it's definitely very very tough at this interest rate.
In the next year, he'll lose 8k a yr give or take.
He'll lose less in the next 2 years as interest rate dips a little.
Real estate is never a 5 yr game.

In 15 years, the property would have increased 50% - 80%.

From what i've been seeing, these rates we're at should be our "normal" rates. The rates have been way too low the last 15 years and that has skewed our perception of rates.

Even at these rates, inflation isn't coming down. I can't see how the BOC will cut rates when inflation isn't going down. It makes sense we'll be stuck here for longer than people think.

I guess it's more of have someone pay part of your mtg for next few years until you need it. Then capital appreciation. Smaller mtg and build equity.

Yes historically rates were low but with all the money printing, hand outs and debt, North America can't afford high rates. Higher rates = gov spend more money that they don't have. At 5% there are paying billions in debt repayment, more than what they spend on us, building houses, health care or education. So literally the gov has no choice but to lower rates cuz it fucks them over too.


Just like the dumbass friend that you have. That is eyeball deep in debt. Owes more debt that his annual income. Raising rates or keeping rates high will not benefit him, neither will giving him more debt, credit cards.

Welcome to Canada new immigrants

I also have an updated view on realtors in general, specifically in the North Van detached market under $2M.

Selling agent:

Pros -- Ridiculously easy money. Get a listing and watch the offers pour in. Sell it in a week. Make $25k in commision. Barely lift a finger except make a brochure and plan some viewings.

Cons -- It's very hard to get listings. Supply of homes is low and supply of agents is high, so just getting a listing is not easy. You need a strong brand and word-of-mouth. Newbies fresh out of school would have a hard time breaking in.

Buying agent:

Pros -- Lots of buyers out there, so it's relatively easier to get clients. The high cost of homes makes the commissions more than decent ($20k let's say). And the inventory is so low that you're not really doing any "digging" to find homes. Just setup the viewings your client asks you to and then prepare the offers.

Cons -- With multiple offer scenarios, the odds your client's offer wins are low. So the commission isn't as easy.

I see how much money some of theses mofos are making compared to the work they do and it's crazy. But now I also realize it's not as easy as one might think.

It's only hard because it's so easy... everyone jumped in and got licensed and crowded the pool

Lol 11 years later I still get "market update" booklets in the mail from the Realtor we used when we bought. Someone spent some time making them, plastic comb bound, carstock front & back pages.

They go straight in the recycle bin.

Sounds about right. Unless you have support going into the industry (family friends referrals join a team) a new agent will exit as fast as they enter the profession

https://nationalpost.com/opinion/why...s-at-all-costs

Stupid turd suggest big banks should also offer these halal mortgages and got shot down right away.

No shit, if this was an option everyone would convert to Islam for the savings

I guess by that logic we can say if he loses $7,200 a year for his entire mortgage length, he'll end up putting down $180,000 ($7,200 x 25) for a $600,000 condo, so you could argue it's a good forced retirement savings. Probably not the best way to scale, but for one or two properties like this, it isn't horrible?

Side note.. You calling my friend a dumbass had me in stitches. That shit was way too funny.

Sending Israel all these arms and rockets that end up killing thousands of children, here’s my apology in your new halal mortgage!

I'll just wear a towel on my head, gib me interest free:lawl:

Not for or against this but I don't think you'll end up saving much, if anything at all, it's just another way to word things (or write the contract) so that Muslims who observe this can say they are not taking out a 'loan' but it is a lien ... whatever.

I am a nerd so I did some math.

Assumptions:
Purchase price = $700,000
Financing = 65% (therefore you require $245,000 down)
Interest rate = 5% annually for the whole 15 years, 25 year amortization
Annual cash loss = $8,000
Sale price in 15 years =$1,260,000 ($700,000 x 180%)

Result is that you will have achieved an approximately 8.2% annualized rate of return on your $245,000 up front investment + annual top up of $8,000 loss per year. This result does not include realty costs to sell it at the end, special assessments, anything not included in the $8k/year. It's not terrible, but it's a highly illiquid investment, tenants are a pain, you are exposed to liability, and so on. At the end of 15 years, you will have $1,009,222 in your bank account after paying back the remaining mortgage on the place.

Alternatively, with 0 skill at all, you could plow your $245,000 and $8,000 annually thereafter into an investment account that owned just a low-cost ETF of the entire US S&P and very likely achieve 10% annually, net of costs. After the same 15 years, the same amount of your money invested results in $1,367,524 in your account, over 35% more.

FWIW, my own portfolio has done a bit more like 13% annually after costs which would result in $2,070,548 in the account.

Real estate is good, but the real value is in the forced savings mechanism. If you put a few hundred thousand away for 15 years, and don't do anything except add a few thousand more a year, all results will be good...

-Mark

So... Mark... how do we contact you to do our investments? lol

Tell us the start and finish date

No need, he just told you his formula. Just buy S&P 500. Buy VFV in your TFSA and non-registered accounts and buy VOO in your RRSP (to save on the 15% withholding tax).

S&P 500 has returned about 15% over the last 10-year period. Over its history it has returned about 10%.

https://www.vanguard.ca/en/advisor/p...group/etfs/VFV

I just pulled the March 31, 2024 statement.

YTD: 10.81%
12M: 25.53%
3Y: 13.81%
5Y: 12.53%
All: 11.18% (March 2018)

These returns are after the ~1.35% fee I pay is deducted.

-Mark

Vangaurd :fuckyea:

Those are some rookie numbers, I was under the impression that RS Baller$ all make 300%+ :troll: :pokerface:

I wonder if anyone takes out a line of credit against their home equity and uses that to fuel purchase of ETFs. The S&P500 is on avg going to yield more than the HELOC rate isn't it? :D

https://forums.pelicanparts.com/uplo...1194654061.jpg

We could not be more boring with our investments - snooooooooze. Our goal is to achieve a meaningful return over and above inflation, while taking the minimum risk and volatility to do so. ZZZ.

But with that said, we have worked hard to front load our retirement savings and other portfolios and that makes a big difference to the end product. I look at financial plans all day and it's so much less stressful to hit the objectives through time and tax-efficiency instead of just chasing yield and absorbing more risk correspondingly.

-Mark

Many people do. You can lock in a 5-year chunk at 5% +/- these days, that's not a huge hurdle rate to have to better with your investments.

With that said, there is also some middle ground which is simply to not speed up your mortgage payments and take your full amortization. No lump sums, no accelerated payments. Instead, every surplus dollar goes into a portfolio. That's what my wife and I do - there's an academic argument to take MORE debt, but there's a "sleeping at night" factor that is different for everybody. For us, it's at having a 30-year mortgage we will take all of 30 years to pay, intentionally.

-Mark

I know some people use the Smith Maneuvre with dividenda because there's some tax loophole involved but I don't remember the specifics.

Wow I've forgotten about that part of automotive internet history