It can also be a business owner. They know their staff need a place to live so you include board and pay less (or pay the same and subtract board). Shady if they took it this far but in boom towns it's a way to ensure you have the staff you need. I know of a resort operator in Ontario that will only hire staff if they stay on site. That's a way for them to reduce expenses (board at a resort is expensive) and extract many unpaid hours (you can't leave and you are within earshot, what else are you supposed to do with your time). Sketchy as but they have gotten away with it for decades.
I worked at Big white in Kelowna in 2007 and this is what my boss did - had a big house separated into 4 apartments and a rough count from what I remember around 16-18 of us living there. Forget how it came off on my pay cheques but the rent was siphoned off somehow. Panorama is building a big staff apartment building currently. Same house I lived in was for sale about a year to year and a half ago - $460,000, listing said it brought in 50-60k a year in rental income. Was very tempting to purchase and rent for 10 or so years to pay it off the knock it down and build something new for personal use. House was from the mid 80's or so. Very large and would need a lot of upkeep. Would have been a headache being so far away and many flights there and back but kind of regretting not buying. Resort is also 45 mins away from the town itself so kind of in the middle of nowhere and would need a vehicle. Hard to decide where to purchase a recreational property with so many great places out there.
Sort of. I don't think the dwellings selling are equivalent. The more expensive part of the market is pausing to see what happens. That drops average. If you look at houses that sold in 2021 and again in 2022, they are up (normally about 10%). The market didn't have a 40-50% rise in the last year.
Sort of. I don't think the dwellings selling are equivalent. The more expensive part of the market is pausing to see what happens. That drops average. If you look at houses that sold in 2021 and again in 2022, they are up (normally about 10%). The market didn't have a 40-50% rise in the last year.
Sort of. I don't think the dwellings selling are equivalent. The more expensive part of the market is pausing to see what happens. That drops average. If you look at houses that sold in 2021 and again in 2022, they are up (normally about 10%). The market didn't have a 40-50% rise in the last year.
I think your spot on. BIL has been looking to buy now for quite a while. The open houses popping up in the area hes looking are priced much lower then open houses several months ago but also seem to need a lot more work (kitchens, washrooms, floors, windows etc etc). Guessing people that can afford to, are holding off selling till the market stabilizes or pops back up.
There's a lot of ways to spin price data, I don't think you can pull average prices when the inventory position changes so dramatically and the mix of condos, houses, pre-build, and assignments are so different by area. Is this showing listings? Sales? Price Drops?
My guess is this is skewed in a negative direction based on movement in prebuilds and assignments, I'd need to see examples of price drops to buy into this data.
Question to the folks shopping for real estate: Have you noticed a 25% discount as you look for a place?
There's a lot of ways to spin price data, I don't think you can pull average prices when the inventory position changes so dramatically and the mix of condos, houses, pre-build, and assignments are so different by area. Is this showing listings? Sales? Price Drops?
My guess is this is skewed in a negative direction based on movement in prebuilds and assignments, I'd need to see examples of price drops to buy into this data.
Question to the folks shopping for real estate: Have you noticed a 25% discount as you look for a place?
Other than a few that were quite optimistically priced to begin with, I haven't seen any movement in that range. More like 5 to 10% below expected march prices. News loves to look at arbitrary timeframes to make headlines. Nothing was special about march other than it was in retrospect a peak. But that doesn't mean they were properly valued then, it may just have been peak craziness. Look at a longer timeframe like a year or pre-covid and the numbers are entirely different.
I have seen a couple of sales outside barrie for six figures and a few sold conditional. Neither of those were happening for the past few years.
Certainly the market has paused. Indications are you can expect to be ‘losing’ value of maybe $20k week in my area. You’re certainly gonna see conditions from buyers start to make a comeback.
Like someone else said; I expect no one is panic selling yet. I don’t have to sell, but we don’t want to be landlords.
Certainly the market has paused. Indications are you can expect to be ‘losing’ value of maybe $20k week in my area. You’re certainly gonna see conditions from buyers start to make a comeback.
Like someone else said; I expect no one is panic selling yet. I don’t have to sell, but we don’t want be landlords.
On the flipside, if you have a house with no mortgage, holding it vacant costs you in the ballpark of $500-1000 a month and a bit of time to check on it. No reason to take a six figure bath to stop the bleeding. You can afford to wait if you want and think prices will rise in the future.
On the flipside, if you have a house with no mortgage, holding it vacant costs you in the ballpark of $500-1000 a month and a bit of time to check on it. No reason to take a six figure bath to stop the bleeding. You can afford to wait if you want and think prices will rise in the future.
Will you sister let you HELOC the house? That house should climb faster than property outside toronto. Heloc separates you getting the money and needing to sell. Obviously not a perfect solution (more complicated, interest expense, etc) but if it is dropping 20K a week, that seems unreasonable and would cover a lot of hassle and expenses if waiting lets you sell in a more stable market.
Will you sister let you HELOC the house? That house should climb faster than property outside toronto. Heloc separates you getting the money and needing to sell. Obviously not a perfect solution (more complicated, interest expense, etc) but if it is dropping 20K a week, that seems unreasonable and would cover a lot of hassle and expenses if waiting lets you sell in a more stable market.
I would explore the HELOC option...especially if there's no mortgage of the property. If you can HELOC 60-80% of the value...you can effectively get 600-800k to do with as you please at a low interest rate (Prime+1% or so).
Buy investment property elsewhere...expense the interest and let the money work for you.
BTW....it's me...your long lost cousin, can I borrow 500k? You know...for family.
On the flipside, if you have a house with no mortgage, holding it vacant costs you in the ballpark of $500-1000 a month and a bit of time to check on it. No reason to take a six figure bath to stop the bleeding. You can afford to wait if you want and think prices will rise in the future.
Loss on capital is an interesting point, makes up the majority of your costs and may not apply. If evo's house is dropping by 20K a week in market value based on fear, holding out for a year could be brutal or it could get past the fear mongering. You can't know the loss of capital until after it's sold (and there is a real potential that it is not a loss but it is a positive of similar magnitude). That's why I left it out. Sure, rent could improve your return but he doesn't want to do that. That is missed income not a real loss. If you want to head down that road, you could look at potential airbnb income and drive up your lost income even higher.
Will you sister let you HELOC the house? That house should climb faster than property outside toronto. Heloc separates you getting the money and needing to sell. Obviously not a perfect solution (more complicated, interest expense, etc) but if it is dropping 20K a week, that seems unreasonable and would cover a lot of hassle and expenses if waiting lets you sell in a more stable market.
HELOCs are getting tougher these days, I'm guessing conventional lenders will be looking at 50% LTV and 40% TDS for revolving secured credit (LOC/HELOC), a conventional mortgage, is easier to get and the rates will be better, and you can go 80% LTV.
Loss on capital is an interesting point, makes up the majority of your costs and may not apply. If evo's house is dropping by 20K a week in market value based on fear, holding out for a year could be brutal or it could get past the fear mongering. You can't know the loss of capital until after it's sold (and there is a real potential that it is not a loss but it is a positive of similar magnitude). That's why I left it out. Sure, rent could improve your return but he doesn't want to do that. That is missed income not a real loss. If you want to head down that road, you could look at potential airbnb income and drive up your lost income even higher.
Loss on capital is net of rents (rents are income on an investment) you would sustain that on any poor-performing investment -- none the less it's a real cost, one that not every investor considers or understands.
Capital losses are harder to predict (the $20K/week discount) -- complete crap shoot -- depending on the market on any given day.
I would be at a loss as to what I would do in his position - but I would look at it as an investment and not like I look at my primary residence. If I bet on continual losses I'd liquidate to stem the bleed, invest in something conservative that spits dividends, then hold on reinvesting in real estate until I thought things were bottoming out to jump back in.
It matters a bit less in your own house as you are effectively offsetting 'rents' in the sense that you're not paying them elsewhere, the $4000/mo it would cost you to rent another person's Oakville house isn't an outflow. For a vacant investment, things are a bit different.
Yes and no. You’re comparing Barrie to a Toronto property where tax is less than half of that amount.
You’re also not losing rent per se as it’s sitting empty so the $5000 is a magic number.
Gardening - do it free yourself
I say holding a house is a much better option than dealing with tenants if you don’t want to.
@Evoex I can be your property manager and deal with the tenants on your behalf. Been a property manager before.
EDIT: my personal opinion is (if you don’t want to be a landlord)…
Let your sister live in it rent free. Except utilities and the property tax, etc
Take out HELOC
Use HELOC money for whatever floats your boat
The interest on the HELOC will easily be outweighed by the capital gain on the property
Obviously there’s the issue of splitting gains with your sister. But that’s between the two of you.
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