Real Estate Talks

There isnt a proverbial weapon pointed at the said head making anyone stay. The more modern way is to encourage the door not to strike oneself when leaving

There isnt a proverbial weapon pointed at the said head making anyone stay. The more modern way is to encourage the door not to strike oneself when leaving

I know - it's going to be great. In 5 years this place will be just like China, the place these racist criminals are trying to flee from.... hahahaaha... the irony!

http://blogs.vancouversun.com/2016/02/0 ... migration/

looks okay

If you bought in 1986 and sold in 2012, after closing costs you would have lost money. Similarly, if you had bought in 2006, you'd still be looking at big losses almost a decade later.

Really? Say I bought a house at 1m, 25% down, interest only mortgage (for simplicity), after 20 years house was sold at 4m. Let's assume all the "gain" came from inflation. Does this real estate deal make me a loser? Hardly.
I take home a pile of cash at l $4m-$.75m=$3.25m after pay off bank's mortgage, that's way above my original capital ($.25m) plus the inflation ($.75m). My "REAL" net profit is $3.25-.25-.75 = $2.25m !!
There is no magic here, only one condition: rent covers costs. That is not "mission impossible" even today.

Unfortunately, people rarely factor inflation, maintenance, taxes, buying & selling costs, insurance, etc., into their calculations when they Bragg about their "gains".

Again, you forgot rent. If you are home owner not investor, you can treat you as an investor to "rent" your own house, all the above argument stands the same.

Can you give me an example of a livable SFH in Vancouver where the rent covers the true full carrying costs?

Lots of properties cover their costs unless you get a low down payment mortgage lol

Lots of properties cover their costs unless you get a low down payment mortgage lol

Ah! So if you don't consider the opportunity cost of a large deposit then you can break even. Great!

The inability to make money on the rent isnt the fault of the seller. Just put a bigger down payment on

The inability to make money on the rent isnt the fault of the seller. Just put a bigger down payment on

I agree. The inability to make money on the rent is the fault of the buyer for not doing the math before paying too much.

I appears that according to your economic theory money has no cost associated with it, so if I buy a house with 100% cash, the rent represents clear profit. And let's not even get into Property Transfer Tax, City Property Tax, maintenance, insurance, lost opportunity costs on the cash used for the purchase, the occasional months with no renter., etc., etc. I'm guessing that you are not a financial planner.

Can you show me a Vancouver SFH which has (properly calculated) monthly carrying costs which are less than its reasonable rental value? No? That's what I thought.

anything in Vancouver that is not a teardown can make money on the monthly rent if you don't do something funny like getting a federally insured mortgage and pay lots of extra fees

Generally I would agree Geyser. That deposit money has opportunity costs. The scenario makes sense in Vancouver because the SFH is gaining 150k/yr.
Even if I lost $1000mo if i rented my house I'd be up each year well over 100k.
If the market ever turns that scenario turns with it.
Except, my neighbour bought another SFH that he's renting at daily rate as an air B & B. He's fully booked every month at over $200/day. That's 12k/month. Making at least 2x his mortgage. So I guess there is the example where a SFH as rental pays the mortgage...PLUS!

The inability to make money on the rent isnt the fault of the seller. Just put a bigger down payment on

I agree. The inability to make money on the rent is the fault of the buyer for not doing the math before paying too much.

I appears that according to your economic theory money has no cost associated with it, so if I buy a house with 100% cash, the rent represents clear profit. And let's not even get into Property Transfer Tax, City Property Tax, maintenance, insurance, lost opportunity costs on the cash used for the purchase, the occasional months with no renter., etc., etc. I'm guessing that you are not a financial planner.

Can you show me a Vancouver SFH which has (properly calculated) monthly carrying costs which are less than its reasonable rental value? No? That's what I thought.

200 bucks a day will result in a hell of a lot of taxes

Generally I would agree Geyser. That deposit money has opportunity costs. The scenario makes sense in Vancouver because the SFH is gaining 150k/yr.
Even if I lost $1000mo if i rented my house I'd be up each year well over 100k.
If the market ever turns that scenario turns with it.
Except, my neighbour bought another SFH that he's renting at daily rate as an air B & B. He's fully booked every month at over $200/day. That's 12k/month. Making at least 2x his mortgage. So I guess there is the example where a SFH as rental pays the mortgage...PLUS!

The inability to make money on the rent isnt the fault of the seller. Just put a bigger down payment on

I agree. The inability to make money on the rent is the fault of the buyer for not doing the math before paying too much.

I appears that according to your economic theory money has no cost associated with it, so if I buy a house with 100% cash, the rent represents clear profit. And let's not even get into Property Transfer Tax, City Property Tax, maintenance, insurance, lost opportunity costs on the cash used for the purchase, the occasional months with no renter., etc., etc. I'm guessing that you are not a financial planner.

Can you show me a Vancouver SFH which has (properly calculated) monthly carrying costs which are less than its reasonable rental value? No? That's what I thought.

Nice: solid math there... How many days are in a month again?

I agree, all sorts of lousy deals can look attractive if you don't understand math.

If you bought in 1986 and sold in 2012, after closing costs you would have lost money. Similarly, if you had bought in 2006, you'd still be looking at big losses almost a decade later.

Really? Say I bought a house at 1m, 25% down, interest only mortgage (for simplicity), after 20 years house was sold at 4m. Let's assume all the "gain" came from inflation. Does this real estate deal make me a loser? Hardly.
I take home a pile of cash at l $4m-$.75m=$3.25m after pay off bank's mortgage, that's way above my original capital ($.25m) plus the inflation ($.75m). My "REAL" net profit is $3.25-.25-.75 = $2.25m !!
There is no magic here, only one condition: rent covers costs. That is not "mission impossible" even today.

Unfortunately, people rarely factor inflation, maintenance, taxes, buying & selling costs, insurance, etc., into their calculations when they Bragg about their "gains".

Again, you forgot rent. If you are home owner not investor, you can treat you as an investor to "rent" your own house, all the above argument stands the same.

Can you give me an example of a livable SFH in Vancouver where the rent covers the true full carrying costs?

Haha, it is a very old question that was repeated by bears year after year. Freako once asked me the same question in 2007, No, thanks, I don't want to sink into the details this time. It seems to me, rent for some reason is always difficult to meet the end at the beginning, and no problem few years after.
Anyway, my original post wasn't about rent / costs, it was the argument about if people can make "real" money when the inflation is the main course for the all nominal gains. I think my point stands well with the history.

Can somebody please offer an English interpretation of that last post?