MSN04

What trend?

I am not a believer that real estate will ALWAYS go up and it's ALWAYS a good in ...
大C姐 發表於 2010-9-2 18:47

Did you just randomly quote me and said sth irrelevant or that you misunderstood my message?
I am talking about rent.  Not the value of the properties.
If you want to know how is the rent going in the recent years, just search on the web and you will see the trend.

And while you brought that up... do you have any good reasoning why the real estate will continue to go up?  (since you said that such statement is as reliable as predicting a crash.  I am just curious.)

大C姐

Hmm.... what do you think it's the "right" or "good" time to invest in property?
FiChai 發表於 2010-9-2 23:17

    I think I should start a new topic... or write a book on this.

I think it's the right time to buy a property when:

1) Buying is cheaper than renting, or when renting is not an option
2) The potential property meets my minimum requirements AND cheaper than other comparables in the area
3) I've found my dream home

I need AT LEAST ONE of the above reasons and assuming I have the cash and not anticipating to move/ quit my job/ make any drastic changes in my life. Everything else is beside the point, no one can predict the economy, the politics, and the climate. DON'T try to predict the future! Look at your financial situation NOW and make the best decision out of CURRENT information available.

FiChai

I think I should start a new topic... or write a book on this.

I think it's the right time  ...
大C姐 發表於 2010-9-2 23:38

"1) Buying is cheaper than renting": Well, that doesn't really make sense and it won't likely happen like that. Cuz rent is somehow related and in proportional to realty market price. If house price drops, how could a rent raise?
But base on your brief idea, that means if there is a time which is not appropriate for you to buy, it might be a good and right time for some other people to buy. So there is no fixed standard.

大C姐

"1) Buying is cheaper than renting": Well, that doesn't really make sense and it won't likely happe ...
FiChai 發表於 2010-9-2 23:49

Of course that is an EXTREME case, but if that ever happen, then it makes sense to buy rather than rent...

But yes, you're right! I think buying real estate is a PERSONAL decision based on your personal plans and financial situation. You can only plan and predict what you are going to do with your life! People spend so much time trying to respond to the market or act "one step ahead" of the market. In reality, if you don't have the money, you still can't buy even when the prices drop. And when you do have the money, are you going to wait for the "right time" to buy or should you really be shopping for the "right property" to buy? - I think the answer is very clear.

samsung

if you don't have the money, you still can't buy even when the prices drop
大C姐 發表於 2010-9-3 10:04

this is so wrong

MSN04

First.  own to rent ratio is like 300 (as i remember, between 250 and 300, i may be wrong).  So, for sure owning is more expensive compared to renting at the moment.

Second, lots of people have already bought when they don't have the money.  Thanks to low interest rate and loose lending practice (almost criminal to some degree).

大C姐

First.  own to rent ratio is like 300 (as i remember, between 250 and 300, i may be wrong).  So, for ...
MSN04 發表於 2010-9-3 13:03

    That's why I keep emphasizing on looking at your OWN financial situation and buy within your budget. Buying a house is very similar to buying a car, yes, you can buy a mercedez or BMW, you can even buy 2nd hand if you can't afford (or don't want to pay full price). But that doesn't mean you can afford maintaining the luxury car at the end...

My point is, if someone were to ask me, what is a "good time" to buy, those are my criteria and recommendations. This is not an argument of rent vs buy - OBVIOUSLY it's more expensive to own a vehicle 99% of the case than taking transit, but if you're out to shop for a car, you buy within your budget (not to compare your monthly car payment to a bus pass).

-- very refreshing english-speaking 大C姐

MSN04

That's why I keep emphasizing on looking at your OWN financial situation and buy within your  ...
大C姐 發表於 2010-9-3 14:12

Buying a car, u know that it is going to depreciate.  A lot of people buying into real estate thinking/hoping that it will only go up.  (I hope life is that great.)

Yes, i agree that you need to look at your OWN financial situation, but I don't agree that the future market should be excluded from the evaluation.

For example, let say 5% is the minimum down payment required?  If the real estate keeps going up or stays flat, there is not a problem.  Let say the market corrects by 10%.  People can easily lose all their saving and the fun time will come when it is time to renew the mortgage.    Therefore, the future market should also be a factor to determine whether you can afford the property or not.  (i.e. big saving or big down payment.)

大C姐

Buying a car, u know that it is going to depreciate.  A lot of people buying into real estate thin ...
MSN04 發表於 2010-9-3 15:07

    Future market is always unknown! If you are that concerned about market variability, think about it this way. If you buy, your monthly payment is likely predictable (excl tax & mgmt fee) but your rent can increase by 50% overnight and you have no control over it, have you thought about this?

Like i said, buy within your budget. 5% down on a $175,000 condo in Surrey for a young couple making $100K a year (combined) may not be very risky at all. Even if the condo drop 30% to $122,500, as long as they don't sell it and they keep their job, nothing will happen to them! They can still afford the mortgage and maintain their lifestyle!

But if you're making $35K a year, putting 5% down on a half million dollar place (i dont' know how you can find a mortgage lender that way), then you're really leveraging yourself to an unacceptable level. You really don't need to predict how the market goes to know that it is a problem! That's why I don't encourage people to "fry" real estate and flip with putting no downpayment. That's pure speculation, or gambling, that's not really the type of house shopping i was referring to.

MSN04

Future market is always unknown! If you are that concerned about market variability, think ab ...
大C姐 發表於 2010-9-3 15:29

LOL!!!  Rent can not increase overnight by 50%.  The law does not allow such thing to happen :p  

Let's use ur example, if the couple pay 5% as down on that surrey property and the value tanks by 30%, they have to come up with the difference when they renew the mortgage.  That amount of money can be significant.  And this is sth predictable with the monthly mortgage payment??  (even the mortgage payment may increase depending on the intereste rate....).  So if we don't take the future into consideration, we assume that market always go up nor the interest rate?

I am not saying we need to predict the future to certain accuracy (we all agree that it is impossible).  However, it needs to be taken into account when making this kind of life-time decision.