Author Topic: Garth Turner - Real Estate in Canada  (Read 512556 times)

alpha

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Re: Garth Turner - Real Estate in Canada
« Reply #1910 on: September 14, 2019, 01:21:26 PM »
Trudeau announced this week that the government would subsidize 800k house purchases if re-elected. What a mess.


scorpioncapital

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Re: Garth Turner - Real Estate in Canada
« Reply #1911 on: September 14, 2019, 02:12:33 PM »
"Navin Seepaul is a 29-year-old single dad who makes $30,000 a year as a barber. He owns a $1-million house in Brampton, a sprawling suburb northwest of Toronto. Each month, the payments on his roughly $700,000 mortgage are $4,300. On top of that, he has $24,000 in credit card debt.
To help pay the bills – even just the monthly interest charges are staggering – he rents out his basement to three or four students, and two truck drivers rent bedrooms on his second floor. At any given time, the young father has six vehicles parked on his property."

Another perspective...The guy is cutting hair leisurely while some very poor renters are paying off his mortgage. At the end he will have a very pricey asset free and clear and he'll probably be in the top 20% richest people in the world. And the renters are probably getting pretty cheap rent for renting a room in canada. win-win?






clutch

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Re: Garth Turner - Real Estate in Canada
« Reply #1912 on: September 14, 2019, 02:53:27 PM »
"Navin Seepaul is a 29-year-old single dad who makes $30,000 a year as a barber. He owns a $1-million house in Brampton, a sprawling suburb northwest of Toronto. Each month, the payments on his roughly $700,000 mortgage are $4,300. On top of that, he has $24,000 in credit card debt.
To help pay the bills – even just the monthly interest charges are staggering – he rents out his basement to three or four students, and two truck drivers rent bedrooms on his second floor. At any given time, the young father has six vehicles parked on his property."

Another perspective...The guy is cutting hair leisurely while some very poor renters are paying off his mortgage. At the end he will have a very pricey asset free and clear and he'll probably be in the top 20% richest people in the world. And the renters are probably getting pretty cheap rent for renting a room in canada. win-win?

In fact, this kind of rental income won't often be reported and therefore don't show up in the debt-income ratios... Also consider that many house owners in Toronto/Vancouver can have foreign income sources that also don't get reflected in the ratio.

frank87

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Re: Garth Turner - Real Estate in Canada
« Reply #1913 on: September 14, 2019, 03:33:49 PM »
https://www.theglobeandmail.com/business/economy/article-how-canadas-suburban-dream-became-a-debt-filled-nightmare/

Opens with a bombshell example:
Navin Seepaul is a 29-year-old single dad who makes $30,000 a year as a barber. He owns a $1-million house in Brampton, a sprawling suburb northwest of Toronto. Each month, the payments on his roughly $700,000 mortgage are $4,300. On top of that, he has $24,000 in credit card debt.
To help pay the bills – even just the monthly interest charges are staggering – he rents out his basement to three or four students, and two truck drivers rent bedrooms on his second floor. At any given time, the young father has six vehicles parked on his property.

What are the circumstances behind this example? Because no bank or federally regulated financial institution, not to mention credit union, will underwrite a $700k mortgage for a guy making $30k as a barber regardless if he's using it largely as a rental. And if $4,300 is his payment and assuming a 35-year amortization, his interest rate is 6.7% which is private lender territory.
« Last Edit: September 14, 2019, 03:39:07 PM by frank87 »

spartan

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Re: Garth Turner - Real Estate in Canada
« Reply #1914 on: October 28, 2019, 06:27:50 PM »
For anyone who hasn’t been reading Garth’s blog recently, he has been warning Canadians of an increase in the capital gains inclusion (50% to 75%). Seems like a very real threat to me.