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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing March 19, 2019 2   0   0   0   0   0
In today’s real estate milieu, where cash flowing properties are becoming more sporadic by the day, the rent-to-own model is emerging as a superior strategy with a favourable buy-in. Helping tenants take eventual ownership of a property by giving them a stake in their own success, rent-to-own investors only have to put 15% for a down payment, enlisting their tenant to put up the remaining 5%. “This is where a lot of the profitability of rent-to-owns is coming from,” said Rachel Oliver, managing partner of Clover Properties.“Eighty percent comes from the bank, 5% from the tenant-buyer and you’re only in for 15% at a time when you can’t buy a residential property for less than 20%, but we found a way to do it. “The sweet spot for a lot of rent-to-own properties would be an initial investment of $70,000 to 90,000.” Rent-to-owns are ideal for supplementing income right away.Rather than banking on long-term appreciation the way most downtown Toronto condominium investors do, RTOs can yield anywhere from $600 to $900 a month in cash flow, after expenses. But the beauty of rent-to-own investment properties is that you can leverage your personal residence or existing rentals to start building a rent-to-own portfolio that actually pays for your lifestyle.For example, a simple
 
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing March 19, 2019 2   0   0   0   0   0
This year, national home sales activity will likely fall to its lowest point since 2010, according to the Canadian Real Estate Association’s updated outlook. The prediction followed the considerably weaker nationwide sales in February, with a 4.4% annual decline and a sharper 9.1% drop from January, The Canadian Press reported. Aggregate nationwide sales in 2019 will shrink by 1.6% to 450,400 transactions, CREA cautioned.Meanwhile, 2020 transactions will see a 2% gain to reach 459,400 sales. The average sales price across Canada last month was $468,350, falling by 5.2% annually.Excluding the elevated-cost environments of Toronto and Vancouver, the average price stood at a little under $371,000. Read more:Significant headwinds to impede 2019 housing starts[1] Data from the Canada Mortgage and Housing Corporation also showed that these developments have accompanied a slowdown in new home construction nationwide. The seasonally adjusted annual rate of housing starts declined to 173,153 units in February, markedly lower than the 206,809 units in January and failing earlier predictions of 205,000 units. CMHC cited mortgage rate hikes and economic sluggishness as major factors in the lower starts volume. “Although housing starts seemed to be unscathed by the new B-20 regulations that took effect in January 2018, higher borrowing costs and tougher mortgage qualifying conditions
 
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing March 17, 2019 91   0   0   0   0   0
While smart cities may be imminent, how they’re developed is still a question mark. Fortunately, Vancouver and Surrey will soon have answers. Both cities are exploring how to develop their respective corridors with tomorrow’s technologies by using superlative international projects as inspiration.The cities’ shared goal of improving residents’ lives will be realized through a competition involving companies from all over the world, with the winner receiving $50 million to fulfill their visions. Jesse Adcock, the City of Vancouver’s chief technology officer, says the chosen projects will have to improve citizens’ safety and mobility, while reducing greenhouse gas emissions and collisions. “We provided the physical characteristics in each city’s corridor and asked the industry how their technology projects will solve particular problems,” she said.“We had over 172 proposals come in from all over the world that represent hundreds of projects, and we managed to shortlist them down to 55 vendors and 81 projects.” Residents, businesses and other stakeholders have also been encouraged to provide as much input[1] as possible around six themes put forth by Infrastructure Canada, and while it’s still too early to describe what smart cities in Vancouver and Surrey will look like, they will incorporate intelligent traffic and data collection systems, censors, autonomous shuttles and last mile vehicles. “By having a strong
 
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing March 17, 2019 96   0   0   0   0   0
Montreal’s home price growth is considerably outstripping the national average as well as the pace set by the leading markets, according to the Teranet–National Bank of Canada House Price Index covering February 2019. The city’s real estate prices increased by 5.15% year-over-year in February, reaching a historic high.To compare, the Teranet HPI found that overall prices nationwide saw only a 1.87% annual increase, which was noted to be the third smallest non-recession increase behind July and August of last year. “The market peak was reached in September 2018, and prices are down 1.43% from there,” Better Dwelling stated in its analysis of the Index. In addition, Toronto saw a 3.56% annual increase, while Vancouver suffered a 1.11% shrinkage during the same period. Read more:Montreal’s affordability drives much of its sales growth[1] The Montreal real estate segment is also benefiting from a strong economy and a vibrant job market, the combination of which is boosting purchasing power of the city’s working-age Canadians, according to the Canada Mortgage and Housing Corporation. “The Montreal and Québec areas have shown strong economic growth and particularly vibrant job markets in the last two years.This certainly contributed to the financial stability of households and supported their ability to make their mortgage payments on time
 
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing March 17, 2019 99   0   0   0   0   0
Commercial property investment in Alberta significantly grew in Q4 2018, largely fuelled by the province’s two most important markets, according to Altus Group’s latest analysis. Calgary saw its third consecutive year of total investment growth, reaching an annual total of $3.7 billion.However, Altus Group warned that considerable uncertainty remains.  “2018 saw increases in investment across all sectors when compared to the previous year, however this has not translated into the higher volumes seen in the past,” Tatterton explained. “What it has demonstrated is that the market is continuing along a path of recovery, and until some of the uncertainty surrounding the greater economy is resolved, it is likely that 2019 will follow a similar path as 2018.” Calgary’s office segment helped propel the market to its stellar performance, with its 21% annual increase in investment value to reach $960 million.The industrial sector also experienced its best year over the past decade, with 132 deals representing an investment total of $758 million. The city’s apartment investment also grew by 8% last year, with Q4 accounting for 68% of this volume.The ICI land market had a 27% increase, while residential investment went up by 18%. Read more:Commercial property market heavily leans upon tech companies[1] Meanwhile, Edmonton’s commercial activity
 
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing March 14, 2019 107   0   0   0   0   0
As cities around the world grow too expensive for young families, they’re renting longer, and this new demographic could provide landlords with stable tenancy for years. But landlords need to be flexible. Craig Watson, a landlord and sales agent with REMAX Escarpment Realty Inc., says that by allowing tenants to baby-proof his rental properties, he scarcely worries about vacancies. “The last couple of years have been really challenging for young families, whether first-timers or new buyers, because they have to deal with the mortgage rules in place,” he said.“They’ve become more prominent on the renting side.I’ve had many more young tenants than I had many years ago.” A good rule of thumb for any property investor is that they should cater to their tenants, and as young families struggle to become homeowners, Watson advises being accommodating. “Be aware of their requirements so that you can best meet their needs,” continued Watson.“When I have people requesting these things from me, I don’t have any problem with it.You’re looking at families coming in and you want them to feel safe and secure, and as a landlord I’m trying to anchor in that tenant to a certain point.It’s my property, but their home, and I want them to love where they live.”
 
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing March 14, 2019 88   0   0   0   0   0
The rest of 2019 might bring with it major risks – including a sluggish national economy and the knock-on effects of previous mortgage hikes – that can lead to less new homes built in Canada’s major markets, CIBC economist Royce Mendes warned. “Residential investment was downright ugly in the fourth quarter, and the latest reading on housing starts only added to the bad news on Canadian homebuilding,” Mendes told The Canadian Press. Latest numbers from the Canada Mortgage and Housing Corporation showed that the seasonally adjusted annual rate of housing starts fell from 206,809 units in January to 173,153 units last month, considerably lower than prior predictions of a pace of 205,000. “Prior to this reading, starts had seen a bit of a renaissance, rising back above 200,000 for four straight months.But the market has been a contending with the effects of higher interest rates and stricter lending standards, and a pace of 200,000 looked unlikely for the year as a whole,” Mendes added. Read more:Multi-family starts predominant in the hottest markets[1] These figures came after the weakest January of home sales since 2015, according to the Canadian Real Estate Association. “As a leading indicator of economic activity, February’s steep decline in housing starts may raise some
 
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing March 14, 2019 167   0   0   0   0   0
New Brunswick’s property tax has led to virtually zero growth in new apartment investment, according to market players and observers. “It is stopping investors from coming here, it is stopping people coming in and purchasing income properties, and it is also hurting our economy,” according to Pamela Doak of the Fredericton Real Estate Board, speaking to GlobalNews.ca. These assertions were supported by Statistics Canada numbers, which indicated that apartment investment has grown in Nova Scotia between 1994 and 2018, while remaining flat in New Brunswick over the same period. Data from the Canadian Real Estate Association showed that the market’s average sales prices make it a relatively affordable option, with the single-family home benchmark as of 2018 at $177,200 (vs.the national average of $488,600). However, this is only part of the picture.Research by real estate information portal Zoocasa has found that keeping a home in New Brunswick is particularly costly, with Saint John having the highest residential property tax rate in Canada (1.785%). Read more:Growing number of PEI, BC locals burdened by insolvency[1] The New Brunswick Real Estate Association has long pushed for legislative changes, as the province is the only jurisdiction in Canada that has a non-owner occupied levy “We’ve been lobbying basically since 2010
 
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing March 12, 2019 106   0   0   0   0   0
Master-planned communities have the obvious advantage of elaborate planning that standalone developments don’t, and that makes them superior investments. “Master-planned communities have the advantage in that you know how the community will change over time,” said Brad Jones, VP of development at Wesgroup in Vancouver.“You know how the community will grow and which retailers are coming on board.There are also parks, schools and a clear ability to understand how your neighbourhood, and your investment, will change over time.” Wesgroup is in the midst of developing River District, the largest master-planned community in Vancouver, that has 54 development parcels over approximately 130 acres.In total, the community expects about 15,000 residents will be spread across 7,000 units of housing. “River District has the unique advantage of one company doing all the buildings, doing all the master-planning work and owning all the retail and commercial space,” said Jones.“Your investment is going to be looked after by us because we’re looking after our own investment, too.We’re buying into the future of the community, like every buyer is, rather than just a few buildings.We’re the landlord for the grocery store, the bank and the liquor store.We’re looking after the community’s reputation by building and thinking long-term.” There are three major phases, the second of which is under construction to build
 
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing March 12, 2019 108   0   0   0   0   0
In recent months, more multi-family buildings were constructed than any other housing type in Canada’s hottest markets, according to a new report by the Canada Mortgage and Housing Corporation. “The national trend in housing starts resumed its downward trajectory in February while still remaining above historical average,” CMHC chief economist Bob Dugan said. The Crown corporation said that despite the nationwide housing starts trend falling to 203,554 units in February 2019 (from the 207,742 units exactly a year before), multi-family complexes represented much of recent home construction activity. “Both single-detached and multi-unit dwellings starts trended lower.Higher mortgage rates combined with still-favourable, but less stimulative economic conditions have contributed to softer demand on new home markets in urban centres.” Vancouver, in particular, saw the predominance of multi-unit buildings in new projects.Condo starts significantly increased in the 12 months ending February 2019, accounting for 77% of the city’s new housing units last month.In contrast, single-detached starts fell by 24% annually. Read more:Rental demand to boost further apartment construction – CMHC[1] Meanwhile, Toronto’s lower February numbers mainly stemmed from low condo apartment starts, although demand for the asset class is not stopping any time soon as “sales of new condominium apartment starts have been strong in 2017 and 2018 and these units
 
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing March 12, 2019 118   0   0   0   0   0
The tech segment now serves as a vital bedrock of the Canadian commercial real estate sector, according to a new analysis by Marcus &Millichap. In its newly released 2019 Commercial Real Estate Canada Investment Forecast study, Marcus &Millichap noted that tech firms’ demand for usable space will foster greater investment in the oft-ignored outskirts of major metropolitan markets. “Elevated pricing expectations and fewer high-quality listings in downtown areas motivate investors to broaden search parameters to suburban locations near major metros.Higher yields beyond the urban core will be a large driver to sales activity in 2019,” the report stated. Moreover, tech giants such as Microsoft, Google, and Amazon – which have already taken roost in Canada’s leading commercial markets – have been predicted to hire new workers in the tens of thousands over the next few years, as well as spend billions in office expansions during that same period. “Microsoft currently has 2,300 employees in the country and 14,000 partners, which could grow to 60,000 overall jobs between employees and partners.Amazon will also grow substantially with plans for 6,000 new jobs across corporate offices in Vancouver and Toronto and multiple new fulfillment centres,” the report explained. Read more:Tech firms are the foundation of the commercial segment’s stability[1] Toronto, as a
 
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing March 10, 2019 146   0   0   0   0   0
Despite the e-commerce disruption, the retail market in Canada’s key markets is expected to remain strong through 2019. In fact, according to Marcus &Millichap’s 2019 Retail North American Investment Forecast, downtown storefronts are proving impervious to the convenience proffered by online retail.The report notes that service-oriented businesses, like fitness and dining, are thriving. “Visitor expenditures rose 2.4% in the third quarter of 2019, carried higher by strong domestic demand,” read the report.“Tourism spending has been a substantial driver to luxury brand expansion as visitors comprise a large portion of all high-end sales, lifting investor interest in high street assets as they are often more e-commerce resilient.” While internet-based sales increased 20% over the past year, they only comprise 4% of Canada’s retail activity.Still, retailers are bracing for change by embracing omnichannel approaches to remain afloat.Luxury retail is also expected to remain strong through 2019 and compensate for weaknesses in the mid-market category caused by Sears, Lowe’s, Gymboree and others. Montreal, Canada’s second-most populous city, is replete with international and discount retails, and as the it rides a wave of newfound prosperity, brands are vying for to establish a presence in the city.Tenant demand is so strong in the city that developers are responding with sprawling mixed-use projects. “Motivated by growing tenant demand, developers
 
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing March 10, 2019 261   0   0   0   0   0
Montreal’s relative affordability is fuelling an unparalleled dynamism that has pushed the market towards its 48th straight month of sales growth in February, according to the latest figures from the Quebec Professional Association of Real Estate Brokers (QPAREB). The metropolitan market’s residential transactions increased by 8% annually last month, ending up at a total of 4,370 transactions. Average sales prices were cited as a major factor in this trend, with Montreal’s condos remaining flat at $250,000 in February.Single-family homes increased by a modest 3% year-over-year (reaching $320,000), while plexes saw 8% price growth (up to a still-affordable $522,000). Condos transactions enjoyed a 14% annual increase last month to reach 1,588 completed deals.The number of single-family homes sold in February was 4% greater than the activity during the same time last year (2,436 transactions), while that of plexes went up by 7% during this time frame (339 sales). Read more:Economy, employment boost purchasing power in Montreal[1] In a report earlier this year, the Canadian Real Estate Association stated that Montreal’s housing market growth will soon outpace that of Vancouver. The total dollar value of property transactions (seasonally adjusted) in Montreal expanded by 18% year-over-year in January, up to $1.63 billion.In contrast, Vancouver’s suffered a 42% decline to $1.7 billion. Are you
 
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing March 10, 2019 248   0   0   0   0   0
A newly licenced tech-funding specialist bank is just the latest in Toronto’s tech-impelled commercial surge. Silicon Valley Bank, which supports tech innovators and their investors, has been granted an OSFI license to operate in Canada.The U.S.-based company will be starting its operations in Toronto. The bank specializes in commercial financing solutions to technology and life science organizations. “Canada has a thriving innovation sector and we’re excited to be a catalyst for its continued growth,” bank CEO Greg Becker stated. “The Canadian banking licence is a significant milestone in our global expansion.The growing team there is well-positioned to execute on SVB’s mission to help innovative companies and their investors be even more successful.” Read more:Tech firms are the foundation of the commercial segment’s stability[1] Silicon Valley Bank is among the recent tech-related firms that have established themselves in Toronto – continuing a trend predicted by CBRE vice chairman Paul Morassutti, who stated that the tech industry will play a central role in ensuring commercial stability for the long haul. Approximately 10 million square feet of office property is under development in Toronto, with 58% of the space already pre-leased and tech firms accounting for 20% of the early birds. “In real estate, identifying areas of growth is fundamental.Increasingly, the
 
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing March 07, 2019 152   0   0   0   0   0
What if data could be harnessed to determine renters’ habits and predict their suitability as tenants? According to Jerome Werniuk, director of sales at Naborly Inc., that day is just around the corner.The real estate industry in Canada has been slower to adopt technology than it has south of the border, but things are beginning to change.Naborly, for instance, is in the business of running credit checks for landlords—up to 100 a day—and, in the process, has amassed an impressive database of information that it intends to parse for trends, habits, and ways to make both landlords’ and tenants’ lives easier. “Companies like Naborly that aggregate information about tenant migration will completely change how landlords look at their real estate investments,” said Werniuk.“A good way to look at this is through numbers for three categories:average house price, average rental price, and average income.” Studying those categories will reveal housing prices are increasing much faster than rental rates—although they’re going up, too—but, fortunately, Naborly’s in-house team of data scientists go much deeper.By combing through the information Naborly has captured from over 50,000 tenants within its system, most of whom are in the Greater Toronto Area, they will produce reports that reveal the average age of renters in a postal code, their average income, and their average
 
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