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Recently, two friends called me and said, “Fujia, help me change my house into a separate house of one or 2 million yuan. My brother also wants to make a fortune!” . As an old friend, I had to pour cold water on them: “Brother, we know each other.” There are only three people in your family, so you don’t need a big house. Moreover, if it is a 1.8 million detached house, the monthly contribution is just over C $9,000, and it is difficult to rent. Will you be under too much pressure? ” . My friend was dumbfounded: “Emma, now eating has become a problem, not to mention buying a LV bag for the baby’s mother!” What should I do then? ”
If you open your eyes a little bit, most of the surrounding areas, such as the north of Whitby/ Oshawa, still have existing detached houses of C $50 to C $650000. With the eastward expansion of HWY 407 and the upgrading of urban planning, the housing market has also risen strongly in recent years. And the independent houses in these places are easy to rent, with a monthly rent of C $1900 to C $2400, which is enough to cover the mortgage and government rent, so that you can enjoy both “cash flow” and “real estate appreciation”.
When buying uncompleted flats, if the developer fails to meet the key target of “pre-sale of 70%” within the time set by the government, the project will be cancelled and investors can only get back the principal. After moving in, the market price and rent of Condo will grow slowly, while the management fee will rise gradually, so it is easy to appear that the total cost of housing is lower than the rent income, and the rate of return on investment may be on the low side.
Therefore, the purchase of Condo uncompleted flats should be carefully selected. The author suggests that you should choose Condo uncompleted flats in accordance with the policy of “good location, small size and clever design”:
Good location, coupled with the strength of developers, the house is naturally easy to sell. The reason for emphasizing “small size and smart design” is that the total price of such Condo is low in the future (less than 300000 per room and one hall), but the rent is not low at all (1400-1600 per month), and can have a net cash flow of about C $300 per month. In this way, 1% rent cash flow plus 3-5% annual house price rise, with mortgage leverage, the rate of return can be stable at about 10%, of course, the house is easier to sell!
Independent houses, semi-detached houses, the project development risk is generally less than Condo, and has a good value-added potential. If you buy independent houses or semi-detached houses, you can ease the pressure of payment through step-by-step payment and pre-delivery transfer (assign). You can also “get up early to pick up bargains”.
However, in several areas closer to Toronto, the price of detached houses is already high. So, there is a risk in investing in independent housing in these areas: when you hand over a house, because the house price is high, the down payment is high, it is difficult to apply for a house loan, and the transaction costs such as HST and land transfer tax are also high, and the pressure to supply the house is also high, so there will still be the problem of “can’t afford to buy or support it.” maybe it was only hastily sold in the end, and as a result, you didn’t make much money after being busy for a long time.
Surprisingly, in some cities inhabited by westerners on the outskirts of GTA, independent houses have increased by more than 10% in 2014 in recent years because of land supply bottlenecks and good economic and employment structures. the price of independent houses is not high (45-500000 of 30 ‘independent houses and 60-650000 of 40’ independent houses), which is worth investing. Anyway, it is an investment in uncompleted flats, so there is no need to bother to take care of it before handing over the house; after the house is handed over, because the price is not high, you can slowly raise it for a while and sell or rent it calmly.