Why is Spring 2016 the Best Time to Sell a House in Toronto? Just take a look at historical Toronto Housing Prices for this time of year.
It’s hard to believe that February is already over and Spring will be here in just three weeks. Like many Torontonians, Realtors love this time of year, not only because of rising temperatures but because it’s the best time to sell a home. Any seasoned Toronto Real Estate Agent will agree that certain seasons are more favourable to sell a house than others. Oftentimes, the transition between cold months to warmer months sparks something in buyers, and with the current condition of the Toronto Real Estate Market, this couldn’t be truer. In fact, it’s in the Spring when Toronto housing prices increase and homes sell at or above asking price. Furthermore, the amount of time they on the market is significantly short when compared to other seasons. We’re still in a seller’s market, and the pent-up demand from buyers is exceeding the supply of Houses for Sale in the Toronto. While warmer temperatures do have an impact on home sales, but there are a few other reasons people want to shell out a few extra dollars for a house in the Spring.
Most families prefer to purchase a home in the Spring because that leaves them with ample time to register their kids in new schools. When it’s time to close, it will be relatively early in the summer, you most likely won’t have to deal with a heat wave when packing moving boxes.
Spring is a great time to showcase your home as well. With the snow finally gone, lawns are visible and houses just appear to be more attractive in the spring. There are no sub-zero temperatures or icy driveways to deter buyers from venturing outside of their homes. By the end of March, some annual flowers will be in fresh bloom and trees will begin to bud, and a feeling of a new beginning will be in the air.
With holiday debts and bills finally paid off, buyers are in higher spirits and aren’t as stressed about making a big purchase. Additionally, most buyers will have the benefit of a tax return in the Spring–this is especially helpful for first-time buyers who are feeling the impact of the increase in the minimum down payment. Remember, many people are entering the market for the first time, so be ready for people who are on the hunt for condos for sale in Toronto.
Competition among buyers is very stiff, and they’re willing to bid to the very end. Bidding wars occur most frequently in the Spring than at any other time of year because home buyers want the perfect move-in date. Use this to your advantage to ensure you make the most of your home sale.
Although Spring isn’t officially here until the Equinox on March 20, it’s definitely sprung early for buyers in the Greater Toronto Area. If you’re planning on selling your house, now is the perfect time to consult your GTA Real Estate Agent. The window of opportunity is wide open, so take advantage of it before other sellers start adding to the mix. While the market conditions will guarantee your house will sell, you want to get the best dollar for it.
In Ontario, tenancies usually last a year, however, if the lease has ended and the tenant has not given you notice, the tenancy will automatically renew on a month-to-month basis. Legally, a tenant must give at least 60 days notice that he/she will be ending their tenancy. But what rules apply to landlords and how do you go about giving tenants notice to vacate? If you have a rental property which currently has tenants but decide that you want to sell the house, a good rule of thumb is the more notice, the better. You can not contract “out of the law,” therefore, the guidelines and standards set by the Residential Tenancies Act or the Landlord Tenant Board must be followed.
If you decide you want to sell your house, giving notice to your tenant asking them to vacate the property in a month because you’re “thinking of selling your property” will not suffice. In this instance, the law does not work in your favour and the tenant is not legally obligated to move.
Let’s looks at a few situations:
You have been renting a condominiumunit to a very responsible couple who have been your tenants for three years. They’re currently renting on a month-to-month basis. You’ve spoken to a few people in the building and noticed that there is a demand for units, and they’re selling at a very desirable price. After doing a CBA, you decide that selling your unit would be more profitable than renting it out. Legally, you do not have to give notice to your tenants until you actually sell the unit, but you can let them know that it’s on the market. As a landlord, you must make a reasonable effort to inform your tenants that you’re going to show the unit to prospective buyers. Showings must occur between 8 a.m. and 8 p.m. In this situation, the couple is cooperative and tell you they’ve been looking at buying a property in another part of the city. Shortly after you listed the unit, it sells above asking and the closing date is two and a half months from today, February 25, 2015. Along with the correct forms, you give your tenants 60 days notice, which goes into effect on the last date of the rental period (February 29). They must vacate the premises by April 30. Since your closing date is May 16, it works out perfectly for you because you’re maximizing your rental income, and have a significant amount of time for your property manager to ensure the unit is clean and ready for the new buyers. You and the couple end the tenancy on great terms, and you start looking into other investment properties.
But what happens if you sell your property while your tenants are in the middle of a lease agreement? Legally, they are not obligated to leave until the end of their tenancy. You can tell them your situation and ask them to leave, compromising on a substantial amount of time. Hopefully, they are cooperative, however, if they are not, you can buy them out. Unfortunately, you cannot force them to leave unless you have grounds to evict them.
In any situation, it’s best to give as much notice as possible. Hiring a Toronto property manager to assist you with a tenant screening process will help decrease the likelihood of you encountering problems when ending a tenancy due to uncompliant tenants. Before you enter any lease agreement, carefully plan it out and consult your property manager for advice to ensure the decision you make is the right one for your situation.
It’s that time of year when many of us are feeling the holiday bloat from all the festive cheer we partook over the past month and are now considering our new year’s resolutions. While many of us are adding “lose weight,” “eat healthier” or “get to the gym four times a week,” we often forget that we’ve made these resolutions in the past, and were lucky if we stuck to them for more than a month. With 2016 quickly approaching, now is the perfect time to take a look at our spending habits over the past year to assess where we are financially, and set some clear goals or money resolutions for the new year. As some goals, such as planning your retirement may affect your loved ones, it would be best to sit down with your family to discuss them. Not only will your family be aware of your goals, but they can acts as accountability partners if you fall off track. Here is a list of some resolutions that you might want to add to your list—also, eating healthier is always a good resolution.
Create a new budget You and your family may have experienced a significant change in 2015, such as a new baby, purchasing your first home, or helping your child through her first year at university. Playing the guessing game can be tough as we might not know how things will play out until several months have passed, but try your best to sit down with a pen and paper and write out your expenses in as great detail as possible. Although it’s important to revisit your budget annually, try to visit it quarterly as this might help you adjust expenditures accordingly.
Take advantage of TFSA and RRSP contribution room If you haven’t maxed out your contributions in the past and have some money kicking around, why not place it in a TFSA or RRSP. Maybe you’ve landed a new job or received a promotion—and are receiving a higher income than last year. A smart way to ensure that money gets set aside is to set up preauthorized transfers to your TFSA and RRSP. You’ll thank yourself when tax time rolls around in 2017 and also feel accomplished knowing you’ve contributed to your nest egg or retirement.
Reevaluate your mortgage situation
Will your mortgage term be coming to an end before you have your house paid off? If you have three years left on your amortization, but paying off your home won’t be possible for another four years, you might want to consider refinancing options. Chances are mortgage rates are not going to get any lower than they are now, and if your term is up in four years, who knows how high the interest rates will be. Reassess your situation, take advantage of low lending rates and breathe a sigh of relief knowing you’re making the most out of one of your biggest investments—your home.
Teach your kids about budgeting
Whether you have a son in middle school or a daughter in university, it’s never too early to teach your child about the importance of budgeting. Take some time to sit down with your young one to discuss his or her allowance. If they’ve been itching to get that bike that Santa didn’t leave in their stocking, you can teach them how to put away a portion of their allowance, birthday money, or money from their paper route to buy that bike. If your child wants a bike by June, he would have five months to save for it. On top of lunch money, entertainment, a long-term savings account and even donations (we should teach our kids about philanthropy), figure out what is left every month/week and how much of it needs to go to the bike. For those of us with older kids off at university, check in to discuss their plans after post-secondary, as well as how much debt has been accumulated. Depending on the financial institution and repayment terms, help your child prepare for the next step after graduation. If your child is lucky enough to land a job after he or she graduates and if you’re planning on helping him/her with their payments, discuss a fair amount that needs to go directly to paying their debt.
Purchase an investment property
If you’ve been considering buying a rental property, early 2016 would be a fantastic time to do so. With rock-bottom lending rates that will undoubtedly rise in the near future, purchasing a multi-dwelling house is something you might want to consider. Investing rental in Toronto or the GTA can be a source of residual income with the population of the GTA rising with young professionals. If you have any questions, talk to a real estate investment expert who will point you in the right direction. Also, make sure you hire a property manager to ensure your rental home is in good hands.
Hey, Big Saver!
Some people are great at saving and before they know it, they have a piggy bank that’s bursting at the seams. If you find yourself maxing out your RRSP and TFSA contributions, and are satisfied with your investments, why not plan a paradise getaway or donate to your favourite cause. Treating yourself now and then never hurts, however, using your money toward meaningful experiences with your loved ones will create memories that are priceless.
The Priority Pyramid
Remember that when making a financial plan it’s wise to follow a priority pyramid to help employ the best strategies to successfully complete Operation: Financial Resolutions 2016.
The Municipal Land Transfer Tax is coming to a town near you, and most likely, your town as well.
The dreaded Municipal Land Transfer Tax (MLTT) might be spreading across Ontario as an additional taxation measure backed by the Liberal Government. This tax will be on top of the existing Provincial Land Transfer Tax (PLTT) levied upon closing a land or property transaction in Ontario. As a buyer, the amount you paid for the land as well as your mortgage or remaining debt related to the purchase of the property are factors that determine the tax payable.
In 2007, Toronto City Council approved the Municipal Land Transfer Tax to the dismay of Realtors® and hopeful residents alike. Currently, Toronto is the only city in the province that levies an additional tax on top of the Provincial Land Transfer Tax. Although the MLTT has caused some homebuyers to consider, properties outside of the city, buyers in Toronto seem to be more accepting of the tax as of late. In a competitive market where the cost of an average detached home is over $1 million, what’s another $15,000 in municipal taxes?
Several Realtors® are up in arms about the possibility of the Liberals moving forward with this decision, as it may have a significant impact on the housing marketing in cities outside of Toronto. Although Toronto’s housing market is robust, during its first five years, the MLTT is said to be responsible for a severe decline in home sales. The Ontario Real Estate Association (OREA) is requesting that the Liberals reconsider giving municipalities the power to levy this tax. Homebuyers in Ontario can expect this new tax to implement as early as next year, and if the Liberals do follow through with the policy change, Ontario will become North America’s most taxed jurisdiction.
As investors, what can we do to prepare for this? Not much, however, we can expect increased competition in housing markets in the surrounding GTA, especially luxury homes in York Region. With the policy change looming near, there is even more incentive to invest in property on the outskirts of Toronto. Do the suburbs suddenly sound more appealing? We think so too.
In the eyes of foreign buyers, Toronto is North America’s New Dubai – But are they behind our city’s short housing supply?
Should Canadian Real Estate Be Open Game for Foreign Real Estate Investors?
News from the CMHC on gathering data surrounding foreign real estate investors in Canada has many local buyers worried that they’re responsible for driving housing prices up. Recently, China’s Government made changes to the Qualified Domestic Institutional Investor (QDII2) program which allows individuals in China, whose net assets exceed 1 million Chinese Yuan or approximately $210,000 CAD, to invest overseas. It is estimated that combined, these individuals have up to $2.3 trillion that can now be invested globally. Despite these changes, the majority of real estate demand still comes from local investors. Toronto is home to top educational institutions, cultural diversity and a thriving economy, and is also the country’s financial hub. In addition to low interest rates, these factors play a large role in the number of Canadians migrating to the GTA as well.
Our low loonie has drawn the interest of foreigners who are able to stretch their dollars further than they can in their own country. While there has been an increase individuals from India, China and even the U.S. entering Toronto’s condo market, Canadians shouldn’t feel discouraged — There is still plenty of room for GTA real estate investors. With the average lease for one bedroom condo unit fetching $1,642 per month, earning back your investment through rental income, while the avoiding the hefty condo fees and financial risk that larger units bring is possible. Keep in mind that renters of one bedrooms are comprised mainly of young professionals, so units in the downtown core are looked upon more favourably. Furthermore, families who have given up on buying a house in Toronto are turning to condos as well – making two bedroom condo units a wise investment. Two bedroom units also appreciate in value considerably faster than one bedroom units, allowing you to see a return on your investment should you sell the unit in the future.
When looking at the larger picture, you have to consider the net number of foreign buyers and immigrants, and the net number of Canadians moving to Toronto from other cities. Also, once the CMHC addresses data surrounding the volume of mortgages issued and outstanding, characteristics of borrowers, property type and geographic location, we will be able to more accurately gauge the of number of Foreign Real Estate investors Toronto brings, as well as domestic investor levels. Despite rumours of a housing bubble, Toronto’s housing market remains a well-oiled machine and shows no signs of slowing down.
Thinking about buying an investment property in Toronto? You’re not alone. For years, savvy investors have been buying, renting, flipping and selling real estate in Toronto. Historically Canadians have always leaned toward real estate as a key investment and according to a recent study by TD Bank, several professional investors also consider their home as an investment. Not only is investing in real estate is an excellent way to build a nest egg, it also offers the security of a hard asset that you are in control of. Whether you’re a seasoned investor or a millennial interested in buying your first rental property, there are a few key things that you should consider before taking that big step.
1. Set realistic goals and stick to them
Begin by writing down a simple plan that will remind you of your goals for property investment. Are you buying this property as a long-term investment to secure your family’s future and your own retirement? Maybe you’re interested in renovating a dated property to eventually sell. No matter what your goal is, make sure that you’re certain of your intentions and that it will help put money in your pocket after all expenses are paid.
2. Do your research
A common mistake first-time investors make is purchasing a property without conducting the necessary research. There is a wealth of information that can be found online, however, a consultation with an experienced agent who can share his/her own experiences can help you weigh the pros and the cons of purchasing, and come to the right decision.
3. Borrow responsibly
Educate yourself on financing. Taking out a second mortgage isn’t as easy as your first, and when buying additional property, a minimum down payment of 20 per cent is required. Talk to your broker or bank to determine how much you can realistically borrow. It’s good to be optimistic about your property’s income generating potential, however, when it comes to borrowing, biting off more than you can chew can add unnecessary stress and strain.
4. Home Inspection
Be sure to have the property inspected by licensed home inspector. This is especially important if you’re buying an older property. For advice on repairs or renovations, hire a contractor who you can trust—if you know of a friend or colleague whose home had recently undergone impressive renovations, ask to be referred to their contractor. You want to get the most out of your investment and by simply updating an older property, you not only raise its market value, you can increase your rental prices, thereby generating more income.
5. Hire an experienced and reputable Property Manager
Property managers can help you find suitable tenants. They can perform screening and background checks, as well as deal with any ongoing maintenance, repairs, or complaints. Property managers can offer useful advice in regard to pricing and marketing your property to maximize its appeal.
6. Stay Organized
Keep all of the property-related income and expense records organized and separate from your personal finances. When it comes time to file a tax return at the end of the year, you won’t have the stress of having to track down those reports amidst other piles of paper.
7. Location, location, location
You want to purchase a property in an area that is close to amenities, has a high Walk Score and is easily accessible by major highways, public transportation or both. Be sure to research other rental properties in that neighbourhood—property investing is a business and you should be aware of your competition. If the location is saturated with rental properties, particularly vacant ones, you should look elsewhere.
Trust your instinct. Don’t be afraid to walk away if the property doesn’t feel right or work for you, no matter how much time you may have invested in the process. The perfect opportunity will come your way–remember, when one door closes, another one always opens.