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Old 02-05-2016, 10:36 AM
 
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Quote:
Originally Posted by aramax666 View Post
To each his own, but OP, i think its naive to make a manifesto on your economic choices at 29. I dont know where you live, so maybe 250k works, but you mention that you would stick to it regardless of location?

I think you are making the mistake of choosing some arbitrary way to value the price of an asset. There is only one way, and thats market with all its greed and inefficiencies.

Making it in the world is hard , it is painful, even brutal. Running after money is not some vain pursuit , it is a validated means to provide for not just yourself, but family and leave somethin for your kids.

But if you are convinced that stock markets are the way to go, best of luck.
The high cost areas on both coasts are not only the places where a decent house for $250k can be difficult to impossible to find, but in addition those also seem to be the places where it makes more sense to rent and invest. I just don't see why renting is not an option if it is the more prudent thing to do. Take the Bay Area for instance. People complain that even a run down condo costs $600k. True enough, but if they can rent the same thing for $2500 - $3000/mo, they can come out ahead in the long run by doing that and investing the rest (once maintenance, repairs, and HOA if applicable are accounted for and not just PITI).

Now of course if I find myself sitting on millions in liquid assets I will absolutely reconsider this, but until then I would rather opt more for options and more financial security.
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Old 02-05-2016, 10:46 AM
 
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Then you probably never want to move to Canada, especially Vancouver.


Tight Metro Vancouver markets push average house price to new record $1.83 million


Canadian House Prices


If we travel back in to the 1990's I think one could buy a decent house in Vancouver for that price.
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Old 02-05-2016, 10:53 AM
 
Location: Whittier
3,007 posts, read 4,873,036 times
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Quote:
Originally Posted by Stockyman View Post
Then you probably never want to move to Canada, especially Vancouver.


Tight Metro Vancouver markets push average house price to new record $1.83 million


Canadian House Prices


If we travel back in to the 1990's I think one could buy a decent house in Vancouver for that price.
Wow. I just did some brief research on that and it looks very unsustainable. A crash is coming for sure.
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Old 02-05-2016, 10:54 AM
 
12,404 posts, read 9,206,608 times
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Quote:
Originally Posted by Stockyman View Post
Then you probably never want to move to Canada, especially Vancouver.


Tight Metro Vancouver markets push average house price to new record $1.83 million


Canadian House Prices


If we travel back in to the 1990's I think one could buy a decent house in Vancouver for that price.
OUCH.
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Old 02-05-2016, 11:00 AM
 
1,723 posts, read 1,174,116 times
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Quote:
Originally Posted by harhar View Post
Wow. I just did some brief research on that and it looks very unsustainable. A crash is coming for sure.
Unfortunately Vancouver is being sustained because of foreign money. That crash you've mentioned started way back in the early 2000's. It hasn't happened and only gotten worse. The Van Mag Q&A: Ian Young on racism and real estate - Vancouver Magazine


This city will eventually be just old people, no kids. Schools will shut down. It's definitely bleak in the future.
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Old 02-05-2016, 12:03 PM
 
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I agree with you OP! That is why I don't think I could ever rationalize living in a high COLA. Given the insane prices of real estate and rentals you would need to pay me at least double (probably more because I would want my wife's salary replaced as well) what I make now to get me to even consider moving to a Seattle, San Fran, NYC, Boston, area.

Quote:
Originally Posted by ncole1 View Post
The high cost areas on both coasts are not only the places where a decent house for $250k can be difficult to impossible to find, but in addition those also seem to be the places where it makes more sense to rent and invest. I just don't see why renting is not an option if it is the more prudent thing to do. Take the Bay Area for instance. People complain that even a run down condo costs $600k. True enough, but if they can rent the same thing for $2500 - $3000/mo, they can come out ahead in the long run by doing that and investing the rest (once maintenance, repairs, and HOA if applicable are accounted for and not just PITI).

Now of course if I find myself sitting on millions in liquid assets I will absolutely reconsider this, but until then I would rather opt more for options and more financial security.
Are you assuming the individual has cash to pay for the 600k condo? The benefit of buying is leverage. If I have 20% to put down on a 600k house and it can generate 8%/yr (which is a big if) it still only produces enough to pay for 3-4 months of rent in a 2.5-3k/month rental.
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Old 02-05-2016, 12:48 PM
 
Location: North Idaho
21,004 posts, read 25,781,024 times
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Quote:
Originally Posted by ncole1 View Post
........People complain that even a run down condo costs $600k. True enough, but if they can rent the same thing for $2500 - $3000/mo,........
The mortgage payment on $600,000 at just an OK rate, not the best rate available, with moderately good credit, is $2800 a month. I can't see the great big savings that comes from paying $2500-$3000 a month in rent. (3.9% and there are mortgages right now for 2.2%, although I am going to assume you'd need excellent credit to get that rate)

Also, your house payment wouldn't actually be that large, because you would put down a down payment and wouldn't really be borrowing a $600,000 mortgage; you'd be borrowing less.
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Old 02-05-2016, 12:54 PM
 
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Quote:
Originally Posted by oregonwoodsmoke View Post
The mortgage payment on $600,000 at just an OK rate, not the best rate available, with moderately good credit, is $2800 a month. I can't see the great big savings that comes from paying $2500-$3000 a month in rent. (3.9% and there are mortgages right now for 2.2%, although I am going to assume you'd need excellent credit to get that rate)

Also, your house payment wouldn't actually be that large, because you would put down a down payment and wouldn't really be borrowing a $600,000 mortgage; you'd be borrowing less.
That's just the P&I payment. What about the T,I,M, and R? (maintenance and repair)
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Old 02-05-2016, 12:55 PM
 
12,404 posts, read 9,206,608 times
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Quote:
Originally Posted by mizzourah2006 View Post
I agree with you OP! That is why I don't think I could ever rationalize living in a high COLA. Given the insane prices of real estate and rentals you would need to pay me at least double (probably more because I would want my wife's salary replaced as well) what I make now to get me to even consider moving to a Seattle, San Fran, NYC, Boston, area.



Are you assuming the individual has cash to pay for the 600k condo? The benefit of buying is leverage. If I have 20% to put down on a 600k house and it can generate 8%/yr (which is a big if) it still only produces enough to pay for 3-4 months of rent in a 2.5-3k/month rental.
No, I am not assuming paying cash.
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Old 02-05-2016, 01:21 PM
 
Location: Los Angeles
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I agree with your conclusion, though not for all the reasons that you state. In 1989 I found a very nice 2,000 sq ft townhouse in a lovely part of Los Angeles and bought it for $ 275,000. It was a stretch at the time due to the 11.5 % interest rate but it has now been paid off for years and is worth about $ 550,000. I could easily afford to buy a $ 1 million + house now, but why? I like my home. It's in a great area, has plenty of space and it fits me like a glove. Every day I go out and appraise million dollar homes and I have yet to become envious of them. Oh sure, they have kitchens fit for a professional chef and they have 5 bedrooms, but I don't need any of that. My house is my HOME and I am happy here.
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