Losing it

ALCOHOL

Not long ago the feds were told to raise interest rates. That, said the C.D. Howe Institute, would wean the natives off crack cocaine mortgages, curb a real estate bubble, make houses more affordable and lift starving pension funds. But the Harper Government rejected the advice. You know why. We’re addicted.

Cheap money, like Molly or House Hunters, kills brain cells. Suddenly people think they can fly, wiggle à la Miley Cyrus or afford a house. A case in point is Jason, in leafy, sad Victoria – where the average detached home still sells for north of $600,000. He says he’s a long-time reader of this blog, and despite that is seriously considering taking the plunge.

“It’s most apparent you feel buying right now is a poor choice, but is this an across the board sentiment (all housing types in all markets)?” Jason asks.  “Specifically, I am considering buying a small house near downtown Vic that I currently rent. It is ideally situated for both downtown work, acess to uVic and all amenities, inexpensive to heat, large lot. I pay $1700/month rent right now and have been offered the house for $375k, which I could put at least 25% down. Using the NY Times buy-rent calculator, it says it’s a good move to buy if I’m going to spend more than five years there (I plan to), but that’s with an annual valuation change of 0%; drop that to -1% and it’s 12 years; drop to -2% and it’s a horrible 24 years. What do you think?”

I think we should let New Yorkers worry about the calculator, and do the math ourselves. You’re now renting an entire little house for $1,700 a month, which seems like a great deal (the price-to-rent ratio of 18 clearly suggests renting wins). But mortgages at 3% are the siren song of housing, luring the hapless into something which may pack danger. Is it the case here?

So you have 25% down, which is $94,000. Plus closing costs you’ll need about a hundred grand to do the deal, and avoid the CMHC insurance premium. Now, what will it cost to own this place on an annual basis?

A cheapo mortgage – 3% variable-rate with a five-year term – comes in at just $1,304 a month, although it’s a safe bet interest rates will be rising over the period of this loan. More on that in a moment. Property tax of about $3,000 equates to $250 a month, and you can add $125 monthly for house insurance. An allocation of $2,400 a year for maintenance is reasonable. Finally, the $100,000 used as a downpayment has inherent value and must be booked as a cost. At an average annual return of 7%, that equal to $584 a month (a balanced, diversified portfolio averaged 6.98% over the last nine years, including the 08-9 melt).

So, the total monthly cost of owning this place is $2,463, or $763 more than renting – a 45% premium.

Why would you pay such a huge additional amount to own the same place you currently live in? Beats me. It only makes sense if you believe the property will be worth more later. But Victoria’s been in price stagnation for some time, with listings piling up, a turgid economy and little population growth. Seems the best you could hope for is to get out in five years at the price your paid.

What does that mean?

Well, Jason, if you sold for $375,000 and paid the usual commission in BC (7% on the first $100,000, 2.5% on the rest), and then retired the $235,139 remaining on the mortgage, you’d have $125,139 left, of which $100,000 is just getting your downpayment back. So, the ‘profit’ is $25,986.

Of course to earn that, you paid $763 more a month for five years than if you’d remained a renter, which is a premium of $45,780. So, the actual loss is $19,794 – which means you threw away about four thousand a year being an owner.

This might be a best-case scenario, too. The TD Bank (as I referenced yesterday) believes the average cost of a variable-rate mortgage over the next four years will be 4.1%, which would increase the loss of $25,800. And if Victoria prices decline a very modest 1% per year, that loss approaches $40,000.

No wonder the dude wants to sell it to you.

Even with mortgages at 3% – and this is fleeting – there’s no financial argument for buying real estate when the certainty of capital appreciation vanishes. Today most renters are subsidized heavily by landlords. Property taxes, insurance, utilities, repairs and financing charges will all likely rise more rapidly than rents. Price-rent ratios will continue to mount, tipping the scales inexorably towards tenants. If your goal is the accumulation of wealth, you have a far superior long-term shot at that with liquid assets than real ones, which are costly to buy and sell, can quickly turn illiquid and are subject to hormonal whims and addled  brains.

That seventy per cent of Canadians have chosen the same illogical place to dump the bulk of their net worth tells you what comes next.

No wonder the government’s vexed.

125 comments ↓

#1 FK on 09.02.13 at 7:10 pm

Thanks again for another great article. It’s hard to beat sentiments.

#2 Donald Trump on 09.02.13 at 7:11 pm

Yess…oh yesss…..
YESSSSSS

#3 Randy on 09.02.13 at 7:12 pm

Housing goes up…these people think they are financial geniuses…Housing goes down…It’s Harper’s fault..haha

#4 1drs on 09.02.13 at 7:14 pm

Even worse than the scenarios given is the one where you freak out because of the plummeting value of the house and try to sell but get no offers, even when the price is underwater despite the $100K down. . . Good luck Jason. If you don’t know you are flirting with being a greater fool , you will become one.

#5 Ret on 09.02.13 at 7:14 pm

Forget the house. They’re offering 84 month new car loans @0%. I’ll treat myself to a new car instead.

Cheap $ is distorting the whole economy.

#6 Realtor Lover on 09.02.13 at 7:17 pm

A realtor was shot in Maple Ridge on Friday.
The dude was apparently involved a little deeper then just listing the property as the media said. He applied for a subdivision permit of the property just two years earlier,hm.
Four years ago when 1 royal pacific realtor scammed his vendor out of a 100,000 by assigning the sale of a condo he was listing to a subsequent buyer who purchased it for 100 grand more just days later.
He was later discovered and was ordered to repay that monies to the deceived seller.
He claimed he didn’t know he did anything wrong and was ordered to take additional courses by the real estate council of BC while being allowed to keep his licence.

I know this as 1 of my closest fiends is a licensed realtor with that firm whose name shall remain anonymous for obvious reasons.

In a different country he would have been jailed!

#7 Stomper on 09.02.13 at 7:17 pm

and still the homebuyers keep coming!

#8 Retired WI Boomer on 09.02.13 at 7:18 pm

Canada nice place, liked working there, rented places never bought. Most I knew there in the late 80’s owned their homes. By today, if they stayed put most would own them free & clear. So, what would they do? Retire in place, sell and downsize, sell and rent?
If you are looking to be a 1st time buyer why would you buy at the top of the market? Would you buy a stock when its near its all tim,e high? A new car is a good analogy, but it or, perhaps find that off lease car, or a model a few years old?
Hey, it IS your money (or credit rating). As for me, I’ve lost money in the markets, made some too. I prefer not taking stupid chances.
Buying the worst performing market sector next year is a much better bet than buying this years top performing sector then.
So, what do i know? Nothing, but I have the experience.

#9 T.O. Bubble Boy on 09.02.13 at 7:19 pm

Here’s the crazy part: this is probably one of the more reasonable house prices you’ll see in a “should I buy or rent” anecdote (and still losing by 40%+).

In most parts of the country, the mortgage payment alone would be far more than the rent. I gave the example a few weeks ago of a $1.1M house asking $3500/month in North Toronto… even with 20% down and a still-low rate of 3.79%, the mortgage would be over $4500/month (losing $1000/month before even looking at property taxes, gains on the down payment, or any maintenance costs).

#10 Brad J Lam on 09.02.13 at 7:20 pm

Great math Garth…numbers don’t lie! I bet Brad J Lamb doesn’t like what you have to say…uhh? BTW, I am fuuurst!

#11 Losing it | The Affluent Boomer™ on 09.02.13 at 7:31 pm

[…] Losing it […]

#12 Mr. BigStuff on 09.02.13 at 7:43 pm

There was a time to make money in mouldy Victoria, it is now passed

#13 TurnerNation on 09.02.13 at 7:46 pm

Ah this weblog’s dour protestant work ethic!

All spirits must be tested. Single malt, specifically!?

#14 Musty Basement Dweller on 09.02.13 at 7:52 pm

OK no shocking post today eh. No problem at least the post was early. It sucks being away from the mouldy city and in the godless time zone where you guys have to wait till 9pm usually to be spanked by Garth.

#15 Evangeline on 09.02.13 at 8:14 pm

~~NEED CASH FOR ALCOHOL RESEARCH~~

when my brother was a smoker, (no longer), he used to say he was supporting migrant farm workers.

#16 Ex Victoria on 09.02.13 at 8:15 pm

This fool bought a 1400 sq ft Semi in 2002 for 172K before finding a greater fool to give us 400K for it in 2007.

What goes up that fast will come down equally fast (or faster now that everyone is house poor and sitting on their wallets, but I digress)

Sounds similar to what Jason is looking at. Keep renting Jason, by next spring you’ll be able to do much better.

BTW, I left in 2012 when the Tsunami debris starting washing up, the radiation is close behind…

#17 buyright on 09.02.13 at 8:16 pm

Renting vs. buying a home

Video worth watching

http://www.youtube.com/watch?v=s8GjDRT2MI0

http://www.youtube.com/watch?v=QA2TBiIsdT0 part 2

#18 Morgan on 09.02.13 at 8:19 pm

The math in this example is a little oversimplified – Jason, get the actual stats on taxes, hydro and maintenance, and then try some negotiation on that price. No realtor involved? – then split the savings on commission with the landlord. Do you think he’s losing money? – then do the math and help him cut his losses. If you plan on staying put (and you’ve had a good chat with yourself about kids, marriage and future jobs in the next 10 years) and the house is in good condition in a good area, it could be a very reasonable long-term buy. Figuring 7% return on your lost investment income is disingenuous unless that’s what you’re actually making on that money. Use real numbers instead of theoretical ones. Also, almost any real estate sucks as an investment over a 5 year period – if you can’t plan for 10 years or more, don’t buy. By then, the capital that you’ll have paid on the mortgage will shift that balance sheet substantially. Is your income steady or increasing? – could you accelerate payments in a few years? Could you rent a room, as an owner, and cut your expenses in a way that’s not allowed as a tenant? – that gives you some options. Is this a place that you could turn around and rent it out with a positive cash flow? – if so, then this reduces your risk. I’m not exactly bullish on real estate, but fear is never a good guide in these decisions.

Why should this person increase his housing cost by almost 50 per cent to live in the same place? What’s the prize? — Garth

#19 Bob Copeland on 09.02.13 at 8:21 pm

I’m beginning to think backwards (upside down?). I bought a condo and paid cash. NOT paying maybe .03% mtg interest is like making .03% with bonds. The condo is 53% of my net worth. I don’t care if it goes up or down, I’m 64. It’s my last home.
I have $270,000 in a whole life prudential life ins policy. Last year it gained .0565% tax free. It guarantees .03%. This year should be better. I can borrow up to 97% with a phone call.
I also paid cash for a beautiful class a rv for winter travel.
My total living expenses is 80% of the SS check I’ll start getting in 15 months.
My income is in the 6 figures for life from a company managed by my son.
I think everybody should remember the saying “a penny saved is a penny earned”.
I sleep like a baby with no risk in the bond, stock or metal markets.
Am I stupid? Is there something I’m not seeing?
It seems so simple that I question it.

#20 Victor V on 09.02.13 at 8:24 pm

Question: We’re selling our house. Or perhaps I should say TRYING to sell our house – it’s been on the market for over three months! We’ve had some interest but no firm offers. We put a lot of money into renovations and we want to get that money back, but there seems to be a lack of buyers in our price range – $1.5-million+ in our Bloor West neighbourhood. What are we doing wrong?

http://www.theglobeandmail.com/life/home-and-garden/real-estate/its-been-3-months-why-wont-my-house-sell/article14023363/

#21 Obvious Truth on 09.02.13 at 8:30 pm

Garth hits the nail on the head here.

People just can’t believe the math. They are willing to pay more for a house that will be worth less later but when they know shoes will go on sale they will wait to save 10 bucks.

Garth forgets to mention that in five years that house will need total redo to attract buyers and compete with new homes. Throw in another 60 to 80 grand for that.

On top of that marginal properties don’t even sell when the good stuff gets cheaper. Think of it like name brand shoes going for the same price as the no name.

The no name gets no bid.

You’re doing great Jason. Leave it at that and find something else to occupy your time. Wait for the clearance sale.

Time is on your side.

#22 A proverb on 09.02.13 at 8:32 pm

“Trust me, you can dance”

-Alcohol

#23 45north on 09.02.13 at 8:32 pm

Bob Copeland: I also paid cash for a beautiful class a rv for winter travel.

I was so happy I didn’t have a class A RV

the day I got lost in the Bronx

#24 James Bond in Gold Finger on 09.02.13 at 8:33 pm

#117 the love boat on 09.02.13 at 5:48 pm

wwi wwii korea vietnam suddam hussein
iraq afghan syria …..
what can we deduce about american history and the
value of their fiat crap money from that list above?

unfortunately doom is coming. u will need a home a gun and lots
of gold and silver.

u are warned.

its all coming undone.
——————————————————–
Ya that’s only part of it. But many are assuming gold will go down due to rising interest rates like in 1980. The nature of the beast is different this time. The rising interest rates will take gold to unbelievable levels. Too bad many will be on the sidelines as this unfolds.

#25 Ex Victoria on 09.02.13 at 8:39 pm

Buying a house in Victoria today is like buying a Cadillac. Buy it for the comfort, not the investment.
I miss Victoria, but it has nowhere to go but down for the foreseeable future.

Thanks Banks

#26 Donald Trump on 09.02.13 at 8:58 pm

As I submitted…

Smoking Man and Old Man are in Syria and thus giving the rest of us much to look forward to.

#27 Ralph Cramdown on 09.02.13 at 9:08 pm

You have to determine if the vendor needs the cash or just wants to get out. If he has significant capital gains, you can structure a vendor take back mortgage, perhaps even at a favourable rate, so he can defer capital gains over 5 years. And you can negotiate on the price and rate.

If he needs the cash and/or doesn’t have significant capital gains, you’ll know he’s screwed.

Of course, you still have to think buying the house is a good idea at the eventual price…

#28 takla on 09.02.13 at 9:14 pm

Im diggin victoria,good restuarants,decent night life,good blues bands and fresh air.Salmon fishins great.Houseing is definately over priced tho,small 60’s era homes on little lots in obvious need of maintenance block after block 450,ooo not moving .Guys at work say its different here,there will be no price correction… comeing from vancouver i tell them there a yr behind van ,correction wise and it just starting,big developement up at bear mnt foreclosed,14 million asking owner forced to sell and droping price to 4.5 mil,.Lots of reduced signs popping up everywhere,starting to smell the fear.Just read today that radiation levels on southern vancouver island have been spikeing as its in direct collision course with fukushema due to the east\west weather currents.How will this bode for future sales if japan gets out of hand??

#29 Dean Mason on 09.02.13 at 9:20 pm

People are losing it alright. They are financial morons. This is the same argument that borrowing money to buy an unaffordable home that takes 35 years to pay is good debt.

The same moronic advice of getting into debt for $30,000 to $50,000 for a 4 year college or university degree, diploma. These people are just clueless and have no idea that they are doing.

The $2,400 for maintenance for a $375,000 house is only 0.64% annually. This is not high enough. Over the next 25 years or more, it is more like $4,000 a year for maintenance and repairs. This is on average 1.067% per year.

#30 Ralph Cramdown on 09.02.13 at 9:22 pm

#24 James Bond in Gold Finger — “The rising interest rates will take gold to unbelievable levels.”

Giddy up buddy, and fill your boots. You can buy 100 ounces for delivery next December at today’s price. Buy now and do not pay for fifteen months.* Be one of the first twenty callers and we’ll throw in the coffee table, for free!

Who’s more INSANE IN THE BRAIN than goldbugs? NOOOBODY!

* OAC. 7% initial margin required.

#31 Freedom First on 09.02.13 at 9:24 pm

Garth, I hope that Jason takes your advice and thus saves himself from committing financial suicide. Jason is unable to see the abyss by himself.

I am constantly amazed, on this blog, and in my own life, how many people are smart enough to make a living doing a myriad of professions/trades/technical fields….etc., and yet, when it comes to financial decisions/management, they are complete idiots. Need proof. Look at all of the recent housing bubbles around the world that burst, rocketing millions into bankruptcy/poverty. Garth gives advice using sound financial principles that work. CREA, BL, SC, [email protected], MIL, are just a few examples of institutions and people who do not give sound advice but are absolutely onl interested in their own interests and do not care if you and your family are financially destroyed. This is not being melodramatic. It is the truth. Look after YOURSELF first, and then others, as Garth does……pass it on……..Freedom First.

#32 White Van Man on 09.02.13 at 9:27 pm

I’ve been renting in Victoria for nearly four years. I want to buy, but not paying $600K for a glorified shed! People I work with admit they couldn’t afford to live here if they had not inherited their home off their parents. Victoria is over-rated and well over-priced for what you get for your money (a post-war, sub-standard, drafty, full of asbestos stick building that will drain you of cash in renovations). Unfortunately, the greedy ones who have bought these crappy buildings for an extortionate sum of someone elses money will lose out when it all goes tits-up!

Good luck

#33 Smoking Man on 09.02.13 at 9:30 pm

#26 Donald Trump on 09.02.13 at 8:58

As I submitted…Smoking Man and Old Man are in Syria and thus giving the rest of us much to look forward to.
………..

Ya like I would go anywhere close to the middle loony bin.
I have relentlessly attacked, Muslims, Jews, Christians

Hell they got there hands on me, the loons would rip me apart, enjoy it so much they might actually get along after that.

#34 -=jwk- on 09.02.13 at 9:31 pm

Offer him 345k. Then Gath’ math works out pretty close to even. The house we rent in Toronto for $1500 would sell for 500 in current condition, 600+ if reno’d. I would pay 379 for it…

#35 john dowin on 09.02.13 at 9:34 pm

Variable Interest rates of 4.1 %?

I don’t think so.

We are heading for much, much higher rates as there is no way anyone with half a brain would buy government bonds that yield in single digits considering the real food and gas inflation.

With stocks and investment alternatives and with the price of Real Estate I would consider the dollar as junk (how much is 1/millionth of a crappy bungalow worth)? as well as the bonds with their ‘return’. No thank you and the moment F or some other idiot forces buying of government junk bonds and I would be out of the country with all my savings.

#36 Smoking Man on 09.02.13 at 9:42 pm

I have attacked teachers, preachers, basement dwellers and renters, track6ers.

Cops, and Robers, politics and politicians, MSM and Julian Assange. Scientists. Stupid people.

I’m running out of shit to talk about.

News flash zero hedge just broke, story of hacked emails re high level us generals, and the gas in Syria.

#37 john dowin on 09.02.13 at 9:44 pm

Ralph Cramdown #30.

Agree on the insanity of the gold bugs.

However you would be surprised by the commodities and specially by the oil prices in the years to come.
BBL – BHP Billiton it is, 4 % yield. Buying tomorrow.

And by the way all the financial advisors are deadly wrong so far on precious metals prices. I have few professional subscriptions including Morningstar, Pechala etc. the financial analysts have no clue on fundamentals. They are creating expected valuations based on direct or inverse correlation to DJ, then they do apply technical analysis around expected DJ trend.

It is a sad story, not as much as the real estate though.

#38 Devore on 09.02.13 at 9:52 pm

#18 Morgan

Could you rent a room, as an owner, and cut your expenses in a way that’s not allowed as a tenant?

Lots of people sub-let, so you’re flat out wrong. And as an owner, even worse than having strangers living in your basement is having strangers living in your HOUSE. Pretty sure the guy’s 10 year family plan does not include roommates.

#39 m on 09.02.13 at 9:57 pm

I think Jason should go for it as he plans to stay long term and it is a big lot. Buy it Jason, put in a rental and sit back and enjoy Victoria.

#40 Devore on 09.02.13 at 10:00 pm

#21 Obvious Truth

People just can’t believe the math. They are willing to pay more for a house that will be worth less later but when they know shoes will go on sale they will wait to save 10 bucks.

Penny wise and pound foolish.

The math is very cut and dry with expensive and fancy properties. It’s not even close. It is when you get to the entry-level market is when things start to get a little more fuzzy. The amounts are smaller, to rounding up/up or omitting some “minor” expenses or benefits can easily swing the equation either way, or make it close enough that lifestyle or other considerations win out. One of those “minor” items is depreciation. Real estate improvements (ie buildings) are depreciating assets. To maintain their value, you need capital investment; you need maintenance, repairs, renovations, upgrades.

That’s why it’s so easy to wave your hands and proclaim buying wins in the long term. But if you’re losing money from day 1, then the only way you can win out is through price appreciation in excess of wage growth (and thus rent increases).

#41 Basil Fawlty on 09.02.13 at 10:00 pm

In calculating the opportunity cost of the forgone income from his $100,000, don’t you have to use after tax returns? The prize is in 20 years, with accelerated payments, he has no rent , or mortgage.

#42 Uh Oh Canada on 09.02.13 at 10:02 pm

I think I’m finally ashamed of being Canadian. We should have learned from our neighbours to the South. Just read an article from the Globe about derelict houses going for sale for over 500k in Toronto. One RE agent said the mould in one house is so bad that the viewers will need to wear a mask to see it. PATHETIC.

http://m.theglobeandmail.com/life/home-and-garden/real-estate/houses-with-issues-tch-selloff-homes-come-with-baggage/article13912046/?service=mobile

#43 Ralph Cramdown on 09.02.13 at 10:10 pm

#35 john dowin — “We are heading for much, much higher rates as there is no way anyone with half a brain would buy government bonds that yield in single digits considering the real food and gas inflation.”

Here’s the fake food and gas price inflation:
http://research.stlouisfed.org/fred2/graph/?chart_type=line&s%5B1%5D%5Bid%5D=CPIFABSL&log_scales=Left
http://research.stlouisfed.org/fred2/graph/?chart_type=line&s%5B1%5D%5Bid%5D=GASREGW&log_scales=Left

And here’s the bonus chart, average new vehicle fuel economy:
http://www.umich.edu/~umtriswt/EDI_sales-weighted-mpg.html

So yeah, if you’re still driving that ’70 Olds 442, fuelling up is gonna hurt. But if CRD, GDI, MultiAir, Atkinson cycle, regenerative braking or variable displacement mean anything to you, things might not be so bad.

#44 john dowin on 09.02.13 at 10:12 pm

Ralph Cramdown #30.

The volumes on Comex futures are fishy. It might be worth buying some put options, if:
1. There is enough volume
2. There is someone left to cover physical delivery / not paper settlement. As for the sellers I guess someone has few ounces left in order to short the market. It could be naked short. It is very strange that while GOFO is negative while the options decline in near term… Someone is going to have a nice whipping.

As in everything: remove the derivatives/or let them blow up and then the market will determine the price.

#45 Devore on 09.02.13 at 10:15 pm

#37 john dowin

And by the way all the financial advisors are deadly wrong so far on precious metals prices. I have few professional subscriptions including Morningstar, Pechala etc. the financial analysts have no clue on fundamentals.

Gold has no fundamentals, aside from industrial uses, which are more than satisfied by above-ground supply and do not support current valuation, it’s all 100% speculative.

#46 Second Class on 09.02.13 at 10:18 pm

Garth. Whats your opinion on buying commercial and industrial property as an investment? Is it destined to the same fate as residential?

It’s all about cash flow. Residential is all about capital value. — Garth

#47 NotAGreaterFool on 09.02.13 at 10:18 pm

Garth – The Autumn real estate market is hours from launching. In the 416, will it take off like gang-busters or it thaw off (from July and Aug)?

#48 Atanas Popov on 09.02.13 at 10:24 pm

Hi,
Not that I think that house prices will increase, but Garth, when you are providing such examples you are just as biased as the rest of the real estate industry participants. I did the math with your parameters (some small adjustments – he can not shelter the entire amount from taxes (capital gains tax would be applicable on investment income sooner or later), insurance is a little less and at this price along with all other assumptions he should be indifferent. That aside most of Canada is overvalued and correction is long overdue. When will it happen – we would know after it occurs.

Renting still beats owning, by a wide margin. My point stands. — Garth

#49 john dowin on 09.02.13 at 10:35 pm

#43 Ralph Cramdown

The first 2 links don’t not work.
Gas was 20-25 cents in US 12-13 years ago. Now is 3-4 times that. You do the math. I calculate 12-15 % average yearly inflation. How was your portfolio in this period?

Efficiency is fine if you have a hybrid (you pay the increased cost of the vehicle)
Is 1.36 a liter not high enough?

#45 Devore
Gold has no fundamentals, aside from industrial uses, which are more than satisfied by above-ground supply and do not support current valuation, it’s all 100% speculative.

absolutely agree. However it seems some see value in it, at least someone (not me) is willing to pay 1400 for an troy ounce. If you think there are no fundamentals just try selling at 900 and see what happens to you.
What bothers me is why central banks keep buying it.

#50 Ralph Cramdown on 09.02.13 at 10:40 pm

#37 john dowin

There’s a lot of energy plays in my portfolio, but no miners to speak of (there’s one I don’t want to speak of…). I came close to nibbling this summer when Teck was paying 4% and Iamgold 6%, but there’s so little cost discipline and so much ego in mining that what should be a straightforward business — buy a junior with a profitable play, dig a hole, mail cheques to shareholders — has become a giant ponzi scheme in which the profits from each hole are used to dig the next slightly less profitable hole, the cash flow goes to leveraged buyouts of competitors, and all the shareholders get are the glossy reports. I predict that any industry which only this year has found religion about cost controls and profitability still has a few years in the woodshed mailing out quarterly writedowns before they’re lean, mean fighting machines.

#51 omi on 09.02.13 at 10:50 pm

Garth, can you comment on structures where on can write off interest payments? Home business?

#52 john dowin on 09.02.13 at 10:51 pm

P.S. If someone thinks commodities are about to decline, please go ahead and short them. Lots of money to make if one is sure/if lucky. If not……

#53 not 1st on 09.02.13 at 11:04 pm

This guy is being offered a house at half of the average price in victoria and it still doesn’t make financial sense to buy it. Lord help us all.

#54 Canadian Watchdog on 09.02.13 at 11:07 pm

#35 john dowin

We are heading for much, much higher rates as there is no way anyone with half a brain would buy government bonds that yield in single digits considering the real food and gas inflation.

We have disinflation heading for deflation if QE5 isn't announced soon. Bonds are oversold and WWIII looks poised to fail when the only evidence produced are allegations of Syria not being able to fabricate those YouTube videos.

#55 Smoking Man on 09.02.13 at 11:11 pm

#51 omi on 09.02.13 at 10:50 pm

Garth, can you comment on structures where on can write off interest payments? Home business?
……..
You ever heard of Google

#56 OMG on 09.02.13 at 11:18 pm

MORE FUN BC PROPERTY TAXES

Plus do not forget Jason must pay the insidious BC Property Transfer Tax of $5500.

Plus Victoria property taxes are set to increase between $300 – $500 per year when the new sewage plant is finished.

What? Is the harbour full? — Garth

#57 Little Bandit on 09.02.13 at 11:20 pm

I see this all makes sense in the short term, but how come I never see any analyses that include cash flows after the house is bought and paid for? What would his situation look like if we were to consider until he was 75? For me that would be 20 years of not paying rent.

Nobody stays in a house anymore for forty or fifty years. Nor are we able to forecast interest rates in twenty years. All we know for certain is that he is wealthier renting over the next five. — Garth

#58 Ralph Cramdown on 09.02.13 at 11:23 pm

Ah, Fred…
Food, note how the line is getting less steep:
http://research.stlouisfed.org/fredgraph.png?g=m1s
Gas:
http://research.stlouisfed.org/fredgraph.png?g=m1t
Canadian Gas prices:
http://www.GasPrices.com/retail_price_chart.aspx?city1=CanadaAverage&city2=&city3=&crude=n&tme=60&units=us
About the same as they were a year ago, and five years ago. Doesn’t that mean the price has declined in real terms?

#59 Winnipegger on 09.02.13 at 11:59 pm

Garth, back in the spring I decided to unload my Winnipeg bungalow in the burbs to rent and invest elsewhere for the foreseeable future.
I have a good portion of my cash in an ETF portfolio consisting of 15% fixed income, 24% US equities, 25% CDN equities, 25% split between gold, reits, emerging markets and 11% equities outside of North America. Is this too risky of a portfolio considering emerging markets are getting beat up and all the talk about a major correction coming to equities? This is long term money.

#60 Mike on 09.02.13 at 11:59 pm

It would be stupid to sell your house just because you believe it will fall in value. If you can’t afford to lose the equity in the house (because it composes most of your net worth), than selling makes sense, especially if your expenses are lower. You should never invest more than you can afford to lose, but every time you sell your house, you degrade your net worth. Anytime you can’t forecast at least 10 years with any certainty, you should rent.

#61 Harold on 09.03.13 at 12:04 am

A turgid economy? I think you mean flaccid, the opposite of turgid.

#62 Donald Trump on 09.03.13 at 12:28 am

I am starting to decipher, thus depreciate, this Smoking Man creature.

I mean sure….we could hunt the the SOB down,(with can of beer/ Canadian Tire coupons)..butt IMHO….. this carbon- base dentity should be in a Zoo/Moose-um.

#63 Ralph Cramdown on 09.03.13 at 12:32 am

#59 Winnipegger — “Is this too risky of a portfolio considering emerging markets are getting beat up and all the talk about a major correction coming to equities?”

http://www.ndir.com/cgi-bin/PeriodicTableofAnnualReturns.cgi

You can choose to be a trend follower: Buy high, sell higher. Let your winners run and cut your losses short.

Or you can choose to be a value investor: Buy low, sell high.

Or you can choose to be an indexer: Set an allocation mix. Rebalance.

You can even be a chartist/technical trader: Don’t pull the trigger until you see Batman’s cameltoe.

But if you switch back and forth between these strategies you will probably lose a lot of your money. Some require more effort than others, but they all require discipline.

#64 ILoveCharts on 09.03.13 at 12:33 am

Garth: What do I need to do to get 7% annual returns?

I know how to buy a house. I don’t know how to make my money give me a 7% annual return. I suspect that most people are in the same boat and that is what skews their calculations. For me, using 2% annual return is more realistic.

If I pay someone to make this happen, what does it generally cost? Assume I only have $100,000 to work with.

#65 Bobby on 09.03.13 at 1:39 am

Why the heck would Jason want to buy in Victoria now. So many stale listings with reduced and lower price stickers. My guess this home has either an asbestos or oil tank problem.
I suggest he keep looking, the prices are falinggggggg.

#66 johnanddagney on 09.03.13 at 1:52 am

#59 winnipegger

See Garths blogs:
“Non Cowboy Portfolio” Oct 15 2012

“Banking” Oct 28 2012

canadiancouchpotatoe.com/model-potfolios/

“Millionaire Teacher” Andrew Hallam

#67 Tony on 09.03.13 at 2:29 am

Re: #19 Bob Copeland on 09.02.13 at 8:21 pm

Everybody should remember the saying “whole life insurance is for suckers”.

#68 Buy? Curious? on 09.03.13 at 2:41 am

When I was in high school, for this photography class, we had to “people” pictures. Almost every student went around with their black and white film and took shots of homeless people, I guess to capture something. I thought it was too easy because they had no place to hide. Instead, I went to the Granite Club and got pictures of rich ladies eating salad after a “hard” game of tennis. I got caught and was threatened with being charged with trespassing if I didn’t hand over my film. I did because I’m no Martin Luther King or Rob Ford but my point was why piggy back on those that have nothing so you can get a good grade. Garth, your posts are great, as always, and it looks like you’ve been working out, but can you lay off the pictures of Homeless people with witty signs begging for change? Go back to sexy ladies getting photo bombed by douche bags. “Hey! Was that Donald Trump at a Toronto Film Festival after party or is that guy letting a Yorkshire terrier sit on his head?”

#69 NoName on 09.03.13 at 3:47 am

http://qz.com/120442

How to go from net worth of 30B down to 0.9B in 18 months.

Is he on drugs or what?! CEO shares his bonus with emoyees.

http://m.slashdot.org/story/191073

@smokingman were you there last night?
http://m.slashdot.org/story/191061
(The Hugo awards)

#70 IM in C on 09.03.13 at 7:51 am

Garth
What is a Smith Maneuver?

http://www.theglobeandmail.com/globe-investor/personal-finance/mortgages/the-smith-maneuver-a-canadian-mortgage-tax-deductible-plan/article12059456/

It looks dodgy

I do not recommend this. — Garth

#71 Victor V on 09.03.13 at 7:54 am

Canada’s banking regulator has been gathering detailed mortgage information from financial institutions, in what could be a precursor to changes in the rules for home loans.

The Office of the Superintendent of Financial Institutions (OSFI) has spent months considering a tightening of mortgage rules for lenders, a decision that’s being weighed as the housing market begins to pick up after a year-long slump. That slide began when Finance Minister Jim Flaherty tightened the rules for mortgage insurance in July, 2012.

http://www.theglobeandmail.com/report-on-business/economy/housing/regulator-eyes-tighter-mortgage-rules/article14072417/

#72 Toon Town Boomer on 09.03.13 at 8:21 am

Not long ago the feds were told to raise interest rates.

Who told the feds to raise rates?

It’s in the post. — Garth

#73 tb on 09.03.13 at 8:52 am

Re: Smith Manoeuvre

[i]I do not recommend this. — Garth[/i]

With all due respect Garth, that’s pretty much the same thing as what you recommended to Francis a couple of days ago.
Pay down a house with your liquid assets, then take out a HELOC to repurchase the same assets to effectively have a deductible mortgage.

Not that I’m for it…

Absolutely not. The SM depends on a systematic withdrawal of funds from liquid assets (usually mutual funds) in order to function, and provide loan security. That is far more risk-laden than a simple loan secured by fixed assets to invest in any portfolio (whether liquid assets or rent-generating real estate) for interest deductibility. — Garth

#74 AJ Brown on 09.03.13 at 9:32 am

7% average return? Grow up Garth

Yes, you’re right. A 60/40 balanced and diversified portfolio last year returned about 10%. The three-year average is 8%. I should have been more accurate. — Garth

#75 Pounding sand in Peachland on 09.03.13 at 9:32 am

#19 Bob Copeland Don’t question it

#76 Happy Renter on 09.03.13 at 9:52 am

MORE FUN BC PROPERTY TAXES

Plus do not forget Jason must pay the insidious BC Property Transfer Tax of $5500.

Plus Victoria property taxes are set to increase between $300 – $500 per year when the new sewage plant is finished.

What? Is the harbour full? — Garth
==========================
Exactly. I lived in Victoria for about 5 years. Old Englandy, demographically boring, prim, proper and self absorbed. yuck. Sure the daffodils big deal. Jason the place is way overrated and overpriced . Dont buy into it.

#77 today on 09.03.13 at 10:02 am

When does this fall glut of listings begin?

In the fall. — Garth

#78 Bigrider on 09.03.13 at 10:07 am

If we consider moneysense magazine to be a reputable magazine then an article titled ” where to buy now” in the September/october issue says a lot.

They mention Wychwood with a +32 % 1 year price appreciation this past year, along with the Kuching at + 18.5 % and yonge and at Clair at + 30%.

Ya some real estate correction and ya Torontonians are gonna start charging into 7% balanced portfolios of financial assets real soon .. LOL

Smart investors do not choose real estate or a liquid portfolio. They have both, in the proper weighting. That’s what the Rule of 90 is all about. Balance. — Garth

#79 Bigrider on 09.03.13 at 10:08 am

Sorry meant junction not kuching

#80 baddog on 09.03.13 at 10:37 am

I seem to remember everyone waiting for a “glut of listings in the spring” last fall and winter.

In some markets, that certainly happened. All are different, as I have stated many times. Be patient. — Garth

#81 coastal on 09.03.13 at 11:09 am

The OSFI is going to finish off the work F doesn’t have the balls to do and stick a fork in this bloated real estate game once and for all.

“The Globe and Mail reports in its Tuesday, Sept. 3, edition that banks could see changes in the rules for home loans. The Globe’s Tara Perkins writes that the Office of the Superintendent of Financial Institutions (OSFI) has been mullling tighter rules for mortgage lending.”

#82 FormerSaskie on 09.03.13 at 11:16 am

Garth a couple of questions,
In the Jason example the interest on the mortgage wasn’t included as an owning expense. Why not?

Will an owner lose the tax free capital gains status on a primary residence if they move out of their home a few months before the house sells. The owner is renting elsewhere and the house is vacant.

Learn lots from your blog.

(a) It is. (b) No impact. — Garth

#83 TheCatFoodLady on 09.03.13 at 12:02 pm

I’ve owned both. Garth is right. Thankfully I had a flexible GIC & dumped that sucker after doing the math. The stock market may be ‘risky’ but GICs are a GUARANTEED net loss.

I bought 2 individual stocks. Made a nice return on one… matched by a loss on the other.

I’m way too ‘small fry’ to mess with that stuff anymore.

#84 Kent on 09.03.13 at 12:35 pm

On the other hand, the landlord gets tired of being a landlord, puts the property up for sale, and you get evicted sixty days later. Currently going through this in a very tight rental market.

Each province has different tenant protection legislation. Know your rights. For example, in Ontario: “Once the landlord gives the tenant a notice terminating the tenancy for this reason (selling the property), they can apply to the Board for an order evicting the tenant. However, a tenant can only be evicted at the end of their tenancy and only if the Board issues an eviction order.” — Garth

#85 Nemesis on 09.03.13 at 12:39 pm

RealZen being a TadThinOnTheGround this Tuesday… Nemesis has magnanimously decided to ‘manufacture’ some for all you SaltyDogs who’ve ever wondered how Victoria actually works…

http://youtu.be/1x_QbVDlLbI

Now, to fully appreciate that parable, all you have to do is replace Ricardo’s GrummanGoose… with OnniGroup’s ‘well travelled’ CL-600 Challenger… and then, just toss in a dash ‘o context… [almost GoodEnough to qualify as a QuoteO’TheDay!]…

“We take drainage very seriously. We’re not going to say people won’t be flooded but at the same time it’s a very small amount that we’d be lowering it by so I’m not concerned.” – PittMeadowsMayor Deb Walters

[TheNews] – Flood level dropped for Pitt Meadows homes

…”Two months after historic floods swept through Calgary, Pitt Meadows council is moving towards lowering the flood construction level for a new townhouse project in the southern part of the city.

Council’s committee meeting OK’d Tuesday the request by Onni Group of Companies to lower the level…”…

NoteToDogs: IronicallyDelicious, and hardly the first time that ‘UnderWater’ & an OnniDevelopment have appeared together in print.

#86 Kent on 09.03.13 at 12:49 pm

Each province has different tenant protection legislation. Know your rights. For example, in Ontario: “Once the landlord gives the tenant a notice terminating the tenancy for this reason (selling the property), they can apply to the Board for an order evicting the tenant. However, a tenant can only be evicted at the end of their tenancy and only if the Board issues an eviction order.” — Garth

Thanks. We are in Ontario. We’ve been renting this place for five years and our lease has long run out. I understand that they can’t evict us unless they’re moving in or they’ve sold and the new owners are moving in. Still, there’s nothing to stop them from selling. Couldn’t come at a worse time, we’re planning to move next summer and my son is finishing his last year of high school.

You still have rights, and an appeal process. — Garth

#87 Not 1st on 09.03.13 at 1:17 pm

Garth it looking a lot like 2008 out there. Over exuberant stock market, emerging markets crashing, oil spiking….

Hardly. Robust economic numbers in the US today. Growth in China, too. Oi’s rising on Syria. No comparison to 2008. Worry about climate change instead – more real. — Garth

#88 Ralph Cramdown on 09.03.13 at 1:29 pm

#86 Nemesis — “We take drainage very seriously. We’re not going to say people won’t be flooded but at the same time it’s a very small amount that we’d be lowering it by so I’m not concerned.” – PittMeadowsMayor Deb Walters”

Huzzah, Nem! I’ve always been peeved by developers naming streets and indeed entire subdivisions and locales after what came before, rather than what remained after. It’s nice to see development in a place whose name pays homage to both.

#89 Ralph Cramdown on 09.03.13 at 1:39 pm

#87 Kent — “Still, there’s nothing to stop them from selling. Couldn’t come at a worse time, we’re planning to move next summer and my son is finishing his last year of high school.”

In addition to standing on your rights, you could politely point out that a vacant, tastefully staged placed is much easier to move at a better price (in some markets, depending…) and ask how much he’d be willing to pay you to vacate early. No point not profiting from the inevitable, especially if both sides win.

#90 Donald Trump on 09.03.13 at 1:52 pm

#86 Nemesis — “We take drainage very seriously. We’re not going to say people won’t be flooded but at the same time it’s a very small amount that we’d be lowering it by so I’m not concerned.” – PittMeadowsMayor Deb Walters”

===================================

Richmond is approx. 6 ft below sea level.
However there are some developments that have still built below even this grade.

There is one excavation for a hi -rise in City Center that is approx 20 ft. down.

This is accomplished with a pumping system, even Richmond City Hall uses such a system.

I think the developers have found some way to gain extra height floor ratios.

#91 Morgan on 09.03.13 at 1:57 pm

A good chunk of the problem with this analysis is that we don’t have enough real information about this home or his overall financial status. A house for sale at $375K when the average is > $600? Why? What’s it’s appraised value? Is it a crap house on a great street or vice versa? If the value is in the land, this may represent a great opportunity, or if conversely, a money pit from hell.
Garth, you seem to assume that the rent includes all utilities, even though he mentions it’s cheap to heat and so may well be paying that on top of basic rent. $250/month for taxes seems like a pretty high mill rate, but it would be smart to actually know for sure, I haven’t paid $125 for house insurance since I bundled it with my life and auto. The assumption that the opportunity loss for the downpayment should be valued at 7% for a whopping $584 a month ‘expense’ seems independent of any fees, reality check on whether his actual investment behaviour reflects these returns and tax treatment of the income gains versus tax-free gains from the house. And yes, in years 1-5 the equity accumulation is slow in a mortgage, but it adds another $46K by year 10 and keeps accelerating from there.
My comment about renting opportunities is simply a question for risk management – can the house be used as an income-producing and/or can he get relief from the cost in case of illness, job loss etc and not be forced to sell at a loss. Since holding RE over the long-term is the only historically-proven way to profit from it, he should really think through a plan b, c and d to see it through. And finally, I’ve owned my home for 21 years, and I’ve had roommates, tenants and a single-family configuration over that time as my needs permit. When you say ‘no one’ owns for 40 years anymore and therefore we have to base our calculations on a 5 year turnover, then yes, pretty much any real estate is excessively burdened with transaction costs, but that doesn’t say anything about its value as a long-term investment.

#92 Canadian Watchdog on 09.03.13 at 2:29 pm

Why Canada’s financial news is often a thinly disguised weather report

First it was a former BLS chief admitting how flawed today's unemployment numbers are, now comes a former chief analyst from StatsCan, Philip Cross, cautioning the same after an unusual move by StatsCan last month to delay its National Household Survey to September 11, by which that time will be another revised guesstimate based on a previous guesstimate.

So here's the real message: today's government produced statistics is nothing more then stacked BS propaganda ordered by the GG regime (the real commander and chief who appoints) to convince Canadians that i) they're richer then they think ii) they're not really paying the amount posted on their bills and invoices, that's just an imaginary number and iii) real GDP is positive and we're not in a recession, so keep borrowing and spending.

At this point folks, everything is being dictated, and if anyone wants to challenge the data, accounting or access to information, they will be dealt with swiftly. 

Can't lie about stats? You're gone. StatsCan head quits over census dispute

Don't like our accounting? You're gone. Stephen Harper to replace Kevin Page as parliamentary budget officer.

Want real estate information? You're gone too. Melanie Aitken to quit as Canada’s Competition Commissioner

Perhaps the best way to explain our government policy towards transparency and credible numbers is by paraphrasing Stalin: "It's not the numbers that matters, it's the people who count the numbers."

#93 AUTHORITIES on 09.03.13 at 2:32 pm

The other F word [videorecording] / a Rare Bird film asks what happens when punks become society’s ultimate authorities

Hmm, see: real estate in Canada

#94 willworkforpickles on 09.03.13 at 2:42 pm

MANIPULATION MANIPULATION MANIPULATION …if the US fed does taper , it will be done primarily to tank and even panic the markets for a resounding bounce off a bottom where the big boys buy in 35% correction . Then a taper reversal into a QE notching up to save the banks and the games and scams to benefit the rich triumph again.

That’s funny. — Garth

#95 Big Brother on 09.03.13 at 2:50 pm

#62 Donald Trump on 09.03.13 at 12:28 am
I am starting to decipher, thus depreciate, this Smoking Man creature.
I mean sure….we could hunt the the SOB down,(with can of beer/ Canadian Tire coupons)..butt IMHO….. this carbon- base identity should be in a Zoo/Moose-um.

MKULTRA knows everything about him, we control his mind. It is quite an interesting little experiment we have going on down in Long Branch.

#96 happity on 09.03.13 at 2:51 pm

The biggest loser in August were EM bonds, followed by Wheat and the S&P 500. The biggest gainer in August was Silver.

Forward Ho with the US economic renaissance.

Silver is the bellwether for a renaissance…

#97 World Traveller on 09.03.13 at 3:12 pm

#36 Smoking Man on 09.02.13 at 9:42 pm

I’m running out of shit to talk about.

Maybe you can shut the hell up now?

#98 Devore on 09.03.13 at 3:22 pm

#49 john dowin

absolutely agree. However it seems some see value in it

Of course it has SOME value, everything has SOME value in it, even complete junk. The valuation basis for gold is completely speculative. I’m not saying it has no value, nor am I saying it is a worthless investment. But people talking about gold “fundamentals” have no understanding of the term, and are using it incorrectly leading to misunderstandings.

What bothers me is why central banks keep buying it.

They’re also buying toxic assets and government bonds. Does that bother you too?

Central banks do what central bans do. You are not a central bank. Neither are you Warren Buffett. You should do what makes sense in your situation.

#99 905 and 416 August stats on 09.03.13 at 3:33 pm

End of month stats for 905 and 416:

GTACondos: http://bit.ly/18pg68A
905SFH: http://bit.ly/18pg9kQ
416SFH:http://bit.ly/18pg6pf

#100 Penny Henny on 09.03.13 at 3:34 pm

For anyone interested in a toronto real estate blog check this out.
http://www.torontorealtyblog.com/

Very well written, as is Garth’s.
best part though is his TRB pick 5, which is a video clip reviewing 5 different listings. very entertaining.

#101 Uwinsome on 09.03.13 at 3:39 pm

“Canadian housing, the most over valued in the world”:

http://watch.bnn.ca/#clip995609

#102 Devore on 09.03.13 at 3:42 pm

#83 happy renter

play the the stock market and you can easily loose very fast.

You certainly will if you “play” the stock market. If you wish to “play with your money, may I suggest the casino.

#103 Devore on 09.03.13 at 3:46 pm

#87 Kent

Thanks. We are in Ontario. We’ve been renting this place for five years and our lease has long run out.

And in the future, if staying put matters to you, consider always having a lease. It doesn’t need to “run out”.

#104 Uwinsome on 09.03.13 at 3:47 pm

Sorry, the article says Canada is the second most overvalued in the world.

It also says that OSFI may be may be weighing future mortgage tightening.

#105 Kent on 09.03.13 at 4:19 pm

#90 Ralph Cramdown – we’re hoping he’ll realize that holding off till next spring he’ll get better results from us. I might not have much to worry about anyway since he’s asking about $50k too much for the place (he wants $350k, the house is worth $300k, if that)

#106 calgaryPhantom on 09.03.13 at 4:33 pm

Another booming month for Calgary. With such a rate of increase, prices here will soon be equal to Vancouver and Toronto.

http://www.calgaryherald.com/business/real-estate/Calgary+housing+market+booms+August/8862396/story.html

And we all read the same headlines in the Vancouver Sun three years ago. — Garth

#107 johnnny on 09.03.13 at 4:37 pm

#31 Freedom First-
“I am constantly amazed by people who are smart enough to do make a living doing a myriad of professions,trades /technical/…but when it come to financial decisions they are idiots.
Well freedom first…would you like a financial adviser deciding if you need surgery,if the bridge you travel over is safe from collapsing,if you are at war,parachuting behind enemy lines to engage the enemy,and on and on?
Has it occurred to you that there are financial advisers because they provide a service to people who are not educated or gifted (like some of the smug egos on this blog.We ,yes we,engage financial advisers for…yes advice!What do you think the mechanic thinks about people who can’t change their oil…etc.
Myself,I know that I need to learn lots,about financial strategies and that I am considered a financial moron by some of the blog strutting peacocks.
“Oh look at me!!! I am smart and gifted and not like the riff raff on this blog!!!
The hell with them.I know what I know,and I try to learn,not just from Garth,but from the worthwhile comments.
I may be one of your idiots,but by God I try,and no one can ever take that away from me.

#108 Smoking Man on 09.03.13 at 5:14 pm

#98 World Traveller on 09.03.13 at 3:12 pm#36

Smoking Man on 09.02.13 at 9:42 pmI’m running out of shit to talk about.Maybe you can shut the hell up now?
…….

Not going to happen, your post just inspired a beauty, once loaded on neo citrine, and 3 wines over the line, I’ll be back.

I’m going to make you famous on here world traveler

#109 calgaryPhantom on 09.03.13 at 5:14 pm

I was just reading an article, in there, it mentioned that

” 1,200 Canadians turning 65 every day for the next 20 years”

Don’t know the source, but Garth you have been bringing this to our attention quite often. Do you think these numbers are anywhere near being true?

#110 Old Man on 09.03.13 at 5:25 pm

#26 Donald Trump – Guy you just don’t get it as 2+2 = 5, and if you don’t conform will have the Inner Party pick you up for a visit to Room 101 to confront your greatest fear, and you too will surrender to get with the agenda. The only hope for humanity in a sea of lies and insanity is with the Proles; now need to get back to work as my plate is filled as have gone on the side of the Proles.

#111 Donald Trump on 09.03.13 at 5:53 pm

#111 Old Man on 09.03.13 at 5:25 pm

Proles?
Do you bake them or broil them?

Paula Deen says Ketchup is the white -out for cooking errors

#112 Devore on 09.03.13 at 5:58 pm

Look at what Rachelle of Landlord Rescue dug up on the Victoria Colwood/Capital City Centre project run by League REIT.

Canvassers Wanted

#113 Canadian Watchdog on 09.03.13 at 6:01 pm

Ontario woman, 80, fractures hip after being struck with police Taser

Ontario’s police watchdog is investigating an incident in which they say an 80-year-old woman suffered a fractured hip after she was struck by police with a Taser.

The good news is she wasn't shot eight times to her death by the officer. The bad news is the police force still continues recuit braindead officers with below average IQ scores who can't tell the difference between a weapon and a knitting needle.

Welcome to the police state.

#114 Gregor Samsa on 09.03.13 at 6:17 pm

Rents all over Calgary are being increased this fall. I just got hit with a $100 increase, and know others who have also received increases. There is no rent control in AB.

This is helping to push up real estate, as more renters get fed up with their crummy apartments and seek to get into condos and houses.

Smart. Take on a $400,000 mortgage to avoid a hundred bucks a month. — Garth

#115 Nemesis on 09.03.13 at 6:22 pm

@CowTownPhantom/#107

“Another Booming Month…”

Well! Since everyone is currently pre-occupied with things that go, “Boom!” – could a little BonusZen from Nemesis’ ZettaByteCloudArchives hurt?…

But first, the ‘Rhetorical’:

Q: What do Albertans do when they decide to ‘downsize’ to the OkiNogan?

A: http://tinyurl.com/m2akxs6

[email protected] “Seeing is believing.”

#116 Evangeline on 09.03.13 at 6:28 pm

#110 The Phantom of Calgary “1,200 Canadians turning 65 every day for the next 20 years”

I noticed a new product at the store today, and I’m not joking: Hot Flash Cooling Towelettes. :)))))

#117 Sebee on 09.03.13 at 7:12 pm

I’m on my mobile, did I miss something on the math?

$102k is the cost of renting over same period if rent stays $1700, a complete loss unless you can make it back in investments. Apparently the return on the 100k would be $35k only, so renting is a $65k cost or loss, he’d have to loose that to match with buying scenario. No?

#118 TnT on 09.03.13 at 7:29 pm

#114 CDN Watchdog

The good news is she wasn’t shot eight times to her death by the officer. The bad news is the police force still continues recuit braindead officers with below average IQ scores who can’t tell the difference between a weapon and a knitting needle.

Welcome to the police state.
—————-

You seem to be pretty good at backing up your comments with research. Spend a few moments researching how deadly a knife can be, even in the hands of an 80 year old.

Also note only trained Sargents are equipped with tasers, not junior officers.

Cheers!

#119 Daisy Mae on 09.03.13 at 7:51 pm

“Numerous statisticians and former Statistics Canada employees have taken issue with Prime Minister Stephen Harper’s government for replacing the long-form census – a mandatory survey – with the voluntary National Household Survey in 2011, arguing that it leaves major gaps in information….”

******************

They missed our gated community entirely even though many of us brought this discrepancy to their attention. What a joke…

#120 Marginal on 09.03.13 at 7:51 pm

#114 Canadian Watchdog on 09.03.13 at 6:01 pm

I guess we shouldn’t be surprised that this news was slow to be released to the press.

It’s a very sad day indeed when 3 policemen cannot subdue an 80 year old woman who possibly has Altzheimers or some other form of mental illness.

It’s very likely that tasers will be rolled out to police forces across Ontario. Sheesh….what’s next; target practice in nursing homes?

#121 HAWK on 09.03.13 at 8:13 pm

#114 Canadian Watchdog on 09.03.13 at 6:01 pm

==================================

I believe the early Americans had a philosophy, unique in history that enabled 13 fledgling colonies to evolve into the greatest superpower ever, that ran something like this…………….

“If ye will trade liberty for security, ye will have neither liberty, nor security”.

In their day and age such “police officers” would have probably been dealt with very differently and very conclusively but we are now a lot closer to a Marxist worldview than theirs.

Sad……..I don’t believe an 80 year old woman exists that can’t be handled without tasering, presuming it even needed to come to that.

#122 Old Man on 09.03.13 at 8:17 pm

#120 Daisy May – I will tell you what happened to me with the last census as my residence is not my mailing address. I had some girl banging on my door and leaving me threating notes, and live in a security building, so wrote her a note back posted on my door giving her hell telling her all was done, and call me with ID on my phone or no deal. She was working for Caesar, as said will be there in 5 minutes, so met her in the lobby, and she scolded me for being late with my return, so said big deal, and laughed at her.

#123 Evangeline on 09.03.13 at 9:00 pm

#12 Old Man “I had some girl banging on my door and leaving me threating notes, and live in a security building…”

I opted not to fill in the “voluntary” part and had the same experience. Nasty, high pressure phone calls, hammering at my door, and calling me from my lobby. The more aggressive they got, the more I was determined not to cooperate. It was scary — the first time I’ve ever been scared by my government. I asked the woman who was threatening me, what are you gonna do, throw me in jail for not filling it out? “Voluntary” my eye.

#124 willworkforpickles on 09.03.13 at 9:18 pm

#95….I for 1 will laugh when it comes to pass.

#125 LulaVan on 09.04.13 at 1:11 am

Hi Garth:
Here are the facts:
1. Own a downtown van condo valued at $600-$650K. (no mortgage).
2. Parents died last year – now have $250K in the bank.
3. Have $500K in RRSP diversified portfolio.
4. I’m 59 and an independent consultant bringing in $150K more or less. No plan to retire yet.
5. I have no Corporate Pension Plan – never had that kind of job.

Want to get out of downtown and have a garden and compost heap. (Live large!)

Was thinking of selling the condo and buying some shitty little house just outside downtown mortgage free or close to it. After 2 weeks of reading your blog I see this is probably not a good idea. What I want to ask you is:

1. Should I sell my condo now, as is, and start renting somewhere? Maybe one of those little houses? Or should I stay put and just find a way to invest the cash?
2. If I sell where do I invest the $1M or so? RRSPs are maxed out. I’m worried about another stock market crash too. (Still not recovered from the last one.)