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COVID and the housing market
- Thread starter mimico_polak
- Start date
Green Meenie
Well-known member
I agree, it's not a move if you're still working. It's a great move, financially, if you're retiring though.
I've made comments about doing grocery shopping Russian style, going back to what I've heard about selection.
You make your list as a guideline. When you get to the store you take what they have and pay what they ask. You go home and say a prayer of thanks.
It seems home buying isn't much different.
Buyer: "I'd like a two story, four bedroom, 2 1/2 baths on a 50 foot lot.
Agent: "Here's a three bedroom condo townhouse"
Buyer: "Good. Here's a signed cheque. Just fill in the amount."
You make your list as a guideline. When you get to the store you take what they have and pay what they ask. You go home and say a prayer of thanks.
It seems home buying isn't much different.
Buyer: "I'd like a two story, four bedroom, 2 1/2 baths on a 50 foot lot.
Agent: "Here's a three bedroom condo townhouse"
Buyer: "Good. Here's a signed cheque. Just fill in the amount."
I know two couples that retired there, one NB and the other NS. It was all about cost of living, mainly real estate.
Inexpensive housing has a spin off in that if you can buy a house you enjoy you're less tempted to get away from it every chance you can. Room to fix your own car or bike.
A lot of people that live in minimal 500 SF condos can't have friends in for a meal so they go out. With a big backyard you have burgers and beer at a fraction of the cost. Bring the kids and a football.
TBH one developed some health issues and seems to be well taken care of.
D
Deleted member 50930
Guest
I saw townhouses in downtown Cambridge going for 560k+
So there is a upside to this mess. Crazy areas like Ainsle/downtown galt are getting more middle income folks.
You couldn't pay me to live down there still though
Also went to Milton this weekend to checkout some townhouses getting built... Meh.
I am thinking more and more my first property will be a income source not my primary residence. But my accountant friends tell me what I am planning is super risky ?
So there is a upside to this mess. Crazy areas like Ainsle/downtown galt are getting more middle income folks.
You couldn't pay me to live down there still though
Also went to Milton this weekend to checkout some townhouses getting built... Meh.
I am thinking more and more my first property will be a income source not my primary residence. But my accountant friends tell me what I am planning is super risky ?
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Of course it's risky...it's an investment. If it goes well great, if it goes bad...it can go very very bad. Have seen both.
I've been a landlord for 10 years before selling. Sure there were some issues (fix this, fix that, etc) but as I lived in one of the units I was always around. I still miss the property and wish we could've kept it. But couldn't make the numbers work so we sold.
There will always be issues. If you're handy and can deal with it...much easier. Or pay someone to do it.
Funniest issue we had...get a call from a tenant 'Can you tell that wh$#e upstairs to stop having loud sex at 3am in the morning?' as she was banging her broom on the ceiling, and the girl being complained on was banging on the floor calling me on the other line.
Good times.
Best part about snoopy tenants is you always know what's going on when you're not looking.
If I was buying as an investment, I would be looking hard at commercial (restaurant space maybe?). Still has some pitfalls but at least you aren't stuck with a non-paying dbag tenant for years while you fight your way through the system. Commercial evictions are fast and cheap and get you back in the market quickly.
If you don't mind putting in some money or labour, co-working offices should even out fluctuations. You can have multiple private offices rented out with a common lobby, photocopier and break room. You make money on rent, internet, printing, voip, etc. If you want to stick a receptionist in there, get virtual tenants and some more mailboxes.
Trials
Well-known member
You can minimize the risk, buy a nice fully serviced building lot and put your own or somebody else's trailer on it for rental charges. Long term plan you build your house on the lot and you are investing in your capitol tax exempt primary residence. Live long and prosper.
Most municipalities have caught on to the trailer game and either don't allow it or put a hard cap on the length of time that is allowed. A way around it can be to build a big garage with a loft first. That gives you living accommodations and a dry workshop while you build the house and an awesome garage after. Either rent the loft out to hammer the mortgage or keep it as a retreat/guest suite. Figure out the plan before you start construction as there is no way in hell tenants would be getting access to my garage.
Trials
Well-known member
bet this one goes fast, 349,900
220 Hungry Lake, Arden, Ontario, K0H1B0, Canada House Detached-Bungalow real estate property for sale - pulseonrealestate.com
? looks fairly covid free from here too
"Fishing on Hungry Lake – Here you will find stocked Splake and Lake Trout as well as Largemouth Bass, Smallmouth Bass, Walleye, Yellow Perch and Northern Pike." lol even has a fresh fish market on three sides.
220 Hungry Lake, Arden, Ontario, K0H1B0, Canada House Detached-Bungalow real estate property for sale - pulseonrealestate.com
? looks fairly covid free from here too
"Fishing on Hungry Lake – Here you will find stocked Splake and Lake Trout as well as Largemouth Bass, Smallmouth Bass, Walleye, Yellow Perch and Northern Pike." lol even has a fresh fish market on three sides.
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D
Deleted member 50930
Guest
Kind of on the same track
Commercial space below and 1 or 2 apartments up-top. Plus I have reseller agent accounts with ISP providers so I can make comission off selling internet, voip, web hosting etc
One of the ways that we have been lucky enough to avoid having bad tenants is to use our realtor to find us the tenants. He does all the pre-screening and manages the showings and I meet with the final crop of successfully screened tenants to pick the one we want based on that personal interaction. We have been renting out for 10 years now and been lucky to have 2 well employed and low maintenance tenants for 5yrs each during this time. One of which we became friends with and visited his family in the villages of Uganda!
It's not perfect because we do have to pay 1 month rent as the fee to our realtor, but we have now used him multiple times over the last 15 years for different services and have a very good relationship with him. If the tenants are paying $20k/yr, then over 10 years they have built up our equity for us with very little effort on our part.
That said, after 16 years of ownership we are between tenants and upgrading the floors and kitchen cabinets and some other things. The means the unit sits untrented for 3 months and we have to cover it. There is risk involved if the unit is unrented. Despite this, it's been a reasonably profitable undertaking while offering a below market value rental to high quality tenants. Obviously much harder to do with a high mortgage amount.
Commercial / industrial is hardball. No landlord tenant committees. No rent controls. Pay up or get out.
The downside is that when the economy tanks there is a lot less need for C.I. space and it could sit empty for quite a while. If a person loses their job they still need a place to live so the middle class house is still needed.
When I bought an industrial condo in 1993 the complex was almost vacant and I paid 1/3 of what the original owners did. Six months later they dropped again. Free rent on many, just pay the TMI. Interest rates 12-13 %
High end houses may not do well. If belts have to be tightened people may move from posh to acceptable and then tolerable. If you can buy a palace bargain and afford to live in it you may do very well in five to ten years.
The restaurant model is interesting. If a restaurateur rents a vacant building and renovates it into a restaurant they could be on the hook for a half a million for service upgrades, decor, plumbing, ventilation etc. Then they pay rent, TMI plus a kickback on sales.
If Covid is hurting their numbers the building owner could think: Get rid of the original owner who is struggling with a half a million in reno debt and re-lease to someone else.
Since the new tenant is getting a ready to go building they can afford to pay more rent and are less likely to default. Win, win for the building owner and a market price for the new tenant.
The original restaurateur gets screwed because unless they are a major chain they had to self finance by mortgaging their home, cashing in RRSP's (Ouch X 2) or borrowing from family and friends.
It's hard to forecast the re-opening if it ever comes. A lot of people are doing well and would pay through the nose for a sit down restaurant meal. A lot of others are suffering big time.
If real estate adjusts downwards there will be recent buyers under water and clawing for the surface.
Trials
Well-known member
That's why you stick em in a trailer park, insure the heck out of it and forget about it when they trash it or burn it to the ground. Drag that one off to the dump and haul in a fresh rental residence lol no repairs or eviction notice required. They pay their own meter or it stops spinning.
D
Deleted member 50930
Guest
So you just own a bunch of trailer park spaces then rent it out like a airbnb?
The problem with that is finding affordable land for your trailer park (and then getting good tenants that want to live there). Mississauga had a few until recently but land value was obviously in the stratosphere and they needed water and sewer upgrades that would have cost hundreds of thousands per trailer. The trailer residents argued they were being driven out of affordable housing (true, because their housing was only artificially affordable).
PP's idea of cabins in the woods for AirBnB is great if you can get it to work with zoning.
A late friend ended up in an illegal trailer park near Carlyle 20 or so years ago. IIRC a farmer rented a spot to one person and then another and another until there was a small town with children and school needs. Total shambles with hydro eventually being shut down for numerous reasons. I don't know what they did with water and sewage.
One resident organized the bunch and used media and politics to wangle special treatment for the dispossessed.
My buddy ended up in a brand new co-op apartment a block from the lake in Burlington. He had it looking like a pigsty within a month.
That said there are some decent parks around but rarely in the major cities. Investment values suck because you don't own the land and new decent trailers aren't cheap.
A cousin lives in a double wide out west and the park decided to sell off a chunk of the property for a strip mall. She was OK but the ones on the sold property were screwed. The trailers had been there so long they would have fallen apart if they got moved.
Isn't there one along Mississauga Rd near Belfountain? Pretty sure I saw it when riding in that area.
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