what would you consider a good deal Toronto area

[Shana Gray]

considering homes have been overpriced here for so long and are coming down now. average home price is supposed to be $300k down from $350k in Toronto. I would have to say the prices vary widely depending on location. quality homes cost more. how low do you think the prices should go to be a good deal in Toronto and the surrounding cities? I am asking about investing not home ownership.

[Shana Gray]

just got a figure in my email more true to my experience that Toronto homes still sell for an average of $400k. I would say at least in the nice downtown neighbourhoods they do. plenty of smaller cities all around can find better deals than that now. though not long ago it was $400k even an hour outside the city and you had to go at least 2 hours to get a $200k nice decent condo.

[Howie NA]

It depends where you are looking in the GTA, but prices are rising again. Contrary to popular belief I have been in 3 bidding wars in the last month. Lost all 3 to people paying WELL over asking. 2 houses selling for more than $150k over asking....

[Shana Gray]

I can believe that. esp for residential homeowners. I think we get bidding wars partly because of the way the homes are marketed. esp if they are unique homes and/or in good locations. and the fact that a good economy affects a higher cost of living for everyone, not just the big companies.

[Quentin D.]

Hi Shana,

It is not the price of the house that should concern you but what type of income you can draw from it. If you are buying solely for appreciation then you are speculating and not investing.

There are opportunities in all types of markets. It really is based on what you know what to do with a property - Buy and Hold, Lease to Own, or Fix and Flip are just a couple main ways.

Take Care,

Quentin

[Joel Owens]

Shana some markets are not rental markets at all.In those cases you invest in other markets where you can leverage your returns from your higher income in a more healthy market.

Example if you had 300k cash and you could buy 12 properties at 25,000 each that rented for 700 a piece for 8,400 a month could you get the same return in Canada buying a 300k house??

The answer is a big no you couldn't rent a 300k house for 8,400 a month in income minus expenses of course.As the rents increased some over the years along with appreciation you could get very nice returns.

If you had 300k to invest you could also buy a distressed asset such as an apartment complex with deferred maintenance and occupancy issues for cash and turn it around or use hard money and once the property is stabilized refinance in a year or sell off for a profit.

What you can do depends on how much money you have to play with without bringing in another partner or raising capital.

Hope it helps.

[Joel Owens]

Wow just saw this post is almost 2 years old.LOL

Oh well.Been a long day!

[Mike Jakobczak]

Were bringing this forum back to life!

Well to recap Toronto's market. Rent cap and high prices of real estate makes the numbers look so bad for renting and getting good income from the assets. I'm not sure what the rent/buy ratio is currently but I think it's under 3. Which the rent cap has something to do with that.

There's a lot of talk with Hamilton's market emerging, but like they say once they start to talk about it get ready to sell.

I have a had a few people make huge returns on pre-construction condos. Doubling the asset before it opens and allowing them to cash flow huge due to the high demand for the area. You can call them lucky or really good at knowing where to buy.

[Eric Scott]

I think, dealing in condominiums in Toronto can be a nice option for investment. Ontario condominiums act provides so many benefits and protection to buyers as well as owners so that both can receive the best from this investment and enjoy the benefits without any complications.

[Paul Mileny]

I am seriously looking into buying a condo in Toronto downtown. How will I be taxed as a US citizen for owning a property in Canada and possibly renting it out?

Thank you.

[Roy N.]

Originally posted by @Paul Mileny:

I am seriously looking into buying a condo in Toronto downtown. How will I be taxed as a US citizen for owning a property in Canada and possibly renting it out?

Thank you.

Paul,

I would be looking almost anywhere other than Toronto (or Vancouver) at the moment. Unless you need to be downtown TO, the prices are more than a little north of ridiculous.

As for your question on taxation, the following link will get you started on the Canada - U.S.A. tax treaty.

[Hai Loc]

Wow... You buy anything in Toronto in 2009 and hold it to now you are likely to have a minimum of 50% appreciation if not 75%.

[Roy N.]

@Hai Loc 

It is easy to look in the rearview mirror.  However, appreciation is not guaranteed and the longer and frothier the market, the less guaranteed it is.   If you are buying a rental property, at a minimum it needs to be cash-flow positive.  Realistically, your money needs to make as food, preferably better, return than you can achieve with a more liquid, {relatively} safe investment.

That has not been easy to approach in the TO market for some time ... but if you must be invested in TO and look hard enough, you can usually find something.

[Hai Loc]

@ Roy N.

Agreed.. There is no way I will buy an investment property in Toronto today and expect it to appreciate the way it has been. Only property I own in Toronto is my primary residence. All my investments are in the US. Cash Flow is king and you are not getting much of that here.

[Roy N.]

I just re-read my post above ... I should quit trying to type on my phone ... the auto-correction feature turns my numerous typos into humorous reading 

[Account Closed]

@Hai Loc 

you make some valid points. Toronto appreciation in the past years have been insane. Where do you invest in the US and how to you balance with investing here and being a Canadian and living in Toronto?

[Hai Loc]

@Ajay Kahlon 

I currently don't invest in Toronto(GTA) I did a few assignments on pre construction condos in Liberty Village back in the days.

Couple of reasons why I don't invest locally in "Toronto"

#1 Prices are too high

#2 Toronto land transfer tax will eat your profit on a flip

#3 Cap rates are too low hence return on investment or cash on cash will stay single digits on a hold factoring in vacancy rates and property management

#4 not too many private deals

#5 multiple offers on desirable areas (its like that everywhere)

#6 little to no seller financing

#7 minimal creative financing

#8 Little to no cash flow relying on equity and appreciation to be positive

I was looking in Charlotte, Atlanta and many places in Texas but the prices sky rocket.

Chicago and Columbus still have deals. 

Only project I will spend my time on in Toronto would be what I did for my friend a few years ago. Buy a 2 or 3 story detached in East York that walking distance to Danforth and convert it into 3 rental units. Must have separate entrance for the basement and 2 car parking at the back. If it would be converted from a single family I would make it relatively easy to convert back when the time comes to sell. 

It was on Danforth and Woodbine and he was cash flowing living in the main level unit. But that was 3 years ago and prices changed. You can probably still find something out there making a 5% return if you find your own tenants and manage yourself. 

[Account Closed]

@Hai Loc great input! thanks.

Also, when you tag someone in the your post, make sure you click on the person names that pops up at the bottom when you start typing i.e: '@Aja....'. This way the person gets a notification when his/her name gets mentioned in a post!