With housing prices on the rise in both Canada and the United States, the next few years will be very interesting for those who are in or thinking about entering the real estate market. Traditionally the real estate market in Canada and the United States has moved in similar directions, but in recent years, the situation has changed.
The Canada Mortgage and Housing Corporation recently stated that real estate markets in the top cities to live in Canada are currently overvalued. In October of 2015 their Housing Market Assessment listed Toronto, Vancouver, Montreal and Edmonton as examples of cities where buying a home can be very risky.
On the surface it seems like a fabulous idea: Carve out a portion of your home, rent it out and use the rental income to pay your mortgage. You get to live basically "rent free" while at the same time reaping the tax benefits of writing off some of the costs associated with accommodating a rental apartment in your home.
A simultaneous fit of euphoria and vertigo weakens your knees as you gaze out the living room window of a brand new 22nd floor luxury penthouse. Amidst the flood of emotions and peer pressures, you manage to clear your head and ask yourself one sobering question -- is this a good long-term investment?