Posted on: 11-01-08 18:26:03
Quote:I'm curious what was so great about the job in Kitchener that motivated you to incur a loss of $50K after-tax dollars?
Originally posted by PakistaniEngineer
Just before the completion of house, I got a better job in Kitchener so moved to Kitchener.
Drastic results were that I paid mortgage of vacant house for six months, till it was sold at original cost. So mortgage cost of six months plus sales agent commission at 4.25%, plus closing costs at purchasing & selling resulted in loss of 40K. Added to that was frequent travelling between Kitchenr and Oshawa, and loss of CMHC insurance (because I had purchased with 5% down payment) so in nut shell my total losses were almost $50K.
Unless the job in Kitchener was paying 3 or 4 times of your original job, why would you move after incurring such losses?
And if is indeed paying you that much better, why complain?
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"Mah deah, there is much more money to be made in the destruction of civilization than in building it up."
-- Rhett Butler in "Gone with the Wind"
love_n_peace,
The above advise given to you by CD members is valuable. Stay put, unless you don't want to land into trouble later.
Five percent and zero down payments, 40 year amortizations etc. makes bank richer and not the home owner. Unless the home owner is using his extra income to invest for profit (writes off interest).
In my opinion, unless home ownership doesn't cost equivalent to ones rent ( or even additional $200 or $300), one shouldn't buy. Gone are the days of double digit real estate growth when the above strategy use to work in buyer's advantage.
You should not be paying more than 35% of your household income on housing (P+I+tax+utility+condo fee, if applicable). By working backward, based upon your income you should budget your housing cost/ type of home that you can afford to buy.
Regards,
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Amit Kalia, Broker, REALTOR®
RE/MAX Real Estate Centre., Brokerage
independently owned & operated
100 City Centre Dr, Unit 1-702
Mississauga, ON L5B 2C9
Phone No.: 905-339-5111
Website: https://www.realestate-ontario.com/
Condo Blog: https://condopundit.com/blog/
Quote:
Originally posted by VJ
If you are a man of progressive thinking or in Sales, then go ahead. The by-product would be "GROWTH", believe me. I have been always spending first and then earning it and thats how I could reach 6 figures in Canada in just 2 years. PRESSURE MAKE US THINK MORE AND WE FIND AVENUES TO COPE UP!!! (This is my personal belief and may not be working for all)
I hope this would help you. If not just ignore t.
Regards,
Vj.
VJ, I can bet you are a sales guy.
This startegy works well with people who know their strengths well enough. Not with everyone.You reminded me of a sales trainer, who would first make his trainee buy his luxury dream car, beyond trainee's ability to pay. Later the pressure to pay off the car loan, made this trainee to not only perform, but also surpass his targets.
With some people, it works!
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Amit Kalia, Broker, REALTOR®
RE/MAX Real Estate Centre., Brokerage
independently owned & operated
100 City Centre Dr, Unit 1-702
Mississauga, ON L5B 2C9
Phone No.: 905-339-5111
Website: https://www.realestate-ontario.com/
Condo Blog: https://condopundit.com/blog/
Quote:
Originally posted by PakistaniEngineer
Hi PakistaniEngineer,
Please check your PM.
rgds,
Hiren
What are the hidden costs to a first-time home ownership?
Our scenario is as follows:
- We are planning to buy our first home this year, since paying rental to the tune of $900 doesn’t make sense any more.
Besides, we don’t want to live in a rental apt/house for the rest of our lives, so we decided that since we have to buy something of our own anyways some day, why not start now!!
- We are planning to go in for a freehold/semi-detached in Brampton within $250000, because after doing market research, realized that getting something like this in Mississauga is next to impossible.
- Based on the above mentioned figure, we estimate that our monthly costs would be in the tune of:
250000 for 40 yrs = $1138.00 (paid bi-weekly)
Taxes = $225 monthly
Heating, hydro, etc = $225 monthly
Repairs, maintenance, etc = $150 monthly
We do realize that we stand to lose a huge amount of money in terms of interest if we go in for a 40 yr mortgage, but again, this is our initial period in this country, and the reduced amount of monthly payments at least gives us the courage to think of taking up the burden of mortgage. Anyways, we plan to pay off the mortgage within the next 20-25 yrs in full.
- We plan to go in for something that has a finished basement, so that we can at least rent it/keep a paying guest. We are interested in areas around Sheridan College. We are hopeful that we will be able to earn a rental income of $500 approx from the basement, thereby paying an extra $300 in costs per month on top of what we are paying as rent for the aptt that we presently live in.
Any ideas as to how easy/difficult it is to rent out a basement in that area?
- We believe that our other costs, for e.g. groceries, car payments/ins, phone/internet, etc. will more or less remain the same. Even if it goes up, it might to an extent of another $150 approx. per month.
Excluding the costs as mentioned above, are there any another hidden costs to a home ownership that we should be aware of? Anything wrong with the estimates that we have worked out?
Quote:
Originally posted by amit kalia
love_n_peace,
The above advise given to you by CD members is valuable. Stay put, unless you don't want to land into trouble later.
Five percent and zero down payments, 40 year amortizations etc. makes bank richer and not the home owner. Unless the home owner is using his extra income to invest for profit (writes off interest).
In my opinion, unless home ownership doesn't cost equivalent to ones rent ( or even additional $200 or $300), one shouldn't buy. Gone are the days of double digit real estate growth when the above strategy use to work in buyer's advantage.
You should not be paying more than 35% of your household income on housing (P+I+tax+utility+condo fee, if applicable). By working backward, based upon your income you should budget your housing cost/ type of home that you can afford to buy.
Regards,
Think outside the box. be creative. if you go with the heard mentality you will part of the heard. if there is desire to own a property of 300K you can still do it.
Quote:
Originally posted by amit kalia
Quote:
Originally posted by VJ
If you are a man of progressive thinking or in Sales, then go ahead. The by-product would be "GROWTH", believe me. I have been always spending first and then earning it and thats how I could reach 6 figures in Canada in just 2 years. PRESSURE MAKE US THINK MORE AND WE FIND AVENUES TO COPE UP!!! (This is my personal belief and may not be working for all)
I hope this would help you. If not just ignore t.
Regards,
Vj.
VJ, I can bet you are a sales guy.
You reminded me of a sales trainer, who would first make his trainee buy his luxury dream car, beyond trainee's ability to pay. Later the pressure to pay off the car loan, made this trainee to not only perform, but also surpass his targets.
With some people, it works!
Yes Amit,
I am in sales and I fully believe and agree to your notes that a sales guy with a progressive mindset can work with no limits of growth. The strategy of planning/spending first and then earning or working towards the same has worked very well for me.
Even you reminded of my last 3 years in India, where we used to make our team of brokers start with buying the best of formal attire to go out in the field and then earn the bills. So many could do that with excelling overall in their profession.
It works man!!!! Sab Bhumi Gopal ki Jay kanaiyah Lal ki!!!!...So I mean it can happen in Canada too...ha ha
