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HomelessinSD
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Re: Renters are getting hammered too...

Sat May 30, 2015 2:43 pm

And my counterpoint is that there might be better investment (real estate) environments than Vancouver, based on price vs income inputs. As usual, the peanut gallery is always counting on continued appreciation indefinitely.
 
HomelessinSD
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Re: Renters are getting hammered too...

Sat May 30, 2015 2:44 pm

Use whatever rate you want, including interest only...
man, you are stupid. :lol:

In the old days when interest rate was high, 10% was "normal", almost all your mortgage payment is the interest. Say, a $100k loan at 25 years amort, mortgage payment is $894/m, interest portion is $812.88. There are much no difference between mortgage and interest. You can use them either way to obtain your cash flow correctly. Obviously, "mortgage" is easier for the public, because banks have it ready for them. I believe that was the reason why the mortgage was put into the formula.

However, today, in the "new normal" low interest environment, the biggest portion of the mortgage is not necessary the interest. Turning point is at 2.99%, under that rate the big portion of the mortgage is the principle. Oh well, if you insist to use the mortgage in your calculation, that's fine, I know your math is as good as my english, you just fool nobody but yourself by watch a distort mirror. :lol:

As an investor, I have to point out that the principle part of your mortgage is your "rental income" , Revenue Canada wouldn't give you a shit whether it's in "flow" or not!
If you purchase a unit and it rents for $1000 month, but your total payments (mortgage,tax,strata, etc) are $1200, you're losing $200 a month? Regardless of how much principal payback you get, I don't think the calculation will turn out in your favour long term.

And secondly, that $200 loss is a write off against other reportable income. No?
No, you have to claim the principle portion of you mortgage as income.
 
rofina
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Re: Renters are getting hammered too...

Sat May 30, 2015 2:47 pm


No, you have to claim the principle portion of you mortgage as income.
Thats awful.

So in above scenario, you lose $200 a month, and still have to claim the principal as income, thereby increasing tax burden? How is this beneficial?
 
HomelessinSD
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Re: Renters are getting hammered too...

Sat May 30, 2015 2:56 pm

Lol, well in Thompson''s opinion, you get to spend that principle payment every month.

But seriously, you get the benefit of principle deduction on the mortgage. You owe less...Likewise, you can claim a deductible loss when / if you sell and the property has gone down in value.
 
rofina
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Re: Renters are getting hammered too...

Sat May 30, 2015 3:03 pm

Lol, well in Thompson''s opinion, you get to spend that principle payment every month.

But seriously, you get the benefit of principle deduction on the mortgage. You owe less...Likewise, you can claim a deductible loss when / if you sell and the property has gone down in value.
I guess this does really boil down to what one views as "cash-flow."

I always viewed principal payback as a little bonus, but the true cash-flow to me is anything earned above and beyond your monthly cost to carry.
 
rMBA13
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Re: Renters are getting hammered too...

Sat May 30, 2015 4:12 pm

The principle portion of mortgage payment is basically the same as getting stock dividend or having the cash dividend reinvested through the dividend reinvestment plan.
 
jimtan
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Re: Renters are getting hammered too...

Sat May 30, 2015 4:21 pm

And my counterpoint is that there might be better investment (real estate) environments than Vancouver, based on price vs income inputs. As usual, the peanut gallery is always counting on continued appreciation indefinitely.
Hmmm! This is what I tell novice investors...

The first thing you must do is to ascertain whether there is a trend. What is this trend? No matter how smart you think you are, always remind yourself, "The trend is my friend."

Hope this helps.
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HomelessinSD
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Re: Renters are getting hammered too...

Sat May 30, 2015 6:50 pm

Thanks my friend. Your insight and advice is so spot on. You are the Shepard, and we shall be the sheep.
 
HomelessinSD
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Re: Renters are getting hammered too...

Sat May 30, 2015 6:53 pm

The principle portion of mortgage payment is basically the same as getting stock dividend or having the cash dividend reinvested through the dividend reinvestment plan.
Except it's not.... Thompson, care to explain the difference from a yearly tax perspective?
 
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WhipMaster
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Re: Renters are getting hammered too...

Sat May 30, 2015 7:22 pm

Renter's are getting totally fawked, just like we dun' tol' you.
Can you imagine if you are a renter who is now retiring???? All of a sudden you cannot pay the rent.
Now what?
You gotta move.
But rents are high all over except Boston Bar. See you there. Your trailer right next to mine. :lol:
Hoo~Cudda~Not~Nod~ed????? :-)
 
westcoastfella
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Re: Renters are getting hammered too...

Sat May 30, 2015 7:31 pm

And my counterpoint is that there might be better investment (real estate) environments than Vancouver, based on price vs income inputs. As usual, the peanut gallery is always counting on continued appreciation indefinitely.
Hmmm! This is what I tell novice investors...

The first thing you must do is to ascertain whether there is a trend. What is this trend? No matter how smart you think you are, always remind yourself, "The trend is my friend."

Hope this helps.
Please don't tell novice investors this - if they are foolish enough to come to you for investment advice in the first place, just point them to a web page or forum where people know what they're talking about... when I started investing, if some airbag had told me to "ascertain whether there is a trend", I would have cock-punched them.
The principle portion of mortgage payment is basically the same as getting stock dividend or having the cash dividend reinvested through the dividend reinvestment plan.
They are not really the same thing at all.
 
eyesthebye2
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Re: Renters are getting hammered too...

Sat May 30, 2015 9:07 pm

And my counterpoint is that there might be better investment (real estate) environments than Vancouver, based on price vs income inputs. As usual, the peanut gallery is always counting on continued appreciation indefinitely.
sure, same thing was said 5 year ago - since then detached properties have doubled in price.
What is the doubling formula anyway? Seems to be every 5-6 years.
So in 2020 my place will be worth 2.7M
 
jimtan
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Re: Renters are getting hammered too...

Sat May 30, 2015 9:09 pm

Please don't tell novice investors this - if they are foolish enough to come to you for investment advice in the first place, just point them to a web page or forum where people know what they're talking about... when I started investing, if some airbag had told me to "ascertain whether there is a trend", I would have cock-punched them.
No one can help you when you don't even read the stuff you link to. Mighty embarrassing when the material contradicts your position? :roll:

BTW, I'm not the one who fled to TO and missed the biggest opportunity in 10 years. :mrgreen:
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HomelessinSD
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Re: Renters are getting hammered too...

Sat May 30, 2015 9:59 pm

And my counterpoint is that there might be better investment (real estate) environments than Vancouver, based on price vs income inputs. As usual, the peanut gallery is always counting on continued appreciation indefinitely.
sure, same thing was said 5 year ago - since then detached properties have doubled in price.
What is the doubling formula anyway? Seems to be every 5-6 years.
So in 2020 my place will be worth 2.7M
Yes, sales price vs rent was in a similar situation 7 years ago when you bought. How's your cash flow? Living the millionaire lifestyle?
 
eyesthebye2
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Re: Renters are getting hammered too...

Sat May 30, 2015 10:01 pm

And my counterpoint is that there might be better investment (real estate) environments than Vancouver, based on price vs income inputs. As usual, the peanut gallery is always counting on continued appreciation indefinitely.
sure, same thing was said 5 year ago - since then detached properties have doubled in price.
What is the doubling formula anyway? Seems to be every 5-6 years.
So in 2020 my place will be worth 2.7M
Yes, sales price vs rent was in a similar situation 7 years ago when you bought. How's your cash flow? Living the millionaire lifestyle?
heck no, I took a vow of poverty many years ago :lol:
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