Real Estate

Not buying in 2011 cost me 500k

  • Last Updated:
  • Dec 14th, 2018 11:53 pm
Penalty Box
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Aug 19, 2008
1924 posts
496 upvotes
noobienoob wrote:
Dec 8th, 2018 6:54 pm
this is really useful advise, thank you very much. I never heard of the term before so let me keep that in mind.

does having a semi-detached versus a freehold, matters for the potential to add a separate entrance? I don't think my fiance is a fan of strangers in the house but i can totally see how this helps so much.

just curious by referring to the government, do you mean RRSP, first-time home buyer tax, less land transfer tax, etc?

What "term" had you never heard of before?

A "semi detached" and a "freehold" are two completely different things. Having a freehold means you're not paying any maintenance fees or condo fees to a property management company. The opposite of a freehold townhouse is a condo townhouse.

You DO NOT want a condo townhouse. Actually, you don't want a townhouse at all if you're going to rent out the basement. The'ye way too small in the basement. A bungalow - - specifically, a raised bungalow - - is king for that.

The opposite of a semi detached is a fully detached. You can put a basement apartment in either, but obviously the fully detached is preferable.

One of the essential things you'll need is a separate entrance to the basement. When it's properly set up, there's ZERO interaction - - or a close to ZERO as possible - - between the people downstairs and the people upstairs.

Do you and your woman have any RRSP room or are you both maxed out? If you've got some contribution room, here's what you do:

Go to the bank and get an RRSP loan right now for $25,000. That's the max you can withdraw under the first time homebuyers program. Put it in something ultra conservative with no redemption fees, or just leave it sitting as cash until you "decide" what to invest in.

Banks will throw money at you for an RRSP loan because they know you're likely going to hand it right back to them to buy some of their useless mutual funds. DO NOT mention you're going to be pulling it out in 90 days under the HBP because they won't be excited to let you use them like that.

What tax bracket are you and your woman in? Let's assume your marginal rate is 30% - - that means you're going to get a $7500 tax refund this spring.

Add the refund to the $25k you pull out of the RRSP and now you're sitting with $32,500.

Lastly, if at all possible, DO NOT put both names on title. If you do, it's going to limit the number of future properties you can purchase.

If you both go on title for this one, that means you're both on the hook for the mortgage. Put your woman on title and then when it's time for the next one, you won't have the mortgage liability against you. This will make financing much easier, and you'll be able to RRSP maneuver again.
Licenced Realtor and P.Eng
Deal Addict
Mar 27, 2004
3118 posts
528 upvotes
Toronto
noobienoob wrote:
Dec 8th, 2018 6:38 pm
wow, you really read me really well. ya i admit i've been always a pessimistic person. first "blue chip" stock i brought is still down 60% from the great recession...put me in a shock...2nd stock i brought was RIM....i went down 17% in a week then up 20% then i cash it out to break even by about $80 bucks

actually i can't afford a house in downtown or central toronto

the area i'm thinking of is in york region..

i think the biggest problem for me is dealing with the emotions
Great time right now to buy in york region, prices are at a equilibrium. Homes are being sold regardless of what people think of the market or market forces such as interest rates or any other policies. If you have the money, take the plunge. The market is done correcting.
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Homelife Bayview

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[OP]
Member
Sep 13, 2007
359 posts
89 upvotes
Toronto
Donnie740 wrote:
Dec 8th, 2018 8:39 pm
What "term" had you never heard of before?

A "semi detached" and a "freehold" are two completely different things. Having a freehold means you're not paying any maintenance fees or condo fees to a property management company. The opposite of a freehold townhouse is a condo townhouse.

You DO NOT want a condo townhouse. Actually, you don't want a townhouse at all if you're going to rent out the basement. The'ye way too small in the basement. A bungalow - - specifically, a raised bungalow - - is king for that.

The opposite of a semi detached is a fully detached. You can put a basement apartment in either, but obviously the fully detached is preferable.

One of the essential things you'll need is a separate entrance to the basement. When it's properly set up, there's ZERO interaction - - or a close to ZERO as possible - - between the people downstairs and the people upstairs.

Do you and your woman have any RRSP room or are you both maxed out? If you've got some contribution room, here's what you do:

Go to the bank and get an RRSP loan right now for $25,000. That's the max you can withdraw under the first time homebuyers program. Put it in something ultra conservative with no redemption fees, or just leave it sitting as cash until you "decide" what to invest in.

Banks will throw money at you for an RRSP loan because they know you're likely going to hand it right back to them to buy some of their useless mutual funds. DO NOT mention you're going to be pulling it out in 90 days under the HBP because they won't be excited to let you use them like that.

What tax bracket are you and your woman in? Let's assume your marginal rate is 30% - - that means you're going to get a $7500 tax refund this spring.

Add the refund to the $25k you pull out of the RRSP and now you're sitting with $32,500.

Lastly, if at all possible, DO NOT put both names on title. If you do, it's going to limit the number of future properties you can purchase.

If you both go on title for this one, that means you're both on the hook for the mortgage. Put your woman on title and then when it's time for the next one, you won't have the mortgage liability against you. This will make financing much easier, and you'll be able to RRSP maneuver again.
I see what you mean. If we both put our names under it, we cannot qualify for the first-time homebuyer program again. I currently have enough to borrow for the RRSP homebuyer program right now. Hmm, this manuevering maybe interesting
Deal Addict
Nov 10, 2018
1651 posts
1526 upvotes
And yet friends of mine who bought in Oakville about 3-4 years ago are down >$300K (not realized loss as they haven't sold, but since we're talking hypotheticals here...)

Hindsight is twenty-twenty. Foresight is.....damn near impossible.

YOLO, move on.
For legal topics and discussions, the opinion, guidance, and thoughts provided are my own and are not considered to be legal advice, in any manner.
Newbie
Apr 19, 2017
61 posts
27 upvotes
angryaudifanatic wrote:
Dec 9th, 2018 10:43 am
And yet friends of mine who bought in Oakville about 3-4 years ago are down >$300K (not realized loss as they haven't sold, but since we're talking hypotheticals here...)

Hindsight is twenty-twenty. Foresight is.....damn near impossible.

YOLO, move on.
not possible
literally impossible to lose on RE in GTA if you hold for at least 2 years.
Member
May 18, 2015
455 posts
646 upvotes
Thornhill, ON
Millenial1994 wrote:
Dec 9th, 2018 12:31 pm
not possible
literally impossible to lose on RE in GTA if you hold for at least 2 years.
Thanks. I'm forever enshrining that quote as my new sig.
Millenial1994 wrote:
Dec 9th, 2018 12:31 pm
not possible
literally impossible to lose on RE in GTA if you hold for at least 2 years.
Deal Addict
Nov 10, 2018
1651 posts
1526 upvotes
Millenial1994 wrote:
Dec 9th, 2018 12:31 pm
not possible
literally impossible to lose on RE in GTA if you hold for at least 2 years.
Look up housing values in Burlington and Oakville for the last two years.

You're wrong.
For legal topics and discussions, the opinion, guidance, and thoughts provided are my own and are not considered to be legal advice, in any manner.
Member
May 18, 2015
455 posts
646 upvotes
Thornhill, ON
angryaudifanatic wrote:
Dec 9th, 2018 1:15 pm
Look up housing values in Burlington and Oakville for the last two years.

You're wrong.
Or Richmond Hill, Markham, Vaughan, Newmarket, Aurora, Stoufville... I can keep going
Millenial1994 wrote:
Dec 9th, 2018 12:31 pm
not possible
literally impossible to lose on RE in GTA if you hold for at least 2 years.
Member
Mar 25, 2017
329 posts
188 upvotes
My friend's brother bought a place in Brampton in 2011 for 400K, sold it in 2012 for 100K more and thought that was the peak. 2 years later he felt bad for not holding on to it as the property had gone up by 250K then. The same house was sold last year for ..............1.11 Million LOL !!!!!!!!!!!!!!!Face With Tears Of Joy

Sh*t happens, my dad could have bought a 3 bedroom condo for $85,000 in 1998 but didn't feel like it for some reason, now imagine how much a 3 bedroom condo would be worth now ? Could have, would have, should have are the way of life. NO point in regretting.
Deal Fanatic
Feb 29, 2008
7685 posts
2877 upvotes
I would live in the burbs, but wouldn't invest unless property was located at a subway station/entertainment hub and even then I probably wouldn't.

IMO you will not lose in the downtown core if you pick the right unit, building, location. Simply can't lose.

Outside of the core your chances of being unaffected by market stagnation or drops rises.

If you're buying as your primary and plan on staying for many years to come, drop in prices shouldn't be that big of a deal as prices will tend to trend upwards over time. My mom's house dropped $150K in value from peak. She's not the least bit worried about it. I think same goes for many homebuyers who plan to be in their homes for many years.
Member
Jul 10, 2018
459 posts
409 upvotes
Three major mistakes I hear all the time concerning real estate:

1) I wish I had bought when I could afford to
2) I wish I had bought more properties when I had the chance
3) I regret selling

We all have something we wish that we could change. I fall into category 2. I bought, but I wish I had bought more prior to 2015. I've never sold property that I own exclusively since I started buying because I noticed that my parents would buy and sell (we moved around a lot growing up) a lot and it set them back financially (transaction costs, moving costs, loss of rapid appreciation when moving from large urban city to small town, etc.). I'm not even sure if they realize this to this day.

It's healthy to reflect on mistakes you've made and learn from them. Just don't wallow in it, and try to make better choices going forward.

I'm no credentialed expert but I'll just put this out there based on what I've observed. Your partner is nagging you about having a secondary suite... things like this are going to be a problem for you down the road because she is not on the same page as you in financial outlook. Sometimes you have to give a little to get more, and having a secondary suite to help pay your mortgage is hardly a great sacrifice for tremendous gain and peace of financial mind. If you're married, you'll find her dictating important financial decisions and you having to compromise even though you know it's going to hurt your net worth when all is said and done. Once you have kids, there is no turning back, and note that each kid you have is essentially like having a $250k mortgage. Ironically, once you start a family, you will want to earn more money for them, yet you'll have less time to earn money, because of them. Whatever bed you make for yourself, you will have to sleep in it.
Deal Addict
Mar 27, 2004
3118 posts
528 upvotes
Toronto
Prices are up still if you bought in 2016. You only got screwed if you bought around the beginning of 2017 just before all the wynne policies came in. dont listen to the doomsday people on rfd.
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Homelife Bayview

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Penalty Box
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Aug 19, 2008
1924 posts
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oasis100 wrote:
Dec 9th, 2018 10:03 pm

dont listen to the doomsday people on rfd.

You mean don't listen to renters on RFD - - they're the ones who've been predicting/hoping for a real estate crash for the past decade.
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Penalty Box
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Apr 21, 2004
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OP, you are still better than many of the r/e bears here on RFD.

When asked what investment will make good money, only one provided concrete answers while the Loler just provide the blanket answer "equities". He will probably backtest his imaginary portfolio and put it in my face that our $70-80k down payment in 2011 he could have made into $3m by now.

Too bad I asked him for his picks going forward yet no recommendation at all. Just once did I display his post (he is being ignored) and his blanket response was a pure disappointment but I was expecting it coming from him. Some people are too insecure with themselves and for Loler, he even pretended to be a lawyer on RFD when at the time, he was a HR coordinator.

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