Toronto Condo and Real Estate Blog

Budgeting is a financial management discipline that is crucial if you are considering buying a Toronto home for the first time or are already a home owner.

Budgeting helps you keep track of your spending. It allows you to put aside money for a down payment or to cover the many costs of owning and operating a home, such as mortgage payments, property taxes, utilities, insurance and maintenance.

The average house price in Canada in the first three months of this year was $238,230, up from $226,230 in 2004. Thanks to mortgage insurance, Canadians can buy a home with as little as a 5% down payment.

Mortgage insurance helps protect lenders and mortgage investors from financial losses in case a loan is not repaid. This insurance benefits lenders and investors, but it also helps homebuyers. Because lenders are protected by mortgage insurance, they are able to offer low down payment loans to homebuyers at competitive rates.

Sticking to a budget will actually improve your chances of getting a mortgage. By establishing a regular savings pattern you make your loan application stronger and increase the chances of having it approved by the lender.

The money you have saved and put in your Registered Retirement Savings Plan (RRSP) can be used to help you with your home purchase. First-time buyers can withdraw up to $20,000 from their RRSP to buy or build a home. The amount withdrawn is treated as a loan and must be repaid within 15 years starting in the third year after the withdrawal.

Budgeting is also an important part of successful home ownership, which allows you to get the most enjoyment out of owning a home.

New homeowners have many new types of bills they probably didn’t have when they were renting. They may be paying utilities such as heating and electricity and may be faced with unexpected bills to repair a roof, hot water heater, furnace and air conditioner or other maintenance costs.

Budgeting can help you avoid the temptation of making major purchases on your credit card. If you know exactly how much you have to spend each month, you’ll be less likely to build up debt payments.

Here are a few tips for building a monthly budget.

* For one month, write down all your daily expenses, no matter how small. Take a small note pad with you and write everything down.
* Identify all of your large, regular monthly expenses such as rent, utilities, phone, insurance and figure out how much you have to set aside to pay them when they’re due.
* Calculate your monthly, after-tax income. Include everything – take home wages, tips, bonuses, any investment income, alimony, child support and pension benefits.
* Compare your expenses and savings with your net income. Look for areas where you can cut expenses and increase your savings. Many people find they can cut down on entertainment, clothing, and dining out. Reducing the number of credit cards you have to a maximum of two or three and consolidating the payments is a good financial management measure.

Once you’ve created a budget and found ways to increase your savings, you can plan ahead to afford living in your home. The more you can save each month, the faster you can build the money you need to buy or maintain and improve your home.

And continue to save each month as an emergency fund over and above your monthly living expenses can provide you with extra peace of mind.

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Contact the Jeffrey Team for more information

by Denise Lash

Karen and John have just bought their first condominium townhome. When they began searching, their main concern was with the location and the look of the home. They hadn’t really considered the legal issues and obligations surrounding their purchase.

It was only after signing the Agreement of Purchase and Sale that Karen and John started thinking about what they had bought. They were surprised to find that condos differ greatly from freehold townhomes.

Here are just a few of those differences:

• The purchase involves two stages of closing. First is the occupancy closing (or possession date), when the municipality approves occupancy. Not everything in the building may be completed at this point, and Karen and John may have to move in regardless of any deficiencies or unfinished items. The second (or final) closing occurs after the registration of the description and the creation of the condo corporation.

• During the occupancy period (prior to the final closing), Karen and John must pay an occupancy fee—similar to rent.

• Upon final closing, Karen and John must pay monthly condo fees. These expenses are based on an annual budget and are subject to change with no restrictions on increases. The fees are in the hands of the board of directors of the condo corporation.

• Karen and John were surprised to learn that they needed different insurance coverage than what is required for a freehold home.

• The couple is required to maintain upkeep on portions of their home, including the back and front yards. Each condo corporation contains different maintenance and repair obligations.

• The townhome documentation places restrictions on altering or adding anything to the exterior of the building. Karen and John won’t be able to change a mailbox or exterior light fixture, re-landscape, or install a screen door without getting prior approval. There are also prohibitions on erecting fences, pools, hot tubs, decks, and satellite dishes.

• The documentation outlines rules on the use of the home, including what kinds of pets are allowed and prohibitions on skate boarding, hockey playing, rollerblading, and basketball playing on the driveway.

• The couple had no idea that, as owners, they would be involved with annual general meetings, voting and elections, budgets, financial statements, and other corporate matters.

Karen and John wish they had known these things before purchasing. It would have made a difference. At least now they’re prepared for their new life as condo owners, and this preparation will assist them with a smoother transition into the condo lifestyle.

Denise Lash is a condo lawyer with Miller Thomson LLP and the host of the television program MondoCondo. Visit www.torontocondoshow.com.

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by Dan Flomen

One of Toronto’s best-kept secrets is the area surrounding the Mount Pleasant and Eglinton corridor. It has everything one could need, including transportation, entertainment, restaurants, and the security to walk around at night without having to look over your shoulder.

Over 10 years ago, Urbancorp Developments created The Townhomes of 123 Eglinton. Situated between Redpath and Lillian, the project consisted of 184 stacked units developed in an unused parking lot behind the Union Carbide building. It wasn’t the first project in the area, but it did spawn the resurgence of developers looking at this part of town. Tridel followed with the removal of Union Carbide and the creation of a modern condominium, The Tower at 123 Eglinton, catering to both first-time and move-up buyers. Several small builders then bought infill sites and developed them into townhomes and small condos.

Four projects are now under construction in the immediate vicinity. Although each is unique unto itself, all share in the belief that this area is a booming market with much to offer. 900 Mount Pleasant by Plazacorp, Chateau Royal by Panterra Federated Properties, 88 on Broadway by Cityzen and Myriad, and Panache by Stanford Homes will eventually become home to hundreds of new residents.

Situated just a couple of blocks north of Eglinton, 900 Mount Pleasant will have a dramatic visual impact on the surrounding area. Immediately to the east are some of Toronto’s fastest-selling homes, and to the west are a growing number of new projects and the shops of Yonge Street. 900 Mount Pleasant will also incorporate a number of town manors, which will serve to enhance the overall look and quality of the project.

Chateau Royal, located three blocks south of Eglinton, is a higher end condo featuring 97 exquisite suites, many of which are one-of-a-kind. Its stucco exterior and traditional windows will blend in with the shops along Mount Pleasant.

“These suites are better described as bungalows in the sky, with finishes that need not be upgraded. Our purchasers are a mix of first-time and move-up buyers coupled with empty nesters. The one thing they have in common is that they appreciate the small building size coupled with its French charm,” says Michael Tullock, sales representative for Chateau Royal.

88 on Broadway launched with huge success. Its suites not only feature inspiring floor designs, but are also well-priced. Now under construction, the new, beautifully appointed tower will be only minutes to Mount Pleasant and Yonge Street and will appeal strongly to those who either live in the area or grew up there.

“What we are creating is the perfect project for almost all residents of the Mount Pleasant-Eglinton area,” says Sam Crignano, president of Cityzen Development Group. “88 on Broadway is designed to reflect the lifestyle people currently enjoy, but to bring it all under one roof. No need for a health club; 88 on Broadway has one. No need to leave the area to find home ownership. It is now right there on their doorstep.”

Panache, a contemporary building, is located one block west of Mount Pleasant directly on Eglinton Avenue. Its residents will be able to walk out the front door and be on one of the most vibrant streets in the city with restaurants and shops only steps away.

The Mount Pleasant corridor, once thought of as an alternative to Yonge Street, has come into its own. It continues to flourish in this thriving market and it’s an area for both users and investors to keep an eye on.

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Contact the Jeffrey Team for more information