Real Estate

Can we Afford this House?

  • Last Updated:
  • Sep 21st, 2020 10:40 pm
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[OP]
Newbie
Sep 17, 2020
2 posts

Can we Afford this House?

My partner and I are looking to upgrade our house in Edmonton. We've found a great $950k house but it'll need a lot to work. Probably 200k. We're okay with renovating it slowly though.

I've always been a frugal guy so I am weary about spending a million bucks on a house. It would be hard for me to spend that money even if I were a millionaire.

Together we net about 11600 a month in base salary. Estimated total house expenses (mortgage, property tax, water/heat, insurance) come out to be roughly 4500 monthly.

Am I crazy to think that we might be able to afford this home? By by the rental rule of 28% and 32% both seem to come out ok.
33 replies
Deal Addict
Aug 28, 2010
1159 posts
270 upvotes
Toronto
$7100 left for cell phones, internet, tv, car insurance/repairs/gas, food, savings/retirement, vacations.... yes... sounds very reasonable TO ME

Im curious where you see any margin of concern given your income.
Member
Dec 5, 2009
205 posts
98 upvotes
Given the standard rule of thumb, yes, you can afford it. But the question, are you upgrading for the sake of upgrading? or is it because you need to upgrade?
Also, if it needs 200k, I would prepare for 250k.
Member
Jan 29, 2007
264 posts
55 upvotes
Markham
Throwaway55 wrote: My partner and I are looking to upgrade our house in Edmonton. We've found a great $950k house but it'll need a lot to work. Probably 200k. We're okay with renovating it slowly though.

I've always been a frugal guy so I am weary about spending a million bucks on a house. It would be hard for me to spend that money even if I were a millionaire.

Together we net about 11600 a month in base salary. Estimated total house expenses (mortgage, property tax, water/heat, insurance) come out to be roughly 4500 monthly.

Am I crazy to think that we might be able to afford this home? By by the rental rule of 28% and 32% both seem to come out ok.
Don't worry, my fam nets much less and we're buying a mil house. I'm screwed, you're likely OK.
Newbie
Aug 23, 2011
46 posts
41 upvotes
VANCOUVER
My partner and I net about the same as you do, we bought a 950k place two years ago... very similar to your situation but the home we picked didn't require any renovations. Our home currently has no rental income either, and we've done fine and still have been able to save money every month. We don't have any car payments though (bought outright years ago) and our monthly expenses are typical. We are not big spenders but we do enjoy eating out from time to time. We have no children.
Deal Guru
Feb 29, 2008
12265 posts
7386 upvotes
Looking at sheer numbers, of course you can afford it. Is this a humble brag post?
[OP]
Newbie
Sep 17, 2020
2 posts
We both come from pretty modest backgrounds so the idea of ever spending a million dollars on anything just makes me uneasy. Never in my wildest dreams would I ever have thought we could afford anything like this so I'm even having trouble believing what the numbers are telling me.

I might just be looking for the reassurance from some internet strangers lol
Deal Addict
User avatar
Oct 26, 2007
1982 posts
933 upvotes
YYZ
Throwaway55 wrote: We both come from pretty modest backgrounds so the idea of ever spending a million dollars on anything just makes me uneasy. Never in my wildest dreams would I ever have thought we could afford anything like this so I'm even having trouble believing what the numbers are telling me.

I might just be looking for the reassurance from some internet strangers lol
yes id say you can afford it
a million dollar home these days isn't even that large.
In toronto there was just a listing for a 2 bed 1 bath for 999,999
Licensed Full Service Realtor
Deal Addict
User avatar
Dec 13, 2016
3486 posts
2949 upvotes
What house in Edmonton costs 1 million?

Thats crazy.
Newbie
Jun 30, 2018
8 posts
1 upvote
Talking about not be able to afford a place, we net less than half of you and still decide to get this 1.3m presale. Someone should stop us lol
Deal Addict
Jan 15, 2017
3451 posts
2795 upvotes
You can afford it. The next question is whether you should invest $1.150 million into a home in Edmonton. Right now there are only 7 listings at $950k, but 35 from $1.1 - $1.2m. Over 64 listings at this price point when you take in the suburbs. This is the city where the average price for a single family for Aug was $439.

If you still fell confident investing that amount, why live through renovations and all the uncertainty that they bring when there is so much choice at that price point?
Deal Addict
Jun 11, 2010
1264 posts
693 upvotes
ottawa
skeet50 wrote: You can afford it. The next question is whether you should invest $1.150 million into a home in Edmonton. Right now there are only 7 listings at $950k, but 35 from $1.1 - $1.2m. Over 64 listings at this price point when you take in the suburbs. This is the city where the average price for a single family for Aug was $439.

If you still fell confident investing that amount, why live through renovations and all the uncertainty that they bring when there is so much choice at that price point?
Honestly I can't imagine a $950k home in Edmonton that also requires $200k in renovations. A $950k home in Edmonton would be a mansion on an hectares.
Deal Addict
Jan 15, 2017
3451 posts
2795 upvotes
barqers wrote: Honestly I can't imagine a $950k home in Edmonton that also requires $200k in renovations. A $950k home in Edmonton would be a mansion on an hectares.
Here's one: https://www.realtor.ca/real-estate/2215 ... tridgeedmo

And another: https://www.realtor.ca/real-estate/2202 ... gemontedmo

And here's what 1.18m can fetch in St. Albert https://www.realtor.ca/real-estate/2223 ... nor-pointe

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