Comments on: Accidental landlords

By: pulunco

pulunco — Thu, 11 Sep 2008 17:55:04 +0000

I’m sorry I just don’t see the sky falling in all of Canada. I live in Grande Prairie Alberta and we have solid fundamentals.

We have a steady influx of young canadians comming to this town (maybe because Ontario and other provinces have no good paying jobs) fresh out of school making over $100,000/year.

My neighbor manages a trucking company and he is 120 people short; there are many good paying jobs here. Lots of new business and lots of activity.

Lots of oil and gas activity already this summer and lots more to come this winter. Even if oil sinks to $100 a barrel the oil companies are still making good money and visibly investing in this area. And lets face it oil will go up and stay up for a long time as long as people want to drive cars and live in warm houses.

One may say “well the cost of living is too high in alberta” well yes it is higher in places like Calgary but in Grande Prairie you can still buy a nice brand new 1700 sq/ft house for $365,000 and a nice new starter home for $210,000. Figure out the affordability index for yourself when any yahoo can make $80,000 per year here.

One can keep living in places like ontario and wait for the house prices to bottom out, while renting some peice of crap and making $40 000 a year. Or you can move somewhere with strong fundamentals own a nice place and have spending cash at the end of the day. All you doom and gloomers keep renting if you want makes no difference to me.

By: Donald James

Donald James — Mon, 08 Sep 2008 04:08:41 +0000

Too young, too hard, too fast. I’m reminded of Jerry White’s speech in wpg December 2004. He held the newspaper’s front page up showing a zero percent savings rate for Kanadians (soon to become Amerikans). We were too busy buying Kiyosaki’s “doodads” on our line of credits. I have always had a 20% “pay your self first” routine, and as a diligent landlord pay my rentals off in 16 years instead of the standard 25 year amort. I live in unsexy Abbotsford and saw no value in the real estate pricing in sexy Vcr during 2005-2007. Always have a large cash position to buy when there is blood in the streets. You make money when you buy low. Pay down the mortgage. Don’t borrow against yourself. Prepare for the worst always. Folks…when China slows down in April 2009, it’s gonna be a real rough ride.

By: neutral

neutral — Wed, 23 Jul 2008 06:56:53 +0000

He-he. There are two teams on this blog: recent buyers who wish to believe the prices will go up or at least stay and prospective buyers who rip the hairs on theirs asses, as they did not buy 3-5 years ago and all the way being in expectations for prices to come down. Second team is in major here, as Garth’s info accords to theirs wishes. But this team is not a winner yet. Will see. I’m neutral, as I bought 5 years ago. Either way is good to me, in terms of switching to another property (which I plan): if I sell for less – will buy for less – there is nothing to loose in my case. Garth’s universal suggestion does not work for me. Keep fighting…

By: Peter

Peter — Wed, 23 Jul 2008 04:27:58 +0000

REMEMBER, if these CASH based paying jobs also decreasing and hits the fan, these people are not in EI books, they wont get their EI into their bank accont and this wont reflect it until these people went into debt and mortgage problems which is very serious.

By: Peter

Peter — Wed, 23 Jul 2008 04:25:52 +0000

There is LOADS of for sale listing in MLS within the GTA area waiting to consume, remember, the more it has listed, the more scary and heavy weighted the market is and once the it hits a turning point, something will HIT THE FAN very very hard and it causes homes going down in value very fast…Today, an automaker has already on the news to put a sudden brake on their new car production in Oakville…and this will cause a chain reaction in some manufacturing plant in Aurora, Scarborough, Markham, Concord also..Although, they should be covered by EI if something smells bad but I dont think they will get back their full pay and this week, 2 chinese restaurant (they were busy all the times)has suddenly closed off and has been complaining for EXCESSIVE rent (10K -> 18K – 20K per month) , HIGH utilities (water ->$ 5000 per month) and FOOD costs. For this, appox. 50 part time (mainly cash jobs) people were put OUT of work in the service industry immediately…Do they and their FAMILY FEELS the PAIN ? YES !!! DOES THEIR HOME FEELS THE PAIN ?? NO !!!

By: dekethegeek

dekethegeek — Wed, 23 Jul 2008 00:17:35 +0000

Garth, What da ya figure. 18 months to 36 months before us “lesser fools” start sniffing around the real estate market again?
I figure after a nice cold winter of high fuel bills, a US election that may or may not cause the beginning of a disasterous recession, high food prices, rising interest rates, foreclosures , inflation, bank failures, layoffs, etc. (Vulture, do you have a positive spin on any of this doom and gloom scenario?) it might be worth while to start sniffing around in a year or two or three.
( Vultures feed off carrion don’t they?)
I remember the early 80’s in Vancouver when Jimmy Pattison told his executives, ” Gentlemen, sell your Cadillacs and pay off your debts! Its going to get worse before it gets better.”
History repeating its self. But which history? 1979 or 1929 ? Ugly.
Pay your bills folks ! You dont want debt these days.

By: PBrasseur

PBrasseur — Tue, 22 Jul 2008 12:42:43 +0000

Market is slowing in greater Montreal according to the local news.

Sales in the first 6 months of 2008 are down 7% compared to previous year. Median price is up 6% (at $225,000) from last year.

Garth, how does this compare to other areas such as Toronto and Ottawa?

According to some “analyst” prices are not going down because houses are already much cheaper in Montreal than say Toronto, Vancouver or Calgary. I’m not sure I believe that, in my area (far suburb) I noticed more and more properties that have been on the market for quite a while now, ther’re still asking for hefty price but they are not selling… Also residential contruction seems to have almost stopped, it was booming just a year ago. The markey is slowing, no question about that, the question is: what to expect with prices?

By: islander

islander — Tue, 22 Jul 2008 07:51:52 +0000

For the first time in five years, I have listings that are generating zero calls. Zero.
The last two people who called about listing their property with me, I flat-out told them “No thanks. Not at that those prices.”
Listings are death right now.

By: Booya

Booya — Tue, 22 Jul 2008 06:43:02 +0000

nonplused – great post. It always bothered me that it’s considered a bad thing when gas, food, and clothing costs go up, but somehow a price gain in a nonproductive asset (RE) is cause for celebration. In fact it’s a terrible thing, because it hasn’t “produced” anything in that time – it’s the same house as it was when it was bought, just a little older. That has the effect of enriching people (owners) with nothing produced to show for it – while diverting capital away from productive assets like stocks, bonds, small businesses, etc.

But people are too blinded by the false wealth effect of inflation and short-term bubble price gains to accept the fact that real estate doesn’t appreciate at all in real terms. Which is why the coming collapse will surprise none of the people who read these blogs, but shock the 99% of the rest of the population who don’t.

By: ian

ian — Tue, 22 Jul 2008 03:41:27 +0000

Had to share my excitement! Just got an offer accepted at 18% lower than what he had it on market for last winter!!! Can you say chaching!! Think he was a speculater… i even him to pay all closing costs. Not to mention its 5 minutes commute to the plant (i didn’t mention that part, i may not have got the last 5 thou out of him)