Recession incoming

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photofly
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Re: Recession incoming

Post by photofly »

assume that your rental income exceeds all payments and costs
That’s a gamble on interest rates, and and assuming no decrease in property prices is a gamble on the real estate market.it may be a reasonable gamble, or unreasonable, and you may be more comfortable with it than others, but it’s still a risk, just like any investment.

Don’t forget 3% fees at both ends to realtors. Then add in some periods without tenants, periods with higher interest rates so that mortgage payments aren’t covered by rent, an allowance for your management time (or agency fees), some time and money chasing bad tenants for rent, and some expensive repairs, and you get a return quite similar to most of the stock market indices over the same period.
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ayseven
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Re: Recession incoming

Post by ayseven »

You r right. Also the stress and general pain in the neck having renters entails. There is no free lunch.
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losercruiser
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Re: Recession incoming

Post by losercruiser »

iflyforpie wrote: Thu Dec 26, 2019 6:11 pm
flyingjerry wrote: Thu Dec 26, 2019 4:13 pm
iflyforpie wrote: Thu Dec 26, 2019 1:23 pm

The emperor wears no clothes.

If you asked a stock broker what he thought about you buying a half million dollars of a single stock in a company leveraged at 75% or even 90 or 95% with annual fees of tens of thousands of dollars and tens of thousands more dollars to sell out and cash in.... he’d probably think you were nuts.

The things the real estate cult never tells you:

How much of your mortgage payment is interest in the first few years, and how much interest you will pay by the time you have your house paid off assuming you don’t dig into your equity like so many people do. Even more so if you’re paying CMHC insurance and fire/death insurance for the benefit of the banks, not yourself.

How much a realtor, lawyer, and closing fees cost when you sell a property... which either have to come out of your savings or equity. First time homebuyers think realtors are the best people in the world.. doing all of this work helping them buy a home for FREE!!

Home repairs... from a $2000 hot water tank to a $30,000 roof repair and appliances and renos all kinds of thousand dollar sundries in between. Nobody ever adds those up when talking about how much money they made when they sold their house.

That’s an awful lot of money to try and avoid “throwing money away renting” when renting is often significantly cheaper due to economics and the (usually) more established owners of income properties.

Then there’s the people who build up little rental empires all on the unsustainable rise of real estate values. What’s going to happen if the values reverse? Maybe smart renters with a bunch of savings will decide that’s the time to buy, and dumb ones won’t be able to afford rent because of the economic situation.

The only time a house makes sense is if you can buy one for about 3-4 times what your household makes in a year and you’re going to put over 25% down and live in it for at least 20 years... making extra payments that go directly against the principle. That way when you retire you won’t have rent or mortgage and an asset that you can sell when you can no longer live independently.

Otherwise, rent. Use your mobility to take advantage of employment opportunities. Put the extra money you would be paying mostly for interest into diverse and more liquid investments. Then when you are where you want to be in career and life and ready to settle down, buy a home in an affordable area.

That’s the advice I wish I would have given myself before being goaded by boomer parents to buy a house at too young of an age and yes making tons of money in transactions but also losing tons and being house broke for a significant portion of my 20s and 30s.
There is so much of this that is just made up guidance based on your own beliefs. It doesn't matter whether you put 5% down or 50% down. If you buy a house, in 25 years you will have no mortgage payment. If you rent, you will be susceptible to rent increases every year for the rest of your life. If the plan is to invest the difference between renting and buying, you will need to have quite a large sum to be able to pay $XX dollars in dividends in 25 years.

Most importantly, people will always need a place to live. Even if housing drops 90%, in 25 years you will have somewhere to live, mortgage free. And you still have the option to be mobile by renting out or Air Bnbing your home.
Yeah. It’s just made up the interest and CMHC insurance you will pay on a 5% vs a 25% down. Money that’s gone, never to come back.

It’s just made up that 5% or 10% down can see your entire equity be eaten up in market swings and closing costs if you have to move early in your mortgage. Ever had the pleasure of paying several hundred dollars a month for someone else to live in the place that you own based on the disparity between mortgage payments and market rental rates? I’ve been on both sides of it.

It’s just made up that house for house, neighbourhood for neighbourhood, that renting is often cheaper than buying initially, and that the point where you actually start building equity in your house in any sort of sustainable fashion (that won’t be wiped out by an interest increase or bad economy) is further along that people realize.

It’s just made up that often market swings are accompanied by job losses making you unable to service the debt that you acquired based on being gainfully employed.

I didn’t say don’t buy a house. I said don’t buy one early, don’t buy one for a minimum down payment, don’t buy one that’s too expensive, don’t take on a mortgage you can only just service, and don’t forget what it actually costs to OWN a house, too.

Yeah... everyone needs a place to live, including retirees who still have to live for decades. Better not have everything tied up in your house.

Is that bad advice?
When it comes to CMHC insurance, given our careers here with pretty significant pay growth over a number of years I would not hesitate to put the minimum down in order to get into a property and start building equity. Then when it comes time to renew you can top up to a higher % down payment when you are making more money.

I also have no problem with overextending myself right now, as I know in a few years when I'm off flat pay I will see significant pay gains but my mortgage will stay the same.
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goldeneagle
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Re: Recession incoming

Post by goldeneagle »

losercruiser wrote: Fri Dec 27, 2019 1:30 pm When it comes to CMHC insurance, given our careers here with pretty significant pay growth over a number of years I would not hesitate to put the minimum down in order to get into a property and start building equity. Then when it comes time to renew you can top up to a higher % down payment when you are making more money.
I would be very hesitant to take home purchase advice on an anonymous internet forum from somebody that doesn't understand what a down payment is, and how CMHC insurance works.
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rookiepilot
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Re: Recession incoming

Post by rookiepilot »

I think it's going be an absolutely huge recession. I hate to say this. I don't take pleasure in it.

Governments are fighting it with massive monetary stimulus. (and the relaxing of the mortgage stress test)

They will NOT succeed, I do not believe.

I only hope people are considering this and preparing. The Corona virus is not the cause but may accelerate events.
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'97 Tercel
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Re: Recession incoming

Post by '97 Tercel »

Social disobedience/criminal actions at railway crossings throughout the country isn't helping either.
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rookiepilot
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Re: Recession incoming

Post by rookiepilot »

'97 Tercel wrote: Wed Feb 19, 2020 10:08 am Social disobedience/criminal actions at railway crossings throughout the country isn't helping either.
Nope....
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Picesprick
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Re: Recession incoming

Post by Picesprick »

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Last edited by Picesprick on Mon Apr 06, 2020 8:12 pm, edited 1 time in total.
derateNO
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Re: Recession incoming

Post by derateNO »

Looking forward to Legault doing something if the feds don't. Quebec doesn't @#$! around, and hopefully them clearing out their own rails and taking action will be the catalyst for the feds to do something.

https://nationalpost.com/news/canada/fr ... protesters

It didn't help that Trudough said they don't tell the RCMP what to do. Well I thought the RCMP were under federal jurisdiction. They sure seem to like telling them to confiscate and ban guns which should be unrestricted like the Swiss Arms ban a few years ago and the hard on they have against the AR.

But telling the RCMP to enforce court orders to clear our rails and highways is too much.
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rookiepilot
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Re: Recession incoming

Post by rookiepilot »

derateNO wrote: Wed Feb 19, 2020 3:05 pm Looking forward to Legault doing something if the feds don't. Quebec doesn't @#$! around, and hopefully them clearing out their own rails and taking action will be the catalyst for the feds to do something.

https://nationalpost.com/news/canada/fr ... protesters

It didn't help that Trudough said they don't tell the RCMP what to do. Well I thought the RCMP were under federal jurisdiction. They sure seem to like telling them to confiscate and ban guns which should be unrestricted like the Swiss Arms ban a few years ago and the hard on they have against the AR.

But telling the RCMP to enforce court orders to clear our rails and highways is too much.
Funny.

Quebec has no issue throwing up their own blockades -- pipelines -- and hurting the rest of the country.
But they speak Canada is supposed to jump?
Piss off.

I love Quebec, love the language and culture, even lived there for a time.
Their government's attitude towards the rest of Canada is another story.

Just leave. Now.
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derateNO
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Re: Recession incoming

Post by derateNO »

I don't disagree with you. But if it's what's needed to get this shit under control then I'm all for it.

No one else other than the VPD seems to be doing anything about it.
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rookiepilot
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Re: Recession incoming

Post by rookiepilot »

derateNO wrote: Wed Feb 19, 2020 3:40 pm I don't disagree with you. But if it's what's needed to get this shit under control then I'm all for it.

No one else other than the VPD seems to be doing anything about it.
I don't disagree it needs resolving. Now.

The bigger picture is our esteemed federal leader should focus more on the overall unity, and showing strong leadership, to a country rapidly headed towards a major downturn, and less on his international popularity on the UN circuit.

And for those Trudeau fan boys -- more like adolescent groupies -- who don't like hearing this--- :roll:
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derateNO
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Re: Recession incoming

Post by derateNO »

rookiepilot wrote: Wed Feb 19, 2020 3:57 pm
derateNO wrote: Wed Feb 19, 2020 3:40 pm I don't disagree with you. But if it's what's needed to get this shit under control then I'm all for it.

No one else other than the VPD seems to be doing anything about it.
I don't disagree it needs resolving. Now.

The bigger picture is our esteemed federal leader should focus more on the overall unity, and showing strong leadership, to a country rapidly headed towards a major downturn, and less on his international popularity on the UN circuit.

And for those Trudeau fan boys -- more like adolescent groupies -- who don't like hearing this--- :roll:
Agree on all accounts.

Listening to the man talk, makes me wonder how he ever got elected. He may be the leader but he does not know how to lead. Leading means making tough decisions when needed, even if it may be unpopular. But that's his job... and he doesn't seem to care.
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rookiepilot
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Re: Recession incoming

Post by rookiepilot »

https://www.cbc.ca/news/canada/edmonton ... -1.5468200

Leadership--

"We have a highly respected and independent judiciary, and in cases where judges issue injunctions to stop illegal blockades then it's the job of the police to enforce those injunctions," Kenney said during a news conference in Calgary."

Blockade "in solidarity" up.
Blockade--- history. Peacefully. Protesters simply left.

Of course the lefties will go all hysterical about supposed violence and racism.
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Lotro
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Re: Recession incoming

Post by Lotro »

I think all the criticisms here are valid and I'm far from a fan of the current governments, but I just want to point out that comments like:

"And for those Trudeau fan boys -- more like adolescent groupies -- who don't like hearing this--- :roll:"
AND
"Of course the lefties will go all hysterical about supposed violence and racism."

Don't really encourage civil discourse. I understand that hurling passive aggressive comments feels good, and baits those with opposing viewpoints to engage with you, but we are in the mess we are in due in large part to our inability to discuss things in a civilized manner.

Lots of great things have been said, don't invalidate them by insulting those with opposing viewpoints.
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Heliian
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Re: Recession incoming

Post by Heliian »

No recession yet.
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Squaretail
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Re: Recession incoming

Post by Squaretail »

Listening to the man talk, makes me wonder how he ever got elected.
I have to wonder if he is for one side of the argument like Trump is for the other. People vote for him because they get a kick how it makes the "snowflakes" on the otherside cry.
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I'm not sure what's more depressing: That everyone has a price, or how low the price always is.
rxl
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Re: Recession incoming

Post by rxl »

Squaretail wrote: Thu Feb 20, 2020 9:39 am
Listening to the man talk, makes me wonder how he ever got elected.
I have to wonder if he is for one side of the argument like Trump is for the other. People vote for him because they get a kick how it makes the "snowflakes" on the otherside cry.
What a wonderful basis for political action ...
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swordfish
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Re: Recession incoming

Post by swordfish »

daedalusx wrote: Sun Aug 18, 2019 3:30 pm A determined person will always find work. Also in a recession, PIC time is king, the 4000hr laided off RJ FO will have a much harder time putting food on the table than the 1500hr Kingair Capt.

I really really wouldn't worry about it.
Agree, 100%
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rookiepilot
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Re: Recession incoming

Post by rookiepilot »

THIS.....is (probably ) not the big one.

Yet to come.....inflation.
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