buying???

[gonzo23]

The thought just crossed my mind...

Do medical students ever go into buying a place for the 4-years they will spend there? Is this a popular option (doesn't seem like it is). If so... why/why not?

I'm just curious why if one will be paying rent on a line of credit anyway they might not consider use that money to pay a mortgage instead and recover more?

Any thoughts?

[Kirsteen]

Hi there,

During the Ottawa interview day I met an Ottawa medical student who had just finished the transaction for buying her own place near campus. To boot, she also mentioned that she received quite a bit of bursary funding. Apparently purchasing a home while in medical school is possible in some parts. :)

Cheeres,
Kirsteen

[CaesarCornelius]

Hey

A classmate of mine just bought a condo right by the school. She says she has ended up paying about $100/month, BUT instead of saying good bye to that money, she is now investing it. Much smarter. The big hurdle is the down payment, she was lucky and was able to get her parents to spot her down payment.

I want to do that, but I like where Im at..:)

CC

[mgupta]

yea here we've got a couple of poeple who've bought apartments not only in 1st year but even did in 2nd (this) year. its well worth the investment and a smart way to use your money.

[peachy]

It's not obvious to me that buying a place is a better investment than renting. I think it CAN be a better investment, but not always.

Say you buy a condo that costs $200K, for example. Say maintenance fees are $250/month, and taxes are $1500/yr. That adds up to $4500 per year. Now, because your $200K is being held in the condo purchase, rather than being invested and earning money, you're losing another 5% (say) of 200K per year, which is another $10K per year. In total, you're losing about $14,500 per year on the condo. That's like paying $1200 rent per month. So if you can rent a place for less than $1200 per month, you're not coming out ahead.

Obviously that's not all there is to it, and I think it's much more complicated if you're using a LOC in combination with a mortgage to finance it, and factors like roommates, and potential capital gains, and tax benefits in situations like having your parents own it and paying them rent, etc, etc.

But I think that you always have to sit down and work through the particular numbers in your particular situtation to see if it's REALLY better financially to buy than to rent.

[gonzo23]

Any thoughts on TO?

I want to live in a decent place (ie. condo) and it seems like rent could be between $800-$1200 if I'm not sharing with someone.

I really haven't done the calculations... but the thought of having $1200 from an LOC go down the drain (I'd never recover rent back) rather than paying a mortgage where in the end I might recover a fair bit to pay off the LOC if I did move after medical school.

I think it's obvious that I'm not very well-informed on the situation and need to really sit down and learn more about what's entailed. But would all you Torontonians say that most med. students are forking out that kind of rent from their LOC (my parents won't be supporting me above and beyond the occasional grocery run :) ).

[peachy]

Any thoughts on TO?Yeah, I've been thinking about it a lot. :) Definitely look at the classifieds at torontmeds.com (http://www.torontomeds.com/) for a sense of prices. If you want to get a sense of prices and availability for buying, go to mls.ca (http://www.mls.ca) and use the advanced search button. If you type in "toronto" and "bay st" then you'll get a list of places available around the bay/college area.

the thought of having $1200 from an LOC go down the drain (I'd never recover rent back) rather than paying a mortgage where in the end I might recover a fair bit to pay off the LOC if I did move after medical school.I keep hearing this kind of thing, and I really don't understand it, but I'd like to! If you're paying prime on your LOC *and* paying interest on a mortgage *and* paying maintenance/taxes on your condo, then how is this going to get you further ahead financially than paying rent? Won't you be potentially be paying more in interest+maintenance+taxes than rent would be?

[gonzo23]

Thanks for the sites peachy! I will take a look.

I see your point. I won't comment any further until I actually do some number crunching and research.

But the info. has started the ball rolling on all that :)

Cheers.

[peachy]

I won't comment any further until I actually do some number crunching and research.When you figure something out, please do share it with the rest of us! :)

[lothya]

i'm signing tomorrow morning on a duplex that i'm sharing with 3 others for the duration of med school in montreal. the biggest plus i've found is that unlike other investments, your ownership of your residence doesn't cut into eligibility for gov't student loans (may be different in other provinces). So, i have a place to invest my money, and i'm only paying ~200/month in capital, interest, & taxes on the place (although any maintenance will be extra). There is currently no way i could get a 3 bedroom apartment for this price in the city. The only downside is that it's not right beside the university...

[cutieyellow]

I also purchased a condo in Quebec city for the duration of my stay here. I figured, instead of wasting all that money on rent, might as well invest the money into a condo. The way the world revolves right now, the condo just keeps increasing in value (it actually went up about 25 000 this yr, b/c the previous owner sold it at a certain loss) so if i were to sell it now, i'd more than make enough money to cover years of rent.

It's really a question of how much money you have at the beginning and if you're willing to risk your property decreasing in value. In my opinion, i would rather stay in a place that i considered mine, without any landlord telling me what i can and cannot do with the place and constantly knockin' to tell me rent has increased again 8o

CY

[Savedby]

Peachy, I think buying is a better investment ONLY if you have a rental income from which you could deduct maintenance fees, taxes, & any interest paid on the mortgage. And if it appreciates in value, then you'll also save a portion of the capital gains tax (it being your principal residence you only pay cgt on the portion that you rented out. This scenario changes if you are not the one on title). I wish someone can share with us the total amount of LOC interest they had paid so far. Even at prime, it can be very expensive. And if there are banks that do not require repayment of both principal and interest until after med school, then I'd suspect the compounded interest must really be a lot! Math has never been my strength :(

Gonzo23, there are a lot of condo buildings in TO. If you are prepared to commute, you'd get a cheaper place for sure. Good luck.

[drmd]

i know a car is considered for OSAP purposes. but does anyone know if owning real estate property will affect OSAP and LOC? thanks.

[Elaine I]

I don't believe so. Earlier this year, I completed an OSAP application (even though I'm not applying for med school until next year - I've since cancelled the app). At no time was I asked about my condo or my equity in it. I received an OSAP estimate of about $5000, which was more than I expected given that I own a car (2001 Civic) and said I would be working FT up until the start of school. If my condo had counted, I would not have received any money.

Hope that helps,
Elaine

PS: I never got confirmation after the estimate, because that would have meant taking my car in for an appraisal, which I didn't want to do, knowing that I am not going to school until the following year.

[Ian Wong]

Buying is definitely possible if you've got generous parents, or maybe a working spouse, etc. Buying a house can be a good investment, but obviously this depends on lots of factors. Renting an apartment or something is a lot lower maintenance, and while you are throwing away money on rent, you are also not paying to upkeep the place (just yell at the landlord a bit) nor are you spending the time to mow the lawn, shovel the sidewalk, deal with the leaking roof/burst pipes, etc.

Definitely an individual decision, but there are some big positives to owning if you're in a favourable housing market (ie. houses you are looking at are consistently appreciating), and if you can afford it (interest rates aren't going anywhere but up from here on in).

Oh, and I'm going to move this out of the Housing Classifieds forum into the Med Student's forum.

Ian

[Makunouchi]

I was also thinking about buying a place with a mortgage(if I get some help on the down payment), and selling it later on.

[Steve U of T]

"i know a car is considered for OSAP purposes. but does anyone know if owning real estate property will affect OSAP and LOC? thanks."

Your principal residence is not considered an asset for OSAP purposes. If you own a condo and live there, it does not count. If you own more than one property, or for some strange reason own one property and live somewhere else, then you probably won't qualify for OSAP.

[coastal79]

My girlfriend bought a condo where we are now and after she finishes her program next year she will be selling it after only 2 years. She got the mortgage through her parents because they could get a lower rate than either of us. We pay about the same, if not less, in mortgage payments and strata fees than we would for rent if she had not bought. The principal won't be paid down too much over the two years, however, we found a great deal, and the appraised value has already gone up by $20,000 (that said, we're in the hottest real estate market in the country). If you buy at the right time and make a solid purchase, buying can work out really well.

[bj]

Hi,

This question seems to have come up a lot, and for me has become very relevant over the last few months. I thought that my money was being thrown away, too, especially with sky-high Toronto rent. Then I got my monthly Strategy magazine (from MD Management, the financial branch of the CMA) that had an interesting article on this very topic: mdm.ca/md/Strategy/index....language=E (http://mdm.ca/md/Strategy/index.asp?url=/content/md/strategy/05/2004/Strat03.asp&language=E)

I would highly suggest reading it over. It essentially covers the "hidden" costs of buying vs. renting, especially when you only want to keep the property for a short period of time (say, less than 5 years).

bj

[cutieyellow]

I agree that it is a topic that should be researched thoroughly before purchasing. However, in the example that was given on the website, Ben and his wife would 'lose' 10 000 over five years if they decided to buy instead of rent. It doesn't consider the fact that housing continuously goes up, and therefore, he probably will make just as much, if not more, by reselling, therefore, completely making up for it.

I bought my condo last August, and if i were to sell it now, i'd make 25 000 profit. Just something to think about i would say. Of course, it's a bit of a gamble, but then again, the advantages must be considered as well as the disadvantages.

CY

[westerngirl2004]

i don't really understand how buying an apartment/condo can not affect OSAP if investments like stocks do?

[Gill0927]

OSAP, like a lot of other bursary/student funding, does not count your primary residence as an asset, even if you own it. If you own a place you do not live in (for some reason), then it counts in the OSAP app.

Hmmm...maybe I'd get money from OSAP if I live in my car??? :b

-Gill :D

[westerngirl2004]

hmmm... so selling all my stocks and buying an apartment (to live in) might be something I should look into.

[lothya]

maybe, but be careful, if you have capital gains when you sell your stocks, i think that'll count against you too....

[coastal79]

yeah, but you'll also have a big chunk of tuition money to put up against any taxable income.

[luch]

Well I have to say that buying a place was one of the best financial decisions I have ever made. I bought a place two years ago in Edmonton while I was doing my BSc. I Just sold it and made 25% on my investment and because of this I just bought another in Calgary (where I will be attending med school). If I was to keep this money it would count against my student loans and it would be like kissing interest free money good buy. I have also just sold all my stocks and put that money into my condo as well. As far I can see the only way to "hide" money (legally) from student loans is to put it into property. I realize that most people probably don't have much money sitting around (but neither did I when I started out) but if you do buying a place might be a good option.

Another good reason to buy right now is that interest rates are still low. Furthermore, because of the massive amount of development over the last few years (because of the low interest rates) there is now a surplus of places for sale. It's a good time to buy!

Ciao

[Kirsteen]

Hi there,

For anyone in the condo rental market in Toronto, i.e., looking to rent in Toronto, I just came across this site which seems pretty good:

www.remaxcondosplus.com/cgi-bin/tame/majorcondos.html (http://www.remaxcondosplus.com/cgi-bin/tame/majorcondos.html) They have listings for many of the buildings mentioned above, and more.

Cheers,
Kirsteen

[noncestvrai]

You guys can check this site as well.

www.mls.ca/map.aspx (http://www.mls.ca/map.aspx)

Enjoy!

noncestvrai

[peachy]

The prices on the remax site are not very accurate, I think, although I have found the list useful. Baystreetcondos.com (http://baystreetcondos.com) is another great site for listing downtown Toronto condos, with floor plans, recently sold prices, and other information.

The mls.ca site is my favorite, though! :) If you do an advanced search you can look for specific buildings you are interested in (look by postal code), specific streets (eg. bay st), etc. You can also search rentals at mls.ca, eg, right now there are about 15 condos listed for rent on Bay street in Toronto.

[Ian Wong]

Floating back to the top.

Ian