clicky pic for biggernessI got an e-mail yesterday (below), and sent a response.
I see no need to write a thesis on it, so without further preamble:
What would you do/say?
Queftion
20 Jun (1 day ago)
Hi,
I am moving from Yaletown to Port Moody, because I have a new job there. Should we keep our condo in Yaletown as an investment? Or should we sell and buy a condo out there? Which is a better investment: Yaletown or Port Moody?
Our condo here is at xxx Cambie on the 26th floor w. SW views. 1150 sq. feet w. engineered hard wood floors, 2 bedrooms and solarium. Assesed (sic) at 550k.
In Port Moody, we would buy a 2000 sq. foot townhouse for about $500k
My theory is to keep our condo here, and wait 10 years or until it reaches 1 million - whichever comes first.
thanks,
(name removed)
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Anfwer
Hello,
I would sell the condo, and rent until the correction has bottomed. Common consensus has it that the market has peaked. Look around at formerly "impregnable" markets (UK prices off 30%), and repeat the mantra - It is not different here, this time.
In 10 years, your condo may only be worth $50k - let alone a million. Your townhouse might be worth the same, and you would be on the hook for the mortgages on both.
If you have read much of my blog, you will know that I have been predicting a meltdown akin to, or worse than the Depression of the 1930's. Do you want to owe at least a half a million (for the TH) in a situation like that? If you want to make an investment, sell the condo, and buy two TH with the proceeds when the market bottoms.
My opinion is worth what you pay for it. I am not a financial planner, nor an RE guru, but I do have much, much more than I owe, and live very comfortably in my rented house, with no stress.
Best of luck, no matter what you decide.
solipsist
7 comments:
Good advice. No stress is good for you.
550K for 2bdr apt.
I'd rather get twin Ferraris.
Or better yet,
one of these...
http://www.unicatamericas.com/photos.html
Then I would not even need the house.
Best regards
Crikey! I'm still trying to get over the dizzying distance between the two 'homes'. Port Moody and Yaletown. You'd better have a good GPS in your vehicle. The wilderness of Barnet Hwy is for intrepid adventurers only.
My advice would have been to "keep the downtown condo and drown in your own greed".
People still haven't gotten it, and likely won't GET it until it's all over the MSM or until they've lost a boatload of "equity". Show them all the graphs and statistics in the world, and they'll still have $$$$$ in their eyes. People in this town are blinded by greed. You can try to shine light in their eyes but they'll just think it's the reflection off their hardwood laminate floors or perhaps their marble countertops or stainless steel appliances.
Btw, if that was a little harsh here's another suggestion:
Buy a livable 2-bedroom condo in Port Moody for about $200-250k (it won't be new and it probably won't have stainless steel appliances or marble countertops, but you'll live... somehow). Put the rest of the money in a high interest savings account.
In a few years, cash out the money from the savings account and buy the downtown condo back for $300-350k.
I guess it all depends on how much profit you would make by selling your condo and then buying the house. Would you be mortgaged to the hilt or would your mortgage payment be closer to paying rent?
fihi
Solipsist - truer words have never been spoken! My hubby and I are semi-newlyweds who have been battling the question, "When are you guys buying a place? You should get into the market and build some equity!" for the past 3 years of living in our current city of Edmonton. In spite of nearly everyone's advice, we chose to rent.
Now that we're moving to downtown Vancouver (and renting, thankyouverymuch), we could not be more thankful that we stuck to our guns. Sales are down, listings are up, prices have dropped in our area, and had we picked up a place to "build equity," we'd be out many thousands of bucks and hard pressed to find buyers for our pad. Our dream of moving to Van would never have materialized.
Sometimes renting is simply the wiser option.
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