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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing November 04, 2018 80   0   0   0   0   0
Investing in Energy Star-grade upgrades can yield investors higher returns. According to Corey McBurney, president of EnerQuality, which partnered with Natural Resource Canada to develop the Energy Star certification, smart technologies lower investors’ expenses. “It’s twofold,” said McBurney.“If you’re renting out to a tenant, the core value proposition is energy savings, so your monthly operating cost, if you own an apartment building or a single unit, comes down because the occupant enjoys the same level of comfort and temperature, yet the cost is reduced because you’re installing advanced measures, whether they’re lightbulbs or things around the actual construction of the building, like a big mechanic HVAC system.” The asset’s value will also appreciate down the road with Energy Star certification.A major reason, says McBurney, is because consumers are attentive about environmental concerns. “The resale value—and your monthly operating net—and an added brand bump of being a third-party certified government-backed building will make it a more attractive product down the road,” he said, adding there’s a huge market in the purpose-built rental sector for energy-saving buildings. “If you’re building purpose-built rentals, you’re holding property.The owners are keenly interest in, not just their one unit’s energy savings, but the building as a whole, and it’s important to that class of investor and developer, but it applies equally
Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing November 04, 2018 82   0   0   0   0   0
Major cannabis producers and sellers are struggling to keep up with the enormous demand for the plant after it was legalized last month. Canadians’ craving for the herb was such that shortages have become all too apparent in the few short weeks after October 17. “The response has been pretty unbelievable,” Canopy Growth Corp.CEO Bruce Linton told Bloomberg.“I don’t think everything will run out but you might not be able to get the identical stuff you got last time.” The most notable supply-side issue is the sheer amount of time that sales licensing takes, which can take as much as a year. “We’re biting our nails and I think our shareholders are biting their nails too,” according to Anthony Durkacz, director at Ontario-based producer FSD Pharma Inc.“We want to be supplying.” FSD has acquired its cultivation license back in 2017, but it has yet to receive its sales license. Read more:Pot industry investors should take heed of this fact[1] The Ontario Cannabis Store reported that it has received 100,000 orders in just the first 24 hours of its operation, defying even the most optimistic projections. Meanwhile, Quebec’s online and in-store orders almost broke through 140,000 in the first week since legalization.Some locations might even get shut
Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing November 01, 2018 92   0   0   0   0   0
According to a report released this week, private lenders funded 20% of mortgage refinances in the second quarter of this year, highlighting how profitable mortgage investment is becoming. The joint report between Teranet and Realosophy also revealed that private mortgages during Q2 2018 jumped 67% compared to the same period two years ago.While much of that can be attributed to new mortgage rules, says Laura Martin, COO of Matrix Mortgage Global and director of Private Lending Hub, there’s nary a reason for concern because the quality of private mortgage borrowers has improved dramatically over the last decade. “The mortgage default rate in Ontario in 2017 was 0.24%,” Martin told CREW.“The mortgage stress test of plus-2% on the contract rate, as mandated by OSFI [Office of the Superintendent of Financial Institutions], has meant a reduction of 20% in purchasing power.High net worth individuals typically have at least 30% of their investments in real estate holdings.They enjoy the liquidity of an investment that matures every year so that they can reinvest, as well as monthly cash flow that is secured on an inherent and tangible value from the real estate asset.” Private mortgage investors, according to Martin, make 8-10% returns on their investments, even with lower loan-to-value ratios. “The average private mortgage amount in the
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing Updated April 18, 2018 1471   0   2   0   0   0
{JoomFuse FirstName} Real estate delivers better returns than the stock market[1] does, but modeling returns requires critical thinking and a lot of due diligence. The better our due diligence, the better our models, the greater the access to capital. What makes commercial real estate such a unique asset class is that every investment is different and our due diligence needs to adjust accordingly. When it comes to due diligence, information costs money and therefore must have a return on investment. In this article, I discuss the decisions that real estate investors face when it comes to physical due diligence—think environmental site assessments[2], property condition reports, BOMA surveys, ALTA surveys, seismic risk assessments, and the like—and how to wring the most return on investment out of the process. Who should direct the due diligence? A questions I often get asked is: should the seller do pre-disposition due diligence? For most transactions, the buyer performs due diligence assessments at their own expense. However, on large transactions where the broker expects the buyer pool to be large and competitive, I believe that the seller is well-served to provide a full due diligence package at listing. In this case it pays to proactively reveal any issues and hold the asset out for auction “naked to the world.” Because in a competitive bidding process, buyers will discount any imperfections and focus on key economics. With a large data room it is difficult for...
How to avoid renting to the tenant from hell
Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing Updated March 22, 2018 897   0   1   0   0   0
Nightmare tenants are afforded a lot of protection under Ontario law, even when they refuse to pay rent or move out, but, fortunately, steps can be taken to ensure your due diligence is foolproof. While asking potential tenants for references and credit reports, as well as having criminal background checks performed, is par for the course, they can be forged or otherwise circumvented, as one Toronto landlord recently found out. A tenant named Mike Lemke had documents forged and friends acting as references—he even enlisted a legitimate real estate sales agent, who happened to be his friend, to represent him—to move into a high-end Liberty Village condo rental.Having experience exploiting the system, he stopped paying rent and refused to move out. Steve Arruda, a sales agent with Century 21 Regal Realty, represented the landlord in that case and had the displeasure of dealing with Lemke.Upon moving into the condo in October 2016, Lemke’s metamorphosis into the tenant from hell didn’t take long. “He paid the first and last month’s rent, then he was there rent-free for six months,” said Arruda.“He’s one of those guys who knows the system and knows exactly how much time he has. “He was bragging about how he’d be there for six months and bragging about how he has rights, like the right not to pay rent. We went to the tribunal, but he’d always stall the hearings, make false accusations—it was just a big mess.It...
Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing November 17, 2017 735   0   0   0   0   0
The cost of investing in Toronto is rising and some investors are beginning to look elsewhere, but are ROIs in Canada’s largest city really that paltry? Brad Lamb, owner of Brad J.Lamb Realty Inc.and Lamb Development Corp., says Toronto condo investments proffer diminishing returns. “It’s getting harder and harder in places like Toronto and Vancouver to buy a home, like a condo, and rent it and have it make any sense as an investment because you’re paying $1,000 per square foot,” he said.“You’re paying $500,000 for a one-bedroom condo apartment that’s 500 square feet and you’re going to rent it for $2,000 a month, but when you add up your mortgage, your condo fees and taxes, it doesn’t cover it.” Lamb says Hamilton is becoming increasingly attractive to investors. “Toronto’s real estate unaffordability shines a nice light on Hamilton, so investors are looking at alternate places to invest and prospective homeowners are looking for other places to live, where they can have a decent life in a nice home,” said Lamb. However, Akshay Dev, a sales agent with REMAX Realty One disagrees with that assessment.Not only do Toronto condominiums appreciate faster than Hamilton’s, they can still be had on the cheap when compared to other international cities. “You have to look at
Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing November 17, 2017 873   0   0   0   0   0
by Paolo Taruc First National Financial announced Wednesday its mortgage investment fund will be terminated by next month. Unitholders are not required to take any action, according to the fund’s manager, Stone Asset Management.Instead, the fund will pay them a special distribution before termination.The payout will be based on the amount necessary to eliminate the fund's liability for non-refundable income tax under the Income Tax Act. The move comes as the favourable tax treatment for the forward purchase and sale agreement (“Forward Agreement”) – an integral part of the fund’s portfolio – is set to expire on 19 December. First National said it will no longer be possible for the fund to provide its unitholders with exposure to the Portfolio on the originally intended tax-advantaged basis. “As a result of the upcoming Forward Termination Date, loss of the intended favourable tax treatment and reduction in the size of the Fund's assets as a result of redemptions over the past number of years, the Manager [Stone Asset] has determined to terminate the Fund on or about the Forward Termination Date,” it added.  Stone Asset will apply to delist the units of the fund from the Toronto Stock Exchange.It is expected that the units will be delisted at the close of
Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing November 15, 2017 710   0   0   0   0   0
October sales indicate the housing market is bouncing back, and the Greater Toronto and Vancouver areas are leading the way. Sales last month were up 0.9% over September, even though listings declined 0.8%, which is in stark contrast to the August-to-September increase of 5%. The Canadian Real Estate Association compiled the data, and another key finding was that October’s sales-to-new-listings ratio of 56.7% was up 1% from September, indicating the market is balancing. Year-over-year sales in October decreased 4.3%, but the national average sale price of $505,937 was up 5%.However, the average sale price dropped to $383,000 when the GTA and GVA were removed from the equation. REMAX Integra CEO Pamela Alexander says inventory is still tight in Canada’s two largest housing markets, but that signifies a return to a stable and predictable market.Fortunately, she says, it will be nothing like the beginning of 2016, when there was unusually high activity and homes sold well over value. “It looks like it’s heading back to a normal market, like the one we’ve been experiencing for the last 10 years,” she said.“The market is trying to find its balance across the country, especially in its two biggest markets.” Looking ahead through the remainder of 2017 and into next year’s first quarter, Alexander expects stable
Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing November 15, 2017 727   0   0   0   0   0
by Paolo Taruc The Urban Development Institute (UDI) has criticized the decision of Vancouver authorities last week to deny the Beedie Living mixed-used condo project in Chinatown. “This ruling creates significant uncertainty because our members don’t know if they can rely on zoning, urban area plans, advice of city staff or recommendations of the Urban Design Panel,” said UDI president and CEO Anne McMullin in a statement. She described the move as a “surprise decision,” as the proposal was revised five times over four years and received the support of expert city staff, the city’s Urban Design Panel of design professionals. McMullin warned that the denials sends a “negative chill” throughout the industry at a time when when housing supply in market, rental and affordable homes has reached historic lows. “Our members, and the thousands of individuals represented in all facets of development and building, are concerned this decision undermines the integrity and reliability of the City’s rigorous planning regime, and puts into question future projects, not only in Chinatown, but across the City,” she added. Opponents of the development believe its construction would gentrify the area and price out the community’s marginalized residents.“In the neighbouring 189 Keefer building, we have seen 1 bedroom condos being sold for just under half
Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing November 06, 2017 842   0   0   0   0   0
According to The Conference Board of Canada’s latest report titled Compensation Planning Outlook 2018, Canadians should not expect a substantial addition to their households’ coffers in 2018. The study revealed that non-unionized employees across the country will see only a 2.4% increase in their salary next year, just slightly higher than the 2017 growth of 2.2%.Projected increases are highest in the pharmaceutical and chemical products industry at 2.7%, and lowest in the health sector at 1.6%. Increases of 2.6% are expected in the real estate industry, along with organizations in construction, finance, and insurance. Read more:Canadian debt-to-disposable income load rises in Q2[1] The highest-demand postings remain IT specialists, management, accounting/finance, engineering, and skilled trades. On a regional basis, Manitoba, Ontario, and Quebec lead the way in terms of projected increases, with wage gains ranging from 2.6% to 2.5%.Meanwhile, the lowest average base pay increases are expected in Alberta and Saskatchewan, at 2.1%. “While the Canadian economy is firing on all cylinders this year, growth projections for next year and beyond show a slowing down of the economy.As a result, business leaders continue to exercise caution, keeping a cap on organizational spending and, by extension, salary increases,” according to Allison Cowan, director of Total Rewards Research, The Conference Board of Canada.
Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing November 06, 2017 759   0   0   0   0   0
In what came as a shock to observers and authorities alike, the nation’s gross domestic product contracted in August after a flat reading in July, Statistics Canada reported last week. The latest disappointment is another sign that the process of cooling is well underway from the blistering pace of growth in the 12 months through June, according to fiscal sector players. “The run of amazing Canadian economic data is officially over, with growth coming back to reality in hurry,” Bank of Montreal chief economist Doug Porter stated in a note to investors, as quoted by Bloomberg.“The two-month lull in activity pounds home the point that the frothy growth of the past year is over and done.” If the economy fails to expand in September, third-quarter annualized growth would be on pace for a sub-2% increase, after a gain of 4.5% in the second quarter.The Bank of Canada projected growth of 1.8% in the third quarter.Economists surveyed by Bloomberg News forecast an average 2.1% expansion in the second half. Read more:Ontario’s vicious cycle of sluggish income growth and sustained real estate strength[1] The nation’s currency dropped as much as 0.6% to C$1.2915 against the U.S.dollar as of November 1, which may fuel concern the Bank of Canada’s caution about raising interest rates
Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing November 06, 2017 788   0   0   0   0   0
Markham is in the midst of a boom.The city’s downtown is home to a slew of residential and commercial development, but most notably it’s become the centre of Canada’s tech industry. According to Sunny Sharma, president of Century 21 Leading Edge VIP Realty Inc.Brokerage, Markham’s diverse population and thriving technology industry make purchasing a condo there a sure bet to appreciate. “They have the most bio tech companies there,” said Sharma.“York University is putting a new campus in downtown Markham, and it is tied in on a new bus lane that goes straight through to Vaughan along Hwy 7.They’re looping everything to make sure there’s better connectivity.” The dedicated bus lane is a straight shot to the new TTC subway station at Vaughan Metropolitan Centre that’s scheduled to open next month.Better transit connectivity – and by extension, employment – says Sharma, is one of the keys to buying an investment property. “Basic employment will give local residents jobs and create secondary levels of employment, which brings in more restaurants, uber drivers, transportation, and different layers of employment,” he said.“Downtown Markham is being urbanized and intensified.” Additionally, Sharma says the downtown core is as hot as ever, particularly in the entertainment and financial districts, and in the East Bayfront, a burgeoning neighbourhood that’s comprises a large
Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing November 03, 2017 823   0   0   0   0   0
Average annual prices of Toronto residential properties remain stable due to sustained gains in the condo segment, and the further tightening of mortgage rules could add a temporary boost this autumn, observers argued. The decision by the Office of the Superintendent of Financial Institutions to impose more stringent stress tests could lead to a scramble as the rules, which take effect on January, might slash a family’s purchasing power by as much as 21%. “The recent changes announced by OSFI might actually result in a short-term rush as those that are impacted by these changes rush to buy,” president John Pasalis told BNN.“What happens after [the Jan.1 deadline] is anyone’s guess right now, but I expect the spring market in 2018 to be cooler that it has been in recent years.” This is despite the overall market being “more balanced” than it was a year ago, Pasalis said.The executive noted the growing evidence of “stark divergences” in the market between condos and freeholds. “Average prices are up 2% over last year, but this is due to the condo market which saw prices rise 17%,” Pasalis explained.“Freehold prices were flat over last year.” Read more:Toronto condo prices could slow[1] The divergences are even more obvious when one examines
Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing November 03, 2017 888   0   0   0   0   0
According to the latest property transfer data released by the British Columbia government, the proportion of sales involving foreign nationals in Metro Vancouver inched up between April and September. The data showed that 5% of the 6,105 property transfers in September involved foreign nationals, up from 2.5% in April. This remained far below the percentage of foreign nationals buying homes before the former Liberal government implemented a 15% foreign buyers’ tax in August 2016 in an effort to cool the hot housing market, The Canadian Press reported. The B.C.Finance Ministry previously reported that from June 10 to August 1, 2016, 13.2% of all property transfer transactions in Metro Vancouver involved foreign buyers. Despite attempts to improve housing affordability, the Real Estate Board of Greater Vancouver said in August this year that the typical price of a home in Metro Vancouver had surpassed $1 million. Read more:Vancouver condo market in demand[1] The New Democrat government has said that it is reviewing transaction data along with the foreign buyers’ tax and an interest-free loan program for first-time homebuyers in an effort to decide whether such measures should be kept, revised, or scrapped altogether. Among municipalities, Richmond saw the highest rate of foreign buyers between April and September this year at 8%,
Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing November 03, 2017 773   0   0   0   0   0
Canadian real estate attracts interest from around the world, and now American company Zillow has announced that it plans to add Canadian listings early next year.However, that could ruffle feathers with the country’s largest real estate board. Zillow publishes properties’ sold data, which has been at the heart of litigation between the Toronto Real Estate Board and the federal competition bureau, who sued the former over anti-competitive practice. John Pasalis, president of Realosophy, a key competition bureau witness during the years-long litigation, says Zillow might not have any problems entering the Toronto market, however, that would be contingent upon its data’s provenance. “I’d be surprised if they can do it if TREB wins the appeal,” he said.“If TREB loses, then it might be easier for them to do it, because they’ll have a right to, but I still think there might potentially be some issues.But it does depend on where they get their data from. If they’ve signed an agreement with Teranet or some other source, it’s going to be a lot different than if they get their data from the real estate board.” Pasalis believes that TREB’s efforts are in vain.Although Realosophy has been prominent in the conflict with TREB, Pasalis says fighting data accessibility is pointless in this day and age. “They’re waging
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