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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing February 18, 2019 69   0   0   0   0   0
Student housing is known as a lucrative investment, but when a deficient heating system cut into veteran investor Lee Strauss’s North Bay property, where students’ rents fetched $500 a room, he was at wit’s end. “A student rental is going to be a bit higher on utilities because of usage, but there was no gas to the house;it was all hydro and it was costing me about $1,000 a month during the colder months,” said the owner of Strauss Investments.“The price of the home was $200,000 so cash flow worked out well during the warmer months, but winter was the killer.” Strauss ultimately sold the property and broke even, but not before looking into remedies.Ultimately, installing a gas furnace would have cost up to $12,000 over a decade, so Strauss cut his losses. Situations like Strauss’s are all too common, says Vahid Azari, a registered home inspector, certified energy advisor and owner of All Season.Worse still, poor insulation and excess energy use actually devalue a home by up to a tenth of its value. “It also decreases the value of the house by the extra money you pay for energy consumption,” said Azari.“If the heating system is poor in an old house is poor, it means you have 60% efficiency, whereas a
Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing February 14, 2019 73   0   0   0   0   0
As the cost of living soars, Canadians have begun to wonder whether the surest path to comfortable retirement is through a Registered Retirement Savings Plan or homeownership. A report from Sotheby’s International Realty Canada and Mustel Group determined that 20% of young urban family homeowners deferred RRSPs in favour of purchasing a home.Sotheby’s President and CEO Brad Henderson reckons that’s the sapient path to retirement. “Owning a home is one of the few tax-efficient purchases someone can make,” said Henderson.“When you buy a home as a principal residence and you sell it, it’s a tax-free event.With a Registered Retirement Savings Plans, the money goes in and you get the benefit of tax reduction up front;you get the benefit of money compounding on a tax-free basis all the way through, but you pay tax on the money when it comes out down the road.” The “Modern Family Home Ownership Trends PART 2:Financing the Canadian Dream” report surveyed 1,743 families in Toronto, Montreal, Vancouver and Calgary, 19% of whom secured more remunerative work to fund a down payment on their home purchase.Fourteen percent found auxiliary work, while 12% delayed parenthood and 9% moved in with family. In addition to 71% of “modern family” homeowners surveyed using personal savings to fund a down payment, just
Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing February 14, 2019 111   0   0   0   0   0
Corporations account for much of the non-individual owners of residential property in Canada, according to a new analysis by StatsCan and CMHC. “Corporation ownership [is] concentrated among real estate, rental, and leasing industry and construction industry sectors,” the study noted.“In both Ontario and British Columbia, the real estate, rental, and leasing industry sector makes up the largest proportion of corporations owning residential properties at 31.1% and 23.4%, respectively.” On the other hand, in Nova Scotia, the largest non-individual owner is the construction segment at 28.8%, followed by real estate, rental, and leasing at 25.2%. “In all three provinces, the combination of construction and real estate, rental, and leasing sectors represented approximately half of corporations that owned residential property,” the study added. Read more:Red tape is a major influence in Vancouver’s housing scarcity[1] All in all, B.C.has the largest proportion of non-individual ownership of residential property.Around 9.8% of the territory’s residential properties were owned by non-individuals, and this ratio is even higher in locales outside the census metropolitan areas (15.8%). The rates in the province’s CMA’s showed considerable variance, with Vancouver’s 5.6%, Victoria’s 5.2%, and Kelowna’s 7.6%. Meanwhile, Ontario and Nova Scotia’s non-individual ownership rates were at 7.4% and 7.9%, respectively.As for their largest cities, Toronto’s rate was 4.2%, and Halifax
Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing February 14, 2019 101   0   0   0   0   0
Amid accelerated price growth, many hopeful home buyers in Ottawa are either cooperating with friends or seeking help from the “Bank of Mom and Dad” for assistance on the payment, according to observers on the ground. The B-20 regulations that have introduced much stricter mortgage stress testing have been blamed for the province’s fevered price growth, with an average rate of nearly 15% from 2016 to 2018.These increases have placed the city’s average home price at $433,500 as of December 2018. Ottawa broker Chris Allard said that he has seen a “significant” increase in the number of cases involving would-be buyers who have received funds from relatives, or co-signed applications with friends. “If there’s an option at all for parents or family members to gift funds or to co-sign, they will take that option before choosing to pay a higher mortgage interest rate,” Allard told the Ottawa Business Journal. Read more:Ottawa’s pace of home price growth accelerates[1] B-20 inadvertently pushed a significant proportion of prospective buyers out of the market, despite some observable cooling down in Toronto and Vancouver prices. Traditional lenders have also ended up with a larger number of rejections, paving the way for alternative mortgage sources like the Ottawa-based firm Advanced Mortgage Investment Corp. “We
Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing February 12, 2019 103   0   0   0   0   0
According to a REMAX report, ski resort properties have strong cash flow potential, however, interest among western Canadians is low. “The ‘Airbnb phenomenon,’ for lack of a better description, provides the opportunity for some return when [owners] are not using the property themselves, and that’s where four-season amenities become important,” said Elton Ash, REMAX’s regional executive vice president.“The properties cash flow through winter and summer months.” But, according to a survey conducted by Leger Marketing on REMAX’s behalf, 67% of western Canadian respondents believe the price of a resort property is proscriptive.Ash, on the other hand, says that they’re relatively affordable. “We know a large proportion of Canadians want to buy properties,” he said.“Seventy-one percent of western Canadians interested in purchasing ski properties want four-season amenities, but that number drops down to 23% who believe they could afford it.It’s interesting because with recreation properties in general, Canadians love the outdoors.” In the last 20 years, resort properties have diversified and now boast year-round amenities like golf courses.The report also revealed that all-season resort capabilities trumped snow level, snow quality level, mountain elevation, and proximity to restaurants and retail as respondents’ interest in resort properties. “What we noticed with this report is more and more Canadians are looking at ski resorts as recreational properties, as opposed
Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing February 12, 2019 60   0   0   0   0   0
Bureaucratic roadblocks continue to have a major influence on Metro Vancouver’s housing supply, as these intricacies have led to massively overdue project approvals, according to the recently released Market Intel real estate report by MLA Canada. Burnaby, Vancouver, and the District of North Vancouver are the areas hit the hardest by these delays, with development approval timelines being among the longest (at nearly 2 years) in the region. In addition, construction costs have increased by almost 50% on average over the past 5 years.This burden is almost always absorbed by the end consumer, the MLA study noted. “2019 is expected to be highly competitive, but an overall balanced market with nominal price escalation will provide purchasers with choice and value,” MLA Canada chief advisory officer and partner Suzana Goncalves said. Read more:Vancouver’s empty homes tax visibly improved vacancy rates, supply[1] One bit of good news is an increased volume of new stock incoming.MLA Intel is expecting 13,975 pre-sale units to be released this year, considerably above the 11,584 in 2018. However, the study quickly added that B.C.’s population will experience consistent growth for the next several years, with roughly 50,000 new residents in 2019 alone. “With job opportunities remaining high compared to other provinces, interprovincial migration will
Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing February 12, 2019 103   0   0   0   0   0
A modest pace of sales characterized Regina as of the beginning of 2019, although the city remains predominantly a buyers’ market. New numbers from the Association of Regina Realtors indicated that during the first month of the year, sales grew by 1.2% annually.The total volume actually ended noticeably above the 5-year average, however. “The number of sales that took place in January exceeded our expectations,” Association CEO Gord Archibald said, as quoted by CTV News. The Canada Mortgage and Housing Corporation’s latest report categorized Regina as a buyers’ market, with a moderate level of vulnerability. “In Regina we’ve continued to see slower demand for housing units whether it in the resale or new home market,” according to CMHC senior market analyst Goodson Mwale. Read more:Saskatchewan affordable housing gets multi-million-dollar tranche[1] “We’ve continued to see elevated supply and that has continued to put downward pressure on prices.Both in Regina and in Saskatoon we’re seeing a buyers’ market conditions persist over the past several quarters.” As of the fourth quarter of 2018, Regina’s supply exhibited considerable abundance, which the CMHC attributed to overbuilding during the past few years.This has also led to vacancy levels seeing a marked increase, from 7% in 2017 up to the 7.7% rate in 2018.  
Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing February 10, 2019 128   0   0   0   0   0
Homeownership is becoming increasingly difficult to attain in Calgary, but the city’s rental market is on fire. In fact, the vacancy rate in the Calgary rental market decreased from 6.3% in 2017 to 3.9% last year. “The way this is connected to the rental market is a function of these affordability challenges we’re seeing in the market, and given the pressures put on an individual’s affordability—and we know interest rates are higher—they are renting longer,” said James Cuddy, a senior analyst with the Canada Mortgage and Housing Corporation. Another reason for the buoyant rental market is that interprovincial migration was positive through the first three quarters of 2018—a stark contrast to the previous 2.5 years of negative growth—and that has also done its part to push the vacancy rate down. “We’ve also seen some steady growth in terms of international migration, so it’s contributing to higher demand for rentals in Calgary,” added Cuddy. The outlook for ownership, according to CMHC, isn’t as rosy.Inventory levels are high in the city and builders have started scaling back production.One reason for languid sales is high unemployment and low disposable income. “The general economic recovery we’ve seen since the last recession has been relatively slow;unemployment rates remain elevated and a lack of personal growth in
Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing February 10, 2019 72   0   0   0   0   0
The value of Montreal’s residential property is seeing sustained growth thanks to a booming economy attracting hopeful home buyers from all over Canada, according to the latest figures from the Quebec Professional Association of Real Estate Brokers (QPAREB) The market’s benchmark price for single-family homes increased by 3% year-over-year in January, reaching $316,000.Meanwhile, condos had 2% growth to arrive at $248,271.Plexes had a 4% rise during the same period, settling at $515,000. The numbers supported the observations of professional services firm Shupilov Real Estate, which reported recently that Montreal has become a highly sought after sellers’ market.Aside from the price growth, galvanized competition was a significant factor that drove sales. Read more:Montreal leads country’s metro areas in price growth[1] “This is especially true in the single family home segment, where bidding wars are increasingly common and offers are more likely to be accepted above the original asking price,” Shupilov’s analysis explained. This level of demand has steadily eaten up the market’s inventory, with the number of active residential listings in the CMA falling by 16% year-over-year last month (down to 20,873 properties for sale). Montreal’s sales enjoyed its 47th straight month of sales growth in January, with activity increasing by 15% annually, the QPAREB added. This is despite plexes
Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing February 10, 2019 74   0   0   0   0   0
The ratio of unoccupied residential properties in Vancouver noticeably fell by 15% in just one year, and half of previously empty homes have been moved to the rental market, according to the initial returns of the city’s 2018 empty homes tax. The Vancouver government stated that these figures point to the effectiveness of the levy, with a tangible impact on both vacancy rates and rental supply. Overall, the number of the city’s vacant homes went down from 1,085 homes in 2017, to just 922 in 2018. However, a markets observer warned that it might be too early to celebrate the empty homes tax as a victory, since Vancouver is not yet seeing an equitable distribution of relief. Andy Yan, the director of the City Program at Simon Fraser University, cautioned late last year that price declines have taken place only in the top tier of the market, while the middle and lower price brackets remained all but unchanged. Read more:Federal gov’t should do more to address shortages – mayors[1] “The softening of the market and cooling of the market is something that is definitely happening,” Yan admitted, but quickly added that it’s “a little bit premature to know whether the policies are a success or failure.”
Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing February 07, 2019 129   0   0   0   0   0
What if condo investing were as easy as owning a mutual fund?Well, it can be. Connect Asset Management will be at the Investor Forum on March 2[1] to explain how it helps its clients turn one property into several and build portfolios that cash flow millions of dollars.One of the ways in which Connect Asset Management does that is by helping investor clients access to some of the most exclusive real estate developments in Ontario. “We help investors plan, invest and retire wealthy with cash flow in condos,” said real estate broker and founder of Connect Asset Management Ryan Coyle.“It’s completely hands-off for our clients;we make investing in real estate as easy as owning a mutual fund.” Connect Asset Management builds a strategy for its clients predicated on timing—that is, strategically choosing when to purchase a property. “From acquisition to completion, there’s a tremendous amount of growth on capital appreciation and rental appreciation, so when the condo is built they have all this appreciation that gives them the ability to refinance, pull out the equity and buy more property,” said Coyle.“We help our clients identify the optimal time to flow that capital into more properties.” The strategy, which Connect Asset Management will decode at the Investor Forum, is called
Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing February 07, 2019 77   0   0   0   0   0
After a tumultuous 2018, the Toronto residential market is expected to encounter notable improvements in activity and housing value this year, according to the Toronto Real Estate Board’s 4th annual Market Year in Review and Outlook report. “Although we won’t experience record levels, we do expect to see a better year in 2019 for sales and selling prices,” TREB president Garry Bhaura stated. A large part of the predicted upticks will stem from the increased number of consumers intending to buy homes in Toronto. “Many buyers who moved to the sidelines over the past year due to various government policies, including the OSFI-mandated mortgage stress test, have re-evaluated their positioning in the marketplace vis-à-vis home type, location and price point,” Bhaura noted. Total sales volume is forecast to increase from last year’s 77,375 transactions to 83,000 deals completed in 2019.Aside from increased home-buying intentions, the growth will also be impelled by healthy employment numbers, lower average fixed-rate borrowing costs, and sustained population growth. Read more:Toronto’s condo market can expect much volatility this year[1] Prices are predicted to continue the moderate growth trend established in the second half of 2018, the TREB said.The median sales price in the GTA will reach $820,000, up from the average of $787,195 in 2018 and
Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing February 07, 2019 89   0   0   0   0   0
Intensified demand brought about by an influx of tech companies has pushed Toronto’s office market towards becoming one of Canada’s premier investment destinations, according to a CBRE Group report. The vacancy rate of the office sector fell to 2.7% during the fourth quarter of 2018, leading to commercial rental rates reaching an average of $35.37 per square foot. This far outstripped Montreal’s figures, which posted a median rental rate of $22.76/sf on a 9.4% vacancy rate during the same quarter.And Vancouver, while having a higher average at $37.20/sf, did not command the level of Toronto’s demand, with a 3.8% vacancy. Even intensified development offered only the most minimal of respites for the overheated market.As of the end of 2018, approximately 14.2 million square feet of new commercial space was under construction nationwide, with most of this situated in Toronto, Vancouver, and Montreal. This was the strongest development activity since the first quarter of 2016, the CBRE noted. Read more:Canadian commercial investment to intensify this year[1] CBRE added that despite the 7.3 million sf of space still under development in Toronto, “chronic shortage” will continue to characterize the market for the foreseeable future. For perspective, this greatly exceeds Vancouver’s 2.86 million sf and Montreal’s 954,510 sf.This also continues the
Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing February 05, 2019 85   0   0   0   0   0
The real estate investing gurus behind Keyspire are coming to a city near you. Michael Sarracini and his partner Scott McGillivray—who’s also the star of Income Property on HGTV, a hit television show in 43 countries—are touring the country[1] to teach both seasoned and neophyte investors the ins and outs of the business with information sessions and workshops. According to Sarracini, Keyspire’s CEO, at the two-hour and three-day in-depth workshops, the tenets of Information Education Implementation—the same technique used on Income Property—will be imparted. The first tenet is about active and passive income.Instead of merely buying to flip, investors are encouraged to build a strategy and then a portfolio.Active income is the process whereby a property is flipped or used as a rent-to-own, but passive income is the turnkey rental property that’s buoyed by a plan to support the investor’s lifestyle. That’s supported by what Keyspire refers to as tools and techniques, one of which is called Flipping to Yourself—a staple strategy on Income Property that McGillivray and Sarracini implemented while the latter worked as a project manager during the show’s first two seasons. “We do rentals and we do them right,” said Sarracini.“When we realized that flipping wasn’t for us, and not the same in Canada as it is in
Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing February 05, 2019 93   0   0   0   0   0
Much attention has been devoted to the feverish pace of housing construction nationwide, although whether this has successfully addressed the problem of supply remains an open question. However, a recent study published by the Housing Policy Debate journal argued that these inventory injections have in the past few years tended towards being valued at market prices, a fact that will still exclude a considerable number of would-be buyers. The report stressed that governments at all levels should “ensure that supply is added at prices affordable to a range of incomes.” “The challenge in housing affordability is to ensure that new housing is built to meet the shelter needs across the income spectrum and not just for high-income earners.It is true that even housing built to draw market prices and rents over time, through market filtering, will improve affordability for low-income earners.However, the filtering process takes time.” Read more:The waning of Vancouver and the waxing of Toronto[1] A recent heavy influx of asylum-seekers has only complicated matters.In late January, Canadian mayors urged the federal government to do its part in addressing the supply shortages brought about by this immigration volume, as the problem exceeds the capabilities of just the municipal or provincial levels. “[The federal government] makes the
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