Tag Archive: investment


Condo expert Jai Wadhwani reveals six key things investors should research before purchasing a condo unit

Dec 16, 2009 – Buying a condo unit as an investment property can be tricky, but if you consider several key fundamentals, you are more likely to end up with a winner. As always, each of these areas should be carefully examined and the more information you can gather, the better.

1. LOCATION

With location comes all factors that define an area, including amenities that are close to the development. For example, investors should check out the local neighbourhood’s transit, retail stores and restaurants, entertainment centres and offices or places of employment. You will be able to sell or rent your unit based on a potential buyer’s and renter’s desire to be close to work or shopping facilities. You will then have an advantage over another property, which may be a safe location, but doesn’t offer anything extra or meet the specific needs of a client.

2. LAYOUT

The layout of a condo can allow you to increase the selling price between $20,000 and $50,000. You can do this by paying close attention to the details of a project. For example, if there is a one-bedroom plus den and the den is large enough to convert to another bedroom, this increases revenue because now your unit is in the two-bedroom price range. Before buying, always look for ways to make improvements on any given unit.

3. POTENTIAL PROFIT MARGIN

Look at several similar units and determine an average price per square foot. Once you have this figure, you can look at what the current market value is and compare it to nearby developments. If yours is higher or lower in value than others with the same projected occupancy dates, then you may want to compare such factors as what finishes or features are being offered in your project. This is also where your agents’ expertise comes in handy. For example, project one has granite counters and offers stainless-steel appliances with hardwood floors. Project two does not come with granite, has white appliances and carpet versus hardwood floors. Some buyers may pay between $8,000 and $10,000 more on the purchase price for project one. You may even be able to increase the rent based on a market that would pay extra for these features.

4. FUTURE DEVELOPMENTS

It is important to know about future developments like what residential and commercial buildings will be coming up near your investment. For example, if you are aware of a future condominium being built within proximity to your investment, find out what they may have to offer compared to your development. An agent will be an excellent tool as they may be in contact with certain builders in the area. Look at both advantages and disadvantages. This will help you determine what factors to point out to a potential buyer or renter and make your unit stand out amongst the masses.

You will also want to look at any upcoming commercial developments such as a grocery store or a coffee shop. These are great selling points to a potential buyer or renter and point to economic growth in any given area.

5. BUILDING AMENITIES

Being aware of what amenities your condominium offers over other buildings will help determine the price point. For example, you can look at a building with high-end amenities. While the amenities are excellent and better than any other building nearby, will your buyer or renter be willing to pay for it? There must be a price tag attached, either in the purchase price or in the maintenance. Some people, for example, may prefer location over amenities as they may not use the gym or pool. Find out what renters in the area prefer, as this will help you determine which development is the right one for you.

6. WHAT IF SCENERIO

If you’re buying off the plan, consider what will happen by the time the project is complete. What will happen to the market in two, four, 10 years? Make sure you look at all aspects and plan for the long term. What if you can’t sell the unit? Will you be able to afford to carry it and for how long? What will your carrying costs be and how will that compare to the rent you receive? What if the unit sits vacant; how long can you last if there is no one to rent it? Be sure to go over all factors to ensure that you can handle a condo as an investment property.

Jai Wadhwani is a sales representative at Royal Lepage Meadowtowne Realty in Mississauga, Ont. For more condo information, visit www.findmeacondo.ca.

From the October 2009 issue of CRE

source: http://www.canadianrealestatemagazine.ca/Features/39334/details.aspx

Luxury Living in Canada

This is an article from Canadian Real Estate Magazine by Suzanne Sharma.

LUXURY LIVING
As real estate prices across the country continue to climb, owning a big-ticket home is no longer just for the rich and famous. In fact, in some markets a million-dollar price tag is merely a starting point. Suzanne Sharma looks at whether it’s really worth breaking the bank for these high-end properties
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One of the driving forces behind the increase in Canada’s overall real estate market is the nation’s luxury market, defined as properties and homes that are worth more than $1 million, have desirable amenities and scenic views, and are in a good location with a low crime rate. According to the 2007 Carriage Trade Luxury Properties Poll, 12% of Canadians reside in homes that fit this description.
“The great strength of our economy is allowing senior executives and those that are affluent to get into the luxury home market,” says Darryl Mitchell, manager at Royal LePage Real Estate Services Ltd. “If they’re already in that market, then they’ve been able to increase their equity and invest.”
According to a report by Merrill Lynch and Capgemini, the number of Canada’s high net worth individuals – defined in this case as people with assets (excluding primary residence) exceeding US$1 million – is growing at an annual rate of about 6.9%. As incomes rise, these individuals are finding it easier to purchase high-end properties.
A safe bet?
Mitchell notes that the tax structure in Canada encourages buyers to purchase more expensive homes. “One of the only ways that a person can gain wealth and not get taxed is by the purchase and sale of a home,” he says. “A single-family residence is exempt from being taxed.”
However, these high-end homes are not for the average Joe, since it could be extremely difficult to meet mortgage payments. “Some people might be tempted to buy a very expensive home with mortgage payments at the verge of their capabilities because our rates are still very low and might go even lower next year,” says Walter Koziej of Mercury Mortgages Inc. “But what happens three to five years down the road when the rates do go up? It’s a disaster waiting to happen.”
Luckily, Canada’s mortgage system typically doesn’t allow people to borrow over their limit. The sub-prime lending crisis in the United States, where lenders offered borrowers a low rate for a short period of time and then dramatically increased the rate for the rest of the term, is not an option here.
If you have the funds to purchase a luxury property, then Vancouver, Calgary and Toronto lead the luxury market race with average high-end prices greater than $1million. According to Royal LePage, Edmonton is also gaining momentum, with the average luxury home just shy of the mark at $950,000. This makes the city a good buy now, since many realtors in the area are expecting Edmonton’s high-end market to soar in the next few years.
Vancouver prices breaking records
British Columbia still boasts the most expensive real estate in Canada, with cities such as Vancouver, Victoria, South Surrey and Kelowna all breaking the $1 million average point, according to RE/MAX.
Vancouver is also the province’s top producing city in terms of investment dollars. According to RE/MAX, the average luxury property in Vancouver costs more than $2 million and the average price per square foot is $2,000. In fact, it is almost impossible to buy a property for less than that in the downtown and inner-city areas.
“Prices have increased so much that the average person with the average income cannot afford to buy a condo in the downtown core, so they have to buy outside the city,” says Christa Frosch, real estate agent at Sotheby’s International Realty Canada. “Therefore, there is more high-end product sitting on the market due to price appreciation.”
The high prices have not deterred international investors from purchasing within the city. These types of buyers, classified as ‘ultra-upper-end buyers’, typically purchase properties listed above the $2 million price point.
“Before, Vancouver was kind of a sleepy town and not really on the radar,” says Ben Kielb, real estate agent at Sotheby’s International Realty Canada. “I don’t think the market warranted having luxury properties because it was too risky. But now you’re attracting investors from Eastern Europe, China and Dubai, and you’re opening it up to the world.”
Additionally, the ageing Baby Boomer population has taken an interest in Vancouver real estate. “Baby Boomers are a very large market segment and have taken advantage of significant amounts of equity buildup over the last few decades,” says Cameron Muir, chief economist at the British Columbia Real Estate Association. “Many of them are translating that equity into luxury properties. The wealth of the Boomers is adding to demand.”
Waterfront properties and homes with mountain views tend to be the investment of choice for buyers. According to RE/MAX, areas west of Vancouver, such as Kitsilano and Coal Harbour, have had the highest appreciation, as well as unit sales, with many properties selling in 30 days if well priced.
Calgary surges ahead
2006 proved to be a booming year for Alberta’s real estate. It was a period when in-migration increased, creating a buyer frenzy, which subsequently caused property prices to rise. Calgary became a city with a prominent luxury market and an average price of $1 million, according to RE/MAX.
The capital that is being made in the oil and gas industries in Calgary is attracting many executives who are moving into the area and purchasing high-end real estate. Additionally, the city boasts one of the highest average family incomes in Canada.
“People pay a lot more here in the luxury market than even in the United States, but people will buy here because the job market is so good,” says Thomas Keeper, real estate agent at Century 21 Terrace Real Estate.
There has been a 57% increase in high-end units sold in Calgary, according to RE/MAX. Keeper notes that two years ago, only half of the homes priced at more than $1 million would sell in the first year, whereas now these properties generally sell within three months.
Lakeside properties south of Calgary in Lake Bonavista, Arbour Lake and Auburn Bay are the most popular with buyers. Additionally, country estates that are situated on two- or three-acre lots are an investment of choice.
“If you can afford the high-end payments, it’s a win-win situation,” says Keeper. “If the market goes down, you get to live in a beautiful home, and when the market goes up, the gains are exponential.”
Toronto tops the luxury meter
Real estate in Ontario has continued to swell in both price and units sold. Areas such as Kitchener, Mississauga, and Hamilton have become excellent investment opportunities; however, it is Toronto’s luxury market that has taken the province by storm.
In the first three quarters of 2007, 2,201 high-end properties were sold, a 33% increase over the same period last year, according to the Toronto Real Estate Board. In many parts of the city, entry into the luxury market will cost closer to $2 million, which is quite an increase from 25 years ago when the highest properties were in the $300,000 price range.
The most sought-after homes in the city are just north of downtown Toronto in the Forest Hill area, which is up 78% in sales year-over-year, and Rosedale, which is up 13% in sales year-over-year according to RE/MAX. In the north end, Yorkville is the number-one choice for high-end condominium investors, with the Four Seasons Private Residences, Trump International Hotel & Tower and Shangri-La all selling at a rapid pace.
“The biggest reason for the increase is immigration,” says Mark McLean, partner at Sotheby’s International Canada. “We’re seeing a lot of people coming from other parts of the world who are looking for stability, cleanliness and education, and the reality is that in other parts of the world such as Paris, London, New York, real estate is so expensive.”
The average high-end property in New York is about $5,000 per square foot according to McLean. In certain parts of Paris and London, luxury properties are averaging about $8,000 per square foot.
Risks and rewards
Buying high-end definitely means that you get the very best in location, amenities and features, as long as it is within a price range that you can afford. However, if it’s an investment you’re looking for, the luxury market carries a higher level of risk.
“If the market cools or goes sideways, luxury homes are tougher to get rid of,” says Kielb. “It’s a lot easier to sell a $300,000 condo than a $5 million home. People are a little more hesitant and cautious.”
It is also more difficult to invest in a luxury rental property. McLean notes that there isn’t a great deal of product on the rental market that is high-end. Additionally, once a property becomes available, it stays on the market much longer since rent prices are typically between $5,000 and $10,000 per month. Therefore, it would be more beneficial to purchase two $500,000 properties instead of one $1 million property.
On the flip side, when a market appreciates in value, investors who buy high-end will achieve greater returns on their purchase. “It works with percentages,” says Keeper. “Where a home priced at $500,000 will increase yearly at a rate of about 10%, it will be the same as a home that is worth $5 million.”
The most important factor when purchasing high-end is the higher utility costs, fees and renovation expenses. If these items are affordable, then buying within the luxury market can be a sound purchase.
“A home is a sanctuary and I think this is particularly true for high-income earners,” says Maureen O’Neill, president of the Toronto Real Estate Board. “Astute businesspeople also recognize that real estate is an excellent long-term investment, so really, there’s no better way to pamper yourself than to invest in a spectacular home.”

Knowledge is power;
Solid foundation of knowledge is the roots of a tree.

By: Sharon Hiebing

Should a Real Estate Investor have a real estate license in order to be successful? Often new investors will ask themselves this question.

What is the answer? Well, it depends on the person asking the question. There is no right or wrong answer. First, each investor must look at their goal in real estate investing. Do they want to purchase one property a year, or twenty?

If they’re taking the “slow and steady” approach, then access to a lot of property will not be a high priority. This investor can take their time in locating profitable markets, performing market research, acquiring team members, and making offers that are accepted. They basically can accumulate their resources and leads through methods other than being a real estate professional.

If, however, they want to invest at a consistent pace, with a goal of one to two properties a month, and they want to do it in their own backyard, then perhaps having a license would be beneficial. This would give them access to all inventory on the market, in addition to “insider tips” on new or upcoming listings.

In fact, in a buyer’s market, they may turn a potential listing into an investment purchase, creating a win-win for the seller and the agent, since in a buyer’s market it can take many months to sell a home, and they’ve just saved the seller the realtor commission.

If an agent operates in an area that does not meet their investment criteria (i.e. cash flow, appreciation, etc.), then there obviously is no benefit to becoming an agent in the first place if one of their primary goals is to find investment property.

As many realtors will tell you, it is not an easy job. You have to work when everyone else doesn’t, which means a lot of nights and weekends. People will want to negotiate your salary. You may play tour guide instead of agent if you’re not good at pre-screening clients. And in a down economy, you may find yourself with very little to no income.

So should you become a realtor just because you’re investing – not unless it’s a job you really want to do and finding viable property is simply a perk!

People generally think they need to have an extensive education in real estate before they can invest. This is simply not true. There are so many ways to get experience without taking risks that it would be silly to spend six months to a year getting a real estate license before you made your first investment.

Yet, many people do exactly that. They feel they must read a ton of books or attend a bunch of seminars before they can “pull the trigger.” Don’t misunderstand. Education is very important. But when it is sought after to the point of preventing you from taking action, it can become a liability.

Usually people have a lack of confidence in their abilities when it comes to doing something new for the first time. If this is the case, then hire a coach, or find a mentor. In fact, many successful people feel when it becomes time to try something new, they need to have guidance from someone with experience.

After all, why should anyone re-create the wheel when there is always someone out there who has been there, done that. If they’ve already attended the “School of Hard Knocks,” why should you become one of its alumni? Finding a Coach or Mentor can save a lot of time, a ton of money, and a great deal of heartache in the long run.

So, do you need a real estate license to be a successful investor? It depends…..

source: http://www.real-estate-article-directory.com/Articles/Do-You-Need-a-Real-Estate-License-to-be-a-Successful-Investor-/5357

Trump VIP tickets

Trump VIP tickets

On May 24th, 2009, I attended a seminar by Trump Institute. The speaker was Tim Payne, an associate of Trump. He specializes in real estate investment. He also ignited the fire within me to begin my research and to learn more about real estate foreclosures. 

Over 90% of wealthy people in the world earns their majority of money from real estate investments. Right now, with the global economy at the bottom of the pit, the prices on properties and real estates is at an all time low. The banks are foreclosing more assets than ever in the history. Right now is the perfect timing for me to step into the realm of real enstates. With the help of consultants from the Trump Institute, Iwill be given the right path to walk down with tibs  (real estate insider trading information, completely legal) provided by the consultants, I will be able to have an opportunity to build up a real estate portfolio. Of course, with work, dedication, and good judgement!

My goal by the time  I turn 25 y/o is to have at least $1 million in asset. This also fits Wall Street’s definition of wealth, having a million dollars working for you”. Learn to let the money work for you. You’re the employer, your money is the employee.

Wealthy people have 3 things in common

  1. If want to be wealthy believe it’s possible
    • Faith is moving cause of all action
    • Willing to pretend you’re wealthy before you can be wealthy
    • I’m FUCKEN WEALTHY!!!!!
    • Read “the secret” AGAIN
    • Hang out with people making great money
  1. Two sides to every equation
    • Want to be on the right side!
    • Wealthy people only look on the right side
    • Ex. If own thousands of gas barrels, will think gas price is TO LOW
    • Wealth is just work, the right way
    • Wealth has nothing to do with genetics
  2.         Pull the trigger
  • Make a decision
  • Don’t second guess
  • ¾ of solution to problem is to admit it exist
  • Never been indecisive
  • Never live from pay cheque to pay cheque
  • Ignorance is most expensive commodity on earth
  • Education is the highest priority investments
P.S. Don’t watch CNN (Constantly Negative News)
3 big days are coming up, June 4-6, 2009. I have enrolled in a training by Trump Institute to learn about the process of becoming a real estate investor. 
Currently, I have tapped into 3 type of business that are at their momentum stage. I will be continuously using my greatest effort to make them as profitable as possible during the next 3 months.
  1. Energy Savings Group (the natural gas industry)
  2. Real Estate investment
  3. Market America (e-commerce/direct marketing)
  4. online advertisements

How will I suceed? C.A.N.I.

    Constantly…and…Neverending…Improving!