Financial advice / opinions needed

[DaveB]

Well here's the deal: the wife and I are looking at acreages. The question: is it financially responsible to go into hawk for another 10-15 yrs in order to get our dream acreage, or stay where we are at and put more money into RRSPs. Our current home is paid for. We've owned it since new and it's worth probably $350k +- today.

To get on what we want around here, we will be around 700k. So....we would probably do a 15 yr mortgage for the difference. What this means is no new sleds and quads every 2 yrs...no 1000 dollar purses for the wife, etc. Right now we have it pretty good....money is easy and we are putting a fair amount away every month, but we are living pretty high for a couple of Alberta blue-collars. Is the sacrifice to get out on an acreage worth it in the end? Will the extra equity that we have in this property be better as a retirement fund as opposed to putting more into RRSPs?

I dunno...we are quite torn bout what to do.

 

[GYMBRAT]

I miss my acreage back home, but the prices around here as opposed to "back home" in Peace River is absolutely OUTRAGIOUS!!! I truly cant see myself ever paying the money they want for one out this way.

Thats a good question tho Dave, even I can never say never I spose :/

 

[badmonkey]

Went thru the same dilema...........opted to stay put. Let the wife retire early,putting money away, saving for my early retirement. No regrets, but to each their own. Don't believe there is a bad decision either way. Hope you will be happy with your decision

 

[Riverjet]

You only live once!

 

[senorjeem]

Well here's the deal: the wife and I are looking at acreages. The question: is it financially responsible to go into hawk for another 10-15 yrs in order to get our dream acreage, or stay where we are at and put more money into RRSPs. Our current home is paid for. We've owned it since new and it's worth probably $350k +- today.

To get on what we want around here, we will be around 700k. So....we would probably do a 15 yr mortgage for the difference. What this means is no new sleds and quads every 2 yrs...no 1000 dollar purses for the wife, etc. Right now we have it pretty good....money is easy and we are putting a fair amount away every month, but we are living pretty high for a couple of Alberta blue-collars. Is the sacrifice to get out on an acreage worth it in the end? Will the extra equity that we have in this property be better as a retirement fund as opposed to putting more into RRSPs?

I dunno...we are quite torn bout what to do.

Personally, I would, and did "Go For It" Real estate is always a pretty solid bet. Given that you are quite solvent now, you are deferring 40+ % income tax by purchasing RRSP's so that you can pay the tax at a later date. Sure, it may be at a reduced rate.....maybe, but it will be in 2040 dollars, that will be different than 2013 dollars. Your new or additional property will also work as forced savings, and if it is your principal residence, no gains tax. Interest rates are low now, and you could make a real dent in the mortgage in short order because of that. Just make sure to leave yourself plenty of room in case the interest rates double or worse!!

 

[rsaint]

What you should look at is recreation property like a lake lot where you can get away from it all. The thing with property it will never depreciate because it has no serial number and no more is made.

 

[deaner]

Not going to tell you what to do either way........but dont let anyone talk you into the acreage based on it being a good investment. No matter which way you slice it 700k is ALOT of money. If you do it, do it as a lifestyle choice because that is exactly what it is. It is not a good "investment". It is a 700k asset that is not producing any tangible return. You have to watch the motives of the people giving you advice. Im saying this as a realtor/mortgage broker and ex banker and financial planner. I have a commerce degree and a fair amount of experience in my field in a few different areas.

If it is merely a tradeoff between spending X amount of money on the mortgage payment or toys.........thats a tough one.

And having said this.......I live on what will be probably close to a million dollar acreage by the time we are done building our house. So.....do what I say...not what I do. haha

 

[somethingnuw]

Personally, I would, and did "Go For It" Real estate is always a pretty solid bet. Given that you are quite solvent now, you are deferring 40+ % income tax by purchasing RRSP's so that you can pay the tax at a later date. Sure, it may be at a reduced rate.....maybe, but it will be in 2040 dollars, that will be different than 2013 dollars. Your new or additional property will also work as forced savings, and if it is your principal residence, no gains tax. Interest rates are low now, and you could make a real dent in the mortgage in short order because of that. Just make sure to leave yourself plenty of room in case the interest rates double or worse!!

my thoughts exactely... he just said it better then i could... quad, truck and toys are nice but the worst investments you could ever have... another sad trick i learned is when they ask you for mortgage life insurance don't get it at the bank... it only insures them not you... just saying..

i don't have a commerce degree... but I know every damb bank i gave a dime to screwed it up... land is something I hold and understand... smoke and mirrors are not... rrsp's scare me cause I always have to give my money to a banker... they always want more of my money... tell me crashes are ok and i have to rebulld yet they make millions...

realestate has never let me down...

 

[imdoo'n]

dave come talk to me i'll take care of all your money problems.

 

[mxz sledhead]

The wife and always thought about it did the pro and cons living in a small town or the country in town I get my street and back alley clean and scrape I get water and sewage to the house garbage pickup in the winter all I have to do is keep sidewalk cleared 30 mins in the summer is keep my yard clean and tidy after spring clean up usually a hour a week .Then I watch friends and relatives struggle with there acreages snow plow in the winter running the lawn tractor year round with snow blower or switching to lawn deck 3 days cutting . I figure I got it good same as you house is pay for I will be 50yrs old this year do I want the exact work not really in five years I have 35 yrs as a steel worker I want retire and do a fun job eg snowmobile tour guide, doing landscaping ,work at a golf course time to live

 

[hbar218]

My wife and i are in a similar situation. It sure is nice if you want something , quad , sled , trailer , truck , sports car, boob job whatever, that you can go pay cash for and not worry about a big mortage payment.
Anyhow our acreage turned into a rental house next door and i can park my trailers and store my toys there(only so much room on a city lot). The beauty of it is someone else is paying for it.

 

[Trax 2 Treadz]

Sounds like you are making more of a lifestyle choice than a dollars and cents choice once you get that separated the choice may be easier. Not that dollars and cents don't come into play but I don't get the feeeling that is the big determining factor here. If you want the lifestyle you can always make the money work.
Jan

 

[X-it]

Age is a big factor, if you are young go for it, your stuck to the grindstone anyway. If your up in your 40s forget it, life is shorter than you think enjoy it. Your crippled up sooner than you think.

 

[rubirose]

Glad we got our acreage in our late 20's, best thing we ever did, paid it off 10 years ago. I personally, at our age, pushing 50 would not even dream of going into big debt now. Toys and fun are much more important in our lives now. But to each his own. $700 grand is a lot of money no matter how old you are, and you have to look at the future resale value, are you going to make a profit when it comes time to downsize later.

 

[rzrgade]

I am in the property development buisness,so needless to say am a strong believer in real estate. As my father used to say;They are not making it anymore...
I could write a long,boring paper as to the advantages of owning property ,but would rather sip on a Crown/coke right now....

I will leave you with a passing thought though..........When you need to borrow money from a bank, what do they want to use as collateral ? Real estate.....,not toys,mutuals,stocks,etc.....

 

[Bogger]

I Love my acreage but I tell ya I often wish I lived in a condo where i could lock the door and walk away. Upkeep is a big factor, I have 4 acres only use 1. I like my boat in the summer and sledsin the winter mowing lawns and plowing yards not so much.... Idealy I would like a smaller lake lot on Wabamun, treed for privacy and the ability to ride from home.

The privacy and riding from home are the big advantages to my place but I could have the same with a smaller property...

Now that we have the acreage I've been to my lake lot twice in the past 4 years.

 

[Trukker]

I think it's an excellent time to take the plunge.......Hell i can sell you a place Norglenwold on Rustic Cres

 

[Sledderglen]

I Love my acreage but I tell ya I often wish I lived in a condo where i could lock the door and walk away. Upkeep is a big factor, I have 4 acres only use 1. I like my boat in the summer and sledsin the winter mowing lawns and plowing yards not so much.... Idealy I would like a smaller lake lot on Wabamun, treed for privacy and the ability to ride from home.

The privacy and riding from home are the big advantages to my place but I could have the same with a smaller property...

Now that we have the acreage I've been to my lake lot twice in the past 4 years.

Bogger if your not using your lake lot where is it at. Just asking

 

[byronkentgraham]

A 2 year old quad or sled probably depreciates $2000(conservative estimate) in that time. Multiply that by 4(2 quads 2 sleds I assume.) then $8000 by 7 times change over is $56,000. That is a good portion of the difference between your house now and an acreage.

Not sure if you have kids, but an acreage is a much better investment than quads and sleds.

 

[DaveB]

Age is a big factor, if you are young go for it, your stuck to the grindstone anyway. If your up in your 40s forget it, life is shorter than you think enjoy it. Your crippled up sooner than you think.

We are early 40's ...so we do have more working years ahead either way....