Quote:
Originally Posted by johny
why is that stupid? as long as the rent is higher then the interest part of the morgarage the guy is making money in the long term.
who the hell is going to rent a place for the same price as a mortage?..
|
There are very few places that fall into this category. I understand that you're suggesting that if something is rented as least someone else is subsidizing the cost which is all fine and dandy if you're living at home with mom and dad footing the bill. If you're living on your own or during the time in which you own something, you have to live on your own, things could get ugly.
There are better places to put your money rather than rent out an overpriced condo. A perfect example is would you rather buy a condo in Vancouver at all time highs for $400k and collect $1400 rent or buy a $240,000 condo in California at all time lows and rent it out for $1600 a month?
Keep in mind that the odds of prices in real estate going down are far greater than up at this point although I wouldn't be surprised to see a little more upside between now and the winter games next year.
Renting in many places is more expensive than ownership. I am not suggesting this should be or will be the case in Vancouver. Rentals typically cater towards people who are unable to afford a home due to down payment, credit issues, or they are working and need a temporary place to stay etc.
For argument sake, if you can own for the same price as renting, why wouldn't you own? The same argument can be said right now. Why own when you can have a nicer place for half the price. If the market drops you have no downside whereas the owners will.
Another interesting thing is that mortgage rates are very low and it's a great time to get a mortgage or refinance. The bad news is for the first time or recent buyers who paid a premium price. When interest rates go up, look out. You will see homes worth less than the mortgage and owners that won't be able to pay down the mortgage.
Vancouverites are funny. They believe everything is just going along fine. When shit hits the fan everyone is dumbfounded!