Toronto Real Estate | Ken Finch

There are many advantages with Canadian tax legislation that enables
investors to use self-directed RRSPs to generate retirement income at
returns that are much higher than traditional investments.
Instead of using a standard mortgage, one option is to transfer your own
RRSPs, into RRSP-eligible bonds against which you can borrow from your own
investment which will typically yield a much higher rate of return.
A limited number of people know how RRSPs can be used in real estate
investing. RRSP investment specialists would definitely not provide you with
details on how to turn your investment funds into a prosperous real estate
portfolio.
Single-family homes to multi-unit residential apartment buildings up to 24
units, along with retail and office commercial properties as large as 40,000
sq. ft. are ideal when you start to purchase investment properties. With
interest rates currently in the range of a 40 year low, now is the best time
to secure the leverage power of a mortgage to construct a solid retirement
plan.
The Golden Horseshoe’s real estate market continual force will boost the
number of income property investors which will increase property values
resulting in growth of brick and mortar assets. Your retirement funds could
turn out to be very low-risk investments, yet generate returns of 10% or
higher.
Adding value to your investment by adding additional rental units, selling
advertising space, leasing roof and basement area to communications
companies, etc can also substantially increase your income stream. Selling a
property to an interested buyer can also double or triple your retirement
nest egg producing funds to buy additional properties or finance development
projects.
Accounts, lawyers, contractors and realtors should be consulted. Advice on
market conditions, tax consulting, legal implications, physical building
inspections and market and invest analysts are strongly recommended.

Closing costs are expenses over and above the price of the property incurred
by buyers and sellers in transferring ownership of a property which normally
include the items below. Allow approximately 2.5% of the purchase price of
your new home for closing costs.

Closing costs typically consist of:

1. Closing Adjustments
Pro-rated amounts for prepaid amounts made by the seller; e.g. Property tax

2. Land Transfer Tax
Amount varies by purchase price and city, contact Ken Finch for a
calculation

3. Legal Fees
Charges from your Real Estate lawyer for title insurance, property
registration fees and tax certificate

4. Status Certificate
For Condominiums only, this document outlines all the details of the
condominium which include the current amount of the reserve fund, common
element fees and any major renovations or repairs anticipated

5. Home Inspection
A home inspector is needed to detect any deficiencies in the property you
would like to purchase

6. PST (Soon to be HST!)
If paying less than 25% on your down payment, you must get mortgage
insurance from the Canadian Mortgage & Housing Corporation (CMHC). This fee
gets added to your mortgage which is PST applicable. The 8% PST must be paid
at closing and will increase to 13% July 1st, 2010 after the HST is
implemented.

7. Moving Costs
Moving company fees vary depending on your quantity of possessions and the
distance of your move

8. Rental Income
When purchasing a property where rent is collected, the buyer receives the
rental income that has already been paid, for the month in which the
property is purchased

9. Rent Deposit
When purchasing a property where rent is collected, the tenant usually pays
a deposit for the last month’s rent which is forwarded to the buyer at
closing

1.      Interest rates – Are they going up? Don’t wait, get pre-approved and lock in now while the mortgage rates are low.
2.      HST – To save 8% on your legal fees, home inspector charges, moving expenses, etc. ensure your closing date is prior to July 1, 2010.
3.      Timing – A new flood of houses will be coming on the market this Spring due to the recent bidding frenzy wars.
4.      Buy First or Sell First? – Buy first. Don’t get caught selling your home and scrambling to buy something you have to settle for.
5.      TDSR – What is your Total Debt Service Ratio? Talk to a mortgage specialist to determine what to expect regarding any penalties when you sell and new interest rates when buying.
6.      Call Ken Finch regarding information on everything above; 416.520.5544

It’s been widely reported that Toronto and possibly Canada is on the cusp of a Real Estate Bubble burst. However the simple construct of a Bubble isn’t available in the first place to create a Bubble which could in turn burst.

1) You would need an upward trend in the home buying market ahead of the typical curve and there would need to be a sudden drop off in this trend.

2) You would need an over supply of available housing.

In both scenarios the construct is not available to substantiate the concern. Given the present economic climate Real Estate along with certain precious metals and other traditional investments continue to be a sound, safe choice for your family and money.

Register today and receive a free Home Buyer’s Guide which provides an easy to understand no nonsense approach to finding the right home to suit your budget and needs.