Housing dilemma – Part 2: emotions can trump math

Housing dilemma – Part 2

Should we stay or should we go?  If we go, when do we pull the trigger?

When we go, will we get good value for our home?

Could we overpay for a place in the city?

Will we miss where we currently live?  (Yes)

…And more questions abound…

Over the last year, my wife and I have considered moving back into the city.  Doing so would bring us much closer if not next door to amenities, walking distance to work and much more.  I won’t provide all the background to this narrative – I already discussed that in this post.

Today’s article is an update on our current thinking and where things might be headed.

Are we still considering the downtown core for our next home?


We would like to live around here (near where we used to live 10+ years ago):

Housing Dilemma 2a

We currently live here:

Housing Dilemma 2b

Will it be a single-family home?

Highly unlikely.

Most single-family homes that do not require at least $50,000-$100,000+ worth of updates cannot be found for under $1 million in the city core.

Older semi-detached homes are selling for $650,000+.  New builds (in very desirable neighbourhoods) are selling for this much – which is absolutely out of reach for us:

Housing dilemma 3

To get into something we can afford (and for the space we really need), at the time of this post, we’re leaning on re-entering the condo market.

No doubt some readers will groan (i.e., why would you ever want to own a condominium??) but we believe this might be the best decision for us – based on our lifestyle plans in the coming years.  (Note:  we used to own a condo 10+ years ago.)

Will it cost us more money to move into the city?


How much are we willing to pay?

We’ve got a range but it’s more than this house will sell for…

If you’ve been following my site for any length of time you’ll realize we’ve been working hard to rid ourselves of mortgage debt.  Well, with any move back into the city being closer to amenities brings value.  Value costs money.

This means we’ll need to do some serious math in the coming weeks. A detailed budget will help us determine if this is financially feasible.  In doing some quick math, here are some considerations to share as they relate to our budget and cash flow needs:

  • Property taxes will be higher in the city than they are now. We estimate the annual cost will be an increase of $2,000 per year over now, starting in year 1, not including inflationary increases over time.
  • Basic operational costs (heat, hydro, water, telcos) will be lower in the city (for a condo) than they are now. We estimate there will be savings of about $1,500 per year or more starting in year 1 of city living.
  • Car / auto costs will be lower in the city. Once there, we intend to go down to one vehicle (instead of two today).  We will sell the other vehicle given we can walk to work, get groceries, and more near the future home.  In addition to that, we estimate our car / auto operational costs will decrease by more than $3,600 per year (at least $300 per month) going down to one vehicle.
  • Maintenance costs will likely be “a wash” long-term (15+ years from now) but they should provide some savings in the early years of condo living. We estimate we spend about 1-3% of our home value on maintaining and improving our home each year.  At the high-end, that 3% value, that would be triple of the projected condo maintenance fees.
  • Home insurance would change to contents insurance (since building insurance is covered by the condo fee). Based on my research there is no way contents insurance will even come close to matching our current home insurance rate.  Those costs now approach $2,000 per year based on mostly weather-related claims in our province over the last few years.

So now what?

We’ll continue running the numbers but what is very clear to us at this point is this: moving back to the city will be a lifestyle choice.  This is not unlike the lifestyle choice that brought us here, to our current home, seven years ago.  But things change – and that’s OK.  It also means this lesson learned: even when the finances might tell us that staying put here for many years might be a better option, the desire and emotions related to moving back to the city are likely to trump math.

As our decisions are made I’ll keep you posted.

What decisions did you make when it comes to home ownership?  Did emotions trump math?  What was involved in your last lifestyle move?

My name is Mark Seed - the founder, editor and owner of My Own Advisor. As my own DIY financial advisor, I'm looking to start semi-retirement soon, sooner than most. Find out how, what I did, and what you can learn to tailor your own financial independence path. Join the newsletter read by thousands each day, always FREE.

39 Responses to "Housing dilemma – Part 2: emotions can trump math"

  1. Hey Mark:

    I’ve been following your blog for a bit now and really do find it informative. We moved to Ottawa recently and are renting but starting to get into the rent vs. buy discussions as we’ve never been home owners before. Working in the East end puts us a little farther ways from the better afforded Kanata/west-end areas so our focus locations are still such a TBD. Do you have kids by chance as that I feel has hugely influenced our decision process. Would really love to grab coffee sometime together if at all possible!


    1. Thanks for following along Rick, appreciated!

      Rent vs. buy discussions, at least in my house, are much more formulated from emotions vs. math. Meaning, I know my wife and I would save more money renting vs. buying but we want to own a home or condo in the city in the coming years.

      No kids for us, two cats, which makes our decision easier I suspect than many other households but it’s still a big decision for us – this moving thing.

      Flip me an email and we can chat more if you like.


  2. Hi Mark,
    We rent (Me, Wife, 1 child). I’ve rented for 12 years personally. Garth Turner’s blog has been a big influence in my opinion of the rent/buy debate. The Wealthy Renter really seals the argument if you take into effect the opportunity cost of owning and costs of ownership.

  3. Hi Mark,
    Have you considered renting in a more desirable area in town?
    I read the book “The Wealthy Renter” by Alex Avery and he makes a strong case for renting.
    Also, I like your website! Glad I found it. Lots of good stuff in here to read and learn from.

    1. Thanks Kevin 🙂 Yes, we have considering renting and to be honest, it would be probably cheaper, but my wife wants to own and so while it will cost more money to do so…I support her in this.

      There is absolutely a case to be made for renting in today’s market. Do you rent or own?

      Holiday cheers!

  4. Hey Mark, definitely follow your heart, and more importantly your wife’s desires!

    My wife and I are trying to do the exact opposite. We live in a condo near downtown Toronto, but we want to move to a house. Based on budget, the house will have to be much further away from downtown. Similar to what you outlined here, anything in downtown Toronto would be 1 million and up for SFH. Craziness! Hopefully, you and I will both figure it out sooner than later.



    1. Thanks Peter. Definitely pros and cons to condo living (again for us) but we believe longer-term it should have benefits. This move is not without risks but hopefully all will work out. Good luck with your move. SFH in Ottawa, in the city, are also $1 M in some cases – which is crazy but it is what it is.

  5. we live in your hi-lighted map area and currently rent our home in a desirable neighbour, where we can walk, dine and go out at night to see a show not far from home.. $1800+ a month
    we want to buy – but not only homes in the $600,000 and up – the taxes on one home we looked at was near 6K! and going up 5-10% a year, then consider the cost of Water, increasing substantially, and home repairs – unless we can almost buy a home outright – we are waiting for this ‘crash’ in home prices OR will continue to rent right where we wanna be and our yearly increase is 1-2%( ontario rent control ) – seems every year, we are further ahead by renting than owning… It seems in our blood that we ‘have’ to own a home eventually – i crunch the numbers and don’t see how it is viable

    1. Yes, homes are in the $600,000 range in that desired area. The good news for us, if we go with a condo, the cost of our heat and water are included in the condo fees. The area we want to live in is desirable given light-rail will be a 5 min. walk away and the footbridge to connect two major downtown neighbourhoods together will be completed in 2019.

      I’ve been waiting for a “crash” or at least a small correction for 5 years now. Haven’t seen it and potentially won’t.

  6. If you are buying in the city such as the home you posted beware that these neighbour hoods are rapidly changing due to density rule changes.
    You will be giving up peace and quiet and quite possibly privacy.You will also be possibly be giving up future gains as these homes are at hi-end of the market and future younger genrations may not be able to afford to buy your home when you leave.
    As we are in this neighbour hood now we are starting to see this now.
    But you have to live somewhere so you may as well enjoy it.

    1. Fair points Joe. It is a concern for us but luckily we know the drill…we used to live in a condo before.

      Interesting comment about future younger generations not being able to afford our home. We hope to buy in a very good area so renting it out longer-term is a viable option.

  7. As Nick as said I believe you ought to sell your current home and go to renting in the city. Purchase when prices are more reasonable, as they almost certainty will be in a few years. Canadian housing (especially in cities) is in a huge bubble right now.

      1. Boy would that be a bonus if you could pull it off financially. Income, renters you know and trust, I don’t see a downside.

        I’m grappling to decide to either sell or keep the house I bought for my daughter in Winnipeg. For now it is rented out to a young guy I worked with so the requirement to make a decision is not imminent but I have to keep it in mind. I think for now I’ll just go with what I’ve got. Procrastination is kinda my hallmark. 🙁

        1. I chose to do almost the opposite of your plan 3 years ago as I’m winding down to retire in the next 2 years. After moving from small town Manitoba to Winnipeg for 15 yrs, I decided that retirement would be cheaper to move back to small town Manitoba. Fortunately my job stayed the same in both locations, with no interruption in pay or benefits/pension.
          I toyed with the idea of renting out my house in Wpg (close to university), but then decided that I didn’t want the headache of being a landlord 4 hours away and student renters can destroy a property pretty quickly. The Wpg house was mortgage free, so I decided to sell when there was peak market demand. The equity tripled in value in 15 yrs. I bought almost the same house in small town Manitoba for cash with 2/3 and invested 1/3 of the proceeds. This was both a financial and emotional decision. Financially I boosted my investments and my future desire to travel alot after retirement. Emotionally, I left the rat race of Wpg to a more peaceful economical town (albeit less amenities). I accomplished a better work/life balance prior to retirement. Sometimes I miss the shopping and restaurants in the Peg, but that’s what weekends are for. 🙂

          1. The Winnipeg house was bought for my daughter when she tried going to university.. She rented out a couple of rooms to friends she went to school with for income. I never lived there and when I retired, she moved out here to be nearer to me and she rented out her house to a guy that I worked with. We had thought of selling it, but the rent option came up and it seemed like a good option in case she decided to move back to the city. Plus it provided her with an income stream. Like all things in life, things happen, and I inherited the house. Keeping it rented out just gives me more options. I don’t think I would go this route if I didn’t know the renter very well. He’s a great guy with a great job and the house is only 5-10 minutes to work by bike. Who knows, at some point he might want to buy it. I would if I were in his shoes.

            Sorry for going off on a tangent Mark.

          2. Fair point about retirement being cheaper in a small town. We’ve considered that as well. However, as long as we are working, we figure we should be close to that to reduce commute times, get more exercise and simplify our life. This is very much a financial and an emotional decision for us. It’s a risk, we know, but one that seems worthwhile to take.

        2. Agreed. We are considering keeping the home, renting it, having that income to pay our new mortgage and finish this one off. Alternatively, we could sell all non-registered assets and essentially be mortgage-free (and therefore debt-free) today but I’m not sure that’s a great move for a few reasons. Capital gains being one and also, I would/we could lose a valuable and growing dividend income stream.

          Just things to think about for us…

          1. Understood. Been there on the selling quite a few unregistered assets for current home. I think you’re on the right track to “try” and avoid doing that with plenty of options to fiddle with.

            1. I’m going to do my best. Basically, carry some debt into the newer place, keep all non-reg + maxed TFSAs and + maxed RRSPs intact. A better long-term strategy I think. Kill debt by 50 or even 55 and still have a great portfolio + pensions.

              Like you say, options to play with, without draining existing assets.

      2. That is sounding like an interesting possibility if something comes of it. Lots of parts and pieces to crunch and cypher for you. G/L with this one.

  8. For where you live, I think you need to do math not only in financial point of view. Looks like if you move into the city, then your commuting time will be reduced a lot. Walking to the office is also better for your health as you are not stressful and also do some exercise. How many more minutes you can use to do things you like, instead of wasting it on the road? I commute long time to work. It’s not a problem before I had kids. Now it became very stressful as I have to rush in order to get my kids to places they need to be on time. I hope I could live somewhere close to my work but unfortunately that’s out of stretch.

    Without kids, and being financially successful, living in the city also makes your life more colourful and meaning. That’s another math you need to calculate.

    Overall, I do not think it’s emotions trump math, if you decided to move and it cost you more money. It’s just a decision to make your life more enjoyable with the cost of a bigger bill. As long as that bill is right within your means it should be OK.

    Of course I could be biased as I just paid a big bill for moving. LOL.

    I think the same principle applies to other things in life too. Travelling cost money but people love it. Kids are so expensive but most people still choose to be parents. The list could get very long. After all, life is not about the number of your investment account. Vice versa, the number of your investment account is about your life. Enjoy the life while you can and as you could afford.

    1. I see a lot of positives with the move…such as walking to the office daily.

      Without kids, I suspect we could do more in the city and enjoy things more there. That might cost more but if that brings increased happiness – then why not right? You’re a long time dead unfortunately…

      Agreed – travelling costs money but people love it – I know we do. I guess at the end of the day it’s about financial priorities and where you value your time and money. Maybe my values are becoming more aligned with time than I think 🙂

      Thanks for your detailed comment May.

  9. I agree do what you want to do. I think deciding where to live eventually comes down to an emotional decision that is often rationalized by logic. People need to be happy; it’s not all about finances (but one must be practical) and there isn’t neccessarily a right or wrong answer, and the happy wife thing is a wise consideration.

    We chose to do almost the opposite of your plan. Leave a newer award winning home in the city just before retiring, spend a lot more on a smaller rural (40km from city) high maintenance home albeit waterfront with a large 3 acre property (~1.5 acre landscaped) 700 ft of private lane/drive & large parking area (my 4th house and my wife’s 3rd). More upkeep, more work, more cost, more commuting, same taxes and we also like to travel a fair bit – away nearly a year now out of less than 4 yrs retired.

    A condo- probably sounds like the best thing for us. Could have moved deeper into the city, put some money in our pocket and had no headaches of a high maintenance place. Probably better future demand and resale value too. But I’m reminded everyday I look up in the yard or look out the window why we chose here at this stage of our lives. People pay big money to have a week of it! And with a condo I’d be bored silly with no need for chores, no place to tinker or enjoy the toys etc!!

    Now was that an emotional decision? LOL But it’s working great!

    1. I think at the end of the day we need to enjoy where we live. Not that we don’t today – but I know my wife is really looking forward to moving to the city more than I am.

      Interesting to read about your opposite “plan”.

      As I get older and mature(?), I’m striving to have a better balance between logical and emotional decision-making. I’m a work in progress…

      1. Yes, you have to enjoy it for sure. It has to work for you overall- financially, location, size, type; all that good stuff etc. Since you clearly will explore, discuss and reflect on all options carefully together you’re the only ones who can decide what’s right…at least for now. 10 years later you might think differently, just as we might (but I doubt). Nothing has to be permanent and for me the most important thing is to have financial flexibility in this regard. We’ve learned we can make things work (be adaptable like even living for 1 year in a small apt=20% of our home size 6 yrs ago while renovating), appreciate/enjoy what we are lucky to have and be happy.

        Yeah, probably opposite of what almost all do as they head towards retirement. Maybe I’ve lost it!!!

        A work in progress is likely a good thing……I’ll take that one for myself too. I could use a little more balance, along with many other things!!!

        Best wishes with all with your discussions and decision.

  10. Money (within reason) shouldn’t have the final say in life choices. There isn’t a perfect place to live just a good place to live when the whole picture is considered. That good place is always more emotionally driven than what the math can tell. Go with your heart Mark I say and of course ‘happy wife happy life’ always!

  11. Housing and where to live is so personal that I’m not sure others experiences will help you in this matter. A person (or couple in your case) has to weigh out the pros and cons to make a decision. Finances would of course play a part in that decision but in your case, I don’t think the almighty dollar and how to squeeze it would be the deciding factor. Do what you want that fits what you want to do. I’m guessing travel is a big factor and a house is a pain when one wants to travel a lot.

    1. Thanks for the feedback. Housing and lifestyle is very personal indeed – which makes the choice in how one wants to live more important than what it might cost over any short or long-term.

      The reality is, if we want to travel (more) in our future – as you have referred to – then maintaining 0.5 acre like we have (although I like it very much) is not really sustainable. We’ll see how our decision unfolds in the coming weeks and months. I’m positive we’ll make the right decision for our lifestyle needs.

  12. Condos can be real bad. No control over neighbors, over zealous condo board, fire damage, water damage, mass repairs etc. Don’t do it. Wait until the great Canadian housing crisis that we all k is is coming. Itsnot if its when.


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