Showing posts with label investor. Show all posts
Showing posts with label investor. Show all posts

Wednesday, April 12, 2017

Bank of Canada announces no change in the interest rates today

Greeting from Fabulous Mississauga!

The Bank of Canada announced that they are not making a change to the interest rates today

They will be maintaining the overnight rate at the current level.  This is what the prime rate is based on.

This means that the prime rate remains 2.70%  This is the rate that lenders charge to their best customers.

This is what the Bank of Canada said today in their announcement.

The Bank of Canada today announced that it is maintaining its target for the overnight rate at 1/2 per cent. The Bank Rate is correspondingly 3/4 per cent and the deposit rate is 1/4 per cent.
Global economic growth is strengthening and becoming more broadly-based than the Bank had expected in its January Monetary Policy Report (MPR), although there is still considerable uncertainty about the outlook. In the United States, some temporary factors weighed on economic activity in the first quarter but the drivers of growth remain solid. The US is close to full employment, unlike many other advanced economies, including Canada, where material slack remains. Global financial conditions remain accommodative. The Bank expects global GDP growth to increase from 3 1/4 per cent this year to about 3 1/2 per cent in 2018 and 2019.
In Canada, recent data indicate that economic growth has been faster than was expected in the January MPR. Growth was temporarily boosted by a resumption of spending in the oil and gas sector and the effects of the Canada Child Benefit on consumer spending. Residential investment has also been stronger than expected. Employment data have been robust, although gains in hours worked are still soft. Meanwhile, export growth has been uneven in the face of ongoing competitiveness challenges. Further, despite a recent uptick in sentiment, business investment remains well below what could be expected at this stage in the recovery. Accordingly, while the recent rebound in GDP is encouraging, it is too early to conclude that the economy is on a sustainable growth path.
During the rest of this year and into 2018 and 2019, growth in Canada is expected to moderate but remain above potential. At the same time, its composition is expected to broaden as the pace of household spending, especially residential investment, slows while the contributions from exports and business investment increase. The Bank now projects real GDP growth of 2 1/2 per cent in 2017 and just below 2 per cent in 2018 and 2019. Meanwhile, the Bank has revised down its projection of potential growth, reflecting persistently weak investment. With this combination of a higher profile for economic activity and a lower profile for potential, the output gap is projected to close in the first half of 2018, a bit sooner than the Bank anticipated in January.  
CPI inflation is now at the 2 per cent target, largely because of the transitory effects of higher oil prices and carbon pricing measures in two provinces, as well as other temporary factors. The Bank’s three measures of core inflation, on the other hand, have been drifting down in recent quarters and wage growth remains subdued, consistent with material excess capacity in the economy. CPI inflation is expected to dip in the months ahead, as the temporary factors unwind, and then return to 2 per cent later in the projection horizon as the output gap closes.
The Bank’s Governing Council acknowledges the strength of recent data, some of which is temporary, and is mindful of the significant uncertainties weighing on the outlook. In this context, Governing Council judges that the current stance of monetary policy is still appropriate and maintains the target for the overnight rate at 1/2 per cent.
I hope this finds you Happy and Healthy!
All the Best!
A. Mark Argentino
P. Eng. Broker
Specializing in Residential & Investment Real Estate

RE/MAX Realty Specialists Inc.
Providing Full-Time Professional Real Estate Services since 1987

BUS 905-828-3434
FAX 905-828-2829  CELL 416-520-1577

Thursday, June 11, 2015

Million dollar homes in Canada are not as common as you think

Hello from Beautiful Mississauga!

I just read this article in the Financial Post, the million dollar homes are not as common as you would think


The Canadian Association of Accredited Mortgage Professionals has analyzed data of some 1,400 home sales over the past 27 months and reports the following:
  • Only 1 percent of homes across the country — including condos, semis and detached homes — sell for $1 million or more.
  • Only 2 percent of detached homes across the country sell for $1 million or more — and the vast majority, 83 percent, sell for under $500,000.
  • Only 3 percent of homes in Ontario — the province with the largest share of million-dollar homes — sell for $1 million or more.

 This graph below shows average prices in GTA for single family homes:
 Read more about average prices in the GTA
Even in Metro Vancouver, a city where buying real estate has been compared to gold hoarding, nearly 70 percent of all sales clock in below $800,000.

That is: The average detached home may now run you $1.4 million, but most people are buying townhouses, which average between $300,000 and $800,000, or condos, which tend to fetch between $200,000 and $600,000.

Read the entire article at this page: million-dollar homes are not the new normal.

I hope this finds you Happy and Healthy!
All the Best!
A. Mark Argentino
P. Eng. Broker
Specializing in Residential & Investment Real Estate

RE/MAX Realty Specialists Inc.
Providing Full-Time Professional Real Estate Services since 1987

BUS 905-828-3434
FAX 905-828-2829  CELL 416-520-1577

Thursday, April 16, 2015

Bank of Canada announcement to keep the prime rate fixed at 0.75%

Good morning from Beautiful Mississauga!

The Bank of Canada announced April 15, 2015 that they will be keeping the prime rate fixed at 0.75% 

The Bank Rate (which is the rate that banks charge each other) is correspondingly 1 per cent and the deposit rate (the rate that the Bank of Canada pays/credits any deposits that it is holding for banks) is 1/2 per cent.  The Prime Rate to consumers is set by the major banks and it currently sits at 2.85%

See interest rate trends at this page

I hope this finds you Happy and Healthy!
All the Best!
A. Mark Argentino
P. Eng. Broker
Specializing in Residential & Investment Real Estate

RE/MAX Realty Specialists Inc.
Providing Full-Time Professional Real Estate Services since 1987

BUS 905-828-3434
FAX 905-828-2829  CELL 416-520-1577
  • Thinking of selling your home in the next 3 to 6 months?  Would you like a Complimentary & Quick Over-The-Net Home Evaluation ?
  • Power of Sales and
  • If you have not already signed up to receive my monthly real estate newsletter, you may do so here: On-Line Real Estate Newsletter sign up
  • See seasonal housing
  • Would you like me to send you a desk or wall Calendar?

Monday, October 13, 2014

Are Mortgage Interest Rates going up to down and should you buy hold and sell investment real estate?

I received an email from a reader and thought I would share the question and my answer with you.

The question from Aijaz was:

I love your site.
Thanks for keeping the data up to date.
Lots of good data on it.

Question. Do u think with interest rates going up possibly mid 2015.
This will cause a correction in pricing.

What is your opinion on the over value of canadas house pricing.
Some forecasters saying 20% drop in pricing.

Are you currently on the Buy, hold, or sell model for investment property?

My answer was:

Hello Aijaz

Thank you for your email and kind comments.

You are asking very good questions.  Unfortunately, nobody can predict the future but these are my thoughts and opinion.

I can see the prime rate rising to 3.25 and maybe 3.5% by the end of next year, at the earliest.  Even if/when this happens, the banks will raise their rates only slightly, I don't see them keeping in step with the Bank of Canada Rate. 

Rates will only rise to keep inflation in check.  I don't think that rates will cause a correction in pricing.  Yes, slightly fewer people will be able to enter the real estate market due to a price increase, but I don't feel this will have a large impact on our resale market.

I believe that it will be some other event or combination of events that will cause our real estate market to have a correction.  Our rise in prices has been unprecedented and nearly constantly upward since 1995.  Logic says this cannot continue forever.  Eventually the market increase in prices will slow and possibly retreat.  When this will happen is anyone's guess.  My opinion is that we will have a gradual slowdown of the market prices in late 2015 and into 2016, maybe only a 2 or 3% increase over that period rather compared to previous year over year increases of 4 to 10%  You have to compare figures from the same period previous year as prices fluctuate during the year and you need to watch the month over month trend to get a handle on real estate prices.  Year over year increases are what I am referring to.

Even if rates increase 0.5 or 1% we are still in extremely low interest rate period compared to last 50 years.  I think that these low rates will be with us until at least 2020 and possibly longer.  There is no reason for the rates to rise to 8% or higher and if they did, the economy would have great difficulty absorbing this shock and may crumble and correct as you and many are suggesting.  I feel this is a generational phenomenon, low rates may be with us for 20 years. Rates have been exceptionally low since 2009 and I see rates staying in this very low range well into the 2020's

Our real estate market, similar to the stock market, can have a major correction in a very short period of time.  Our TSX stock market has dropped (corrected - good grief I don't like that word, as it's a drop/loss/fall, not really a correction) nearly 10% since the high in mid September.  In a similar way, if buyers stop paying the prices that sellers are asking and the real estate market softens then we can easily have a correction in the average price of 10% or $60,000 on the current average price of nearly $600,000  It would take about 2 to 4 months for this correction to happen.

I am always of the mindset to buy and hold for the longer term, at least 5 years and more like 10 to 20 or longer.  Buy real estate, hold, reduce original amortization to 20 years, use bi-weekly accelerated payments, pay yourself by making up the $100 to $300 per month shortfall with your savings and let the tenants pay off your investment properties in 15 to 20 years.  Then you can enjoy the income in your later years.

I hope this helps.

If you have more questions, please let me know.

Happy Thanksgiving to you and your family!

Thursday, April 10, 2014

Investment property purchase and rental considerations

It is great to hear that you have decided to become active in the rental investment market.

First you need to decide if you want a single family residential or a multi-residential.

In a single family residential you are likely to break even on monthly cash flow (all your expenses - mortgage, property tax etc) paid but you will not make cash flow. The money here is made on resale value and equity that the tenant pays into your home.

I would consider the best investment for this type a townhouse - they are low maintenance and easy to rent. If this is your decision, let me know and I will narrow down some good options to send.

In a multi-residential, resale value increase is not as high (depending on area) unless you somehow increase the profit of the operation (renovate to create higher rents, add in coin-op washer and dryers, implement paid parking, etc). These are great to create monthly cash flow and can often be fully paid off within ten years if you put 100% of the rents into your mortgage payments; which would leave you with net incomes ranging from $30,000-$100,000, depending what and where you invest.

The value of these are based on CAP rates. Places like Toronto and Port Credit in Mississauga will have a lower cap rate, around 3-6% max; as the resale is higher. Places like Hamilton and Brampton have lower resales, but are very hot rental markets with cap rates ranging into the 8-11% range.

Hamilton is a good area right now for investment property for a multi-res. It is the number one investment spot in Ontario for multi-family and due to low income, renters are very active.

If you want 20% or less down, we would need to stick with 5 units or under ( I believe most banks are 4 and under, but either RBC or CIBC is 5 and under

Once you review the above information to help you decide which investment strategy you would like to pursue and then we can go from there into more detailed info.

All the best!

Monday, March 10, 2014

Landlord and Tenant Property Insurance Reminder

This is a reminder for Tenant Property Insurance
If you are an owner of a condominium townhouse or a high-rise condominium, you too want to make sure that your insurance on your investment property is active.  The reason you need insurance is because the tenants package only covers the tenants contents and the condo insurance typically only covers to middle of the exterior walls.  As an owner, you need insurance to cover your appliances, flooring, walls, drywall, cabinets, bathrooms etc. in the event of a loss.
Also, if your loss in your unit or property creates a loss in other units adjacent to your unit then you need insurance for that too.  This can get very expensive. 
If you are a tenant, you need to read this below! 
I recently heard that a small fire this past New Years' Eve in the bedroom of a condominium townhouse created a huge personal and financial loss for the tenant living in the property.  The reason for the loss was the tenants insurance policy had expired and the tenant did not renew the insurance for another year because the tenant wanted to save about $225. 
This tenant is now out of pocket over $25000, had to move somewhere temporary for 3 months which cost additional money and the tenant lost all her belongings and furniture due to this oversight!
This email is not meant to scare you, it's a friendly reminder for you. 
If you are a tenant you must confirm that your insurance policy is currently active and keep your tenants package for your personal property and legal liability insurance policy in full force and active.
If there is a fire or flood and you lose some or all of your belongings you need your own insurance coverage and policy.  Also, if you cause the fire or flood and if this loss creates damage or a loss in other units or properties adjacent to your unit or property then you need insurance for that too.  This can get very expensive. 
Please verify your insurance policy is active and that you have a tenants insurance package that covers your contents and at least $1million liability insurance that is current and active. 
Thank you, 

Tuesday, December 17, 2013

ADU Accessory Dwelling Units in Mississauga

As they have said on council, there will surely be some issues with regards to the implementation of Accessory second units,
to read the full report on the ADU's in Misissauga, click this link (pdf)
The City of Mississauga licencing by-law that will legalize second units will come into effect soon. .If approved, the bylaw will set licensing fees and other requirements, such as inspections and proof of insurance, for owners who want to rent second units.
You can read more at for updates and more information.

Toronto Real Estate Board (TREB) Average Prices and Graph

For more information please contact A. Mark Argentino

A. Mark Argentino, Broker, P.Eng.,
Specializing in Residential & Investment Real Estate
RE/MAX Realty Specialists Inc., Brokerage
2691 Credit Valley Road, Suite 101, Mississauga, Ontario L5M 7A1
BUS. 905-828-3434
FAX. 905-828-2829

Monday, December 16, 2013

Basement Apartments in Mississauga ADU's will be legally licensed starting January 1, 2014

Basement Apartments will be legal in Mississauga shortly.

Secondary Units Licensing Program Bylaw Effective January 1, 2014

City Council approved a bylaw on September 18 to license second units in Mississauga. The bylaw will be effective on January 1, 2014~ Ontario laws now require municipalities to allow second units in homes. These units are also known as basement apartments, in-law suites and secondary units .

Starting January 15t,a City licence is required for second unit in Mississauga to be legal. A unit will only be licensed if it complies with Official Plan zoning regulations, as well as Ontario fire and building code requirements.

The City held public meetings in 2012 to gather the public's thoughts and ideas about how second units should be permit them in Mississauga.

Comments were also received by email and through an online survey. A statutory public meeting required by the Planning Act was held in early 2013.

The City's Second Unit Implementation Strategy is part of Housing Choices: Mississauga's Affordable Housing Stragey. The City's goals for legalizing second units included ensuring safety, preserving neighbourhood character and maintaining public services.

See the article below too.


Toronto Real Estate Board (TREB) Average Prices and Graph

For more information please contact A. Mark Argentino

A. Mark Argentino, Broker, P.Eng.,
Specializing in Residential & Investment Real Estate
RE/MAX Realty Specialists Inc., Brokerage
2691 Credit Valley Road, Suite 101, Mississauga, Ontario L5M 7A1
BUS. 905-828-3434
FAX. 905-828-2829

Housing Choices -- Second Unit Information

Recent changes to provincial legislation require all municipalities in
Ontario to permit second units.

Second units are self-contained units in single-family homes. They are often
called basement apartments or in-law suites.

Second units can expand housing opportunities within established communities
and provide much needed safe, healthy, housing choices. They can offer
accommodation for people with affordability issues such as youth, older
adults and new immigrants. They can also provide additional income for young
couples looking to buy their first home or older adults wanting to stay in
their neighbourhood

Monday, October 07, 2013

Real estate Investment Strategies & Thoughts in Mississauga and surrounding areas

There are many different methods to invest in real estate in the Mississauga and surrounding areas.

Let's look at investing in real estate rental properties.

I am ruling out the option of a flip. With this out of the picture you would be looking at a rental property.

The options below are as follows:

1. You can buy a property for short term investment where the resale is very good so you will get maximum return when you resell in 4 years. Best bet is probably a town home in Churchill Meadows or Erin Mills of Mississauga or near Square One. These are great rentals as well!

2. You can purchase a maintenance free condo. For this I would recommend one Mississauga, Mimico or Toronto. For new-5yr old condos in Square one and Mimico - the rent would depend on the unit and area, but for an idea, sq one 1 beds go around 1350-1400 per month and 2 bedrooms $1600+.

3. You can buy a home in a high rental area, such as Mississauga or Brampton, where it is split into two units (ie: upper and basement) rented separately and get maximum rent and make a monthly profit.

Email me and I'll send you a list of Properties of Interest for you to view in this style

(As you will not make a profit on the above 2 options - you will just break even)

With a down payment of $90,000 you are looking to purchase in the $400k or below range.

The area is dependent on which of the investment goals you choose to purchase in as for

(1) you need a high resale area like certain Mississauga pockets,

(2) would be good by square one or downtown (although the downtown condo market is pretty saturated right now and prices are decreasing - great to buy but risky cause it is unknown if they will inflate again), and

(3) would be best in Brampton. I personally am not a fan of "student" rentals as the turnover is frequent and the wear and tear is sometimes high.

Please let me know if you have other questions or need more information.

Thank you,

Monday, April 22, 2013

17 Items you should consider when you are thinking of leasing business commercial space

I am mainly a residential real estate agent.

I had a client looking for commercial space to open up a small bakery store and was considering a commercial location to rent.

These were some of my thoughts and experience and items to watch out for when considering a commercial lease.
  1. rent is usually charged as per square foot of total space plus TMI
  2. TMI is taxes, maintenance and insurance (building)
  3. TMI is typically more than the rent, meaning that the rent may be $4/square foot but the TMI is $8 extra, this is not always the case, but I've seen this often, cheap rent, high TMI
  4. typically, you will need to install all interiors, from the electrical panel to the ovens and vent hoods and bathroom and even the walls, many people when they leave an existing commercial rental space, take everything
  5. you will need permits for everything you do in a commercial installation, from the outside bent hoods for your ovens, to the lighting and sinks and whatever, you will require all professional trades to do all the work and approve everything with the municipality and meet all codes, your landlord and municipality don't want you burning down the building when you cook or overnight due to shoddy work, so they want it done right
  6. the landlord must approve all your renovations, inside and outside and will have restrictions on signage etc
  7. the landlord will also have clauses in the lease that will only allow you to sell or make or bake certain items
  8. typical commercial leases will also have a non-competition clause section where you can only bake your cakes and cupcakes etc. but you can't sell cigarettes or maybe coffee or pop or something that someone else in the strip plaza or building could or does sell
  9. all commercial leases allow for the landlord to lock you out and seize all your goods and chattels and everything inside your business if you default on the rent (this is NOT allowed in residential leases in Ontario)
  10. commercial leases are typically 5+5, meaning you sign a 5 year lease with the option of 5 more years - you want this, because if you become successful, you don't want to be thrown out after the first 5 years of hard work AND you don't want your rent tripling in the last 5 years because your business has done so well
  11. you will most likely be required to provide an entire business plan with everything in your business sales, installation, all costs and expenses, advertising, floor plans, the entire enchilada before the landlord will accept you - reason is that that commercial leases are far different than residential, they don't want to lease to you and then have you go belly up in 6 months because the landlord doesn't want to lock the doors and sell your stuff, they want you to survive, flourish and be successful so that they get your rent for 5+5 years AND you make the plaza, building look good
  12. You need to know to lease commercial space like the rent commitment, plus other costs per month
  13. what it would cost to put in what you need like the oven and sometimes the landlord will help with this, but you need to ask if  the landlord help with that
  14. I strongly suggest you go to RBC at 33 City Centre in Mississauga and speak with the business development branch of the RBC, they have tons and tons of information that will help you develop a business plan
  15. to go about finding a reputable commercial agent that will answer your initial questions before actually going to see places will be difficult. 
  16. You need to gather all this information beforehand so you know exactly what you are getting into
  17. There is a very high cost to start up a business like this, just make sure you know everything before you do anything
I'm a very optimistic person, but I am also a realist and extremely skeptical of everything and anything when it comes to spending money. 
You must be extremely careful in this. You could spend a year researching and investigating how to start up a business online and with the help of banks and others.  I'm not negative, but I think I just read in a real estate publication that 19 of 20 restaurants fail in the first year and more than half of all new business ventures failed by the end of the third year - cash flow from your personal savings, the banks loan or from sales are most critical in first year and too many people don't estimate the costs in the first year and end up closing shop because of poor planning - as I tell everyone who will listen to me -  "if you fail to plan, you plan to fail" -  I hope that your business flourishes! :-)

There are many other considerations too, but this is a start.

I would recommend you look for a suitable space that you 'think' you might like, contact the listing agent on the mls and gather as much information about their particular listing, the restrictions etc. to see what they tell you.

You can use the ici search tool,

I hope this helps

Please let me know if you have more questions or more specific items you want to know.


Wednesday, November 09, 2011

FW: China's Rich


Interesting trivia tid bit...

There is 960.000 people in China worth more than U$ 1.000.000.
(There are now approx. 272 Billionnaires).

Oddly enough, more than 46 % intend to immigrate.

Reason: There are worried about the security of their assets.

Immigration choices: # 1 - United States, # 2 - Canada.

Let's hope that they all want to invest in real estate in GTA!!


Monday, November 07, 2011

I wish I would have taken his advice starting 25 years ago!

Unfortunately, I began investing in the stock market with my RSP's beginning
in 1981 and have contributed as much as I could over the past 30 years into
my RSP's. I checked the value last week and my entire RSP portfolio and the
returns are bleak, absolutely terrible. And these are all 'quality' mutual
funds. Ya right.

Every time I had 20% downpayment I should have purchased an investment
property rather than putting money into my RSP's I too "bought in" to that
philosophy, too bad. You can bet my son's won't follow my footsteps on this

Read below what RE/MAX is showing as increases of house prices very RSP's,
you will be shocked!

Housing evolution driving average price appreciation in Canada's major

Mississauga, ON (November 7, 2011) -- Billions spent in new construction,
renovation, and infill over the past decade have contributed to a serious
upswing in the calibre of Canada's housing stock, propping up residential
average price in the country's major centres,
<pdf housing report> according to a report released today by RE/MAX (pdf).

Since 2000, the value of a Canadian home has doubled, rising from $163,951
to $339,030 in 2010. Nowhere has the upswing been better captured than in
both the value of residential building permits issued nationally between
2000 and 2010 - at $340 billion - and the estimated $450 billion spent in
renovation. The impact of these two forces alone has fuelled the Canadian
residential real estate market - as well as the construction industry - for
more than 10 years.

As a result, investment in Canada's housing stock is at an all-time high in
the 16 Canadian residential real estate markets examined in the RE/MAX
Housing Evolution Report. Higher quality housing translated into
extraordinary price appreciation across the country - with 62 per cent (10
markets) experiencing increases in excess of 100 per cent since 2000.

I hope this finds you Happy and Healthy!

All the Best!


A. Mark Argentino
P. Eng. Broker
Specializing in Residential & Investment Real Estate
RE/MAX Realty Specialists Inc.
Providing Full-Time Professional Real Estate Services since 1987
BUS 905-828-3434
FAX 905-828-2829 CELL 416-520-1577

* Thinking of selling your home in the next 3 to 6 months? Would you
like a Complimentary & Quick Over-The-Net Home Evaluation ?

* Power of Sales and Foreclosures

* If you have not already signed up to receive my monthly real estate
newsletter, you may do so here: On-Line Real Estate Newsletter sign up

* See seasonal housing patterns

* Would you like me to send you a desk or wall Calendar?

Sunday, March 06, 2011

Latest Economic News from TD Canada Trust

Hello, I thought you might find this an interesting read from TD's
perspective on the economy.

March 1, 2011

Data Release: Tax Cuts Boost Personal Income in January, But Spending

* Personal income bettered market expectations in January jumping 1.0%,
driven largely by payroll tax cuts.

Personal disposable income (PDI) was up 0.7% on the month; however, were it
not for the impact of the tax

changes PDI growth would have been up only a scant 0.1%, after a 0.4% gain
in December.

* Personal consumption expenditures disappointed markets, posting only a
0.2% increase in January. That muted

spending growth pushed the savings rate up a few ticks to 5.8%. The savings
rate had averaged 5.4% in the fourth

quarter of last year.

* Spending was even softer in real terms, down 0.1% on the month - the first
contraction since last April. That

reflected real declines in nondurables (-0.2%) and services (-0.1%), with
spending on durables managing to

register a 0.3% gain.

* Inflation as measured by the personal consumption deflator rose to 1.2%
unchanged from December, while core

PCE inflation (ex food & energy) is running at a 0.8% pace year-on-year, the
same reading for four months now.

Key Implications

* Today's disappointing showing for real consumer spending means that we
will likely have to revise down our target

for first quarter consumer spending. We see consumer spending posting a
closer to 2.5% pace in Q1, down from

our previous expectations of 2.9%. And in turn will likely result in
slightly lower real GDP growth than we had been

expecting for Q1.

* That said, the US saw some pretty significant storms in January, and we
could see a comeback in the months

ahead, particularly given the healthy headline income gain, although not
soon enough to save real spending in Q1.

* January's poor spending performance also stands in stark contrast to the
more positive mood consumers have

been reporting in recent confidence surveys, suggesting that the healthy
income gains should lead to decent

consumer spending growth in 2011. Friday's payrolls reading for February
will be eagerly awaited to see if jobs

growth will pick up to further underpin sustained spending growth ahead.

I hope this finds you Happy and Healthy!

All the Best!


A. Mark Argentino
P. Eng. Broker
Specializing in Residential & Investment Real Estate
RE/MAX Realty Specialists Inc.
Providing Full-Time Professional Real Estate Services since 1987
BUS 905-828-3434
FAX 905-828-2829 CELL 416-520-1577

* Thinking of selling your home in the next 3 to 6 months? Would you
like a Complimentary & Quick Over-The-Net Home Evaluation ?

* Power of Sales and Foreclosures

* If you have not already signed up to receive my monthly real estate
newsletter, you may do so here: On-Line Real Estate Newsletter sign up

* See seasonal housing patterns

* Would you like me to send you a desk or wall Calendar?

Thursday, January 27, 2011

Condominium Insurance Policy on Your Real Estate Investment Properties - Do you need it?


Do you have your own insurance policy on your investment property that is a condominium townhouse or condominium high-rise? If not, you better think about adding your own policy.

I am not able to give legal advice or any expert advice on issues that don't relate to real estate, but please consider what I am saying below and consult with your own insurance company and condominium corporation. This advice below could prove to be very important or costly to you in the event of a problem in the future.

My thinking in the past was that since a condominium corporation has building insurance and since a tenant has contents insurance, then I don't need to buy insurance on my investment properties.

This is incorrect!

I just put insurance on all our investment properties There are many reasons for me to have an insurance policy on these rental investment properties.

Some reasons for me having insurance on our investment properties are as follows.
  • I am now covered if the condominium insurance does not cover water damage or roof damage or any other damage such as water, ice, snow or sleet damage on the interior or exterior of the unit
  • If the condominium insurance company attempts to claim money from me for damage caused by our tenant then I am covered.
  • If the condominium insurance does not cover the entire loss and comes after me to pay for part or all of their loss then I am covered
  • If a tenant causes a problem, such as plugging a drain line, that causes damage outside of the unit and the condominium corporation comes after the tenant or me to pay for those repairs, I am now covered.
  • If the tenants insurance does not cover damage that the tenant causes inside the unit, my insurance may now cover that damage.
  • If the tenant lets their insurance policy lapse, then at least I am covered in the event of a loss caused by the tenant.
  • In the event that the tenant has to leave the unit for some reason and I'm losing rent, such as repairs after a major fire or flood inside the unit, then I am now covered for up to 1 year rental loss while the unit is being repaired.
  • There are other endorsements in the insurance policy that I now have that cover us for many other situations, but these items above seem to be the major potential problem issues.

The annual cost to me is about $100 per property.

These are some of the major reasons for me to have insurance on all our investment properties and I would recommend that you look into obtaining insurance on all of your investment properties too.

I wish you all the best!

Thursday, September 16, 2010

Buying a Townhouse investment property in the Erin Mills Town Centre Churchill Meadows Area


I thought that I would share with you the email that I just sent a client who is looking to purchase another investment townhouse property in the area of the Erin Mills Town Centre and Churchill Meadows (see the map below showing the boundaries of the area I am referring to).

The reasons he wants to purchase another townhouse in the Erin Mills Town Centre area are the same as my reasons for owning investment properties in the area, that is; great amenities, easy to rent, good rent, draws quality tenants, good future potential, townhomes are the lowest price to get into market, low maintenance fees compared to a high-rise condo and more.

This is the email I sent to him, he was asking about what the state of the market is, what the next three months should bring and if there any "good deals" on townhomes currently for sale on the market.

I wrote to him:

The market continues to do well, in spite of the negative press. The stats of late are typical of June, July and August, no worries, but with interest rates increasing people are a little more cautious. The market is not 'on fire' the way it was in the spring, but most properties are still selling, some big price reductions here and there, but nothing significant yet.

See the link below, there are two townhomes at 2955 Thomas that are 'typical' 2 storey or 3 storey townhouses, otherwise, everything is as you say, well over $300k

Click here

to view Properties of Interest (this link will only work for 2 weeks, up to about end of September 2010)

At 5659 Glen Erin that about 1.5 years ago had units for sale at $240k now has a unit for sale at $314k, just nuts.

These new price levels seem that they are here to stay. As you pointed out, prices are at $345k and more for McFarren, on at $358 and another at $385k at McFarren are both sold conditionally.

I too was hoping for a 'good deal' sometime in the summer, only one at 3150 Erin Centre, but it faced Erin Centre and was at the corner of Erin Centre and Oscar Peterson and it was the only 3 bedroom that sold for a hair under $300k

Notice that the 'Last Status" on many of the listings is PC meaning a price change, meaning they have dropped their price recently. This is an indication of a normal to softer market, but the prices are still high.

I'm not sure what Oct, Nov and December will bring. I don't think interest rates will go up again. If there is a recession or slowdown out there, it's certainly not in the GTA or Mississauga real estate sector.

The townhouses at 2955 Thomas are about the only townhomes that will carry with the rent. Passing on those at the price they are at could be a mistake in hindsight. There are some typical 2 storey units in that complex, but not listed right now.

Please let me know if you have more questions or would like to see inside any of the properties above.

Thank you,

So there you have it, the current townhomes for sale in the Erin Mills Town Centre and Churchill Meadows area in a nutshell!

Wednesday, November 25, 2009

Current Trends in the economy many sectors improving

RBC is reporting the economy and current trends are that sales are up in many sectors

Current trends…

Economy stumbles for second month in a row

p GDP output slid by 0.1% in August, defying expectations for a move into the plus column. Slumping manufacturing, wholesale trade and oil and gas activity weighed down output in the month.

p The economy pared back the number of employed by 43,200 in October — the first decline in employment in three months. However, because of job gains in August and September, there was a net gain of 14,500 positions during the three-month period.

p Retail sales recorded a second monthly increase of 1% in September; sales were up an even stronger 1.2% on a volumes basis following a 0.5% rise in volumes in August. This augurs well for a positive GDP report for September.

p Housing starts rose 5.4% in October to an annualized level of 157,300 . The rise re-established the upward trend that had prevailed through August, with starts steadily rising from a cyclical trough in April of 118,500.

p The merchandise trade deficit was cut in half in September to C$0.9 billion from C$2 billion in August. The improvement was almost solely the result of a 3.5% jump in exports; imports were relatively steady, dropping a marginal 0.1%.

p The headline inflation rate emerged from a four-month period of negative readings in October as the deflationary pressures coming from movements in the energy component of the CPI dissipated.

I hope this finds you Happy and Healthy!

All the Best!


A. Mark Argentino
P. Eng. Broker
Specializing in Residential & Investment Real Estate

Thinking of Selling? Best Mortgage Rates Current Home Prices Search MLS Newsletter
RE/MAX Realty Specialists Inc.
Providing Full-Time Professional Real Estate Services since 1987

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Monday, November 09, 2009

I hit the SELL Button last Friday, and I'm elated!

Last Friday, November 6 2009 I hit the 'sell' button. Not on our real estate holdings but on our RSP's and RESP's After the 'financial crisis' and market meltdown in the stock markets last September 2008 our RESP's and RSP's plummeted (as did most people) who were exposed to the stock market because their RSP's and RESP's were made up primarily of stocks.

Our entire stock portfolio dropped about 40% from a high in September of 2008 to a low in about April of 2009 I made a promise to my wife that when our RESP's and RSP's were back to or even close to or near pre-September highs, I would hit the sell signal.

I had set an arbitrary figure that if they reached that figure, we would sell. That figure was about 20% higher than our total contributions over the past 20 years or so in RESP's and RSP's, pretty sad return indeed in my opinion.

For anyone following the stock market's of late, the TSX and the DJIA are almost back to the high's of September, about 10% or so off the absolute high reached in late September 2009.

I set a fictitious figure that I would sell at and be comfortable and that figure "arrived" last Friday November 6, 2009. I called my financial planner Friday morning and said, "today is the day" and I called it ''freedom day', and sent in the sell signal.

The reason that I pulled all our RSP's and RESP's out of market linked mutual funds was because I was actually losing sleep over the ups and downs of the financial markets. Crazy isn't it?! I'm not fully retiring for about 14 years and probably won't need to use one cent of our RSP's for about 19 years from today, when I'm 70. That's plenty of time for the stock markets to rise back to historic high levels and likely surpass today's levels by 20 to 50 to 100% or more over the next 19 years. But, I just can't stomach the ups and downs of the financial and stock market's anymore.

We will begin withdrawing some of the RESP's beginning in about September of 2011 when our son begins university. These funds we just don't want to "gamble" with anymore. As you may know with RESP's in Canada, for every dollar we contribute the Federal Government contributes 20% It's almost a no brainer and a 20% return is guaranteed (almost). So for every thousand dollars we contributed that $1000 you would think in our RESP's would be worth $1000 plus 20% or $1200 plus the rise in the markets over the last 10 years or so which would make it about $1500 Not even close. We invested our RESP's into mostly US and global funds and we're sitting at about a total overall 10% increase over our personal contributions. Bleak, very bleak. Crappy investments, crappy market returns, crappy funds and crappy investment advice. Heck, if we only put the RESP's into GIC's over the same 10 to 15 years, every $1000 would be worth about $2000 today. But I was not wanting to be a wimp or a weak investor or a conservative investor because we had time on our side and I put it all of it into the markets to get that expected 10 to 15% per year. Again, not even close.

Hindsigh is 20/20 with everything, but with our RESP's we really blew it. If we were a conservative investor and only put them in GIC's we would have more than doubled our money. As of last Friday, when I cashed the RESP's we're up about 20%, not bad if you don't take into consideration the government 20% contributions, at least not a loss, but certainly not great.
You must be joking, that is crap, really crap, not a single % increase over 19 years of contributing, absolutely brutal when you think of it like that.

Financial planners and financial planners all say, that's good for the short term and besides, investing in the markets is a long term solution and you have to be aware and ready for sharp increases and decreases in your portfolio. What a crock. I'm done with that crap.

For example, with the RESP's Had we taken the same $1000 19 years ago when we began the RESP's or even 10 years ago and invested it in real estate, that same $1000 would be at least $2500 or $3000. It would have been leveraged investing and if we took, say $10,000 RESP and bought a $200,000 townhouse with it in 1999, that same townhouse would be worth about $275,000 today, so the initial $10,000 would have gone up by about $75,000 - significantly better than inside the RESP plan don't you think?

This same analysis can be found with our RSP's It's very depressing to think that we contributed all those funds over all those years and now it's not worth much more than 10 or 20% over all the contributions during the same period of time. Again, had we bought real estate 10 years ago with our RSP contributions rather than piled it into the markets we'd be up at least 200 to 300% because of the increase in real estate over the same period and the fact that it was leveraged investing.

Again, the pundits and financial planners will say that the RSP's gave a tax refund every year. That's true, but for self employed people like me, that only means we pay less tax in April, we don't get refunds. Regardless, for every $10000 I would have contributed in RSP's over the past 10 years, I would pay about $3500 less tax so for round figures contributions of 100k over the past 10 years contributions of $10,000 per year, that netted us $35000 in less tax paid, but I did not invest that 35000 that I gained, I just didn't have to pay it, and it got absorbed into our finances and spending.

Again, had I taken that $10,000 per year in RSP's contributions over the past 10 years and contributed it towards, for example, two townhomes, one townhouse purchase in year 3 (after 3 years of 10k per year equaling 30k in RSP's savings) which would have been 7 years ago or 2002 and another after 6 years of contributions, ( again, another 30k after 3 years of savings), that would have been a second purchase of a townhouse in 2005, the increase in value is absolutely astounding. The first townhouse purchase in 2002 would have cost us about 210,000 ( I just checked and that's what townhomes were selling for, for example, at 5305 Glen Erin Drive during 2002) and it would sell for about 275000 today, a gain of about 60,000 and the second purchase at, say the same complex, would have cost about $245000 in 2005 and selling
today, our gain would have been about $30000 so our total gain of our two investments totaling $60,000 investment would have been $90,000 (60,000+30,000) or about 1.5 times the initial value investment or 150% return, plus we would have the $40,000 in cash for the last 4 years that we did not invest and saved to buy a third townhouse.

Now, and here is the real kicker to why buying real estate is a great investment, during the 6 years that we owned the first townhouse and the 4 years we owned the second townhouse in the analysis above, the tenant helped pay off our mortgages in the amounts of about 40,000 for the first townhouse and 20,000 in the second townhouse. So our equity position increased by about 60,000 for a grand total increase to about $250,000 versus the $150,000 in the stock market RESP's This is the truth what people and financial planners don't tell you.

To summarize the analysis in the paragraph above:

- for the RSP option, over the same 10 year period of investing the same $10k per year for a total of $100,000 plus $30,000 less tax paid, plus a gain of $20,000 we would have a grand total of $150,000

- over the past 10 years we invested $60,000 with a net gain of $90,000 plus the $40,000 we continued to save from year 6 to 10 plus the $60k in equity increase we would have a grand total of $250,000

The above analysis is 'real life' no BS, just the facts.

The downside to real estate investing is that there would have been tenants to deal with and maintenance and other issues, but this analysis is very real and very accurate. Some of my clients will say, just buy REIT's and get the best of both worlds, how many of you did that?

Now, back to the RESP's and RSP's that I sold last Friday, the main reason I did it was to be able to sleep at night and to stop having to listen every hour to 680 for financial market updates etc. and reduce my stress level.

The other reason I had the nerve to do it was that I finally found a solution of where to put our investments. RBC has a market linked GIC where the initial contribution is guaranteed and the teturn is equal to 40% of the value that the TSX 60 index increases over the same period. RBC get's 60% of the gain (big surprise! LOL). So, if the TSX 60 index increases 100% over the next 10 years then our RSP increased 40% At least we can't lose any more than our initial investment and I can now sleep!

This was a very long post, but I wanted you to get a general idea of our thinking and why we sold our RSP's and RESP's and got out of the stock markets with our retirement funds. This may only be a temporary solution while we live in such turmoil and I may go back into the market's with our RSP's in the future, but this is what we are doing now.

As an aside, we've opened up an account at TD/CT that will allow our future RSP's to be in mortgages, we will give this a try and see how it goes, just another option that many don't know exists.

My plan is now to contribute future RSP's to bond funds and save enough every year to purchase a townhouse and hold for 10 years until retirement.

Only time will tell!

I wish you all the best!

Friday, February 06, 2009

Where is the Mississauga real estate market heading?

Many buyers are sitting on the sidelines waiting for 'the market to bottom out" My observations in the past when we have gone through difficult real estate markets (as we are right now) is that sitting back for a while may be the best course of action to take for some.
With that said, we just purchased another investment property. I feel that at least the townhouse market in west Mississauga has already bottomed out and did so back in December of 2008.
The problem with our local real estate market is that we will not know until about 3 to 6 months AFTER our market has turned that it bottomed out 3 to 6 months ago. This is almost always the case!
Plus, when the market turns, it goes up very fast.
Currently, there is plenty of pent up demand in the real estate marketplace and there are many people with cash sitting waiting to purchase real estate.
Certainly interest rates are favourable, they are at all time record low percentage rates, so this is no excuse not to make your move up or purchase an investment property.
I hope this finds you healthy and happy,