Real Estate

Just realized last year, the house made more money than I did, by a big margin

  • Last Updated:
  • Jan 20th, 2017 10:04 am
[OP]
Penalty Box
Jan 13, 2017
456 posts
361 upvotes

Just realized last year, the house made more money than I did, by a big margin

in 2016, the amount that my house went up by(in Vaughan), exceeded my pre-tax income, and almost doubled my after-tax income. and I am fairly positive this is pretty normal in GTA.

but I am not sure if that is good thing, most people would say that is good, so you can retire early and sell then move to some little towns mortgage free.

In reality no one will do that, they will hold on to it for as long as they can with 15-20% increase yr/yr, they will not sell unless they have to. that itself creates a supply problem.

and what about the younger generation? sometimes I truly feel bad for them, they will never, ever see the days of 350k detached house again in GTA.

I felt like the older people are some what to blame too, they hold on to their hot properties, they hold on to their jobs and in general they live longer these days, the younger generation just never had the chance the older generation once had.
19 replies
Newbie
Nov 5, 2016
29 posts
2 upvotes
MMMPower wrote: in 2016, the amount that my house went up by(in Vaughan), exceeded my pre-tax income, and almost doubled my after-tax income. and I am fairly positive this is pretty normal in GTA.
You only know how much you gain when you sell property. But not only you, many people in GTA are enjoying such numbers on paper :)
Member
Mar 9, 2009
433 posts
161 upvotes
Thornhill
Can you buy food with the money your house made you? Can you pay your utilities bill? Can you buy medicine with it? It's all worthless until it's realized.

The money you made at work is yours to keep and no one can take that away from you, the money you "made" in your house is phantom, and can theoretically drop tomorrow.

Just some perspective.
Deal Addict
Sep 5, 2009
3038 posts
1162 upvotes
You haven't made anything until you sell.
Current cell plans:
Fido $15 3gb
Koodo $40 for 5GB Public Mobile migration plan.

Affordable wireless is possible, just takes some creativity.
Member
May 5, 2013
311 posts
97 upvotes
It is not really about the gain. The beauty about this is selling it is easy but buying it is hard right now.
Deal Addict
User avatar
Dec 27, 2011
3323 posts
1574 upvotes
Waterloo
Here's my thoughts. Real estate prices rising is really only beneficial to current homeowners who move somewhere cheaper.

If you're moving up to a bigger house but still within the GTA, the house you're buying has also gone up so you haven't benefited at all. Not only that, but everyone is paying higher property taxes because of the higher house prices. And because so much more of your income is going towards the house/mortgage, you have less money for other stuff. So where exactly is the benefit?

If you're retiring and moving from GTA to somewhere else, then that's great. But otherwise, you would be way better off if house prices just rose like inflation.
Banned
Dec 5, 2015
2038 posts
427 upvotes
Concord, ON
MMMPower wrote: in 2016, the amount that my house went up by(in Vaughan), exceeded my pre-tax income, and almost doubled my after-tax income. and I am fairly positive this is pretty normal in GTA.

but I am not sure if that is good thing, most people would say that is good, so you can retire early and sell then move to some little towns mortgage free.

In reality no one will do that, they will hold on to it for as long as they can with 15-20% increase yr/yr, they will not sell unless they have to. that itself creates a supply problem.

and what about the younger generation? sometimes I truly feel bad for them, they will never, ever see the days of 350k detached house again in GTA.

I felt like the older people are some what to blame too, they hold on to their hot properties, they hold on to their jobs and in general they live longer these days, the younger generation just never had the chance the older generation once had.
So? You don't live in multi acre lots like people before...People will live in higher density like towns, stacked or condos
Banned
Dec 5, 2015
2038 posts
427 upvotes
Concord, ON
RobertSmalls008 wrote: Paper money until you cash out.
I've cashed out multiple times...By buying and selling multiple properties...No different than investment gains..It's all paper until you sell.. that's why you sell, rebalance and rebuy and keep it going
Deal Addict
May 31, 2007
4996 posts
2115 upvotes
Relatives house went up 600k in 6 months (Toronto), last year, unbelievable. But really large equity gains now unproductive, those with huge equity can even rent nice condo and live like kings and queens. (if you cash out)
Deal Addict
User avatar
Dec 27, 2011
3323 posts
1574 upvotes
Waterloo
GrandePike wrote: I've cashed out multiple times...By buying and selling multiple properties...No different than investment gains..It's all paper until you sell.. that's why you sell, rebalance and rebuy and keep it going
But the houses that you're buying, haven't they also risen in price?
Deal Expert
Feb 29, 2008
24027 posts
2960 upvotes
Montreal
MMMPower wrote: In reality no one will do that, they will hold on to it for as long as they can with 15-20% increase yr/yr, they will not sell unless they have to. that itself creates a supply problem.
Greed. Gotta love it.

RE is neither real nor estate. It's about psychology.
Banned
Dec 5, 2015
2038 posts
427 upvotes
Concord, ON
crystallight wrote: But the houses that you're buying, haven't they also risen in price?
Yes..That's how you make money....E.g. I rmb my first condo...Put 40k down and 3 yrs later make 90k when it was done ..Rinse and repeat with more properties...Buy a 1m house...Put 200k down...Sell couple years later and make few hundred k and continue

Top

Thread Information

There is currently 1 user viewing this thread. (0 members and 1 guest)