Real Estate Investment..
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About Residential ReSales in GTA in 2008:
Feb.2008 sales decreased 11.2%
Mar.2008 sales decreased 22.2%
Apr.2008 sales decreased 7.3%
May.2008 sales decreased 16%
Mid-June.2008 sales decreased 14%,avg.price up, and inventory listings are up 17%.
Location: Canada-Glorious and Free
Posted on: 03-07-08 08:56:11
Quote:
Originally posted by JRF
Hi,
Has any one invested in commercial real estate here ? What are the pros and cons against residential real estate ? From a broad perspective, how are the prospects? including investment, rent, tax, maintenance etc..,
Alternatively, how is to invest 20% down payment on a second home and rent both main unit and basement around Brampton where a 3-bed detached home with basement cost around 320-330K expecting the rent to cover the mortgage. I think some of the CDs have invested in second home. Cost benefit analysis? though I couldn't expect a return from income perspective but the cost of land and appreciation of the house in 10-15 years when it could possibly be paid off.
Thanks in advance.
Well, I had initially done residential real estate investing. Now there are ways of investing in residential real estate. There is flipping, there is tear and re-build and there is value appreciation. Since you are looking at value appreciation, let me tell you the experience I had in the area.
Pros are that the market is open and free - meaning at any point you can get out of the market and free up cash. There are many folks out there who have the cash and the means to buy residential real estate at any time of the year. Another Pro is that finding tenants is easy (vis-a-vis commercial tenants)
Cons are that the quality of people now renting a home has dropped. Anyone with even a decent income can get a mortgage and own a place. Another con is that the current rental income is either in the negative cash flow position or very small positive. My personal con is that I do not have the stomach to kick out a family if they default on the rent or damage the property etc.
People invest in negative cash flow properties only if the capital gain from appreciation and the loss write-off in personal taxes. It is a way to switch income into capital gains. I had residential tenants once and the problem was with the thin cash flow and profits, one empty Month meant the years profit was wiped out. I ended up spending about $ 1000 to $ 2000 every year on maintenance like changing carpets, painting, plumbing, electrical, doors, windows etc.. the list was endless. And it grew every time I changed tenants.
I personally did not find it profitable but maybe I was a bit to soft too.
BV
Hi BV,
Thanks for your information. I'm in the process of collecting data including very basic cost benefit / affordability / risk analysis.
Best regards,
JRF.
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The cowards never started,
The weak died on the way,
Only the strong arrived.
http://www.youtube.com/watch?v=_yK1i9cLAMM
Location: Canada-Glorious and Free
Posted on: 04-07-08 09:09:19
Quote:
Originally posted by JRF
Hi BV,
Thanks for your information. I'm in the process of collecting data including very basic cost benefit / affordability / risk analysis.
Best regards,
JRF.
http://www.landlordsoftware.com/
There is a Canadian version that they sell. Canadian mortgages are compounded bi-annually. They have a free trial but it can do all of the analysis automatically.
BV
Location: Canada-Glorious and Free
Posted on: 04-07-08 09:13:35
Quote:
Originally posted by Big Vee
http://www.landlordsoftware.com/
There is a Canadian version that they sell. Canadian mortgages are compounded bi-annually. They have a free trial but it can do all of the analysis automatically.
BV
Sorry try this link to get the canadian version.
http://www.landlordsoftware.com/real-estate-investment-software-canada.htm
They have all kinds of specialty versions now. I use the Cash Flow analyzer which is designed for value investors. There is a flippers version. No one needs the property mgmt version. The cash flow version has the mortgage cash flow (amortization schedule) built into it - so you don't need that either.
BV
This calculator seems to be a great tool.
Are you sure that it covers CRA guidelines for investment properties?
Regards,
-----------------------------------------------------------------
Amit Kalia, Broker, REALTOR®
RE/MAX Real Estate Centre., Brokerage
independently owned & operated
100 City Centre Dr, Unit 1-702
Mississauga, ON L5B 2C9
Phone No.: 905-339-5111
Website: https://www.realestate-ontario.com/
Condo Blog: https://condopundit.com/blog/
Location: Canada-Glorious and Free
Posted on: 07-07-08 12:36:29
Quote:
Originally posted by amit kalia
This calculator seems to be a great tool.
Are you sure that it covers CRA guidelines for investment properties?
Regards,
Hello Amit,
The calc does not have any preset CRA guidlines on taxes. You input the tax rate that applies to you when you do the analysis.
BV
