stocks vs real estate

[Anonymous No.927556]

In about 20 months I will graduate from university and start making money. My starting salary will be about 60,000 CAD, giving me the ability to pay off my student debt and buy a small car within the first year.

What comes after this is what concerns me. My family is pressuring me to buy real estate once I can, but this article (http://www.theglobeandmail.com/globe-investor/personal-finance/mortgages/renters-make-for-wealthier-investors/article17834799/)) and others like it have convinced me that stocks have a better return than real estate. Stocks tend to appreciate at about 8% and real estate tends to appreciate at about 5%.

Between the ages of 25 and 30, I have a chance to live with my parents and work full time while putting money into stocks and retirement savings. This will give me an opportunity to save a down payment on a house and accumulate a lot of money. Once I hit 30, I will probably get married and move out, at which point I will have lots of money saved from my previous five years of work. Alternatively, I could buy property, rent it out, and then sell it once I want to buy the house that I will raise my family in.

Which plan is better? I would be buying real estate in the Vancouver or Victoria area. I live in Canada, in case that wasn't obvious already.

[Anonymous No.927565]

We got a live one, boys.

[Anonymous No.927569]

>>927556
>pay off my student debt
>buy a small car within the first year.
>I will probably get married and move out,

What are you doing?

[Anonymous No.927573]

>buying at the top of a bubble

kek

greaterfool.ca

[Anonymous No.927604]

>>927556
dont get married

[Anonymous No.927671]

>>927556
you will get 200loan for real restate. for stocks you will et 20k at max.

you'll have to live somehwere anyhow. real estate is not a investment in that sense.

[Anonymous No.927680]

>>927556
Man stop thinking about assets just in term of returns. Yes stocks have historically higher returns but they also have higher volatility. Next year you could be -30% or +20% if you invested only in stocks.
What do you mean "investing in real estate"? You could be investing directly in real estate (buying a house) then renting it or living in it (yes buying a house for you to live in is an investment) or in REITs.... Again you gotta think about the risk. Rent prices fluctuate (which gives you a hedge against inflation) but house prices change a lot and that depends on location, don't invest blindly.
Also, buy when prices are low... I don't know the figures in Canada but there are definitely bubbles in RE at the moment around the world and many predict a burst soon.

[Anonymous No.927690]

>>927556
Hurr durr what are taxes? Hope you don't live in Ontario.

Also your mortgage better be less than a million otherwise you can't get insurance on it. And you want insurance.

[Anonymous No.927717]

Instead of living with your parents until 30, why don't you start your life as an adult? Yes, you could save more by living with your parents, but it sounds like they already influence you too much. Get a roommate of find somewhere inexpensive. You'll learn some good lessons while being out on your own and can have a girl over if you want.

[Anonymous No.927904]

>>927717
I can have a girl over here if I want. I just don't want to spend money on rent, so moving out to rent is out of the question.

[Anonymous No.927906]

>>927604
Why not? I want to have children some day.

[Anonymous No.927912]

>>927671
I cannot afford a good house on one income. I would have to buy a small, bad place and sell it once I got married.

[Anonymous No.927916]

I don't know why you're even asking us to help choose your fate, when the decision is ultimately up to your parents.

[Anonymous No.927917]

>>927680
people have been predicting a burst last 10 years. there is a bubble but it does not mean it will ever burst. 20% drop in prices is possible in short term, but you will never get quality apartments in larger city areas cheaper than that. most likely prices will keep rising next 20 years.

[Anonymous No.927930]

>>927916
How is it up to my parents?

[Anonymous No.927932]

>>927917
Do you really think that Canada can maintain its real estate bubble? There are crack houses in Vancouver selling for like 1 million dollars. I don't want to buy one.

[Anonymous No.927935]

I just looked on oodle.com, and all the 4 bedroom houses listed are above 500,000 CAD. There is no way I could afford that on my initial income. I would end up house poor.

[Anonymous No.927977]

>>927556
from what I've seen in the market trend, people are beginning to realize that, at the current time it's more viable for them to rent versus buy a house, so there is a grain of salt to investing in real estate now rather than later, however, the trick is how to make your money back from the loan you took to buy the property. if you can get a small loan, around 150k and put the rest of the cash in yourself and then charge rent nearly the cost of the mortgage payments, you're sitting pretty high on the hog in your twilight years, assuming you've done this multiple times, you'll have a nice big paycheck every month and solid retirement set up.

as far as stock goes, they can appreciate by 8% but good god they can rebound and drop to -10% in a heartbeat, land is the safest long term investment in this one

[Anonymous No.927984]

>>927977
I cannot really buy anything around here with 150,000 dollars. Small homes go for 300,000 to 400,000 CAD, and decent sized ones go for 500,000 CAD and up. I would have to save probably 300,000 dollars just to buy a home with a 150,000 CAD mortgage on it. That would take forever. Alternatively, I could buy a condo for much less money, but I don't need or want a condo. I can live in my parent's place and buy a house when I need it.

Also, if I save up a down payment on a house, that money will not be invested in the stock market, which gives better returns than real estate.

[Anonymous No.927993]

>>927984
True, but the long term benefits of property rent far outweighs the short term gain of stocks, always look towards retirement.

I'd rather work hard now and have it easier later on

[Anonymous No.927996]

>>927993
What are you talking about? It's not a long term vs short term thing. Stocks have better returns in the long term.

I only have a finite quantity of money. I want to invest it in what gives me the best returns.

[Anonymous No.928500]

>>927604
this. one of the worst business decisions.

[Anonymous No.928508]

>>927906
Why have a child when you already have a manchild in yourself?