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COVID and the housing market
- Thread starter mimico_polak
- Start date
Not wiring but KiTec plumbing was the same deal, an aluminum foil core around plastic pipe , connected to a brass fitting and wait 15 yrs till in all corrodes and blows up inside a ceiling or wall . Little batteries everywhere.
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Mad Mike
Well-known member
Clesrly your not a local.politician! A $200m govt boondoggle would see a lot of cash oozing from local contractor wallets.
It comes in the form of free work (how about a new kitchen or HVAC), meals and entertainment ( liquor & whores), or just stacks of cash.
Everyone gets a taste.
Friends bought a six bed rental house in kingston (1600 sf finished) for $540k. The plan is to rent it to students for $4,800/mo. Property tax is about 3K. That should be very profitable for my friends. Property tax is 250/mo, mortgage maybe 2500/mo, that leaves 2000/mo free for repairs or profit from day one (assuming they get their rent number).
Buddy bought a place in Hamilton to rent out. He lived in Mississauga.
He lasted 6 months before he got fed up driving there and back non stop to deal with tenant issues.
My rule (if I can ever afford another rental place) is to be a 30-45min drive maximum to deal with issues.
Otherwise it’s time to get a property manager which eats up profit.
My friends rented a place in Kingston…they had beach parties inside the house.
Literally had sand brought by truck, put it inside the house, and party hard on the last weekend before summer break.
Good luck to your friend. As @crankcall says, I hope they live close to Kingston.
At 2k a month available cash, they could easily hire a property manager and still be very cashflow positive.
On the upside you expect student housing to get treated like that. Normally finishes are chosen with that in mind. When you sell, 99% chance you are selling to another landlord expecting students as normal people don't want to live in the student ghetto (and they can't afford to pay the inflated price for houses that can rent for so much).
Same guy that bought in Hamilton ended up buying 2 houses in Guelph. One for each daughter.
Girls got the master bedrooms, and rented out each room. Place was a dump on Mondays when they came back to school from a weekend at home. But they were able to keep people in check during the week.
Both houses paid off within their 4 year terms, and they kept them for a few more years and flipped for tax free money as a gift from mom and dad.
I knew some people that did that. That was my theoretical plan. When prices went to the moon, I figured the plan was dead. Obviously there are still some situations where it is feasible.
Edit:
For those that finished their degree, this worked out well with everyone well ahead financially. I know a couple families that got burned when the kid dropped out first semester and moved home. Now you own a house far away with no property manager and an empty room. F.
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Sochi
Well-known member
Just read this article and was laughing as I recall my buddy real-estate broker was calling me "stupid" to doubt anything related to "guarantied investment" in DT Condo market... There are waves up and down after all, good for those who can ride this one out..
www.theglobeandmail.com
Looking for blood: Condos nearing completion with mortgage appraisals less than investors paid
They bought presale at the top of the market. Now, with completion near, mortgage appraisals are coming in at less than they paid. The sharks are circling
www.theglobeandmail.com
Ha. "In one case, the original buyer of a one-bedroom, 648-square-foot unit at 88 Queen Condos paid $810,000 a couple of years ago. The buyer tried to sell the contract in the assignment market for $909,000, then recently dropped the price to $860,000 after 86 days on the market. But Ms. Wong points out that a buyer can purchase a unit of a similar size in the resale market for about $700,000."Just read this article and was laughing as I recall my buddy real-estate broker was calling me "stupid" to doubt anything related to "guarantied investment" in DT Condo market... There are waves up and down after all, good for those who can ride this one out..
Looking for blood: Condos nearing completion with mortgage appraisals less than investors paid
They bought presale at the top of the market. Now, with completion near, mortgage appraisals are coming in at less than they paid. The sharks are circling
Now, when they were talking about "investors" (used loosely as I suspect many are far more accurately described as speculators), they are probably in a better position than someone trying to buy a place to live. It will hurt but they should have access to capital to get the deal to close. The person trying to buy somewhere to live probably maxed out everything they had in the offer so higher interest rate and more money required at closing may bankrupt them.
BigEvilDoer
Well-known member
About 1.5 years ago, an end unit townhouse directly across the street from me (in Eastbridge, Waterloo - a nicer area) sold for $1.2M. Another end unit, next block over from mine, which was nicer than the prior unit, sold for $855.5K last week. Ouch.
Short-term price adjustments only matter if you need to sell in the short-term. My real-estate philosophy is try to buy places that you plan on being in for 10 or more years and historically you will be fine. Even if you bought at the peak, by the time there is a dip and then normal growth, you are probably up after a decade. With crazy canada market in recent history, after about two years you are invincible (with the notable exception of bidding wars in late 2021/early 2022 where prices went full panic bubble).
Short term markets are always volatile and erratic. Same goes for investing and stocks, don't try to daytrade and catch a falling knife.
Zoom out and just buy solid companies or stocks that you know will continue to grow and be strong in 5-10 years.
Location Location Location.
I'm an advocate of buying resales in established neighbourhoods. Sometimes that doesn't work, particularly if the house needed is non typical. Good neighbourhoods tend to be more price stable.
The speculators were gambling on a lottery win. Resales in established neighbourhoods are normally more stable (less potential for a lottery win) and they are a lot more expensive ticket. Speculators would rather buy four cheap tickets (each of which they expect to win with) than one expensive one.
Treasure hill bought an entire estate lot subdivision in aurora in 2020. Average of 3M per house, total of 48M. Owners stayed in their houses for two years rent free. Demolition under way now.
www.cagrichmondhill.com
Post | CAG Richmond Hill
www.cagrichmondhill.com
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