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Affordability

w.ll.am said:
hmm..... tell that to the 190k we made after selling our last condo. That's after 4 years of living in it. Seems like a profit to me? That's after all fees and whatnot btw.
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You will be sadly disappointed if you are expecting the same thing to occur in the next 4 years.

The past 10 years in TO experienced unprecedented appreciation ... a smaller bubble than US and western Canada, but a bubble none the less, fueled by interest rates at historical lows (which have no where to go but UP).

RE prices have about a 10-20% decline ahead of them to get back to trendline (~ $325-350 PSF)
 
We had the luxury of buying a few years before we sold that unit. So we bought at 315 per square foot in the London. I don't think prices will drop that low for that location so we're still set to make a profit off it.
 
w.ll.am said:
hmm..... tell that to the 190k we made after selling our last condo. That's after 4 years of living in it. Seems like a profit to me? That's after all fees and whatnot btw.
Click to expand...

Your logic is akin to someone who wins money in a lottery and concludes that lotteries are profitable. I don't deny that you made some great money, and more power to you. But that doesn't mean that the avg condo bought at the avg point in the market cycle will produce a profit net of fees/costs. Quite simply, you got very lucky.
 
cdr108 said:
You will be sadly disappointed if you are expecting the same thing to occur in the next 4 years.

The past 10 years in TO experienced unprecedented appreciation ... a smaller bubble than US and western Canada, but a bubble none the less, fueled by interest rates at historical lows (which have no where to go but UP).

RE prices have about a 10-20% decline ahead of them to get back to trendline (~ $325-350 PSF)
Click to expand...

I absolutely agree that the next 4 years will NOT yield any appreciable results.

However, I do think that low interest rates, although not as ridiculously low as they are now, will be around for the next 5 years at least.

I also agree there will be another 10-15% correction, however, that will only drop the downtown Toronto market into the 400 sq/ft range. It is never going to go back down to the 325 level that was circa 2004. Never. Yeah, I said it. ;)
 
Lucky? We knew to sell at that point because we knew that the market couldn't continue at the current rate. My father-in-law is a successful land developer and we both agreed it was a good time to sell. The second property will also turn a profit. Is that lucky as well?

But more to the point I was specifically responding to this...

Mindset said:
The end user never, ever makes money on their property.
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Timing and other factors are important when 'flipping', but this of course is a bit of a gamble. However, buying a condo to live in makes all sorts of sense.

Say you buy a $300k downtown condo for cash. You are now living in a place that's probably costing you around $600/mo (maint+tax) that would cost probably a thousand bucks more than that to rent. That's a tax-free yield of $12000/yr or 4%, a pretty decent investment for your $300k. And that's ignoring potential appreciation.
 
w.ll.am said:
Lucky? We knew to sell at that point because we knew that the market couldn't continue at the current rate. My father-in-law is a successful land developer and we both agreed it was a good time to sell. The second property will also turn a profit. Is that lucky as well?
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You bought during the appreciation phase of the cycle and have a real estate expert in the family to advise you. Sorry, but it seems pretty lucky to me.
 
Congrats Willy on the sucessful investment. Would you be able to do me a favour and list all the costs, fees, taxes, upgrades, funishings, heating/hydro, pruchase/sell price, location, etc. relating to living and owning the property?

Also what/where did you buy now?

I dont doubt you, I simply wish to have a better understanding so that I may learn from your experience.

Thanks!


w.ll.am said:
Lucky? We knew to sell at that point because we knew that the market couldn't continue at the current rate. My father-in-law is a successful land developer and we both agreed it was a good time to sell. The second property will also turn a profit. Is that lucky as well?

But more to the point I was specifically responding to this...
Click to expand...
 
I apologize for that statement, what I meant to say is that in the end after all the homes you move in and out of, and all the expenses that come with living in a home you will never ever be ahead.

The sun shines on every dog's a$$. The road is long, and the more moves you make the greater the chance of making a mistake, no matter how intelligent you believe yourself to be. I wish you all the good fortune in the world but this world has a tendency to humble even the brightest and business savvy minds.

w.ll.am said:
hmm..... tell that to the 190k we made after selling our last condo. That's after 4 years of living in it. Seems like a profit to me? That's after all fees and whatnot btw.
Click to expand...
 
I don't really agree with that.... while you may pay a little more overall for a condo/home than renting your are paying towards and investment that will accrue over time if you bought at the appropriate time.

With regards to my previous condo we had no upgrades. We did put in new hardwood before we sold (which I adjusted for in the total haul) , real estate fees were about 20k, and we had no lawyers fees since my father-in-law used to be a real estate lawyer. Location was queen and beverley in the Phoebe. It was a one-bedroom no den at the courtyard level. We essentially levied at additional 50k on the purchase price because of the courtyard level location (it's quite green with a little waterfall running through it.)

Heating and hydro is irrelevant as with renting you usually end up paying more for hydro since landlords tend not to upgrade to proper insulation.

The big cost is obviously upkeep on a house or fees on the condo. This runs about 50c sq ft at this time depending on amenities. Our current will probably end up being about 500 per month. At the previous location it was 300. These are worked into rent so you won't have much difference there though older places are cheaper to rent so you pay a little more for heat and a little less for rent.

Our new place as I mentioned earlier is in the London on the Esplanade.

Overall the payments over 4 years probably don't return much if anything. You need to buy the right place at the right time. I don't really buy to make money though it is fun to make money when you do :)

Our final purchase for instance won't be for money but to enable my wife to pursue the work that she loves. These previous purchases have been stepping stones to enable us to do that though.
 
Thanks Simuls :) Sometimes recently I feel a little guilty for doing well. Especially in this economy. The last recession I was very unemployed.
 
Insulation in Condos

w.ll.am said:
Heating and hydro is irrelevant as with renting you usually end up paying more for hydro since landlords tend not to upgrade to proper insulation.
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All condos are insulated according to Ontario Building Code (OBC) and there are no options for purchasers to make any material changes with regards to the construction, such as insulation.

The insulation problem is with houses, especially old ones, not condos.

- yossi
 
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