Here’s a question for real-estate investors and/or Canadians on the forum: is there any real-estate in the Toronto area (for example) that is worth buying right now? The market seems really out-of-whack compared to most of the examples I see on this forum with American prices/rents. I’d really like to buy something to either lower my monthly costs or as an investment, but it seems that there aren’t any properties that even come close to being worth it, even assuming prices remain stable.
For example, my case:
Paying $1550/mo for a place that would list and probably go for about 450k since it’s penthouse level in a new building. It is a 1bdrm 650 sq/ft condo downtown (I work downtown and walk to work). Taxes would be $1500/yr, maintenance fees $400/mo. Parking spot not included, that’s an extra $180/mo to rent (I do not do that).
The standard fixed rate mortgage is 5y at 2.89% right now. I think it’s possible to get a 10yr fixed but higher than that is not really done in Canada afaik. It can be amortized over whatever time period up to 30y I think but a refinance is required after the fixed rate period ends. Our mortgage interest is not tax deductible.
There’s lots of analysis I could do here to show that this is a bad investment that is really counting on further price increases but I think it’s just stating the obvious. Am I wrong? Or am I right, and I'm simply "doomed" to rent until the market changes in some way (higher rents or lower prices)?
If you are curious, check out the local listings for the surrounding area:
http://bit.ly/12c21Z5 - is there anything that even looks remotely worth the money?
Maybe my case is an anomaly though because it’s downtown – let me give another example which is a bit more typical, a SFH in a nearby suburb which is walking distance to the train that goes right into the downtown area of the city (a reasonably desirable location and it looks like a nice spot although small).
http://www.realtor.ca/propertyDetails.aspx?propertyId=13174656&PidKey=-1029554656It has a basement apartment that could be rented. I am guessing that taxes would be about $3700/yr (maybe somebody else knows better? This is based on the fact that the avg. Mississauga home costs 365k and about $2800 in tax so I just scaled it up linearly). As an investor, what type of rent would you demand in this situation for it to be considered a good investment? Assume house is in good condition. I know you probably don’t know the ‘hood - ballpark? I’m really curious what an experienced real-estate investor would think!