My_question_is: Canadian-specific
Subject: Investing in Real Estate or Mutual Funds...
Expert: taxman at centa.com
Date: Saturday November 05, 2005
Time: 05:08 PM -0800
QUESTION:
I enjoy the questions posed and am learning plenty by reading the solutions
you offer. Can you offer me any advice on whether a person should be buying
real estate (principal residence) or considering renting now until our
values of property in the lower mainland decline? Is it also best to have
more than 30% down payment with a mortgage at 4.5% fixed? I will be moving
within a couple of months to be closer to a job and am still uncertain about
investing in a single detached residential home with a mortgage helper or
simply just rent in an area where I am interested in living. Any suggestions
would be greatly appreciated. Thanks.
----------------------
david ingram replies:
There is no question - you should buy your place if you ha ve the money to
do so. There is no doubt that in greater Vancouver, the property WILL go up
over time.
I am one of the people who believes that we have plateaued and should go
down but 9 out of 10 economists are still going the other way as evidenced
by BC Central Credit Union's forecast this last week. They are predicting
another substantial rise in the next two years.
So, if I am wrong and the property goes up 10% on a $300,000 place, you will
need to save about $100,000 after tax to pay the difference b because that
will be the last $30,000 you pay off on the mortgage 20, 21, 22, 23, 24 and
25 years from now.
$30,000 at 5% is $104,438.71 after 20 years which is sort of when you
"might" be starting to pay off "that" $30,000.
Of course, at that time, you ha ve to earn $170,000 and pay $65,000 tax to
have $104,000 to pay off the mortgage.
In the meantime if you buy the place and you do not intend to sell it, it is
of no matter if it goes down 10 or even 20% for the short term because you
are staying in it.
So - absolutely NO question. Buy now even though I personally expect a
decline in Greater Vancouver Real Estate prices in the short term.
You should likely get Fred Snyder of Dundee Wealth Management to produce a
written financial plan for you. Fred is also the host of "IT'S YOUR MONEY"
on 600AM every Sunday (tomorrow for instance) morning at 9 AM in the Greater
Vancouver er and Vancouver Island calling area. Those outside the are a can
tune in to www.600am.com and listen live or in archives on the internet.
Callers to the show are invited to a dinner at the THAI House Restaurant
followed by a free seminar at 1764 West 7th every Thursday Evening.
Answers to this and other similar questions can be obtained free on Air
every Sunday morning.
Every Sunday at 9:00 AM on 600AM in Vancouver, I, david ingram am a regular
guest on Fred Snyder of Dundee Wealth Managers' LIVE talk show called "ITS
YOUR MONEY"
Those outside of the Lower Mainland will be able to listen on the internet
at
www.600AM.com <http://www.600am.com/>
Call (604) 280-0600 to have your question answered. BC listeners can also
call 1-866-778-0600.
Callers to the show and questioners on this board can also attend the
Thursday Night seminars on finance and making your Canadian Mortgage
Interest deductible.
And for those in the Vancouver area, Fred is running an infomercial for 1/2
hour every night in October on Channel 10 television at "groooaaannnn" 1 AM
in the morning. It has a couple of useful concepts in it that can be
recorded to really get the idea.
Every Thursday Evening, Fred Snyder of Dundee Wealth Management conducts one
of 17 different financial seminars in the boardroom of his office
Time: 7:00 to 9:30 PM
Date: Every Thursday evening
Place 1764 West Seventh
Vancouver (corner of Burrard)
Phone (604) 731-8900 to register
No cost - no obligation
Topics always cover mortgage interest as a deduction
other topics - getting the mortgage, estate planning, critical care
insurance, income taxation, differences between stocks and bonds, and
usually the most innovative HELOC mortgage offered in Canada from Manulife
Bank
If you are starting in downtown Vancouver and do not want to go home first,
one of the excellent THAI HOUSE restaurants is in the same building and
makes a nice start to the evening.
I, david ingram, manage to make three out of 4 of them to cover mortgage
interest as a deduction and give the class an adding test.
David Ingram's US/Canada Services
US / Canada / Mexico tax, Immigration and working Visa Specialists
US / Canada Real Estate Specialists
Home office at:
4466 Prospect Road
North Vancouver, BC, CANADA, V7N 3L7
Cell (604) 657-8451 -
(604) 980-0321 Fax (604) 980-0325
Calls welcomed from 10 AM to 10 PM 7 days a week (please do not fax or phone
outside of those hours as this is a home office)
email to taxman at centa.com <mailto:taxman at centa.com>
www.centa.com <http://www.centa.com/> www.david-ingram.com
<http://www.david-ingram.com/>
Disclaimer: This question has been answered without detailed information or
consultation and is to be regarded only as general comment. Nothing in
this message is or should be construed as advice in any particular
circumstances. No contract exists between the reader and the author and any
and all non-contractual duties are expressly denied. All readers should
obtain formal advice from a competent and appropriately qualified legal
practitioner or tax specialist in connection with personal or business
affairs such as at www.centa.com <http://www.centa.com> . If you forward
this message, this disclaimer must be included."
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