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Tag Archives: mls

Canadians’ Rapid Debt Accumulation to Slow Next Year as Housing Market Cools

08 Monday Nov 2010

Posted by gtarealtyagent in condo assignment investments, current real estate affaiirs, Interest Rates, Let's Talk Investing, Mortgage, Opinion, Uncategorized

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caamp, mls, Mortgage Broker, Mortgage FAQ, Mortgage Lending Rules, RealNet


Canadians’ rapid debt accumulation to slow next year as housing market cools

TORONTO – Low interest rates and a hot housing market helped push Canada’s total residential mortgage debt to a record $1 trillion this year, but a cooling real-estate market is expected to slow further accumulation, says the chief economist of Canada’s mortgage industry association.

The value of outstanding mortgages is now 7.6 per cent higher than it was last year, the Canadian Association of Accredited Mortgage Professionals said in its annual report released Monday.

“We’re still seeing a lot of movement into home ownership and that’s what’s driving the growth of debt,” said Will Dunning, CAAMP’s chief economist.

“The growth will gradually decelerate but we’re still looking at rates of six and a half per cent or so, so still fairly rapid,” Dunning said.

This year’s growth was higher than the average annual increase is around 7.1 per cent. However, it is still much lower than it was in the early 2000s, when debt growth hovered closer to 10 per cent year over year.

Higher home prices drove many Canadians to borrow heavily to finance -purchases, while a low interest rate environment encouraged others to refinance loans and consolidate debt, the CAAMP report said.

The low interest rate environment has enabled some consumers to take on bigger mortgages than they might otherwise have been able to carry, while it has encouraged others to borrow against their homes.

Recent housing market data points to a massive downshift in housing market activity.

A separate report issued by Canada Mortgage and Housing Corp. Monday suggested that home construction in October fell to its lowest level in more than a year, part of a slowdown that is expected to persist for much of next year as builders put the brakes on supply to match a chill in demand.

The report found that the seasonally adjusted annual rate of housing starts — which multiplies monthly levels by 12 to reflect annual levels — was 167,900 units in October, down from a revised 185,000 in September.

A decline in new housing starts, which usually lag a cooling trend by about six months, indicates that builders are slowing down construction activity as they see demand falling, to avoid creating a glut of unsold houses on the market.

Less activity in Canada’s resale home market and moderating housing starts will mean fewer people taking on new mortgages, Dunning said.

“That (slowdown) now and in the near future going to result in less mortgage takeout as those sales get closed,” he said.

Canada’s housing market has been on a tear for much of the past year after the Bank of Canada sent its trend-setting policy rate to an emergency low of 0.25 per cent to stimulate borrowing and consumer spending.

Buyers, spurred by easy access to relatively cheap borrowing, rushed into the market and competed aggressively for homes, which drove prices to record highs.

The market has been cooling in recent months as many sales were pushed ahead to the beginning of the year in advance of tighter mortgage qualification rules, a new tax regime in B.C. and Ontario and higher interest rates.

Meanwhile, the Bank of Canada’s policy rate has been hiked three times to one per cent, still historically low. The central bank is expected to take a pause on rate hikes until the middle of next year, giving mortgage holders more time to refinance at low rates.

Most Canadians have heeded warnings from economists — including the Bank of Canada — about growing debt levels and took advantage of low interest rates to refinance and pay off other debts, CAAMP said.

The report found 18 per cent of mortgage holders have taken equity out of their homes to free up extra cash. Almost half of mortgage holders who borrowed against their homes cited a need for “debt consolidation or repayment” and the average amount borrowed against home equity was $46,000.

The association said that most mortgage holders appear to be comfortable with their debt levels and that the vast majority — about 84 per cent — said they could afford at least a $300 or 30 per cent increase in their monthly mortgage payment, Dunning said.

The association asked approximately 2,000 Canadians surveyed how much of an interest rate hike they could withstand. The average Canadian monthly mortgage payment is about $1,025 and the average homeowner has room for $1,056 per month on top of current costs, the report found.

However, about 350,000 out of 5.65 million, or about six per cent of Canadian mortgage holders, would be challenged by rate rises of less than one per cent, CAAMP said.

“Most of the people who have low tolerances for increased payments have fixed-rate mortgages,” the reports said. (So) by the time their mortgages are due for renewal, their financial capacity will have expanded and their mortgage principal will have been reduced.”

Canadians continue to favour fixed-rate mortgages and a five-year fixed-rate mortgage remains the most popular option despite the fact that variable rates have become much less expensive than fixed rates, the report found.

source:http://ca.news.yahoo.com/s/capress/101108/business/mortgages_report

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Multiplexes-Get Started in Real Estate Investing & Make Fortune. Part-2

26 Saturday Jun 2010

Posted by gtarealtyagent in BANK SALE P.O.S. - TAX SALE, condo assignment investments, Condos, current real estate affaiirs, Development, FSBO, Interest Rates, Leasing/Renting, Let's Talk Investing, Mortgage, Multiplex-Multi Residetial Investment, POWER OF SALE-FORECLOSURE PROPERTY, Real Estate info & ideas

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bank, canada, Economic Conversion, elements, Financing, investment, mls, multifamily property, policy, stock, Survey, treb


Multiplexes-Get Started in Real Estate Investing & Make Fortune. Part-2

(Three elements crucial to buying multifamily property)

There are many ways to get started in real estate investing.
 Okay, let’s look at three elements crucial to buying multifamily property and then consider the pros and cons of multifamily property ownership.

1) Obtain Sound Financing

Establishing a sound financing package on the property is paramount to buying any rental property–you want to obtain a loan that doesn’t place excessive burdens on the property or yourself.

Because lenders evaluate rental property based on income stream, and generally structure a loan based on the property’s financial strength as well as the investor’s, always bear in mind the role that “using other people’s money” plays in financing the investment. Therefore, when applying for a loan on multifamily property be sure to present lenders with clear and concise cash flow reports. When the property is represented fairly to the lender and the income and expenses are shown to be accurate, the investor is more apt to obtain a favorable financing package.

You can find the multiplexes listings on webs sites as under www.vijaygandhi.com

2) Conduct a Rent Survey

The cornerstone of any multifamily property is the tenants and the rents they will pay to occupy a unit in the apartment complex. It is incumbent upon real estate investors, therefore, to understand local rental market trends for vacancies and rental rates when buying multifamily property.

Luckily, rental market trends are easy for multifamily property investors to recognize. Just watch the newspaper or drive around the community noting all rental properties that have vacancies. If you see few “for rent” ads or signs, or surmise that rents are increasing, it probably signals a shortage of rental units, and a favorable opportunity for you; and vice versa.

When vacancy rates decrease, for instance, property owners can be more selective about the type of tenant they rent to and establish a positive direction for the complex; perhaps even increase rents. On the other hand, when tenants become scarce, owners might have to become less selective about tenants and perhaps lower the rents just to fill the units.

You can find the multiplexes listings on webs sites as under www.vijaygandhi.com

3) Consider Economic Conversion

In cases where the former property owners have let the property run down and rents had to be decreased to keep the units filled, an opportunity to upgrade the building and raise rents might be in order. If these rental properties are in a good area of town or in an area that is returning to a former higher quality, then the remodeling of a rundown apartment complex can be a profitable venture.

Just be careful to ascertain the cost for remodeling and what impact it will have on rental income. Pure “window dressing” for the sake of appearances only, unless it has a positive influence on occupancy levels or rents, is typically avoided by prudent real estate investors. Moreover, get a qualified contractor to give you a bid on remodeling. Otherwise, what you surmised as surface issues when you were buying the multifamily property could in fact be a costly can of worms

More details in next post to follows– part3

part3:The Pros and Cons of Buying Multifamily Property

 (The comments contained on this site are for information purposes only and do not constitute legal advice.)

If you have any questions/suggestion or require more information, please do not hesitate to contact me for buying or selling and also  I will be happy to assist you negotiating your investment needs.

You can find the multiplexes listings on webs sites as under

www.vijaygandhi.com

Vijay Gandhi,
Sales Representative- REALTOR®,
RE/MAX Dynasty Realty Inc. Brokerage*
C: 647. 267. 6338 (Direct-Leave message or text)
P: 416.335.4335 | 905.471-0002 (page me-Have me)
F: 905.471.7441
E: vtgandhi@yahoo.com , vgandhi@remax.net
W:  www.vijaygandhi.com , www.gtarealtyagent.com

Please call me TODAY for a No Obligation Buyer Consultation or Pre-Listing appointment!

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Multiplexes-Get Started in Real Estate Investing & Make Fortune. Part-1

26 Saturday Jun 2010

Posted by gtarealtyagent in BANK SALE P.O.S. - TAX SALE, Business, condo assignment investments, Condos, current real estate affaiirs, FSBO, Let's Talk Investing, Multiplex-Multi Residetial Investment, POWER OF SALE-FORECLOSURE PROPERTY, Real Estate info & ideas

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bank, investment, mls, pos, reit, remax


Multiplexes-Get Started in Real Estate Investing & Make Fortune. Part-1

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(Multifamily and Multiplexes info.)

There are many ways to get started in real estate investing. For the beginner, a good strategy might be to purchase a multi family unit to rent out. Four families or less per building is the ideal size to look for. This will allow you to still acquire a building with a residential mortgage, taking advantage of the lower interest rates. Here are some great reasons why investing in a multi family building can be less risky than other types of housing.

First is competition. There are going to be more investors going after those single family houses. This can drive the price of those houses up to a point where they will not cash flow for you. Do not depend on appreciation to create cash flow. You need your properties to be cash flow positive right out of the gate. If you are considering being a landlord, you might as well purchase a unit that has more than one tenant option.

Then there is the fact that you have more than one unit to rent out. If you purchase a single family house and the tenant skips town, you have to cover the entire mortgage payment until you get it re-rented. With a multi family, it would be highly unlikely that all of your units would be unoccupied all at once, giving you a bit of a cushion. If you have a four unit building, having one tenant gone may not even put you in negative cash flow! This could make all the difference in the world for your yearly profit.

You can find the multiplexes listings on webs sites as under www.vijaygandhi.com

Multi family units bring you more money per month. Depending on your market, duplex or triplex properties can be around the same price as a single family house. However, you can get more rent from 2 units than a single unit. So, you will be getting more money per month for approximately the same mortgage payment. Which means more positive cash flow – the most important aspect of real estate investing?

Repair costs per unit average out to be less. If you have 3 single family homes and need to replace the roof on each one, which is a lot of money per unit. However, if you have a triplex that needs a new roof, you are in effect replacing 3 roofs in one, making the cost per unit decrease. Same thing goes for maintenance; it’s less travel time to go from unit to unit, maximizing labor costs.

As you grow your real estate portfolio, the increased cash flow given to you from your multi family units will allow you to be able to afford a property management company if you want. This will free up your time to find other deals, or do whatever you want!

So, don’t get stuck in the mindset that real estate investing only involves single family homes. Smart investors will have a portfolio that includes a mix of single and multi family properties. Just work the numbers and you may find multi family investing to be profitable for you!

More details in next post to follows– part2

Part2: Three elements crucial to buying multifamily property
Part 3: The Pros and Cons of Buying Multifamily Property

 (The comments contained on this site are for information purposes only and do not constitute legal advice.)

If you have any questions/suggestion or require more information, please do not hesitate to contact me and I will be happy to assist you.
You can find the multiplexes listings on webs sites as under

www.vijaygandhi.com

Vijay Gandhi,
Sales Representative- REALTOR®,
RE/MAX Dynasty Realty Inc. Brokerage*
C: 647. 267. 6338 (Direct-Leave message or text)
P: 416.335.4335 | 905.471-0002 (page me-Have me)
F: 905.471.7441
E: vtgandhi@yahoo.com , vgandhi@remax.net
W:  www.vijaygandhi.com , www.gtarealtyagent.com

Please call me TODAY for a No Obligation Buyer Consultation or Pre-Listing appointment!

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