The Toronto real estate market continues to challenge and confound potential buyers out there. Lack of inventory, multiple offers and prices well over the list price have become common-place, and it seems like there is no end in sight. It is difficult to determine a fair market price when it sometimes feels like people are willing to pay anything. Prices for investment properties in the downtown core now average in the seven figures and are getting harder and harder to obtain.
If you are frustrated with the local situation, please do talk to us about Hamilton, Oshawa and other close-by towns where income properties still do make fiscal sense. Real estate investing is still a great way to make money and secure your financial future, despite the current situation in Toronto.
I would like to wish all the moms out there a happy Mother’s Day. I would also like to wish a very happy Birthday to my Dad, Peter Anand, who turns 80 years young this month.
Is Foreign Ownership of Toronto Real Estate Out of Control?
Over the past couple of years, the Toronto real estate market (like Vancouver) has been seeing high increases in the amount of non-residents who are buying property. Canada welcomes home buyers from all countries, and there are no restrictions on the amount or kind of real estate you can buy.The barriers for foreigners to own real estate here are essentially non-existent and many see Toronto as an ideal place to park their money. This increased competition has left many local residents unable to buy since the demand has simply become too fierce. In Australia, for example, foreigners are only able to buy newly-constructed properties, leaving the resale market for locals only. We have no such restrictions or policies in place here.
CMHC has been warning that these high house prices are inconsistent with local economies and have become overvalued. There are few barriers to entry for wealthy foreign owners who have been bidding up the prices. There are no higher property taxes and no stringent requirements for outsiders to buy into the Toronto real estate market. In fact, with the Canadian dollar tanking, free healthcare and world-class universities for foreigners to send their kids to, Toronto may be one of the best places going to invest in. Also, Prime Minister Trudeau is talking about introducing measures whereby it will lower the amount of time an immigrant is required to live in Canada before they become a citizen.
Unfortunately, the reality is that money talks. Every seller is looking to get as much money as possible for their property and the reality is that to them, it doesn’t matter where the money comes from. Foreigners don’t have a
competitive advantage. It just seems that they are prepared to pay a little more and in general to not lose in multiple offer situations. This speaks to their strong desire to invest in Toronto and lay foundations for their future here. It is easy to point the finger and blame foreigners for inflating the market, but if we don’t have rules or policies in place to address this phenomenon, should we be surprised that wealthy investors continue to take advantage of our system?
Have You Done Your Spring Cleaning Yet?
Now that we are in the midst of the spring real estate market, this is the time that landlords should ensure that their investment properties are kept clean and in tip-top shape.
Here is a list of maintenance items that I recommend you, as a landlord, should consider:
- Check your eaves trough for any areas that are plugged with debris. Look for any places that are cracked and leaking. Also, make sure that downspouts are properly draining away from the house. Poor drainage can lead to a weakened foundation and even flooding in basement areas. The City of Toronto does not allow for you to drain back into the house, but rather expects your drain to run away from the property.
- Look at your roof shingles from the safety of the ground. Inspect the roof as best you can to see if any were lost during the winter. If you notice any shingles that are cracked, mossy, loose, or missing, make arrangements to have them fixed or replaced. While a roofer is up there, have them check the flashing around the vents and look for puddles if your roof or a portion of it is flat.
- Examine any outdoor hose faucets for winter damage by turning the water on and letting it run for a few minutes. If you aren’t getting much water, there could be damage to pipes inside.
- Inspect any wood, wood trim, shutters and so forth on the exterior of the rental property to see if there is any wood rot. Warmer temperatures and spring rain can make a small problem a lot worse, so get it fixed before that happens. In Toronto, we have termites in certain areas of the city and they tend to like moist wood.
- Check sidewalks and the driveway for any new cracks or sinking. The moisture and cold weather from winter can cause concrete to crack, heave or sink.
- Check on the condition of the property’s fences and see to any repairs as needed. If the fence is vinyl or wood and sustained any damage during the winter, it should get fixed sooner rather than later. Remember good fences make good neighbours.
- Trim trees, shrubs and plants as may be needed. It’s also an ideal time to plant any new items like a tree or bush to improve the curb appeal of the rental property. Add mulch to flower beds if needed to keep these areas tidy.
- Wash the exterior of your rental property using a power washer or the old-fashioned bucket and sponge. Not only will it look better, but you’ll get an up-close look at the property, the foundation, the flower beds and more to possibly discover other issues or problems you or your tenants wouldn’t normally notice. You may want to consider power-washing your external brick as well.
- Give the exterior of the windows a good cleaning as well using a recommended window cleaning solution. Also, don’t forget to clean and repair the rental property’s window screens.