Tag Archives: condos

New short-term rental regulations you need to know if you own property in Toronto

New short-term rental regulations you need to know if you own property in Toronto Image

The City of Toronto will be moving forward with the new short-term rental regulations that were proposed and approved back in late 2017.

The Local Planning Appeal Tribunal recently dismissed the appeal of the City council-approved zoning regulations for short-term rentals, so Toronto will soon have a different rental landscape.

“This is good news for Toronto residents and a step in the right direction when it comes to regulating short-term rentals and keeping our neighbourhoods liveable,” said Mayor John Tory in a release. “When we approved these regulations in 2017, we strived to strike a balance between letting people earn some extra income through Airbnb and others, but we also wanted to ensure that this did not have the effect of withdrawing potential units from the rental market. I have always believed our policy achieves the right balance which in this case falls more on the side of availability of affordable rental housing and the maintenance of reasonable peace and quiet in Toronto neighbourhoods and buildings.”

There are a few new rules that will be implemented soon. Short-term rental will be permitted across the city in all housing types, but only in principal residences (and both homeowners and tenants can participate). If you live in a secondary unit, you can rent out your home short-term, but only if the secondary unit is your primary residence.

You’ll be able to rent up to three bedrooms or your entire residence. If renting your entire home while you are away, you can do so for a maximum of 180 nights a year. If you are renting out any part of your home, you must register with the City and pay a $50 fee.

For companies like Airbnb, they will have to pay a one-time fee of $5,000 to the City, plus $1 for each night booked. This way, the city is benefitting from the success of a company that is leveraging local housing to make a profit.

There will also be a Municipal Accommodation Tax of 4% that you will have to pay on any short-term rentals less than 28 consecutive days. Companies like Airbnb will be able to volunteer to collect and pay the MAT on behalf of their users.

It seems like these changes will mostly impact the condo rental market. Most investors renting their condo units through companies like Airbnb are not renting out their principal residence; it’s usually a secondary residence. Without short-term rental income as an option, we could see a slight drop in investors in the new condo market. Fewer investors means less sales and more supply for end-users. This could result in price moderation or even a price drop in the pre-construction market.

We could also see some condo units hitting the resale market and long-term rental market, as investors look to other options to profit off their properties.

There will be a transition period as investors figure out what to do with their condo units, but in the long-run, this change seems to make sense in that it delivers more supply to the people who are living in the city, as opposed to just visiting.

Source:  Newinhomes on Nov 20, 2019

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Pharrell Williams is collaborating with developers on a new Toronto condo project

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Photo: Anthony Cohen

Grammy Award-winning artist, songwriter and producer Pharrell Williams is collaborating with developers on a new midtown Toronto condominium project.

Westdale Properties and Reserve Properties launched the marketing for their two-tower residential development, called untitled, today during a press event in Yonge-Dundas Square. Williams, who introduced the project via video on the screens across the public square, partnered with the developers on the design and creative elements of the condominium tower.

“This partnership has evolved from a desire to do something really unique for Toronto in architecture and design as a whole,” said Sheldon Fenton, president and CEO of Reserve Properties, at the launch. “We believe that by bringing in a cultural icon with vision and ideation, from outside the realm of real estate, it would allow us to break the mold in terms of what has been traditionally done.”

<img class=”aligncenter size-full wp-image-197266″ src=”https://d3exkutavo4sli.cloudfront.net/wp-content/uploads/2019/11/untitled_condos_pharrell.jpg” alt=”” width=”1200″ height=”1333″ />

Photo: Norm Li

Untitled is said to focus on key themes surrounding, “essentialism, connections to the elements and the universality of space,” according to a project press release. Williams desired to create an ethos of universality within the project, whereby “physical space is only a backdrop.” Drawing from these ideals, the project team landed on the name, untitled.

“We wanted to make sure that it continued to give you the message of this amazing vibration of being home, and once you get in it, you make it you,” said Williams via a recorded video, who could not be present for the launch in person. “It’s universally beautiful, but there’s enough space for you to get into it and make it yourself.”

 

Working with the project team, which also consists of Toronto-based architects IBI Group and local interior design firm U31, Williams played a role in crafting the vision and material aspects of untitled. His involvement ranged from consultation on the architectural and interior design, to choosing the furnishings in specific spaces. Williams is best known for his appearances as a judge on The Voice and his 2013 chart-topping single, “Happy.” Untitled marks his debut into multi-residential development.

“The opportunity to apply my ideas and viewpoint to the new medium of physical structures has been amazing,” wrote Williams in the release. “Everyone at the table had a collective willingness to be open, to be pushed, to be prodded and poked, to get to that uncomfortable place of question mark, and to find out what was on the other side. The result is untitled and I’m very grateful and appreciative to have been a part of the process.”

Source: Livabl.com –

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9 tips for buying profitable investment condos in Toronto

Photo: Jenny Henderson

Real estate is not a one-size-fits-all strategy. Pierre Carapetian, a top 1 percent agent in Toronto and an avid real estate investor himself, shares what we should know about buying an investment property in Toronto. Here are his tips to profitable purchases.

1. Understand your goals

The type of product you invest in will depend on your goals as an investor. Are you investing for equity gains or are you looking for an investment that generates cash flow?

Cash Flow

Toronto’s lucrative condo market and rising interest rates have raised carrying costs, making it more challenging to find cash-flow positive properties. There are, however, strategic ways to improve your margins, like a higher downpayment or purchasing the right product. Your Realtor will know best.

Type of property to invest in: Resale

Equity Gains

If it’s equity gains you’re after, you’ll need to think long-term. Toronto condos are a great option as prices in the core have been stable and rising substantially. An experienced Realtor can help guide you to the right product and the right neighbourhood so that you can achieve higher equity gains.

Type of property to invest in: resale or pre-construction

2. Know your budget and closing costs

Ensure you know how much cash you will need and how much mortgage you can afford to carry. This will influence the types of properties to evaluate when investing. If this is your principal residence you are allowed to purchase with as little as 5 percent down. However, as an investor purchasing a secondary property you must have at least 20 percent down.

5 Percent vs. 20 Percent Downpayment

Different products have different downpayment structures:

Type of property to invest in with < 20 percent downpayment: resale
Type of property to invest in with 20 percent + downpayment: resale or pre-construction

Closing Expenses

Beyond your downpayment, you’ll also need to account for closing expenses. These include Land Transfer Taxes and, on pre-construction condos specifically, HST (capped at $24,000).

Use this Land Transfer Tax Calculator to find out how much you’ll owe. First-time buyers are also eligible for a partial Land Transfer Tax rebate.

When investing in a pre-construction condo, you’ll need to pay HST on the registration date (approximately four years after purchase) to a maximum of $24,000. With a one year lease in place though, this amount is fully refundable as you’re able to file for a full HST rebate.

3. Understanding price per square foot averages in the neighbourhood

Paying attention to the price per square foot is a great indicator of an investment’s profit potential. Look for properties that have a low price per square foot compared to a comparable unit trading in that same neighbourhood. This will also help you determine if the best deal is pre-construction or resale.

“If the average resale condo in King West is trading for $900 per square foot and the current pre-construction deal is selling for $1,100 per square foot, you’re likely going to generate higher returns investing in resale,” says Pierre.

Photo: Jenny Henderson

4. Know how to spot a good deal

Beyond the price per square foot, there are many other factors to consider when spotting a profitable investment condo. Some of these include:

  • Does the builder have a good reputation?
  • Does the location or floorplan allow you to rent for a premium?
  • Is there future infrastructure development coming to the area?

We aren’t all real estate whisperers — if you don’t know how to spot a good deal, or maybe don’t have the time, hire an experienced Realtor to help you.

“I’m always scouring the market for profitable purchases that I can send along to my investor clients.”

5. Purchase investments where you can charge a premium in rent

There are key factors to look for as you search that will help guide you to a profitable investment property.

Rental prices favour condos along major transit/subway lines. You can also typically charge about the same rent for a two-bed, two-bath, 750-square-foot condo as you would a two-bed, two-bath 800-square-foot condo if they are in the same building. That 750-square-foot condo, however, will cost less to purchase, so you actually will improve your margins and lower your carrying costs.

6. Buy in gentrifying neighbourhoods

When it comes to equity gains, the biggest wins to be had are in pre-construction properties in up-and-coming neighbourhoods. If you can invest in areas when prices are low, you’ll reap the benefits in years to come as the area becomes more desirable.

Leslieville is a great example of how gentrification impacts property values. Condo prices there have increased 50 percent since 2014.* Investment opportunities in up-and-coming neighbourhoods where rental inventory is low will also allow you to charge a premium in rent.

PRO-TIP: Be on the look-out for investment opportunities on the Danforth along the subway line.

7. When purchasing, think long-term

When it comes to investing, it’s always wise to think long-term. The longer you hold your investment, the more equity you amass. As your investment’s market value goes up and your mortgage goes down, you’re able to leverage that equity into other investment condos. Learn about Pierre’s leveraging strategy and building a real estate portfolio.

PRO-TIP: Borrowing to invest can dramatically improve ROI.

8. Understand the tax implications

Knowing how your investment will affect your taxes — and the amount you owe — can make all the difference when purchasing property.

Capital Gains

When you sell your investment property, you are required to pay Capital Gains Tax. This means that 50 percent of your net profit will become taxable income. You are entitled to deduct expenses incurred during the investment from these gains (like interest on a loan and cash-flow losses).

HST

As we mentioned earlier, when investing in a pre-construction condo you’ll need to pay HST to a maximum of $24,000 when the building registers with the city (typically four years after your initial purchase). Your lawyer can file for a full HST rebate, refunded approximately four to six weeks later, provided you have a one year lease in place.

If you do not rent out your property for the minimum one year, you are not eligible for the HST rebate.

9. Ensure you’re playing by the rules

Ensure you play by the rules when investing. This includes understanding the rules regarding short-term rentals (eg. Airbnb) in the building to flipping condos and the financial consequences that come with it.

If you sell your investment too quickly you run the risk of being taxed as a trader rather than as an investor, which means you can be taxed on 100 percent of your profits as it’s seen as business income. It is best to get legal and property advice from your lawyer and/or accountant regarding tax implications as a flipper.

When it comes to spotting profitable investment opportunities in Toronto, just remember: it’s not about buying something, it’s about buying the right thing. Equipped with these nine investment tips, you can rest assured you’ve invested with sound advice and guidance from one of Toronto’s top real estate brokers.

You can read more on Pierre’s investment strategies here.

*Based on E01’s average condo price for 2018 compared to 2014

 

Source: Livabl.com – Feb 11, 2019

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How to ‘plan, invest and retire wealthy’

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 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 the Multiplier Effect: The ability to use equity in a safe, not to mention lucrative, way. Coyle says that, with the right strategy, anyone can become a millionaire through investing in real estate.

For starters, ever wonder why the best units in key developments are gone well before sales open to the public?

“We’ve been a top-producing team for many years now and what that means for us is we get to access all the best developments, and we get our clients first access to all the developments before they open to general public and, quite frankly, before anyone even knows about them,” continued Coyle. “This way, our clients are able to get the best deals on the best units.”

Condominiums are far from Connect Asset Management’s sole investment strategy. The firm identifies key markets where yields remunerate clients well, and some of them include university towns with high enrollment but meagre student lodgings.

“Student housing is often referred to as ‘recession-free real estate,’ meaning that when recessions hit student housing tends to be among the strongest real estate because more people go back to school and that increases the demand on both the rental and resale side. The areas we invest in are seeing some of the highest enrollment rates in the country, and Canadian schools have a shortage of on-campus housing, so there’s a new demand for student living, such as condos.”

Source: Canadian Real Estate Magazine – by Neil Sharma  07 Feb 2019

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Do You Know Your Clients?

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Mortgage Professionals – get to know your clients! Millennials are just one of the surveyed groups from our Mortgage Consumer Survey. 

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Condo Nation

Condos reign supreme in Canada’s hottest cities. The majority of first-time homebuyers in Vancouver, Toronto and Montreal are picking condos, in part due to affordability challenges with single-family detached residential homes. Here are the numbers behind Canada’s condo explosion.

Source: Genworth.ca

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Condo or house: What’s right for you?

Do you want a condo or house? As a first-time homebuyer, this question is probably the first you’ll answer before starting your home hunt. Budget is a large factor, as is region: condos are king in urban markets like Vancouver, Toronto and Montreal, while houses are the go-to in Calgary and on the East Coast. Want to know what’s right for you? Take our “Condo or House?” quiz to shed light on your condo or house dilemma.

Condo or House?

Answer each question below, noting which answer you picked. Use our answer key and tally up your points to find out what’s better for you: condo or house.

Question 1: Can you afford to spend $500,000 or more on your first home?

  1. a) Yes.
  2. b) No.

Question 2: Do you work from home?

  1. a) Yes, most or all of the time.
  2. b) No.
  3. c) I may occasionally bring light work home.

Question 3: Are members of your household very busy with outside activities, or do you tend to be homebodies?

  1. a) We’re very busy and spend a lot of time outside.
  2. b) Most of our hobbies are home based.
  3. c) It’s a mix in our household.

Question 4: Do you enjoy outdoor chores like yardwork, gardening and home maintenance?

  1. a) Yes, I love working on my home and garden.
  2. b) No way!
  3. c) I’m not sure, but I’d consider it.

Question 5: Do you like to entertain friends and family in your home?

  1. a) Absolutely! We love hosting big family dinners and dinner parties.
  2. b) Sometimes, but we’re more into parties than sit-down meals.
  3. c) Yes, but we prefer intimate get-togethers, like having a couple of dinner guests over at a time.
  4. d) No, we prefer to host guests in a restaurant.

Question 6: What best describes your household composition?

  1. a) Living solo and loving it!
  2. b) We’re a couple, with no immediate plans for kids.
  3. c) We’re a couple, getting ready to start our family.
  4. d) We’re a full house of four or more, looking for room to grow!

Question 7: Minimalist living: yay or nay?

  1. a) Yay: I am the queen (or king) of clutter-free living!
  2. b) Nope: I like personalizing my space with my objects.

Answer key:

Q1:

If you selected A, add 10 points.

If you selected B, add 5 points.

December 2017’s national average house price was $614,575. While houses can be had for less, even in big cities like Edmonton, Ottawa and Montreal, those who live in the Greater Vancouver Area or Greater Toronto Area will find that a budget of half a million dollars limits them to condos.

Q2:

If you selected A, add 15 points.

If you selected B, add 5 points.

If you selected C, add 10 points.

Those who work from home should prioritize home office space; a spare bedroom is ideal. Others can get by with a small computer station or even converting a closet into a tuck-away office.

Q3:

If you selected A, add 15 points.

If you selected B, add 5 points.

If you selected C, add 10 points.

The more time you spend at home – and the more members of the household that join you – the more home you’ll need for comfort.

Q4:

If you selected A, add 15 points.

If you selected B, add 5 points.

If you selected C, add 10 points.

Owning a house comes with both seasonal tasks (shovelling snow, gardening, raking leaves, etc.) and weekly chores (taking the trash and recycling to the curb).

Q5:

If you selected A, add 15 points.

If you selected B, add 5 points.

If you selected C, add 5 points.

If you selected D, add 5 points.

Avid home chefs and entertainers will benefit from a roomy kitchen and an open-plan kitchen/dining/living area. A large backyard would be a perk. Condos needn’t cramp your style if you have smaller get-togethers, or if you host your birthday bash in a party room, the perfect pop-up spot for canapés and mingling.

Q6:

If you selected A, add 5 points.

If you selected B, add 5 points.

If you selected C, add 10 points.

If you selected D, add 15 points.

Although condo living is adaptable, at a certain point a growing family may be bursting at the seams and need more room to roam.

Q7:

If you selected A, add 5 points.

If you selected B, add 10 points.

Decluttering will keep your smaller space looking sharp. While houses also look their best when belongings are edited, they do provide more hiding spots for those things you’ve been meaning to purge (but haven’t gotten around to yet!).

Results:

Tally up your points and find out whether a condo or house is better suited to your lifestyle.

If you scored:

35-55: Confirmed Condo-ista

Between price and lifestyle considerations, urban condo living is ideal for you. You’ll love the convenient, maintenance-free condo lifestyle and, of course, being in the heart of the city’s action.

60-80: Ambivalent Shopper

Aspects of condo living (convenience, price point) hold strong appeal for you, but you’re also considering a house you can grow into. It wouldn’t hurt to explore both options, plus townhouses, which offer a bit of each home type.

85-95: Hard-Core House Hunter

You’re looking to live large in a home that does your lifestyle justice – and you’re willing to pay a premium and put in sweat equity to do it. You’ll love turning your house into a home, with room for the creature comforts you cherish.

 

Source: Genworth.ca

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