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Invest in property With Us

Top 5 tips to successful investing.

Whether you are a brand new or an experienced investor, we can help you build wealth through purchasing strategic properties based on your individual needs.
Before we dive in, perhaps the most important concept to share is the 4 WAYS TO PROFIT with real estate investment properties.
1, Cash flow (rental income-expenses),
2, Principal recapture (aka. mortgage paydown from the rent payment),
3, Active appreciation (upfront gain due to a renovation/addition or getting a below market value deal)
4, Passive appreciation (the market’s appreciation)
The second most important concept is The 3 lanes of investing. There are 3 main paths to take when considering an investment property.
You may have the opportunity to purchase a condo or freehold unit from a builder prior to its construction. This can be tricky to navigate, as you want to have access to the very first round of pricing via a platinum broker. We have spent years fostering relationships with developers and their teams in order to secure access to some of the most desireable pre-con opportunities. We are very selective when it comes to project launches. If we recommend it, chances are we are considering buying in it, as well!
The main considerations when selecting the right opportunity are: location, developer & team, pricing (in comparison with similar resale units), deposit structure, and architecture/look/amenities.
Who is pre-con best suited for?
– Investors who don’t need immediate cash flow, with capital to park.
– Those who perhaps cannot quite close on the unit yet, but 3-6 years from now will have the ability to do so.
– Parents who are looking to set their kids up for the future
– Those who can move into the unit once it’s ready and capitalize on principal residence tax exemption
– Those looking to make their return
– You will not need to think about mortgage/tenants/closing fees until final closing (this could be years down the road)
– Enjoy appreciation while waiting for the unit to be completed
– Forced savings (depending on deposit structure, a pre-con opportunity will require 3-5 deposits, typically over 1-2 years)
–  Assignment opportunity (if the value has increased significantly, you can flip the unit for a profit without ever having to close on it, as long as the builder allows assignments)
– Getting in at the lowest price point
– You get to choose your finishes/upgrades
– If it aligns with your plans, move into the unit upon closing to qualify for principal residence tax exemption (or purchase in kids names and have them live in the unit)
– Larger downpayment (5-20%, but typically 15-20%)
– Potentially having to close on the unit if the assignment isn’t viable
– Opportunity cost of Cash deposited (it can take years for a unit to be handed over)
– Potential market downturn
– Could be considered speculative as all returns are calculated on future assumptions (the rent will be xyz in 4 years, values will go up by xyz% in the future)
– Higher closing costs than resale (add 1-3%)
Assignments are units that were purchased from a builder, but the buyer no longer wants to close on them. Instead, they wish to “assign” their agreement of purchase and sale contract to a new buyer who will then close with the builder. Let’s take a look at a simple example. Buyer A purchased a unit from a builder for $300,000. They put down a 20% total deposit of $60,000. They will now assign this unit at $500,000. Let’s assume similar properties trade around $600,000 on the resale market. Their profit is $200,000 ($500,000-$300,000). Buyer B (assignee) purchases the unit by giving them their deposit back (Buyer B now takes over Buyer A’s deposit that’s already with the builder), and giving them their $200,000 profit upfront. The investor needed $260,000 available to make this deal happen. However, they will realize a $100,000 immediate gain (active appreciation), as the value of this unit on the resale market is $600,000, but they only paid $500,000.
Who is it best suited for?
– Investors with strong upfront capital. The beauty of an assignment is that the original buyer (now the assignor) can make a decent profit, and the new buyer (assignee) can still get a below-market deal, especially with a very strong upfront deposit.
– Investors who know they will have the ability to close when the time comes (no re-assignment right once you buy a unit as an assignment)
– Those looking for a big chunk of active appreciation, and cash flow down the road (not as long as pre-con, but not immediate either)
– Large gains without having to tie down cash for many years
– Shorter completion frame than buying from the builder (typically 6 months – 2 years before closing)
– Condo units can typically be rented during the occupancy period before the final closing
– They tend to be the “best deals” pricewise, especially if profit can be paid upfront
– Large funds needed upfront
– No further ability to assign
– Potential market downturns
– More complex paperwork & lawyer review
– Higher closing costs than resale (add 1-3%)
The world is your oyster when it comes to resale opportunities! From multi-unit dwellings to perhaps a small condo, the options are endless.
Who is it best suited for?
– Those who have the ability to finance a property right away and close
– Those looking for immediate cash flow and future appreciation
– Investors who can renovate/add to create a higher and better use (ie. adding an accessory apartment to a home)
– Investors looking for diversification/larger cash-flowing, turn-key investments
– Those who are looking to buy a property to live in with an additional unit attached to supplement mortgage payments
– Immediate potential cash flow
– No opportunity cost of deposit
– Potential upfront appreciation & upside
– Turn-key opportunities
– Potentially lower deposit
– You have to be approved and have the ability to finance the property right away
– Additional carrying costs: Maintenance/property management
– Potential vacancy
– Potential market downturn
The beauty of investing in real estate is that is not dependent on the current market conditions. As long as the numbers make sense, a well-educated decision can be made to purchase a property. Sure, it would be nice to hit one of the lulls in the market, however, realistically timing of funds & ability to leverage may just not line up with the best time to buy. Generally speaking, August, November, and December can be good months for picking up a “deal” here and there, as the market activity is lower due to summer/winter festivities.
Again, a great advantage of property investment is that it doesn’t have to be location-specific, rather more driven by financial analysis. However, as a rule of thumb, we like to invest in areas we are familiar with, not too far away (although property management can be a great source to take care of more remote properties), and up-and-coming markets. In the GTA, Durham region is still the most undervalued pocket. Within Toronto, look for smaller pockets around Eglinton (Keelsdale, Wexford-Maryvale to name a few). Also, Laneway housing is now legal, so a property with laneway access can have a huge upside. Garden suites (landlocked secondary dwellings on one property) are currently going through legislation discussion. Once they become legal (Barrie & Guelph already legalized them!), properties with longer/larger backyards that will fit the setback requirements, will become especially valuable.
There are many ways to start investing (unlocking RRSPs, equity in homes, loans, lines of credit, savings). If you don’t have the upfront cash ready, you can even partner up with a family member or trusted partner.
In general, for resale, you will need 10%-25% of the value of the property available with closing costs. Assignments require 20-50% down (due to large profits being paid upfront), and pre-construction will range from 5% – 20% plus closing costs.