‘nobody you know’ at VREAA 22 July 2011 10:34pm -
“We’ve got a kid on the way and are [looking at the] rent vs. buy situation right now.
If we continue to rent:
– Cost of housing is less than $1000 per month
– Commute to work is 5 minutes or less
– Wife can quit job, stay home with baby in early years
– RRSP and RESP savings continue uninterrupted
– Mortgage savings grow, emergency fund intact
– Disposable income allows for travel to visit family, enjoy life
If we choose to buy:
– Cost of housing rises to $2000
– Commute to work increases to 20-45 minutes + $100 or more in gas
– Wife forced to work, child placed in daycare system
– RRSP and RESP stalled indefinitely
– Savings gone, emergency fund won’t be replenished if used
– Disposable income wiped out, new baby separated from grandparents
Five years from now we’ll have a nice little pile of cash, our kid will have spent their early childhood being raised by their mother, and we’ll be able to travel and have a bit of fun. My wife will go back to work, the kid will be in school and we’ll be able to buy what we need.
But if we are pressured into buying right away we’ll drastically increase our cost of living at the same time that our income is going down. Our finances would be brutally tight. If my wife worked she’d give so much of her net income to a daycare that she’d be working for minimum wage and all so we could have a place in an inconvenient suburb that required me to spend 5-8 additional hours per week in a car. We’d be stressed and unhappy, as we’d be reducing our quality of life just to fit in and join the excitable real estate chatter at family gatherings and work parties.
And the best part about renting now is that we’ll actually be able to buy a much nicer place in a few years even if prices don’t go down. So instead of being stuck in a condo we’ll have a real house. Yes, this requires patience and discipline, but we’ve got plenty of both. We’ll just have to put up with mortgaged bank tenants looking down on us for a while.”