House prices in Toronto have been on the rise for many years and even with the prices adjusting after the 2017 housing plan was introduced, you still need a lot of money to purchase property. Lately, I have had many clients looking to invest their money in real estate and taking advantage of the more balanced market. There are several options that one can invest in, each offering varying complexity, risk level and ease of entry. Here are a few strategies that are most common.
1. Purchase and Hold
This strategy is simple: buy a property to rent out and hold onto it for the long term. The goal is that the tenants gradually pay off the mortgage and you gain equity in the home. In the current Toronto real estate market, unless you have a huge down payment it is unlikely the rental income will cover the mortgage in its entirety, but it is still a solid investment strategy if you can afford it. It is a very straight forward calculation and often easier to get financing. Keep in mind that a minimum of 20% down payment is required.
2. The Flip
Everyone has seen the abundance of real estate TV shows where a home that is in disrepair is purchased and the savvy real estate agent and designer renovate it, stage it and sell the home for a profit. Fun! It does look really easy but in reality it can take quite some time to find the right house for this and if you aren’t a builder yourself, it can become quite costly carrying a mortgage while doing the renovations. It can be a huge financial success if done in the right market, and with the right partners. On the financing side, it is a little trickier to get a mortgage since you won’t be able to show an income from it until it is sold. In a very hot and rising real estate market flipping houses can be very profitable.
3. Buy, Renovate & Hold
This strategy is similar to the first one, buy and hold for the long term gain. The primary difference is sometimes you can buy a property for a better value, renovate it and then rent it for a higher rent before ultimately selling when the market is more favourable. This is a great option for those who have contractor connections, designers or of course contractors often choose this investment option. This is another scenario where you may have to get creative on your financing sources unless you have a lot of money down and saved for your renovation, banks are conservative around giving out mortgages. It’s important to calculate all your expected costs and potential profit so ensure your investment goals are achieved.
4. Partnership
Lots of people prefer to share in the risk of purchasing an investment property, or don’t want to tie up all their funds buying on their own. Investment purchases with a team is a great way to get a foot in the market but also requires the right partner with the same vision and goals. In a partnership it is critical to have absolutely everything in writing before any money changes hands. You should outline not only the initial financial expectations of each party but also the details like who will manage repairs? how will you select tenants / who will manage the process?, when do you want to sell the house and on what criteria?
Get in touch, I’m happy to speak with you about your investment goals and what option may be best for you.
Happy Investing!
There is no shortage of fall activities to do this November, but here are a few ideas that are worth getting in your calendar. Check them out!
Royal Agricultural Winter Fair | November 2nd – 11th
Family Sundays at the Gardiner Museum | Every Sunday in November
The National Woman’s Show | November 9th – 11th
Harry Potter & the Goblet of Fire, In Concert | November 15th – 17th
The Toronto Christmas Market | November 15th – December 23rd
Santa Claus Parade 2018 | November 18th
Charlie and the Chocolate Factory | November 20th
Gourmet Food & Wine Expo | November 22nd – 25th
One of a Kind Show & Sale | November 22nd – December 1st
Calvacade of Lights | November 24th
Summer of 2018 proved to be a true hot and steamy summer in the city! Even the cottagers in northern Ontario were cooling off in the unusually warm lake waters. Fall isn’t slowing down, a welcoming crisp in the air and back to routine for many of us. Routine doesn’t mean there aren’t plenty of fun options to do this October! Check these out.
1. Forsyth Family Farms
October 7 – 31 | October Harvest Festival (weekends) / Pumpkin Farm
Head out to any number of pumpkin farms to pick your own pumpkins, get lost in a corn maze or enjoy the fresh crisp apples just picked off the trees!
2. AGO – Art Gallery of Ontario
September 28 – January 6 | ANTHROPOCENE
Anthropocene dramatically illustrates how we, individually and collectively, are leaving a human signature on our world. The renowned photographer Edward Burtynsky and multiple award-winning filmmakers Jennifer Baichwal and Nicholas de Pencier have created a powerful series demonstrating how humans have changed the Earth’s systems more than all natural forces combined. This is the central argument of the proposed current geological epoch: the Anthropocene.
3. Soctiabank Theatre Toronto
October 12 – 11 – 19 | TORONTO AFTER DARK
October is Halloween month so it only makes sense to check out the After Dark Film Festival. This is one of the world’s leading showcases of new horror, sci-fi, action and cult movies and each year you have the chance to catch upwards of 50 feature films and shorts.
4. Various Locations
Octover 10 – 14 | REELWORLD FILM FESTIVAL
Join in for five days of films that raise awareness, spark conversation, and create greater understanding of the world around us. Now in its 18th year, Reelworld Film Festival takes audiences on journeys that deeply explore the world’s most pressing social issues from the perspectives of diverse filmmakers. Through socially relevant films, Virtual Reality (VR) experiences, video games, and conversation, Reelworld uses storytelling as a tool for social change.
5. HUSH HUSH
October 20th | Bloor Gladstone Library
The Bloor/Gladstone Library is being transformed into a must-attend party. A group of 400 guests are wined and dined by top caterers, an open bar and an interactive activations, all within the walls of a busy library!! The funds raised go to support Toronto Public Library’s initiative to bridge the digital divide.
6. Evergreen Brickworks
October 19 – 21 | CASK DAYS BEER FESTIVAL
This festival will feature over 400 beers and ciders and 200 brewers over three days of beer-focused fun. Cask-conditioned ale is unfiltered, unpasteurized, naturally carbonated beer that ferments in the barrel until it’s almost time to be poured. Keep an eye on the website for the list of this year’s brewers. There will also be music to keep you entertained as you sample beers and several food vendors if you get hungry.
7. Metro Convention Centre
October 26 – 29 | ART TORONTO
Canada’s international contemporary and modern art fair features artwork from leading Canadian and international galleries. This year is the 19th addition of the fair and will present 102 exhibitors from seven countries and 28 cities. There will be many returning galleries represented as well as some new galleries.
8. Evergreen Brick Works
October 26th | TEDxToronto
TEDxToronto is Canada’s largest TEDx event, a platform for exceptional ideas, and a catalyst for profound change. Director X, Masai Ujiri, Mary Walsh and Sarain Fox all share their ideas about their journeys during the Toronto edition of TEDx.
9. Pedestrian Sunday
October 29 | KENSINGTON MARKET
This will be the final Pedestrian Sunday for the year in Kensington Market so if you haven’t been yet, make sure to check it out. Enjoy the market without worrying about dodging cars. Enjoy great food, street performers, live music, shop and enjoy the entertainment from 12PM to 7PM.
10. Casa Loma
October 28 – 31 | Legends of Horror
A perfect time of year to have some spooky fun! Casa Loma, Legends of Horror is a one hour, 2 km self-guided walking tour which starts in the lower gardens of Casa Loma and winds its way through the castles tunnels and darkest spaces never before open to the public.
Landlords in Ontario need to start thinking about how they will be impacted by the legalization of marijuana. On October 17th, 2018, marijuana will become legal in Ontario for adults 19+ years of age. It will also be legal to grow up to 4 marijuana plants in your home. This is pretty straight forward for a home owner of a single-family residence but it is not as clear how landlords will deal with tenants use of marijuana in a condo, or apartment complex. Tenants will have to be careful not to disturb neighbours down the hall with strong smells. Landlords are also concerned about the potential that growing marijuana plants could damage the property, specifically paint, carpets and drapery. Most condominium boards are creating rules to deal with the legalization of cannabis and many are choosing to go completely smoke-free for all new tenants (tobacco and marijuana). Landlords of smaller residential rental complexes will need to stay current on updating their leases and understanding the laws and their rights.
What Ontario Landlords Should Consider:
There are many clauses that Landlords can include in a lease agreement and the new Ontario standard Tenancy Agreement has a section that is specific to smoking rules and you can ask the tenant to agree in writing to not smoke in the unit. If you are renting your condo, get a copy of the condominium rules and bylaws and include in the lease that the tenant must abide by such rules. Many condo buildings are smoke-free now, this makes it a little bit easier. Another factor to consider is the increased expense of hydro if your tenant does grow pot within their unit and how that may impact your hydro bill. Consider who pays for the hydro? If it’s all inclusive, you may have to adjust your rental amount. At some point insurance companies will start to have policies that address the smoking and growing of cannabis. Like all new things, there will be more to come once the law is passed. For help leasing your unit, a REALTOR can assist with specific critical clauses to protect you and your investment as much as legally possible.
