ghost dog Posted February 9, 2012 Report Share Posted February 9, 2012 It depends if my house continues to appreciate in value. A house is an investment. It is part of your capital. You can always sell your house and move to a cheaper place to live. If my house continues to appreciate in value, much mroe so than QC houses, I will have the higher net worth. This may or may not happen; it is a gamble. But a house is not like buying a car. A car depreciates the minute you drive it off the lot. A house won't unless the market crashes, then we're all in trouble. So your point about housing prices is moot, because you will actually have a higher net worth (unless you find a better investment than real estate while living in QC) if your house appreciates at a higher rate in BC than in QC which it has for the past 10-20 years. And you can always move out to Surrey or the burbs, and buy a much cheaper house out there (a nice detached house is about 500-700K out in the burbs, easily affordable for doctors). I pay a set amount each month for my mortgage. A good junk of that goes to interest, but I also rent out my house, so the interest I pay on my house is actually quite low; it's much cheaper than what I would pay had I rented my house. The rest goes into the house, which is a much better investment than dumping it in the bank or playing the stock market or worse, buying mutual funds. Even if the market does "crash" this will be temporary. Real estate is a great investment. Link to comment Share on other sites More sharing options...
bloh Posted February 9, 2012 Report Share Posted February 9, 2012 Real estate is NOT a great investment. It historically has barely surpassed inflation. What's happened in the last decade is an anomaly, and it remains to be seen if it'll crash and burn, deflate or stagnate. But we're getting sidetracked here. Back to IM income Link to comment Share on other sites More sharing options...
Prince Medward Posted February 9, 2012 Report Share Posted February 9, 2012 Even if the market does "crash" this will be temporary. Real estate is a great investment. If you are an American, Irish, Japanese, Spanish, Icelandic, and more recently, if you are Chinese or Australian, real estate is not a great investment. The latter two countries are starting to see their bubbles deflate. The others are well into big busts. The Japanese have seen house prices falling for 20 years while their interest rates have been at zero. But like moo said, it is a gamble. The gamble is that the unprecedented real estate boom of the last decade will continue for another decade. Link to comment Share on other sites More sharing options...
ghost dog Posted February 10, 2012 Report Share Posted February 10, 2012 Real estate is NOT a great investment. It historically has barely surpassed inflation. What's happened in the last decade is an anomaly, and it remains to be seen if it'll crash and burn, deflate or stagnate. But we're getting sidetracked here. Back to IM income Really ? Do you plan on renting for the rest of your life ? I think you are playing chicken little here; over the long term the sky is not falling ( at least compared to the stock market). Unless you want to rent for the rest of your life ( not cheap), a house is a great investment. Link to comment Share on other sites More sharing options...
bloh Posted February 10, 2012 Report Share Posted February 10, 2012 There's a difference between a GREAT investment and a decent way to invest and save your money. Buying real estate falls in the latter category. If you're settled in a place and plan to stay there for an appreciable length of time, then by all means buy a place. But if you're planning to flip it shortly and make money, then you're doing nothing more than gambling. People make money by gambling no doubt, but call it what it is. Link to comment Share on other sites More sharing options...
moo Posted February 10, 2012 Report Share Posted February 10, 2012 Whether your rent or buy depends a lot on market conditions and your income. As doctors, we can all afford to buy, even in expensive areas like Vancouver. (Can't say the same for NYC or HK, where condos in nice areas can go for 2+ mill). My point is, long-term, real-estate is a good investment. Like I said, I pay about 3200 a month on my mortgage, which is really not that much for a doctor. 1700 bucks a month so far goes to interest (which goes down yearly as I pay off my loan). Thus, with my downpayment, it's like paying 1700 bucks rent for my place. I also rent out my basement which gives me 900 so I'm only "losing" about 800 bucks a month, compared to renting a place like what I have in Vancovuer, would easily be 2500 a month. In about 7 years time, which is when I will pay off my house, I will have a property that can be converted to cash if I sell, or I can re-mortgage, rent the whole place out for about 3500 and use that as the downpayment on another house. The rental income from that place can cover (most) of the second mortgage while I just pay the mortgage on my second (primary) residence. If you buy a place in Montreal for 300K, you will pay it off in less than 3-4 years as a doctor if you save. Then what? Your money will need to be invested somewhere, unless you leave it in the bank, in which case it won't earn any interest. If you can find a great investment that's great, but investments that have the potential to earn you a lot of money also have a lot of inherent risk. Real estate, over the long term, tends to be generally a good but not great investment. Link to comment Share on other sites More sharing options...
Dany Posted February 10, 2012 Report Share Posted February 10, 2012 Real estate, over the long term, tends to be generally a good but not great investment. so do we have a GREAT, reliable, and little risky investment? Link to comment Share on other sites More sharing options...
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