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MAY THE MARKET BE WITH YOU!



Canada’s real estate market has been booming, and scaring off many potential buyers and investors. In reality, there’s never been a better time to start your investment portfolio! With the post-pandemic immigration influx, and a new work-from-anywhere mentality, investing in real estate can be a sure bet if you do it in a smart, and well informed way.

Real estate investment is a broad industry so the first step is to figure out what will work best for you, your life and future, and your personal business strengths. Some options include;


Home for you, with a second dwelling A great way to offset your mortgage payments as long as you study the rental market and know you’re in a desirable area, with an in-demand unit


Triplex rental property Commercial taxation kicks in after that third unit; keep it manageable to start


Short term rental outside the city Support the locals in a lakeside or cottage town by hiring them for property management, cleaning, snow removal, etc. Marketing and area research are key for this type of investment


Long term rental in your hometown

Reach out to your hometown pals and see if someone can be your local handyperson, super, property manager, or emergency go-to for a rental property in an area you’re already familiar with


Consider co-owned investments

Lots of people want to invest, but not everyone has the startup capital to get there! Talk to some friends, and get a squeaky clean contract signed to get started

Once you’ve chosen the best path for your investment plan, the real work begins. To have a successful investment property means planning, planning, and more planning! Speak with professionals in real estate, investing, banking, and business to ensure you’ve got a smart plan, and effective goals. Research growth areas to help grow your equity faster, and find a property that’s manageable; you don’t want to take more than you can handle and suffer from burnout or failure. You’ll also need up-to-date taxes, clean and clear finances, a realistic short and long term business plan, an emergency fund, and to find the right place to safely invest your hard earned money.

Always think about the best bang for your buck to get you started small, when you make some money (or build equity) you can invest larger and grow your business. Read on to hear more about how to prepare to meet, and crush your future goals! We’re available to chat with you about investing in your future when you’re ready to take that first step. Happy planning!

-EXP Ossington Team


 

Rent to Own



Did you know you can rent-to-own?!

This is a great option if you are looking to get into the market but don’t have enough of a down payment saved. Essentially a portion of your monthly rent payments will be set aside, which are called rent credits, that will go towards the purchase of the home as an eventual down payment. While a downside might be that if you decide to not purchase the home, you may lose some or all of your paid rent credits, but one of the greatest benefits is for that the rent-to-own agreement might also lock-in a home purchase price.

How it works:

There are two sets of contracts: a rental agreement and a rent-to-own agreement. The rent-to-own agreement can either be a Lease-Option Agreement (aka option to purchase agreement) or Lease-Purchase Agreement. Whether you sign either, an agreed-upon portion of your monthly rent payments will be accumulated to be eventually applied towards the principal of the house.

You will still need to be approved for a mortgage but you will be able to use your rent credits to build the down payment!

 

Market Snapshot - April 2022



 

Federal Savings Account

Saving to buy a home is a huge challenge, especially with current housing prices! Luckily, there's a new initiative from the federal government to help you save more! The First Home Savings Account was created to help Canadians save for their first homes.

Check if you're eligible:

  • You must be a resident of Canada

  • You must be at least 18 years of age

  • You can not own a home at any time in the year the account is opened, or during the preceding four calendar years

The total limit is $40,000 and you can contribute up to $8000 a year!


 

First-Time Home Buyers Grants

A first-time home buyer grant is a government incentive program that helps Canadians who are buying their first home make financing the purchase more affordable. The programs that are grants include the First-Time Home Buyers' tax credit, Home Buyers' Plan, GST/HST New Housing Rebate, and Canada Greener Homes Grant, and the loans the Land Transfer Tax Rebate and the First-Time Home Buyer Incentive.

Grants

The First-Time Home Buyers' Tax Credit is also called the Home Buyers' amount let Canadians who are buying a house that must be your principal residence for the first year after you buy it. You can claim a total amount of $5000 and this credit let's you put a $750 rebate on your taxes for the year. This is one of the easiest and simplest programs for new property owners to get.

The Home Buyer's Plan is a grant that let's Canadians that are first-time home buyers to withdraw to $35,000 or $70,000 for couples tax-free from their RRSP for buying or building a first home.

The GST/HST New Housing Rebate is a grant for low and middle income Canadians which is easy to get because you are automatically considered when you file your taxes. This grant helps offset the amount of GST and HST you pay per year. The CRA usually sends out these tax credits payments that vary in amount depending on your income and circumstances.

The Canada Greener Homes Grant is an incentive that can help pay for upgrades and retrofits to make your home more efficient. This grant is available for homeowners who want to retrofit their primary residences, the residence you live at. This grant gets you $600 towards the combined costs(for your pre and post retrofit evaluations) and to $5000 for eligible retrofits done after December 1st, 2020. This program requires you to book an evaluation from a register energy advisor, use the evaluation report to decide what upgrades to make, hire professionals for your upgrade, and book a post retrofit evaluation. There are other grants and loans that might become available in the future like the Greener Homes Interest-free loan, Toronto Home Energy Loan program, and the RBC Energy Saver loan.

Loans

The Land Transfer Tax Rebate was created by the Canadian government to make buying your first property more affordable for middle-class individuals. It is a form of shared equity mortgage with the Canadian Government which means the government will loan you either 5% or 10% of a home's purchase price to put towards a downpayment. This is really useful because the loan is tax-free and can be repaid in 25 years or when the house is sold. This will lower your monthly mortgage payments.

The First-Time Home Buyer Incentive is a form of shared equity mortgage with the government. The government will lend first-time home buyer Canadians that have a total annual income below $150,000 in Toronto. You can borrow up to 4.5x your income in total, but you need to have enough for a minimum downpayment. This loan is tax-free and needs to be repaid in 25 years or when the house is sold. This program is great because it can help lower your monthly mortgage payment.

All things consider it is important to do your research and decide what is best for you and make a savings plan that factors all the programs you can take advantage of them.


 

Things in the City To Do on The Cheap to Save Money

Toronto is an expensive city and if you are planning on buying into the housing market, one simple way to help get there is to save money on your entertainment!

Luckily there are a lot of fun things to do in the city that won’t cost you a dime!

  1. Enjoy nature at your doorstep and take a walk through High Park or Trinity Bellwoods, two of Toronto’s most popular parks!

  2. The Art Gallery of Ontario has a free evening on Wednesday. You might have to wait in line for a bit, but it will be well worth it when you are taking in the art on the walls.

  3. Evergreen Brickworks is a wonderful spot to experience Toronto’s geological history with 40 acres of wilderness, accessible from the city center.

  4. Kensington Market offers a unique experience in the heart of the city. A bohemian feel full of original architecture and street art.

 

Ways to Prepare your Finances for Investment

If you are someone who is more of a spender than a saver, it might be difficult to squirrel enough away for a down payment. Having a budget with an allotment of guilt-free spending money might be the way to help you get there!

Here are 5 things you can do to budget for your financial future:

  1. Keep track of your spending. If you like spreadsheets, this might be a fun activity for you!

  2. Avoid using credit to pay your bills. Set aside enough money to pay these every month from your checking account.

  3. Save regularly. One very easy way to do this is to set up an automatic saving amount every-time you use your bank card.

  4. Cut or downgrade your services. Swap out Netflix for YouTube! There is endless great content for free at your fingertips.

  5. Separate your wants from your needs. Ask yourself if you really need that item before you put it in your cart.


 

Carl's Corner Office

Carl Laudan, REALTOR®, EXP Ossington Office Manager

Happy May days! This month’s newsletter is dedicated to ‘Entering the property market’ in theme, but I’m going to take a bit of a detour if you all don’t mind. For me, this time each year brings as much hope as realism and as much joy as disappointment. Okay, weird opening but stay with me…

Most people have passed through tax time by now, maybe not unscathed but more understanding of how last year’s efforts translated into more or fewer choices that are open to take this year based on last year’s assumptions. The effort begins anew to try to maximize what we’re left with (if anything) from the last year to make the next more successful, whatever that may mean to you.

If nothing stands-out as a simple fix to gain better control over your finances, relationships, and mental health, I have some pointers that I’ve learned from coming from an extremely challenging upbringing, and long term effort to rescue myself from homelessness to owning a house, and from trauma to mental health.

I can’t tell the story without writing the book(s) on all that. But, should you find yourself keen to rise above and move forward remember that the first step is to identify the main obstacles and challenges that foil your efforts on a personal level first since that is what you are always able to control since they’re literally your own things to fix. All the external or 3rd party problems come second and will work hand-in-hand to help solve those original obstacles.

The first thing to do is be honest with yourself. Easily said, not easy to do. And the second thing to do is remember to never lie to your professional experts: we’re there to help you. Duties of honesty go both ways.




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