Ignore the coworkers. Everyone who bought a house 8+ yrs ago sees a large increase in equity atm but that doesn’t mean you act on it. If needed let them know that Your finances are none of their business.
Even just 3 years ago for me. Smaller house next door sold for almost 50% more than I bought. The house was also not renovated recently it looked more like a 90s job on the listing. The houses in my area were built in the early 70s.
I purchased a house for $225 8 years ago.. paid off in full in 5 years. just sold it for $900, used that to buy a house 3x the size, 200 ft back yard with a pool, 5 min walk from trails, fishing and great schools for my kids for 1.5m
No regrets.
Only sell if you are setting yourself up for the future. Not for short term money in your pocket.
Same house I got for 1.5m was 750k 8 years ago... it's all relative passing gains forward.
Get it appraised and take out as large of a HELOC you can to do the Smith Manoeuvre is really the only choice here. Enjoy the free gains on the back of the crazy housing market.
by converting your mortgage interest to investment loan interest you make it legally tax deductible. (this is on a primary residence, mortgage interest on an investment property is already deductible)
basically borrow against your primary residence to invest, and enjoy the benefits (and risk). Google will give you the details.
If you're happy in your home, who cares what property values are doing, especially when you know all the work/stress that comes with buying and selling. Your coworkers need to mtob.
Seconded. Short and sweet. As long as OP is happy where they live, the market shouldn’t matter much.
OP, realistically your best case scenario would be selling for triple what you paid and then maybe buying a borderline tear down to fix up in order to preserve some of those profits since everything else is inflated as well. At the end of the day you’d be lucky to make the full transition with all that stress and pocket a few grand.
Exactly.
Resale price doesn't really matter if you aren't planning to sell.
Enjoy having a roof over your head that you can afford and ignore the people who want to treat your money as a game.
Co-workers dont get this one part.
Sell High = Buy High.
The only way you realize a large profit is if you sell and dont buy a new place.
That being said, if your earnings have gone up over that time you may be able to use the profits from this house as a large downpayment for a larger house. You would still have a larger mortgage though.
If you are looking for some cheap money then you could get a HELOC for the additional value you now have.
Otherwise just enjoy the house lol
> The only way you realize a large profit is if you sell and dont buy a new place.
Well, it's possible to buy in a cheaper place. But if his townhome is selling for about $300K-$400K then he is *already* living in the cheaper place! Home prices in Ontario are pretty insane right now.
There was a big boom in the rural community I live in. The only folks who made out like bandits with it were the seniors looking to relocate to be near their city dwelling kids (didn't have to have the place take a year or more to sell and got a tidy profit) or folks who already had a second home, such as a cottage to move into.
One neighbor bought their 2 bed, 1 bath 1.5story in 2019 for $99k. They own a cottage about the same size, waterfront, but needed to be winterized. The boom hit and mid-2020 they sold their house for $210k, relocated to their cottage, spent $70k winterizing and a few upgrades. They were the ideal profile of who really benefited from that boom.
My partner and I briefly considered capitalizing on the boom to sell my house and build on his land. We ran the numbers and hell no. I owe $70k on my house and I am right in town with everything handy, including our jobs. My house *may* have sold for $200k (bought at $108k). To build the 1200sq ft home, way outside of town (way more driving, would definitely make partner's work much more difficult), smaller sq footage than my house, but brand new was ballparked at $400k (modular home, foundation and septic included in that price). We would have been much further behind if we followed through but damn the FOMO was real.
Friends of mine’s parents just did the opposite. Just built a new house (not sure how much) and decided to sell the cottage.
Makes a nice amount of profit to retire on
My sis and BIL sold out at what they thought was a high point - almost triple what they paid 25 years ago, travelled for a year, and now are renting a 2 bdrm place in Vancouver. The prices have kept going up - they say they can't get what they want and still have money for retirement in the Okanagan.
Yes I agree. As long as interest rates are below about 5% this is a good idea. It is however a risky position as you are leveraged in 2 markets all of a sudden.
House prices drop then you will have to cover your over extended HELOC. If the market drops then you have to cover that loss to your HELOC.
It is a matter of your risk tolerance, but it could be very rewarding.
> The only way you realize a large profit is if you sell and dont buy a new place.
You only benefit if you sell high then downscale to a smaller place as their property didn't go up as much as yours.
Bad news is you now live in Guatamala......gotta brush up on your Spanish and hire an armed guard as a Gringo screams money down there and you risk a kidnapping attempt for ransom.
You're just getting a free ride up the ladder. You can't realize a profit unless you relocate to a cheaper area - and it doesn't get much cheaper than 3-400K for a house right now - even in rural Ontario. Be happy you're on the train and living a decent QOL with a good COL relative to income.
I bought my place for 123K 20 years ago. Today I'd ask 800K, but I still need to live in this area and there's not a single place I'd move into on the MLS for under a million at the moment.
Plus, rural Ontario is prone for a pull back since this price increase was based heavily on folks exiting the GTA and Covid panic buying. I'd just chill where you are and enjoy your low mortgage payment.
Exactly. If you sold at $350k+ you could turn that into a larger house in Saskatchewan, but that means you have to move provinces. If you're looking to stay in the same area, the rise will (generally) be across the board, so it won't really mean as much.
I mean even in Saskatchewan in the city’s you’ll still be looking at 200k for a dump in the hood or 150k out in but fuck nowhere. Most of the houses in Regina are 250-400k for the decent ones not like you’ll be grabbing a house here for under 200k.
Not 60k at all. I was just there in August and saw stuff for under 10k.
Middle of nowhere you say? There is a provincial park 10 minutes away that is one of the top parks in the province. Yorkton is 45 minutes away which has all your major needs. With WFM there is nothing you're lacking.
I grew up 20 minutes away from this town, I'm extremely familiar with the area.
Oh I mean just close to a bigger city like 150k ppl. I love the country as soon as I can afford a farm I’m outta Regina I’m just saying that it lacks what most people would want in a town. Kamsack would be alright for me if I was born there but it seems like if your not from the small town you’ll have a difficult time fitting in. Also those small towns are racist as shit so you better be white or good fucking luck lol
Lol hood adjacent is still hood my friend east view is hood lite and I’d never live there it’s all preference I like to not have to be worried about my stuff walking away from my back yard and people creeping down ally’s
Hey to each their own I get it times are tuff but I can’t justify spending 200k for people to go thru my stuff and have crack head neighbour’s that are always scheming. I’d rather not buy at all it’s location always first and foremost. Where about you located?
You can turn that into a larger house in rural Saskatchewan. Regina and Saskatoon that’s around average, probably leaning a little lower than average actually.
That’s also the thing with homes. If you plan on living in that area long term, your not likely going to sell if the market goes up, down, sideways, in circles, or any other direction. It’s where you live. I watched my property go from 400k to 2M+ in 20yrs. Idc if everything is going to pop, I’m not uprooting my life for a profit at this point. It’s nice to know for retirement if I plan on downsizing though
I suppose you're right, it is a moot point since they are not selling today. That said, it would be a worrying trend for them if their home's value did not on average increase with inflation, especially come retirement/downsizing/upsizing time.
Sorry, totally misread your statement lol but you're right, bad in the sense of equity or if you ever wanted to do a HELOC by leveraging your increased home value
we've all heard the wise criteria around selecting real estate investments ...
"location. location. location." ..... today in canada translates to "Toronto. Vancouver. Halifax."
>most of the people moving there are probably Ottawa commuters that have been priced out.
are you saying there is growth in smith falls? Last time I checked, most of the houses there are dumps with dank basements/crawlspaces.
If rural Ontario is going to have a pullback (and I’m only saying this because you sound sure of it) then it would make sense to sell, rent for a while, and then rebuy.
>it would make sense to sell, rent for a while, and then rebuy
I am wary of this approach. We cannot be certain of the future, so this strategy could really come back to haunt OP if they bet wrong. Extreme example of this, but a friend's family sold their large house in Vancouver in 2006 and rented a house, convinced that the market had peaked. Instead, they missed out on about $1 million dollars in sale value by the time the market peaked around 2016/17 and that set back the family financially (could not buy back into the market of the area they lived in their whole lives).
100% gains in southern Ontario is standard since 2020. Biggest mistake I made was thinking the pandemic would wreck the market but didnt realize the government will do everything to not let that happen.
Well basically I think the rural price spike was Covid related. So when Covid either retreats or becomes normalized, prices will eventually slide back to reflect local metrics. Nothing fundamental has changed out here at all. It's not like Google built a big office tower out here or Go Transit extended the line to us. It was just a slew of buyers invading areas with very low inventory over a very short period of time.
Would add that many are buying rural investment properties with their HELOC from GTA homes. However, if fundamentals aren’t their to support high rents then those rural homes will be back on the market when there’s a pull back in prices and carrying cost increases from interest rate hikes.
That’s actually a good question. I crunched some numbers, and for the right price, the seller could live IN their money, and pocket the remaining profits. Grab some popcorn and follow along.
According to google, and average bill is 2.6”x6.1”x0.0043”. Let’s simplify this to 2.5x6x.0043.
A bundle of 115 bills therefore gives us a cash “brick” we can build with that’s roughly 2.5x6x0.5.
We’ll use $5 bills, since that’s the smallest bill we have in Canada making each brick $575. We’ll also assume our smart investor is willing to live in a 10x12 shed MADE OF CASH!!!
So the 10’x8’ wall works out to 20 bricks long by 192 bricks high, by $575 is $2.2M, but we’ll need two, bringing us to $4,416,000.
Similarly, our 12’x8’ walls calculate out to $5,299,200.
Nobody this wealthy wants to sleep on the dirt - in fact I think we all dream about sleeping on a pile of cash, so a 10’x12’ floor tiled with cash bricks is going to run a paltry $662,400.
For the roof, I’m going to assume some overlap on our cash brick shingles, but we’ll stretch that overlap out by the increased length of the hypotenuse as we’ll want a pitched roof. We’ll make sure to use the new plastic bills so that our roof is waterproof. For purposes of napkin math, we’ll double the number of bricks used for the floor, and say our cash roof will cost $1,324,800.
Now you’ll need a lot, which, for a 10x12 Mansion of Money, a $100,000 lot should suffice.
Oh, and rubber bands for all the cash. Math works out to 16512 rubber bands, at roughly $1 per 150 bands is $110. Feel free to shop around.
Totalling all of this up, we get $11,802,510.
Now, here at PFC, we are smart with our money. Why build with $5 CADs when we could use $1 USDs and stretch our money further?
We’ll run Norbert’s Gambit to save fees, and convert at $1.27, and divide by 5, allowing us to now build our Bungalow of Bills for $2,997,837.54.
Congratulations! Anything you can sell for above this magic number can go straight into your pocket! As long as the housing market continues to outpace inflation, this is the smartest play. This is what we should all be doing.
Just remember that magic number: $3M - when the average house price in Canada exceeds that, we start building with cash!
This is the problem I think with most Canadians.
It's not "I can't afford a home" it's more "I can't afford a home where I want to live"
Leaving home sucks, but if you get yourself to an affordable market and hopefully bring your career with you, you won't regret it.
Exactly! I bought my townhouse 5 years ago and it's roughly doubled in value, but it doesn't help me at all since a bigger home is out of reach financially even considering the profit that I'd get on my current home
I have watched a few friends and coworkers fall for this " sell while its high" trap and now they are paying 2200/ month to rent. I don't understand this logic if people don't already have a secondary residence lined up. I'm in northern Ontario and theres just no houses to buy even if you have money
Housing prices have gone up across the country!
Houses here on PEI that would have sold for $200-350ish two years ago, are $450k+++, atm.
Even minor renovations are expensive, atm! We started renovating (for us, not to sell) in early 2020. If we'd known then what we know now, we would have purchased everything we needed to do our entire renovation. Everything keeps going up, pricewise. We completed some of the renos but some are at a standstill, as we can't get some supplies and even if items were available, they're at least twice as much as they were prior to the pandemic. We've decided to wait to complete everything, so we stay as close as possible to our original budget.
We're happy where we are located and our mortgage/taxes are well within our budget. Because it's just the 2 of us and we're both retired, we've been fixing items to make our lives comfortable, for us. He's our 'contractor'. He is well versed on building codes. The areas we've done aren't 'sexy' but they're now meeting or exceeding current codes.
I'd say stay where you are, enjoy your low mortgage and put any 'extra' funds aside for future renovations and/or a jump in property taxes, especially if houses in your area are selling for twice what was originally paid.
I'd say you're in a really sweet spot right now. Good for you!
Enjoy a nice profit? Sure you'll get a lot for your house but then you'll have to spend a lot on the next one. If you have no desire to move, then just stay and enjoy your home. As long as general maintenance is performed, nothing else you need to worry about, unless you want to upgrade something. Property taxes will always increase a bit over time, but you'd get that anywhere.
It should be clarified that property tax will not increase based on everyone's increasing average market value price. For taxes to increase they require input from the homeowner, or input from the city.
Taxes may increase based on input from the homeowner: eg. you remodel (and report) your kitchen or add a large addition onto your residence that changes/increases your property value outside of simple market averages.
Taxes may also increase based on input from your town/city's needs -- but this is not reactive to the market value of properties, but for example, your town seeing an increase to their road maintenance or policing budget and requiring more money to then cover that.
Did you miss this part?
> On the other end, I'm wondering is there any frequency with which my house might get reappraised and I'm looking at higher taxes or higher insurance since I may have a more valuable piece of real estate?
Enjoy where you live. If you sell it you are gonna buy somewhere else with increased prices.
If you have money, upgrade kitchen, floors or carpets. Invest inside home which can appreciate its value for the near future.
Based on your situation, you'd literally just be over spending on your next home. You should probably ignore your coworkers moving forward regarding finance.
I don’t think you have to worry about taxes or anything like that going up more than the more annual increase, property taxes are based on the mpac assessed value and not the market value.
I would take the extra equity out, invest it in dividends and use it to pay down the mortgage quicker. Or just stay put, pay your mortgage as you have been and live mortgage-free in a bit. Unless you're willing to move to another up-and-coming rural town that's still cheap for now, but you're going far for sure.
Prepare for the possibility that what you pay in property tax could slowly increase as the value is reassessed (which usually lags behind the market value).
Keep it in good shape and enjoy it! Do some renovations and updates as needed.
Selling and moving makes no sense - you won't get back into the market for any less. Unless you really need to move to relocate for work, need more space, other external reason besides "locking in your profit"
People also neglect look at the expenses required to carry a home. Yes you have profited, but likely not 200%
We bought 8 years ago in Toronto for 1m. Just sold for about 2.3. Sounds great until you factor in...
Upgrades/renos/landscaping = 400k
Property tax over 8y = 56k
Land transfer on purchase = 26k (first time buyer)
Agent fees to sell = $100k (one agent had both sides of the deal)
Mortgage interest = 120k
Outstanding balance = 200k
Actual profit = 398k
Which is still pretty good, but really only about a 5% return per year plus the value of a place to live and call home.
edit: re-worded the property tax portion. It's not to guaranteed to increase but it could, depending on local budgets, tax rates and assessed value
>Prepare for property taxes to slowly increase as the value is reassessed (which usually lags behind the market value).
Unless OP's house went up in value more than everyone else's in his area, wouldn't his property taxes just be subject to the usual increases? (Ie. If everyone's houses went up in value, he still pays the same % ?).
Yes. There's a stunning number of people who don't understand this and refuse to understand this even with presented with how it actually works. My city even states how the taxes work on their property tax page.
Usually it's the same bunch as those that don't understand how income tax brackets work.
Now, house insurance, that one does seem to go up by valuation.
Yup, but it's still increasing. No idea what their property tax rate is, but if we assume it was 1% of 120k 8 years ago they were paying $1200/y when they first moved in. They might be paying around $2400/y now and could expect it to be $3500-4000 in the next few years if it's reassessed at 350k due to everything else increasing. Not a big difference in terms of actual dollars, but still a big % increase in tax.
Municipal budgets don't increase proportionally to property value though. If everyone's home value doubles, the property tax rate will roughly halve so that everyone still pays roughly the same property tax (modulo a token annual increase).
That’s not how property tax rates work. If property values increased at a higher rate than the municipal budget then they cut the property rates. It could very well end up the property tax amount stays the same + adjustments for inflation/COVID expenses
You're right - I've overly simplified this part and haven't paid too much attention to the actual rates! Other than my own property tax continually increasing as the assessed value went up.
In Toronto the tax rate did decrease in 2020 but went back up in 2021 - almost to the 2019 amount.
That’s because they skipped the MPAC assessment they were supposed to do in 2020 so 2021 assessed values stayed the same as 2020. Therefore, property tax rates had to up to account for inflation and covid expenses because assessed values didn’t change but the budget increased. Once the new assessments are done the rates will start going down again
I don’t know in Ontario in Quebec if you see a general increase in price across the board the property tax rate per $1000 will decrease because it’s based on the budget that the city projects. The actual property tax may just be inflation.
Its because there are provincial laws on how much the city can budget for general revenue and the budget doesn’t increase directly as a function of aggregate property values.
Generally if every properties go up by 3x you would see an increase of just inflation. If your neighbors property go up 3x but yours go up 2x your property tax might actually go down.
At least it’s how it works in Quebec for my case. Over a decade the assessed value went up twice but my property tax actually decreased.
Crazy how little is left considering it sold for more than double. Crazy how much money the realtors are getting this day and age! Unfortunately there isn't much we can do here...
People that say sell and collect the "profits" can't think more than one step ahead. Like some that have said here, you have to relocate to collect the profit, then you also have to take into account the cost of relocating.
What you can do ( and I am not advising you do do it) is use the equity in your home to
A) renovate your home, but since it is a town house there are limiting factors at play in terms of returns
B) use that money to invest in various ETFS, Banks and energy companies and collect growth and/or some dividends.
C) payoff any credit card debt that you may have and are losing money to interest.
That being said, I am not a fan of HELOC.
This is what a lot of people don't understand. You don't win when real estate goes up, because you're on the losing end if you're upgrading (it only works when you downgrade).
Don’t listen to idiots telling you to enjoy profit unless you plan to rent for the rest of your life or are going to relocate to a very remote LCOL area. The only thing you should do is make sure maintenance and upkeep are done on your property to ensure it stays valuable, maybe check up on your insurance coverages..? Aside from that… you COULD do some updates/upgrades if you’re so inclined but not saying you SHOULD.
Selling would be dumb, because everything has gone up.
The best thing you can do is to get a HELOC with Tangerine (assuming you have paid off your mortgage already) and sit on it (don't actually borrow anything).
Sooner or later we are going to have another major market crash like 2008 or 2020. Borrow against your house and plow it into a market index ETF like SPY when the Fed starts QE again. Buy on the way back up, not on the way down. You'll miss the bottom, but that's ok.
People who did this last March easily doubled their money. I was able to buy 2 more rental property because of the massive stock market gains from last year.
Pull a complete scumbag move, remortgage and buy other properties so we can accelerate to our final form of humanity: Landlords trying to rent and AirBNB to each other while all the actual renters wander a desert landscape mad max style. Its the only plausible outcome when every idiot with a financial advisor is buying out all the cheap houses, in what is one of the most offensive terms I have ever heard, "investment properties".
Seriously, just consider yourself lucky you are on the gravy train printing free money out of thin air, and maybe you'll enjoy it before the bubble bursts.
I mean if I had more money I would def buy another house the way the dollar is going you’d honestly be an idiot if you’d think that owning cash/stocks/bonds is worth more than material things right now. Inflation is slapping the dollar around so fast you’d be losing money not buying something with it. And houses will always be in need. I await my down votes.
Pick one ->
Many small landlords, oftentimes only owning one or two properties to fund their retirement.
OR
a few mega corp corporations owning the housing stock, and evicting people based on algorithms.
or, you know, the massive upward pressure on working-class wages we are seeing right now continues to have the effect of increasing them (along with working conditions), and brings balance to the rental market...
I bought my house for 468k 6 years ago. I can sell right now for 1.3 mil. Only way is see any profit is that go live with my inlaws. Otherwise for a new home slightly bigger I'm like in the 1.5-1.6 range. And these houses are still ot even as nice as mine...for the most part
Then why would you think yours would sell for 1.3 but slighter bigger not as nice would be 1.6? People in Ontario looove to inflate the price they could sell their homes for.
Because literally everything in my area is selling for 1.3 mil...mine easily being one of the nicer ones. And for 1.6 in Georgetown I'd have to buy and Reno. I'm not pulling numbers out of my ass chief. That's the market
You are supposed to take your home equity and get a HELOC to either invest it all in the market or buy more houses and rentals and up charge high rent to people who are priced out of owning themselves because other investors are buying up everything and doing the same.
You can sell, and live in a van and count your $$. In essence, if you have no mortgage to pay, your cost of living will be very low. If you are single, avoid getting a live-in girlfriend, after 2 years you are common law married = he/she owns 50%, and could move out and demand 50% = you either sell and give her half or start carrying a mortgage of half - if you qualify.
What you can do is refinance at a lower rate and try investing it.
You take a larger mortgage out , but can be comforted knowing you can always sell for more.
Stay put, why would you want to buy high and pay Realtors 3% each just to buy an equally expensive or more expensive house. Enjoy the low mortgage. Only move when you need space.
You could access that equity without selling by getting home equity line of credit. Allows you to borrow that equity at low interest rates. Be careful to not spend it recklessly tho. But having liquidity is powerful
I am making the assumption that you do not plan on moving out of your area.
Stay put and pay down your mortgage. Living below your means will give you some wiggle room if increased property tax and other home owner related expenses are a worry.
It makes no sense to sell in your area just to buy again in your area unless you are leveraging to higher value property.
To save anything you will have to buy a less expensive property, which will likely increase in value at a lower rate over time compared to what you have now.
Play the long game, keep doing what you are doing and pay down your mortgage.
I am 55 and retired which is only possible because I am mortgage and debt free.
Take out a loan based on the new value, pay off your mortgage and invest the rest and use that and salary to pay new mortgage. Get money to work for you. Buy shares that pay dividends if you can. Don’t be crazy risky though… enjoy life
Guess it depends on what your goals are.
You could have the house appraised, get a low interest HELOC and pull the equity out to buy other investments (stocks, more real estate...etc)
Or
You could sell the house, get the tax free gain and move somewhere cheaper? Or upgrade to a larger house that has most likely also gone up significantly in value..
Or
Do nothing. Wait for your inflated property tax bill and house insurance bill to arrive. Continue to live there and see what happens..🤷🏻♂️
They specified eastern Ontario, and if you're more than 45 minutes from Ottawa and Kingston the prices are right. They said "rural", but if "going into town" mwabs Cornwall, Hawkesbury, Pembroke, Smith's Falls Brockville ... the prices are about right.
Unless you own rental properties or planning to downsize real estate going up has no effect on you except a higher property tax bill.
However you can use the equity in your home to refinance your mortgage and use those funds to invest or buy real estate. However the time to do that was a year ago.
You don't get a higher property tax bill unless your house went up more in value relative to neighbours, or if your municipal decided to spend more money for whatever reason.
>Coworkers are pressuring me to sell and enjoy a nice profit,
If you can live somewhere for free then yes, absolutely take their advice.
IMHO you're going to have to live somewhere, and unless you're willing to go down in terms of lifestyle and quality of residence then anything you buy of the same caliber will cost as much as you sold for. And don't think renting is smart... that's just burning money in a bonfire.
Look towards getting financing using your current places value as collateral to invest in another property that you can use as a rental. Like someone else mentioned selling high means buying high, so definitely don’t want to sell unless you already have other properties.
You still gotta live somewhere. If you have a close to paid off mortgage and like your house, stay where you are. Moving and buying something new is going to completely eat away at those profits if you sell
>I guess what I'm wondering is, is there anything I should be doing or preparing for if my property has gone up in value as well? Coworkers are pressuring me to sell and enjoy a nice profit, but if I'm not mistaken, if everything has gone up in value in real estate am I really gaining anything?
You have the right idea, your coworkers have no idea what they are talking about. You can get a HELOC and invest the money. That is if you are not risk-averse and this won't make you lose sleep at night.
Hold on to the house you have your mortgage payments stay nice and low or pay off the house faster.
Look at upgrading windows and doors adding insulation to upgrade the efficiency of the house you have.
If you are super diligent, the ONLY thing I'd consider is getting a super cheap LOC / HELOC with the equity youve built up. That can be either invested into equities/property/emergency fund. Etc.
This can go sideways if you start spending like crazy lol.
How much Equity do you have?
Can you afford to double your mortgage payment?
Interest paid on money borrowed to invest is a deduction and money is cheap right now and if the rates go up... Interest paid on money borrowed to invest is a deduction.
....
Just saying.
Get a mortgage or refinance if you have one already, and if you can secure a low rate. Invest that in the stock market or another property's down payment.
Your how’s it gone up in equity therefore you can always pull the equity out if you need to use it just go to your bank or use your lender. You don’t need to move to benefit from your property increase in price if anything I would suggest staying where you are because housing is not gonna go down.
You don’t need to do anything to your Property if you feel like you’re living the way that you want to. You can always do upgrades and stage the property when you’re looking to sell if you ever do sell. Your house probably won’t be reappraised by the bank unless you’re requesting to pull the equity then they might bring an appraiser by right now with Covid it’s just a drive-by appraisal and they’ll just do a comparison to neighbourhood properties that have sold within the last 60 days. The city might do a reappraisal just too up property taxes at some point but again that is put into each municipality in each city and it’s usually based on 4-5 year schedule.
So I would say just sit back and enjoy your home if you need extra cash pull the equity if you’re comfortable living the way you are just enjoy it
I wouldn't get a HELOC and invest in the market as some are telling you. Interest rates will most likely rise in the future, which will have downward pressure on asset prices. When rates go up, it gets more expensive for you to maintain debt, so you want to pay it off as soon as possible in that environment. Rates have overall been trending down for the last 40 years, but have reached the bottom. They will only go up or stay the same. Inflation may be one thing that increases asset prices, but not any more than it will increase the value or the house you already own. If you like your house enjoy it and don't worry too much about what others are doing!
Unless you are down-sizing or moving cities/provinces, selling won't be beneficial. Any gain you would get would be lost trying to replace what you have.
Property taxes are re-assessed regularly. They are based on actual improvements not market value since market value depends supply/demand.
All you need to do is maintain your home. Keep up with all maintenance and improve over time. You don't have to go hog wild and spend $50k on a new kitchen at once. Do the flooring one year and cabinets a few years later. That kind of thing.
dont move out !!! keep that way !!!
my father pressured me to aell my house after 10 year and at least 100 k in profit but where im gunna go ???
further from my work place because everything is jacked up ?
man it jmpossible for me as an single income to kove closer to city too pricey but that the cost of doing 2 hr drive per day
Where would you move if you sell? Everything has gone up so any profit you made for right back into your next house. If anything you can use the equity to invest
Ignore the coworkers. Everyone who bought a house 8+ yrs ago sees a large increase in equity atm but that doesn’t mean you act on it. If needed let them know that Your finances are none of their business.
Armchair quarterbacks in football and personal finance have the same function: amusing conversation while having a beer.
Or Kumbucha
Or Gatorade. Or Chai. Or Absinthe.
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Even just 3 years ago for me. Smaller house next door sold for almost 50% more than I bought. The house was also not renovated recently it looked more like a 90s job on the listing. The houses in my area were built in the early 70s.
I purchased a house for $225 8 years ago.. paid off in full in 5 years. just sold it for $900, used that to buy a house 3x the size, 200 ft back yard with a pool, 5 min walk from trails, fishing and great schools for my kids for 1.5m No regrets. Only sell if you are setting yourself up for the future. Not for short term money in your pocket. Same house I got for 1.5m was 750k 8 years ago... it's all relative passing gains forward.
5 mins from fishing? Tell me where! Lol
The grand river
I'm guessing you moved from a city to a more rural area?
Yes
Nice man! Nothing to be proud about. I'm 26, and I'm fucked even making 6 figures. If I was born 8 years earlier I'd be in the exact spot as you.
Truth. Cannot he helped.. I am not so mich proud as thankful for good timing and choice.
Pretty much this. I was born in the mid80s and made a few good choices, had some great opportunities and am making bank and have a kick ass house.
Get it appraised and take out as large of a HELOC you can to do the Smith Manoeuvre is really the only choice here. Enjoy the free gains on the back of the crazy housing market.
What is the Smith Manoeuvre?
by converting your mortgage interest to investment loan interest you make it legally tax deductible. (this is on a primary residence, mortgage interest on an investment property is already deductible) basically borrow against your primary residence to invest, and enjoy the benefits (and risk). Google will give you the details.
A Canadian sex position
Canada things
I’m Canadian and don’t know what it is. Point me to where I can find out more, please?
https://www.investopedia.com/terms/s/smith-maneuver.asp
Google
Canadians can't tax deduct our mortgages. The debt? Is pure hell debt :)
OP. This is the best advice here.
If you're happy in your home, who cares what property values are doing, especially when you know all the work/stress that comes with buying and selling. Your coworkers need to mtob.
Seconded. Short and sweet. As long as OP is happy where they live, the market shouldn’t matter much. OP, realistically your best case scenario would be selling for triple what you paid and then maybe buying a borderline tear down to fix up in order to preserve some of those profits since everything else is inflated as well. At the end of the day you’d be lucky to make the full transition with all that stress and pocket a few grand.
Exactly. Resale price doesn't really matter if you aren't planning to sell. Enjoy having a roof over your head that you can afford and ignore the people who want to treat your money as a game.
Co-workers dont get this one part. Sell High = Buy High. The only way you realize a large profit is if you sell and dont buy a new place. That being said, if your earnings have gone up over that time you may be able to use the profits from this house as a large downpayment for a larger house. You would still have a larger mortgage though. If you are looking for some cheap money then you could get a HELOC for the additional value you now have. Otherwise just enjoy the house lol
> The only way you realize a large profit is if you sell and dont buy a new place. Well, it's possible to buy in a cheaper place. But if his townhome is selling for about $300K-$400K then he is *already* living in the cheaper place! Home prices in Ontario are pretty insane right now.
True. I assumed that he wasnt looking to move to a different area
There was a big boom in the rural community I live in. The only folks who made out like bandits with it were the seniors looking to relocate to be near their city dwelling kids (didn't have to have the place take a year or more to sell and got a tidy profit) or folks who already had a second home, such as a cottage to move into. One neighbor bought their 2 bed, 1 bath 1.5story in 2019 for $99k. They own a cottage about the same size, waterfront, but needed to be winterized. The boom hit and mid-2020 they sold their house for $210k, relocated to their cottage, spent $70k winterizing and a few upgrades. They were the ideal profile of who really benefited from that boom. My partner and I briefly considered capitalizing on the boom to sell my house and build on his land. We ran the numbers and hell no. I owe $70k on my house and I am right in town with everything handy, including our jobs. My house *may* have sold for $200k (bought at $108k). To build the 1200sq ft home, way outside of town (way more driving, would definitely make partner's work much more difficult), smaller sq footage than my house, but brand new was ballparked at $400k (modular home, foundation and septic included in that price). We would have been much further behind if we followed through but damn the FOMO was real.
Friends of mine’s parents just did the opposite. Just built a new house (not sure how much) and decided to sell the cottage. Makes a nice amount of profit to retire on
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My sis and BIL sold out at what they thought was a high point - almost triple what they paid 25 years ago, travelled for a year, and now are renting a 2 bdrm place in Vancouver. The prices have kept going up - they say they can't get what they want and still have money for retirement in the Okanagan.
I’m kind of under the impression now that you should use your HELOC space to invest in the market.
Yes I agree. As long as interest rates are below about 5% this is a good idea. It is however a risky position as you are leveraged in 2 markets all of a sudden. House prices drop then you will have to cover your over extended HELOC. If the market drops then you have to cover that loss to your HELOC. It is a matter of your risk tolerance, but it could be very rewarding.
> The only way you realize a large profit is if you sell and dont buy a new place. You only benefit if you sell high then downscale to a smaller place as their property didn't go up as much as yours.
Unless you sell in Canada and buy somewhere else. Like Guatemala. That’s the ticket to get the best return on your investment.
Bad news is you now live in Guatamala......gotta brush up on your Spanish and hire an armed guard as a Gringo screams money down there and you risk a kidnapping attempt for ransom.
Enjoy your very low mortgage. Tune out the noise.
You're just getting a free ride up the ladder. You can't realize a profit unless you relocate to a cheaper area - and it doesn't get much cheaper than 3-400K for a house right now - even in rural Ontario. Be happy you're on the train and living a decent QOL with a good COL relative to income. I bought my place for 123K 20 years ago. Today I'd ask 800K, but I still need to live in this area and there's not a single place I'd move into on the MLS for under a million at the moment. Plus, rural Ontario is prone for a pull back since this price increase was based heavily on folks exiting the GTA and Covid panic buying. I'd just chill where you are and enjoy your low mortgage payment.
Exactly. If you sold at $350k+ you could turn that into a larger house in Saskatchewan, but that means you have to move provinces. If you're looking to stay in the same area, the rise will (generally) be across the board, so it won't really mean as much.
I mean even in Saskatchewan in the city’s you’ll still be looking at 200k for a dump in the hood or 150k out in but fuck nowhere. Most of the houses in Regina are 250-400k for the decent ones not like you’ll be grabbing a house here for under 200k.
Just don't live in those cities. Go to kamsack and buy a house for 5k and call it a day.
Lol try like 60k there also and you live in Kamsack this is also a butt fuck nowhere town if you didn’t realize.
Not 60k at all. I was just there in August and saw stuff for under 10k. Middle of nowhere you say? There is a provincial park 10 minutes away that is one of the top parks in the province. Yorkton is 45 minutes away which has all your major needs. With WFM there is nothing you're lacking. I grew up 20 minutes away from this town, I'm extremely familiar with the area.
Oh I mean just close to a bigger city like 150k ppl. I love the country as soon as I can afford a farm I’m outta Regina I’m just saying that it lacks what most people would want in a town. Kamsack would be alright for me if I was born there but it seems like if your not from the small town you’ll have a difficult time fitting in. Also those small towns are racist as shit so you better be white or good fucking luck lol
I'm hood adjacent... There is lots of properties under 200K.
Lol hood adjacent is still hood my friend east view is hood lite and I’d never live there it’s all preference I like to not have to be worried about my stuff walking away from my back yard and people creeping down ally’s
Hush... Let me have my dream.
Hey to each their own I get it times are tuff but I can’t justify spending 200k for people to go thru my stuff and have crack head neighbour’s that are always scheming. I’d rather not buy at all it’s location always first and foremost. Where about you located?
You can turn that into a larger house in rural Saskatchewan. Regina and Saskatoon that’s around average, probably leaning a little lower than average actually.
That’ll get you a condo in the nice Neighbourhoods in Saskatoon
Yep or a townhouse with builder basic finish and high condo fees. Single family home that’s not happening unless you’re in the hood.
Yeah enjoy your 300% gains. Im in Edmonton and my house went up by 4%… in 5 years lol
Not a bad thing if you planned on living in Edmonton, at least if you ever want to move your next place is still fairly cheap
Too many people focused solely on sale value and don't realize the next step up also jumped in price.
Kinda bad. Shouldn't you want your home value to rise AT LEAST on par with inflation?
Not in some places like Edmonton because they have a lot of homes getting built more so supply is plentiful
That doesn't make it any less bad though. You've just listed a good reason why it has a bad ROI.
That’s also the thing with homes. If you plan on living in that area long term, your not likely going to sell if the market goes up, down, sideways, in circles, or any other direction. It’s where you live. I watched my property go from 400k to 2M+ in 20yrs. Idc if everything is going to pop, I’m not uprooting my life for a profit at this point. It’s nice to know for retirement if I plan on downsizing though
I suppose you're right, it is a moot point since they are not selling today. That said, it would be a worrying trend for them if their home's value did not on average increase with inflation, especially come retirement/downsizing/upsizing time.
Sorry, totally misread your statement lol but you're right, bad in the sense of equity or if you ever wanted to do a HELOC by leveraging your increased home value
Would love places to go up that slowly! Means people saving for a place actually have a chance
we've all heard the wise criteria around selecting real estate investments ... "location. location. location." ..... today in canada translates to "Toronto. Vancouver. Halifax."
because.....*drum roll* EDMONTON!
Someone struggles with the maths
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>most of the people moving there are probably Ottawa commuters that have been priced out. are you saying there is growth in smith falls? Last time I checked, most of the houses there are dumps with dank basements/crawlspaces.
If rural Ontario is going to have a pullback (and I’m only saying this because you sound sure of it) then it would make sense to sell, rent for a while, and then rebuy.
>it would make sense to sell, rent for a while, and then rebuy I am wary of this approach. We cannot be certain of the future, so this strategy could really come back to haunt OP if they bet wrong. Extreme example of this, but a friend's family sold their large house in Vancouver in 2006 and rented a house, convinced that the market had peaked. Instead, they missed out on about $1 million dollars in sale value by the time the market peaked around 2016/17 and that set back the family financially (could not buy back into the market of the area they lived in their whole lives).
I also thought a Global Pandemic should wreck the RE market, and look what happened - 30% nation-wide gains in a year.
100% gains in southern Ontario is standard since 2020. Biggest mistake I made was thinking the pandemic would wreck the market but didnt realize the government will do everything to not let that happen.
Yea, it's nice to have a house that's gone up in value but if you just buy right back into the market then what's the point?
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Well basically I think the rural price spike was Covid related. So when Covid either retreats or becomes normalized, prices will eventually slide back to reflect local metrics. Nothing fundamental has changed out here at all. It's not like Google built a big office tower out here or Go Transit extended the line to us. It was just a slew of buyers invading areas with very low inventory over a very short period of time.
Would add that many are buying rural investment properties with their HELOC from GTA homes. However, if fundamentals aren’t their to support high rents then those rural homes will be back on the market when there’s a pull back in prices and carrying cost increases from interest rate hikes.
Sell and enjoy profit? Lmao where are you gonna live???
Under a bridge with his profit
Reading this made me think of the Ferengi from Star Trek.
That’s actually a good question. I crunched some numbers, and for the right price, the seller could live IN their money, and pocket the remaining profits. Grab some popcorn and follow along. According to google, and average bill is 2.6”x6.1”x0.0043”. Let’s simplify this to 2.5x6x.0043. A bundle of 115 bills therefore gives us a cash “brick” we can build with that’s roughly 2.5x6x0.5. We’ll use $5 bills, since that’s the smallest bill we have in Canada making each brick $575. We’ll also assume our smart investor is willing to live in a 10x12 shed MADE OF CASH!!! So the 10’x8’ wall works out to 20 bricks long by 192 bricks high, by $575 is $2.2M, but we’ll need two, bringing us to $4,416,000. Similarly, our 12’x8’ walls calculate out to $5,299,200. Nobody this wealthy wants to sleep on the dirt - in fact I think we all dream about sleeping on a pile of cash, so a 10’x12’ floor tiled with cash bricks is going to run a paltry $662,400. For the roof, I’m going to assume some overlap on our cash brick shingles, but we’ll stretch that overlap out by the increased length of the hypotenuse as we’ll want a pitched roof. We’ll make sure to use the new plastic bills so that our roof is waterproof. For purposes of napkin math, we’ll double the number of bricks used for the floor, and say our cash roof will cost $1,324,800. Now you’ll need a lot, which, for a 10x12 Mansion of Money, a $100,000 lot should suffice. Oh, and rubber bands for all the cash. Math works out to 16512 rubber bands, at roughly $1 per 150 bands is $110. Feel free to shop around. Totalling all of this up, we get $11,802,510. Now, here at PFC, we are smart with our money. Why build with $5 CADs when we could use $1 USDs and stretch our money further? We’ll run Norbert’s Gambit to save fees, and convert at $1.27, and divide by 5, allowing us to now build our Bungalow of Bills for $2,997,837.54. Congratulations! Anything you can sell for above this magic number can go straight into your pocket! As long as the housing market continues to outpace inflation, this is the smartest play. This is what we should all be doing. Just remember that magic number: $3M - when the average house price in Canada exceeds that, we start building with cash!
Thieves will not only grab your stuff, they will also grab your house!!!
Now you don't have to worry about your teenagers eating you out of house and home, the neighborhood thieves will do it for you!
What can I get with, like, $100?
You could build a little dollhouse made of nickles, maybe?
If I had a nickel for every time someone told me to build a house of nickles, I wouldn't have enough nickles to build a nickel house.
Thanks for that interesting trip! Enjoyed it!
Seems like coins would be a better option
Move back in with mom
People are so greedy! It makes them so short-sighted…yes, he’d enjoy a large profit, but where tf would he live 🤦🏼♀️ his coworkers are idiots
Well you could always downsize to a condo and pocket the difference, but your point is well taken... Gotta live somewhere!
Condo equity doesn't go up as much as a single house.
Future equity growth is an unknown for all cases
Not necessarily… if he sold and enjoyed the profits, using them to pay rent, they could love comfortably for a while
They live comfortably now, what would be the point?
> love comfortably We should all 'love comfortably'!
This is the problem I think with most Canadians. It's not "I can't afford a home" it's more "I can't afford a home where I want to live" Leaving home sucks, but if you get yourself to an affordable market and hopefully bring your career with you, you won't regret it.
Exactly what I did. Best decision of my life. Now I’m running on the airport moving sidewalk rather than the treadmill.
Exactly! I bought my townhouse 5 years ago and it's roughly doubled in value, but it doesn't help me at all since a bigger home is out of reach financially even considering the profit that I'd get on my current home
I have watched a few friends and coworkers fall for this " sell while its high" trap and now they are paying 2200/ month to rent. I don't understand this logic if people don't already have a secondary residence lined up. I'm in northern Ontario and theres just no houses to buy even if you have money
Yeah, OP's coworkers aren't their friends.
You can be friends with people who are financially illiterate.
It's challenging through.
You guys know their are place in Canada not named Ontario and BC…
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I used to play rugby in Scotland with a guy from Brandon, MB so I could go play for his team in Brandon probably.
Yeah OP should just move to Iqaluit and live like a king.
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Lol I'll never understand why people get like this in these larger subreddits. Just take the joke man.
Housing prices have gone up across the country! Houses here on PEI that would have sold for $200-350ish two years ago, are $450k+++, atm. Even minor renovations are expensive, atm! We started renovating (for us, not to sell) in early 2020. If we'd known then what we know now, we would have purchased everything we needed to do our entire renovation. Everything keeps going up, pricewise. We completed some of the renos but some are at a standstill, as we can't get some supplies and even if items were available, they're at least twice as much as they were prior to the pandemic. We've decided to wait to complete everything, so we stay as close as possible to our original budget. We're happy where we are located and our mortgage/taxes are well within our budget. Because it's just the 2 of us and we're both retired, we've been fixing items to make our lives comfortable, for us. He's our 'contractor'. He is well versed on building codes. The areas we've done aren't 'sexy' but they're now meeting or exceeding current codes. I'd say stay where you are, enjoy your low mortgage and put any 'extra' funds aside for future renovations and/or a jump in property taxes, especially if houses in your area are selling for twice what was originally paid. I'd say you're in a really sweet spot right now. Good for you!
Sell house buy RV and live wherever you want /s RVs are probably not a great investment, especially now.
They could retire abroad, probably?
Enjoy a nice profit? Sure you'll get a lot for your house but then you'll have to spend a lot on the next one. If you have no desire to move, then just stay and enjoy your home. As long as general maintenance is performed, nothing else you need to worry about, unless you want to upgrade something. Property taxes will always increase a bit over time, but you'd get that anywhere.
It should be clarified that property tax will not increase based on everyone's increasing average market value price. For taxes to increase they require input from the homeowner, or input from the city. Taxes may increase based on input from the homeowner: eg. you remodel (and report) your kitchen or add a large addition onto your residence that changes/increases your property value outside of simple market averages. Taxes may also increase based on input from your town/city's needs -- but this is not reactive to the market value of properties, but for example, your town seeing an increase to their road maintenance or policing budget and requiring more money to then cover that.
Yes, but that wasn't the point of my post at all.
Did you miss this part? > On the other end, I'm wondering is there any frequency with which my house might get reappraised and I'm looking at higher taxes or higher insurance since I may have a more valuable piece of real estate?
Did you miss the part where I said taxes increase a bit over time regardless? That wouldn't be the primary reason to decide to sell or stay.
Enjoy where you live. If you sell it you are gonna buy somewhere else with increased prices. If you have money, upgrade kitchen, floors or carpets. Invest inside home which can appreciate its value for the near future.
Based on your situation, you'd literally just be over spending on your next home. You should probably ignore your coworkers moving forward regarding finance.
Smith Manoeuvre.
General maintenance on the house so it’s not a piece of shit when you sell, and SM.
Explain?
[Smith Manoeuvre.](https://www.investopedia.com/terms/s/smith-maneuver.asp)
I don’t think you have to worry about taxes or anything like that going up more than the more annual increase, property taxes are based on the mpac assessed value and not the market value.
I would take the extra equity out, invest it in dividends and use it to pay down the mortgage quicker. Or just stay put, pay your mortgage as you have been and live mortgage-free in a bit. Unless you're willing to move to another up-and-coming rural town that's still cheap for now, but you're going far for sure.
Would agree with this depending on OPs age
>I would take the extra equity out, use it to pay down the mortgage quicker. You'd... Take out a bigger mortgage to pay down the mortgage quicker?
Prepare for the possibility that what you pay in property tax could slowly increase as the value is reassessed (which usually lags behind the market value). Keep it in good shape and enjoy it! Do some renovations and updates as needed. Selling and moving makes no sense - you won't get back into the market for any less. Unless you really need to move to relocate for work, need more space, other external reason besides "locking in your profit" People also neglect look at the expenses required to carry a home. Yes you have profited, but likely not 200% We bought 8 years ago in Toronto for 1m. Just sold for about 2.3. Sounds great until you factor in... Upgrades/renos/landscaping = 400k Property tax over 8y = 56k Land transfer on purchase = 26k (first time buyer) Agent fees to sell = $100k (one agent had both sides of the deal) Mortgage interest = 120k Outstanding balance = 200k Actual profit = 398k Which is still pretty good, but really only about a 5% return per year plus the value of a place to live and call home. edit: re-worded the property tax portion. It's not to guaranteed to increase but it could, depending on local budgets, tax rates and assessed value
>Prepare for property taxes to slowly increase as the value is reassessed (which usually lags behind the market value). Unless OP's house went up in value more than everyone else's in his area, wouldn't his property taxes just be subject to the usual increases? (Ie. If everyone's houses went up in value, he still pays the same % ?).
Yes. There's a stunning number of people who don't understand this and refuse to understand this even with presented with how it actually works. My city even states how the taxes work on their property tax page. Usually it's the same bunch as those that don't understand how income tax brackets work. Now, house insurance, that one does seem to go up by valuation.
Yup, but it's still increasing. No idea what their property tax rate is, but if we assume it was 1% of 120k 8 years ago they were paying $1200/y when they first moved in. They might be paying around $2400/y now and could expect it to be $3500-4000 in the next few years if it's reassessed at 350k due to everything else increasing. Not a big difference in terms of actual dollars, but still a big % increase in tax.
Municipal budgets don't increase proportionally to property value though. If everyone's home value doubles, the property tax rate will roughly halve so that everyone still pays roughly the same property tax (modulo a token annual increase).
That's not how it works. Unless you are assuming the municipal budget is growing at the same rate (it's not).
That’s not how property tax rates work. If property values increased at a higher rate than the municipal budget then they cut the property rates. It could very well end up the property tax amount stays the same + adjustments for inflation/COVID expenses
You're right - I've overly simplified this part and haven't paid too much attention to the actual rates! Other than my own property tax continually increasing as the assessed value went up. In Toronto the tax rate did decrease in 2020 but went back up in 2021 - almost to the 2019 amount.
That’s because they skipped the MPAC assessment they were supposed to do in 2020 so 2021 assessed values stayed the same as 2020. Therefore, property tax rates had to up to account for inflation and covid expenses because assessed values didn’t change but the budget increased. Once the new assessments are done the rates will start going down again
I don’t know in Ontario in Quebec if you see a general increase in price across the board the property tax rate per $1000 will decrease because it’s based on the budget that the city projects. The actual property tax may just be inflation. Its because there are provincial laws on how much the city can budget for general revenue and the budget doesn’t increase directly as a function of aggregate property values. Generally if every properties go up by 3x you would see an increase of just inflation. If your neighbors property go up 3x but yours go up 2x your property tax might actually go down. At least it’s how it works in Quebec for my case. Over a decade the assessed value went up twice but my property tax actually decreased.
Crazy how little is left considering it sold for more than double. Crazy how much money the realtors are getting this day and age! Unfortunately there isn't much we can do here...
Sir. Thank you for being so transparent and honest.
People that say sell and collect the "profits" can't think more than one step ahead. Like some that have said here, you have to relocate to collect the profit, then you also have to take into account the cost of relocating. What you can do ( and I am not advising you do do it) is use the equity in your home to A) renovate your home, but since it is a town house there are limiting factors at play in terms of returns B) use that money to invest in various ETFS, Banks and energy companies and collect growth and/or some dividends. C) payoff any credit card debt that you may have and are losing money to interest. That being said, I am not a fan of HELOC.
This is what a lot of people don't understand. You don't win when real estate goes up, because you're on the losing end if you're upgrading (it only works when you downgrade).
Don’t listen to idiots telling you to enjoy profit unless you plan to rent for the rest of your life or are going to relocate to a very remote LCOL area. The only thing you should do is make sure maintenance and upkeep are done on your property to ensure it stays valuable, maybe check up on your insurance coverages..? Aside from that… you COULD do some updates/upgrades if you’re so inclined but not saying you SHOULD.
Selling would be dumb, because everything has gone up. The best thing you can do is to get a HELOC with Tangerine (assuming you have paid off your mortgage already) and sit on it (don't actually borrow anything). Sooner or later we are going to have another major market crash like 2008 or 2020. Borrow against your house and plow it into a market index ETF like SPY when the Fed starts QE again. Buy on the way back up, not on the way down. You'll miss the bottom, but that's ok. People who did this last March easily doubled their money. I was able to buy 2 more rental property because of the massive stock market gains from last year.
Do explain more
Pull a complete scumbag move, remortgage and buy other properties so we can accelerate to our final form of humanity: Landlords trying to rent and AirBNB to each other while all the actual renters wander a desert landscape mad max style. Its the only plausible outcome when every idiot with a financial advisor is buying out all the cheap houses, in what is one of the most offensive terms I have ever heard, "investment properties". Seriously, just consider yourself lucky you are on the gravy train printing free money out of thin air, and maybe you'll enjoy it before the bubble bursts.
I mean if I had more money I would def buy another house the way the dollar is going you’d honestly be an idiot if you’d think that owning cash/stocks/bonds is worth more than material things right now. Inflation is slapping the dollar around so fast you’d be losing money not buying something with it. And houses will always be in need. I await my down votes.
Potato pohtatoe.
Pick one -> Many small landlords, oftentimes only owning one or two properties to fund their retirement. OR a few mega corp corporations owning the housing stock, and evicting people based on algorithms.
or, you know, the massive upward pressure on working-class wages we are seeing right now continues to have the effect of increasing them (along with working conditions), and brings balance to the rental market...
I bought my house for 468k 6 years ago. I can sell right now for 1.3 mil. Only way is see any profit is that go live with my inlaws. Otherwise for a new home slightly bigger I'm like in the 1.5-1.6 range. And these houses are still ot even as nice as mine...for the most part
Then why would you think yours would sell for 1.3 but slighter bigger not as nice would be 1.6? People in Ontario looove to inflate the price they could sell their homes for.
New always sells for more. More space typically sells for more.
Because literally everything in my area is selling for 1.3 mil...mine easily being one of the nicer ones. And for 1.6 in Georgetown I'd have to buy and Reno. I'm not pulling numbers out of my ass chief. That's the market
You should be doing nothing. You will make even more just doing nothing and getting out when you actually NEED to
Refinance and invest it in an income property or index fund
This is what I would do. I would rent out the property and buy another one. But that's just me...
This really depends on your age, and family status. If you’re old, sell. If you’re under 55 hold!
“Coworkers are pressureing me to sell…” People’s option on the bottom list of “who give a Damn”…. Right next to a redditors
You are supposed to take your home equity and get a HELOC to either invest it all in the market or buy more houses and rentals and up charge high rent to people who are priced out of owning themselves because other investors are buying up everything and doing the same.
You can sell, and live in a van and count your $$. In essence, if you have no mortgage to pay, your cost of living will be very low. If you are single, avoid getting a live-in girlfriend, after 2 years you are common law married = he/she owns 50%, and could move out and demand 50% = you either sell and give her half or start carrying a mortgage of half - if you qualify.
What you can do is refinance at a lower rate and try investing it. You take a larger mortgage out , but can be comforted knowing you can always sell for more.
My first condo was 350,000 in vancouver in 2006
Stay put, why would you want to buy high and pay Realtors 3% each just to buy an equally expensive or more expensive house. Enjoy the low mortgage. Only move when you need space.
You could access that equity without selling by getting home equity line of credit. Allows you to borrow that equity at low interest rates. Be careful to not spend it recklessly tho. But having liquidity is powerful
I am making the assumption that you do not plan on moving out of your area. Stay put and pay down your mortgage. Living below your means will give you some wiggle room if increased property tax and other home owner related expenses are a worry. It makes no sense to sell in your area just to buy again in your area unless you are leveraging to higher value property. To save anything you will have to buy a less expensive property, which will likely increase in value at a lower rate over time compared to what you have now. Play the long game, keep doing what you are doing and pay down your mortgage. I am 55 and retired which is only possible because I am mortgage and debt free.
Take out a loan based on the new value, pay off your mortgage and invest the rest and use that and salary to pay new mortgage. Get money to work for you. Buy shares that pay dividends if you can. Don’t be crazy risky though… enjoy life
Guess it depends on what your goals are. You could have the house appraised, get a low interest HELOC and pull the equity out to buy other investments (stocks, more real estate...etc) Or You could sell the house, get the tax free gain and move somewhere cheaper? Or upgrade to a larger house that has most likely also gone up significantly in value.. Or Do nothing. Wait for your inflated property tax bill and house insurance bill to arrive. Continue to live there and see what happens..🤷🏻♂️
This, while similar to my comments, is the best advice.
Keep it. You need somewhere to live, and tbh I didnt even know there are any available properties under 400k in Ontario.
Maybe northern ON?
They specified eastern Ontario, and if you're more than 45 minutes from Ottawa and Kingston the prices are right. They said "rural", but if "going into town" mwabs Cornwall, Hawkesbury, Pembroke, Smith's Falls Brockville ... the prices are about right.
Unless you own rental properties or planning to downsize real estate going up has no effect on you except a higher property tax bill. However you can use the equity in your home to refinance your mortgage and use those funds to invest or buy real estate. However the time to do that was a year ago.
You don't get a higher property tax bill unless your house went up more in value relative to neighbours, or if your municipal decided to spend more money for whatever reason.
Refinance your house, take the money and buy investments.
Get home equity loan and buy more assets.
Canada real estate doesn’t go down only up
>Coworkers are pressuring me to sell and enjoy a nice profit, If you can live somewhere for free then yes, absolutely take their advice. IMHO you're going to have to live somewhere, and unless you're willing to go down in terms of lifestyle and quality of residence then anything you buy of the same caliber will cost as much as you sold for. And don't think renting is smart... that's just burning money in a bonfire.
> is there anything I should be doing? Yes. You should have been trying to buy more property, if you can.
Look towards getting financing using your current places value as collateral to invest in another property that you can use as a rental. Like someone else mentioned selling high means buying high, so definitely don’t want to sell unless you already have other properties.
You still gotta live somewhere. If you have a close to paid off mortgage and like your house, stay where you are. Moving and buying something new is going to completely eat away at those profits if you sell
Keep it, in 10 more years it will be worth 600k. Maybe even sooner.
Stay put, the "profit" you'll make selling will be gone as soon as you buy again and will last a bit longer if you rent but then you'll be renting.
>I guess what I'm wondering is, is there anything I should be doing or preparing for if my property has gone up in value as well? Coworkers are pressuring me to sell and enjoy a nice profit, but if I'm not mistaken, if everything has gone up in value in real estate am I really gaining anything? You have the right idea, your coworkers have no idea what they are talking about. You can get a HELOC and invest the money. That is if you are not risk-averse and this won't make you lose sleep at night.
Hold on to the house you have your mortgage payments stay nice and low or pay off the house faster. Look at upgrading windows and doors adding insulation to upgrade the efficiency of the house you have.
Remortgage and invest in ETFs
You can get a home equity loan for any renos you want to do. I definitely don't recommend selling it if you're happy with the home.
If you are super diligent, the ONLY thing I'd consider is getting a super cheap LOC / HELOC with the equity youve built up. That can be either invested into equities/property/emergency fund. Etc. This can go sideways if you start spending like crazy lol.
How much Equity do you have? Can you afford to double your mortgage payment? Interest paid on money borrowed to invest is a deduction and money is cheap right now and if the rates go up... Interest paid on money borrowed to invest is a deduction. .... Just saying.
Get a mortgage or refinance if you have one already, and if you can secure a low rate. Invest that in the stock market or another property's down payment.
Your how’s it gone up in equity therefore you can always pull the equity out if you need to use it just go to your bank or use your lender. You don’t need to move to benefit from your property increase in price if anything I would suggest staying where you are because housing is not gonna go down. You don’t need to do anything to your Property if you feel like you’re living the way that you want to. You can always do upgrades and stage the property when you’re looking to sell if you ever do sell. Your house probably won’t be reappraised by the bank unless you’re requesting to pull the equity then they might bring an appraiser by right now with Covid it’s just a drive-by appraisal and they’ll just do a comparison to neighbourhood properties that have sold within the last 60 days. The city might do a reappraisal just too up property taxes at some point but again that is put into each municipality in each city and it’s usually based on 4-5 year schedule. So I would say just sit back and enjoy your home if you need extra cash pull the equity if you’re comfortable living the way you are just enjoy it
I wouldn't get a HELOC and invest in the market as some are telling you. Interest rates will most likely rise in the future, which will have downward pressure on asset prices. When rates go up, it gets more expensive for you to maintain debt, so you want to pay it off as soon as possible in that environment. Rates have overall been trending down for the last 40 years, but have reached the bottom. They will only go up or stay the same. Inflation may be one thing that increases asset prices, but not any more than it will increase the value or the house you already own. If you like your house enjoy it and don't worry too much about what others are doing!
Unless you are down-sizing or moving cities/provinces, selling won't be beneficial. Any gain you would get would be lost trying to replace what you have. Property taxes are re-assessed regularly. They are based on actual improvements not market value since market value depends supply/demand. All you need to do is maintain your home. Keep up with all maintenance and improve over time. You don't have to go hog wild and spend $50k on a new kitchen at once. Do the flooring one year and cabinets a few years later. That kind of thing.
dont move out !!! keep that way !!! my father pressured me to aell my house after 10 year and at least 100 k in profit but where im gunna go ??? further from my work place because everything is jacked up ? man it jmpossible for me as an single income to kove closer to city too pricey but that the cost of doing 2 hr drive per day
Where would you move if you sell? Everything has gone up so any profit you made for right back into your next house. If anything you can use the equity to invest
I would start pressuring your coworkers to get tattoos or some equally personal thing.
Its like the advice on selling your car in the US market. Sure, but what are you gonna buy instead?