COVID and the housing market | Page 173 | GTAMotorcycle.com

COVID and the housing market

My only real trainwreck was a family from Australia that had relocated. What crtedit check we could run "seemed" ok. Turns out they had escaped massive business debt by hiding in Canada.
Last straw was nieghbour calling me from Kitchener , the Aussies are having a garage sale , some of the stuff looks like yours and is really cheap. I had put a mountain of stuff in a locked basement store room , they broke in and sold the stuff. ie: $1500 AllClad pot set for $50.00 , $6k worth of silver flatware for $500. It was a gong show. Police said it was a civil problem , I asked about stolen good being sold? Police said "they said it was thiers". Lesson learned .

And never underestimate a criminal.
 
I did not raise rents for my tenants during the time they were there. Probably lost 100-200k in selling price over it. I tried to be the best landlord I could for the residents and always was very attentive and responded quickly to any issues that arose. When I was living there it was easy, but also annoying when they could just walk up and knock on my door.
 
Evoex said:
Once my aunt is out of the picture on our cottage my plan is to Airbnb it. Lakefront property on a small lake is easy money, imo.
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We've tried to do that with our cottage in Wasaga. But parents are 100% against it. It's not on the water, and my mom is really worried that people won't take care of it.

If it's ever passed to us, we plan on gutting it, updating it, and then renting it out AirBnB.

My neighbour does it to his cottage near Parry Sound. 30-50k/year. On the water.
 
mimico_polak said:
While I think realtors are way overpaid for what they do. I think the vast majority of them aren’t making anything special in terms of annual salary after the commission splits and payout to brokerage.

Landlording all depends on your skill set and ability to deal with people. If you’re not handy you pay handsomely. If you are….it’s awesome.
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I don't know what has changed since I had a heart to heart talk with a RE salesperson long ago. They were at that time considered self employed. They even had to rent desk space at the office, now probably WFH. Paid for their advertising, car expenses, signage, phone etc. Commissions back then were 4 - 6 percent split four ways. RE listing company, listing rep, RE selling company and selling rep. Percentages were negotiable but averages would be 1.5%.

Today the rates are negotiable to a few percent. 3% of a 2 million sale = $60 K = $15 K each. The trouble is the low stock of houses and the number of wolves going after the listings. $15 K a week after listing is good but the next listing could be months away. The lifestyle is a lot of rejection and evening / weekend work. Never shut the cell phone off.

A colleague's cousin is a high performer in the market. He's described as 50 YO going on 70 and there's a family pool as to when he dies of a heart attack.
 
mimico_polak said:
We've tried to do that with our cottage in Wasaga. But parents are 100% against it. It's not on the water, and my mom is really worried that people won't take care of it.

If it's ever passed to us, we plan on gutting it, updating it, and then renting it out AirBnB.

My neighbour does it to his cottage near Parry Sound. 30-50k/year. On the water.
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A buddy is being audited because of suspected undeclared AirBnB income -- looks like Rev Can is tracking AirBnB rentals. She getting ready for the pain of an ungreased finger on 3 years of undeclared income.
 
Mad Mike said:
A buddy is being audited because of suspected undeclared AirBnB income -- looks like Rev Can is tracking AirBnB rentals. She getting ready for the pain of an ungreased finger on 3 years of undeclared income.
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Presumably you could write off the expenses vs the income. That assumes that the expenses were documented. This is going to be like the ebay days. CRA has a record of income and gets thousands to bend over. CRA gets to leave the uber rich buddies of the politicians alone and stick it to slightly rich normal people that played fast and loose with reporting.
 
Mad Mike said:
A buddy is being audited because of suspected undeclared AirBnB income -- looks like Rev Can is tracking AirBnB rentals. She getting ready for the pain of an ungreased finger on 3 years of undeclared income.
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I have zero sympathy for people that dodge taxes in a way that makes housing unaffordable for people. Real estate has been touted as an 'investment' for too long.

I paid my taxes each year, and spent close to 70k in capital gains once we sold our building. Mind you I was able to drop 75k into my RRSP room, so that all worked out.

As per your comment @nobbie48 the market for agents is ridiculous. People think it's easy money. It's not. If you're a buying agent, your only way of getting paid is to get your client/customer to 'pay more because there are more bids'.

As a selling agent, the hardest part is getting the listing. The selling is super easy nowadays. Drop the ad, and wait for the calls and bids to come in.

Then you can sell 'over asking' and market yourself again.
 
GreyGhost said:
Presumably you could write off the expenses vs the income. That assumes that the expenses were documented. This is going to be like the ebay days. CRA has a record of income and gets thousands to bend over. CRA gets to leave the uber rich buddies of the politicians alone and stick it to slightly rich normal people that played fast and loose with reporting.
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You can definitely write a lot off. Especially considering that you have to travel to your property to check it out, have it cleaned, prepared, upkept, etc etc etc.

Just depends on how creative you want to be, and how big your risk tolerance is.

This is where a good accountant is key. We kept fairly solid books, and I've got a few more years before I can burn all these receipts and proof for good.
 
mimico_polak said:
You can definitely write a lot off. Especially considering that you have to travel to your property to check it out, have it cleaned, prepared, upkept, etc etc etc.

Just depends on how creative you want to be, and how big your risk tolerance is.

This is where a good accountant is key. We kept fairly solid books, and I've got a few more years before I can burn all these receipts and proof for good.
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I was more implying that many of these undeclared AirBnb's probably pay out cash for cleaning etc so there will be minimal trail of eligible expenses. Operating half in the light and half in the dark is probably the stupidest way to run. Not highly likely that there is an accountant involved as they would be leaning on you not to be such a huge moron. Furnished Airbnb is a great way to update the decor in your house using pre-tax money (put it in the rental, post pictures of the unit for rent, revise furnishings in rental every few months).
 
GreyGhost said:
I was more implying that many of these undeclared AirBnb's probably pay out cash for cleaning etc so there will be minimal trail of eligible expenses. Operating half in the light and half in the dark is probably the stupidest way to run. Not highly likely that there is an accountant involved as they would be leaning on you not to be such a huge moron. Furnished Airbnb is a great way to update the decor in your house using pre-tax money (put it in the rental, post pictures of the unit for rent, revise furnishings in rental every few months).
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There's an empty house on our street. Fully renovated...listed for $6,000/month rent.

Ad goes up, ad goes down. 6k/month in income to show 'see look we found a tenant'. Easy way to clean some cash money. Throw some expenses into the mix.

Frak I'm dumb.
 
Mad Mike said:
I suspect a lot of cash is going to flow into smaller homes further from big cities. A combination of immigration incentives, WFH opportunities, threat of increasing mortgage rates, and the fact a many of rural homes are priced less than the cost to build. The $$$ gains may appear small, but the percentage gains outside the GTA are proving to be enormous.
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Yes sir. Look at KW - London - Ingersol, holy moly rent and housing prices. No clue how the students will be able to afford rent :(
 
george__ said:
Yes sir. Look at KW - London - Ingersol, holy moly rent and housing prices. No clue how the students will be able to afford rent :(
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Personally I wouldn't chase real estate in SW Ontario. Those prices are rising on excitement - most are defying supply/demand economics, so you know it's dumb money (speculators) flowing in. Same thing for Barrie and Peterborough.

It's a bit different in the GTA and rural Ontario. In the GTA there is no more developable land -- demand growing, supply side not easy to fix so prices face upward pressure. Rural ON has a lot of residential property that costs less to buy than it would cost to build, as demand builds prices can rise until build vs buy gets near par.

Small city ON is different. There is lots of development land available, it's just not under development yet and houses are priced above their build cost. Once the big builders see profit in those places, they will start clicking out cheapie track and townhomes by the thousands. I also think these areas are the most likely focus for federal and provincial house market easing as there land supply is not constrained. Opening the floodgates to developers will most certainly put downward pressure on prices.

I guess we will see.
 
GreyGhost said:
Presumably you could write off the expenses vs the income. That assumes that the expenses were documented. This is going to be like the ebay days. CRA has a record of income and gets thousands to bend over. CRA gets to leave the uber rich buddies of the politicians alone and stick it to slightly rich normal people that played fast and loose with reporting.
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My accountant related related the story of a client that did a ton of cash business, paying for supplies and wages in cash. Unfortunately he put all his personal expenses on a credit card to get the loyalty points. CRA saw big spending on little income and Ouch.

The guy should have laundered the money through the sale of his prime residence, leading to the point, Who benefits from the soaring house prices?

A market newcomer working stiff doesn't benefit.

A present homeowner that wants to move up has a foothold but the market is fast and furious and unless one also has bags of money it can be a nail biter. Not a guaranteed win in a market where one has to make hasty decisions.

A retiree who wants to move two hours or more out of the city is OK for now but if anything goes wrong, health, family, finances, expectations etc, he could be screwed trying to get back in.

The real winners are the flippers, speculators, tax manipulators and money launderers.
 
mimico_polak said:
What happens if you move, market tanks, and now you're in AB instead of here? (unlikely but with impending increase in rates...anything can happen).

Just make sure you look at ALL the options before pulling the trigger.
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Then you better makeup the guest room or the couch…😬
 
Evoex said:
Then you better makeup the guest room or the couch…😬
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If the MIL wasn’t living with us I’d be happy renting out that room to help out with mortgage!

Just looking at houses in our area for comparison. Saw a couple potential properties.
 
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