why young people who can afford it are choosing not to buy homes in calgary - where to buy a smart board

If all goes well, the arc of early adulthood should be: Graduation, looking for a job, buying a house.
We are told that this is the secret of success.
Every milestone you reach, friends and family will shoot you back.
When you get to the last step, you know you did.
You're the owner now.
Congrats.
Welcome to the club. But wait.
Some smart young people in Calgary who have money to buy choose to rent a house. Yep. Rent.
Or, as your uncle might say, "pay someone else's mortgage. Are they crazy?
Or do they know what the rest of us don't know?
The decision to choose a lease or purchase depends entirely on your personal circumstances.
If you are sure that you will be living in the same place for more than 10 years and believe that house prices will exceed inflation, then the standard curve after adulthood may be suitable for your life.
In this case, buying is definitely a good choice.
But there are risks.
A mortgage may make your mom happy, but you have to do a lot of things to make up for a small part of what she did in her first home.
If it's just a question or two, you may find yourself trapped.
The return of the past does not guarantee the return of the future.
Taking a closer look at these numbers will reveal how the scale of risk and return is tilted in different directions.
It may run counter to conventional wisdom.
The Orthodox ownership promulgated by the government, banks and real estate agents.
This may lead to complaints from family members.
It may even end the Tinder appointment suddenly.
But let's explore why you might want to rent.
All of this comes down to mathematics.
In the past few years, the price of a typical independent house in our city has hovered around $510,000.
The same is true of the Calgary Real Estate Board.
Buying that house today may cost you $3,000 a month.
This will cover real estate taxes, insurance and maintenance costs. (
We will discuss these estimates further later. )
At the same time, if you want to rent a similar house, you may find something in the current market for $1,700 a month, and during the downturn, the vacancy rate has quadrupled.
Right there you can save $1,300 by renting a house
Every month.
Plus the tens of thousands of dollars you don't have bound in your down payment, now you have some serious capital to invest in any other investment.
This is at the heart of the calculations that some young people have been doing.
They considered the more diverse investment opportunities offered by leasing, and they were attracted by flexibility and reduced market volatility.
So they are not in a hurry to buy.
Bridget Casey is a 32-year-old girl. year-
An old entrepreneur at the University of Calgary financial MBA.
She has recently experienced life changes that have often prompted people to buy a house.
She became a mother.
"Just four days after I moved into the new pregnancy test, I received a positive pregnancy test --
"Bedroom apartments," she wrote in a popular financial knowledge blog in last April, which is aimed at people between the ages of 20 and 30.
Caseyhad has been saving-a lot—
Ready to buy.
She had to pay a big down payment but was not in a hurry to pull the trigger.
As early as the 2015 s, she had questions, and she went through this in detail on her blog.
Three years later, even as a new mom, she still chose to rent a house.
"Now that I have children, I am thinking about moving to a more permanent place," she said . ".
"But it doesn't work every time I do math.
"Danny Hynes also did math.
He estimated that the house he rented was 40 cents cheaper. The 30-year-
The old engineer, who also has an MBA, bought an apartment in Edmonton about 10 years ago, and said that once he paid for a realtor and other closing expenses, he basically made ends meet.
But now that he has moved back to Calgary, he thinks renting is a better option.
He took the money he had saved and saved it elsewhere.
This includes some of the funds in the real estate investment trust fund, but only as part of a diversified portfolio.
"I mean, this is the first thing you learn in any business class," he said . ".
"It's a very stupid idea to focus all your money on an asset.
Your risks and fluctuations in the market are very large.
"Putting all the eggs in the real estate basket will also bring the so-called opportunity cost.
It's a theoretical concept, but it turns into real money.
In the case of Haines, buying a house means missing the opportunity to invest cash outside the stock market.
He said the investments have been "very good" in the past few years ".
"I believe they are doing better than many people's homes," he said . ".
It also adapted him to the changing situation.
So when he was fired in 2015, instead of worrying about how to pay the next mortgage, he traveled and worked in New Zealand for a year.
Renting a house not only liberates his capital, but also liberates his life.
But Haines admits there are other costs for renting. asocial one.
He said his decision was a tough one for some family members, especially those of the older generation who did well in the real estate sector.
Then there is a side eye of someone his age.
"The first date will definitely show up: 'Oh, you rented this place?
How much did you make? This is weird.
"The generation gap may be strange now, but it is becoming more and more common.
Young r rentals are still a minority in the city, but only barely.
Housing ownership rates for people under 35 have been declining over the past decade.
Only 50 out of the 2016 census. 6 per cent.
In contrast, the proportion of baby boomers and older generations increased slightly to 83. 1 per cent.
Clearly, there is little debate in the crowd about the wisdom of owning a house.
This is understandable.
"They are a bit backwards --
From this point of view, "said max Fawcett, a former Calgary resident, who wrote a lot about the real estate religion he described.
"If you look back on the last 30 years, buying is a great option.
But that does not mean that future purchases will be the right choice.
"Q & A: Max Fawcett said Why renting a house is better than buying a house, and he said whether there will be an" imbalance "in information for potential buyers ".
It comes from real estate agents and bankers who are motivated to sell their houses.
It's from the well-
This means parents who want their children to benefit from the same rewards they enjoy.
Who attracted it from the government first-
Time buyer with ability to borrow down payment from RRSPs and apply for tax credit for house decoration.
"This makes it difficult for people to accurately assess the information that is in front of them," said Fawcett . ".
The task is already arduous enough.
Evaluate the information, trying to compare the cost of the lease and purchase
And the expected return on your investment-
Even the head of the most inclined person in mathematics is enough to swim.
Fortunately, you can use some online tools.
But they can also be confusing.
One of the more complex but powerful tools comes from the repeal of what is known as mortgage intelligence.
Insert a bunch of numbers that show you how long it will take to buy a home to break even, rather than using down payment and monthly savings as a rental r investment.
The New York Times also has an interactive tool that is easier to understand, one of the complex factors.
In order for the calculation to work in a Canadian environment, you must make sure to set your "marginal tax rate" to zero.
This is because the US government has a bigger incentive to buy a house.
They can deduct mortgage interest and property tax from the income tax.
Using these tools together with the numbers of our typical stand-alone houses, add some assumptions and you will find that there is actually a very close relationship between rental and purchase.
Let's give it a try. Three in-per-
Mortgage rate of 20 centsper-
Down payment, lowerend estimate (1.
5% of house value)
For maintenance costs, assuming that house prices and the moderate annual return on any investment you make as a rental r are 2 per cent, math will come out soon to support the purchase. Cool.
But by adjusting some variables, things will change dramatically.
Raising the mortgage rate by one percentage point, suddenly it takes twice as long to buy the option to make more profits.
Reduce the expected increase in house prices by one percentage point, and rental housing looks better in 20 years or more.
Assuming the return rate on the stock market is one percentage point higher, math tells you to rent a house forever.
Then the question becomes: How much are you willing to bet on real estate?
Guess the future, if you buy today and the price increases by three to four per year, then of course, you can sell in five years, and you may sell in advance compared to renting a house.
But what if they only grew 1 cent?
What if they drop a little?
What if they crash?
If it takes 10 or 15 years for your purchase to succeed, what will the interest rate look like?
During that time, how likely is the roof leaking, soot blowing furnace, special assessment by the board of directors of the apartment, or other major maintenance costs?
On the other hand, renting is cheap now, but prices have begun to rise.
Will they exceed the purchase cost?
Of course, we don't have a crystal ball.
You can do your best to make an informed decision, but at the end of the day, it's never a sure bet.
For the young people we hear, however, it comes down to spreading the risk rather than rushing into a long termLong-term commitment.
"I do think smart young people value keeping their choices," said Fawcett . ".
"They know they can buy it at any time.
This is a good thing to rent a house . . . . . . If the numbers change, math starts to work in your favor, or your living conditions change, you can buy them next week.
"At the same time, they are resisting the pressure to buy.
They are more than happy to save money by renting a house while enjoying the freedom and flexibility that comes with it.
They may choose to buy a house one day.
But now, they're not left to their families, their first date or the fear of missing it.
Calgary: When we build the city we want, ahead is CBC Calgary pays special attention to our city --
The city we need.
This is a place full of possibilities.
The market of ideas. So. Have an idea?
Send email to: calgarytheroadahead @ full blood count.
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