The Times Advocate, 2005-03-30, Page 5Wednesday, March 30, 2005
Exeter Times -Advocate
5
Opinion Forum News
ROSS
HAUGH
BACK IN TIME
I 0 YEARS AGO
March 29, 1995 - Arc Industries
in Dashwood recently created a
volunteer program which now
allows clients to choose non -work
activities. Faye Rader is one of the
volunteers reading stories to some
of the younger clients.
Russell Electric recently
received recognition marking the
60th anniversary of selling
General Electric products to
Exeter and area residents.
20YEARS AGO
March 27, 1985 - Bob Down of Usborne township
has been returned for a fourth term as president of
the United Co -Operatives of Ontario. Down says,
"UCO is well on its way to recovery. We are about
three weeks ahead of schedule to restructure our
financial base."
Exeter council is now considering 30 applications
for the position of "senior police chief' to replace
retiring chief Ted Day.
25 YEARS AGO
March 26, 1980 - The Exeter rodeo, a top attrac-
tion for many years, may be back in operation in
1980. Rodeo president Dalton Finkbeiner says, "I am
optimistic that the rodeo will return this year. We
have decided to allow Doug Andrews of Square Sun
Productions to tentatively list Exeter in the official
1980 Molson Canadian Rodeo Circuit schedule.
Named the most valuable players for each team in
the Huron Park minor hockey program are Mike
Moffat, Mark Christie, Steve O'Neill, Yvonne Wells
and Russell Finkbeiner.
35 YEARS AGO
March 28, 1970 - Bev Rabbetts, formerly of Aylmer
has taken over as assistant Postmaster in Exeter suc-
ceeding Donald Ladd who has taken over as
Postmaster in Blenheim.
Dogs in Exeter had better look out. Council has
again hired the Exeter Veterinary Clinic as animal
control officers. The clinic will receive $215 a month
from April to September when they will make two-
hour patrols twice each week.
40YEARS AGO
March 26, 1965 - Two SHDHS leaders Carolynne
Simmons and Bryan Baynham have expressed their
views that teens are not ready for lowering of the
legal age of 18 to permit them to consume alcohol
and vote.
Red Cross Blitz chairman Reg Beavers has noted
that the $1,000 collected by the Lions Club was
almost double from the previous year.
55 YEARS AGO
March 29, 1950 - Julie Dunlop was named the best
actress in the play "Charlie's Aunt" presented by stu-
dents of Exeter High School last week.
A fire completely destroyed the race barn at Exeter
Community Park Saturday evening and only one
horse of the seven stabled there was saved.
60YEARS AGO
March 29, 1945 - Exeter Public School was closed
for two days last week because of heavy rains. Two
feet of water flowed into the basement putting the fur-
nace out of commission.
There is good news for western Ontario sugar beet
growers and for consumers, too, from Queens Park.
The government has granted a subsidy of $1.55 a ton
on 1945 sugar beets up to a maximum of $225. This
amount provides subsidy on 145,161 tons of sugar
beets. Canada and Dominion Sugar Company will pay
the $1.55 on all beets over and above that tonnage
delivered.
At the annual meeting of Centralia United Church it
was learned that the outstanding debt on the parson-
age has been cleared up after 15 years. Total monies
raised in 1944 for all purposes was $5,300.
In a fire at Wiarton which wiped out a business
block, the apartment of Mr. and Mrs. Kenneth
Hodgins, formerly of Centralia was destroyed.
85 YEARS AGO
March 27, 1920 - In this sloppy weather, Southcott
Bros. is the place to go for first-rate rubber boots at
$5 a pair.
E.F. Klopp is the president of the Zurich
Agricultural Society for 1920. Profit from the 1919
fair was $91.98.
I I OYEARS AGO
March 30, 1895 - Messrs. Joseph and Edward
Kestle of Sharon have rented two acres of swamp
land from the Canada Company and are now busily
engaged in cutting the wood thereon.
Immersion issue still alive
Contrary to the impression left in readers by your
most recent article, in fact, the issue of bringing French
Immersion to public school families in Huron County is
still alive and well!
On Tues., March 22, several concerned parents and
Monika Ferenczy, Ontario President of the Canadian
Parents for French association met with Avon Maitland
District School Board members to discuss the most
recent French Immersion survey and the board's hesita-
tion to offer a registration for September 2005 based on
"lower than expected" numbers.
The parents and Ms. Ferenczy pointed out that there
actually were enough interested students to form Grade
1/2 split classes in several towns including Listowel,
Wingham, St. Marys, Clinton and Exeter for September
2005. Parents asked the board members to be cognizant
of the fact that Huron County is rural and that our num-
bers should not be compared to those in Stratford, an
urban centre. There were close to 250 positive respons-
es from the surveys, quite a sizable number. Ms.
Ferenczy cited the examples of several areas which
began their French Immersion programs with small
opening class sizes. She said that French Immersion
programs in rural areas tend to thrive since there are
not as many competing programs for children to be
enrolled in. The board officials were still amenable to
the idea and said they would like to have discussions
with board members from the other smaller centres.
They also said a motion could be entertained by the
board regarding offering a registration for French
Immersion, possibly in January 2006 for the fall of 2006,
since, by then, staffing deadlines could also be met.
Parents have been pleased with the open lines of com-
munication with the AMDSB members and are looking
forward to having their children enrolled in local French
Immersion programs in the near future.
VICKIE CANDOW, ANDREA SCHAEFER AND GILLIAN THOMAS
Huron County Parents for French Immersion
Panther Profile
EXETER — I hope everyone had a wonderful long
weekend and is ready to do some actual work in second
semester, instead of all this silly time off we've had. Just
kidding, I love time off school.
Anyway, if you walked into South Huron this week
you'd see some interesting decorations ... election
posters that is! It is time once again for Student Council
elections.
On April 4 you can vote for next year's Student
Council. I encourage everyone to take a serious look at
who is running this year and make an informed vote.
I'm sure none of the candidates would object to students
actually asking them about their plans if they were voted
onto Student Council. To those running for Student
Council, I encourage you to talk to this year's council to
ask them what Student Council is really like, especially if
you've never been on council before.
On April 5 the Black Jazz Band is
heading to Central Huron for the first
ever Massed Jazz Band. Jazz bands
from South Huron, Central Huron and
GDCI will spend the afternoon working
with conductors and learning a few
rocking songs, then performing them
for parents, friends and relatives. If
you're interested in coming to this first-
time -ever event, it's at Central Huron
Secondary School April 5 at 7 p.m. Be
there and support South Huron Music.
Coming events:
Wed., March 30
•Jr. boys hockey to Stratford, all day
•Memorial at 2:30 p.m. for Brian Desjardine
Thurs., March 31 • Skills Canada assembly in the
small gym, last period. For grade tens only.
•Reach for the Top to Clinton, all day
•Jr. and Sr. badminton to Stratford, all day
Fri., April 1 • 30 -Hour Famine starts at noon and
goes until 6 p.m. the next day
Mon., April 4 • Student Council Elections Assembly
Tues., April 5 • Black Jazz Band at Central Huron, bus
leaves at 11:40 a.m.
Thurs., April 7 • Teacher/Parent interviews, 3:30 -
5 p.m. and 6:30 - 8 p.m.
•Battle of the Bands and Fun Night
,-711111
AMANDA
ZEHR
PANTHER
PROFILE
Jim Bearss will
return next
week
The Turner Report
THE MYTHS OF RENTAL REAL ESTATE
My, my, my. This column apparently caused an
increase in communal blood pressure on Vancouver
Island last week, judging by my e-mail inbox. There
are a lot of people wholly unprepared to hear any talk
that real estate values may have peaked and will
inevitably correct that way the stock market did in
2000.
My comments last were in part a reflection of a new
report penned by Toronto economist David
Rosenberg, who figures there should be a healthy cor-
relation between real estate prices and the kind of
income a house could generate, or else real estate is
over -valued. Rosenberg even went so far as to draw a
comparison with today's housing
market—where prices have never
before in history been higher—and
that dot-com mania which swept
the country six years ago.
Pshaw! say more than a few read-
ers who fervently believe real estate
values will probably go up forever—
at least in Victoria and its boomer -
friendly neighbourhoods. In fact
one guy ripped your scribe's
intestines out with a razor-sharp e-
mail saying real estate is obviously a
great place to put money, when his
$600,000 investment property can rent for $2,500 a
month.
Hey, on the surface, that doesn't seem such a bad
deal, I will admit. After all, $2,500 a month is $30,000
a year, which is a five per cent return on the money
invested in that house. Compared to GIC rates these
days, that's okay. But it's also just a part of the calcu-
lation.
It costs money to own a house, even when the place
is paid for. In this instance, property taxes would be
(at least) $10,000 a year, and utilities would average
about $900 a month. Add in a modest $3,000 a year
for property and building maintenance, and you have
annual overhead of $24,000 a year on this rental
property. But, real estate groupies cry, all these costs
are deductible for tax purposes against the income
received, which is absolutely right.
So, if the investor is in the 50 per cent tax bracket,
then write off half the costs, bringing them down to
$12,000 a year, or $1,000 a month. Deduct that from
the $2,500 monthly rent, and the net income is $1,500
a month, or $18,000 a year—a three per cent return
on the $600,000 invested buying the house. But, of
course, this $18,000 is taxable as income to the
investor, so applying the same 50 per cent tax rate,
the rate of return is reduced to just a little over one
per cent—which is actually below the current inflation
rate.
So, buying a $600,000 home to rent out means you'll
likely enjoy a negative rate of return. How smart is
that? In fact, your only hope of breaking even over a
few years is if the price of the real estate continues to
climb, and you receive a (taxable) capital gain. But
that is exactly Rosenberg's point—when the price of a
piece of real estate climbs beyond the ability of that
asset to generate a positive rate of return, then it's
probably over -valued. That means instead of it going
up in value more (or, in the case of Victoria, forever),
it will more likely correct to a more normal and
affordable level.
So, let's compare buying a home to renting it out,
with just investing the money in a low -yield, no -risk
fixed income asset. If you received the same five per
cent on $600,000, that would be earned investment
income of $30,000 per year—taxed as income. If you
were in the 50 per cent tax bracket, that would
become $15,000, or 2.5 per cent, which is nothing to
yodel about. But, if you took half the money and
invested it in an RRSP, you'd get $7,500 back as a tax
refund, giving you retained income of $22,500 a year,
or a return of close to four per cent.
You could take that $22,500 and put it towards the
$30,000 rent on the $600,000 house that the guy
above owns, and living costs for a year would total
$7,500 annually. But at the same time, your RRSP
would be increasing by $15,000 a year, and also be
generating tax-free income. After five years you
would have $600,000 in cash and $75,000 in tax-shel-
tered investments, for a total of $675,000 that cost
you $37,500. Oh yeah, and you lived for free.
Meanwhile the guy who bought the $600,000 house
and rented it out still owned a $600,000 house.
Maybe.
The moral here is not that real estate is a bad
investment, because it isn't. But trying to justify
today's prices by today's rents is a mug's game. Living
in it is one thing, renting it out quite another.
GARTH
TURNER
THE TURNER
REPORT