It's a Good Time To Buy:Poll

Toronto Sun, Mar. 15, 2009. The economy hasn't slowed down Canadians' intensions to buy a home. In the 16th annual RBC Homeownership Survey, released last week, 65% of Canadians think it's a buyer's market, and more than a quarter of Canadians(27%) say they intend to purchase a home over the next two years, up 4 points from 23% in 2008- largest single year increase since 2001.
In Ontario, the response is even stronger: 30% said they were likely to purchase a home within the next two years, up from 21% in 2008.
"The current economic environment does not appear to have dampened Canadians' overall confidence in the housing market," said Karen Leggett, head of home equity financing for RBC Royal Bank.
According to the survey, conducted by Ipsos Reid, a majority of Canadians(83%) remain positive that home ownership is a good investment.
"Low Mortgage Rates and favourable housing prices are influencing home purchase intentions this year and may be the reason more Canadians are poised to purchase over the next two years", added Leggett.
Indeed, among those who intend to buy, three in ten say favourable price is a major reason.
The primary reason stated by homeowners not planning to purchase a home is that they are content with the home they have (60%). Job loss/employment factors (8%) as well as general concerns about the economy (6%) also influenced people'd decision not to buy a home.
Almost all respondents (96%) indicated that buying a home with low energy consumption was important to them, and 81% said the same about environmentally friendly features.

First Time Buyer's Dream!

Affordable Home Ownership in this Terrific Newer Freehold Townhome! Whitby.

Unique Open Concept Main Floor with "Great Room". Neutral Decor, Tastefully Upgraded. Fully Fenced Backyard with Access to Garage PLUS Direct Entry From Garage. Extremely Clean & Well Kept with over 1,500 Sq Ft. Close to Schools, Parks, Shopping & More! $249,900

If You Are Currently Renting...

Investment Chart
For Wealth Creation!

Year 1..........................................................Year 20

Buy................$200,000.....(Use Zero Inflation)...$200,000
Down Payment....$40,000.....(rent pays mortgage).............
Mortgage........$160,000.......................Clear = $160,000

You have $160,000 free & clear more than you have today (not taking into consideration interest, tax w/off, home repairs etc.

Index to Inflation:
@ 3 1/2 % inflation doubles in 20 years = house worth $400,000 ++

If you take positive cash flow and put back into the mortgage you may realize full return in less than 15 years.

$40,000. Down
$10,000. in Annual Rent
= 25% Annual Return on Cash Invested

If you are currently renting, then your Landlord gets these benefits.

Unsure Where To Put Your Money???

GIC's? RRSP's? TFSA's? RESP's?

Try Real Estate!!!

Is This The Right Time to Buy an Investment Property??
Many of you have asked me that question recently. Now is a good time for me to share with you some unprecedented realities on this subject. The real estate market conditions are very good right now for Buyers and Investors to take that step forward.

1. The Market has cooled down from previous years which means instead of a Seller's Market (More Buyers than Sellers), we are seeing more of a Buyer’s Market (More Sellers than Buyers) now. There are many good opportunities out there now from a pricing standpoint.

2. Mortgage rates have NEVER been as LOW as they are right now. Prime Rate is 3% and “best” 5 year rates are sitting at 4.34%.. Historically when we have seen an adjustment in the Real Estate Market, the interest rates have actually risen. That is not the case now.

3. The Rental Market is currently very robust. Toronto is not only a very diverse city which attracts many corporations and industry, there are very healthy rental market conditions.

4.When looking at building your Portfolio which includes multiple property ownership, we need to focus on monthly carrying costs more than purchase price. Reason being that the key to success here are the carrying costs.

Sample Investment Costing Breakdown

Investment Property Price: $300,000
Downpayment: $30,000
Mortgage Amount: $270,000
CMHC Fees: @2.4% $6,840
Total Financing: $276,840

Principle & Interest @ 4.34% 5yr Term, 35yr amortization .........................15,315.00 /yr... 1,276.30 /month
Property Tax............................ 3,000.00 /yr... 250.00 /month
Total Payment..................... 18,315.00 /yr... 1,526.30 /month

Refinancing of Existing Property

Downpayment for Investment Property........... 30,000.00
Land Transfer Tax ......................................5,700.00
Legal Fees for refinance .................................200.00
Legal fees for Investment property Closing........ 1,300.00
Total.................................................... 37,200.00

Additional Principle & Interest Payment @4.34% 5yr Term 35yr Amortization....................... 2,058.00 /yr... 171.50 /month
TOTAL MONTHLY CARRYING COSTS.............1,697.80/month

This looks like a substantial monthly commitment, Right?

Let’s now look at Potential Income.

Typical 2/3 Bdrm Upper Unit Income..13,200.00/yr...$1,100.00 month
Typical 1 Bdrm Lower Level Income.....10,200.00/yr..$ 850.00 month
TOTAL MONTHLY INCOME.............................. $1,950.00 month

In this Sample “Investment Cost breakdown” you will see that there is a surplus of $252.20 monthly. This amount could be used to Offset your Existing Mortgage on your Principle Residence or Potential Maintenance or simply treating yourself to an Evening Out.

This Sample Investment Cost Breakdown is just an example using average Dollar amounts, ie property price, property tax, etc. Every situation is different so looking for the right property/scenario is important. Feel free to give me a call and I would be happy to help you further your property portfolio.