Wednesday, July 14, 2010

Don't be a Greater Fool


Some of you know that Hubbs & I have some very strong opinions about real estate, and why we've abstained thus far from investing our dollars into a home purchase. We are, by and large, super happy renters. Here are some of the reasons why:
  • Our rent just dropped by $200.
  • We are debt free. Imagine owing $300K or more to the bank, with interest! That's not fun.
  • We don't worry about property taxes.
  • If so inclined (or called by God to even greener pastures), we can move out on a month's notice (though we probably won't be).
  • We're not paying rapt attention to hiking rates and sweating over mortgage payment increases and renewals.
  • We don't have to shovel or mow or worry that our car might get broken into (concierge/security services).
  • We don't worry about our neighbour's house and their property values affecting our own.
  • If something malfunctions, our landlord fixes it on his dime. No continuous repairs or upgrades necessary.
  • Re-assessments? Condo fees? Nope and nope.
  • We never had to compromise our location based on our price points; we are exactly where we want to be, without the pain of commuting.
  • If we ever need to downgrade our home because of finances, we don't risk losing our life savings *and* being on the hook for the "remainder" of our mortgage. Canada doesn't really allow people to walk away from a property even if they declare bankruptcy.
  • We are not alone! Many of my smartest friends in NYC, HK, and Van are also renters. So are millions of people in other parts of the world.
Now, this isn't to say that we will never purchase a property. One day we might, if the conditions are right and we can afford to pay for it outright or else by-pass CMHC altogether by putting 35% down (all the while maintaining our other investments such that our real estate assets amount to no more than 40% of our net worth). But we're not quite there yet, and we aren't in any hurry. Frankly, neither Hubbs nor I enjoy lawn care and we don't like being locked down by debt.

We also recognize that our generation has a propensity to buy only the shiniest and newest stuff, making purchases on (or building) first homes that put their parents' last homes to shame. There seems to be a lack of humility or restraint in real estate these days; so many are buying first homes that are >2,000 sq. ft., and laden with hardwood, stainless steel appliances and granite counter tops. I'd like to think that these are luxuries that one must save up for, and not something that every young couple is entitled to have from the get-go (and frankly, I wouldn't want a 30-40 year amortization, thankyouverymuch). I certainly do not want to chase after such earthly things; I would rather focus my effort and attention on laying up treasures elsewhere by the grace of God.

Such is our position, controversial might it be. We get a lot of wisdom from a blog that I highly respect, called The Greater Fool (http://www.greaterfool.ca/). It's not a site for everyone, and most people aren't open to hearing what the author (Garth Turner) has to say. Then again, few also listened to the prophets of old either. ;)

My wish is that you will not be a greater fool, and that your eyes and your heart will long more for Him than for anything that this impermanent, perishable world might have to offer.

2 comments:

Linda said...

I forgot that this wasn't facebook so I couldn't click "like"

:)

Mrs. Loquacious said...

Awww..thanks Linda! :)