Thought of sharing!

[markel]

Hello all,
Here is an informative post. What you should look for as a first time home buyer? There are lot of things you need to consider when becoming a home buyer for the first time. Buying a house is one of the most expensive purchases that one makes in their lifetime. There are many ways to ensure that you choose the best investment. I have found this blog http://www.mortgagesmortgages.ca/blog/mortgage-refinancing/look-first-time-homebuyer/, where they have provided some details about it. One of the important thing when buying a home is to find a loan option which is personalized, flexible and that is suitable for you. I hope that it would be helpful for those who are planning to buy a house.

 

[Matt Crowley]

Why is buying a home a more expensive decision than choosing to rent the same home? In either case there is an element of consumption waste for just living in a space over time: utilities, property taxes, insurance - it doesn't matter if you are renting or buying the pass through is the same.

Whether you rent or buy the cost of the purchase is still the present value of future cash flows. If you buy a house you have entered into a world of potential equity traps:

• CMHC fees
• Realtor fees
• Closing costs
• Land transfer tax
• Max LTV take out of 80%
• ...and government is requiring reporting of sale of personal residence on tax return...perhaps overshadowing a tax on personal property in future?

The real question as Canadians we should start considering is when our price-to-rent ratios are hitting 25+ why are we buying? If buildings depreciate in value (which is true if building is not a trophy or historical asset) is there really basis to think land prices should increase 15% per year? Why is buying better than renting?

 

[Thomas Beyer]

Why is buying a home a more expensive decision than choosing to rent the same home? In either case there is an element of consumption waste for just living in a space over time: utilities, property taxes, insurance - it doesn't matter if you are renting or buying the pass through is the same.

Whether you rent or buy the cost of the purchase is still the present value of future cash flows. If you buy a house you have entered into a world of potential equity traps:

• CMHC fees
• Realtor fees
• Closing costs
• Land transfer tax
• Max LTV take out of 80%
• ...and government is requiring reporting of sale of personal residence on tax return...perhaps overshadowing a tax on personal property in future?

The real question as Canadians we should start considering is when our price-to-rent ratios are hitting 25+ why are we buying? If buildings depreciate in value (which is true if building is not a trophy or historical asset) is there really basis to think land prices should increase 15% per year? Why is buying better than renting?

Good arguments.

In urban areas with in-migration land is tight and getting tighter. As such, with lose monetary policies worldwide real assets go up in value, especially if scarce liek diamonds, gold or urban land. As such buying land in tight supply, be it GTA waterfront, on a river, on a coast, on an urban park, with a nice view or on a lake will always be a good investment if in an area with perpetual demand by others !

You can also do what you want with the house, ie paint it red, tear down walls, leave it ugly or fix it up, unlike a rental property with far more restrictions. That freedom is worth a lot to some !

 

[Rickson9]

Diamonds actually aren't scarce.

https://www.gemsociety.org/article/are-diamonds-really-rare/

Gold isn't scarce either.

https://www.forbes.com/forbes/welco...use-it-is-plentiful-not-because-it-is-scarce/

 

[Thomas Beyer]

Yeah that is why an ounce of gold is over $1000: because there is so much of it. Why is it 50 times the price of silver ? Because it is more plentiful ?

 

[Rickson9]

Yeah that is why an ounce of gold is over $1000: because there is so much of it. Why is it 50 times the price of silver ? Because it is more plentiful ?

I've never heard of this term, but I think some call it "inflation". Maybe "inflation" is a measure of "scarcity"?

http://goldprice.org/inflation-adjusted-gold-price.html

We should compared a $1250/oz of 2017 gold to a $40/sh of 1972 Berkshire Hathaway. Wow! What a massive difference!

 

[Thomas Beyer]

Common sense is not so common.

 

[Rickson9]

Common sense is not so common.

I agree!

Some people think gold has increased in value!

 

[Cory Sperle]

You can also do what you want with the house, ie paint it red, tear down walls, leave it ugly or fix it up, unlike a rental property with far more restrictions. That freedom is worth a lot to some !

Absolutely. Renting may make sense on paper but when one factors in the freedom, location close to amenities and schools, and also pride in ownership renting is a tough sell if one can buy. Also a possibility the owner could decide to sell, or jack your rents ridiculously high in boom economies thus renting carries risk as well. There is some debate on whether one should purchase as large as they can to benefit on the appreciation proportionally, however the right balance of affordability and common sense, and a lot of thought should go into every home purchase.