Whether one buys a house or not depends on many factors. If you are
rich, you don't have to buy
a house until you are ready. But if you are middle to low income and
you are able to afford
to buy a house within your means or income, there is merit to doing so
in some circumstances.

Let me give you my example. I live in one of the most expensives cities
in the world. I bought a shack
- modest house - 30 years ago, when I was in my mid twenties. I though
I had lots of time but my collogues
bugged me about it and I am glad they did. Let me pause to say that my
uncle bought a place in the 1920s for 3,000 dollars. I bought a place
for 45,000 dollars in the 1970. Today to buy a place probably costs
225,000.
All modest accommodations. I bought a modest shack so that if I lost my
job or got down-sized, I could still work at McDonalds and make the
monthly payments.

So what does this all mean? Well, my property taxes are 3.50 cents per
day including water and garbage. I have house insurance of about 50
dollars a month. That is it. Oh, I have electricity and gas but they
are a luxury if times get tough. I would be hard pressed to find a
cheaper place to live anywhere in North America.
To rent one room is 500 to 600 a month. To rent a basic apartment is
800 to a thousand plus.

Those that have not done as well, given similar circumstances, are those
that moved because of jobs or divorces/several spouses and sold and
bought several times. The market and the real estate fees have
basically destroyd them over time becuase they are just average not
rich.

Those that bought in the better neighbourhoods have had their property
values go sky high but they are paying 11 dollars a day in taxes such
that staying where they are on a modest pension is very, very
difficult. They, of course, are free to move to a unknown
neighbourhood at today's prices, but that alone is not an easy
proposition.




victor wrote:

Ok, ok, ok. My friends and family keep nagging at me to stop renting
and buy a house. I'm so sick of them droning on about points-this and
closing costs-that. But the more I think about, the less sense it seems
to make for me. Here's why:

1. "You'll save a fortune on taxes." True. But the property taxes
will pretty much cancel out any savings you got on the income taxes.

Speaking as an American, yes. Canadians can't write off mortages as
such on a home.

2. "You're throwing rent money down the toilet." True. In all
likelihood, your mortgage payment will be twice your rent.

Well, that wasn't the case when I bought and I don't think it is the
case today either.
I rented a townhouse in the 1970s for 350 a month. The notice to raise
the rent a year later to 400
had me house hunting pronto. Mortgage payemnts were 450 a month. Just
a couple of weeks ago
a young couple bought a place and their mortage payments as I recall
were 1,500 a month. Given
that rents today in this city are averaging 800 to a thousand, it is not
that dissimilar.

By the time
you pay it off, you'll be drinking Ensure, wearing Depends, and too old
to maintain the house.

Not sure how old you are, but if you bought at 25 you will be 50 with a
25 year mortgage.
Most 50 year olds may be bigger in the butt than most 25 year olds but
most are not wearing Depends yet
contarary to what you believe, want to believe or think you know.

Then you'll be wanting to move back to ... AN
APARTMENT!

Yes, many move from the big house with the kids gone to an apartment.
Many however, bought a modest
first house and stayed in it and will likely breath their last breath in
it, too. Your/their choice.

By that time, an assisted living apartment.

Two options here. Some want to move to assisted living regardless of
their health or condition to live as
long as they can, with or without Depends.

Others want to live independently for as long as they can and then call
it quits, refuse all medications
and go quietly in their own home after a very long, and happy life.
They don't want the extra years in
assisted living apartments.


And let's be
realistic. You're NOT going to be like those power couples in Money
magazine who claim they're going to pay off the mortgage in 5 years and
retire in 10. Yeah, right.


You are right, not a consideration, even if it is true.


3. "It's one of the few things you buy that appreciate in value."
Assuming that you find someone who is willing to pay your inflated
selling price. Assuming that the neighborhood doesn't go down the
tubes. Assuming that the new house you buy will end costing as much as
you think it's going to (not!). Too many assumptions.


You are right about all that. There really are so many varriables.
I am referring to an average city. Small towns, company towns change
the dynamics greatly.
Many sad stories.

When I bought my house, it was never about it going up in value and
buying and selling houses in the market
place. Many people did well doing this and many did not. It was about
buying a place to live a quiet live in a modest way through wars,
floods, stock crashes and the unknown.

In the context of neighbourhoods going down the tubes, a very valid
point. My neighbourhood had elderly people living in it when I bought,
but on fixed incomes most had to move. A younger mixed group moved in,
not bad, not ideal overall, not because of their age, but because of the
percentage of less desirables; however, because my city doesn't have any
more property, redevelopment is slowly changing the neighbourhood and it
will improve before it gets really bad. In the politest language you
could say I bought a shack on the better side of the tracks as opposed
to a mansion on the wrong side of the tracks.
Overall it has been an effective move.

4. Maintenance. I'm lucky if I have time to clean my apartment, let
alone a house.

This is my favourite area. I bought an old second-hand electrolux
vacuum for 50 dollars from a walk-in
electrolux dealership on the wrong side of the tracks part of town.
Like you, I wouldn't want to tell
you how many times I have vacuumed or not vacuumed. But not a problem,
it's a small place.

I am not that bright but with the help and patience of Home Depot I have
reroofed, replumbed, and rewired the shack over the 30 years. Each
roughtly costs 600 dollars to do it yourself. So dirt cheap. But the
good part is, you can do it when you have the cash and if you don't have
the cash for a while, you use the one tap that works, the one light that
works and sleep in the only dry corner in the house where the roof
doesn't leak.

I've worked customer service for plumbing, HVAC, and
home maintenance companies before, and I hear how much people pay for
this stuff. In an apartment, it's all FREE.

Jokingly, I ask how young are you?

Everyone I know, without exception, complains that the landlord doesn't
fix anything and if they do, it is a makeshift shoddy job and leaves a
mess behind and their doors unlocked not to mention they have no idea
when the trades person will or will not be there and security issues
everywhere.

Oh, and about it being free. Improvements means the rent can usually go
up - and up.

And before I forget, I will tell you about a story of a lovely woman who
was going to retire. I said, keep working, who knows what the dollar
will do or what portion of the pension won't be there in a few years.
She agreed and then throught better of it, her choice. But wait, she
gets a letter from the strata council
telling her that her portion of repairs and upkeep to the building will
be 30 t 50 thousand dollars due within the next couple of years. Pay
that on a small fixed pension. So she can't retire, she has to work and
save for the unknown.

In the end, I suppose it's a matter of personal preference. But I do
wish my home-owning friends would cut out the holier-than-thou attitude.

Absolutely no question it is a matter of personal preference. But you
should talk to people over 45 who rent, are of modest income and have
little hope of buying at this late stage. These people see their rents
go up
regularly and their salary does not.

One last comment. A guy who lived across the street in a rental
apartment building for over 30 years since it was built, was told they
were going to renovate his suite and he would have to move - long story
short - he could move back later. My take on the story is that he won a
free satelite dish and mounted it on the outside balcony of his rental
suite. That I believe was a no, no for a number of reasons from his
landlord's perspective. The only way to get him out was to removate.
That they did. He fought moving but in the end the law is, you rent,
you have to move. The landlord may have to pay you thousands in the end
to get you to move, but in the end you move. What would be the
likelihood of this guy wanting to move back, give notice and all that at
the other building and there would be a new contract at his old
building, higher rents. You got it. He was roasted.

My personal opinion is that considering all of the circumstances, buying
a modest shack somewhere on the planet that is affordable to you when
you are able to earn a modest income is that as bad as it seems and to
most, done carefully, is probably a good idea.