home ownership posts

By Morgan Housel
Motley Fool

Mostly by accident, I have never owned a home, and consider it one of the best financial moves I've ever made.

Not because suffering through one of the worst real estate downturns in history would have slammed my finances, although that's likely true. But because in the last four years, my wife and I have lived in four different locations in three different states on each side of the country. Each move was driven by work and school opportunities that would have been out of reach had we been tied down to one home.

Our story is hardly unique. In one of the most telling studies looking at the benefits of home ownership, economists Andrew Oswald and David Blanchflower ask, "does high home-ownership impair the labor market?"

Their answer is "yes."

It's been a busy year for accountant Selva Perera, 45, who lives and works in Brampton, Ontario. His wife, Vasudha, 43, has had a pretty eventful year too. (We've changed their names to protect their privacy.) Six years after arriving to Canada from Sri Lanka -- via a brief stint in Abu Dhabi -- they became Canadian citizens last winter. "When we received the chance to come to Canada, we didn't hesitate," says Vasudha. This long awaited opportunity did not come without a few sacrifices.

Since immigrating to Canada, Vasudha, a trained lawyer, has had difficulties finding steady full-time work in the legal profession. This has meant that her family has endured some financial hardships on their way to achieving their Canadian dream. "It's been demoralizing as well as financially challenging," she adds.

With two children aged 11 and 16, like many parents, both Selva and Vasudha want to provide them with a secure future. In 2012, after many years of searching and praying, Vashuda finally landed a full-time job as a legal assistant at a downtown law firm.

Over the years the Pereras have toiled away and saved enough money to purchase a townhouse for their family of four. The Pereras were laser-focused on their quest of buying their first home, so much so, that they cashed in the entire value of the RESPs they had set aside for their children's post secondary education. Now that Selva and Vasudha both have reliable full-time jobs, Canadian citizenship and a home that they can call their own, they are at a loss as to what their financial priorities should be. Should they be more aggressive with saving for their children's education or should they focus more on their retirement savings?

By Michele Lerner
The Motley Fool


There's a new study that shows a surprising way parents can encourage their kids' success: Buy a house.

A study by Richard K. Green and Gary D. Painter at the University of Southern California and Michelle J. White at the University of San Diego looked at housing and school data before and after the foreclosure crisis and determined that children of homeowners are 2.6% less likely to drop out of school than children whose parents rent their home.

Not only that, but according to the study, homeownership also reduces the likelihood of a teen pregnancy by 5%.

Weekends of hard labour, pricey closing costs, and expensive second mortgage payments are no where in the minds of those who have discovered the benefits of land leases.

Popular throughout Europe and the United States, land leases are a relatively new concept to come to Canada. And its timing could not any be better. Today, Canadians face alarming household debt levels and tightened federally mandated home ownership regulations.

But an online survey conducted by Leger Marketing, on behalf of Royal LePage Real Estate Services, reveals that many Canadians either own or hope to own a recreational property.

When you're talking about life and health insurance, the question of whether or not people have sufficient coverage is fairly regular and recurring. Recently, I've come to wonder if the same questions are or should be as prevalent when talking about homeowner's insurance as well.

I suspect most people do have enough house insurance, but there are also a few things that have occurred which make me wonder: A neighbour's house burned down recently, taking the contents and her entire sewing business with it; the news here is always full of cottage-related accident stories which make me wonder about liability; a friend showed me an amazing ring she received as a gift (I strongly urged her to get a separate rider to cover it) and I was talking to another friend about the collectibles and equipment he keeps in his basement.

Does any of this sound familiar or similar to your own situation?

It's becoming an age-old question: Will I ever be able to afford to buy a home?

According to economist Brian Yu, the average cost of a home in Vancouver will increase to $517, 000. And mortgage brokers say that an annual income of $157,000 is required to get on the B.C. property ladder.

It's not just Vancouverites that are feeling the pinch. In August, a housing trends and affordability study commissioned for RBC revealed that affordability is eroding across Canada. For August 2011, the cost of home ownership in Canada averaged at $349,916. This is an increase of 7.7% from the same period in 2010. And, as if that isn't enough, this past summer, the Bank of Canada cautioned that it would be hiking interest rates. All this information is discouraging, isn't it?

Retirement is not normally top of mind for Canadians aged between 25 and 30, but a new report has found that as many as 44% of future retirees in this age group will not have enough money to adequately fund their lifestyles.

The study, conducted by independent social policy and economics think tank C.D. Howe Institute, says that Canadian retirees risk a significant drop in living standards if current trends and behaviours continue. At present, only 16% of retirees find themselves in circumstances that require them to significantly reduce how much they spend once retired.

C.D. Howe says Canada's retirement system has performed relatively well over the past few decades. However, projections for the future using data such as income from registered pension plans (RPPs), registered retirement savings plans (RRSPs), individual savings and home equity, has revealed a disturbing trend. More than two in five retirees, 40 years from now, will experience a significant drop in living standards.