Toronto Condos: Should you rent or buy?
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Toronto Condos: Should you rent or buy?
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Re: Toronto Condos: Should you rent or buy?
#2The author did not factor in Condo fees or property taxes.
Re: Toronto Condos: Should you rent or buy?
#3> Myth 4: Renters throw cash away, at least owners build equity
It's no myth, because you have to live somewhere. (Well, you could put your money elsewhere, and go live in a cardboard box under a bridge, but let's be realistic.)
Owners are building equity with the money they would otherwise be completely throwing away on rent, and they got into that situation with just a little money down.
(Depending on area), current rents are in about the same ballpark as payments on a new mortgate, but: 1) mortgage payments stay approximately the same over the life of the mortgage, whereas rents just go up and up. 2) only the interest portion of a mortgage payment is thrown away, and it goes down over time.
For the cost of the opportunity loss on your down payment, you're fixing the amount of a significant living expense that would otherwise continue to inflate, and you're getting a slice of that expense to go into equity that would otherwise be thrown out, and that slice gets bigger.
The opportunity cost on the down payment is not bad, if the property appreciates! You have to think in terms of leverage: if the property goes up by 80K, and the down payment was 80K, that's a 100% growth! You put in 80K, and it doubled. And your rent expense was replaced by something better. If you compared the leveraged view to the stock market, the stock market doesn't look so good. You can use leverage in the stock market also ("margin"), but that's a heck of a lot of risk.
I just renewed a mortgage for another term and the payment was supposed to go down (probably due to all the acceleration). Moreover, I declined that and kept it at the same amount. No way will a renter face a declining payment in the same area---not to mention that it would be irrational to refuse it.
Re: Toronto Condos: Should you rent or buy?
#4The author did not factor in Condo fees or property taxes.
Factoring in condo fees should also factor in reasonable estimates of condo repair levies.
Re: Toronto Condos: Should you rent or buy?
#5> Myth 4: Renters throw cash away, at least owners build equity It's no myth, because you have to live somewhere. (Well, you could put your money elsewhere, and go live in a cardboard box under a bridge, but let's be realistic.) Owners are building equity with the money they would otherwise be completely throwing away on rent, and they got into that situation with just a little money down. (Depending on area), curren…
You're forgetting the cost of being tied to a mortgage, in places where you can't just "walk away" from the property and have the debt released.
Re: Toronto Condos: Should you rent or buy?
#6> Myth 4: Renters throw cash away, at least owners build equity It's no myth, because you have to live somewhere. (Well, you could put your money elsewhere, and go live in a cardboard box under a bridge, but let's be realistic.) Owners are building equity with the money they would otherwise be completely throwing away on rent, and they got into that situation with just a little money down. (Depending on area), curren…
Wouldn't the counter argument be that what the renter doesn't make in equity they would make in returns via stocks?
Re: Toronto Condos: Should you rent or buy?
#7> Myth 4: Renters throw cash away, at least owners build equity It's no myth, because you have to live somewhere. (Well, you could put your money elsewhere, and go live in a cardboard box under a bridge, but let's be realistic.) Owners are building equity with the money they would otherwise be completely throwing away on rent, and they got into that situation with just a little money down. (Depending on area), curren…
> (Depending on area), current rents are in about the same ballpark as payments on a new mortgate,
Not in Toronto, which is like the whole point
> 1) mortgage payments stay approximately the same over the life of the mortgage, whereas rents just go up and up
Condo fees go up and up
Re: Toronto Condos: Should you rent or buy?
#8> Myth 4: Renters throw cash away, at least owners build equity It's no myth, because you have to live somewhere. (Well, you could put your money elsewhere, and go live in a cardboard box under a bridge, but let's be realistic.) Owners are building equity with the money they would otherwise be completely throwing away on rent, and they got into that situation with just a little money down. (Depending on area), curren…
> (Depending on area), current rents are in about the same ballpark as payments on a new mortgate, Not in Toronto, which is like the whole point > 1) mortgage payments stay approximately the same over the life of the mortgage, whereas rents just go up and up Condo fees go up and up
> Condo fees go up and up
Indeed. As a building ages, you can be assured that the condo fee will go up with inflation.
Re: Toronto Condos: Should you rent or buy?
#9> Myth 4: Renters throw cash away, at least owners build equity It's no myth, because you have to live somewhere. (Well, you could put your money elsewhere, and go live in a cardboard box under a bridge, but let's be realistic.) Owners are building equity with the money they would otherwise be completely throwing away on rent, and they got into that situation with just a little money down. (Depending on area), curren…
Wouldn't the counter argument be that what the renter doesn't make in equity they would make in returns via stocks?
As long as the renter is investing the money that would've been property equity in the stock market.
Re: Toronto Condos: Should you rent or buy?
#10Neither. I had to do it all over again, I would buy a detached house in the middle of boondocks ( like Mississauga, Brampton , Vaughn ,Markham , Richmond hill etc. ) . The supply of detached houses is limited whereas condos in Toronto are growing like weed. The detached houses have grown more in value and they are not encumbered with maintenance fees.