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I have roughly $30,000 CAD saved already and I've been looking to get my own place, perhaps a Condo but the prices in the GTA are just absurd, you're looking at 500k for a 1 bedroom/1 den/1 bath pre construction condo these days.

I live with my parents and they are the ones getting a large windfall of money and the 100k is a portion they are gifting to me. So put yourself in my shoes, debt free, 25 years old, $130,000 in your account. Do I throw a large chunk of this on a down payment for a property or should I keep it, part of me just wants to sit on it because lets be honest its nice to open up your mobile banking app and see that kind of balance.

Thanks.

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    Do you have an income? What would you like the money to do for you, other than look at a nice bank balance? Given that your parents are gifting this too you, what are their suggestions/desires? – Pete B. May 29 '18 at 11:23
  • @DStanley If a 1 bed 1 bath condo is going for $500k, why do you think he could buy a house for $130k? – Hart CO May 29 '18 at 15:08
  • GTA = Greater Toronto area? – shoover May 29 '18 at 17:53
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You probably know this already.

Don't pull all of your eggs in one basket. Putting all of this money in real estate would be a giant mistake as it would tie up all your cash for a good amount of time, you run the risk of a market correction, etc.

General advice would be to diversify between equities and bonds, perhaps some real instate. All of this depends on the investment opportunities at your disposal.

If you haven't already, it's probably a good idea to max out your RRSP and TFSA.

  • I wouldn't put much in bonds at your age, but yes, a diversified portfolio would be great. Check out some low fee index funds. – Glen Pierce May 29 '18 at 4:01
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    This is one of the reason's you shouldn't think of buying a house as purely and investment. It is a place to live. If the OP is ready to live on his own then I see absolutely nothing wrong with buying a house. – D Stanley May 29 '18 at 13:29
  • @DStanley did not to buy a home, just not to invest all or most into a home just for the sake of "investing". At those prices I would personnally move to a cheaper area but thats just me. – ApplePie May 29 '18 at 13:36
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Have you considered moving somewhere else or just renting?

There must be somewhere in Canada where the real estate market is more reasonable, if you want to move out, maybe you should consider it.

There seems to be a bit of ambiguity on what you exactly mean by investing in 'real-estate'. There are a lot of unit-trusts that focus on real-estate, that would be fine, but buying actual property to rent out is a risky proposition.

Take the human element out of your investing and don't rent out your own place. Personally, I would rather consolidate your position with a well-rounded basket of investments and just move to a region with more reasonable properties to rent.

Renting is just the most responsible way for young people to live. I know you are thinking something along the lines of getting that 20-year mortgage as soon as possible so you can start paying it off, but I would caution against this.

If you rent you have much more control in living within your means. If you get a good job you can rent a place that you know you would be able to afford, if you lose your job, you can get out of the agreement much easier than if you have a mortgage.

If you do well in your job and you get regular raises you can again probably within a year move to a place that is every time one peg higher on the socio-economic ladder, you cannot do this as easily with a house.

Consider this money more in line with a 100K kickstart to a pension fund, you can later settle down and buy some property but for a 25 year old building a position is much better

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