When Living on the Wrong Side of the Tracks Can Put You on the Right Track Financially

It has always amazed me how much stock people place in living in the 'right neighbourhood'. My first home was in the trendy 'Beaches' neighbourhood in Toronto. I no longer live there, but do visit occasionally. It is a lovely area that, as the name suggests, comprises a stretch of sandy beach adjacent to Lake Ontario. As such, it is wonderfully lively area and a favourite among yuppies and tourists. There is nowhere in Toronto that has a higher per-capita rate of baby strollers, dogs or convertibles. The main thoroughfare through this neighbourhood is Queen Street, and any house that is south of Queen Street commands a much higher price than any house north of Queen Street. Such is the popularity of the area, and by extension the desire to live there, that there is even an area called the Upper Beaches. The northern (and invisible) boundary of the Beaches 'proper' is Kingston Road, and any property south of Kingston Road will command a much higher price than anything north of Kingston Road, lest any self-respecting snob be caught living in the 'Upper Beaches'.

The point I'm trying to make is that people can, by merely crossing a street or two, save tens, if not hundreds of thousands of dollars - by locating to the edge of a trendy or desirable neighbourhood, rather than spending the premium for the right address within the actual neighbourhood itself. One might ask if this strategy would not affect resale values. My response is that, if a neighbourhood is that desirable, it will encroach upon its outlying areas and bring up the property values with it (the 'all ships rise with the tide' theory). Also, the money you would save on the mortgage payments will provide you with a lower debt burden, and if those savings we funneled to a savings or retirement account, would lead to a better qulaity of life and retirement. Many people have mistakenly thought of their homes as their retirement nest egg, but the recent market turmoil has shown that this is not a sure-fire retirement strategy.

In Ottawa, Ontario, there are many people who work in Ottawa (where salaries are higher and opportunities more plentiful) but who live across the provincial border in Hull, Quebec where housing prices are significantly lower than in neighbouring Ottawa. With a short drive across a bridge, people have been able to increase their revenues but minimize their largest expenses.

I have also previously lived in an area that was considered to be 'sketchy', but bordered another neighbourhood that was becoming gentrified and subsequently became known as the 'Gallery District'. The previously 'sketchy' hood is now home to stylish boutiques and cozy coffee shops. With it, rising property prices have followed. I actually prefer a neighbourhood that has some grit and realism to it, rather than the vacuous falseness of many of the high-priced, lily-white neighnbourhoods.

Start thinking outside the box and you may want to live on te other side of the tracks.