With the best personal financial advice they could get from the bank, the Logan's put down $15K on a $245K townhome purchase.
They lived in their townhome for 2 years and then sold it for $273K.
The Logan's think they made money off the sale of that property.
They must have - they sold the thing for $28K more than they paid for it, right? Well here are the specifics..
...
During the 2 years that they lived in the 3 bedroom townhome here is the Total Cost of Ownership (TCO) to Logan-CO..
keep in mind that none of this was ever tracked because Logan-CO has no personal budget, no household CFO, and no tracking for their books
00 So the Logan's, following the best personal finance advice available to them, paid almost $66K to live in their town home for 2 years, compared to the less than $10K they would have paid at the rental by the water...
$400/month in rent.
As a side bar, you should all know that I feel sick even typing this out..
..
To think that $56K was simply flushed down the toilet for NOTHING!! Crazy.
And this $56K does not even include the extra time, gas and mileage that Mrs.
Logan added to her life as a result of the extra commute to the hospital which is in the centre of the city they moved further away from - not the best personal finance strategy they could have employed.
Ugh.
Okay, back to non-emotional math.
In order to truly break even, after 2 years, the Logan's would have needed to sell their home for $245,000.
00 purchase price + $ 65,697.
00 cost to live + 6.
05% real estate commission (it's gonna be 6.
13% come July 1st thanks to the HST...
surprise!) = $329,494.
17 But the Logan's aren't sick like me, they're happy...
cause they don't know about any of this.
They took the best personal finance advice from the bank and they know the number they bought the house for...
$245K.
They know the number they sold the house for $273K.
It's a windfall! They don't track their spending and they don't calculate total cost of ownership.
They are home owners now...
and they think they made 28K! Hurray! Oh yes, their bank is very happy too cause with the arrival of their second son, they decided to purchase a 3,000 sq.
ft house so they're gonna borrow MORE money.
They lived in their townhome for 2 years and then sold it for $273K.
The Logan's think they made money off the sale of that property.
They must have - they sold the thing for $28K more than they paid for it, right? Well here are the specifics..
...
During the 2 years that they lived in the 3 bedroom townhome here is the Total Cost of Ownership (TCO) to Logan-CO..
keep in mind that none of this was ever tracked because Logan-CO has no personal budget, no household CFO, and no tracking for their books
- Land transfer tax on townhome purchase: $ 3,675.
00 - Property tax X 2yrs: $ 6,370.
00 - Home insurance X 2 yrs: $ 1,800.
00 - common elements @ $143/month: $ 3,432.
00 - 2 years of utilities: $ 14,880.
00 - Home improvements: $ 5,900.
00 (window shutters, painting, new carpet, built-ins) - mortgage payments: $ 29,640.
00
00 So the Logan's, following the best personal finance advice available to them, paid almost $66K to live in their town home for 2 years, compared to the less than $10K they would have paid at the rental by the water...
$400/month in rent.
As a side bar, you should all know that I feel sick even typing this out..
..
To think that $56K was simply flushed down the toilet for NOTHING!! Crazy.
And this $56K does not even include the extra time, gas and mileage that Mrs.
Logan added to her life as a result of the extra commute to the hospital which is in the centre of the city they moved further away from - not the best personal finance strategy they could have employed.
Ugh.
Okay, back to non-emotional math.
In order to truly break even, after 2 years, the Logan's would have needed to sell their home for $245,000.
00 purchase price + $ 65,697.
00 cost to live + 6.
05% real estate commission (it's gonna be 6.
13% come July 1st thanks to the HST...
surprise!) = $329,494.
17 But the Logan's aren't sick like me, they're happy...
cause they don't know about any of this.
They took the best personal finance advice from the bank and they know the number they bought the house for...
$245K.
They know the number they sold the house for $273K.
It's a windfall! They don't track their spending and they don't calculate total cost of ownership.
They are home owners now...
and they think they made 28K! Hurray! Oh yes, their bank is very happy too cause with the arrival of their second son, they decided to purchase a 3,000 sq.
ft house so they're gonna borrow MORE money.