Live for free or try to acquire property #2

[ojoao]

Hi All,

Here's my badassity so far. I'm a 24 year old PhD student in Toronto making 40k/yr and have currently managed to save 40k in my tax free savings account in addition to owning a house in Hamilton that I rent out for 32k per year since I’m no longer going there for school. The house in Hamilton should be paid off in 3 years, but I want to buy a condo in downtown Toronto before then because I currently commute 3 hours everyday to get to school from my parents house. Present net worth (150k)

This is my toss up:
Live for free at my parents house and commute 3 hours per day.
Rent downtown for ~10k/year
Buy a condo downtown (Not simple with current balance on mortgage, but makes more sense that renting)

[GrowingTheGreen]

Yowza. Anything sounds better than a 3 hour commute to me. If buying makes more sense, then do it. There are some times when money really does buy happiness. This might be one of those times.

I'm all for saving money, but I wouldn't make my life a living hell by traveling 3 hours a day to do it :)

[marty998]

Thank you for describing my commute as a living hell.

Makes me feel so warm and fuzzy inside. Try and be a *little* bit more mindful of people who make this choice (or have the choice forced upon them).

I actually choose to live where I do because of the lifestyle I have away from the office. My area is beautiful and has everything I need for an active and fulfilling life. The area close to work is a traffic gridlocked, noisy, polluted shithole.

Additionally moving closer to work (for the < 10 years that I have left to work) is not worth the extra half a million it is going to cost.

Everything needs to be weighed up.

[Think]

How much have you invested in the market?  I would make sure you don't overly invest in real estate.  Especially with concerns around the Canadian market.  Regardless, I would nix the three hour commute.  You couldn't pay me anything to endure that.  Life is too short. 

[DebtFreeBy25]

Hi All,

Here's my badassity so far. I'm a 24 year old PhD student in Toronto making 40k/yr and have currently managed to save 40k in my tax free savings account in addition to owning a house in Hamilton that I rent out for 32k per year since I’m no longer going there for school. The house in Hamilton should be paid off in 3 years, but I want to buy a condo in downtown Toronto before then because I currently commute 3 hours everyday to get to school from my parents house. Present net worth (150k)

This is my toss up:
Live for free at my parents house and commute 3 hours per day.
Rent downtown for ~10k/year
Buy a condo downtown (Not simple with current balance on mortgage, but makes more sense that renting)

Congrats, you are officially a badass! Revel in the awesomeness of having choices as opposed to being forced to do whatever you can afford.

I personally could not justify a 3 hour/day commute long-term. Are you planning to stay in Toronto? If so, I think it makes sense to buy because it's not so much a question of "if" but "when". Would you be willing to consider a roommate to help with the cost of the second mortgage?

If you really don't want to shoulder the extra costs of moving downtown, is there anyway you could reduce the number of days you need to be in Toronto each week? Have you looked into house sitting gigs downtown or in surrounding neighborhoods? I understand they're not plentiful, but if you find one you could stay somewhere closer for free. 

[HipGnosis]

Not much info to go on, but...
Being a student in Toronto is a temporary situation; don't make any long term financial decisions based on it.
Why not live in your house in Hamilton until you graduate?  If it's big enough, you could have a room mate or two and live there free, or very cheaply.

[JAYSLOL]

Buying in downtown Toronto is unlikely to happen with your current income though, do you mean when you finish school and start working full time or upgrade jobs?  Can you elaborate on why buying makes more sense than renting?  What are you current expenses?  Some numbers and a little more detail about jobs and living situation would help. 

[FrugalFan]

I would not like that kind of commute! But I don't think it makes sense for you to buy in Toronto right now. Mr. Money Mustache actually wrote a great post specifically about Toronto this summer: http://www.mrmoneymustache.com/2015/07/27/rent-vs-buy/

It is one of those places where the financials of renting actually make more sense. I think this is especially true in your case because you already have another mortgage, prices in Toronto are really high right now, your salary is (understandably) not very high and not permanent, and you are potentially only in Toronto temporarily.

You are doing great financially though (much better than I was mid-PhD!), and I would consider spending the money and renting downtown. I think it would be a great place to live for a while and would buy back 3 hours of your time every day (that's 780 hours a year!). Plus there would be fun stuff to do on the weekends too, which you probably don't do too often if you get tired of the commute.

[richyf]

How about a third or hybrid option.
Commute into town on Monday morning, stay somewhere Monday/Tuesday/Wednesday/Thursday night and commute back to your folks place on Friday?

[ojoao]

Hi All,

Thanks for the awesome feedback. I thought I was going to be able to manage the commute, but it's brutal. I've started looking for a place downtown to rent. It will definitely makes things easier since I have to be in Toronto everyday for my research. The calculator from MMM's rental blog post was a neat tool that helped with the decision.

http://www.nytimes.com/interactive/2014/upshot/buy-rent-calculator.html?abt=0002&abg=1&_r=1

Richyf - You're hybrid suggestion is interesting, but I'm not sure how I would feel not being settled.

Travelling Biologist - Yes, downtown can be a blast and I'm looking forward to actually having the time to enjoy it.

Jayslol & Think - I currently have 40k in the markets, which would easily be enough for a Toronto Condo downpayment if I didn't have the other mortgage. I think I might just have to wait until I'm done grad school to see where life will take me before buy another property. Hopefully, it's still in Toronto