days?
If I'm not mistaken, families who are below a certain income bracket get additional assistance for each kid they have - correct?
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These days , I'm not sure. I imagine there are people doing it, but it cant be fun.

Something I think is sad, is families that can least afford another kid, can tell you to the nickel how much assistance (baby bonus) that kid is worth. You see the 'baby mommas' at the hospital with 4 generations in the room and the oldest person in there is 60.

Back to housing , that renter vs owner, its great to be a renter if your making 300k and rent and investing is easy. Harder if your making 100k and rent is 25% of your gross income. Not a lot left to be invested.
 
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