I spoke with CTV at the Keller Williams office yesterday morning, and they also spoke with a client, Stephen Litt on site at the Arrow Lofts development. They ran the segment on the 6pm news, and again at 11.
Ottawa’s tougher mortgage rules have sparked a rush by home buyers to get in before the new regulations take effect Monday, but may not dampen the real estate market to the extent observers believed.
“When the new mortgage insurance rules were announced, there was widespread expectations that this could help to cool the market,” said Toronto-Dominion Bank economist Craig Alexander. “But the true impact should prove limited.”
The rule that was expected to have the most widespread effect says all borrowers must meet the qualification standards for a five-year fixed-rate mortgage, even if they choose a variable-rate mortgage or one with a shorter term.
Wrong – the change that will have the biggest impact is that CMHC is now making real estate investors put down 20% on an investment property (up from 5%), meaning many prospective property investors will not be able to get into the market.
The government designed the new rule to help ensure that homeowners will be able to afford their mortgage payments when interest rates rise. Rising rates are less of a worry for a borrower who has locked in for five years than for those who have three-year mortgages.
“The government stressed that the rule changes were not to deflate the housing market, but rather to diminish speculation and provide greater incentive for buyers to take mortgages that were less vulnerable to rising rates,” Mr. Alexander said.
I think the change to the mortgage rules that the article talks about – making people be able to afford the fixed rate 5 year payments, even if they take a variable rate mortgage – is a good thing for most people.
The bad changes are the ones not mentioned here.
As Robert McLister said this morning on twitter ““The true impact [of the new mortgage rules] should prove limited,” says TD. Yeah…as long as you don’t need a variable or rental mortgage.”
For questions about the current real estate market in Kitchener Waterloo, call me now at 519 772 4376, or email me at Benjamin@BenjaminBach.com
A real estate investor recently asked me why people like buying condos at the Kaufman Lofts in Kitchener, Ontario
Between the terrific location (across from the new Health Sciences campus at the corner of King and Victoria St in downtown Kitchener), the iconic nature of the property – Kaufman Footwear has been there since the early 20th century – and the premier rents the condos generate, they can make a great real estate investment.
Along with desireable addresses like the Bauer Lofts and 144 Park in Waterloo, Kaufman Lofts are a premier building in the region.
Click Play to watch the video. This looks at the reasons investors like buying condos here, and goes through the potential cash flow that the rental unit can generate.
Let’s assume a real estate investor is looking at a 1 bedroom condo here. There are units available around $180,000 – a unit at this price is amongst the smallest available, but still in demand by buyers and tenants alike.
(These figures are all projections. Contact Benjamin for a personalized consultation)
The sheet above (click to enlarge it) shows us the assumptions we’re using:
$1200 a month in rent
$3000 condo fee and $1700 in property tax annually etc.
It also shows us the mortgage options – this investor is using a 20% downpayment, and getting a 80% LTV (Loan to Value) mortgage.
A real estate investor recently asked me why people like buying condos at the Kaufman Lofts in Kitchener, Ontario
Between the terrific location (across from the new Health Sciences campus at the corner of King and Victoria St in downtown Kitchener), the iconic nature of the property – Kaufman Footwear has been there since the early 20th century – and the premier rents the condos generate, they can make a great real estate investment.
Along with desireable addresses like the Bauer Lofts and 144 Park in Waterloo, Kaufman Lofts are a premier building in the region.
Click Play to watch the video. This looks at the reasons investors like buying condos here, and goes through the potential cash flow that the rental unit can generate.
A real estate investor recently asked me why people like buying condos at the Kaufman Lofts in Kitchener, Ontario
Between the terrific location (across from the new Health Sciences campus at the corner of King and Victoria St in downtown Kitchener), the iconic nature of the property – Kaufman Footwear has been there since the early 20th century – and the premier rents the condos generate, they can make a great real estate investment.
Click Play to watch the video. This looks at the reasons investors like buying condos here, and goes through the potential cash flow that the rental unit can generate.
Let’s assume a real estate investor is looking at a 1 bedroom condo here. There are units available around $180,000 – a unit at this price is amongst the smallest available, but still in demand by buyers and tenants alike.
(These figures are all projections. Contact Benjamin for a personalized consultation)
The sheet above (click to enlarge it) shows us the assumptions we’re using:
$1200 a month in rent
$3000 condo fee and $1700 in property tax annually etc.
It also shows us the mortgage options – this investor is using a 20% downpayment, and getting a 80% LTV (Loan to Value) mortgage.
One of the questions I get a lot is “whats the cap rate on this one?” Real Estate Investors looking to gauge their return will often use the cap rate as a rule of thumb, a quick (but very limited) statement of value.
What is a cap rate? Is it a good indicator for the return you hope to generate on your return? Is there a better figure to look at?
Cap Rate, or capitalization, expresses the ratio between the net operating income a property produces, and the value. It shows up, based on income, what a typical investor (or ‘the market’) is willing to pay for the income the property produces.
Cap rate = Net Operating Income / Price (or value)
When we’re evaluating properties and we want to determine what we’ll pay for a certain apartment building, we will rework the formula to look like this:
Value = Net Operating Income / Market (or desired) Cap Rate
Cap rate does not take into the financing available, so unless you are buying a property in CASH, that is, without a mortgage, you’re going to want to factor in the cost of debt into your return calculations.
I was speaking with a long time client today about the new CMHC mortgage rules and the impact they will have on investors and owner-occupants (people buying homes to live in personally).
Take a look at this video about the new mortgage rules, where we talk about how the changes to a) minimum downpayments b) qualifying interest rates c) and changes to the rental offset formula will impact property investors in Canada
Real Estate Investors in Ontario know there is a cap on an annual rent increase. This is governed by the Residential Tenancies Act, 2006.
Did you know that not all rental properties are subject to this ? Our clients are investing in Kitchener Waterloo properties with an important piece of knowledge – Do you know it ? Watch the video at this link to find out!
Kitchener Waterloo’s Favourite Real Estate Agent** wants to show you how Real Estate Investing can make you wealthy. Benjamin works with people from all across Ontario and Canada and the world helping them build wealth through smart real estate investments.
Benjamin is a Sales Representative, and runs the Wealth Team at Keller Williams Golden Triangle Realty in Kitchener Waterloo. He’d love to answer any questions about buying, selling and owning a residential, or income & investment property in the greater Waterloo region.
As I just mentioned over at my Real Estate Investing blog, I’m happy to announce that I am opening registration of my upcoming Millionaire Real Estate Investment workshop to the general public. There are only 20 spots, and a little under half of the seats are spoken for already (translation: ACT NOW, SEATS GOING FAST).
If you’ve ever wondered about how you can get started investing in real estate, or wanted to know the best practices of Millionaire Real Estate Investors, you need to register for the workshop.
I will be talking about what you need to do to start your portfolio, the professionals you’ll need to grow your investments, as well as some specific opportunities in the Kitchener Waterloo region.
Anyone can do it, not everyone will.
WHEN: Thursday January 10th, 7:00-8:30pm
WHERE: Keller Williams offices, 871 Victoria Street North, Kitchener Ontario. You can email me for directions.
You must register to attend, and there is no cost for registration. You can register by calling me at 519 570 4447 or emailing me at Benjamin(AT)BenjaminBach.com
A $5 charge at the door will apply, but the workshop is free with registration.
See what others are saying about building wealth through real estate investing:
“Benjamin is an expert in the field of investment real estate. He is highly knowledgeable and a great speaker on this topic. He does an excellent job going through the process one on one and has worked very patiently with me. It doesn’t take long before you realize that he truly works hard to help make other people wealthy and successful…stays true to his life mantra. I strongly recommend Benjamin if you’re looking for person to help you build your wealth!”
Every time I hold a workshop, I help someone change the way they think about building and accumulating wealth. I’d love to help educate you on how you can become a millionaire and retire rich. Call or email me today and register for the workshop.
Kitchener Waterloo’s Favourite Real Estate Agent (Gold Award, Kitchener Waterloo Record Readers Select Awards 2007 – 2008) wants to show you how Real Estate Investing can make you wealthy. Benjamin works with people from across Ontario and Canada, helping them build wealth through smart real estate investments.
Benjamin is a Sales Representative with Keller Williams Golden Triangle Realty in Kitchener Waterloo and would love to answer any questions about buying or selling a rental, income or investment property.
You can reach Benjamin at Benjamin(AT)BenjaminBach.com or call him at 519 570 4447
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Legalese
Benjamin Bach, Sales Representative
Benjamin@BenjaminBach.comCushman & Wajkefield Waterloo Region Ltd.
(519)-585-2200 | (519)-585-2208 fax
120 Randall Drive, Unit F, Waterloo, ON, N2V 1C6
Not intended to solicit anyone or properties under contract to another brokerage.
My Enduring Purpose is to build relationships with and contribute significant value to my clients while attracting success with my integrity and actions.
To help people I have relationships with achieve wealth, be it financial, emotional or spiritual, while living a balanced life of my own.
To give freely.
Value System
Win-Win... or no deal.
Integrity... do the right thing.
Customers... always come first.
Commitment... in all things.
Communication... seek first to understand.
Creativity... ideas before results.
Teamwork... together everyone achieves more.
Trust... starts with honesty.
Success... results through people.
The information provided on this website is generalized, and is for educational purposes. Please arrange a personal consultation to build a plan that is right for you
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