Posted on: 04-09-15 11:37:54
Thanks
Quote:
Originally posted by AshwaniG
@ OP please note that bank do not provide mortgage on land . You have to have CASH to buy a land . Either you can use your LOC OR emergency funds if any .
There are many lots avlbl with in GTA including in middle of Mississauga to buy . Some comes with with all permits etc .
I thought they do with the a high downpayment, something like 40%. Here in BC, it's a common practice among Desis to buy land first and then custom build the house. Some people get around it by buying an old dilapidated Rancher (something like bungalow in GTA) with 5% down, live in it for a few months and then raze it all for a raw land.
No you can't get a loan on vacant land no matter how much downpayment . Once can get a construction loan in instalments .
Getting a house / ranch on a mortgage and than tearing it down has a huge risk. Bank can come after you to pay off the mortgage same day as soon you tear it down since house which they mortgaged exist no longer . There are many legalities involved . Definitely it doesn't stop many people to go this route as you can also save a substantial amount on development charges and hassles .
Quote:
Originally posted by febpreet
I thought they do with the a high downpayment, something like 40%. Here in BC, it's a common practice among Desis to buy land first and then custom build the house. Some people get around it by buying an old dilapidated Rancher (something like bungalow in GTA) with 5% down, live in it for a few months and then raze it all for a raw land.
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Quote:
Originally posted by AshwaniG
No you can't get a loan on vacant land no matter how much downpayment . Once can get a construction loan in instalments .
Getting a house / ranch on a mortgage and than tearing it down has a huge risk. Bank can come after you to pay off the mortgage same day as soon you tear it down since house which they mortgaged exist no longer . There are many legalities involved . Definitely it doesn't stop many people to go this route as you can also save a substantial amount on development charges and hassles .
Quote:
Originally posted by febpreet
I thought they do with the a high downpayment, something like 40%. Here in BC, it's a common practice among Desis to buy land first and then custom build the house. Some people get around it by buying an old dilapidated Rancher (something like bungalow in GTA) with 5% down, live in it for a few months and then raze it all for a raw land.
Ah! You're right. I get it.
Quote:
Originally posted by happywoman36
i saw board in Florida $29999 for 5 miles or sq miles. I wonder how much is that in sw ft.? I think it's worth to buy it and forget about it for 10-15 yrs. Just a thought.
If there's no development planned around/nearby in another 10 years, then you won't even recover your money. My advise, do what you do best - invest in Rental properties or at best any 'Motel'.
Quote:
Originally posted by happywoman36
i saw board in Florida $29999 for 5 miles or sq miles. I wonder how much is that in sq ft.? any idea. I think it's worth to buy it and forget about it for 10-15 yrs. Just a thought.
Florida has different property tax structure, income tax structure and capital gains for foreigners and non-state residents, so you get penalised in that regards
Also the loonie is down big time, just a few yrs back when it was on par, such an investment might have made sense but not today
Here's also some very useful information on buying land and/or applying for Raw land mortgage:
http://www.mortgagebrokerkelowna.ca/mortgage_services/14/raw_land_purchase.php
Excerpts from the article:
"According to the banks, undeveloped land is considered to be the riskiest kind of real estate investment to purchase. Typically, financial advisors counsel against land purchases for the majority of all private investors. They believe that it is at best, only a place to invest funds that you are confident you will not need to utilize in the near future. The following issues are what make investing in land such a risky business.
a) In all forms of real estate, raw land is considered to be the most liquid investment. As a whole, it is considered to be an illiquid investment genre. This means it can often take years to sell certain land parcels and may be difficult to become marketable in the future no matter what price it is listed at. As well, land development is often subject to a variety of regulations and environmental testing.
b) Since the land is considered to be indestructible, as far as federal income tax purposes, there is no depreciation allowed. The municipality where the land is physically located is governed by zoning that dictates how the land can be used and developed.
c) Most raw land purchases generate no income during their ownership period; hence, this creates a negative cash flow situation due to the accrual of annual property taxes.
Due to the above factors, most lenders will usually only lend up to 50% of the market value of the land. Certain trust companies may consider lending up to 75% in some situations. There may be some farming based lending available if the land is used for agricultural purposes.
Read more about Raw Land Purchase by http://www.mortgagebrokerkelowna.ca"" rel="nofollow">LINK
