There was a time in the not-so-distant past when waiving any and all conditions on an offer was so common it practically became fashionable.

But the market softened and people fortunately regained their senses.

The move to make an offer as attractive as possible meant many condo buyers were removing the condition that required them to approve their status certificate. A status certificate is a legally binding document that tells you about the financial shape of your condo unit and the condo corporation that runs your building.

It’s important not to disregard the status certificate, regardless of how many buyers are competing for the same condo.  This document outlines condo fees, informs you of pending increases, of special assessments being considered by the board and any arrears or liens on a particular unit.

The status certificate also discloses bylaws, budgets, reserve funds, insurance, management contracts, rules and minutes of the last annual general meeting as well as information about lawsuits the condo corporation may be facing. Essentially, the status certificate is a report card on the financial and physical health of your condo.

The status certificate lets you know what extra costs you may incur as a prospective condo owner. So if you do purchase a unit and then learn, say a month later, that you need to cough up $3,000 for new windows, what happens? Well, you have the right to refuse to pay up.

According to the Ontario Condo Information Centre, failing to announce a special assessment or a steep hike in fees or even an important expense against the reserve fund in the status certificate is like trying to sell a car with a rolled-back odometer. “It constitutes false advertising.”

If you’re a bit of a risk taker and you’re really hungry for a particular condo plus you know there could be a feeding frenzy come offer time, why not spend some time investigating potential condos. Do your homework, speak to people who live in those condo buildings you like and learn all you can about its management, finances and physical shape. That way you’ll have much more confidence about your purchase, and if you have to, you can remove the condition, somewhat confident in knowing that the management company has a reputation for doing a good job.

Yes, it’s a risk, but it’s one that may be worth it as long as you do your due diligence.

Sources: www.condoinformation.ca,

Condo amenities and condo fees are a funny thing. Since one very much depends on the other, you need to be mindful of what features you really need because it’s easy to get sucked in by splashy features that sound like they will improve your life.

Does the notion of star gazing each evening from a 30-storey observatory platform appeal? How about mini putting? Maybe you would like access to a communal dog grooming salon where you can wash your Doberman after a muddy walk? Perhaps shooting hoops on a basketball court would do?

Developers are continually looking to up the ante on their development’s amenities in an effort to market their condo buildings. While some might say an outdoor TV-viewing area is a bit much, others might be pushed into buying because they think that’s the best feature ever.

The point is these amenities have to be paid for, as does the maintenance of them. As your condo ages, expect your fees to rise in an effort to cover the cost maintaining declining amenities such as hot tubs and swimming pools. If you’re not a swimmer or a hot-tub soaker, you may decide that paying for those features is not worth it.

Condo fees are nothing to sneeze at. In fact, next to your mortgage payment, they are likely your next biggest expense in owning a condo. According to Condos.ca, the average condo fee in Toronto in 2017 was 65 cents per square foot. On a 1,000 square foot condo that comes to $650 per month. Condo fees in the city naturally vary and can drop as low as 50 cents per square foot to as high as $1.

Though condo fees also cover other expenses of condo life such as some or all of the utilities and the building’s reserve fund, there are some developers who take a different approach. One reportedly surveyed and then listened to residents on how they wanted to use the spaces. Others say developers here should model after their European counterparts who offer amenities that might be described as no frills.

While Zen gardens, yoga studios and squash courts sound tempting, you need to think long and hard as to whether you would actually use them. Know what you realistically will use. Understand the difference between the must-haves and the nice-to-haves.

Sources: www.condoessentials, www.ratehub.ca, www.globeandmail.com, www.condo.ca

Saving up for a down payment on your first home can seem like a goliath task these days. With the average house price in the GTA fluttering around $700,000, the notion of making a dent in your savings on a down payment may seem daunting, if not insurmountable.

If you’ve already been saving your nickels for retirement, there is some help to be had thanks to a federal government program known as the Home Buyers’ Plan (HBP). The HBP lets first-time home buyers withdraw up to $25,000 from an RRSP to put toward the down payment on a house. Since a couple can each withdraw funds they can pool their assets and withdraw as much as $50,000. How that benefits first-time home buyers is that the funds withdrawn from the RRSP are not immediately taxed as long as you meet the deadline to return the funds within a specified time.

Do you qualify?

You do if you or your partner did not own a home that was your principal residence in the four calendar years prior to purchasing a house with an HBP.

Pay back

It’s an unfortunate reality but under this Canada Revenue Agency program, the RRSP funds have to be paid back within 15 years. The good news is that you don’t have to start paying back your RRSP until the second calendar year after the withdrawal. So if you used the HBP in 2018, you have until 2020 to start paying back your RRSP.

No tax benefit

Because you are paying back what you originally contributed to an RRSP, there is no tax relief as you would have experienced the first time around.

Expectations

You are expected to make payments every year under the HBP and the repayment expectations are far from onerous. Annual repayments are 1/15 th of the withdrawal total so if you borrowed $15,000, your annual repayment would be $1,000 per year for 15 years.

If, for some reason, you can’t meet the yearly repayment or can only manage a part of it, then the payment or the part that you couldn’t pay is added to your taxable income.

The HBP has been in place since 1992 and though some critics say it should be scrapped because people need to save for retirement, others say its absence would harm the housing market.

You know the old saying that if something seems too good to be true it probably is? Well, the same principle kind of applies when it comes to condo fees.

There are no quick fixes or mystical remedies that will magically help you reduce your condo fees. That said, there are measures you can take that may help in the medium and long run. Your persistence and stick-to-itiveness will be put to the test and may eventually pay off. But know this: while you can put certain measures in place that may relieve the burden of mounting condo fees, the chances of reducing or rolling them back is pretty much slim to none.

So what is a condo owner to do? Here are a few suggestions:

Toronto, Ontario, Canada

Get involved

To ensure reasonable condo fees, you may want to have a say in how your condo is operating. Do you prefer the notion of building a reserve fund for those emergency repairs that are sure to one day happen? Or are you more comfortable keeping fees lower and only raising them under duress? By joining the condo board and attending meetings you will learn why your condo fees are what they are. Only once you see where your fees are going can you actually make some headway about changing direction. Do you think your condo corporation is being over charged for certain services? Being a member of the condo board means your voice will be heard.

Do your homework

It’s easy to get sucked in by the dulcet tones of salespeople who flaunt fabulous party rooms, fun-filled hot tubs and a fitness centre? But know that these amenities come at a cost. According to the National Bank, the average condo fee in the GTA averages 65 cents a square foot. On a 600 square foot condo that would be $390 per month and for a 1,000 square foot unit, your condo fee would hit $650.

It’s also a good idea to investigate condo fee increases at other buildings by the same developer. Fees undoubtedly vary based on the building’s location, amenities, age and the size of the units so comparisons are sometimes difficult to ascertain. By scrutinizing the developer’s history you will determine if the builder has earned a positive or negative reputation when it comes to managing condo fees and the like.

 Reserve fund

You need to find out about the health of the reserve fund of the condo you’re interested in. Is there a good chunk of savings for major work or an emergency repair or has the well run dry? Find out what major work has taken place and what is slated to take place in the future. A well-run condo corporation should be able to provide this information.

Sources: www.torontostar.com, www.ideas.nationalbank.ca

There is so much to learn about buying a home, and let’s face it, dry and boring finances can easily be cast aside as you explore the features of HVAC systems, paint chip shades and new schools for the kids.

But the type of mortgage you choose is an important step forward in how to properly finance your future. Let’s take a look at the difference between a closed and open mortgage.

Closed

These types of mortgages are appealing because the interest rate is always lower than an open mortgage. They also offer longer terms as well. If you’re looking to save money on your monthly loan payments this may be your best bet. Usually, those who select a closed mortgage are homeowners whose income is relatively set. Borrowers who pick this type do not plan on paying off their mortgage in the short term.

This is not the type of mortgage you would take if you were expecting a big inheritance or other significant increase in your income. The reason for this is because you will face a penalty if you try to pay off a portion of or your entire mortgage. And the penalties can be high. If you can, you’re best to wait until the renewal term of your mortgage comes due before making any changes.

To be fair, most lending institutions are not as severe as they once were when it comes to paying off or paying down your mortgage. Most permit some kind of allowance that lets you pay off a certain portion or percentage of your mortgage without penalty.

Open 

This type of mortgage offers a higher interest rate and shorter borrowing terms but it has a kind of flexibility that is important to some borrowers. The beauty of this kind of mortgage centres on the fact that it lets the borrower pay back the mortgage or part of it without penalty. An open mortgage is perfect for those who plan to sell their house or who are soon anticipating a significant infusion of money and planning to pay down their mortgage debt with it.

These mortgage rates tend to be variable, which is another benefit. You can move into another mortgage product at any time if you decide a variable open mortgage is not suitable for you.

Sources: www.creditfinanceplus.com, www.youngandthrifty.ca, www.lowestrates.ca

Next to January and February, November might just be one of the year’s most hated months.

Its drab and rainy weather does little to endear us, as does its call to winter with cooler temperatures, unwelcome snow and dreaded ice. There aren’t even any terrific holidays this month to buoy us out of our seasonal-related misery. And for some of us, it’s a time to start stressing about the coming holiday season and all the excessive consumption that entails.

But November is not all doom and gloom. When it comes to real estate, in fact, it may be one of the best months to sell your house. Here’s why:

Quick sale

If you’re looking for a transaction that is fast November is a good time to list your property. People who are looking now are likely more serious and motivated. As a result, they tend to have more urgency so a quick sale that can get you out of your current home before, say, Christmas might just be possible. Know this: if buyers are trudging through snow, ice and generally crummy weather conditions, they mean business.

You’re an introvert

You don’t really like people very much so the prospect of having hundreds of potential buyers traipsing through your door is enough to send you over the edge. Selling your home in November definitely means you’ll have to contend with strangers but the numbers will be far less than in the spring market.

Less competition

Real estate inventory shrinks from about November to January and while that sounds like an unlikely scenario for successful sales, just the opposite is true. You may be even more so in the driver’s seat as a seller with less competition during this time. In fact, sellers might find they can get prices they could not command previously.

Seasonal splendour

Not everyone hates fall and winter. Each of those seasons showcases a unique and remarkable beauty unto its own. Don’t let cooler temps or drizzle get you down. As a seller, play up the loveliness of fall and winter. Adorn your front door with a seasonal wreath or favourite decoration. Let your garden spotlight the charm of the season with fall and winter blossoms and the changing colour and shapes of foliage. Your efforts will be appreciated.

Sources: www.time.com, www.ctvnews.ca,

A hard-fought and lengthy battle between the Toronto Real Estate Board (TREB) and the Competition Bureau ended in late August with a Supreme Court of Canada decision that will permit TREB’s 50,000 Ontario agents to publish home sales data on their websites.

The country’s top court refused to hear an appeal from TREB, Canada’s largest real estate board, which wanted to put an end to members posting sales numbers on websites. But the court dismissed TREB’s application.

The board wanted to keep the data in the hands of realtors as it believed publishing the numbers violated consumer privacy. However, critics say TREB was not concerned with issues of privacy but rather market control and ensuring that only realtors with access to the MLS would know the full story behind home sale prices.

What this decision means for consumers is that they will be able to have greater access to information, such as finding out the selling price of homes in certain neighbourhoods or on specific streets, the history of a house and property market trends. This will only serve to make decisions about buying and selling real estate much easier.

Before the only way to access sales data was through real agent requests. And those requests had to be made via fax, email or in person. Others would also look to online property value services or local land registry offices, which charge a fee.

Those who supported removing the restrictions say this has been the case for some time in the U.S. and rather than hinder the real estate market, some say it has actually fueled home sales there and enhanced transparency.

“Today’s decision will allow greater competition and innovation in the real estate services market in the Greater Toronto Area, and concludes seven years of litigation in the bureau’s case against TREB,” the Competition Bureau said in a news release.

“The order requires TREB to remove restrictions on its members’ access and use of real estate data – including restrictions on the display of historical listings and sale prices online through virtual office websites.”

Sources: CBC.ca, Financialpost.com

Do headaches and hassles come with owning student rental units? Of course, but there are also plenty of opportunities that might just make investing in student housing worthwhile.

Let’s look at some facts. The number of domestic and foreign students drawn to Canadian universities and colleges is not going away. In fact, it’s growing.  In 2017, Canadian universities were home to more than 1.7 million students. About 370,000 international students attended universities and colleges in 2017. And they all need a place to live.

Industry insiders have long been aware of the investment opportunity in student housing. They say the Baby Boom Echo, which is essentially a second explosion of babies born thanks to the original boomer demographic, has grown up and is looking to further their education, thus making student housing a solid niche for investors.

You’ve likely at least heard of friends of friends who decided to purchase a house, townhouse or condo for their post-secondary-bound son or daughter. While that may sound a bit extravagant to some, it’s actually a clever way to invest your money. Living expenses add up quickly, whether they are on campus residences or co-op living arrangements in off-campus housing. Residence fees can range from $7,000 to as high as $15,000 or $20,000 per year. Living off campus is likely cheaper. But why not invest your money in a rental property? Your son or daughter can keep an eye on the day-to-day operations of the unit, especially if you live far away.

You can rent a 3-bedroom Toronto condo for $3,400 to $4,500 per month. While that is a lot of money to hand over each and every month, the hit is softened as it is divided among three tenants who share the condo’s common living space, which includes the kitchen, bathrooms, living room and balcony.

Another advantage to investing in student housing has to do with late or absent rent payments. When a single tenant is late paying his or her rent, the financial setback can be quite a blow for the landlord, who typically needs prompt payments in an effort to pay mortgage fees, condo fees and other bills. Withstanding the loss of rent money from one student renter is easier to swallow as the remaining renters help ease the shortfall with their rent payments.

So there are certain benefits to investing in student housing and the biggest one is that cash flow is usually higher than with single-family rentals. Of course, tenant turnover is higher so there is that to contend with. Just be sure to do your due diligence when vetting potential tenants and don’t forget to insure your property so it reflects that you are renting your space to students.

If you’re a millennial hoping to build your life and grow a family within the city, you will likely know that Toronto’s condo boom is also in short supply of family friendly units.

While developers have spent the past decade or so building smaller condo units with single folks or investors in mind, a 2017 housing report by Ryerson University and Urbanation points out that developers and city planners need to look at the changing demographic landscape to help guide the housing development of tomorrow. The report notes that as millennials mature and begin to raise families and as baby boomers age and decide to move out of their homes and into condos, the city will require more family-oriented housing units for these groups.

Yet condos are getting taller and smaller overall. Proportionately speaking, developers are building fewer two-bedroom condo units than ever before. The size of so-called family units is shrinking when compared with, say, a three-bedroom condo from a decade or two ago. Many condos buildings are towers, and as such, considered unliveable by some. At the same time, affordability has also taken a hit. For example, in 2007, the price gap between a detached house and average condo was $205,000. In 2017, the difference jumped to over $600,000.

The report titled Bedrooms in the Sky calls for a shift in how developers meet the housing needs of the future and the so-called “missing middle” housing options that fall somewhere in between a detached home and small condo apartments.

Toronto, Ontario, Canada

“This missing middle includes low-rise walk-ups and stacked townhouses that can infill low-density neighbourhoods predominated by single-family homes,” says the report. “Mid-rise buildings can also help bridge the gap between detached houses and small apartment units. Mid-rise buildings tend to include larger units and can be more attractive to families than high-rise buildings due to their moderate scale and better integration into existing communities.”

At the time of the report’s release in November, 2017, just three per cent of condos slated for development in the GTA were in buildings under five storeys and only seven per cent were for five to eight storeys.

Buildings under six storeys can be built using wood-frame construction, a feature offering developers greater flexibility, according to the report.

Building bedrooms in the sky for growing families may be the way of the future for those who want to own property in the GTA. In order for families to stay put, developers need to make condos that are spacious and family friendly. That requires political will and the recognition that if condo prices continue to climb, good families will be forced to relocate outside the city.

Don’t let the naysayers bring you down. There are still numerous ways in which to invest in real estate in the GTA.

Investments come with certain rewards and risks so it’s important to go in with your eyes wide open. How risky, how accessible and how difficult or easy depends on your resources and your tolerance level.

Given the city’s escalating real estate prices, making a quick buck in the market is not as easy as it once was. But that doesn’t mean earning a profit on your holdings is a product of a bygone era. You likely need to be in it for the long haul.

An ideal scenario would give investors a positive cash flow in which your investment property spikes in value and your dream tenants never squawk about helping you pay off the mortgage. In today’s market that would be the stuff of dreams, however. Investors in Toronto are lucky to break even on their outlay. Your cash flow, which is the amount you keep after collecting rent and paying the expenses on your property, may see you recover your costs. But if you’re looking to fund your kid’s university education or a vacation home this may not be for you.

Let’s look at the types of investments that might be right for you:

Income Property

These are typically detached and semi-detached homes that have been converted into apartments. Houses in the city typically grow in value greater and faster than do condos so that’s an argument in their favour. You should be able to at least balance your expenses against your income and – who knows? – maybe realize a positive cash flow. Of course, know that you will have all the headaches that come with renting out a space, too.

Condos

These investments are hot, hot, hot right now. But condo investing likely means a more long-term proposition. Thanks to the city’s very low vacancy rate, landlords have the upper hand and can pick and choose from a list of preferred tenants. The maintenance and all-round work of keeping a condo in good repair is significantly less than with a freehold house. Their appreciation levels over time are also respectable.

Commercial Property 

These are often also known as mixed use properties as they have a mix of retail, office and apartment space. A big reason to invest in these properties centres on earnings, which are generally higher than that of residential buildings. Other bonuses include the pride retail and commercial business operators take in their businesses. The leases you negotiate with commercial tenants can be attractive, too, as the onus is often on the tenant, and not the landlord, to pay the expenses associated with the space. On the down side, there is more work involved with managing a commercial property, you will likely need more upfront funds for your investment than with a residential property and there is a higher liability risk as more people will be accessing the property due to its commercial focus.