Almost worth it

COP modified

“I’m doing pretty well for my generation,” she says, which I guess speaks volumes. Like most 33-year-olds these days, Pat has one yard stick for wealth, social status and accomplishment. Real estate. In this case, her condo. Her only asset, and her biggest debt.

But to her credit, Pat’s confused. This blog has played a pivotal role, I’m happy to say, in messing with her head.

“My dad is a big fan of your blog and directed me to it. I have to say your outlook on the condo market is making me nervous! My dad reads your blog everyday he keeps suggesting that I look into selling my condo. I’m so confused, as it seems I would pay pretty much the same amount to rent a condo (around $1600-$1700/month) as it is to own my current condo (around $1800/month).

“I’ve been a condo owner in downtown Toronto since March 2010. I bought my 1 bedroom condo for $290K with 20% down ($25K of that came from my RRSP using the first time home buyers plan). I owe around $200K on my mortgage now, and I recently emailed my real estate agent who said my place is worth somewhere between $325K-$350K. Not bad for a 4 year investment.

“My condo is currently costing around $1800 per month ($1300/mth for my mortgage, $330/mth for maintenance fees, and $2000/yr for taxes). My maintenance has gone up around $30 per year since I moved in (my building is about 4.5 years old) and my taxes have gone up around $200 per year. My biggest concern is the increase in maintenance fees and taxes year over year, the fact that everywhere I look a new condo building is popping up, and of course the possibility of a housing bubble! I don’t want to move anytime soon (I’m 33 and single) but I also don’t want to risk losing the money I’ve invested.

“What advice would you give to someone in my situation? I’m sure you get loads of emails for advice so I appreciate you taking the time to look at mine.”

Well, Pat, your dad’s a smart guy. Let me tell you why you should listen to him.

First let’s put your “not-bad-for-a-4-year-investment” in context. You bought for $290,000, with $58,000 down which was partially withdrawn from an RRSP where it earned tax-free gains. With closing costs, that condo would actually cost a little closer to $300,000 – which the realtor says might now fetch $340,000. Let’s say he’s right (I doubt it). If you sell and pay 5% commission, you’re left with a profit of $23,000, or about $5,000 a year. That’s called a capital gain, so score one for Patricia.

On a cash-in/cash-out basis, after selling for $340,000 and paying commission, the mortgage remainder (assuming zero penalty), and returning the downpayment and closing costs to your bank account, you have $55,000 left.

Yay. Real estate rocks!

Now, look at the cash flow. The mortgage ($1,300) plus condo fees ($330), property tax ($166) and money the down payment could have earned if left alone (at 7% – $340 a month) means it costs you $2,140 a month to live there. That’s a $540 premium over renting the same place, and over four and a half years, it means you paid $29,000 more to be an owner than a renter.

So deduct that premium from the $55,000 left after selling, and your net is $26,000. That’s what you actually made for 4.5 years of ownership. Not great, but not bad.

But what if you’d left the downpayment and the closing costs invested and enjoyed the same return as, say, the TSX by just keeping it in an ETF that paced the market? (Remember markets have soared 17% some years and tumbled 11% in others.) In that case the $58,000 would now be worth just shy of $85,000 – for a profit of $27,000. If that money were back inside your RRSP, plus in a TFSA, all returns would be tax-free.

So, Pat, there ya go. Your condo made the same as if you had rented and invested in financial assets. So, is it a wash?

Hardly. This is probably a best-case scenario – in which you sell for top dollar, do it now before the market wilts and pay no penalty to break the mortgage. You are also getting rid of a relatively new unit before it ages and becomes less attractive to the next wave of hipsters who salivate for newness.

Selling also reduces risk – and you’re shouldering much. With 104,000 new condos in the pipeline in the GTA there’s a massive amount of supply hurtling towards a market were demand can be squished in a few months. That could happen in 2015 as mortgage rates start a long and relentless ascent or as the economy struggles, thanks to a crappy job market, sluggish wages and an inflationary 89-cent dollar.

So was the condo a bad investment? Not exactly. But in the midst of a bubbly real estate boom, it’s done no better for you than if you’d done nothing. Meanwhile you assumed market risk, rate risk and economic risk. Your monthly costs unexpectedly increased. Plus paying a hefty premium to own, not rent, came right off your liquid net worth. And you could have lived in exactly the same unit.

Worth it? Tell us once you find a buyer. I guarantee it’ll be another virgin.

150 comments ↓

#1 Stickler on 09.26.14 at 7:11 pm

…the ONLY reason houses are worth so much in the “hot” markets are because people think they will continue to increase in value.

Once that meme dissolves…Done.

#2 Stickler on 09.26.14 at 7:21 pm

A word of advice to condo investors. “New” condos have artificially low condo fees. They have not been adjusted for reality yet. They do not have a reserve fund included.

The problem is, if you own an older more established unit, you will have to compete with the newer units when you sell…and guess what!? On a monthly basis you’re going to look $200/ + per month more then the new unit.

You will simply not compete. The vapid buyers will not consider your unit unless your monthly comes in lower…

#3 Happy Renting on 09.26.14 at 7:31 pm

Ooh, suspenseful. Pat, will you pull the trigger and sell or cling to your condo because you “own”? If the unit value drops and you have to justify a huge loss in equity as just the premium for the fine feeling of being an owner, you’ll wish you’d been brave and taken the advice you asked Garth to give.

(Is Pat’s father a regular commenter? Thoughts on turning your family members onto the GF blog?)

#4 Setting the Record Straight on 09.26.14 at 7:33 pm

@Cato the Elder
“Democracies have been completely subverted. If politicians alter their behaviour out of fear of their private communications being released, we are no longer free. What you are witnessing is it’s final breathes.”

Not really. Like any other form of government, they expand and increase their power. Predictable evolution.
And please do not rehash –democracy is the worst form of government except for all the others— . That is not at all clear.

I am ignoring the conflating of the process of electing representatives with democracy. They are not the same thing.

#5 A Yank in BC on 09.26.14 at 7:34 pm

Possible typo..

“..it means you paid 29k more to be a renter than an owner.” ???

Now, you know what I mean… — Garth

#6 Dirty Debtor on 09.26.14 at 7:38 pm

An investment in a shoebox? Goes great with all the other popular millennial investments, such as:

Investing in a brand new shiny car

Investing in designer clothing (vintage LV holds value, right?!)

Investing in an exclusive private school education at the academy of make-up styling, fashion design, modelling, acting etc.

Investing in a flashy new engagement ring from Spence diamonds

Ask anyone of my generation, we really know how to invest!!!

#7 Nemesis on 09.26.14 at 7:38 pm

#TooMuchCar?… #OrJustAnotherDayOnTheJobInTampa?…

http://youtu.be/uBX2b-zback

#8 Freedom First on 09.26.14 at 7:38 pm

Well Pat, your Dad agrees with Garth. And so do I. All of your $$$$ in one asset is financial insanity. No exception.

Pat, it would do you well to read all of Garth’s Blog from the beginning to the present. That would be time well spent as it would pay you huge dividends throughout your life, saving you from a highly likely financial suicide from one of the many likely scenarios you can’t even fathom, but for sure are worse than any horror movie you have ever seen, because it will have you playing the lead role as the victim.

#9 Andrew on 09.26.14 at 7:41 pm

What am I missing here?

If the condo minus closing costs would be $323k under this example, and she had $200k to pay back the mortgage, that would leave her with $123k. Less her initial investment, she has a profit of $75 over these 5 years, not $23k as reported. This represents the appreciation on the total house price, not only the initial investment.

What am I missing in my assumptions? Genuinely confused here, and would appreciate some enlightenment.

$123,000 less $58,000 is $65,000, less closing costs equals $55,000, which does not factor in the higher occupancy cost of an owner, as described. — Garth

#10 Setting the Record Straight on 09.26.14 at 7:42 pm

@132
#132 Reginald D’autreille on 09.26.14 at 3:41 pm

“You Canadians are a very funny bunch – much funnier than we ever were 7 or 8 years ago as it pertains to paying ludicrous prices for real estate.”

Americans are a funny bunch to. They elect a community organizer as their President. Someone who managed to transfer to Columbia without ostensible qualifications. Someone you are not even sure was born in the USA.

Of course on the other hand, Canadians seem to think being a low information, part time drama teacher is good preparation for leading the country. Many on this blog are persuaded.

As I said above, do not rehash the old saw about democracy being the worse except for all the others.

#11 Realties.ca » Almost worth it on 09.26.14 at 7:45 pm

[…] Source: http://www.greaterfool.ca/2014/09/26/almost-worth-it/ […]

#12 Waterloo Resident on 09.26.14 at 7:47 pm

I’m wondering if interest rates will EVER go up more than 2 or 3% from the rates that they are at now. Probably not for the next 10,000 years.

#13 James on 09.26.14 at 8:07 pm

“My condo is currently costing around $1800 per month ($1300/mth for my mortgage, $330/mth for maintenance fees, and $2000/yr for taxes).”

Is this typical for property taxes in Toronto? That seems steep. My detached home with large lot is barely more than that, and I’m in a high property tax jurisdiction in the USA.

#14 Blacksheep on 09.26.14 at 8:07 pm

Holy crap where’s the Tylenol # 109,

“As far as jihadist assholes coming to blow up subways let em come. For every 1 of us they kill we will take out 100 of theirs. By the way don’t fool yourselves as smug Canadians by saying they will only hit America as they hate them.”

“They hate all of us and I have it on good word from someone in an agency here that we are targeted and we are on the hit list!”
——————————————-
Yes…inside information, everyone loves a good laugh : )

But seriously, don’t go fear mongering this shite to the ignorant Cattle or we are going to have tactical units, sporting M-16’s, at every bus stop.

I think it’s time people (and by people, I mean Cattle) take a step back and asses what the hell, is really happening here.

My formerly clear thinking, (now old and scared) father in law, is very concerned (willing to give up rights, just keep him safe) about the unstoppable ISIS wave of death, about to roll over the planet. This bullshit, on 24-7, in every source of media, is for the weak minded (sorry Dad).

I think a change of perspective may be in order for anyone panicking about our immanent demise from dudes in black PJ’s.

Some suggested, light, weekend YouTube viewing:

1) 1984 http: //www.youtube.com/watch?v=Z4rBDUJTnNU
2) V for Vendetta: http://www.youtube.com/watch?v=lSA7mAHolAw
3) The Matrix: http://www.youtube.com/watch?v=m8e-FF8MsqU
4) They live: http://www.youtube.com/watch?v=iJC4R1uXDaE

Apply a little critical thinking and see the bullshit for what it is. Fear is not a real thing, it only thrives in your mind, as only you can give it power.

#15 James on 09.26.14 at 8:07 pm

#12

If there is a null hypothesis here, it is reversion to the mean.

#16 Shawn on 09.26.14 at 8:08 pm

A proof is a proof and it’s a good proof because it’s proven.

Wstcdn late yesterday said:

George Soros has proved that betting on exchange (futures) rates is the best way to make money fast.

*****************************************
Yeah proved it in the same way that the latest big lottery winners has proven THAT is the best way to make money fast.

Betting on exchange rates is a zero sum game. Negative after the house takes its cut.

Is investing in stocks or even houses a zero sum game in the same way? (hint, no!)

#17 Piccaso on 09.26.14 at 8:11 pm

So, Pat, there ya go. Your condo made the same as if you had rented and invested in financial assets. So, is it a wash?

ppppppppppppppppppppppppppppppppppppppppppppp

Well she got to live there, can’t live in a ETF

Rent costs for the same unit were clearly factored in. Clean your glasses. — Garth

#18 Blacksheep on 09.26.14 at 8:13 pm

Don’t know why the 1984 movie link is broken.
Here it is again, It works if you copy and past to google.

http://www.youtube.com/watch?v=Z4rBDUJTnNU

#19 souvereigninternational on 09.26.14 at 8:14 pm

Re.: recent talk here in the comments section about Real Estate in Canada loosing 10% +, by the virtue of a drop in the loonie (to US dollar). First ,Shawn, it is really shallow to state that we should ignore that as we operate (get paid etc.) mainly in C$. Second, value of everything fluctuates and while there is no perfect measurement of value of something we can use the relation to other assets or even better a basket of assets to establish any real estimate of gains or loses.

#20 raisemyrent on 09.26.14 at 8:14 pm

Ha ha I love this.
I love how she calls it “her” condo.
How she doesn’t talk about mortgage rates and renewal.
How she calls it an investment.

She’s been carrying $1,800/m (that, in Vancouver, gets you granite and water views), but, excluding her 20% down (some of it came from an RRSSP!!! so she still owes it back too), she has only paid down about $32,000 in about 54 months! That means that only about $600 a month are being “invested”, and the rest ($1,200, which pays full rent elsewhere) has gone to taxes, condo fees, etc, and the bank. But hey, renting is throwing money away!

#21 Mark on 09.26.14 at 8:18 pm

Shawn, “Completely wrong. A government DB or any really strong DB pension provides the retiree with fixed income.

The pension plan sponsor and anyone contributing to it may be affected by the market performance. The retiree is not impacted at all. No exposure to equities,

Tell that to the millions of pensioners on both sides of the border who are finding out that their underfunded pension plans’ estimated “fixed” income returns are going to be fictional. And that the original plan sponsor is not on the hook for the shortfall.

Air Canada pensioners found out. Nortel pensioners. Plan asset allocation isn’t really a black box over the long term. The issue is, if everyone went self-directed, its likely that they would invest everything in fixed income. Doesn’t Garth tell us every week that TFSA’s are 80% in the sort of low-interest fixed income products flogged by [email protected]?

#22 Michael on 09.26.14 at 8:19 pm

Compared to Vancouver, that place looks like a bargain! Here is a Vancouver condo that rents for a $1,750. They are asking $500k!!! This is not an exception, it’s typical.

https://www.ecorealtyinc.ca/bc-real-estate-listings/vancouver/mls-V1070174/402-1680-West-4th-Ave-Vancouver-V6J1L9?id=261053096

#23 Piccaso on 09.26.14 at 8:24 pm

Rent costs for the same unit were clearly factored in. Clean your glasses. — Garth

pppppppppppppppppppppppppppppppppppppppppppp

Your right, my mind started to drift as I read.

#24 Mark on 09.26.14 at 8:24 pm

“I’m wondering if interest rates will EVER go up more than 2 or 3% from the rates that they are at now. Probably not for the next 10,000 years.”

A few more years of relatively low rates, albeit rising rates on increasingly out of favour collateral such as housing. But as corporate borrowing ramps up, and the boomer retirement waves intensify, rates should climb fairly steadily particularly at the long end. Take a look at the chart of 1960-1980 for long-term interest rates and see the sort of increases that are possible!

#25 JSS on 09.26.14 at 8:34 pm

What’s not factored into the analysis, is the potential for a “special assessment” on a condo unit, i.e. roof leaks, structural issues, major building envelope problems etc. which may involve a $10,000 or so payment from each condo owner in the building.

These issues are cropping up more and more with condo units built in the last ten years, with shoddy material and workmanship, typical in a boom period.

#26 Bottoms_Up on 09.26.14 at 8:37 pm

Pat, Garth’s right, you’ve done OK, but have assumed lots of risk (and haven’t had to pay for that risk yet). Going forward? The risk increases.

I bet you could find someone to buy your unit and rent it back to you. You get to cash out your money, and lose all the risk (i.e., special assessments start hitting condo owners at 8-10yrs for new windows etc.?). Well, you will retain some risk as a renter, such as being booted out if the owner wants to occupy it.

But, you also have to consider your long-term plans. Is this your lifelong home? If you think you will stay forever, you might just want to keep paying down that mortgage. You’ll pay more over the medium-term than renting, but eventually you’ll own it.

#27 Canaan on 09.26.14 at 8:46 pm

Crunch the numbers…crunch the numbers….always. Renting these days, and generally for the last few years, has been a better deal then buying. Why can’t people figure this out? It’s really simple. Get a budget, get real, get a life.

#28 Rabi Dmangycur on 09.26.14 at 9:07 pm

I think that real estate has been a speculation since this blog started in March 2008. Some people are nimble and informed and can make money from this. Most people are not and can’t.

I think Garth is truly trying to serve and protect normal everyday hardworking people from losing their ass. Some are just like this.

I have read every post now since its inception and feel qualified to make comments.

Yes, some people could have made money during this bubble, but I have found most people do not know when to sell – end up holding on and take huge losses.

I think this blog’s purpose is to educate people (like me) and make people think for themselves.

Pat has an opportunity few of us have. To sell at or near the top of a bubble. Pat- list your condo and be thankful for the dogs.

#29 brokerbyday on 09.26.14 at 9:07 pm

#12 – Waterloo Resident

Based on today’s rate of 2.99%; a 1% or 2% rise is equal to a 33% to 66% increase. What’s going to happen to the home owner when a $1,500 mortgage payment costs them almost $2,000 at renewal? Add in the real possibility that house prices may be worth less at the time and wages will in no way go up by the same amount.

#30 Vangrrl on 09.26.14 at 9:11 pm

#22:
For the first time in years I’ve seen pet friendly rental housing in ‘nice’ areas (ie Cambie and 13th) listed for as low as $1400 for 2 bedrooms, lots of light, above ground, etc. The rental market is def not as tight so it was years who. Renters should start playing hardball.

#31 Mark on 09.26.14 at 9:11 pm

” What’s going to happen to the home owner when a $1,500 mortgage payment costs them almost $2,000 at renewal?”

Might even be worse than that. As equity recedes and rates go up, not only is the interest burden greater, but lenders become more reluctant to lend. HELOCs get restricted and amortized. People “between jobs” are told they get no mortgage payment “holiday”. Not happening yet, but what the credit cycle giveth, it eventually taketh.

#32 Vangrrl on 09.26.14 at 9:11 pm

‘As it was years ago’… *sigh* :)

#33 NostyVlad the Snugglebombed on 09.26.14 at 9:20 pm

#14 Blacksheep on 09.26.14 at 8:07 pm — “Apply a little critical thinking and see the bullshit for what it is. Fear is not a real thing, it only thrives in your mind, as only you can give it power.”

Spot on. For a major dose of fear, watch the last 75 mins. of the second and more accurate film, The Exorcist: The Version You’ve Never Seen.

Other than the obvious two changes, one of which was necessary, the other wasn’t, that hour and a quarter is identical to what happened. But fear exists only in one’s mind.

It appears that CC is much more deeply rooted than previously thought — Wowzers! And we thought the limeys were barmyballs!

#93 Helen on 09.25.14 at 11:45 pm — “Lumping John McCain & Joe Biden into the same camp shows incredible ignorance.”

Although I rarely use Google, it does come in handy once in a blue moon, so — Joe Biden and John McCain. Satisfied? Blacksheep is right.

For Kenchie 2:12 clip revealing the seven countries in five years. A further reason the US military is still there, and ain’t leaving anytime soon is the trillion-dollar plus of Af’stan’s minerals underneath their land.

#34 Randy on 09.26.14 at 9:22 pm

About four out of every three people seem to have trouble with math. Keep teaching that Liberalism and Self-Esteem.

#35 Godth on 09.26.14 at 9:25 pm

#14 Blacksheep

Follow the Money; Follow the Oil
How the West Created the Islamic State
http://www.counterpunch.org/2014/09/12/how-the-west-created-the-islamic-state/

#36 Blacksheep on 09.26.14 at 9:44 pm

Godth # 35,

Thanks for the link.

#37 Kenny on 09.26.14 at 9:53 pm

Today’s blog would be much more useful with pics of the 33 yof!

#38 Bruno on 09.26.14 at 9:59 pm

Busted! Garth old boy, come out of the closet and admit it. Your a Redditor.

#39 CREIT on 09.26.14 at 10:04 pm

@#10 Setting the record straight..

What university did you attend?

#40 EmpCod on 09.26.14 at 10:04 pm

You’ve already subtracted the opportunity cost of the down payment from the condo cap gain figure of $26,000.

You can’t account for it again in the investing scenario and then pretend it’s an apples-to-apples comparison.

#41 Smoking Man on 09.26.14 at 10:06 pm

You ever get the feeling you’re trapped in ground hog day..

Friday night, working on a buzz at the world famous, the meca where losers congregate, the orbs of no self control.

The waitrisses in short skirts, another inch up. Pay day for the optic nerves…

Yet, you’re feeling pressure to finish something, a shit book. Promising your 27 fans some thing damn it.

I should of went to university, I would be on novel 10 would have the training to finish, meeting a dead line..

But I’m the smoking man, my watch never worked..

When it’s done, it’s done…

This JD, honey brand, is going down like a… Shit forgot the end..

#42 JSS on 09.26.14 at 10:07 pm

In other news, for all you Canadian dividend junkies…

Emera Approves a 6.9% Increase in Common Dividend and Establishes Dividend Growth Target.

http://www.businesswire.com/news/edmontonjournal/20140926005501/en/Emera-Approves-6.9-Increase-Common-Dividend-Establishes

#43 Mister Obvious on 09.26.14 at 10:08 pm

“Crunch the numbers…crunch the numbers…”

Your average citizen detests numbers. Even more, they detest getting so personal with them as to afford any possibility of crunching.

Perhaps most people, when properly motivated, can follow a logical number-based argument if someone else does the bull work as Garth did tonight.

As for voluntarily getting out the notepad and calculator and doing a good, solid analysis accounting for all the factors… not so much.

Rent versus buy discussions will always remain fraught with emotional baggage. Remember back when you were twenty-five that prick landlord who harassed you daily and eventually cheated you out of your damage deposit? Don’t we all.

As long as one continues rendering unto the bank that which is the bank’s, fiction can be maintained about being the master of one’s domain.

That’s the real basis of it.

#44 Retired Boomer - WI on 09.26.14 at 10:11 pm

Pat, the jury has voted.

We find selling now near the top of the market the best thing you can do to protect your financial interests going forward. Here is hoping that a willing, and able buyer can be found.

Renting for the present time seems the wisest option, allowing freedom of movement. You are single, your employment could change.

Who knows where a few years will bring us.

Personally, I have never found that owning a condo had much appeal. Too much I had NO control over like increasing strata fees, and special assessments. I
see the appeal though in my later years, but why buy when renting is an option? Good luck, and let us know what you decide, and how it turns out.

#45 Shawn on 09.26.14 at 10:14 pm

Math Challenged?

Randy said:

About four out of every three people seem to have trouble with math. Keep teaching that Liberalism and Self-Esteem.

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

True enough. Buffett has noted that there are three kinds of people. There are those who can count and those who can’t.

#46 Andrew on 09.26.14 at 10:15 pm

Carried on from #9…

“$123,000 less $58,000 is $65,000, less closing costs equals $55,000, which does not factor in the higher occupancy cost of an owner, as described. — Garth”

Mea culpa on the small math error ($65k as you say, not $75k), but doesn’t the $323K already include the loss on the closing costs (as it was sold at $340k); unless you’re counting closing costs at both ends (buying and selling)?

As for the extra costs of being an owner, those are omnipresent, as you suggest – however, my main question was about the actual gain in the investment. The new value of $55k cleared changes things from $5k/year to $10-12k/year, which may help offset some of those costs (or at least tip the scales slightly…). At that point it’s still up to us to factor in the extra costs of ownership as you mention.

Thanks for the response!

#47 Smoking Man on 09.26.14 at 10:28 pm

Wouldn’t it be cool to be able to fly..

Your at the bar, two fishing Jd… All of a sudden you levitate 10 feet above your table. Bar patrons goes wild, you do an airborne dance of sorts. Cheers and clapping , woman flashing there lures , men firmly pressing the trigger on there lighters.

You’re a hero, famous.. Never to be able to walk through the front door of a rub and tug again…

Shit what a nightmare…..

#48 Eco Capitalist on 09.26.14 at 10:31 pm

@13 James, yes, those taxes are typical and no, they are not steep. Toronto has a lower property tax rate than the surrounding 905 region. When the 905 hears Toronto complain about their taxes, we usually tell them to be quiet (though not nearly so politely).

#49 Singaporean Investor on 09.26.14 at 10:43 pm

Pat is doing much better than other people her age. Her condo investment will make her wealthy, our population continue to increase. We continue to have a healthy population growth through immigration. Everybody who doesn’t buy now will be priced out. Investing in a condo is a much better thing to do for millenials rather than blowing the money away for shiny new things like the iPhone 6+ 128GB for $1,079+tax. Or buy a BMW. It’s much better to buy a condo near a skytrain station and buy a tax deductible monthly bus passes.

That was weird. — Garth

#50 Smoking Man on 09.26.14 at 10:58 pm

DELETED

#51 Smoking Man on 09.26.14 at 11:10 pm

DELETED

#52 Smoking Man on 09.26.14 at 11:18 pm

I saw a flower.. Deleted?

#53 visorman30 on 09.26.14 at 11:22 pm

#49 sure is a better investment then “blowing the money away”…

So is you’re argument for why a condo investment that it’s better than wasting it?

Ultimately, you gotta live with the risks you take in life. Whether to buy or sell is not really for anyone else to say exactly for you. I think people can only really present facts and context to inform you about the various risks of each action or inaction.

You’re an adult, and if you’ve honestly done the homework and concluded one way or another there really is no judgment of that. The best thing you can do is to give yourself the time and effort to really examine the risks of your options. Good luck Pat.

#54 a prairie dog on 09.26.14 at 11:29 pm

#27 Canaan on 09.26.14 at 8:46 pm

Crunch the numbers…crunch the numbers….always. Renting these days, and generally for the last few years, has been a better deal then buying. Why can’t people figure this out?

– – –

Because this ‘special’ generation has the attention span of a text message, or a 14 year old girl. (whichever is less)

And what they don’t know, they browse on eTard.com

#55 Nomad on 09.26.14 at 11:35 pm

I’ll admit that there is 1 advantage to buying a condo:
You can’t get kicked out.

This has happenned to a few of my work colleague. It cost them moving fees and more important, frustration.

Ideally Toronto would have high-quality appartments.

Some say go look at Davidsville, but bed bugs are an issue in many of the towers there. There are also all-rentals towers around Yonge and Eglinton, but you don’t want to live there. Sad people live there.

I’ll buy real-estate eventually, but like my stocks, I’ll get my asset at a good price.

If condo prices don’t bulge in about a year, we’ll move. We’re not particularly attached to the Toronto pollution, crowded TTC, and noise.

#56 Waterloo Resident on 09.26.14 at 11:51 pm

With Japan it was ‘step 1’, followed by ‘step 2’.
With America it was ‘step 1’ followed by ‘step 2’.

but with Canada it seems to be ‘step 2’ followed by ‘step 1’

Step 1 = the country’s real estate market crashes.

Step 2 = new young grads cannot find jobs, so they give up and become basement dwellers in parent’s houses.

So as you can see, CANADA HAS GOT THE STEPS GOING BACKWARDS.

#57 WhiteKat on 09.27.14 at 12:20 am

Keep on living the Canadian dream. I used to think I was Canadian. Now I discover I am …cough…a ‘US person’, which trumps my Canadian citizenship from birth, and makes most of Garth’s investment advice toxic (not his fault).

Seriously, it could/will happen to you or a friend or loved one. Please help 10% of Canadians DIRECTLY affected, and 100% indirectly affected. http://www.adcs-adsc.ca/

#58 Tedfiftyfour on 09.27.14 at 12:22 am

The comparison is bad because she did not have access to her RRSP to have the alternate opportunity as Garth proposes to have invested in ETF’s She only had the opportunity for Real Rstate because she could access the RRSP, the rest is fictional, she has done well but aught to sell regardless

#59 Joe on 09.27.14 at 1:02 am

Bed x Smoking man.

#60 Renter's Revenge! on 09.27.14 at 1:14 am

RE: Singaporean Investor

“That was weird. — Garth”
Weird is fun sometimes. Maybe he/she was being sarcastic.

“Pat is doing much better than other people her age.”
That would be true of anyone, unless they were lying dead in a ditch somewhere.

“Her condo investment will make her wealthy… Everybody who doesn’t buy now will be priced out.”
This is impossible by definition, as she would need someone to sell her investment to in order to realize a profit. Unless you’re just providing an example of the cognitive bias known as “anchoring”, in which case, well done.

“…rather than blowing the money away for shiny new things like the iPhone 6+ 128GB … Or buy a BMW.”
See, Garth, not every millennial is horny for granite and stainless. Some of us actually appreciate the finer things in life!

“$1,079+tax”
I think you got ripped off there, buddy.

“It’s much better to buy a condo near a skytrain station and buy a tax deductible monthly bus passes.”
No, it’s not. It’s really not.

Oh, and S.I., if on the off chance you were being serious, then I extend my deepest condolences for your cognitive dissonance. It must be truly deafening.

#61 Son of Ponzi on 09.27.14 at 1:33 am

I am told you dissed me on the Vancouver Condo blog. Why? — Garth
———–
Dissing? Here’s the post:

Son of Ponzi Says: 
September 25th, 2014 at 2:20 pm 20
Where’s the ‘Over-Inflated Homes Full of Overreached Lenders Subsidized by Cheap Money’ website?
—————-
Why don’t you start one?
You could be the next Garth Turner.

Like or Dislike:  5  3
—————-
I meant  it as a compliment. Like saying to a budding actor: “You could be the next Marlon Brando”.
I even got 5 up votes.

#62 cynically on 09.27.14 at 3:36 am

To #10 Setting the Record Straight:
It looks like the Tea Party has seeped down into Canada
maybe from Alaska, when one reads your comments about Obama. Well sir, he is much smarter than you are even if he went to Columbia and not Harvard. As for his birthplace, Hawaii is the 50th state but you wouldn’t know that. There are 50 of them so now you know. Smarten up or cut the sarcasm and in your case it will probably have to be the latter. Now that is sarcasm!

#63 condopoor on 09.27.14 at 4:08 am

Here’s a good piece.

http://www.thestar.com/life/homes/2014/09/26/green_light_for_taller_wood_construction_a_game_changer.html

#64 condopoor on 09.27.14 at 4:10 am

Also a Coles Notes version of Mr. Turner’s research and lessons as posted to this blog:

http://www.moneysense.ca/must-read/balance-sheets-canadian-vs-u-s-households

#65 CdnFlier on 09.27.14 at 6:32 am

Garth, please stop giving Smoking Man a venue to spout his worthless, off-topic diatribe. I tire of his self-importance and make-believe life.

#66 earthboundmisfit on 09.27.14 at 8:08 am

There is a rather big assumption in the equation. $325K to $350K BASED ON WHAT HER REALTOR TOLD HER!!! Good luck with that. 104,000 new units in the pipeline. She’ll be lucky to get what she paid. Skews the numbers a tad, doesn’t it?

#67 Catalyst on 09.27.14 at 8:12 am

You’re doing just fine. The real truth is, it is expensive to live in this city, renting or owning. If I were in your position (even being a real estate bear) I would not sell at this time. You are breaking through your heavy interest repayment period and will start building equity at a faster clip. If we could rewind the clock 5 years I would advise you differently but now would be the worst time to sell imho.

#68 g on 09.27.14 at 8:40 am

#65 CdnFlier on 09.27.14 at 6:32 am

Garth, please stop giving Smoking Man a venue to spout his worthless, off-topic diatribe. I tire of his self-importance and make-believe life.

Ditto with Mark!!

#69 crowdedelevatorfartz on 09.27.14 at 8:47 am

@ Blacksheep, Godth, Nosty.

Ummmmm what does ISIS constantly in the media(video’d decapitations tend to do that) and conspiracy theories have to do with a 33 year old girl trying to make up her mind about selling her condo????

Condo….sell or hold…..is the subject at hand.

#70 Nomad on 09.27.14 at 9:27 am

I pay for a 5iResearch subscription, one of the very few sources where there isn’t a motive to “sell stocks” all day (unlike MarketWatch and all.).

The members on there are, you could say, cool-headed and educated investors.

For the first time I’m seing questions such as “What do you think about me selling my GTA house and renting for 2-3 years”. The answer is as usual calm and cool, and underlines the fact that he will have to pay selling fees.

Sentiment might have shifted in the serious investor crowd already.

#71 What about CMHC? on 09.27.14 at 9:31 am

Completely off-topic: who do MPs work for? PMO or people?

#72 gut check on 09.27.14 at 9:46 am

I was chiming in to advise virtually the same thing as Catalyst, #67.

Pat, if you are happy, into a routine which depends on where you live, the commute, the neighbours, habits, etc and you aren’t in need of a bigger space then I think it’s obvious you should stay put.

Investing in the ‘market’ at this time is just going to be a gigantic headache and it’s as risky as home ownership. The one real risk I see for you is a special assessment, which could cost you. However in a rental scenario you have costly risks, too – ie having to move again.

People fail to properly estimate the cost of routine and predictability, comfort and habit into these equations. You are happy (I’m assuming) and you have stable employment (as stable as anyone can be, I’m assuming). No need to sell and invest (ie put your cash in a casino) Blah blah balanced & rebalanced. Do you have any idea how many people I personally know that lost between half and all of their life’s savings in the past crashes? I’m not being a fear monger – it’s just a fact. Like someone else said: you can’t live in an ETF.

disclosure: I rent. I rent because we wanted out of where we lived and didn’t find anything to buy. So much overpriced crap on the market at the time. Had we been happy where we were we would have stayed, too. It’s nice to have realized our gains and everything, but for us it is about lifestyle – now and into the future.

finally (sorry this is long) you have lots and lots of earning years left. Make sure you are setting aside savings. Concentrate on MAKING more money, not investing or counting on equity growth.

cheers.

She can stay in exactly the same place as a renter, reduce risk and build liquidity. For a young woman, that is a superior goal than paying down the mortgage on an aging condo and giving up mobility with its attendant career opportunities. — Garth

#73 Leo Tolstoy on 09.27.14 at 10:38 am

Pat, unless your dad made his millions in meal estate, don’t listen to your dad (or this blog) about real estate. In your direct experience you’ve been right for over 4 years now and are richer than your renting counterparts.

Real estate bear are only upset because of jealousy and envy. Just keep doing what you’re doing. And you’re doing great!

Canadian real estate prices (of which sources are never cited by posters here) have been rising across the board since you were a teenager.

Cheers.

Actually I demonstrated she is no richer than a renter, and to achieve the same point has shouldered far greater risk. Prove otherwise. — Garth

#74 Godth on 09.27.14 at 10:53 am

Ready Or Not…
The unsustainable status quo is ending

http://www.peakprosperity.com/blog/87650/ready-not

#75 Ray Skunk on 09.27.14 at 11:04 am

#66 earthboundmisfit

There is a rather big assumption in the equation. $325K to $350K BASED ON WHAT HER REALTOR TOLD HER!!! Good luck with that.
—————————————————

Absolutely. I know of two people who have recently sold their condo. Both took a haircut five figures below asking.

Unless the condo building is boutique (thinking a hard loft with <20 units total) or the unit has something really unique/desirable about it, there is no way it's going for asking.

Too much inventory, too much supply, too much identikit competition. In some buildings there are 5+ of roughly the same layout/size to choose from with the only differences being the floor and the colour of tile on the backsplash. As soon as one seller needs to get out and sets a new price floor, that’s that.

#76 John W Foster on 09.27.14 at 11:47 am

While we’re at it, my personal favourite…

There are only 10 kinds of people in this world – those that can read binary, and those that cannot.

#77 rosie "moving forward" in the knowledge that, "this won't end well" on 09.27.14 at 11:48 am

#71 What about cmhc

MP’s work for the PMO. We all work for these guys. Show is replayed at 6:00 pm on NPR.

http://www.bloombergview.com/articles/2014-09-26/the-secret-goldman-sachs-tapes

#78 bguy1 on 09.27.14 at 12:00 pm

Just so you know, total return >39%

http://www.kijiji.ca/v-condo-for-sale/kitchener-waterloo/best-luxury-condos-on-king-st-of-uptown-in-waterloo-open-for-sal/1015341967?enableSearchNavigationFlag=true

#79 FormerSaskie on 09.27.14 at 12:24 pm

Re: Pat’s profit

I just did the numbers for the condo I owned for 10 years and discovered that I would have been better off renting and investing the difference btwn higher owning cost (mortgage, condo fee, taxes) and lower rent cost. Buying low and selling high was what I was able to do and I still didn’t come out ahead.

My long winded point is, Pat can make a bit of profit if she sells her condo NOW. If she waits that profit will be reduced each month by the higher cost of owning. There is also the risk of the resale price stagnating or falling plus inflation will nibble away at the profit over time. Owning real estate is surprisingly costly when compared to renting and Pat needs to decide if that is where she wants her $ to go.

#80 Mark on 09.27.14 at 12:39 pm

“Ditto with Mark!!”

I don’t get it. Is it because I bold the quotations in my responses? Is it because of the materiel I bring to the responses? Is it because my explanations are clear and concise? Seriously, why would you want to suppress such a valuable source of information and analysis?

If you disagree with me, Garth has made an extraordinarily minimally moderated forum available to do so respectfully.

#81 Derek R on 09.27.14 at 12:57 pm

#72 gut check on 09.27.14 at 9:46 am wrote:
you have lots and lots of earning years left. Make sure you are setting aside savings. Concentrate on MAKING more money, not investing or counting on equity growth.

Making more money is all very nice and that but the financial independence guys (Mr Money Mustache and the like) have proved that the best way to become financially secure is to spend less, not to make more.

Look at it like that and Garth’s advice to sell up and rent makes even more sense because it cuts both Pat’s day-to-day spending on shelter and her risk of unexpected spending on special assessments.

#82 Mike T. on 09.27.14 at 1:05 pm

‘Ummmmm what does ISIS constantly in the media(video’d decapitations tend to do that) and conspiracy theories have to do with a 33 year old girl trying to make up her mind about selling her condo????’

you didn’t ask me but…
what if there is a ‘terrorist’ attack (planned op) to blow something up in Calgary for instance, where the CBC has reminded you constantly about radicalized youth in Canada?
Where it has already been written in stone that an economic shock would be disastrous for Canada?

you’d probly want to have sold you condo before the credit markets freeze and we all get a case of heeby jeebies

I don’t expect this to happen but it’s fun to speculate

#83 Proud Canadian on 09.27.14 at 1:20 pm

The economy of Canada is the strongest in the world because Canadian society respects the rights of marginalized groups such as minorities, women, transgender and gays and lesbians.

Canada will remain a world superpower because we never will oppress women or stone gays unlike in barbaric countries which live under military unrest.

Canada is a great country, and anyone who suggests that Canada’s economy has a flaw should book a one way ticket to another country and live under poverty, oppression and filth.

Luckily we don’t stone trolls, either. — Garth

#84 Casual Observer on 09.27.14 at 2:38 pm

I don’t get it. Is it because I bold the quotations in my responses? Is it because of the materiel I bring to the responses? Is it because my explanations are clear and concise? Seriously, why would you want to suppress such a valuable source of information and analysis?

Hubris – from Wikipedia…
“…hubris denotes overconfident pride and arrogance. Hubris is often associated with a lack of humility, though not always with the lack of knowledge.”

With all due respect…
your posts are knowledgeable, but they lack any sense of humility. You never once concede that you could ever be wrong about anything.

I don’t always agree with you, but I respect the fact that you are willing to back up your opinions with mostly sound arguments.

I make an effort to do the same with my opinions, but I try not to lose sight of the fact that I could be wrong.

Having said all that, your posts are a net positive to this blog, and it would be a shame for you to stop posting.

But that’s just my opinion. As I said, I could be wrong.

#85 hosed on 09.27.14 at 3:01 pm

I am no accountant, so I may have messed up here:

“Now, look at the cash flow. The mortgage ($1,300) plus condo fees ($330), property tax ($166) and money the down payment could have earned if left alone (at 7% – $340 a month) means it costs you $2,140 a month to live there. That’s a $540 premium over renting the same place, and over four and a half years, it means you paid $29,000 more to be an owner than a renter.

So deduct that premium from the $55,000 left after selling, and your net is $26,000. That’s what you actually made for 4.5 years of ownership. Not great, but not bad.”

I like how you factored in the opportunity cost of spending the down payment but…

“But what if you’d left the downpayment and the closing costs invested and enjpyed the same return as, say, the TSX by just keeping it in an ETF that paced the market? (Remember markets have soared 17% some years and tumbled 11% in others.) In that case the $58,000 would now be worth just shy of $85,000 – for a profit of $27,000. If that money were back inside your RRSP, plus in a TFSA, all returns would be tax-free.”

You don’t include any opportunity costs in your renting calculation. So the $26,000 “owners” calculation isn’t directly comparable to the $27,000 “renters” calculation. If you want to compare the investment earnings directly, you don’t get to count earnings on the down-payment twice. The numbers should be $44,360 to $27,000 – though the $27,000 would have been without massive leverage (and risk).

#86 cynically on 09.27.14 at 3:01 pm

To Proud Canadian:
You sound like a 10-year old boy on the playground spouting off your feelings about your country. You are right about Canada being a free, democratic-minded country with no ills toward marginalized groups but it having the strongest economy in the world is a huge stretch. Also Canada is certainly not a world superpower and probably never will be – too many candidates ahead. I do however, admire your very strong feelings about your country but lighten up!

#87 Blacksheep on 09.27.14 at 3:01 pm

crowdedelevatorfartz # 69,

“@ Blacksheep, Godth, Nosty.
Ummmmm what does ISIS constantly in the
media(video’d decapitations tend to do that) and conspiracy theories have to do with a 33 year old girl trying to make up her mind about selling her condo????”

“Condo….sell or hold…..is the subject at hand.”
————————————————
Been reading / posting here for about six years.

Sold the house Aug / 2009 after owning 15 years. Was absolutely certain (lots of research + Garth’s site and book G.F.) the market was going to correct hard at the time, and it indeed started to.

We all know what happened.

I / we, were technically correct, but that didn’t stop the powers that be, from stepping in and supporting the market. Prices stopped falling and even began climbing, again. While renting, I invested in ‘other things’ and made nice gains in the next 5 years. House prices rose in that 5 year period I had rented.

In Jan / 2014 I re entered the housing market vulching (snow on ground) a wonderful home with a huge shop, for a very attractive price. This great buy, more than covered price increases, while not in the market.

But realistically, I got lucky.

I’ve made my bet and will deal with the outcome, good or bad.

Why don’t I ‘guide’ Pat on which path to take?

At this point, I don’t believe any of us (certainly not I) can predict the direction the market will take (to many variables) with enough certainty as to advise others were to invest the bulk of their net worth.

So while the numerous experts (Garth excluded) distribute volumes of insight, is it OK if a few of us distract ourselves with discussions on relevant events that will likely have a larger impact on our lives than a 15 % RE correction?

Like I’ve stated many times before, If you don’t like what your reading, skip right by. Censorship via topic policing is unnecessary when adults are having civil conversations.

#88 SOS on 09.27.14 at 3:06 pm

Mark I prefer when you don’t bold. I think your writing is more technical than Garth’s so people don’t always understand your posts. Smoking Man you could use your extra cash to invest in a month of rehab.

#89 Freedom First on 09.27.14 at 3:25 pm

#53 visorman30

Yes, we all decide what we are going to do in life. You can have anything you want, all you have to do is pay for it. If you wish to put all of your $$$$$ in one leveraged asset, it is true, it is everyone’s individual choice. However, there is no escaping the consequences, No exception. What Garth teaches though, is how to make decisions which have an extremely high probability of ensuring excellent consequences. Unlike what you teach visorman30, which goes against sound financial advice.

#90 AfterTheHouseSold on 09.27.14 at 3:29 pm

#80 Mark

I appreciate your posts because they are “clear and concise”. I think you have a lot to offer this blog.
Maybe #68 g followed you over from that other site and should just be ignored.

#91 Flawed on 09.27.14 at 3:32 pm

#83 Proud Canadian on 09.27.14 at 1:20 pm
The economy of Canada is the strongest in the world because Canadian society respects the rights of marginalized groups such as minorities, women, transgender and gays and lesbians.

Canada will remain a world superpower because we never will oppress women or stone gays unlike in barbaric countries which live under military unrest.

Canada is a great country, and anyone who suggests that Canada’s economy has a flaw should book a one way ticket to another country and live under poverty, oppression and filth.

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

So because I come from a country that does not “honor murder” people, that means I should be happy that in the 60% in taxes we are charged in the province of Bring Cash is completely justified? Be happy?

FAIL

#92 Entrepreneur on 09.27.14 at 4:03 pm

A condo is not a good buy. Real estate agents steer first time buyer towards condos; tell them to get into the real estate and move up. Lately in the news they said that first time buyers cannot move up.

Should a group with power that have strong influence be accountable for not being transparent? If not telling the truth is it not wrong, a sin? Has greed overruled ethics?

#93 Shawn on 09.27.14 at 4:25 pm

Multi-Million Portfolio? Do Tell.

StangerThanFiction yesterday posted:

This is the formula I have used to build a multimillion dollar portfolio from zero in 25 years. 99% of the stocks I own pay dividends. Regardless of the market being down sideways or up…or what flavour of the month…I always get my dividends…monthly, quarterly and annually.

Plus I always keep 15% in cash for all reasons…..I own no gold. 15% means I can live comfortably for around 16 years while the market goes through any tizzy it may do…

****************************************
Congratulations, that is impressive.

Can you tell us more like approximately the portfolio size?

Have you tracked how much went into the portfolio over the years? Do you have a figure on the average return?

Where did you find the money if you made big investments? High earnings or more through frugality?

Is this mostly in taxable accounts or RRSP?

Again, congratulations, well done.

#94 crowdedelevatorfartz on 09.27.14 at 4:55 pm

@#87 Blacksheep
“If you don’t like what your reading, skip right by. Censorship via topic policing is unnecessary when adults are having civil conversations….”

I also sold about 2 years ago, still renting.

Just askin what ISIS had to do with the topic at hand. Condo sell or hold?
Pretty civil question if I may say so.

Perhap a new moniker such as “Black Swan” might be more appropriate for your name since that “event” is what you seem to be wishing for….

#95 crowdedelevatorfartz on 09.27.14 at 5:03 pm

@#83 Proud Canadian
“Canadian society respects the rights of marginalized groups such as minorities, women, transgender and gays and lesbians.”
+++++++++++++++++++++++++++++++++++
Wow you’ve pretty much covered all your bases with….lets see….”minorities” check, “women” check, transgendered” check, gays and lesbians” double check.
So I guess the only “people that dont need any help are the heterosexual males species? Good to know. I’ll breath easier .
As for the others…….Marginalized? Are you kidding me ? It seems that these days one has to belong to one of those groups to qualify for a govt job! Geez!

P.S. WHAT does this have to do with todays topic?
Condo, sell or hold?

#96 Ray Skunk on 09.27.14 at 5:14 pm

#92 Entrepreneur

Has greed overruled ethics?

I think we established that long ago.

The annals of this blog contain quite the comprehensive listing of RE “tactics”.

#97 Cato the Elder on 09.27.14 at 5:22 pm

Re: #4 Setting the Record Straight

Not really sure what you were disagreeing with. My observations have simply been that most people have no real clue about freedom in this country. Whether it’s through movies where the hero has to subvert peoples’ rights in order to save the day (which is nonsense) or entertainment programs parading themselves as news organizations (CNN – laughable). There’s something to be said about the subconscious education people are receiving through their television screens – even Garth has pointed out how effective the real estate media bombardment has been. People are becoming zombies with no real way to critically think. Look at the next generation of smart phones – built in with question and answer capabilities (Siri). Now, you don’t have to rifle through information and use your critical thinking skills to deduce the right answer, the software will do that for you! And you don’t think special interests are going to hijack a system like that? How naive. Within the next few decades, people are going to be hardwired into the system. I speculate some kind of chip in the brain. When they need something, they are going to be directed straight towards a business. Businesses hate advertising – they would MUCH rather have people go directly to them! This is a trend that will occur – if you think it can be stopped, again you are naive. Look at how quickly people are becoming dependent on their devices.

The scary thing to me is this dependence is making people dumb, and too trusting of government officials. Here are some of the ways gullible (most) people are justifying the erosion of our rights. I strongly suggest anyone on this blog read my thoughts and then THINK about what I’ve said. You will probably find that you have noticed these things too – perhaps only subtlety, but you have. It is something to be concerned about:

1. Right to privacy. People are constantly saying ‘if you aren’t doing anything wrong, you have nothing to worry about’. This is a line I hear being spouted allover the place in the media. Of course, what people don’t realize is that you ARE doing something wrong – EVERYONE breaks laws, almost on a daily basis, because there are so many of them. Yes, to whoever is reading this, you have broken laws. Pirating music, movies, a rolling stop at a red light, no seatbelt, underage drinking, not paying taxes on your garage sale income, etc. To top it all off, what happens when one day in the future you want to run for office on a platform of truth? Oops, someone just ‘leaked’ those compromising photos of you and your ex-lover! Problem for the establishment averted – that blackmail repository we convinced the serfs was ‘good for them’ sure was a great idea!

2. Right to remain silent (not testify against yourself). Again, ‘if you’ve done nothing wrong, why won’t you talk?’. People don’t realize the basis for this legal protection. It’s there because in the past, INNOCENT people were TORTURED until they ‘admitted’ whatever the torturer wanted. So, the legal protection is there for innocent people so they can’t be compelled through violence to admit to something they didn’t do. But, this is under constant attack, especially on television. All these shows (especially that propaganda show starring our very own Kiefer Sutherland in ’24’) where the good cop has to ‘take matters into his own hands’ to save the day from the terrorist. Of course, those shows NEVER explore the ramifications of a suspect that’s tortured that turns out to be innocent. And history has proven that far too often, innocent people are in fact the ones who receive this punishment, and not the guilty.

3. Freedom of speech. Political correctness and the spineless politicians that promote it are killing this inalienable right. People are so easily offended, and the moment they show such offense, everyone is quick to apologize. Maybe we ought to ignore the TINY MINORITY of people that get offended so easily? Maybe we need to tell them to get over it? Or how about this, if something is offending you, walk away? No, our politicians are continually writing laws that are slowly eroding away this fundamental right. Of course, outright attacks would not be tolerated. So, it starts with the repugnant – racial slurs. Then it slowly morphs itself into other areas of human expression, such as political beliefs. Soon, people with a strong belief in limited government are going to be persecuted as it is ‘hateful to government officials’ to want to fire them. Just wait – it’s coming.

4. Right to self defense. This isn’t something that most Canadians consider a ‘right’, but I could care less. You have a natural right to defend you and your family from an aggressor. No one is going to tell me to lay down and ‘wait for the police’ for 10 minutes while someone is attacking my family. But, look what happens every time someone does it in this country. The victim gets punished! Government officials are so brain dead on this issue they can’t see that violating a gun law in order to save a life is perfectly legitimate. I saw a video about a guy whose house was being firebombed, and he went outside and shot his gun into the air to scare the thugs off. When the police arrived, they charged HIM with a criminal offense! And that was with incontrovertible video evidence of what they were doing to his house!

5. Right to keep the fruits of your labour. Notice people are constantly complaining about ‘fairness’? They don’t even know the meaning of the word. It isn’t ‘fair’ to tax someone who works harder and makes more money at a higher rate. My uncle is a TILE SETTER (a tradesman) who busts his butt working hard and makes a good living. Why should he pay a higher tax burden than someone else? Fair means an equal playing field with an impartial referee. But what socialists want is a referee that runs onto the field, holds some players back, gives free kicks to others, and confiscates goals from one team to give to another. I find this especially troublesome in my generation (I’m young). I don’t have much but I don’t want the government to steal from someone who does in order to provide me with it.

Anyways, those are the trends I can see developing. If you don’t notice these, I’ll be confrontational and say you’re blind. It’s slowly sneaking up on us. The hard work of productive people is being punished by unproductive rule makers. Anytime a society does that, it is doomed.

#98 Roy on 09.27.14 at 5:23 pm

Barbara Yaffe: Family can’t buy Vancouver home despite high income
http://www.vancouversun.com/business/Barbara+Yaffe+Family+Vancouver+home+despite+high+income/10239666/story.html#ixzz3EXvbwT3h

Family income of $128,000 and a $150,000 down payment in hand

“It’s hopeless, there’s nothing out there for us”

“Cannot financially compete with deeper-pocketed developers”

“Middle-income people are being priced out of this city”

“Should a couple earning nearly $130,000 a year need the Vancouver Affordable Housing Agency? The median household income in Vancouver is $70,000.”

LOL

At least they meet the Conservative Party’s definition of “middle class”
2 kids, $130K household income

The Statscan number is $78K

#99 Piccaso on 09.27.14 at 6:23 pm

#90 AfterTheHouseSold

He should be in politics, type/talk for 10 minutes and say nothing.

Speaking of politics, anybody catch Weeping Paul’s apology to Commons for not answering in question period?

He put on a big tear jerk and still never answered the question. lol

#100 Habs76-79 on 09.27.14 at 6:35 pm

In the big picture of things, a home is just a place to live. That’s really all folks! Your primary residence be it rented is just paying fair money for a decent roof over your head. If it’s bought and (paying off over time) owned, it is NOT a credible investment to make money (sure some folks lucked and/or time out well, you may not).

The costs of home ownership, price, interest, taxes, fees, repairs etc. for most will likely equal the potential rise in price over the years. Or if you over pay in a bubbly market you may lose lots of money over time.

Living in a home again be it bought or rented is really only a way to keep you and yours from being homeless on the streets where a inside of a car, $69 pop tent, or cheap tarp is your home. THAT’S ALL HAVING A REAL HOME IS! No matter what mumbo jumbo is spewed to you by whomever in life.

Buy too much home to income and YOU WILL BE SCREWED in the end. Waste too much money, borrowed at that on stupid, non paying back renos for house bling and crap like that will burn you too.

Oh, borrowing for needed repairs or improvements as such is usually a fair use of credit. But no damn granite counter tops, stainless appliances, fancy water faucets, fancy lighting or any other home bling will EVER pay back more than it all cost (esp. if you used credit to buy).

Now if YOU like bling, save up cash and pay for any bling with cash. ENJOY IT ALL! But never will this raise the real value of your home.

Investing in real estate other than your primary residence MAY give you a suitable return. But the markets will determine that, NOT YOU AND YOUR OWN BRAINS (if you have any credible brains or not.)

I like many when especially younger was easy to get caught up in the rat race, keeping up with others, bling, for home, bling for cars, bling for what ever. I no longer play that loser’s game. Oh, don’t get me wrong I enjoy nice things and to do nice things, but all in perspective and all with thought as to value to costs paid. Other than that, I COULD NOT GIVE A RATS A$$! what others think or say.

#101 Blacksheep on 09.27.14 at 6:40 pm

“Just askin what ISIS”had to do with the topic at hand.”
————————————–
Like I explained, absolutely nothing.
————————————–
“Condo sell or hold?”
————————————–
Also explained, If I don’t feel I have something to contribute to “aid’ Pat’s decision, better saying nothing.
————————————–
“Pretty civil question if I may say so.”
————————————–
And I responded pretty civilly.
————————————–
“Perhap a new moniker such as “Black Swan” might be more appropriate for your name since that “event” is what you seem to be wishing for….”
————————————-
With a handle like “crowdedelevatorfartz” I’m surprised you believe your in a position to pass judgements on anybodies moniker of choice.

As a business and home owner it is in my vested interest that the world get back to positive growth ASAP. The world is changing very quickly now. One can close their minds to the realities, or discuss things as adults.

I choose the later.

Did you miss the, skip right by, part of my post?

#102 Nemesis on 09.27.14 at 6:54 pm

#@ElderlyCato/97… #HaveIGotNewsForYou… #BeenThereDoneThat…

http://youtu.be/BuwF3dRJiS8

#YouWouldn’tBelieveTheNewStuff…

http://youtu.be/WzV6mXIOVl4

#103 Happy Renting on 09.27.14 at 7:29 pm

#80 Mark on 09.27.14 at 12:39 pm

Mark, you are very willing to answer questions and engage in discussion, which is great. However, your posts are so numerous it’s too time consuming to read them all, and I suspect they are valued less by other blog dogs because there are just so many of them. A little scarcity couldn’t hurt.

#104 dienekes on 09.27.14 at 8:32 pm

@ #58 Tedfiftyfour
What the hell are you talking about? Seriously?
She could have invested her RRSP money in an ETF. RRSP are not investments, they are just shelters you invest under.
Geez people know nothing

#105 Nomad on 09.27.14 at 9:18 pm

International Business Times about China real-estate (September 4th):

“a collapse in the real estate sector in their country may result in a flood of money leaving China and making housing even more expensive in markets as far-flung as Vancouver, New York and Sydney.”

“China’s citizens, fearful of investing in the country’s volatile stock markets, pump their savings into real estate, with the wealthy snapping up multiple apartments in a speculative frenzy.”

“The Chinese government imposes strict controls on how much money Chinese citizens can remove from the country, limiting each individual to $50,000. But people can wiggle around this restriction through collaborating with others.”

Two chinese colleagues who recently because permanent residents bought 1.5 million dollar houses near North York and Yonge. They make less than 90k. Grand-parents contributed to most of the downpayment, then moved from Shanghai into the house.

Is it a rare thing in Toronto, or, a trend? If the government combined what they have on record with what the banks have, we’d know.

Even if we don’t know that, a fact is that properties have increased in price by 3-4 times over 10 years in Shanghai. Wouldn’t you sell if you had the opportunity to come to Canada? And then, wouldn’t you have a massive amount of cash to buy a house? That’s what happens when a bigger bubble is happenning elsewhere.

There’s not that many houses in downtown Toronto, so it’s very likely that foreign money contributed to the 1 million dollar average detached price.

#106 Crossboardershopper on 09.27.14 at 9:29 pm

there are probably 30000 people in hamilton looking for a minimum wage job and we criticize this girl. she is doing awesom. Owns a condo has a job, probably healthy has a nice boyfriend who loves her. I see poverty no hope of a job, perpetual poverty, broken families, poor health every day. Come to barton street in hamilton and i will show you stuff that even hastings in vancouver has nothing on it. People talk about taxes and portfolio allocation or that some girl who has 55000 in equity being criticized. When you have a girl willing to do oral sex so her kid can have diappers you will see a reality that you think doesnt exist here.

#107 saskatoon on 09.27.14 at 9:35 pm

#97 Cato the Elder

this one’s for you buddy:

http://www.truthrevolt.org/news/artist-makes-millions-selling-invisible-art

p.s. personally, i (partly) blame the toxic NaF (i.e., rat poison)…especially in major urban centres.

#108 Strathcona on 09.27.14 at 9:35 pm

Is this the end? I note the high level of “mortgage helpers”, young couples or singles renting out a room, in their 100 year old rowhouse, for the Toronto price of $750K, and getting some “income” of $1800 per month, which they owe to the bank. They’re told on HGTV that it isn’t risk, they’re building a big equity.

with lowering oil prices, Saturday’s discovery of a billion barrels of oil in the Russian arctic, no industry of any importance in Toronto other than real estate, how can this continue next year?

#109 Herb on 09.27.14 at 9:42 pm

#106 Crossbordershopper,

as difficult as it was to read, thank you for the reality check.

#110 Nemesis on 09.27.14 at 9:42 pm

#TimelyParables… #ForWorriedSaltierDogz…

http://youtu.be/T5f1xzYM8kI

#”TopMen[People?]”… #AreWorkin’OnIt…

http://youtu.be/bg4BbctI7MQ

#111 bigtown on 09.27.14 at 9:43 pm

The reality of the annual increase in taxes and maintenance fees in owning a condo being as high as 10% increase is profoundly disturbing in this era where annual incomes rise a meager 1 to 2% a year. Truly people are willing to cut corners in the family budget to own a home and believe the trade/off and sacrifice can be managed.

#112 Setting the Record Straight on 09.27.14 at 10:03 pm

@ Cato

“Anyways, those are the trends I can see developing. If you don’t notice these, I’ll be confrontational and say you’re blind. It’s slowly sneaking up on us. The hard work of productive people is being punished by unproductive rule makers. Anytime a society does that, it is doomed.”

I am simply suggesting that these trends are not sulbverting ‘democracy’

I am suggesting they are trends you would expect from a
democracy or any other government. So they are not subversions.

I assume you are defining democracy as representative elections. That is not “rule by the people” and not what is meant by democracy. But it certainly is conventional usage.

I am

#113 Godth on 09.27.14 at 10:18 pm

#69 crowdedelevatorfartz

The world must be very difficult for you to understand. Perhaps that’s why you choose to fart in elevators. Very sad but it takes all sorts.

#114 Smoking Man on 09.27.14 at 10:24 pm

Fellow students at greater fool University.

Calling for banishment of posters and people that are in direct conflict with your programming. The fact that you are not even aware of you’re handicap is not surprising.

Curriculums are by no accident…

You arrogant, self important, exceptionalist pieces of dung….

How dare you call for anyone to be banished.

#115 Son of Ponzi on 09.27.14 at 10:24 pm

#105
Two chinese colleagues who recently because permanent residents bought 1.5 million dollar houses near North York and Yonge. They make less than 90k. Grand-parents contributed to most of the downpayment, then moved from Shanghai into the house.

Is it a rare thing in Toronto, or, a trend? If the government combined what they have on record with what the banks have, we’d know.
—————
Pretty common tactic here in Richmond.
Lots or elderly looking after the kids, while the parents are back in China.

#116 Smoking Man on 09.27.14 at 10:44 pm

Short Facebook. Full Margin…

It’s got a strong rival growing at exceptional rate

Google Ello….

#117 april on 09.27.14 at 11:12 pm

If there is a collapse in Chinese housing meaning difficulty in selling how would that cause a “flood of money leaving
china” to invest in other places??

#118 Flawed on 09.27.14 at 11:33 pm

Coming to a Canadian Private Sector Funded Pension Plan near you:

http://armstrongeconomics.com/2014/09/27/the-pension-crisis-2-trillion-hole-in-just-top-25-funds/

#119 bill on 09.27.14 at 11:43 pm

Luckily we don’t stone trolls, either. — Garth
and very rarely stone the crows…

#120 WhiteKat on 09.28.14 at 12:00 am

“Luckily we don’t stone trolls, either. — Garth”

Nor the interlopers. Thank you.

#121 Musical Jimmy on 09.28.14 at 1:58 am

“I’m so confused, as it seems I would pay pretty much the same amount to rent a condo (around $1600-$1700/month) as it is to own my current condo (around $1800/month).”

So much you can do with $100-$200/month…

#122 Mark on 09.28.14 at 2:09 am

“If there is a collapse in Chinese housing meaning difficulty in selling how would that cause a “flood of money leaving
china” to invest in other places??”

There won’t be a ‘flood of money’. The whole idea as presented is absurd.

#123 Leo Tolstoy on 09.28.14 at 3:01 am

I second the motion to delete Mark’s posts. It’s just error-filled babbling. And a lot of it.

#124 Leo Tolstoy on 09.28.14 at 3:08 am

“In your direct experience you’ve been right for over 4 years now and are richer than your renting counterparts.”

Easy to ‘prove’.

All studies comparing homeowners to renters show that homeowners, as a group, are significantly wealthier than their rent-paying counterparts. Forced-savings beats relying on a renter to save/invest. Always.

This isn’t new. Homeowners have been shown to be wealthier than renters for decades.

#125 Tony on 09.28.14 at 3:44 am

The exact same condo in America would be about 29,000 dollars and in some parts of Florida like Fort Myers some condos values dropped 90 percent from the peak. Once million dollar condos now sell for 110,000 dollars presently. Rarely can you do the wrong thing at the wrong time and get lucky like Pat. If Pat doesn’t sell she’ll likely lose her condo to the bank in the future.

#126 Tony on 09.28.14 at 3:55 am

Re: #106 Crossboardershopper on 09.27.14 at 9:29 pm

Correction the bank owns the condo and if Pat doesn’t sell it very soon the bank will probably own it outright. Pat is a modern day example of what not to do.

#127 Tony on 09.28.14 at 4:03 am

Re: #13 James on 09.26.14 at 8:07 pm

Yes it’s correct and Toronto property taxes are low compared to almost every other city in the greater Toronto area.

#128 Harry Wilson on 09.28.14 at 4:55 am

re #78 bguy1:

Thanks for the link, big guy; that was as hilarious as it was baffling. I tried, and failed, to figure out how he came up with those net income and appreciation returns, but I notice that in his world, 10% + 28% = 39%, so perhaps that explains my lack of understanding.

______________________

P.S. Mr. Turner, since it seems to be today’s sub-topic, can you ban everyone who tells you whom you should ban, except me, of course.

Also, can you ban Temporary Foreign Prime Minister, so that I can steal his awesome screen name?

Thanks. G’night.

#129 };-) aka Devil's Advocate on 09.28.14 at 7:58 am

#41 Smoking Man on 09.26.14 at 10:06 pm
You ever get the feeling you’re trapped in ground hog day..

You know it. For the past six years I’ve read this blog off and on wondering when Garth and the Blog Dogs are going to catch up with what’s actually going on in the real estate markets and throw in the towel admitting it is what it is. But they keep on, every one of the 2,190 days pining away for 2008 to happen all over again but with an intensity that makes that year look like a picnic.

Really.

I have no doubt the market will crater… eventually. It always does just as summer comes to and end yielding to winter, just as the sun rises and sets, just as the tide recedes, the economy (and the housing market) like life has it’s cycles, always has and always will. C’est la vie. Get over it…

Shift happens. Learn to ride the tide.

“Life is what happens to you while you are busy making other plans for the future” – John Lennon

“Our main business is not to see what lies dimly at a distance, but to do what lies clearly at hand.” – Thomas Carlyle

#130 };-) aka Devil's Advocate on 09.28.14 at 8:25 am

#119 bill on 09.27.14 at 11:43 pm
Luckily we don’t stone trolls, either. — Garth
and very rarely stone the crows…

#120 WhiteKat on 09.28.14 at 12:00 am
“Luckily we don’t stone trolls, either. — Garth”
Nor the interlopers. Thank you.

Everybody must get stoned .

#131 CdnFlyer on 09.28.14 at 8:39 am

Smoking Man,

That’s rich. You calling someone arrogant and self-important.

#132 AfterTheHouseSold on 09.28.14 at 8:42 am

#106 Crossboardershopper
“People talk about taxes and portfolio allocation…”

When you come to an investment and real estate blog you should expect to find people discussing such matters. It doesn’t preclude them from having compassion and empathy for others. I would venture to say that many here make financial donations and volunteer in their communities.

This blog offers free advice to help people avoid the financial pitfalls and resulting poverty that you describe.

#133 W on 09.28.14 at 8:49 am

If she rented for $1700/m for 4.5 years she would have been out $91800 by now. By owning, she’s actually in a better place, since the market value of her condo moved up in her favour. If she sells at a profit, she essentially had no housing costs for the past 4.5 years, which vastly outweighs the modest returns she could have had if she invested all her savings into ETFs/TSX.

Sometimes I think this blog fails to acknowledge that rent money is dead money. It’s definitely better to rent and invest if you have a net worth of 1MIL, but for people like Pat who has a very small net worth, sometimes you get more ROI by owning property because you leverage borrowed money. You can also lose more this way, but it all depends on when and how you purchased the property.

Pat put down a very sizeable 20% down payment, has been able to make all her mortgage payments, and her condo has appreciated in value year over year. She also plans to live in the condo in the long term. It sounds to me like she made a reasonable investment and has been financially responsible.

I don’t understand the pessimistic/dismissive tone of this blog in the context of Pat’s story.

Voodoo math, since you discount the substantial downpayment. Even factoring in capital appreciation, this woman is no better off financially than if she had invested the same amount, while shouldering greater risk. Additionally, we are at a point of danger for GTA condos (obviously) and selling to harvest the gain is most wise. Finally, no sane person lives in a downtown condo of 700 square feet “in the long term.” Yuck. — Garth

#134 Funny that on 09.28.14 at 11:02 am

Finally, no sane person lives in a downtown condo of 700 square feet “in the long term.” Yuck. — Garth
+++++++++++++++++++++++++++++++++
that’ll catch you some flak

#135 g on 09.28.14 at 11:08 am

#80 Mark on 09.27.14 at 12:39 pm

“Ditto with Mark!!”

I don’t get it. Is it because I bold the quotations in my responses? Is it because of the materiel I bring to the responses? Is it because my explanations are clear and concise? Seriously, why would you want to suppress such a valuable source of information and analysis.

No! it’s because you’re so wonderful!

All we have to do is just ask you… and you’ll tell us!!

#136 SRV on 09.28.14 at 12:28 pm

… and the $300 maintenance will be over $500 in no time.

How anyone can rationalize owning a condo anywhere in the metro area is beyond me… I’ve happily rented them for 10+ years!

And btw, the price stats are very questionable (in general not this piece). The one I’m in (7 yr old Mississauga luxury 2B 2B) is worth barely more than the original purchase price, so the ultra luxury suites downtown must be skewing the averages (or they’re simply playing with the numbers).

Slightly off topic, but how about a little blowback on the way condo management and directors treat “renters”… you know, the typically >30% of condo residents who contribute 30% of building upkeep costs who are treated like second class citizens (the first question asked by Building Management is ALWAYS… are you and owner)!

#137 Nemesis on 09.28.14 at 12:32 pm

#AlmostWorthIt?… #DiabolicalSundayMischief….

[SCMP] – Hong Kong first target of China’s new pursuit of corrupt officials

…”China’s top legal supervisory body will launch a six-month campaign targeting suspects of corruption who have fled overseas, Xinhua reported.

The campaign, announced on Friday by the Supreme People’s Procuratorate – the nation’s top prosecutor – will focus on investigations and establishing methods to bring suspects home, including extradition, repatriation and… ‘persuasion’.”…

http://www.scmp.com/news/china/article/1602643/hong-kong-first-target-chinas-new-pursuit-corrupt-officials

[SCMP] – Party must embrace Mao spirit to survive, Xi Jinping quoted as saying

…”In the new collection of documents, Xi also requests cadres to report changes in their personal lives, including divorce, remarriage, and whether they have sent all their family overseas.

“We will not leave the party in a good position if we discover such information on the internet, then have to rush to confirm with them later,” Xi was quoted as saying at a meeting in January.’…

http://www.scmp.com/news/china/article/1602828/party-must-embrace-mao-spirit-survive-xi-jinping-quoted-saying

[UK Guardian] – George Clooney and Amal Alamuddin appear together after Venice wedding

…”Clooney’s hands were shaking so much after the vows that he had trouble cutting the cake, according to an unnamed source close to the hotel quoted by AFP.”…

http://www.theguardian.com/film/2014/sep/28/george-clooney-amal-alamuddin-first-appearance-venice-wedding

#138 Rainmaker on 09.28.14 at 12:35 pm

W #133

“Sometimes I think this blog fails to acknowledge that rent money is dead money.”

I disagree, each option has costs and risks and Garth has nicely outlined these for both options. It is statements like this that pushes many people into buying when renting is financially smarter and less risky approach.

I recently sold my home in Toronto and am currently renting. I hear similar statements from people – “you’re just throwing away your money” , “what are you thinking”, etc. They look at me like I am nuts.

I consider myself to be in excellent financial shape and could buy if I wanted to, but on balance I think renting is currently the smarter financial option when I consider the costs and risks. Not matter your net worth, I think that choice would be a wise one for many.

This blog feels like coming to a place of financial sanity.

#139 crowdedelevatorfartz on 09.28.14 at 12:40 pm

@#101 blacksheep

I’ve earned my name, many times over.

@#113 godth

Yes the world is a difficult place to understand. Such is the perils of traveling in oxygen deprived elevators. But if you’re a god why do you have a lisp?

#140 Shawn on 09.28.14 at 1:14 pm

Renting is Dead Money?

W #133

“Sometimes I think this blog fails to acknowledge that rent money is dead money.”

******************************************
It’s no so simple.

Anyone with a mortgage is renting the money to own the place.

Anyone with equity in a house is losing the opportunity to invest that equity elsewhere for a return.

There are dozens of variables to consider in the rent versus buy decision.

The decision is not simple. Those who think it is may be.

#141 Mister Obvious on 09.28.14 at 1:16 pm

#133 W

“I don’t understand the pessimistic/dismissive tone of this blog in the context of Pat’s story.”
———————————-

OK W, that’s a fair comment. What is typically lost in these discussions is this:

A human life span on planet Earth isn’t much more than a long exercise in risk management. We all live perilously close to negative financial, medical and emotional outcomes. In addition, we can never escape the normal distribution curve, a feature of life about which the innumerate tend to have no clue. Thus, as a society, we are steeped in the gambler’s fallacy, circular reasoning and non-sequiturs.

I believe this blog exists to help people understand risk so they can make better decisions, especially in the financial arena. I like to think so anyway. We can all point to someone, perhaps a favourite aunt, who smoked two packs of cigarettes every day for 75 happy years then passed away peacefully in her sleep. Then there’s the fit young athlete with a perfect diet who dropped dead of a heart attack on the basketball court.

Examined in isolation (as humans are fond of doing) such events ‘prove’ nothing. They are distant outliers. Most of us slog along in the fat middle of the curve. That is the definition of normal. Normally, if you do action ‘A’ then you can generally expect outcome ‘B’. Of course that is never a certainly, only a reasonably good prediction based upon established laws of probability.

Thankfully mankind has developed excellent tools for examining risk versus reward as it applies to the bulk of players in the game of life. We simply can’t predict outlier events to reliably profit from them (in the positive case) or avoid them (in the negative case). We must work within the middle using realistic probabilities and calculated risks.

Pat, the subject of tonight’s blog took a ‘condo risk’ and won. For each Pat there are many others for whom it has gone (or will soon go) the other way. The message of this blog post is that there certainly existed a path of lower risk likely leading to the same probable outcome.

The purveyors of condominiums and associated debt vehicles vehemently deny that such a path exists. They insist, usually for selfish reasons, that a path of excess risk is the only viable one. That is precisely what this blog fights against. It’s also why people who have actually done well on the path of less risk tend to get their back up. You might too if your experience was consistently denied by the unscrupulous.

#142 devore on 09.28.14 at 1:33 pm

#124 Leo Tolstoy

All studies comparing homeowners to renters show that homeowners, as a group, are significantly wealthier than their rent-paying counterparts. Forced-savings beats relying on a renter to save/invest. Always.

This isn’t new. Homeowners have been shown to be wealthier than renters for decades.

You need a study to tell you this? Really? Please tell me it wasn’t a taxpayer funded study.

This shows correlation, but not causation.

Here, I’ll “prove” it to you: do a study of people who own islands, they are all significantly wealthier than their non-island owning counter-parts. Clearly, owning an island leads to more spare time, which increases wealth.

That makes exactly as much sense as what you said.

#143 NEVER GIVE UP on 09.28.14 at 2:08 pm

#97 Cato the Elder on 09.27.14 at 5:22 pm
It isn’t ‘fair’ to tax someone who works harder and makes more money at a higher rate.
____________________________________
Most of the Million Dollar CEOS are not being paid for the fruits of their Labor. They are being paid out of a board fear of losing a “star CEO” Pumped up by our misguided media and system of elevating these guys to an unnatural “Star Power”.

( The Little Book That Builds Wealth: The Knockout Formula for Finding Great Investments by Pat Dorsey (Mar 3 2008) )

Pat Dorsey notes that most of these companies could run by themselves. They are stable and have a smooth running business plan.
CEO salaries are wacko. I believe that no man alone can produce more than a million dollars of wealth by himself in a year. Any notion otherwise is ridiculous.
These men are making the money on the backs of others who are not as good at negotiating salary and also because of our system of wealth. land ownership and taxation that favors the accumulation of wealth at the top.
My belief is that we should tax incomes over $1 million at 90% and outlaw the theft of shareholder wealth via share options and bonuses.
If this were done the stock market would rock with new confidence and trust.
$1,000,000.00 is enough to incent a man to work hard and to the best of his ability.
Too many people at the middle and bottom are being squeezed.

#144 stock picking success story on 09.28.14 at 2:13 pm

OH oh….climate change pimps alert!! It ain’t happening!! BTW…my gas futures are spiking this past week. I hate being different!!! I’m laughing all the way to the bank.

http://www.climatedepot.com/2014/09/27/noaa-1695-low-max-records-broken-or-tied-from-sept-11-to-sept-20-one-record-broken-by-25f/

Farmers Almanac has a track record of around 85% accuracy…and is calling for a 100 year cold winter this year. Loaded up on nat gas and energy related stocks with both hands during the recent three day slump when stocks went on sale….the window was short.

It’s unusual for stocks to spike on Friday…especially at times when so much is going on around the world and nut job politicians can loose black swans over weekends typically.

I hear the geese flocking over my roof all day long now. …. in greater numbers every day. So get ready kiddies. I’ll spend the winter in Thailand as a smart stock picker has the wherewithal to do. My luxe condo in Paradise cost’s me less than a grand a month….and in BKK…a grand a month buys a lot !!!!

My advice is…..stop listening to anyone’s advice. isolate yourself from the noise….look at things for what they are…not what some bobble head on TV says it is. Clear your mind…make decisions based on fundamentals not greed or fear.

#145 robert reid on 09.28.14 at 2:13 pm

For those who are interested, apparently now is the time for residents of the Middle East to invest in Canadian (Toronto) condominiums! The developer had quite the booth set up at the Cityscape Real Estate Expo in Dubai lat week…

I guess if the Canadian buyer is evaporating, time to look elsewhere.

http://middleeast.empirecommunities.com/

#146 Mark on 09.28.14 at 2:51 pm

“I second the motion to delete Mark’s posts. It’s just error-filled babbling. And a lot of it.”

I beg your pardon? Error-filled? What on Earth are you talking about?

#147 Tony on 09.28.14 at 3:14 pm

Re: #144 stock picking success story on 09.28.14 at 2:13 pm

All stocks except bear funds and the ilk at trading around four times their fair market value. Good advice is buy the commodities not stocks.

#148 Shawn on 09.28.14 at 4:03 pm

No One is Worth a Million salary?

NeverGive up said:

I believe that no man alone can produce more than a million dollars of wealth by himself in a year. Any notion otherwise is ridiculous.

****************************************
Sounds like you already gave up.

I don’t like really HUGE executive salaries either. These days every two bit company with shares traded on an exchange figures its CEO should get at least a million.

But really your $1 million figure is too low for the really big companies.

$100k is totally ordinary pay these days. Look at the Ontario sun shine list. And may in the private sector trades get $100k plus.

To me, $3 to $5 million (30 times $100k to 50 times $100k) is just not out of line for CEOS of really big companies.

Some companies are so big that what they pay the CEO is simply of almost no consequence.

Warren Buffett has said that in some cases it would be almost impossible to over-pay a really great CEO. But I am sure he could list many who are over-paid for poor results.

50% marginal income tax is enough in my books, no matter how much you make.

By espousing 90% taxes for anyone over $1 million you may be coming from a position of jealousy or a socialistic bent.

#149 Shawn on 09.28.14 at 4:07 pm

Tony has Good Advice?

Tony, you have been on this Board what? a couple of years? Predicting doom at every turn. You have predicted what 25 of the last zero stock market crashes in your time here?

But what the heck you are entitled to your views and are free to share them. All hail freedom.

#150 peachtree on 09.29.14 at 11:14 am

The condo building in which I rent was recently vandalized – someone broke off the hose valve in the fire cabinet on one of the higher floors (above ten), and water poured out for an hour before it could be turned off. By the time I came home there was water in the lobby corridor.

A colossal number of units were flooded, and now all of those units and the common corridors require floor/baseboard/carpet/wallpaper replacements. Repair timeline was estimated to be 6+ months. Two of the three elevators are also currently down because the cables need to be replaced.

Not saying that kind of vandalism flooding is commonplace but it demonstrates the kind of risk you expose yourself to. So what if you have property insurance? Hello Special Assessment fees! And would anyone buy a condo in this building again?