CN Tower
Banned
Low intelligence I can excuse; it's beyond your control. Ignorance I cannot.
Try this out as a starting point Mike:
http://en.wikipedia.org/wiki/Capitalism
At least you have fine taste in music!
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Baby, we got a bubble!?
- Thread starter simuls
- Start date
Low intelligence I can excuse; it's beyond your control. Ignorance I cannot.
Try this out as a starting point Mike:
http://en.wikipedia.org/wiki/Capitalism
At least you have fine taste in music!
radioheadmike
Active Member
So if Empire fails to meet the 70% sales to build Eau Du Soleil, what would you suggest they do in this Captilist society?
Cancel the project as the moveyville article states? I don't see why instead of cancelling, they just bring down the price to be competitive. I am sure they still make money at $300 sq/ft. There is demand for affordable housing.
TCW
New Member
If you can make money at $300, but the market will buy for $700, why would you sell it at $300? I'm sure Apple can make money selling their iPhones for $200 too...
If it doesn't sell, first thing they will do is offer some incentives to brokers and agents so they push it more. Next, they will throw in some free upgrades. After that, some cash back or signing bonus. Then after all that, they may drop the price slightly to get that final push to 70%.
radioheadmike
Active Member
cdr108
Senior Member
another thing is they don't want to jeopardize the market. they all have vested interests, so if one sells that much cheaper, it puts pressure on their other projects and developers.
as TCW stated, they will pile on the incentives to brokers/agents/buyers first.
i already see $10-20K cash back for many projects
brockm
Active Member
This isn't so much a capitalist market. The prices are not being driven by greed. They're being driven by buying power. That buying power is being subsidized by the government in three ways: subsidized insurance against default, government-sponsored mortgage lending in the primary market, and of course, low interest rates.
I always find it so ridiculous how people blame capitalism or free markets for high prices. They start throwing out words like "gouging" and "speculation" as if as high prices are ipso facto a sign of abject greed on the part of sellers.
Every transaction in a capitalist economy has two sides. It is not just the seller who sets the price. A good or service with a price for which nobody will buy might as well be a price of infinity.
The "greed" in the housing market is just as much manifest in the buyers. Who, with googley-eyes, run into the real estate market with visions of massive property price appreciations. Or what about the "greed" of the buyer who wants more for less?
If I was a developer right now, I'd be trying to suck every last dollar out of the market I could too. Because I'd be thinking the market is on the verge of a crash. And that being said, I'm probably facing several years of low activity and low income. People dumb enough to leverage up and throw me that cash? Screw 'em.
James
Senior Member
Ah, a crash course in business. I can't disagree with anything stated. Blunt but well put.
James
Senior Member
Canadian Business article:
http://www.canadianbusiness.com/blog/investing/103074--housing-markets-and-market-timing
Housing markets and market timing
By Larry MacDonald | October 19, 2012
Market timing appears to be alive and well in the housing sector. Some homeowners have sold their dwellings and taken up renting because they expect prices to fall. Similarly, a number of first-time buyers have delayed purchases in hopes of buying later at lower prices. But speculating on price fluctuations is a tricky art that can end up doing more harm than good.
You can see the prevalence of market timing in the housing articles now popular in the media, especially in reader comment sections. A large number of the posters say they are renting in order to avoid price declines. They also express support for price tumbles of as much as 50%, which would allow them to buy back in at cheaply.
A number of these commenters even appear, regrettably, to be trying to encourage a collapse in prices. For example, on one site a poster wrote: “Home prices will follow sales declines. If you own a home and want to get ‘top dollar,’ sell now. Don't hesitate.”
I can perhaps understand resorting to market timing in extremely overvalued places like Vancouver. But generally speaking, markets have a tendency to confound, as economist John Maynard Keynes noted when he quipped they can remain “irrational” for longer than we expect.
Market timing, in fact, is a discredited practice in financial markets. Countless studies have found that it does not work compared to simply buying and holding over the long run. For a summary of these studies, see the website of Index Funds Advisers.
Legendary investors express similar views. Take Benjamin Graham, author of the classic Security Analysis. Near the end of his life, he declared: "If I have noticed anything over these 60 years on Wall Street, it is that people do not succeed in forecasting what's going to happen to the stock market."
One of the problems is timing the entry. How does one know when the bottom is reached? If prices tick up by 5% to 10%, does it signal the uptrend has restarted or is it a head fake that is followed by a return to the downtrend? In the stock market, traders often end up “whipsawed” (downtrend resumes after buying on an uptick) or they let a breakout pass only to realize later it was the turning point.
House prices may at times go into reverse, but they historically have enjoyed a long-term upward trend, like stocks. Even the infamous housing corrections of the early 1990s in Toronto and Vancouver have long ago been recouped.
As long as the world operates on fiat currencies, there will likely be inflation in houses and real assets. And as argued in one of my previous columns, "Real estate as an inflation hedge," we could be nearing a resumption of the inflationary environment given the historic amounts of currency that have been printed by central banks around the world.
Market timers shouldn’t overlook transaction costs either, notably real-estate commissions. Say a $400,000 house with a $350,000 mortgage is sold. The agent charges 5% of the sale price and takes $20,000. This amounts to 40% of the owner’s equity ($50,000), which dramatically raises the bar.
First-time buyers (with adequate downpayment) delaying the purchases are focused on avoiding the well-publicized risk of sliding prices. But this inaction exposes them to a risk that's less often in the spotlight—that of having nio hedge when inflationary tendencies resurface.
In past housing cycles, many first-time buyers acquired properties that needed fixing up or could be partly sublet. This approach provides protection against inflation yet offers some comfort against market setbacks. In the case of fixer-uppers, renovations boost market value. As for subletting part of one’s house, the rent provides a supplementary stream of income.
Buying a property with an income suite may have an edge over the fixer-upper in the event the tail risk of a housing crash materializes. In the aftermath of the U.S. meltdown, the ranks of renters swelled, which caused rents to escalate.
Instead of worrying about market timing, homeowners can stay focused on the long-term tendency of real-estate prices to appreciate and ignore the media noise.
http://www.canadianbusiness.com/blog/investing/103074--housing-markets-and-market-timing
Housing markets and market timing
By Larry MacDonald | October 19, 2012
Market timing appears to be alive and well in the housing sector. Some homeowners have sold their dwellings and taken up renting because they expect prices to fall. Similarly, a number of first-time buyers have delayed purchases in hopes of buying later at lower prices. But speculating on price fluctuations is a tricky art that can end up doing more harm than good.
You can see the prevalence of market timing in the housing articles now popular in the media, especially in reader comment sections. A large number of the posters say they are renting in order to avoid price declines. They also express support for price tumbles of as much as 50%, which would allow them to buy back in at cheaply.
A number of these commenters even appear, regrettably, to be trying to encourage a collapse in prices. For example, on one site a poster wrote: “Home prices will follow sales declines. If you own a home and want to get ‘top dollar,’ sell now. Don't hesitate.”
I can perhaps understand resorting to market timing in extremely overvalued places like Vancouver. But generally speaking, markets have a tendency to confound, as economist John Maynard Keynes noted when he quipped they can remain “irrational” for longer than we expect.
Market timing, in fact, is a discredited practice in financial markets. Countless studies have found that it does not work compared to simply buying and holding over the long run. For a summary of these studies, see the website of Index Funds Advisers.
Legendary investors express similar views. Take Benjamin Graham, author of the classic Security Analysis. Near the end of his life, he declared: "If I have noticed anything over these 60 years on Wall Street, it is that people do not succeed in forecasting what's going to happen to the stock market."
One of the problems is timing the entry. How does one know when the bottom is reached? If prices tick up by 5% to 10%, does it signal the uptrend has restarted or is it a head fake that is followed by a return to the downtrend? In the stock market, traders often end up “whipsawed” (downtrend resumes after buying on an uptick) or they let a breakout pass only to realize later it was the turning point.
House prices may at times go into reverse, but they historically have enjoyed a long-term upward trend, like stocks. Even the infamous housing corrections of the early 1990s in Toronto and Vancouver have long ago been recouped.
As long as the world operates on fiat currencies, there will likely be inflation in houses and real assets. And as argued in one of my previous columns, "Real estate as an inflation hedge," we could be nearing a resumption of the inflationary environment given the historic amounts of currency that have been printed by central banks around the world.
Market timers shouldn’t overlook transaction costs either, notably real-estate commissions. Say a $400,000 house with a $350,000 mortgage is sold. The agent charges 5% of the sale price and takes $20,000. This amounts to 40% of the owner’s equity ($50,000), which dramatically raises the bar.
First-time buyers (with adequate downpayment) delaying the purchases are focused on avoiding the well-publicized risk of sliding prices. But this inaction exposes them to a risk that's less often in the spotlight—that of having nio hedge when inflationary tendencies resurface.
In past housing cycles, many first-time buyers acquired properties that needed fixing up or could be partly sublet. This approach provides protection against inflation yet offers some comfort against market setbacks. In the case of fixer-uppers, renovations boost market value. As for subletting part of one’s house, the rent provides a supplementary stream of income.
Buying a property with an income suite may have an edge over the fixer-upper in the event the tail risk of a housing crash materializes. In the aftermath of the U.S. meltdown, the ranks of renters swelled, which caused rents to escalate.
Instead of worrying about market timing, homeowners can stay focused on the long-term tendency of real-estate prices to appreciate and ignore the media noise.
daveto
Active Member
Spectres of "market timing" failure are used to dissuade people from selling. No-one was talking about "market timing" when real estate was appreciating above its long term rate of under 1% above inflation.
But ultimately market timing studies refer to financial markets, not real estate markets. A lot of people made a lot of money riding the real estate cycle during its upward cycle, and a lot of people will make a lot of money during its downwards cycle. Its not "market timing".
As long as someone is properly diversified and not over-leveraged they'll be fine. But those who have leveraged heavily and are over-weighted into the real estate market may want to consider some diversification and risk management due to the current status of the real estate market (call it "market timing", or what you will)
But ultimately market timing studies refer to financial markets, not real estate markets. A lot of people made a lot of money riding the real estate cycle during its upward cycle, and a lot of people will make a lot of money during its downwards cycle. Its not "market timing".
As long as someone is properly diversified and not over-leveraged they'll be fine. But those who have leveraged heavily and are over-weighted into the real estate market may want to consider some diversification and risk management due to the current status of the real estate market (call it "market timing", or what you will)
interested
Senior Member
interested
Senior Member
From Andrew Lafleur at Remax condos +
I post this because if I can paraphrase him (If I am incorrect I apologize to him) he has suggested the market had stagnated and was dropping at the higher end. I am not at all in agreement with him that the market is turning but the fact that a high profile project is coming in at $650-670/sq.ft. instead of $700/sq.ft. is a sign of some realignment. I am betting that the lockers, parking spots and perhaps 2 tier packages for appliances are not included in this price. I still think it will take more than this to sell these projects but it will be a clear benchmark. These are among the high profile releases and if they don't sell, it will be indicative. I note that 88 Scott street which I though was a very high profile project and would do well as did INDX and Massey Tower is at over 50% according to the newspapers. I would have thought given the other 2 it would be beyond that level.
Also, I believe that 10 York lowered the building from 75 stories to 65 though A. Lafleur's column below suggests 68 floors. I believe the requested prices are still too high and will attract now better more stable and perhaps foreign investors. I think the locals have realized that this is still $100 over comparable resale though given that they are 5-6 years away I think they may be safer than those who have invested in projects coming due now or over then next 2-3 years when 48000 more units are due. Also, I expect that the rent "bid up wars" are virtually done now and I read that there were more listings than rentals recently which should alleviate price pressure.
DISCLAIMER: Please note: I am not nor in anyway related to Andrew Lafleur or have any interest in posting his thoughts other than to say that he is a realtor who has posted over the past year or so that the high end got "ahead of itself" which appears to be proving correct.
From: Andrew la Fleur [mailto:andrew=truecondos.com@mail125.us2.mcsv.net]On Behalf Of Andrew la Fleur
Sent: October 20, 2012 8:44 AM
To: =?utf-8?Q??=
Subject: Is the Condo Market Starting To Heat Up Again?
Introducing 2 New MEGA Towers Downtown:
King Blue and 10 York Going Head to Head
Market Showing Signs of Heating Up Again
Last week I wrote about One Park Place in Regent Park. I now know that the Platinum sales event alone generated in excess of 300 worksheets for approximately 180 units! And this project doesn't even open to the general agent community for another 2 weeks! The building could very well sell out this month. The market hasn't responded to a condo launch like this since the early part of 2012. So what happened? The developer priced it well and the market responded. It seems some developers may have read my 'Condo Manifesto' and are doing the main thing that I've been advising them: price your units aggressively and they will sell!
Now, we have 2 HUGE projects launching in King Blue and 10 York. Both projects would probably have launched at much higher prices if this were six months ago, but it seems both developers recognized the state of the market and have priced their projects pretty well in my opinion.
King Blue Quick Facts:
Built by Remington Group and Easton's Hotel Group
2 towers (48 and 44 storeys) in the heart of King West and the entertainment district
studios from the mid $200s, 1 bedrooms from the mid $300s
Average $PSF $650-$670
Occupancy 4-5 years away
10 York Quick Facts
Built by Tridel (Canada's largest condo builder)
Approximately 68 storeys
Located at 10 York street, in the 'south core' neighbourhood, steps to Union Station and the PATH, also the waterfront
1 bedrooms from $345K
Average $PSF about $650
occupancy about 5-6 years away
If you are interested in receiving the floor plans and price lists for either King Blue or Ten York, respond to this email or call me at 416-371-2333.
Best,
Andrew
truecondos.com
I post this because if I can paraphrase him (If I am incorrect I apologize to him) he has suggested the market had stagnated and was dropping at the higher end. I am not at all in agreement with him that the market is turning but the fact that a high profile project is coming in at $650-670/sq.ft. instead of $700/sq.ft. is a sign of some realignment. I am betting that the lockers, parking spots and perhaps 2 tier packages for appliances are not included in this price. I still think it will take more than this to sell these projects but it will be a clear benchmark. These are among the high profile releases and if they don't sell, it will be indicative. I note that 88 Scott street which I though was a very high profile project and would do well as did INDX and Massey Tower is at over 50% according to the newspapers. I would have thought given the other 2 it would be beyond that level.
Also, I believe that 10 York lowered the building from 75 stories to 65 though A. Lafleur's column below suggests 68 floors. I believe the requested prices are still too high and will attract now better more stable and perhaps foreign investors. I think the locals have realized that this is still $100 over comparable resale though given that they are 5-6 years away I think they may be safer than those who have invested in projects coming due now or over then next 2-3 years when 48000 more units are due. Also, I expect that the rent "bid up wars" are virtually done now and I read that there were more listings than rentals recently which should alleviate price pressure.
DISCLAIMER: Please note: I am not nor in anyway related to Andrew Lafleur or have any interest in posting his thoughts other than to say that he is a realtor who has posted over the past year or so that the high end got "ahead of itself" which appears to be proving correct.
From: Andrew la Fleur [mailto:andrew=truecondos.com@mail125.us2.mcsv.net]On Behalf Of Andrew la Fleur
Sent: October 20, 2012 8:44 AM
To: =?utf-8?Q??=
Subject: Is the Condo Market Starting To Heat Up Again?
Introducing 2 New MEGA Towers Downtown:
King Blue and 10 York Going Head to Head
Market Showing Signs of Heating Up Again
Last week I wrote about One Park Place in Regent Park. I now know that the Platinum sales event alone generated in excess of 300 worksheets for approximately 180 units! And this project doesn't even open to the general agent community for another 2 weeks! The building could very well sell out this month. The market hasn't responded to a condo launch like this since the early part of 2012. So what happened? The developer priced it well and the market responded. It seems some developers may have read my 'Condo Manifesto' and are doing the main thing that I've been advising them: price your units aggressively and they will sell!
Now, we have 2 HUGE projects launching in King Blue and 10 York. Both projects would probably have launched at much higher prices if this were six months ago, but it seems both developers recognized the state of the market and have priced their projects pretty well in my opinion.
King Blue Quick Facts:
Built by Remington Group and Easton's Hotel Group
2 towers (48 and 44 storeys) in the heart of King West and the entertainment district
studios from the mid $200s, 1 bedrooms from the mid $300s
Average $PSF $650-$670
Occupancy 4-5 years away
10 York Quick Facts
Built by Tridel (Canada's largest condo builder)
Approximately 68 storeys
Located at 10 York street, in the 'south core' neighbourhood, steps to Union Station and the PATH, also the waterfront
1 bedrooms from $345K
Average $PSF about $650
occupancy about 5-6 years away
If you are interested in receiving the floor plans and price lists for either King Blue or Ten York, respond to this email or call me at 416-371-2333.
Best,
Andrew
truecondos.com
Last edited:
cdr108
Senior Member
Going all in: Canucks max out their mortgage to buy in Brooklyn
interesting article ... what do you guys think ?!?
http://www.theglobeandmail.com/life...r-mortgage-to-buy-in-brooklyn/article4623131/
Going all in: Canucks max out their mortgage to buy in Brooklyn
KERRY GOLD
Special to The Globe and Mail
Published Friday, Oct. 19 2012, 10:10 AM EDT
Last updated Friday, Oct. 19 2012, 2:54 PM EDT
Meet Rodney Hynes and Thomas Hunt, Vancouver owners of a new brownstone in Brooklyn, N.Y.
“We’d like to thank the over-priced Vancouver real estate market for making it possible,†says Mr. Hynes, dryly.
Mr. Hynes, who works for Aboriginal Affairs, bought a home on Vancouver’s east side with Mr. Hunt, a TV producer, nine years ago. They purchased the house, which needed a $200,000 renovation, for $268,000. According to a recent appraisal, it’s worth $850,000.
They purchased the three-unit brownstone, in the up-and-coming area of Bedford-Stuyvesant, for $725,000 (U.S.), by re-mortgaging their Vancouver house for around 80 per cent of its value. Because the Brooklyn property will bring in rental revenue of $7,000 U.S., their mortgage and other expenses will be more than covered.
Full disclosure: I’ve known these guys through friends and media connections for a number of years. They are a perfect example of Vancouver buyers who were initially reluctant to jump into the market, but once in, soon embraced the seemingly endless ride, as, year after year, the value of their home climbed. They were smart, or lucky enough, not to lock into a five-year rate, but instead went with a variable rate so low that they rapidly paid down a hefty chunk of their principal. It meant they were sitting with a lot of equity, and they became eager to use it towards another purchase.
You won’t hear the Suze Ormans of the world advising consumers to mortgage one’s home to the max. Most every money expert will tell the average middle-income earner to pay down the mortgage, not borrow further on it.
Mr. Hynes and Mr. Hunt had almost paid off their Vancouver home but chose to mortgage it to the max so they could own the brownstone clear title. I spoke to a few Century 21 realtors in Vancouver and Toronto who help clients liaise with realtors south of the border, so they can work their way into the U.S. market. When I ran the idea of maxing one’s mortgage to make a U.S. purchase possible, the realtors weren’t so sure they’d personally go that far.
Mr. Hynes and Mr. Hunt say they have already endured shocked reactions from friends, of the “are you crazy?†variety. But the couple regularly travel to New York, and one day, when they’ve paid down the mortgage, they will reserve one of the small suites for themselves, as a pied-à -terre.
“Canadians are very conservative, especially around matters of money,†says Mr. Hynes.
Says Mr. Hunt: “What’s interesting is when you go to New York and you’re doing what we’re doing, you see it’s as normal as can be. There are people from all around the world purchasing real estate, and being entrepreneurial about it.
“We’re not worried.â€
Mr. Hynes and Mr. Hunt aren’t alone in their quest for U.S. real estate. Overall, foreign purchases of U.S. properties have gone up 24 per cent in the last year, according to a recently released report by the American National Association of Realtors (NAR). Canadians are, by far, the greediest buyers. We account for 24 per cent of the foreign sales stateside in the last year. Meanwhile, the second-biggest buyer, China, is responsible for 11 per cent of sales. Toronto realtor Paul Indrigo said he relies on such stats to help Canadians find properties in popular hot spots in Florida, California and Arizona.
But it’s not a straightforward process, purchasing an American investment or holiday property that’s nowhere close to home.
If Mr. Hynes and Mr. Hunt want to renovate, which they do, their property management company will have to hire contractors. To do the work themselves would require a work visa. As well, non-residents of the U.S. are expected to pay a 30 per cent withholding tax on gross rental income – unless, of course, they find an accountant who can help them file the forms that will save them from having to take such a hit. Fortunately, there are local accounting firms who’ve become expert in U.S. tax laws and one of them, a Surrey firm, helped guide the way for Mr. Hynes and Mr. Hunt.
“There will be challenges every step of the way,†says Mr. Hunt. “Taxes are huge. Expenses are really high. Insurance is high. Water has to be paid for separately. We have to budget for maintenance.â€
And the vacancy rate isn’t the same as Vancouver, adds Mr. Hynes. In an up-and-coming neighbourhood like Bed-Stuy, they say demand is so much lower that people might not show up for an open house on a rainy day.
However, compared to Vancouver, the New York market is a breeze, says Mr. Hunt.
“We spent two years looking for a house in Vancouver, and the fact that we survived a sellers’market here meant we didn’t freak out about the New York purchase.
“The market in Vancouver was way more intense.â€
interesting article ... what do you guys think ?!?
http://www.theglobeandmail.com/life...r-mortgage-to-buy-in-brooklyn/article4623131/
Going all in: Canucks max out their mortgage to buy in Brooklyn
KERRY GOLD
Special to The Globe and Mail
Published Friday, Oct. 19 2012, 10:10 AM EDT
Last updated Friday, Oct. 19 2012, 2:54 PM EDT
Meet Rodney Hynes and Thomas Hunt, Vancouver owners of a new brownstone in Brooklyn, N.Y.
“We’d like to thank the over-priced Vancouver real estate market for making it possible,†says Mr. Hynes, dryly.
Mr. Hynes, who works for Aboriginal Affairs, bought a home on Vancouver’s east side with Mr. Hunt, a TV producer, nine years ago. They purchased the house, which needed a $200,000 renovation, for $268,000. According to a recent appraisal, it’s worth $850,000.
They purchased the three-unit brownstone, in the up-and-coming area of Bedford-Stuyvesant, for $725,000 (U.S.), by re-mortgaging their Vancouver house for around 80 per cent of its value. Because the Brooklyn property will bring in rental revenue of $7,000 U.S., their mortgage and other expenses will be more than covered.
Full disclosure: I’ve known these guys through friends and media connections for a number of years. They are a perfect example of Vancouver buyers who were initially reluctant to jump into the market, but once in, soon embraced the seemingly endless ride, as, year after year, the value of their home climbed. They were smart, or lucky enough, not to lock into a five-year rate, but instead went with a variable rate so low that they rapidly paid down a hefty chunk of their principal. It meant they were sitting with a lot of equity, and they became eager to use it towards another purchase.
You won’t hear the Suze Ormans of the world advising consumers to mortgage one’s home to the max. Most every money expert will tell the average middle-income earner to pay down the mortgage, not borrow further on it.
Mr. Hynes and Mr. Hunt had almost paid off their Vancouver home but chose to mortgage it to the max so they could own the brownstone clear title. I spoke to a few Century 21 realtors in Vancouver and Toronto who help clients liaise with realtors south of the border, so they can work their way into the U.S. market. When I ran the idea of maxing one’s mortgage to make a U.S. purchase possible, the realtors weren’t so sure they’d personally go that far.
Mr. Hynes and Mr. Hunt say they have already endured shocked reactions from friends, of the “are you crazy?†variety. But the couple regularly travel to New York, and one day, when they’ve paid down the mortgage, they will reserve one of the small suites for themselves, as a pied-à -terre.
“Canadians are very conservative, especially around matters of money,†says Mr. Hynes.
Says Mr. Hunt: “What’s interesting is when you go to New York and you’re doing what we’re doing, you see it’s as normal as can be. There are people from all around the world purchasing real estate, and being entrepreneurial about it.
“We’re not worried.â€
Mr. Hynes and Mr. Hunt aren’t alone in their quest for U.S. real estate. Overall, foreign purchases of U.S. properties have gone up 24 per cent in the last year, according to a recently released report by the American National Association of Realtors (NAR). Canadians are, by far, the greediest buyers. We account for 24 per cent of the foreign sales stateside in the last year. Meanwhile, the second-biggest buyer, China, is responsible for 11 per cent of sales. Toronto realtor Paul Indrigo said he relies on such stats to help Canadians find properties in popular hot spots in Florida, California and Arizona.
But it’s not a straightforward process, purchasing an American investment or holiday property that’s nowhere close to home.
If Mr. Hynes and Mr. Hunt want to renovate, which they do, their property management company will have to hire contractors. To do the work themselves would require a work visa. As well, non-residents of the U.S. are expected to pay a 30 per cent withholding tax on gross rental income – unless, of course, they find an accountant who can help them file the forms that will save them from having to take such a hit. Fortunately, there are local accounting firms who’ve become expert in U.S. tax laws and one of them, a Surrey firm, helped guide the way for Mr. Hynes and Mr. Hunt.
“There will be challenges every step of the way,†says Mr. Hunt. “Taxes are huge. Expenses are really high. Insurance is high. Water has to be paid for separately. We have to budget for maintenance.â€
And the vacancy rate isn’t the same as Vancouver, adds Mr. Hynes. In an up-and-coming neighbourhood like Bed-Stuy, they say demand is so much lower that people might not show up for an open house on a rainy day.
However, compared to Vancouver, the New York market is a breeze, says Mr. Hunt.
“We spent two years looking for a house in Vancouver, and the fact that we survived a sellers’market here meant we didn’t freak out about the New York purchase.
“The market in Vancouver was way more intense.â€
interested
Senior Member
I wish these 2 well. That said, I would never do what they did. Clearly in Vancouver they have only seen an up market. Possibly they will be OK in New York as well. However, I could see Vancouver very easily dropping 25% or more.
the one thing going is at least one has a government job so his salary is secure presumably. The other I am less certain. What is not mentioned here is their cash flow and whether they can afford to carry if for some reason the rents don't cover, unexpected expenses occur etc.
That said, they may well be right and make a lot. However, to extend oneself in New York even if it is a good market by remortgaging a fully paid home I think is akin to gambling. The advantage as I said is one has a government job with a government pension and that provides them the backdrop on which perhaps to take on more risk than the self employed can.
Also, age is important here. If they are in their 30's or early 40's they will make money for quite a while. If they are in their mid to late 50's this would be "not so smart" in my view.
MAU
New Member
I'm curious to know when this transaction actually happened and when the valuation was done. 80% of the value then may be 90% of value now.
marsh
Active Member
There are US estate taxes to consider as well if they should still hold the NY property on death.