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Your models are almost certainly missing something. In a perfect world that would be true but in the actual world where lending is subsidized and tax-preferenc
by CPLX 5y ago
Your models are almost certainly missing something.
In a perfect world that would be true but in the actual world where lending is subsidized and tax-preferenced and the supply of housing is artificially constrained buying is just clearly a better scenario if you can do it.
Some people do this by comparing a 5:1 leveraged portfolio of the S&P 500 against a home purchase or something but that's not a real comparison that exists as a choice in the real world.
- cmrdporcupine 5y agoMortgage lending is not tax-preferenced in Canada like it is in the US. But our housing market is ridiculously overheated for other reasons.
- wnolens 5y agoI would love to find out what I'm missing (honestly, I spend a lot of time thinking about it). I'm working on publishing it as an interactive page. ETA soon. The principal residence sale tax free thing is a huge deal in Canada, so as an individual I can see it in many cases (though you need to sell to access it). That still doesn't help investors at all - which is confusing to me. It doesn't seem worth it to me to be a landlord of a standard duplex/triplex in Toronto. The comparison against a leveraged portfolio is only true at day one. You are continually de-leveraging yourself. At the end of the mortgage term, it's comparable 1:1, no?