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Carrick on money

If you can’t afford a house, is a condo a smart choice? Add to ...

Buying a condo is an obvious option if you’re driven to own a house but can’t afford it. Problem is, condo buyers often plan to move up to a house in a few years. Is this a smart move, financially?

Only if the condo rises significantly in value. But how much? A blog post by a Toronto real estate agent offers some guidance. Using the example of a downtown Toronto condo owned over five years, Charles Young figures you need a 15 per cent price gain to make condo ownership a better move than simply renting and building up your down payment.

Condo resale value is a key consideration if you’re trying to decide whether to get into the housing market via a condo. In some markets, detached houses are much more in demand because of a more limited supply. Another consideration is the cost of condo fees, the rate at which those fees go up annually (often higher than inflation) and any additional charges required for building maintenance.

Finally, here’s a column I wrote recently that suggests aspiring home buyers look at Calgary for a model of affordability. This young couple found affordable housing in the Northern Ontario town of Timmins.

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This is what 13 women spend on retirement vs. coffee
As noted in this article, the “most exhausted easy money-saving tip of all time” is to cut back on buying lattes and other coffee drinks. Now for something original: a look at how much a group of American women are spending on coffee per month compared to how much they’re saving for retirement.

Money lies we tell our kids
A thought-provoking list. I particularly like No. 4 – that taxes are unfair.

Will cities become generational ghost towns?
A segment of Steve Paikin’s The Agenda looks at whether rising house prices in some cities will keep young adults from ever owning a home. In some cities, the answer is quite possibly yes.

Five ways to improve your credit score
Say what you want about the level of financial literacy in this country, but people are undoubtedly paying more attention to their credit scores. Here are some ways to build up yours.

Horrifying truths about retirement
One thing we need more of in personal finance is commentary about retirement from people who are actually retired. Here’s a tongue-in-cheek look by a retiree at some surprises he’s encountered in his first few months after leaving the workforce.

Inside the world of fake reviews
CBC’s Marketplace TV show looks at fake online testimonials for all kinds of products. They find one woman provides fake testimonials for businesses all over the world, who then post them online.

Today’s featured financial tool
Try this tool and let me know what you think. It shows you how much of your mutual fund’s gains are left over after fees. Some background: Posted returns are shown on an after-fee basis. Add the fund’s management expense ratio to the posted return to get the gross return.

Ask Rob
The question: “My robo-adviser firm deducts U.S. income tax from my account every time a U.S. firm in my portfolio pays a dividend. Is that normal?”

My reply: Yes, this is normal for non-registered accounts and TFSAs. There should be no tax withheld in an RRSP or RRIF. In a non-registered account, you may be able to claim the tax withheld by your robo-adviser as a foreign tax credit when completing your income tax return.

Do you have a question for me? Send it my way. Sorry I can’t answer every one personally. Questions and answers are edited for length.

Featured video
Financial tips for surviving unexpected singledom.

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