Toronto Condo and Real Estate Blog

Real estate or the stock market - where to put your money

From New Homes & Condos Magazine

Q: I am a recent graduate from university and was fortunate to be hired in my field of study. I have read several books on finances and would like to start investing. However, I am not sure if I should invest in the stock market or purchase real estate rental income property. A friend mentioned Real Estate Income Trusts (REITs) as an alternative. Any thoughts would be helpful.

A: The answer to the old question “Stocks or Real Estate” always depends on an individual’s circumstances. Anyone owning Toronto real estate over the past three years has experienced phenomenal returns compared to very mediocre returns for the Canadian stock market. The question remains: “Will the Toronto real estate market continue to sustain such high gains?” Most experts expect the real estate market to slow, particularly in the Toronto condo market. However, these predictions were said more than a year ago and the real estate market continues to forge forward. Interest rates continue to be at historical lows and there is little indication of any drastic rise soon.

In the past 25 years, the stock market has consistently outperformed real estate. However, you cannot live in a stock certificate! Choosing specific stocks is not for the weak at heart and generally will require some financial guidance.

In recent years, Income Trusts have become increasingly popular because of the maturity of the businesses involved and regular monthly income distributions to its unit holders. Income trusts have experienced growth, not unlike when mutual funds were initially introduced. Currently, Energy Income Trusts such as oil and gas are in favour. However, remember if you and the waiter at your local restaurant have this knowledge, where will prices be in the next several months?

There are four major groups of Income Trust: businesses, the resource sector, utility and REITs (Real Estate Investment Trusts). REITs can be an excellent alternative for investors who prefer real estate but do not have the large capital to invest or the desire for the possible headaches from directly owning real estate. Some believe with a REIT you can have your cake and eat it too! REITs pool investors’ capital to acquire various forms of income-producing real estate that offers investors regular distributions.

REIT investors should pay particular attention to the monthly return that is promised. Some areas to ponder are:

• Dividends promised are not treated the same as dividends for tax purposes, but more like interest.

• Know the true yield on your investment, as this monthly distribution generally includes a return of capital.

• The cost of your investment must be adjusted for the return of capital received for tax purposes.

• REITs can have difficulty meeting the fixed monthly distributions.

• The monthly distributions are relatively stable.

• A portion of the distributions is tax deferred.

• Returns are generally not as high as choosing individual stocks.

Understand your investments before committing. Speak to your stockbroker and real estate agent. They may help shed some light for you.

New Homes & Condos Magazine is an excellent source of housing information for those looking for information on new homes in Ontario, Canada. We offer the most up-to-date information on new communities across the Greater Toronto Area.

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Contact the Jeffrey Team for more information

Buying a home can seem like a frightening prospect. Whether it’s your first home, or your fifth, so much is at stake - your savings, your credit rating, your financial freedom.

It’s difficult to get up the courage to sign on the dotted line, even if you want that home very, very badly.

How do you determine whether or not the purchase of a home makes sense? What’s the easiest way to examine the whole picture, from emotions to economics? This article should help you learn how to separate whims from true needs. You’ll discover how to prepare a game plan for your real estate venture, how to research effectively, choose wisely, finance appropriately and survive the whole procedure with your smile intact.

Step One: Establish Your Needs And Wants

Begin your search for a perfect home by making a careful assessment of the kind of a home you need and want. Try taking the time to do this in writing - be as specific as you can about your particular requirements. Do you want a house? A condo? In the city or rural?

Step Two: Determine How Much You Can Afford

Set up a budget for yourself. Decide how much you can really afford to invest monthly for your house payment. Be realistic here. Most Lenders want your payment to be no more than 30-40% of your total monthly income.

Step Three: Get Pre-qualified Or Pre-approved By A Lender

You can save yourself a lot of time and heartache by meeting with a mortgage lender before you start your search for a home. This lender will let you know what specific loan programs would be best for you. They can also help you understand what it takes to qualify for the loan that you want.

Many lenders call this pre-qualifying. If you would like to be certain that you can be approved for a loan, you may want to ask to be pre-approved, which is a little more detailed than pre-qualifying but less involved than full qualification. In the approval process, all of your documentation is completed and submitted to an underwriter.

Step Four: Find A Good Real Estate Agent To Help You

You can learn a lot about a real estate agent by just letting them talk to you about how they help buyers. Within a few minutes, you will probably be able to determine if their style is compatible with yours.

Questions for real estate agents:

1) Are you knowledgeable about the area of town and price range that we are interested in? (Some real estate agents specialize in only one area or one price range.)

2) Do you have the time to work with us? (This is especially important if you’re on a tight deadline.) What procedure will the real estate agent follow in working with you? How often will they update you with new property listings?

3) Can you represent me as my buyer’s agent? Ask as many questions as you can upfront. By finding a good real estate agent, you will save yourself huge amounts of time and effort.

Step Five: Find A Home That Meets Your Needs

1) Keep an organized record of all your research data. Write down comments about the homes that you see and keep track of your likes and dislikes.

2) Make sure your real estate agent is aware of your time schedule and expectations. Do you like to look at one or two homes in a session? Four? Eight? Discuss this with your agent.

3) Tell your real estate agent about any homes you see that interest you and that you’d like to know more about. This includes homes you’ve discovered as you’ve explored the area yourself, or those advertised in the newspaper.

4) If you like to spend time driving around by yourself looking at homes, ask your real estate agent for a list of drive-bys - homes to consider first from the outside. Your agent can make appointments later to show you the interior of those that appeal to you.

5) Express your likes and dislikes to your real estate agent after you look at a home. Honest communication is essential. Many buyers are shy and afraid to tell a real estate agent what they really think of a house. They think the real estate agent might take it personally. Remember, the homes don’t belong to the real estate agent! You must be straightforward about your likes and dislikes in order for the real estate agent to do the best job for you.

Step Six: Make An Offer To Buy A Home

Your real estate agent can help you make an offer to buy the home that you want. It is important to know beforehand whom your real estate agent represents. Some real estate agents work only for the seller. In this case the real estate agent may not be able to advise you what a fair offer to make is. By looking at what homes are selling for in the area and how long they are taking to sell, you should be able to get a good idea of value.

Step Seven: Save As Much As You Can On The Purchase

There are only two major investments to consider when buying a home. These are the initial investment, which includes down payment and closing costs, and the monthly payment, which includes principal, interest, taxes and insurance.

To reduce your initial investment, choose a low down payment loan. You do not necessarily have to put 20% or even 10% down. You can pay 5% or even 3% down on some loans. You may also want to try to have someone give you money to pay closing costs. A blood relative, church or nonprofit organization can give you money for closing costs.

Tp help keep you monthly payments low, get a loan that doesn’t have monthly mortgage insurance premiums. You may be able to reduce or eliminate them by paying a little more at closing. By putting 25% or more down, you can eliminate them entirely. Take advantage of being able to lock in mortgage rates ahead of time, some lenders will lock in a rate for up to 120 days. You can also choose an adjustable rate mortgage, which can be up to 3% lower than fixed rates.

Now that you are done reading, it’s time to go out and find the home of your dreams! Make sure that you cover all of the steps in this report in the proper order. See a lender first. He or she will help you decide how much of a loan you qualify for. Then find a good real estate agent to work with - if you don’t have one, ask your friends and work associates for a referral.

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Contact the Jeffrey Team for more information

From The Condo Guide Magazine

This new condo in St. Lawrence neighbourhood starts construction less than a year after sales launch
A charming and historic downtown neighbourhood, architecture inspired by the great cities of Europe and one of Toronto’s top chefs were all part of the celebration of the official groundbreaking at the exciting London on the Esplanade condo development.

Just eight months after launching sales, Cityzen Development Group began construction of London on the Esplanade. Located at 38 The Esplanade in the heart of downtown Toronto, London on the Esplanade is just across the street from the Hummingbird Centre and within walking distance of Union Station and the Financial District.

“The design of London on the Esplanade bridges between the historical character of the St. Lawrence Market neighbourhood, with its great pubs, restaurants and shops, and the contemporary designs of the skyscrapers in the financial district,” Sam Crignano, a Cityzen partner, said at the recent groundbreaking ceremony.

The project will have two towers rising from a five-storey podium with the taller 33-storey tower sitting on the west side of the site. Architect Roy Varacalli, of Burka Varacalli Architects, has given the development’s taller building an all-glass, modern design that connects with the skyscrapers of the business district. On the east side of the site, the 15-storey tower features a glass and red-brick exterior that blends with the 19th-century buildings of the St. Lawrence neighbourhood. The podium housing the central lobby and amenity area connects the two towers.

Massimo Renzi, head chef at Sotto Sotto Trattoria on Avenue Road, one of Toronto’s leading restaurants, purchased a suite in London on the Esplanade because the St. Lawrence neighbourhood reminds him of his native Rome.

“What I love about the St. Lawrence area are the walkable streets packed with historical buildings. It gives the neighbourhood an old-world look that reminds me of great European cities like London and Rome. And as a chef, I couldn’t resist living in a building located so close to the culinary delights of St. Lawrence Market,” Renzi said.

With the start of construction, Cityzen has released a new series of Courtyard Suites in London on the Esplanade. Many of the Courtyard Suites overlook the rooftop outdoor swimming pool and landscaped sun deck.

A wide range of suites are available in London on the Esplanade, from studio units of 345 sq. ft. to one- and two-bedroom units, with or without dens, up to 955 sq. ft.

Prices range from $199,990 to $800,000 for spacious penthouse suites with spectacular views of the downtown skyline and the waterfront.

Residents at London will enjoy a taste of outdoor living, for all suites have a balcony or terrace. Interior features include floor-to-ceiling windows, engineered hardwood flooring, sliding bedroom closet doors with full-length mirrors and bathrooms with framed-glass shower stalls, marble-tiled floors and cultured marble countertops.

Functional, open-concept kitchens have extended upper cabinets, a wide choice of granite countertops, ceramic tile backsplashes and kitchen islands ideal for eating at or for using as serving stations when entertaining.

Residents at London will be able to wind down after a busy day at Club London, which has a rooftop outdoor swimming pool and year-round whirlpool, massage and spa rooms, aerobics and yoga rooms, a fitness centre with cardio and weight-training equipment and his and her change rooms with showers.

For those who wish less strenuous activity, the Club also has an entertainment room, an English-styled pub, a games room with two billiards tables, fireplace lounge and movie room with theatre-style seating.

The Condo Guide Magazine is an excellent source of housing information for those looking for information on new condos in Ontario, Canada. We offer the most up-to-date information on new condos in Toronto.

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Contact the Jeffrey Team for more information