Projects
Writing
Notes

Pros

  • Housing is a highly subsidized and incentivized investment (RRSP withdrawal program, no capital gains on primary residence, various homebuyer and renovations tax credits...)
  • They ain’t making more land
  • You eventually own where you live which could ideally drop your monthly costs to utilities and property tax
  • Forced savings vehicle (won’t ever not make a mortgage payment, might skip savings some months if not disciplined)

Cons

  • Responsible for maintenance
  • Almost certainly higher cash cost for just the mortgage let alone taxes, renovations, utilities on a per month basis
  • Locked into a single location (every move drastically drops ROI of owning)
  • Opportunity cost of the reduced cash flow per month ($300/month put into investments starting at age 25 grows to $1 million by 65, \$600/month starting at age 35) especially at young age
  • Opportunity cost of kingdom and charity projects that are funded out of cash flows and from maintaining lower living standards
  • Accustoms children to higher living standards than in an apartment or rented house
  • Reduces patience with annoyances of rental properties when as an owner there is power in your hands to continually fix annoyances
  • Home equity is not liquid unless a loan is taken out against it
  • Retirement can’t be funded from the equity value increase in a house unless loan taken out against the value
  • Owning encourages upgrades and renovations to improve it (it’ll pay off and add value to the home when we sell)
  • Owning can cause unrelated lifestyle increases: living far away => more commuting / second car; spend more on renovations per year ($5-10k vs $0 renting)
  • Reduced job mobility (moving is much harder)
  • Reduced willingness to travel and leave house vacant for long periods of time
  • Reduced cash flow / increased % spent on housing leads to higher income requirement and tighter margin of error if either person loses employment or wants to take leave for a period of time
  • 30+ year bull Canadian RE housing market, willing to bet it will continue another 40 to cover our lifetime (I’m not sure...)
  • Near peak for short term and long term debt cycle (Ray Dalio), thus deleveraging of some sort is coming, likely leading to reduction or pause in growth in house prices as most overleveraged sell houses and others decide not to buy or upgrade because of overextended debt levels.