real estate..... is it true??
- Thread starter parisbeautiful222
- Start date
This is true.
A primary residence, for most people, is a brick and mortar savings account. When one factors in mortgage interest, property taxes, maintenance, insurance, most people do not MAKE money on their homes. After 25 years, their home is paid off but if they sell they would make no more money than if they had put the same mortgage payments into a high interest savings account for 25 years instead. Many people fall for the illusion that they've made money because their property has appreciated in value but they do not consider that this increase has been offset by the hundreds of thousands of dollars they've paid in interest over the 25 year period.
Investments actually make you more money than you had before. Investments are not savings accounts with fees so high that you only get back the money you put into them.
Real estate investing - owning properties to rent/lease, fix/flip - are a completely different animal from owning a home to live in. Lots of money can be made in actual real estate investments.
But for every successful companies like Rogers, there are tens of thousands of stocks didn't earn anything or disappeared.
The average detached house in Toronto now costs $1.04 million. I don't think that most green investors like the OP have that kind of money to spend on a primary residence nor investment property.
Always try to own 2 properties, see what sells first, one in your name and other in a family members! Live and fix them up too inprove value. Sell after 6 mos or always make available to enterain offers. Generations of Torontoanians have been doing this. The only thing Cra. hasn't screwed us out yet.
The courts will be filled disgrunted vendors, who have not closed or closed deals in the last few months.Looking for that extra money!
I agree. My first property was in Fergus. As I sold and made money I kept moving inward so to speak. Houses north of the city, Bradford and south, are the best value in my opinion. That is the area I'm in presently with nice gains annually.
one.of.a.kind certainly do know what he is talking about. This is the strategy for a lot savvy investors in real estate. Some also do "land banking" which is for people with deeper pockets.
Another way to avoid drawback of the Residential Tenancy Act is to find properties that are combined with residential and commercial (not going to talk in details)
The links above finally worked if anyone is interested in reading the piece.
And just as an aside, I've been seeing an increasing number of Canadian institutional real estate investors reducing Canadian exposure for real estate in other parts of the world including the U.S. Given the appreciation in currency on top of the capital growth that has outpaced Canada in the last couple of years, the argument for static, one-dimensional real estate investing just doesn't make sense to me.
My philosophy for investing is simple. I'm not smarter than the most successful investors of history, so why deny the reality of history? I'd rather model my strategy that way than follow popular opinion which generally suffers from a lag effect in addition to bias. In the Capital Markets, the accepted theory is that if its a popular trade, it's probably time to get off the trade and maybe even go in the opposite direction. Given several conversations I've had with Hedge Fund PMs that are considering shorting Canadian real estate, assurances here and elsewhere about the "resilience" of the market doesn't change my opinion.
And just as an aside, I've been seeing an increasing number of Canadian institutional real estate investors reducing Canadian exposure for real estate in other parts of the world including the U.S. Given the appreciation in currency on top of the capital growth that has outpaced Canada in the last couple of years, the argument for static, one-dimensional real estate investing just doesn't make sense to me.
My philosophy for investing is simple. I'm not smarter than the most successful investors of history, so why deny the reality of history? I'd rather model my strategy that way than follow popular opinion which generally suffers from a lag effect in addition to bias. In the Capital Markets, the accepted theory is that if its a popular trade, it's probably time to get off the trade and maybe even go in the opposite direction. Given several conversations I've had with Hedge Fund PMs that are considering shorting Canadian real estate, assurances here and elsewhere about the "resilience" of the market doesn't change my opinion.
Last edited:
http://www.theglobeandmail.com/repo...ds-in-canadas-housing-market/article23378421/
The writing is on the wall folks. When a correction happens, (and I'm not saying it's imminent but it is avoidable) the recovery will be long and drawn out.
The writing is on the wall folks. When a correction happens, (and I'm not saying it's imminent but it is avoidable) the recovery will be long and drawn out.
there may be a correction in both Vancouver and Toronto. just remember Vancouver is landlocked- constricted by the ocean and the mountains. there is limited real estate and there is growing demand for houses. the economy in bc is still good. so what will cause a crash? rising interest rates will -but how long will that take. we have been expecting higher rates for years but they remain low. so its hard to say what will happen?
in Toronto- the city is surrounded by other municipalities and there is little real estate for future single family homes to be built on. so the supply is fixed more or less. the demand is still strong with 30,000 new residents per year (per city of Toronto) and there is no indication this will change. (over 100,000 come to the GTA every year, mainly new immigrants to this great country. the economy has been middling for a while but demand remains strong. again an interest rate hike could cool the market but the BOC isn't going to ramp it up to 5% over night. it will take years and years.
so- will there be a correction- likely. a crash- unlikely.
in Toronto- the city is surrounded by other municipalities and there is little real estate for future single family homes to be built on. so the supply is fixed more or less. the demand is still strong with 30,000 new residents per year (per city of Toronto) and there is no indication this will change. (over 100,000 come to the GTA every year, mainly new immigrants to this great country. the economy has been middling for a while but demand remains strong. again an interest rate hike could cool the market but the BOC isn't going to ramp it up to 5% over night. it will take years and years.
so- will there be a correction- likely. a crash- unlikely.
I agree. One thing that could cause a crash is a rapid increase in interest rates, and as you said, it seems unlikely. Or some macro economic event(s) that causes massive job losses. Even if mortgage payments are low due to low interest rates, those payments cannot be made if people are out of work.
Both scenarios seem unlikely, but whose to say that worsening economies in other cities in the country won't spill over to the two major cities.
But based on Barca's charts, even a correction seems several years away and I suspect home prices will eventually plateau but not recede. Condos in Toronto may see a reduction in value (mini correction) as more supply becomes available in 2015 thru 2016 but this inventory should be snatched up by first time buyers under current conditions. Money is practically free now.
We don't have NINJA mortgages like the US did which account for 15% of mortgages prior to their housing crash. Our banks and lenders must qualify borrowers, and they must qualify at an assumed 5% interest rate.
Toronto and Vancouver will be hot destinations for people to settle in for years to come so demand will remain strong. A correction or soft landing seems the most plausible future outlook.
Both scenarios seem unlikely, but whose to say that worsening economies in other cities in the country won't spill over to the two major cities.
But based on Barca's charts, even a correction seems several years away and I suspect home prices will eventually plateau but not recede. Condos in Toronto may see a reduction in value (mini correction) as more supply becomes available in 2015 thru 2016 but this inventory should be snatched up by first time buyers under current conditions. Money is practically free now.
We don't have NINJA mortgages like the US did which account for 15% of mortgages prior to their housing crash. Our banks and lenders must qualify borrowers, and they must qualify at an assumed 5% interest rate.
Toronto and Vancouver will be hot destinations for people to settle in for years to come so demand will remain strong. A correction or soft landing seems the most plausible future outlook.
If we adopt the American, version of housing buying and selling, mortgage interest tax deductable. Once selling vendor must move up in order qualify for interest and appreciaton on propertey. If not done, sale is taxable.
If government of Canada trys too change current real estate transactions, adopt American buying and selling. It all stops!
Cityhall Toronto for example love these real estate crazy prices, Taxes go up! I own a house in a older area of TO. Homes are bought to be demoished, monster homes are then built. I get notifications for home inspection to re-evalue the home i am in. I call them tell them to fuck off.
If government of Canada trys too change current real estate transactions, adopt American buying and selling. It all stops!
Cityhall Toronto for example love these real estate crazy prices, Taxes go up! I own a house in a older area of TO. Homes are bought to be demoished, monster homes are then built. I get notifications for home inspection to re-evalue the home i am in. I call them tell them to fuck off.
hey guys, thx again for all these informations, (i'm the one who started this thread lol).... I pretty much know what i will do as my first invest.. I will buy a nice house, near by an university and i will re configure the house to become a student home, i will rent each room and hopefully find student with co sign parents. I will make sure I have someone that I trust who's handy man and live near by the house, or simply hire company who collect rent and make sure i have good people. I just didnt determinate with neibourhood.. somewhere like hamilton or closer to downtown but i can't afford downtown. I will start with one and hopefully have many more in couple years. I'm pretty sure the house market will never depreciate even with a correction.. It might not go up like it use to but my mortgage will get pay by it self so its better then nothing! What do you think guys about it? do you recommend me a specific neibourhood that the value is going up? thank you
If you do this, DO NOT tell the bank you plan on making it a student rental. I've seen mortgages refused based on this. In fact, do not advertise the student rental until you close the mortgage. Banks do some research beforehand.
Guelph, Kitchener and Ottawa are university towns. The first two will be a cheaper place to buy a home. Ideally you should have the house as close to you as possible as you should check on it monthly yourself. Do you drive/own a car?
No matter where you buy check the bylaws about rooming houses. That is what you are doing. Some communities ban them and you don't want to be caught with a house and no one to rent it to.
The bill is in the mail. :biggrin1: :wink:
Toronto west end is a maket that is seeing prices slowly go up. Specially around lakeshore between Islington and browns line. Humber college is heavily expanding there. Lots of student. Other part is south east Mississauga.
I don't know about slowly. I'm in the area and two things are occurring.
Properties are bought and split into two homes regularly. Or torn down. And rebuilt.
My place has gone up about 70%+ since I bought it 8 years ago I estimate. Maybe more. For the prices I've seen some rat traps go for it may have doubled with a few bully offers.
