I would think that would be more to do with Location and carrying costs. If it's cash flow positive that'd be good to hold on to?
Looks like right now it isn't though.
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Ask me anything about Real Estate
- Thread starter Addy
- Start date
I would think that would be more to do with Location and carrying costs. If it's cash flow positive that'd be good to hold on to?
Looks like right now it isn't though.
I once heard about a bad experience someone had with an accountant. no one should use one 
I once heard about a bad experience someone had with an accountant. no one should use one
Accountants shouldn't be allowed to deal in personal finances and investments, its insider trading.
1. I specialize in income producing assets which can be residential or commercial properties... I work regularly with apartment buildings, plazas, condo buildings, development lots, senior homes and executive rental market.
2. The resale condo market is softer than it's been over the past couple of years... As per my post earlier, I'm predicting that we will see a drop in unemployment which will yield to inter-provincial migration (if oil prices remain this low) for people looking to move into the manufacturing jobs in Ontario. This will put pressure on our vacancy rates and while sales might be softening up, the rental market will see a crunch which will eventually translate to sale. There is supply available in the pipeline with new condos coming so how much it would translate in appreciation or depreciation is a matter of opinion... I don't see a decline for at least two more year, all things equal...
3. Great markets to be a player in. They have seen steady increase in values and lack of supply has put pressure on prices and cap rates... More and more properties are getting listed there with low caps and are selling. We are seeing a lot of buyers that aren't able to afford in Toronto moving into these markets and buying assets... Cambridge has done really well for Toronto buyers!
Hope this helps...
It's an interesting question because the property was a primary residence, then changed to investment property... As mentioned, you would need to talk to an accountant that handles capital gains... Based on the limited knowledge I have, it's calculated along side the income you had for the year you are looking to sell it in. The gains are also calculated based on your purchase price, when it switched over to an investment property, profits made from then to now and can amount to be up to 50% of your profit... I would highly recommend a tax accountant to review this before thinking of disposing it.
Another idea is to use the equity via a HELOC and invest that money in other money making ventures where the money that would've been making little to no profit can generate more return for you.
If you need a referral for a good accountant, let me know and I can connect you with an accountant I deal with.
Hope this helps...
As above, I add get a real accountant that deals in this area and taxation. Not H&R block guy or somebody that got the simpletax software. There are also Tax Lawyers you can talk to, but the last one i talked to was extremely expensive, was more than a high end hooker per hr. A good CA will probably save you more than he charges.
My only caviat is you are responsible for whatever "interesting process" he may come up with, if theres an audit its your butt on the hot seat. Your comfort level with creativity is your problem if Ottawa asks WTF.
Thanks for all the informative replies.
As for the HELOC suggestion - based on the little I know, I was thinking that would be what we might do in about 5 years if we are ready to buy another property to rent out or do major reno's to our house. Currently, the main focus for us right is to make sure that we are doing things by the books now so we don't get surprised later. And we want to make sure that we are paying correct taxes now and/or doing what we can to minimize our taxes related to this condo.
This condo is beside Fort York and in a great building. This is a very good unit, in a desirable location and we rent it for cheaper than market value to a great tenant, while still not losing money. We actually wanted to buy a house in Toronto, but could only afford to do so if we sold this condo as well and that did not feel like a smart decision. It seemed like a smarter idea to have a little diversity than buy a bigger or more expensive house.
As for having long term equity in a condo - that's an interesting situation. It certainly has a lot to do with location and carrying costs. I personally think that if you are in a good location, then hopefully the unit will always be in demand, especially in a diverse city like Toronto. We hope this area will be desirable for many years to come, but I have no idea what the market will do and don't pretend to try and play it. When I bought a different condo in early part of 2008, many told me it was a sketchy time to buy and the condo/housing market was going to burst. I needed a place to live at the time and didn't want to rent, and ended up making a healthy profit off the place after selling it 5 years later. We just do what works for us at the present stage in our lives and try to keep it simple - it's just a bonus if we turn a profit.
We will definitely be in touch with a proper accountant - my partner is self employed so we may use her business accountant - I'm not sure if I should use her accountant or a real estate accountant. Any thoughts?
As for the HELOC suggestion - based on the little I know, I was thinking that would be what we might do in about 5 years if we are ready to buy another property to rent out or do major reno's to our house. Currently, the main focus for us right is to make sure that we are doing things by the books now so we don't get surprised later. And we want to make sure that we are paying correct taxes now and/or doing what we can to minimize our taxes related to this condo.
This condo is beside Fort York and in a great building. This is a very good unit, in a desirable location and we rent it for cheaper than market value to a great tenant, while still not losing money. We actually wanted to buy a house in Toronto, but could only afford to do so if we sold this condo as well and that did not feel like a smart decision. It seemed like a smarter idea to have a little diversity than buy a bigger or more expensive house.
As for having long term equity in a condo - that's an interesting situation. It certainly has a lot to do with location and carrying costs. I personally think that if you are in a good location, then hopefully the unit will always be in demand, especially in a diverse city like Toronto. We hope this area will be desirable for many years to come, but I have no idea what the market will do and don't pretend to try and play it. When I bought a different condo in early part of 2008, many told me it was a sketchy time to buy and the condo/housing market was going to burst. I needed a place to live at the time and didn't want to rent, and ended up making a healthy profit off the place after selling it 5 years later. We just do what works for us at the present stage in our lives and try to keep it simple - it's just a bonus if we turn a profit.
We will definitely be in touch with a proper accountant - my partner is self employed so we may use her business accountant - I'm not sure if I should use her accountant or a real estate accountant. Any thoughts?
I'd say it depends on her accountant and his skill set. Oddly my accountant is the CFO of a small international, but he has a few rental real estate houses and is very knowledgeable in the field and works for/with me as a favor, I do some stuff for him. Accountants seem almost specialized these days.
The alleged experts are now saying the Toronto market that is 20%? overpriced is also going to be 20%? under supplied in the next 5 yrs. I wouldnt feel bad holding onto a condo right now, consideration being the condo has a well managed reserve for the inevitable mega repair.
Question for Addy;
which is going to be the next nieghborhood in west TO to go to the moon? In your opinion of course. Mimico, Long Branch? whos on the move?
The alleged experts are now saying the Toronto market that is 20%? overpriced is also going to be 20%? under supplied in the next 5 yrs. I wouldnt feel bad holding onto a condo right now, consideration being the condo has a well managed reserve for the inevitable mega repair.
Question for Addy;
which is going to be the next nieghborhood in west TO to go to the moon? In your opinion of course. Mimico, Long Branch? whos on the move?
I've actually been looking into getting a starter home, just curious how much you deal with places up Simcoe way. From north of Barrie to Orillia to as far west as Midland.
Also say on a $150,000 home, roughly how much money in fees would there be in the selling process? Thanks!
Also say on a $150,000 home, roughly how much money in fees would there be in the selling process? Thanks!
A very good question:
Price appreciation are based on income and population factors. If you're looking to invest, you should be paying attention to areas that are growing in population. I would look for areas where there are larger lots and properties are being demolished for newer in fill projects. Also, since John Tory announced the relief line, I'd be paying a lot of attention to where the stops will be. Prime areas are within 800 meters of the station...
Hope this helps
I don't deal a lot in simcoe or Barrie but have agents that do and can refer you to a good agent. PM me and il get you the info...
In terms of selling expense, you would have to pay commission, lawyer fees (1000) plus any misc expense relating to your move
When buying, you would have land transfer tax, legal fees, title insurance and inspection fees if you chose to have one.
Hope this helps...
You can try out some closing costs calculators (http://www.closingcosts.ca/)....they'll give you a fairly good idea of what you can expect.
Not as many fees in selling costs as in buying costs though. I think it's mainly lawyers, and commission fees. Obviously you have to pay off the gas/electricity/water bills up to the closing date but besides that should be fairly easy.
If your looking at getting into (buying) a starter home, fees on the selling side, not your problem. On the buying side, you would have hookup (new acct billing) charges for gas/water if its municipal, and electrical and maybe phone. They vary but count on a couple hundred. You have land transfer taxes, they vary with property cost but your agent should be able to provide that and a lawyer to look over the paperwork and that can range from a few hundred to a couple grand. If you dont have a lawyer you can shop around, rates vary. I'd want to have 3-4k cash to cover out this stuff, more is better.
Property taxes are usually included with a listing, or easy to find out. When you find a shack you like you can check with whatever services are into the house for actual cost in setting up new accounts.
A shack in my area (New Toronto) just sold for 627k.....asking was 579.....that's insane in my opinion.
We were looking in Mimico and south west Etobicoke and homes were pretty pricey for the house quality or lot size. That's why we started looking in Mississauga. What a difference 15 minutes makes.
yup.....lot is 28.5 x 120' and the actual house looked horrid....but I'm sure someone will make money on it.
we bought our place 6 years ago a few doors down and I'm happy with the increase but trying to get a bigger place in this neighbourhood is just not in the cards. Realtor said im out to lunch and should look to Hamilton!
In Hamilton, you can still buy a decent property with a price tag that starts with a 1....
Im not sure its insane, I think the commuter phase is dying and people will pay a lot to be closer to a job. I'm seeing a LOT of friends that are sick of burning out a car every 4-5yrs, 600. month in fuel and loosing an hr+ on both ends of a work day. Living closer to work will continue to keep prices climbing.
And as Addy pointed out, anything on/near a transit line has value.
All valid points. I'm just shocked as to how much such small lots are going for. I'll just keep an eye on it to see what they build it up to be and very likely will be flipped into a new style home. Then it'll sell for $800k+.
As for Hamilton, if I didn't work in Etobicoke then I'd definitely consider it but as it stands, I'm not willing to commute that far. We can make do with the place we have for a few more years. Mississauga still has decent pricing in many pockets.
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