It depends on what you use the money for. If you use it to buy investment properties or renovate your home, it can be worth it.
40 Year Mortgages, have we discussed this?
- Thread starter doe moe
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Exactly. Bit overwhelming looking at those numbers in that the house is still nothing special. It’s modest.
Side note - my dad and aunt sold their late parents East Van home in 2009. Approx 50 years old (at that time) and it sold in that 600 - 630k range. The new homeowners put 250 - 300k in renovations into it to completely modernize it. Nice couple. They told my aunt and dad they could stop by anytime to see the renos. Lots of memories for them and they loved seeing how they did that place up right. But hell - not many people have 250–300k set aside to 100% TLC a place. I haven’t checked the assessed value of that place. I will do that shortly. It’s been 14 years since fam’ sold it to them.
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@M3MD
So I just checked the assessed value of my late grandparents' place just now. Assessed value is current as of July 1st, 2022. Again, it was sold for 600 - 630k in the spring of 2009. When grandparents lived there, it was a 3-bed, 2-bath. It is now a 4-bed, 3-bath home ... built in 1959.
Assessed value in July 2021 - 1,743,000 (land = 1,584,000 / building = 159,000)
Assessed value in July 2022 - 1,848,000 (land = 1,702,000 / building = 146,000)
So I just checked the assessed value of my late grandparents' place just now. Assessed value is current as of July 1st, 2022. Again, it was sold for 600 - 630k in the spring of 2009. When grandparents lived there, it was a 3-bed, 2-bath. It is now a 4-bed, 3-bath home ... built in 1959.
Assessed value in July 2021 - 1,743,000 (land = 1,584,000 / building = 159,000)
Assessed value in July 2022 - 1,848,000 (land = 1,702,000 / building = 146,000)
They doing the same thing for cars.
You got folks financing brand new cars for 7 or 8 years.
You got folks financing brand new cars for 7 or 8 years.
Yup, it depends. Refi'd to drop my rate from 4% to sub 2.9%. I had about 20 yrs left on the original mortgage, and the refi pushed it back out to 30. Also took cash out (~$38k) to renovate bathrooms and the laundry room and other house things.
Ultimately the monthly payment dropped $350 bucks (longer term, lower rate). Now I don't plan to stay in this house for 30 years. However, if I did, I would still want to pay the house off in the original 20 years that were remaining. So, I took the $350 difference and invested it in the stock market monthly. Based on my calc I would need to achieve a 3.50% average rate of return to make a lump sum payment at the end of 20 yrs to pay off the house. Stock market averages 7%+ annually from a historical standpoint. Hell, t-bills are near 5% right now (no state tax on new issues).
All the while, I still have quite a bit of equity in the house. I wouldn't do a cash out refi to buy something that couldn't appreciate in value (e.g. a car). Home Renos can add value so those definitely make sense.
$1.8 mil for a 60 year old house that needs renovations and it's not a water front property?
Unless there's a lot of details he's leaving it, there's no way that house is worth that kind of money.
A society of long-term debtors.
I'm about to start investing in those shipping container companies, or the folks that are 3d printing houses.
3D and/or Prefab Modular are the future of construction. The cost savings of automation vs the rising costs and liability of labor is too much to ignore.
This will help support keeping housing prices high. Most people judge affordability by the payment rather than total cost. Most people don't stay in homes for the life of the loans too. In the end it will likely hurt buyers because they will have less equity in the home due to paying lower payments with more interest.
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@M3MD
By comparison, my dad's gf's daughter and her family have been looking to buy a place in recent months. They've been living in a basement suite for the better part of the past decade (their cousin is their landlord). They work for his company. Their current rental is approx' $1500 (everything included) for 2000 sq. ft and also includes usage of the backyard pool, plenty of home security, etc.
The current real estate market is too pricey, so they've been looking at the manufactured / mobile home parks and are looking to close on a place by late-May. The initial link lists the assessed value as 239k in July 2021, and 269k in 2022. The real estate sales ad lists it as 369k. All building value, and not land. Fully renovated as of 2015 (but built in 1974) - floors, kitchen, washroom, electrical. 2 bed, 1 bath. 1 ad lists it as 864 sq. ft, and the other 924 sq. ft.
They are in their late-30s and their 2 kids are 3 and under.
By comparison, my dad's gf's daughter and her family have been looking to buy a place in recent months. They've been living in a basement suite for the better part of the past decade (their cousin is their landlord). They work for his company. Their current rental is approx' $1500 (everything included) for 2000 sq. ft and also includes usage of the backyard pool, plenty of home security, etc.
The current real estate market is too pricey, so they've been looking at the manufactured / mobile home parks and are looking to close on a place by late-May. The initial link lists the assessed value as 239k in July 2021, and 269k in 2022. The real estate sales ad lists it as 369k. All building value, and not land. Fully renovated as of 2015 (but built in 1974) - floors, kitchen, washroom, electrical. 2 bed, 1 bath. 1 ad lists it as 864 sq. ft, and the other 924 sq. ft.
They are in their late-30s and their 2 kids are 3 and under.
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Refinance yes if your rate is high. HELOC wrong. Most people only take out 20-100k to renovate, buy more property or pay off credit card debt . The payments are low and you can pay it off way faster than 30 years . You also can write off the interest.
Dad emailed me the following links.
It's his friend's old place. It was built in 1967, but he gave it plenty of renovations around the late-80s or early-90s and lived there until 2015/2016 before downsizing to a condo with his GF.
It was a 5-bed, 4-bath when he lived there. The place was knocked down and is now an 8-bed, 6-bath.
He listed it for $1,988,000 and sold for 1,770,000 as noted.
The assessed value for the house in its place now is 4,106,000 as of July of last year.
www.bcassessment.ca
It's his friend's old place. It was built in 1967, but he gave it plenty of renovations around the late-80s or early-90s and lived there until 2015/2016 before downsizing to a condo with his GF.
It was a 5-bed, 4-bath when he lived there. The place was knocked down and is now an 8-bed, 6-bath.
He listed it for $1,988,000 and sold for 1,770,000 as noted.
The assessed value for the house in its place now is 4,106,000 as of July of last year.
5111 HARBOUR VIEW RD, Burnaby - SOLD
List Price: $1,988,000, Beds: 5, Baths: 4, Lot Size: 13,349 sqft, Listed By: Les Twarog and Sonja Pedersen
www.sonjapedersen.com
BC Assessment - Independent, uniform and efficient property assessment
BC Assessment provides current actual value assessments for tax purposes on all properties in British Columbia and provides expertise in real estate data, mass appraisal systems and management.
Two kids 3 and under and they are going to blow money in a 50 year old home in a mobile home park, for a sf they will outgrow when those kids hit intermediate/middle school in 6-7 years? They’ve got a SWEET deal right now, 2000 sq ft. is a lot for four people depending on your part of the country. Seems like they’d be taking a step backwards.
Agreed. At their current place with the landlord being their cousin ... they've got immediate family to visit with (he has a wife and 3 daughters). Each party can help babysit the others' kids. Current basement suite is nice & large. Close to work.
The place they're looking to close on later this spring is smaller and older, and like you said they will outgrow it.
I asked pops what he thought and he was unsure. Asked him what his gf thought about her daughter pressing for this place in particular. He said she wasn't too happy. Wished she'd begun saving sooner and gotten into the market years ago. Sort of priced herself out waiting so long. Plus the place still needs some work once they move in.
Sounds they are suffering from FOMO and now looking to make a good situation a bad one. That babysitting help is invaluable and can help sustain a relationship by having a few hours kid-free time. If it needs work once they move in? It means they are losing money from the jump and honestl, pre fab and manufactured homes are low on the resale totem pole. Sounds like they are buying someone else’s problem. I hope they decide to stay put.
Agreed. She seems too eager to make the move. When in reality they could have bought further east and a much bigger home 10 years ago. A place that would have truly been a live-in investment.
The landlord is cool as fuck. He has hosted a number of Xmas parties. Went to some pre-covid and had fun meeting their extended family. The house itself can easily host 25 - 30 people and not feel cramped. And that backyard pool is a major perk / especially for kids.
@cold-n-cocky
So pops called this morning and apparently they are going ahead with the purchase for May 27th. Mom is not happy! Thinks she’s making a mistake. The 2nd bedroom is more like a workshop that needs to be converted into a kids’ room / nursery. There is no fence, so they’ll need to build one to contain the kids and dog. But the worst of all is that the slab for the trailer is a $1250 a month rental / fee, on top of their mortgage for slightly under 900 sq ft. So that’s $15,000 a year right there to rent the space aside from mortgage. Damn. Whereas they have spent the better part of the decade enjoying 2000 sq ft all included for $1500. And they will be on 1 income as mom has been home with the 2 kids. Fortunately his job pays well at over 100k, but still it’s more costly now for less than half the space.
I dunno ...
So pops called this morning and apparently they are going ahead with the purchase for May 27th. Mom is not happy! Thinks she’s making a mistake. The 2nd bedroom is more like a workshop that needs to be converted into a kids’ room / nursery. There is no fence, so they’ll need to build one to contain the kids and dog. But the worst of all is that the slab for the trailer is a $1250 a month rental / fee, on top of their mortgage for slightly under 900 sq ft. So that’s $15,000 a year right there to rent the space aside from mortgage. Damn. Whereas they have spent the better part of the decade enjoying 2000 sq ft all included for $1500. And they will be on 1 income as mom has been home with the 2 kids. Fortunately his job pays well at over 100k, but still it’s more costly now for less than half the space.
I dunno ...
Damn. This is backwards hustling at its finest. Is the point to have some faux “asset” they can call “their own”? They are taking on an unnecessary burden based on emotion over logic.
When those utilities and other bills hit they didn’t pay before, compounded with growing kids (who eat more, need more clothes, activities, etc.) AND they are on top of each other pressed for space in an outdated money pit? Welp, you said your peace and now will just await the inevitable bemoaning that you’ll be a listening ear for.
Agreed. I reminded my dad not to get worked up or stressed, as it’s not his kids. Let them make some big mistakes. They will soon find out unfortunately. Sounds like the wife is calling the shots and husband is along for the ride. That $1250 got me just to rent the space for the house. Who knows about bills and mortgage? Especially when heat, cable and gas were all included for $1500 and 2000 sq ft now. Told my dad ... they minus whale stay put. But apparently take possession in 1 month.
@cold-n-cocky
Side note, her brother is unemployed and renting an apt for $1900 a month. Living off his savings and has gone through some shit over the years. Another big stressor for mom ... that my dad hears about from her (his gf) all the time. I am glad us kids don’t stress him out like that.
Side note, her brother is unemployed and renting an apt for $1900 a month. Living off his savings and has gone through some shit over the years. Another big stressor for mom ... that my dad hears about from her (his gf) all the time. I am glad us kids don’t stress him out like that.
Mom needs to watch her health for real.
Agreed. She is 76 and still works part time by choice. Her husband passed from brain cancer 20+ years ago. She is lean and does lots of walking, but those stress levels are high. Daughter is demanding / helping regularly with the grandkids. Wish she would slow down a bit for her own good. I think her goal is to leave a good inheritance for her kids. But careful compromising yourself in the process to gettin’ there. Let them continue hustling yet - they are 38 - 40.
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