Struggling financially and getting frustrated?

[sburns]

I am as well. I'm counting on these forces to collapse the housing market:

• The greed of previous generations
• The lack of money management by the vast majority
• The obsession with wanting to own a house

The US collapsed in 2008 because of this, and I hope it repeats itself as it'll be an opportunity for those who are diversified or not in it.

Apparently if the second wave happens, and most likely it will, it may really stress the housing market. So far which has been stable, and actually Vancouver is seeing growth due to low interest rates. Rich getting richer I guess.

From what I understand the US collapsed because of shady lending deals/loopholes, with the financial market exaggerating it, and people getting these shady mortagages only to find out later they were only paying off interest. Things which wouldn't happen here because of gov regulations. Well not yet anyway.

The first 2 points are pretty valid. I'm not sure if obsession is the correct word to use. I believe most people want a home and if you have a family it would be a high consideration to have one. I grew up in a house, all our immediate family had homes, I didn't like the idea of living in a apartment or condo, just didn't seem right. Plus fiancially it made more sense to buy a home then give someone rent, or condo fees you have no choice on.

It's unfortunate the cost of living has gone bonkers and this idea is less attainable then it should be.

 

[油井緋色]

Apparently if the second wave happens, and most likely it will, it may really stress the housing market. So far which has been stable, and actually Vancouver is seeing growth due to low interest rates. Rich getting richer I guess.

No proof of this, but I'm willing to bet it's a lot of foreign investors. I'm seeing the same thing happen at Yonge and Finch; there can't be this many sub 30 Asians with Lamborghini and Ferraris. Not that there's anything wrong with this......it just fucks everyone else who wants to own a condo or house but isn't trying to stabilize their money from a corrupt country.

From what I understand the US collapsed because of shady lending deals/loopholes, with the financial market exaggerating it, and people getting these shady mortagages only to find out later they were only paying off interest. Things which wouldn't happen here because of gov regulations. Well not yet anyway.

Yeah, it was due to subpime mortgage or something. There was a hilarious cascade effect because:

• Mortgages were being given to ppl that really shouldn't have
• A bunch of investors were ass humping the bonds associated w/ this

So when everyone and their mother started defaulting, it caused a beautiful cascading effect that rippled out to the world because it also tanked the US' bond market.

The first 2 points are pretty valid. I'm not sure if obsession is the correct word to use. I believe most people want a home and if you have a family it would be a high consideration to have one. I grew up in a house, all our immediate family had homes, I didn't like the idea of living in a apartment or condo, just didn't seem right. Plus fiancially it made more sense to buy a home then give someone rent, or condo fees you have no choice on.

The sad truth is that we really should actively stop procreating as much as possible. The whole carbon emissions thing boils down to a simple thing: how many humans are on this planet. But this is heavily against our biological nature, and most people aren't high enough on Maslow's Hierarchy of Needs to really contemplate this; nobody is gonna care about the future of Earth if they can't figure out how to pay bills or struggling to survive (3rd world countries.) This creates situations where people desperately (obsession) want housing because who the hell wants to raise a family in a 1 bedroom condo. So yeah, I agree with you, but my rationality for the wording is quite bleak lol

 

[bigpoppa]

I HIGHLY doubt there will be a crash, **** there wasnt one on 9/11 or 2008.

https://imgur.com/7m0N6h6

its crazy out there

 

[GreyGhost]

I HIGHLY doubt there will be a crash, **** there wasnt one on 9/11 or 2008.

https://imgur.com/7m0N6h6

its crazy out there

I could see condos taking a big hit if we get locked down again as people go insane with tripping over each other 24 hours a day. I think conventional detached/townhomes will climb at a crazy pace especially in the outer burbs as condo dwellers buy more space at the expense of location.

 

[mimico_polak]

I live here and im laughing at the million dollar mortgages that the middle class are willing to shell out for.

Many have a good plan, many do not. Even if i could afford a million dollar property i would never buy it.

I also thought that...and then kids happened. And you know a funny thing that happens after, you want to try and make their life better. And a larger home/yard made sense and we justified it. A postage stamp townhouse was great for cashflow, but it sucked for quality of living.

Mind you we were very fortunate in our previous real estate dealings. I could've gone and had a 300k mortgage on our new property, but we opted to save some cash for a rainy day, and now have a similar mortgage to the one we had on our previous property.

 

[GreyGhost]

I also thought that...and then kids happened. And you know a funny thing that happens after, you want to try and make their life better. And a larger home/yard made sense and we justified it. A postage stamp townhouse was great for cashflow, but it sucked for quality of living.

Mind you we were very fortunate in our previous real estate dealings. I could've gone and had a 300k mortgage on our new property, but we opted to save some cash for a rainy day, and now have a similar mortgage to the one we had on our previous property.

Yeah 1M house does not necessarily equal 1M mortgage. Add in the stupid tax law that gives you unlimited primary residence capital gain tax free and you end up with many people in something huge and expensive as an investment instead of an appropriately sized residence.

When we were looking at places to move north, my wife wanted to look at places that were ~even money with the house we were selling. We could have had an ok subdivision house with no mortgage. I pushed her to buy an awesome house in a great location with a reasonable mortgage. In a perfect world, I would prefer to keep taking 200K mortgages and leapfrogging but the transactional cost of a real estate deal is nuts so you need to take bigger steps to come out ahead. FWIW, the house is probably up 150 in 18 months (two sales of similar houses in the neighbourhood in the last month that are slightly smaller, on busier roads and slightly less interesting design for 120K more than we paid). For the last owners, it went up over 75 a year.

 

[Evoex]

So do you live in a apartment?

I rent a townhouse and invest the excess.

 

[Evoex]

I also thought that...and then kids happened. And you know a funny thing that happens after, you want to try and make their life better. And a larger home/yard made sense and we justified it. A postage stamp townhouse was great for cashflow, but it sucked for quality of living.

Mind you we were very fortunate in our previous real estate dealings. I could've gone and had a 300k mortgage on our new property, but we opted to save some cash for a rainy day, and now have a similar mortgage to the one we had on our previous property.

Sure i get that, but even if i had kids i'd still pass on that kind of mortgage. Plenty of decent schools, neighborhoods outside of the city. Have to drive a little farther to see family and friends? Doesn't bother me, not like i'm making that trip everyday.

 

[Evoex]

Yeah 1M house does not necessarily equal 1M mortgage. Add in the stupid tax law that gives you unlimited primary residence capital gain tax free and you end up with many people in something huge and expensive as an investment instead of an appropriately sized residence.

Excellent point, i will revise my statement.

I will never get into a million dollar mortgage.

 

[GreyGhost]

Aside from any financial reasons for owning (which can go either way), I know that I am a bad renter and a good owner. If I see something that can be better, I want to fix or build it. I dont like waiting around for idiots to show up and do a crap job repairing issues. Construction is calming and makes me happy. I cant build a $30K deck on a rental property (well I guess maybe I could, but what a dumb idea).

 

[Deleted member 50930]

Aside from any financial reasons for owning (which can go either way), I know that I am a bad renter and a good owner. If I see something that can be better, I want to fix or build it. I dont like waiting around for idiots to show up and do a crap job repairing issues. Construction is calming and makes me happy. I cant build a $30K deck on a rental property (well I guess maybe I could, but what a dumb idea).

Same.

My OCD goes into overdrive and I can’t get the defect out of my head

I caught a few landlords doing stuff without permits and took a few to the LTB

Ended up just moving back with my parents until I have enough down payment for a house

 

[stangn99]

We recently bought a 1M semi detached house in leslieville. We put about $100k into a complete gut/reno job.

$50k of the $100k was paid to trades people for heavy work, and the other $50k was DIY by me. Hire your own trades people and save a ton of money. Learn the trades and save all your money. A non-renod home with the same footprint recently sold for $1.45M, so I'm guessing we could sell for at least 1.4M and pocket about $250k (after fees/taxes/etc) in a little under 10 months.

We used equity and savings from the old house as down payment for the new house. We AirBnBd the basement of the old house back-to-back for 6 years. The main floor of that house is now tenanted and we continue to AirBnB the basement. Any excess positive cash flow pays off the renos on the new house.

We plan to rent/airbnb the lower apartment of our new semi as well, and our agent estimates an average of $22,000 from that.

All this to say, if you're willing to hustle you can build up equity REALLY quickly in Toronto. Sure, houses cost a lot of money, but you can also build a lot of equity really quickly. Our first home wasn't anything glamorous (740sqft bungalow in east york), but we made it "our own" over the 6 years we lived in it, and learned A LOT about construction and renovation during the process. I should also mention we don't spend money on materialistic things. We travel outside of Canada once a year, and take mini trips in between. My motorcycle is probably the only thing I have that I "waste" money on.

 

[mimico_polak]

Excellent point, i will revise my statement.

I will never get into a million dollar mortgage.

This statement I agree 100%. No f’in chance in hell would I put myself on a 1M mortgage....may as well tie the noose around the neck now. Our mortgage is 500k but I’m basically doubling on the payments biweekly to accelerate while I work in BC.

 

[GreyGhost]

This statement I agree 100%. No f’in chance in hell would I put myself on a 1M mortgage....may as well tie the noose around the neck now. Our mortgage is 500k but I’m basically doubling on the payments biweekly to accelerate while I work in BC.

With the crazy appreciation in house values, the 1M mortgage could get you ahead but the trouble is, very few salaries can support it. If appreciation slowed or stopped and you had to dump the house to save your finances, there is a very real chance that you would be looking at at least six figures of lost equity.

 

[black_CG2]

We recently bought a 1M semi detached house in leslieville. We put about $100k into a complete gut/reno job.

$50k of the $100k was paid to trades people for heavy work, and the other $50k was DIY by me. Hire your own trades people and save a ton of money. Learn the trades and save all your money. A non-renod home with the same footprint recently sold for $1.45M, so I'm guessing we could sell for at least 1.4M and pocket about $250k (after fees/taxes/etc) in a little under 10 months.

We used equity and savings from the old house as down payment for the new house. We AirBnBd the basement of the old house back-to-back for 6 years. The main floor of that house is now tenanted and we continue to AirBnB the basement. Any excess positive cash flow pays off the renos on the new house.

We plan to rent/airbnb the lower apartment of our new semi as well, and our agent estimates an average of $22,000 from that.

All this to say, if you're willing to hustle you can build up equity REALLY quickly in Toronto. Sure, houses cost a lot of money, but you can also build a lot of equity really quickly. Our first home wasn't anything glamorous (740sqft bungalow in east york), but we made it "our own" over the 6 years we lived in it, and learned A LOT about construction and renovation during the process. I should also mention we don't spend money on materialistic things. We travel outside of Canada once a year, and take mini trips in between. My motorcycle is probably the only thing I have that I "waste" money on.

You wana hire me as your right hand man and do all DIY with you? I have been asking everyone who is handy on gtam.

 

[backmarkerducati]

Back to the OP's friend. If he is making 60K a year his best bet is to get away from (far away) the GTA. What people also need to understand is they are not owed anything by anyone, they make their own choices. Some here still think this is all some other generation's fault they are not geting what they view as what they are entitled to--it is faulty logic that holds them back.

As Toronto rises it pushes people out to the burbs and to the surrounding cities, they rise and push the areas next to them up. So on and so forth. So far this has spread IMO to 1.5 to 2 hours (no traffic) driving times from Toronto (150 km plus). This does not mean everyone is driving to Toronto! Toronto guy moves to Hamilton for cheaper real estate driving up Hamilton prices, Hamilton guy moves to Brantford for cheaper real estate, Brantford guy.... I think of it like a sheet on the floor, grab the middle and start pulling up, the higher the middle goes up the higher the other areas do and the larger the circle. It is also not all Toronto, but other hub (larger) cities in the province (just not as dramatic)--Kingston, KW, even Windsor, Toronto is just the largest epicentre.

Back to the OP's friend, I will take a leap of faith that at 60K a year he is not working in a highfalutin career that requires him to be downtown Toronto. Can he get a similar job on the east coast, prairies, even well outside of the GTA in Ontario? Plenty of places there where 40 to 60K one income gets you plenty. My sister just moved to NS and bought a very nice house on a very nice lot for ~130K, easily done for for the income levels we are talking, even with a pay cut. It is a choice. Things like savings and toys are also well covered in this thread.



There may be some condo opportunities in the GTA coming up as the long term rental markets are getting saturated (and rents are also dropping) as AirBB dried up, owners shifting. Lots of income units not earning income. Mandatory masks in common areas, long elevators waits all due to COVID. More working from home, limited space in the units for a proper home office. People are looking to the fringes of the above mentioned sheet circle for a SFH. Detached houses will not see a large correction in the city, condos likely will. Still at 60K, I just do not see that much of one.

One final note on the sheet analogy, when you lower the centre of the sheet, what happens to the rest?

 

[油井緋色]

I HIGHLY doubt there will be a crash, **** there wasnt one on 9/11 or 2008.

https://imgur.com/7m0N6h6

its crazy out there

We weren't as stupid in 08 as the guys south of us. Both 9/11 and 2008 collapses had nothing to do with us (in terms of systematical failures, the systems that failed were 100% the USA's in 08.) I also know the banks have stress tests in place so in theory, we should be fine.

...but I'm counting on us to **** up lol

Aside from any financial reasons for owning (which can go either way), I know that I am a bad renter and a good owner. If I see something that can be better, I want to fix or build it. I dont like waiting around for idiots to show up and do a crap job repairing issues. Construction is calming and makes me happy. I cant build a $30K deck on a rental property (well I guess maybe I could, but what a dumb idea).

I think one of the biggest things is financial discipline. Some people need a system that forces them to pay (e.g. mortgage.) For someone like @Evoex and myself, we don't. This is a huge reason why some renters stay broke.

Some here still think this is all some other generation's fault

Eh.....it is though lol

Greed is bad. I've got no problems with accepting that life sucks and you gotta make the best out of it. But I'm going to show zero mercy at the dumb fucks that make things worse for others, especially if I have to fix their problems (very common in IT.)

For example, if someone owns multiple houses for the sake of exploiting a lack of supply, **** them. Please get hit by multiple cars. We have enough suffering from simply existing; we don't need others to add to it intentionally. And obviously, simply due to time = money, the vast majority in this category would be previous generations (which will change in 10-20 years, then I'll flame the morons in mine and gen z.)

Remember those shitbags that wanted to exploit the lack of mask supplies as well btw?

And this is why I'd never become a politician =D lol

 

[blackcamaro]

Where else can I get a $500,000 loan at 2% to buy an asset that is likely to go up in value yearly at a rate of 3-8%? Can't do it with stocks, I would already need $500,000 in cash to put up against a margin account and then a margin account can always get called so that's not great.

On the crash topic. The other day in the news they had real estate up 16% yoy, so even if it fell by 20% we're going back to early 2019 prices. Not a big deal. There is still a lot of money out there, if you saw a drop larger then that you'll see the investors rush in.

Places like St. Catharines, Oshawa, Orillia, Hamilton etc you can still buy a detached place under $400,000 but that window is closing fairly quickly.

Personally I wouldn't touch a 1 BR condo for the next few years.

 

[stangn99]

You wana hire me as your right hand man and do all DIY with you? I have been asking everyone who is handy on gtam.

Yes, if it were 4-6 months ago when I really needed help with cement boards, bathrooms, tiles, kitchen cabinets, doors, etc. The hard stuff is done. Just painting now. I ******* hate doing doors (framing, hanging, etc)

 

[bigpoppa]

Places like St. Catharines, Oshawa, Orillia, Hamilton etc you can still buy a detached place under $400,000 but that window is closing fairly quickly.

Oshawa? No.
Orillia? Maybe

The other places? Perhaps, hope you like multiple biddings.