Building equity for multiple properties

by Haripal Pannu, real estate broker and investor

One real estate agent looks at pre-build investments for the first-time investor.

It’s always challenging to buy the first investment property because there is a lot that must be learned. There is a little bit of difference when it comes to buying real estate as your primary residence compared to buying it as your investment property.

If you are buying real estate as your primary residence you can get financing even with 5% down
(as long as you qualify) but for investment properties you typically need 20% down in some cases even 25% or more.

Some “A“ lenders (big banks) don’t finance an investment property after a certain number of properties; for investment properties there are other costs associated too if you are also buying a primary residence you get certain rebates and you can even buy under first-time home buyers plan while in case of investment property it is not possible. If you are buying a brand new investment it is very likely you are going to pay HST on top of purchase price (if you fulfil the conditions the HST you pay you will get it back one condition is that you cannot sell the property before one year period).

Let us look at where and what kind of investment property one should buy so that equity can build up fast and that equity can be used in future to buy more properties.

One thing which matters most in real estate is the location; excellent location makes all the difference where your property is located location is always the key. Do not buy a property in an area where you do not want to live. Good location must have public transit system accessible to everyone, good walk score and should be close to all amenities.

Check the vacancy rate in the area. A low vacancy rate in the area is an indicator that your property will be rented out quickly and more chances are that rent will increase in the near future.

Check employment rates in that area. Property prices are increasing at a very fast rate not only in the GTA but all over in Central and Southern Ontario and, as a result, more and more people are being forced to rent instead of owning.

Let us look at an example of a $400,000 pre-build condo property. We’ll assume it will be ready in 2-three years. By the time you take ownership of the condo you will see that property already has already appreciated by 3-4 % or approximately $50,000. If it is in a desirable location you will have no problem renting it out and in another 2-3 years you should have paid already approximately $15-20k of your mortgage and also at the same time your property is further appreciated by another approx. $30 – 40K. Now it is time to talk to your bank or your lender so that you can take money out and on your way to buy another property and in another 2-3 years next property and so on.

The more properties you own, the more cash flow you will generate. In times of inflation real estate creates hedge against inflation. One can reap the rewards of equity build up, not to forget many tax advantages of owning real estate and advantages of appreciation real estate enjoys.

Word of caution before you buy a rental property: it is very important you do your due diligence.
Make sure numbers work out for you and seek help from a real estate expert. Owning your real estate is owning your own business and you are your own boss.

Are you looking to invest in property? If you like, we can get one of our mortgage experts to tell you exactly how much you can afford to borrow, which is the best mortgage for you or how much they could save you right now if you have an existing mortgage. Click here to get help choosing the best mortgage rate

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Major investor hotspot no longer seller’s market

Real estate association tries to find the positive in a downward trending market.

“BC home sales trend toward ten-year average,” the British Columbia Real Estate Association proclaimed in its latest sales report.

“Moderating consumer demand in the province’s largest population centres continues to trend home sales toward the ten-year average,” Cameron Muir, BCREA Chief Economist, said. “The seasonally adjusted annual rate of MLS® residential sales was approximately 89,000 units last month.
The ten-year average is 83,000 unit sales, while the 15-year average is 85,300 unit sales.”

But is that the big story?

For investors with interests in the province, not likely.

Sales were down 20.1% year-over-year in November, coming in at 6,419 total residential sales.

Prices also took a dip, falling 6.4% year-over-year to $625,871.

Vancouver, specifically, had a tough month. Unit sales fell 37.4% to 2,225 and the average price dropped 3.8% to $895,084.

According to the Canadian Real Estate Association, Vancouver is no longer a seller’s market

“A sales-to-new listings ratio between 40 and 60 percent is generally consistent with balanced housing market conditions, with readings below and above this range indicating buyers’ and sellers’ markets respectively,” CREA said in its monthly stats release. “The ratio was above 60 percent in almost half of all local housing markets in November, the vast majority of which are located in British Columbia, in and around the Greater Toronto Area and across Southwestern Ontario.

“In Greater Vancouver, the ratio has moved out of sellers’ market territory and into the mid-50 percent range.”

Still, it’s not all bad news.

“Year-to-date, BC residential sales dollar volume increased 22.8 per cent to $74.5 billion, when compared with the same period in 2015,” BCREA said, again focusing on the positive. “Residential unit sales climbed by 12.1 per cent to 107,488 units, while the average MLS residential price was up 9.6 per cent to $692,745.”

Are you looking to invest in property? If you like, we can get one of our mortgage experts to tell you exactly how much you can afford to borrow, which is the best mortgage for you or how much they could save you right now if you have an existing mortgage. Click here to get help choosing the best mortgage rate

Investment Hot Spots:
Lakeburn, Saint-Pascal-Baylon, Fairhaven, Pownal, Franktown

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85 real estate firms not compliant with anti-money laundering rules

by Alexandra Posadzki

At least 85 real estate companies have not implemented a plan showing how they are trying to detect money laundering and other suspicious transactions, nearly 15 years after they were required to do so, according to data obtained by The Canadian Press.

The federal anti-money laundering agency received 337 compliance reports from roughly 1,000 companies in the real estate sector it surveyed including brokers, sales representatives and developers between Jan. 1, 2013, and Feb. 8, 2016.

The data, which was obtained through an access-to-information request, represents only a small sampling of the real estate industry. There are about 20,000 companies in the real estate sector that are required to report to Fintrac.

An analysis of the data contained in those reports found that roughly a quarter of the 337 respondents admitted they had not yet fully implemented a compliance regime, which has been required by federal anti-money laundering laws since 2001.

Thirty-eight of the companies said they had only partially implemented a compliance regime, while the other 47 said they had not even begun to do so. The names of the companies were not included in the documents.

Fintrac spokesman Darren Gibb says some of the reports weren’t sent back because the companies no longer exist, while others simply failed to respond.

Fintrac routinely sends out compliance reports to various sectors to gather information about the companies it regulates, says Gibb.

Those reports can sometimes lead to further enforcement actions such as on-site examinations, he says.

“If we see an assessment report come back and it’s clear that the entity is not where they should be, then certainly that’s a flag for us that it may be examination-worthy,” says Gibb.

“Or conversely, if we don’t get an assessment report coming back, that’s potentially an even bigger flag.”

If violations are discovered during an examination, that could lead to fines of up to $100,000 per violation for individuals and up to $500,000 per violation for companies, depending on severity.

Gibb was unable to specify how many of the 85 companies that did not have a compliance plan were fined, noting that the reports are only one factor that the agency considers when deciding whether to investigate a particular firm.

“It is only one small piece of the puzzle,” says Gibb.

The largest number of firms that admitted they have yet to finish implementing a compliance regime was in Quebec, where there were 32 such companies.

Gibb said he could not speculate as to why the figure was higher in Quebec than in other provinces.

In Ontario, 19 firms said they hadn’t fully implemented a compliance regime, while in Alberta there were 12 such cases. Eight of the B.C. real estate firms surveyed reported that they hadn’t finished setting up a compliance regime.

Meanwhile, 43 of the companies surveyed nationwide said they had not yet appointed a compliance officer, as required by law.

Ottawa also requires companies subject to the Proceeds of Crime (Money Laundering) and Terrorist Financing Act to have a system in place for training their employees on how to comply with the law.

The data obtained by The Canadian Press found that 42 of the 337 companies surveyed by Fintrac had only started implementing a training system, while 57 had not even begun yet.

Pierre Leduc, a spokesman for the Canadian Real Estate Association, says keeping up with the changes to anti-money laundering laws is a challenge for the real estate sector because most realtors work on their own and are not big corporations like banks or casinos.

“In addition, until recently, awareness was low, which is why CREA embarked on a national information tour to raise awareness and explain compliance responsibilities,” Leduc said in an email.

Canadian Press

Are you looking to invest in property? If you like, we can get one of our mortgage experts to tell you exactly how much you can afford to borrow, which is the best mortgage for you or how much they could save you right now if you have an existing mortgage. Click here to get help choosing the best mortgage rate

Investment Hot Spots:
Smith-Ennismore-Lakefield, Haliburton, Donaldston, Lac-Chicobi, Saint-Aimé-du-Lac-des-Îles

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The market investors should be focusing on may surprise you

Phil Soper, chief executive officer of Royal LePage, is bullish on this one surprising market. This is why investors should take note.

Toronto and Vancouver will continue to provide impressive returns for investors in 2016, but it’s another market that may be home to the best prospects.

“The surprise #3 from my perspective is Montreal; I use a hockey metaphor: Montreal in real estate terms hasn’t made the playoffs in years, it’s had a tough time and, as a result, the average home price in Montreal is much lower than other major or minor cities in the country,” Soper told Canadian Real Estate Wealth. “For example, average home prices in St. John’s Newfoundland are higher than in Montrael and that makes no sense based on the economic potential. There is much more opportunity (in Montreal).”

The average price for a property in the Greater Montreal area rose 2.3% in 2015 to $340,207, according to Royal LePage. It’s expected to see further gains in 2016 as well.

According to Soper, the City of Saints has dealt with it share of economic challenges. However, many of those – including its oversupply issues – have worked themselves out.

“As I look to 2016-2017, some of the broad-based macro-economic factors that benefitted B.C. and Ontario, such as the low Canadian dollar and those will all start to work in Montreal’s favour in 2016,” Soper said. “Quebec is both for manufacturing and for services exports – education and financial – it is an exporting province in a big way yet it didn’t see the kind of uptake in export volume that BC and Ontario have seen and I think we are starting to see the front edge of that improvement in the Quebec economy. And the lower Canadian dollar will (help that along).

“I would call it the most improved market in Canada … for 2016.”

Are you looking to invest in property? If you like, we can get one of our mortgage experts to tell you exactly how much you can afford to borrow, which is the best mortgage for you or how much they could save you right now if you have an existing mortgage. Click here to get help choosing the best mortgage rate

Investment Hot Spots:
Vanguard, West Guilford, Steeves Mountain, Rimbey, Meeting Creek

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Forget Vancouver and Toronto; consider these markets instead

Although Royal LePage admits that Canada’s housing market “unfolded closely along the lines as we expected,” in the fourth quarter of 2015, the data still contains valuable information for investors looking ahead to 2016 and beyond.

In particular, while Vancouver and Toronto remain “sellers’ markets where there’s not enough product to meet demand,” other parts of the country show considerable potential for returns, according to Phil Soper, president and CEO, Royal LePage

“For most of the country, in real terms, we’re seeing flat appreciation. Prices are moving at approximately the same rate as inflation,” Soper said. Moreover, the CIBC calculated that lower energy prices represented a 9% tax cut for Canadian families, which may serve as an economic driver of certain regions.

Quebec, in particular, posted a “reasonable” year, but should look more optimistic soon.

“We believe that other factors were at play, such as the new government’s mandate to get the provincial books in order and their focus on austerity and fiscal prudence,” Soper said. “Now they’ve reached the halfway point of that mandate, and will begin looking to stimulate Quebec’s economy in the latter half of it.”

While he considers Vancouver to be Canada’s real estate MVP, he believes that “Quebec, and Montreal in particular, is well-poised to be the most improved player year-over-year.”

Moreover, he advises investors who are able to take a more long-term approach to consider Alberta. While cities such as Calgary may be suffering now, he believes that they are destined to an eventual rebound.

“The softness of the Calgary market would lead some to be brave and look there for investment opportunities, but I’d say the first half of 2016 is too soon,” he said.

Soper is “very bullish” on Alberta over the long-run, since he believes it has a diversified economy and educated workforce that will allow it to recover from oil’s downturn.

“There’s a difficult adjustment right now with the dramatic reduction in the value of its primary export product, but along with the instability of bounding prices and uncertain markets, you have a period where uncertainty can lead to opportunities for investors,” he said. “Right now is fairly risky, however, as I think there’s more downside to come.”

Still, despite the high barrier to entry, investors may not want to turn a blind eye to Vancouver and Toronto just yet.

“We have a general manager in Vancouver who told me, ‘I don’t have a crystal ball and I don’t know if or when market correction is coming, but I do know that people who thought they were going to wait because things were too expensive a year ago are finding it’s a much tougher entry into the market today,” Soper said.

Along with Southern Ontario’s “Golden Horseshoe,” Soper predicts that the two will remain “very good prospects for 2016, even though it’s more expensive than other areas of the country.”

Are you looking to invest in property? If you like, we can get one of our mortgage experts to tell you exactly how much you can afford to borrow, which is the best mortgage for you or how much they could save you right now if you have an existing mortgage. Click here to get help choosing the best mortgage rate

Investment Hot Spots:
Sainte-Sophie, Weslemkoon, Jasper, Rosedale, Upper Blackville

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December home data comes in

National home sales fell 0.6% in December from November to December, but increased 10% year-over-year.

Buyers trying to get ahead of changing mortgage rules faced obstacles last month.

“An increasingly short supply of listings in Vancouver and Toronto blunted the impact of changes to mortgage regulations announced in December that were aimed at cooling these housing markets,” CREA President Pauline Aunger said in a release. “Buyers there had been expected to bring forward their purchase decisions before new regulations take effect in February 2016, but they faced a growing shortage of supply. Meanwhile, supply is ample in many other major urban markets, particularly those where buyers have become cautious amid economic uncertainty.”

Sales were down from the previous month in over half of markets.

“December mirrored the main themes of 2015, with strong sales activity and price growth across much of British Columbia and Ontario offsetting declines in activity among oil producing regions,” said Gregory Klump, CREA’s Chief Economist. “The recent decline and uncertain outlook for oil prices means that housing market prospects are unlikely to improve in the near term in regions where job market prospects are tied to oil production.”

Still, actual sales were up 10% year-over-year overall in December, with B.C.’s Lower Mainland, the GTA, and Montreal leading the way.

The national average price rose 12% year-over-year; excluding Greater Vancouver and the GTA, where prices increased by 5.4%. The average Canadian home cost $405,538 in December.

New listings, meanwhile, rose 2.2% from November to December and, according to CREA, the housing market overall remains balanced.

Are you looking to invest in property? If you like, we can get one of our mortgage experts to tell you exactly how much you can afford to borrow, which is the best mortgage for you or how much they could save you right now if you have an existing mortgage. Click here to get help choosing the best mortgage rate

Investment Hot Spots:
Rossway, North Dundas, New Haven, LaHave, Annan

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Titan Equity Group placed in receivership

Titan Equity Group and its CEO, Lance Kotton, are under investigation by the Ontario Securities Commission, with the company head also fending off allegations he misappropriated investor funds.

No charges have in fact been made or those allegations yet proven in court.

The OSC alleges that Kotton used investor’s funds to purchase a home, luxury cars, and pay himself “excessive” management fees.

An Ontario Superior Court of Justice placed Titan in receivership at the behest of the OSC on November 16.

An OSC-issued temporary cease-trade order against Titan and its CEO has been extended to December 17.

There are allegations of personal enrichment. There are excessive management fees of more than a million dollars,” The OSC alleges in a court filing. “A court-ordered Inspector discovered payments over a million dollars towards personal credit cards and vehicle expenses of $600,000 in an 18month period.

“There are no audited statements for 2014, no 2015 interim internal statements, and no corporate tax returns for any fiscal years.”

According to court documents, Titan has raised $30.7 million from 335 different investors since 2011.

The OSC alleges Titan engaged in unregistered trading; illegal distributions; misappropriation of investor funds; and giving misleading statements to investigators. Again, no charges have yet been laid.

Kotton contacted the Star to share his side of the story.

“They’ve taken my office. They sent a receiver to itemize every item in my home,” he told the publication. “They’re trying to liquidate everything before I have a (chance) to prove myself.”

Are you looking to invest in property? If you like, we can get one of our mortgage experts to tell you exactly how much you can afford to borrow, which is the best mortgage for you or how much they could save you right now if you have an existing mortgage. Click here to get help choosing the best mortgage rate

Investment Hot Spots:
Parkside, Kitimat, Sainte-Lucie-de-Beauregard, McIvers, Big White

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CHAMBRE À SOUS-LOUER (1er décembre 2015)

Une chambre à 400$ et une chambre à 450$ sont disponibles (minimum 6 mois).

L’appartement est situé à 5 minutes de marche des stations de métro Préfontaine et Joliette, et à un coin de rue de la promenade Ontario (commerces, restaurants, bars).

Les quatre universités sont facilement accessibles à partir de chez nous. Une fois dans le métro, ça prend 5 minutes pour se rendre à Berri-UQAM, 9 minutes pour se rendre à McGill, 12 minutes pour se rendre à Guy-Concordia et 23 minutes pour se rendre à Université de Montréal.

Nous sommes à la recherche d’un nouveau ou d’une nouvelle co-loc à partir du 1er décembre. Nous sommes un mélange de Québécois et de Français, gars et filles, d’âges variés, avec des intérêts pour les arts, la musique, le cinéma, la psycho, la socio, la discussion, etc…

Nous habitons un très grand appartement de 10 pièces sur deux étages (rez-de-chaussée et sous-sol). Il y a beaucoup d’espace à l’intérieur, les pièces sont grandes et éclairées. Les chambres disponibles sont entièrement meublées et se trouvent au rez-de-chaussée. Il y a une galerie et une cour (jardin) en arrière, avec un petit barbecue. L’appartement est non-fumeur, alors ceux d’entre nous qui fument le font dehors.

Nous voulons garder une atmosphère calme et conviviale dans l’appart, donc nous privilégions les personnes tranquilles et ouvertes d’esprit, qui aiment partager des moments entre co-locs à l’occasion, tout en étant capables de respecter les moments de solitude dont chacun peut avoir besoin.

Tous les services et commodités se trouvent dans un rayon de 300 mètres : épiceries, boulangeries, boucheries, fruiteries, banques, pharmacies, magasins de vêtements, restos, bars, cafés, station de métro, bus de nuit, etc…

Inclut l’électricité, le chauffage et un service internet wi-fi extrême vitesse avec bande passante illimitée.

Cuisine toute équipée : 2 frigos, lave-vaisselle, four, mini-four, four à micro-ondes, gril à viande, mixeur, mijoteuse, friteuse, couscoussière, tajine.

Chambre à coucher avec fournitures : literie complète, bureau de rangement, table de travail, meuble à tiroirs, garde-robe.

Salle de lavage : laveuse et sécheuse.

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Chambre meublée dans 5 1/2, tout inclus le 1er Decembre 2015


je loue une grande chambre ensoleillée et meublée dans un 5 1/2. Lit Queen, bureau+chaise, étagères de rangement, TV+lecteur DVD et penderie.

Inclus laveuse, sécheuse, hydro, internet haute vitesse wi-fi, lecteur Blu-Ray. Cuisine toute équipée.

C’est un endroit non fumeur, pas d’animaux.

Proche de tous les services (promenade Ontario environs 5 mins a pied max) et à 2 pas du métro Joliette.

Idéal pour quelqu’un qui viens SEUL AVEC SEULEMENT DEUX VALISES!!!

J’ai 38 ans, je suis tranquille et sociable. Grand habitué de la vie en colocation, je sais m’adapter aux habitudes de chacun.

Canadien d’origine Française, j’aime faire découvrir la ville aux nouveaux arrivants.

Le ou la coloc idéal(e) est quelqu’un de respectueux, responsable, courtois, organisé, avec un emploi, capable de partager la vie sociale au sein de la colocation.

A très bientôt

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