No vacancy sign and for rent sign with Vancouver in the Background July 6, 2016.John Lehmann/The Globe and Mail
High home prices mean a lot of young adults are going to have to accept the idea of either buying in the distant suburbs, moving to a more affordable city or choosing a condo instead of a house. Oh, right – there's also renting.
The idea of being a long-term renter makes a lot of people squirrely. I know that from my many columns about the benefits of renting. Some people just won't buy the argument that you save a lot of money by renting instead of owning and, if you invest it diligently, you can generate comparable wealth to home owners.
So let's look at some resources to help you work through the buy versus rent debate on your own. I like this rent or buy flowchart because it takes a holistic look at your finances, including debts and savings. For a numbers-focused analysis, try a spreadsheet created by personal finance guy Preet Banerjee, and this calculator from GetSmarterAboutMoney.ca. Remember that it's a fool's comparison to look at rent vs. mortgage payments alone. Home owners also have to pay property taxes, and cover upkeep and maintenance.
Can you really be financial success as a renter? Here's a couple that would emphatically say the answer is yes.
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Ask Rob
The question: "Are there any good investment advisers/funds that derive their charges/fees from your money's performance? For example, if I make 10 per cent, they take a cut. If I make nothing, I am charged nothing."
My reply: A very small number of advisory firms tie fees to investment results, but none so far as I know take zero if your account is unchanged or down. Also, hedge funds and a few mutual funds have performance fees that kick in when a certain level of performance is reached. Again, don't know of any that waive fees in bad years. I'm not a fan of tying fees to returns, and I'll explain why in an upcoming column.
Do you have a question for me? Send it my way. Questions and answers are edited for length.
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Rob Carrick