M city condos location. How to choose the type of real estate investment in Canada? To invest money in stocks or bonds is to share the growth of the business.Please Visit: M city condos location to Get Your VVIP Registration Today!
To invest in real estate is to share urban development. Some people also invest money in tangible goods such as antiques, works of art and stamps, but according to 2015 statistics in the United States, only 1.3% of households with more than 2 million net worth invested in tangible assets, and 20 million households with more than net worth invested about 1.8% of assets in tangible goods. People seem to be used to putting money in financialized light assets rather than bulky physical assets. There are two options for real estate investment, one is to invest in financial light assets, and the other is to buy the heaviest asset, the house, and put it in your own name.
Investors who intend to share the dividends of urban development have a wealth of options in Canada. Buying a house can be renovated and rebuilt, raising rents and house prices, which is often called forced appreciation; another way, lazy people like me, do nothing, wait for the market price to rise, cash out through additional mortgages, use it as a down payment for the next house, and use the house as a carrier for borrowing money over and over again. Do not want to own real estate, through financial instruments can also share the development of the city. Light assets and heavy assets have their own advantages and disadvantages, and the risks they face are also different. This article briefly introduces the various forms of real estate investment in Canada and makes an in-depth study of the risks and returns.
Real estate development is the primary market of the real estate market, which belongs to the production behavior of building real estate. Investors participate in the development and realize profits by building houses and selling them. In China, you can buy shares in real estate development companies and share the profits of developers. Canada’s urbanization rate is 82%, there are not many new properties, and the real estate development market is small, which cannot be compared with the raging situation in China. Canada also has no real estate development listed companies, can not buy shares to participate in the investment.
There are two forms for ordinary investors to participate in real estate development in Canada, but it is difficult to find successful cases. On the other hand, it reflects that taking Canadian real estate development as the investment goal has high risks and difficult to guarantee income. The first is a joint mortgage, syndicated mortgage, which is a tragedy. If you are interested in google the keyword “syndicated mortgage fortress”, you can find an affectionate investment tragedy directed by a Toronto company called “Fortress”. The second is private equity, which financing real estate development for a particular project through private equity firms. I have not participated in any private equity investment, have no personal experience, and there is no information about the return on investment in real estate development through private equity in public reports, so it is difficult to judge.
Most of the financing for real estate development in Canada is in the form of syndicated loans, and a small part is provided by a variety of large pension funds, teachers’ funds and other non-bank institutions. Developers financed by syndicated loans usually require the buyer to provide proof of pre-approval of the loan after the pre-sale, because the developer needs to provide this document to the syndicate when applying for a construction loan.
This is why people who buy uncompleted flats are chased for loan pre-approval letters. Developers can start construction on schedule only if they get construction loans as scheduled. Developers who use non-bank financial institutions as financing channels do not need buyers to provide pre-approval of loans when signing pre-sale contracts. In Canada, it is very difficult to get construction loans. Some Chinese developers underestimate the difficulty of construction loans. They have the money to buy land, but do not have the money to build houses. Ontario has a new home guarantee insurance company, Tarion, which records the quality of properties built by all builders in the past.
Builders must register with Tarion, so when a new property is put on sale, people should not believe the “famous developers” in the sales advertisements, but should check the builders’ records on Tarion. If they are novice developers, they should veto by one vote. Whether the bank approves the construction loan or not also depends on the record on Tarion, so the new developer had better cooperate with other local developers with good reputation to develop several projects before developing independently, otherwise they won’t even get the construction loan.