Comments on: Debut Episode of The Mortgage and Real Estate Show

By: Stephan

Stephan — Sun, 25 Oct 2009 17:07:32 +0000

My first house in Calgary was purchased from the original owner. He purchased that home in 1981 for 98000$. I purchased it in 1997 for 130000$ tax assessed @127k. He built a garage and developed 2 of the 4 levels of the house.That same house in 1985/86 would have sold for no more than 70k.Today that same house tax assessment is 330k.

I think people that purchased recently will face the same situation.

We may not see a crash but years of no price gains at best.

I personally don’t think rates can go up but at the same time I will lock in mine for 5 years as soon as it comes due.

I sold property in Calgary in July 07 and have been looking to get back into the market. I think I will wait a few years to see whats gouing to happen. Right now Arizona is looking pretty tempting to me.

Just my 2 cents

By: Nathan

Nathan — Tue, 07 Jul 2009 21:43:46 +0000

No problem Jason. Thanks for the reply.

By: Jason Dodd

Jason Dodd — Tue, 07 Jul 2009 18:22:38 +0000

I agree Nathan that my comment about renters might have been a little extreme, it was fueled by the disrespect I had seen on the BLOG from previous responses. I think you do have to calculate where your community is in respect to rent. If you are looking at any strong communities with nice homes, schools and ammenities you could be looking in the $2000.00 monthly range(Calgary) not including utilities, phone and any other items not included in rent.
My intent here is to bring up another side that was not discussed in regards to negatives of renting since many bloggers were singing praises of Garth’s advice on renting.

REnting is a necessary and good strategy for some people but for those who can afford their mortgage and handle the always eventual ups and downs of markets should seriously consider buying.
Thanks for your response and for keeping me in check.
Regards,
Jason Dodd

By: Nathan

Nathan — Fri, 03 Jul 2009 00:54:36 +0000

Oh, I should also say that I strongly disagree with Jason Dodd’s rather extremist views of renting. In particular:

“If you think your neighbors don’t know you are a renter think again. Try and have a backyard party or gathering and see how fast the complaints come in. No one wants renters around and will find any excuse to get them in trouble. I have seen it on my own street and other stories from friends and family. Their is a stigma.”

Sounds like a neighbourhood I wouldn’t want to live in, as a renter or an owner! No one I know – or care to – judges people based on whether they rent or own the place that they live in.

Sometimes owning makes sense based on your personal situation, expectations of the future, and comparison of the costs of ownership vs the costs of renting, and sometimes it doesn’t. Saying either option is always better just doesn’t make sense; nor does the following statement:

“You are paying the same for rent as a mortgage don’t kid yourself about that”

Well, that would depend entirely on what you pay in rent vs what the sale price of the home was, interest rates, property taxes, etc. It is this balance that determines the long-term relationship between housing prices and rental rates. When the short-term prices or rates deviate from the mean, one or the other may be more attractive.

By: Nathan

Nathan — Fri, 03 Jul 2009 00:44:16 +0000

Hi Greg,

I actually found your blog through Garth’s, and wanted to say that I do see you trying to paint a balanced picture here. (Especially considering your business relies on people buying houses!) Your focus on affordability and thinking of the future is exactly what the industry should be striving toward.

And I agree that Garth comes off as far more polarized than you, although even he has stated that it’s impossible to say that buying real estate is a bad idea for *everyone*. (As you say, he’s bought some himself lately.)

Anyway, regardless of the (ridiculously) abusive comments, you should really thank him. I’m sure he steered a number of other people here who likewise appreciate your analysis.

Of course, none of that is to say I agree with all of your opinions. Particularly I think the talk about Calgary being unique is perhaps a bit naive – every region seems to believe that, just for different reasons, be they Olympics, ocean, immigration, size, isolation, etc.. Also about incomes rising in the near future, for reasons mentioned by other commenters. But as you say, that is the nature of opinions, and I appreciate that you are trying to present the full picture as you see it.

By: Bruce from Ontario

Bruce from Ontario — Wed, 01 Jul 2009 07:44:29 +0000

Hi Greg,

I appreciate what your doing and agree with much of what you are teaching. I look forward to how your project unfolds. I also find much, not all of what Garth is writing valuable as well.

My comment however is to the many negative comments that are on this blog. It’s one thing to disagree with Greg but disagree with an educated opinion. Greg has clearly stated he willing to explain himself and has done a great job so far, have some respect with your comments for those who are emotionally charged rather than logically disagreeing.

This site is a tool for coaching and educating. On that note keep up the good work Greg!

Thanks for your support, glad you enjoy the site

Greg

By: LOL

LOL — Wed, 01 Jul 2009 00:37:31 +0000

I enjoy Garth’s blog, but I have noticed he doesn’t tell us how to make the profits he’s making as he closes on yet another property. I am of the same belief that RE is in for a big crash, but people, including Garth, are making on it while I am not. Reminds me of what I said 4 years ago when I saw a 23 year old unskilled rig worker, buy a $500,000.00 home. “what does he know that I don’t”. It was foreclosed on this year.

By: Kenda

Kenda — Tue, 30 Jun 2009 14:37:12 +0000

Hi, I am fan of no one in particular and not likely to take sides here. Am on the lookout for a house and has a degree in Economics and Finance.

Are you willing to provide your guarantee in writing that when I purchase a house I will not lose any money. If you are so so sure about that, then I propose you do it.
If you can’t do it, then stop doing cheap politics and admit that you are in this as a salesman who does what they do best…SELL and use cheap tricks to do so

My position as any blogger has is to tell you my opinion, and defend it. It is your job as the reader to decide who you connect with. For what it’s worth, if you are buying a house, then just make sure you put as much thought and effort in choosing your mortgage planner and their corresponding strategy for you as you would if you were choosing someone to manage an investment of the same amount.

For instance if you were getting a $400,000 mortgage, ask yourself, how would I think and act if I was INVESTING $400,000. put that same pasion and expectation into the person managing your debt as well. Thanks for your comment

- Greg

By: Jason Dodd

Jason Dodd — Mon, 29 Jun 2009 21:23:16 +0000

Just to correct the math on your June 27th post from Juneberg. this is mortgage software calculations using a mortgage based system recognized by lenders across the country.
Mortgage Amount: $ 450,000.00 Payments Displayed: 1 – 60
Interest Rate: 4.400% Payment Frequency: Monthly
Initial Amortization Period: 35 Year(s), 0 Month(s) Initial Payment: $ 2,090.86

——————————————————————————–
Period Total Paid Interest Principal Balance
Year 1 1 – 12 $ 25,090.32 $ 19,510.27 $ 5,580.05 $ 444,419.95
Year 2 13 – 24 $ 25,090.32 $ 19,262.03 $ 5,828.29 $ 438,591.66
Year 3 25 – 36 $ 25,090.32 $ 19,002.76 $ 6,087.56 $ 432,504.10
Year 4 37 – 48 $ 25,090.32 $ 18,731.96 $ 6,358.36 $ 426,145.74
Year 5 49 – 60 $ 25,090.32 $ 18,449.13 $ 6,641.19 $ 419,504.55

Totals: $ 125,451.60 $ 94,956.15 $ 30,495.45

although it doesnt come out as clear as on my system the payment is actually $2090.86
Interest paid down is actually $30495.00 by year 5 and not $14091.39 as described.
ending balance at year 5 would be $419504.55 and not $435909.00
At 30 years remaing and 419504.55 remaining at new term with interest rate at 8.8% your payment would be $3268.20/monthly
Additionally in the first 5 years if you put $100.00 a month extra on your payments at 4.4%(the minimum with almost every lender for prepayment privileges) you would shorten your amortization by 2.6 years which would obviously save you thousands of dollars in interest. Not to mention if you took our advice and priced your mortgage at 5.5% levels which would increase your mortgage payment by $300.00/monthly you would erase 6.7 years of your amortization. Your 5 year balance would be at or near the $400000.00 level and your payment would be subsequently lower at that time. This considering a POSSIBLE worst case scenario of 8.8%. although the last 15 years have not indicated our rates be at that level.

By: Jason Dodd

Jason Dodd — Mon, 29 Jun 2009 16:54:45 +0000

Hello everyone,
As a Mortgage Agent who works on Greg’s team I can tell you with great care he analyzes and focuses on all view points. His opinions are backed with many years of experience and with proven results. I joined his team because of the great views and his focused and professional approach to our industry.
Many of the people on this blog making obscene or inflammatory comments are likely the same people who were breathing down their bankers or brokers throats wondering where their approval is and why they couldn’t get approved for more or at a lower rate.
We teach responsible lending and offer not only assistance on the lending side but partner with great financial planning, insurance and other industry partners to protect not only your home but your financial future.
Garth doesn’t live in the real world and if your not careful you could be renting one of the houses he owns and lining his pocket.
Garth can you tell me what the average increase in home values have been in the last 10, 15 and 20 years? The point is responsible decisions on what you can afford in a home will reap rewards for you. What is this crazy example of a lady with $800000.00 sitting around? I have seen hundreds of clients Net worths and I would say around the 1 or 2% of the population has that sitting around to invest or sitting in equity. What a terrible example and not reflective of the true situation Canadians are in.
Take responsibility for your own destiny, make informed decisions and don’t throw all your collective decisions into one man’s opinion. Yes Garth Turner is very educated and experienced and his opinions hold valid points but he is in the business of selling books and apparently people with negative view points are biting hook, line and sinker.
We are in the trenches everyday and we see exactly who has made money and have live, real stories and data on success following sound financial strategy in real estate.
If you are planning to buy and flip you are dreaming, if you plan to make a good economical decision to buy and follow good financial strategies you will see rewards.
Negatives of renting I did not see discussed.
1) What security do you have against the owner selling and sending you packing?
2) Do you personally know the landlord? perhaps any repairs or items wrong with the property are not looked after. I only say this because I have had many clients with this complaint on rising rent costs and problems with their landlord. Don’t think rentals are the perfect living conditions for you. There are pitfalls.
3) You likely will not get all your damage deposit back. Another amount of money you can throw in your calculation for money going down the drain.
4)Unless you have a large amount of money earning you interest for investments then how is your money working for you. You are paying the same for rent as a mortgage don’t kid yourself about that, I hear it everyday from real live clients. At least there are some forced savings with a home as you paying down principal. Rent goes directly into paying down someone else’s principal or lining their pockets if they own the property at low borrowing amounts or free and clear. Talk to people who have owned property for a good length of time. They are covering all their expenditures on rent roll alone. The money they make they are investing and making more.
5) Your availability decreases on the property you can rent because of landlord guidelines. No pets, no smoking, and restricted use of property. If you think your neighbors don’t know you are a renter think again. Try and have a backyard party or gathering and see how fast the complaints come in. No one wants renters around and will find any excuse to get them in trouble. I have seen it on my own street and other stories from friends and family. Their is a stigma.
6) If you can invest while renting and paying your same monthly bills or close then you can certainly invest while owning. Pay yourself first and you should be able to do that if you don’t extend yourself and make a good informed decision up front. Your rent amount is only set for a certain time, your landlord can give notice and increase that as cost goes up for them. YOu can either suck it up or put a deposit on a new place and start the process all over again.

Anyway I hope all viewers of the BLOG can step outside their comfort zone and just listen and think about what is being said. These are opinions and it is a learning forum and perhaps you can learn something from listening to other viewpoints.
Regards,
Jason Dodd