Investment Property, wait or buy?

[Robert11]

If you invest in a property then with the passage of time the value is increase and you will receive reward from it, and you are "road to an art" in the property investment field... and you can take a better decision time to time...

 

[Stratford1]

This is hilarious....

Investing in property now is no different than buying a stock at it's peak... on a very extended marging.

Sit down and do the math, even if your property increases every year at the rate for 4% (extremely ambitious) After 5 years on a 300K property, if you sold at 350k you would make very little, if any money. If you consider the Risks and costs involved in this market (Vacancy, Tenant from hell, Land transfer taxes, Realtor fees, Closing costs) and do the actual return, you'll see the risks completely outweigh the benefits.

You're better off buying gold on a margin - at least you'll have a lot more liquidity.

Sounds like there are a bunch of realtors looking for more money.

Yeah I posted a quick analysis on another thread:




I follow this area on MLS and notice a lot of listings for 55 Stewart/550 Wellington on the market, these days.


http://www.loftsellers.ca/SUPPLEMEN...5-Stewart-St-103-Toronto-ON-M5V2M9/01001,3050

Let's talk condo fees: for above link a 860 sq foot two level "townhouse", at $488,000, it states about $550 month in condo fees.

That's $6600/yr on fees alone. What do you get? As I understand it, hydro is not included. Nor is you own owner's insurance (I may be wrong on this point). Property taxes are of course extra.
Let's figure another $250/mo - at least - for insurance and property taxes.

All-in that's at least $10,000 /year of your after-tax income just for living here... but wait:

If you buy the unit you'll pay two land transfer taxes: Ont. and T.O. Add at least 1.5% of price: another $7000 capitalized on mortgage, plus interest.

Only paid 10% down? Then pay at least another $7000 in CMHC insurance fees: another $7000 capitalized onto mortgage, plus interest.

Plus a few thousand of closing costs. This means you add almost $20,000 to your mortgage just in these fees from day one in closing costs.
Even if you threw $2000/mo at this debt , factoring in interest your first 2 years of paying 2000/mo goes towards these closing costs!

And don't forget almost $1000/mo for the condo fees, property taxes, insurance plus cable, internet etc.

Result: paying $3000/mo for two years and you've not touched one penny of mortgage interest or principle!!

What a scam (for the banks).

You might as well rent it for $3000/mo all-in for a few years, and save your 10% Downpayment of $48,000, saving $20000 in closing costs and land transfer taxes - then take this $68,000 and invested in a mix of income paying funds. e.g I know one conservative mutual fund at $11.50/unit that pays .08/unit each month in income. That's $475 in monthly income if you invest this $68,000 into a fund like this one. Just as an alternate example.

Best part is you can walk away withouth another 4% in selling realtor fees and closing costs when you move on (and these days who lives in the same place for more than a few years - we are very mobile).