Condo Investor

by Darrin DeRoches March 28 - April 3, 2013

The big move to Hamilton is constantly being talked about and is it really true? There is a property in a sketchy area of Hamilton that is promoting an entire block available to build a new apartment tower since Hamilton is a having an influx of people moving here. All the papers and magazines are writing about this huge movement and there are examples of people moving here but how many and why? Condos are going up and more are in the pipeline so a new tower geared towards rentals makes sense or does it?     There is around a 3.5 per cent rental gap in Hamilton and if you believe statistics it is considered low in comparison to other markets. We are the best place in the country to invest in real estate right now so all the indicators show we will be in need of more rentals. My only question is when exactly are the droves of new Hamiltonians supposed to show up? I personally have written about all the inquires and excitement about our city and even made fun of real estate agents who mock the new condos as “who the hell are going to live in them?” but you still must wonder – when?     I believe the new influx of condos will not only bring more people to our city it will bring in the “condo investor”. These people have bought and sold condos in Toronto, Vancouver and Montreal where they buy multiple units with the sole intentions of selling them for a profit when the project completes. It is a pretty simple way to make money over a short period of time. They buy at the lowest point before the project begins and in a couple of years when the project is actually built they make the increase in value. This increase can be a good 20 to 40 thousand dollars an a average unit. Hamilton had a 7 per cent increase in value in the last two years, with this and buying first and then selling high, money is to be made.     People always ask why there are units for sale once a project completes – it is the investor. The only problem with this is sometimes the units will not sell and the investor then puts them up for rent. A new project in the west end did just this and you can rent a condo for around $1,300 a month since they are unable to sell – right away. This influx of condos and potential rental units into our downtown market is most likely more than we will need when it comes to quality rentals. Let’s be honest there are not a lot of people who can afford to rent a $1,300 dollar condo and save enough money to eventually buy their own home. If you can afford that rent you can also afford to buy the condo itself or a great home in our city. We are still priced affordable compared to everywhere else so the investor may be careful jumping into our market! V         Darrin DeRoches is a local real estate and mortgage broker. He can be reached to answer questions, comments or stories about real estate experiences through this weekly column at mail@uniquerealty.ca.

The Phones Are Ringing

by Darrin DeRoches March 21 - 27, 2013

Spring is here and the phones are ringing. It may still be cold outside and the flowers are not blooming but the spring market is starting strong. I received four different calls about income properties this week and I do not have any listed. I also had two calls on a commercial property that is for lease but two different buyers want to purchase a property that is not listed. The real estate investor is looking to Hamilton in a big way.     The inquiries are for duplexes, students, triplex and commercial spaces. The questions are all the same – positive cash flow and good tenants. Hamilton is one of the only cities left where you can put down 20 per cent investment and have a property pay itself off and still have a positive cash flow monthly. The first time investor is always a challenge since they believe they will make a ton of money with very little work. A good property will make you money but the right tenants will make your life easy. Every type of investment has its challenges and a little bit of wisdom can go a long way.     Most people think the more rooms in a student house the better the return. Eight rooms at $400 each is $3,600 a month income so buy a property in the mid $400,000 and it all makes sense. I would suggest you get a student house with six rooms in the mid $300,000 and make more money.  Why would I suggest to a buyer to purchase a cheaper home and make less commission? A proper set up home with two baths and 6 rooms is easier to rent or split between groups so you can charge a little more for more space and a better set up. That six bedroom property will bring in $2,400 to $2,600 per month and be fully rented, compared to an eight bedroom house you cannot charge the same price for the attic or basements and it is next to impossible to find a group of eight who want to live together. An eight bedroom house will likely bring in $2,800 to $3,200 per month on average and the difference may pay the mortgage difference but it is more likely to be a challenge. The larger homes tend to turn into “animal houses” and bring a lot of challenges.     Duplex and triplexes are great investments but when you are buying those you have to really consider the locations and what type of tenant and rent it will bring. A rule of thumb is if they do not have long term tenants in them, there is an issue. If the seller is selling this great investment but cannot bother to have put an ad on Kijiji and fill his house it is a big red flag. Pay more for a property in a good rental area with higher rents and you will tend to have better clientele. Investing is not just about the numbers it is also about the location, people and history of the property. V         Darrin DeRoches is a local real estate and mortgage broker. He can be reached to answer questions, comments or stories about real estate experiences through this weekly column at mail@uniquerealty.ca.

The Market Is Changing Fast

by Darrin DeRoches March 14 - 20, 2013

The MLS is a great tool to shop for your dream home but remember your agent’s knowledge and expertise is worth more than a website. In today’s market people believe they can shop online and pick out a house they want, take a look and then make an offer with the listing agent. So why use your own agent? You think that you can even save money doing it that way. The problem is you really do not know what the market is doing and the agent selling the property is working for the seller not you.     I have clients who look at the MLS every day and send me the listing asking me to set up appointments. I spend more time trying to explain to them the problems with the property than actually picking the right properties to view. I know what they are looking for because I’ve listened to their requirements but they still want a showing based on a picture. The problem is they are wasting their time and also getting frustrated with the properties not living up to their expectations. They finally got all their paperwork together so I can finally take the lead and show them what they need and not just a good looking pictures.     The MLS can open your mind to the market but a real estate agent can take you to the right properties and open the doors to your dream home. A real estate agent has access to the properties before they hit the mls and if the right property hits the market it will sell even before the average buyer sees it online. The spring market is just around the corner and having an agent working for you can make the difference between buying a home and chasing after the wrong property. You can also beat most of the competition if your agent is on his toes and gets you in before the property hits the MLS.     The best way to get ready for the spring market is by using the MLS to do your window shopping but you have to have your agent ready to move fast or faster than the market. I am getting people calling me about a property that is for lease but was up for sale last year. There are not enough quality properties on the market and there are buyers looking to find something that is not even there. Then they want a great deal on it. I hate to tell them that the market is strong and prices are going up and the inventory is going down. In simple terms, you are going to pay top dollar for real estate in our market. There is a lot of action and buyers with money ready to buy. Then there are people looking to lease and do not want to pay the asking price. The smart landlord is holding out for top dollar because available space is limited. The market is changing fast – pay attention. V         Darrin DeRoches is a local real estate and mortgage broker. He can be reached to answer questions, comments or stories about real estate experiences through this weekly column at mail@uniquerealty.ca.

The Right Mortgage Broker

Mortgage Broker

by Darrin DeRoches March 7 - 13, 2013

The right mortgage broker can save you a ton of money. When buying a house most people are so excited that they will sign just about any mortgage to get the money so they can have their dream home. The majority of people just walk into their bank and ask for a mortgage where they are given a percentage that is posted by the bank. They figure it is the best deal and sign away. The problem is it usually is not the best deal for them but rather for the bank. This is why everyone should always consider using a Mortgage Broker for their renewals, new mortgages and re– finances.     The only problem with this is to find the right one. Usually when buying a home your real estate agent works with several brokers. Some are good at customer service and some are good with “getting the job done.” So you have to be careful who you go with since they are handling the biggest purchase that most people make in their lives. Just because they can get the job done does not mean it is worth signing your life away. I had an unusual need for a mortgage for a client of mine so I called the mortgage broker to see if they could get it done.     The client has a home that is fully paid off and is currently up for sale and is worth $280,000. They wanted to buy a new townhome that was worth about $170,000 today before the original home sold. Most people would just say to get a “bridge mortgage” from your bank. Simple enough but the bank said no. The original house is worth over $100,000 more than the house that they wanted to purchase—why would the bank say no? Banks would do the deal but it would require a lot of paperwork and time to get it done and when pressed on this their answer was simply no. So when we asked the mortgage broker to shop it around to lenders, he did.     The problem was the client was in–between jobs and the banks were worried that they would be unable to pay the carrying costs. The mortgage broker kept getting declined from several banks so he looked into private financing. This is where he got a yes! Only one problem—they wanted $16,000 to do the deal and then a monthly payment which was about double the posted rate. It would have cost the client about $20,000 to buy a home before selling theirs. Of course we declined the deal but the mortgage broker found another private lender who did the deal for under $5,000 and a reasonable carrying cost.     Big difference from 20 grand to 5 grand and a yes from a definite no from the banks. This was all completed in less than 48 hours and we closed the deal early. Working with the right people not only saves you a ton of money but gets the job done—the right way! If you need a qualified, honest mortgage broker drop me a line and I will give you his contact information. V         Darrin DeRoches is a local real estate and mortgage broker. He can be reached to answer questions, comments or stories about real estate experiences through this weekly column at mail@uniquerealty.ca.

Royal Connaught

by Darrin DeRoches February 28 - March 6, 2013

Downtown Hamilton is still humming with activity and the latest announcement from the owners of the Royal Connaught is really exciting. The developers, Rudi Spallacci and Ted Valeri have owned the property for over a decade and they have had some false starts but this plan seems to be the right one for the times. They are planning on three additional towers being built at 36 storeys, 33 storeys and 24 storeys tall. With a total of 708 units when they are done building their new project but most importantly a saved historical building as its foundation. They are planning on opening the grand foyer of the Royal Connaught this summer with all the plans laid out. The biggest question is will the project actually move forward and I can answer that with a resounding – yes!     These developers have done a ton of projects in the city and they know exactly what it takes to get it done. They are starting with the existing structure and selling one tower at a time. The demand will be there once the product is released.  The beauty of this project is it can go in stages and finance itself as it grows. Sure, we are not Toronto where they just build it and it gets filled up, we will build then sell and then build some more. The demand and market conditions will dictate the pace but the final results will be magnificent. A heritage building as its anchor and a new 36 storey  building will change the landscape of our city just as the original building of the Royal Connaught did when it was erected.     The addition of all of these new people living downtown, with the other projects already being built, will be a huge change to our downtown. I am getting inquiries on my downtown commercial listings from all over the place. Toronto is obvious, but also Kitchener, Peterborough and Oshawa companies as well. A commercial space put up a for sale sign this week and had four showings before it hit the market. They are asking nearly triple the price of what they bought it for 12 years ago and they will get close to their price. Downtown will fill up in the next five years and there is a lot of opportunities for those who can look ahead.     I was speaking to a real estate agent about it and his response to these announcements was “who is going to buy them?”. Hamiltonians will buy, people from outside the city will buy, and investors will buy to rent out. We are one of the last “affordable” cities in the Golden Horseshoe and these condos are going to be the perfect fit for breathing new life into our downtown. Rumour is they may still incorporate a hotel in the project and I really hope they do – it would be the perfect project with that mix – old and new – condo and hotel. V     Darrin DeRoches is a local real estate and mortgage broker. He can be reached to answer questions, comments or stories about real estate experiences through this weekly column at mail@uniquerealty.ca.

HOW IS THE MARKET DOING?

Real Estate

by Darrin DeRoches February 14 - 20, 2013

Every real estate agent hears the same question over and over “How is the market doing?” Since I write a weekly article I figure I should answer the question from time to time. The market is doing great. We are beating every other market in the country – right now. Our employment rate is below the national average and our real estate market is constantly growing. Our only problem is inventory. I presently have several clients looking for townhouses in stoney creek and ancaster but the problem is no quality units are on the market. There are units available which would need some work and my clients are looking for ready to move in units. I spent the weekend showing several clients different properties and even slugging through snow drifts to find a suitable unit. There are very few options out there. I do not blame the sellers on trying to get top dollar but if they priced it right properties are selling fast.     We stopped in an open house which already had a conditional offer on it and they had couples clamoring to get in to see if the deal falls apart. This particular house was priced right and sold in under a week during a snow storm. Buyers are braving snow drifts, soaking feet and a few slips and falls to get into a quality property before it sells. My clients just started looking and they were even considering on putting in an offer just so they would not miss out. I told them to digest it, sent them some history on the property and wait and see. The property is over–priced and I believe we can find them another unit for a better price. I know it is my business to sell properties but time and patience can help make a better decision.     The year has started with a bang and properties are moving. The biggest push of the year is the spring market and I know it will be fast and furious. The snow will melt and the market will be blazing hot. If you are considering on selling this spring give me a call and I can show you how to take advantage of the fast moving market and realize top dollar on your sale and get a fair price on your purchase. Being prepared and ready to move will be the best strategy to win in the spring market. If you are a first time buyer we can also prepare you to not only be pre–approved but to be the top candidate in the search for your first home. This market will be the most competitive and how you present yourself and your offer will be the difference from winning in this competitive marketplace to losing in frustration which could keep you renting. V     Darrin DeRoches is a local real estate and mortgage broker. He can be reached to answer questions, comments or stories about real estate experiences through this weekly column at mail@uniquerealty.ca.

Locating The Casino

by Darrin DeRoches February 7 - 13, 2013

Over the past few weeks, the debate over the casino has heated up. It seems the location of the property is the biggest problem. Downtown Hamilton or keep it at Flamborough racetrack? When it comes to the viability of a casino the location does not make or break it. The old saying “if you build it – they will come” is so true when dealing with the location of any casino. A casino has all the money and marketing power to convince the average person to drive, fly, bus or walk to its doors and spend their “entertainment dollar”. So, since the location should not matter to their bottom line, they should go ahead and put it out in Flamborough where it will be a destination oasis out in the farmers’ fields.     The casino will work wherever they put it but the missed opportunity of not placing it downtown is the real issue. It will change the face of a city and give those looking to invest in our city that we welcome all investments. The hotels, jobs, entertainment, restaurants and a slew of spinoffs that would come from a casino downtown would help our city grow into the future. The casino is not the be all and end all of our city and it does not represent the city’s future at all but it does help us move forward. As a city we have to welcome all types of investments to our bottom line. The casino will attract other businesses to the core. The casino will attract conventions to our city. Good or bad, a casino in the downtown will attract more investment. If the opponents of having a downtown casino want our city to stay the same then vote no for a casino we will be fine without one.     Our downtown has turned the corner as the ad in the Spectator points out and I am the first to applaud the changes independent and corporate people are doing to help “grow” our city. From food trucks, to business parks to Supercrawl – these great successes are the reason we have turned the corner. A corner we have been waiting to turn for over 20 years. Looking forward, a casino will be a piece of the puzzle to change our downtown just as important as the independent store owner opening a new spot in our downtown. Both belong downtown. Both can co–exist downtown. Both will help Hamilton catch up for the lost years of doing the same – nothing! Location does matter and a casino downtown is just as important as a market downtown, a festival downtown, a condo downtown, a hotel downtown, McMaster downtown, hospital downtown, theatre downtown, restaurants downtown. These are all great investments located in our downtown which help bring people to our downtown. V     Darrin DeRoches is a local real estate and mortgage broker. He can be reached to answer questions, comments or stories about real estate experiences through this weekly column at mail@uniquerealty.ca.