Blessed by the Potato

I’m heading into the busiest three weeks of the year for me. Caffeine levels are at max, and I’ll be trying to survive the stress and sleep deprivation until this project is done, so don’t expect a long post in the next while. Here are a few short updates though.

Renting in Toronto: I’m scoping out rental houses in Toronto to get a feel for where current rents are. For several years market rents have been quite stable and it’s been easy to conclude that the absurd price:rent ratios were not going to be fixed by rents increasing. Every now and then a rental would come out way above market, where clearly a landlord was trying to actually cover their costs on a recent purchase price instead of collecting market rates and hoping for appreciation. However, this fall I’m seeing that rents are actually up, with a huge spread in prices (and price:rent). For houses that would be ~$1.3M in a particular neighbourhood, I’m seeing rental rates from $2600 (about where prices from last year would be with inflation) through to $3600. And it’s not just “that one crazy listing” (though one listing did sit for over a month at that top end and is now down — not sure if it found a tenant or just got pulled), there are places at each point in the spectrum, which makes for price-to-rent ratios of anywhere from 460X to 375X — a pretty big spread.

Even at the high-end of that range, renting is still the better deal (because prices to buy are crazy), but it’s surprising to see nearly a thousand dollars a month in possible rent inflation in just a year’s time. Moreover, I’ve commented before that one of the nice aspects of renting over buying is that you get a lot more for your housing dollar — we could never afford to live here if we had to buy. Well, if rent rates are increasing that much, we might not be able to afford to live here even as renters. On the one hand that’s a scary thought, on the other, I don’t really think Toronto’s priced dual-professional families out of even the burbs forever. I’ll have to keep a closer eye on the market to see if it’s just an anomaly of a few crazy people putting their listings up at once without knowing the market rent, or if it’s truly gotten that much more expensive.

In discussions with a reader on the rent-vs-buy choice (which I’ll turn into a post later), I had to bring up the point that buying is in many ways easier (distinct from better) when you’re looking for a detached house. While there are detached houses available, and while it’s the better move financially to rent, there are 20 or 30 for sale listings for every house for rent. It can take months of looking to find one that ticks all the boxes for you, and part of what makes that a challenge is that as a renter you’re almost exclusively looking for as-is properties (or close enough to as-is — it’s possible to put some work in to a place to make it your own space with a long lease or even to negotiate repairs and upgrades with a landlord, but you’re not going to do anything major), whereas when buying you always have the option of getting any old place and gutting it.

I also volunteered to re-write the rent-vs-buy calculator page as part of the Reddit /r/PersonalFinanceCanada wiki effort. I’ve written so much over the years on real estate and the rent-vs-buy choice and the math involved, but I really don’t have a good “start here” resource, and the last time I tried to write one it got way too long and ranty (and when I tried to make a “start here, how-to” page for investing, it turned into a book). Again, busy now, but look forward to something like that later in the fall — and if there’s already a good guide that would serve the average Redditor off the street, let us know and you’ll save me the trouble.

Because Money: I’ve been a guest several times on the Because Money internet show (in fact, the guest with the most appearances on the show). This year I’ll be joining the team as a producer — basically clicking on things while the hosts and guests chat, and every now and then throwing graphs up on the screen because I’m a nerd. We’ll also have MYD doing the hard work of off-line producing, which will make Because Money a downloadable audio podcast and not just a YouTube sensation. For season 3 Chris Enns will fill the seat of Ensign Redshirt/Male co-host #3, and we were really clear in our enunciation of the words of warding to try to ensure that the same curse does not befall him.

Course: This busy period was not unexpected, and that’s why there was nothing in the release schedule for the course in September. However, things started getting busy earlier in August than I had expected (plus I actually took an actual vacation instead of using that time off work to work on the course), so most of the modules I had promised for August are not up yet. Sorry about that, I’ll try to get them all done in the October update (none of the August videos are shot, but most of the articles are at least partway finished).

Questrade: They can’t leave well enough alone over there, and have tweaked their UI again. It’s a fairly minor change so I’m not going to rush to update the errata for the book.