There’s just way too many costs associated with the home buying process now and everyone wants their cut, realtors 5% on sale and purchase so that’s 10% if you move, banks and mortgage penalties, CMHC with their insurance, land transfer tax, and now jumping through hoops to get approved and now higher interest rate costs. If you factor these in youd have to stay someplace at least 4 years to make owning worthwhile on an average 250k condo. You could be easily be at 30 grand in these built in costs. It’s crazy.Posted by Curtis on Friday, January 11th, 2019 at 2:42am
Received my 2019 property tax assessment from the City this week for my rental unit. Value is down 11% in one year, bringing the two year drop to 14%. Cash flow positive or not, I’m losing gross amounts of money.
This is pretty typical of any condos right now, and it’s a great reminder that RE is just another asset class that that can go up, down, or sideways and certainly isn’t some magical asset that never goes down. Plus there’s a ton of pain in the butt factor- my financial portfolio never asks for a special assessment, and there’s never an issue collecting rent.
This is true. Even in a normal real estate market it's very difficult for the average person to truly turn a profit once you factor in all costs including time and the opportunity cost of your money..
Factoring in how leveraged the average rental owner is a 14% loss on the property is likely close to a 100% loss for most people's overall net worth... Sad but true
It's getting very ugly out there. Nothing is selling. I can't remember it ever being this bad.
The housing market definitely isn't doing well. When speaking to friends/family about their house sales, many of them have indicated that showings are consistent but, because the buyers have so many options so there is a lower chance the house will sell. The only houses that are actually moving are the ones that have been undervalued, due to the seller being in a tough spot. I think it also has to do with mortgages being harder to qualify for so there are less buyers in the market place.