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Felix07Richerd
Guest
I have some money for invest but so confuse, because I can't decide which option is best for good response at this time.
Please help me.
Please help me.
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urbandreamer
recession proof
F currently @$14; P&F price target: $19. I'd sell in around $17.50
GS: currently @160, nice recovery from the lows. Is it over yet? Nope, 50/200ma crossover means P&F target of $200 is within reach, sell in the $185 range....
Now, if stocks scare you, hold for the coming Winter 2011 condo market crash. March 2011--buy in imo.
GS: currently @160, nice recovery from the lows. Is it over yet? Nope, 50/200ma crossover means P&F target of $200 is within reach, sell in the $185 range....
Now, if stocks scare you, hold for the coming Winter 2011 condo market crash. March 2011--buy in imo.
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SovX
New Member
It depends on how much money you have to invest and your personal level of risk aversion. I would suggest you speak to a planner first because questions like yours can't be easily answered on a forum.
Kenny
Active Member
Choose them all. You're better off with a diverse portfolio.
interested
Senior Member
the most sound advice even if posted by an obvious planner with self interest.
I would suggest to get started you read some simple investment books and the business pages of the Globe and Mail or Financial Post. You need to get some knowledge to begin to approach this issue.
The correct decision is not the same for one person to another. If you are young, have a great future ahead of you with good earning capacity, you can take risks. If you have significant expenses less certainty or are older, you should not be taking risks.Hence, the question is too vague to answer with any degree of confidence.
If this is "play money" maybe UD's advice and the market may make some sense (if you can understand it). Otherwise, I am sure UD will explain.
Catapult
Active Member
Max out your RRSP contributions first so you get the tax deduction. I also assume you already own your own home. If you don't, the capital gains exemption for your principal residence makes owning an attractive investment. I also don't like mutual funds much - the fees can siginificantly reduce your return plus if they're back loaded you often can't get out of them for a long time (somethig to check). Interestingly, I found my mutual funds generally underperformed the market during the recession. I've now moved most of my investments (to the extent possible) into a self directed RRSP and use a financial adviser.
GraceCondos
Active Member
If you want to invest in RE, I'd suggest a buying a duplex or triplex in an established neighbourhood close to TTC. It's not exciting, but you'll make ~6%/yr on rents plus any appreciation. And as your mortgage is paid down and the value rises, you can tap into that equity to make further investments.
Just my 0.02
Just my 0.02
CN Tower
Banned
More like 3%...
GraceCondos
Active Member
Who's buying property at a 3% cap rate?
interested
Senior Member
Everybody if they are lucky on a non constructed condos.
Maybe even less than 3%.
The big problem with cap rates is people keep quoting figures that were in existance years ago.
I believe you can on a triplex get 6% as GraceCondos suggests. However, one has to be prepared to do alot more work than on a condo.
If one goes outside Toronto, there are better opportunities but again it is not fun being a landlord 60-150 km away for example.
Maybe even less than 3%.
The big problem with cap rates is people keep quoting figures that were in existance years ago.
I believe you can on a triplex get 6% as GraceCondos suggests. However, one has to be prepared to do alot more work than on a condo.
If one goes outside Toronto, there are better opportunities but again it is not fun being a landlord 60-150 km away for example.
GraceCondos
Active Member
Yes, my suggestion was based off a duplex or triplex (freehold). I wouldn't buy a condo with positive rental cash flow as your primary goal. With buying off spec, the goal is to flip for appreciation - at least that's my belief.
There is more work with freehold, but you can limit your headaches if you buy right. I suggest clients buy infill properties (built in the 50s, 60s or 70s). They are usually double brick construction and were built specifically to be multi-family. The rooms are large and you usually don't have to worry about knob & tube (although aluminum wiring is a concern with the ones built in the 70s). They're pretty cookie-cutter and you can slap IKEA kitchens and Home Depot Bathrooms in them and there isn't much that will go wrong!
CN Tower
Banned
I'd love to see the numbers on that one Grace. I bet you can get a proforma 5% return using above market rents and below market operating costs and not factoring in any vacancies or bad debts or property management fees, ie your time. When you pull it all together at today's prices I would shocked to see a decent property yield more than 4%. And wait until you have to made an unexpected capital expenditure.
Even so, if you have numbers it would be fun to review. I don't normally see this small stuff but people are always asking me how to get started.
Even so, if you have numbers it would be fun to review. I don't normally see this small stuff but people are always asking me how to get started.
GraceCondos
Active Member
CN Tower - I'll choose a couple recent sales over the next few days and report back with the math. You're right, my figures don't incorporate vacancies or management. But not because I'm ignoring them, but because if you choose the right location you can run with next to zero vacancies and with this size of property almost no one pays for managmenet.
Thanks for the "chat"! (and it's Geoff btw - Grace is the family name)
Thanks for the "chat"! (and it's Geoff btw - Grace is the family name)
interested
Senior Member
Big assumption Geoff: No vacancies: I have been a small landlord like you are suggesting and while I have been fortunate: No vacancies is simply not a reasonable assumption. Also, assuming one uses a real estate agent, you are looking at 1 month rent and HST. You have move in costs, etc. It would be tough in Toronto to get 6%. In University towns one can get this. But then there is not much price escalation so one trades income for capital gain.
CN Tower clearly deals with a different section of the market but anyone buying not allowing for contingencies is just asking for trouble. CN Tower's point especially with older property about an unexpected capital expense has to be factored in as well in your calculations with an amount put aside each year. Otherwise you have 8 years no expense and then 1 year major unplanned expense. I too will look at your examples but for others less well versed in this or with lack of experience, I think we owe it to those people to point these additional factors to them.
CN Tower clearly deals with a different section of the market but anyone buying not allowing for contingencies is just asking for trouble. CN Tower's point especially with older property about an unexpected capital expense has to be factored in as well in your calculations with an amount put aside each year. Otherwise you have 8 years no expense and then 1 year major unplanned expense. I too will look at your examples but for others less well versed in this or with lack of experience, I think we owe it to those people to point these additional factors to them.
urbandreamer
recession proof
Market pullback today, but an update: F(ord) closed above $16 today, GS (Goldman Sachs) hit $170 yesterday and today. Not bad return on two big caps, but gosh, it took so long...
One week? That's worse than buying presale!- Status