How to PROFIT from the Condo Market in 2019

Published on 13th December 2018

As time changes, your investment strategy may change as well. I’ve evaluated so many different types of real estate strategies in my own personal experience from rent-to-owns, buy and hold, flips, land, pre-construction, buy-fix-refinance-rent, secondary suits, student rentals, vacation homes, short-term rentals, some weird cocktail mix of various strategies, and so many more. The world is your oyster when it comes to real estate investments. Some people can get really creative! Of course, every strategy has its own pros and cons. It all really just depends on your end goal, level of experience, budget, and ultimately, your commitment to making it all work for you.

Pre-Construction Condo Outlook – By now, you may know me as the “pre-construction guy” because it’s been a great run in the past few years for the pre-construction strategy, especially with the rising condo prices. However, the market is slowly starting to change.

When I evaluate pre-construction investment opportunities, I always compare the sale price to existing resale condos of the same style in the area to see if the asking price is reasonable. Plus, I make sure that the projected rental income will cover the purchase price. However, it’s been getting increasingly difficult to go through all of the investment criteria on my list and still be able to call it “investment-worthy”.

Currently, as I write this Insight Article in mid-December of 2018, the difference between a pre-construction condo and a resale condo is the biggest I’ve seen it… EVER!

Recapping the Pre-Construction Condo World – Approximately 5-7 years ago, pre-construction condos were being sold at BELOW resale market prices because you were buying into what builders marketed as “potential for growth”. With the reward for potential growth came along the potential for risk.

  • Pre-con was probably 5-10% below the price of the resale market at this point.

When projects were completing and the market had confidence in pre-construction, builders began removing incentives because they knew people were going to buy their product regardless. At this point, “potential growth” seemed like a sure-fire win for investors, with minimal risk attached.

  • Pre-con was probably 0-5% below the price of the resale market at this point.

Then shortly after that, pre-construction projects were marketed as “new build homes”. Essentially, this meant that you were going to pay an amount on par with resale or more for your pre-construction condo.

  • Pre-con was the same price as the resale market at this point.

Fast forwarding to present day, many of the pre-construction condo projects are more expensive than most resale buildings in the same area. There is a premium put on location, supply and the “newness factor”.

So What Now? There are many reasons that led the market to its current position. Does it mean that pre-construction isn’t worth investing in anymore? Well, not necessarily – it just means that it will be more difficult to find the correct project to invest in.

Condo Projects By the Numbers – When you factor in the rising condo prices, the initial investment in pre-construction is getting larger and larger, and therefore making it very difficult for first-time investors to get started. In the downtown core, condos are currently selling at close to $1,000 per square foot. Some of the newer buildings are closer to $1,100 per square foot.

Below are projects that came out in the downtown area in 2018, their respective initial starting price, and when they were released:

Jan/18 – 357 King St W – $950 per square foot
Jan/18 – Theatre District – $970 per square foot
Mar/18 – Playground – $850 per square foot
Apr/18 – in.De – $1,000 per square foot
Apr/18 – Garden District – $1,000 per square foot
Jul/18 – Maverick – $1,300 per square foot
Aug/18 – Sugar Wharf – $1,100 per square foot
Sep/18 – Encore – $1,100 per square foot (This is Theatre District Phase 2)
Sep/18 – 543 Richmond St W – $1,100 per square foot
Oct/18 – 533 King St W – $1,700 per square foot
Oct/18 – YSL – $1,400 per square foot

All of this is not meant to scare you, but rather, it is meant to give you a better understanding of exactly what is going on in the market. Theatre District Phase 1 and Phase 2 were released 8 months apart and these 2 projects offered essentially the same product, BUT the price went up 13.4%!

There is some arbitrage right now if you are looking to invest in the resale market. Developers have to price their product to “future-proof” their profits and the rising costs of development, the latter of which is one of the main reasons why prices have jumped so high recently. If the builders are bullish on the condo market, then why not profit from it and buy resale right now?

Still in the Pre-Con Condo Game! If you still prefer the pre-construction strategy, there are a few projects coming up in 2019 that will provide some good investment value, so make sure you let our team know to keep you informed about these new releases! We know these upcoming projects are going to sell out fast given that the prices on some of these latest released projects have been absurd.

The Wrap – Of course, with so many strategies and so many constantly changing factors in the market, your personal situation makes a big difference in which strategy you should execute. If you’re looking for the best strategy that suits you specifically, then give us a quick call to discuss your next move!

Relief is Coming – The Awakening of Supply!

Published on 6th December 2018

I have never been one to think that constant whining and complaining about a topic will make anything go away. However, when there is enough media attention on a particular subject matter, then there will be enough eyeballs on the issue for someone to eventually step in and address the matter.

The Movement is Starting – This is exactly what is happening with the supply issue in Toronto right now. We’re slowly getting media attention and traction on that matter – slowly, but surely. Rather than finding new ways to suppress prices or rental rates, our governing authorities must focus on building more homes for the hundreds of thousands of people immigrating to the GTA every year. The city must get creative with incentivizing the private sector to build more homes. Removing rent control from new homes after Nov 15th, 2018 was a good start.

Most people already know there is no money from the government to build more housing. The Toronto Community Housing Corporation (TCHC) is significantly backed up with applicants. During election time, every government platform talks about “building more affordable housing,” but in reality, this hasn’t been put into action in two decades.

Bring on the Stats – Condo investors have been responsible for 70%+ of high-density supply in the last 20 years. Take a look at the graph below.

source: Bullpen Consulting

Purpose-Built Rentals – The orange in the graph above represents purpose-built rental apartments. Keep in mind, those numbers don’t include the purpose-built rental buildings that were converted into condos afterwards in 2017. When we see these corporations moving into the purpose-built rental market, it tells us that there is more opportunity in the market. If major for-profit businesses are doing it, why aren’t we, as individual investors, getting into this market as well?

Strategically Timed Announcements – This past week, we saw two major corporations announce their plans for new purpose-built rental buildings. These corporations are The University of Toronto and Google.

This announcement comes two weeks after the removal of rent control… coincidence? Hmm… I don’t think so.

The “Four Corners” of U of T – The University of Toronto has been putting out some major headlines about real estate this year. It doesn’t surprise me that they are trying to capitalize on their downtown Toronto real estate. Their “Four Corners” strategy is all about “building non-academic spaces” (i.e., high-rise density student rentals). This is very smart of them to do because many condos have basically been converted into student rentals all around the St. George campus area.

Seeing Green – They can already see the profits written all over the walls. “We anticipate being able to generate financial returns for the institution that can be used toward future academic investments” – Scott Mabury (VP of Operations). Yes, Scott did say that the money would go towards “academic investments” but don’t be fooled because remember, universities are also for-profit businesses.

No Rent Control, Baby! The University of Toronto is setting an ambitious goal of $50 million in revenue per year by 2023. This target is considered realistic because when I was in school, on-campus residence was much more expensive than a house with 5 rooms down the street!

Google Bringing the Cool – The second announcement came from Google’s Sidewalk Labs. The draft site plan (basically the initial concept) has been submitted. At first glance, this site plan looks very good and way COOL! Below is a quick snippet of what the site would look like.

source: Sidewalk Labs November 2018 Draft Site Plan

There are 5 proposed sites, for a total of 12 buildings between Lower Sherbourne St. and Cherry St. Sidenote: My clients who bought at Great Gulf’s Monde condo are going to be SO happy!

If you want to review the full draft site plan: CLICK HERE to DOWNLOAD

93% of the proposed buildings will be residential, which should greatly increase the lack of supply that we have at the moment.

source: Sidewalk Labs November 2018 Draft Site Plan

source: Sidewalk Labs November 2018 Draft Site Plan

Breaking Down the Sites – For all of these sites, it looks like there will be a combination of purpose-built rental and shared ownership buildings – a condo/rental hybrid if you will. 40% of the residential properties will have “below market” rent, with half of that (20%) being for the “middle-income” class and the other half (20%) being for “deep affordability for low-income” residents. So I suppose the other 60% will be for the “high-income” class.

This all sounds great but perhaps this Toronto market has trained me to look at pretty infographics with a bit more cynicism. The definition of “below-market” rent is subjective to each person’s own finances. When Google creates 3,900 IT jobs in this area, I doubt “market rent” will be that low, especially since there is no rent control to govern it.

Remember, similar to UofT, Google is also a for-profit company, so the subsidized rental rates will come from somewhere. There is nothing that is completely free in this world because someone is paying for it – some way and somehow.

The Wrap – Regardless of my skepticism, Google’s design, impact, and increased density by East Harbourfront will continue making Toronto a world class city. Go Toronto Go!

Needless to say, it’s a great time to be an investor. If you haven’t invested in any properties yet, it’s never too late to start. But remember, prices are climbing each day, whether you believe it or not!

How Inflation Will RUIN Your Retirement Plan!

Published on 29th November 2018

In this week’s Insight Article, I’m going to make a slight left turn in terms of content. But don’t worry, this topic will most definitely be relevant to you. Content is always curated to help you along in your real estate journey. Today, we’ll explore a real estate adjacent topic – Inflation.

The Money Game – There is a huge systemic problem in our economy that will completely obliterate your retirement savings if you are not aware of what’s going on. This systemic issue is what I will refer to as the “money game” in this week’s Insight Article.

You may not know it, but we’re all playing the same money game. If you didn’t already know that you’re playing this game, you’re already behind. That’s exactly why I want to shed some light on this topic for you today.

Full Disclosure – I am not a financial planner, but in order to play the money game and to come out on top, I needed to know the rules and how its played (and so will you). Going through the formal schooling system, teachers never really taught us how money works. Money is also one of those topics that is a very touchy, sensitive topic. So this is something that you must take into your own hands if you want to win the money game, and it’s exactly what I had to do.

Saving At Its Finest… or Worst? As a first-generation Chinese immigrant to Canada, I was always taught to save, save, save. There is a great lesson to be had with spending below your income level and saving aggressively, but unfortunately, this will not allow you to win the money game in today’s economy. There is one missing component to this aggressive saving strategy, and that is, you must invest your savings in order to win.

Going Up! I’m sure you have of heard the term inflation. Most people just assume it’s prices generally going up (i.e., the increase in price on common items such as milk and eggs). While that is absolutely true and 2% inflation is not, seemingly, much of an increase, there is a larger, more devastating impact than you may think.

Did You Know? If inflation is 2%, the money that you have now would only be HALF as valuable 36 years later? For instance, if you have $100 dollars today, 36 years later, it would only be worth $50. Let that sink in for a second.

If inflation is even higher than 2%, the number of years it takes for your money to lose its value will decrease. In other words, you’re losing money even faster!

The general rule is that you take the number 72 and divide it by the rate of inflation to get the number of years that it will take for your money to lose half its value. Take a look at the chart below for the various inflation rate scenarios.

Isn’t That Scary?! If inflation is about 3.5% (which has happened before in Canada, see chart below) and you’re trying to save enough money for your child’s post-secondary education, that will actually require you to save TWO times as much money due to inflation alone!

Silent But Deadly – If that wasn’t bad enough, take a look at the Bank of Canada’s website. The Bank of Canada has a targeted inflation rate that they try to meet each year, between 1% and 3% (referenced below, highlighted in yellow). Every year, they are silently destroying your retirement savings plan.

So What? So why is all of this important and how does it relate to real estate? It’s important because we’re all playing the same money game. We need to protect ourselves from things that are out of our control, such as the government’s mandates on inflationary increases.

If you’re lucky and have a job that adjusts your annual salary in accordance with the inflationary increases, then that’s a great start. If you are not in that category of people, then you really ought to start thinking about Plan B.

Putting your hard earned money into a savings account is just not going to cut it. Even after the 6 months promotional rate at your no fee bank, your savings is only going up by a mere 1.25% each year. That’s lower than the rate of inflation! You need to actually invest into things that will generate you a much higher return (higher than inflation at least!). Many people use the power of real estate for that reason. The returns on real estate will far outweigh the costs associated with inflation.

The Wrap – When the rules of the money game are against you, it’s hard to win, especially if you just came to the realization that you’re playing the game. There are many cards in your hand that you could use to win the money game (i.e., a variety of investment options are available out there). When executed correctly, real estate is the least volatile yet most productive hard asset class that will allow you to jump ahead and win the game. Let that be YOU!

As always, we’re here to help. If you want to learn more about how to beat the system and come out as a winner in the money game, reach out to us to see how we can help you do just that!

How Rent Control Being Lifted Will Affect the Market

Published on 22nd November 2018

574 days. That’s exactly how long rent control lasted in Toronto. It’s been an interesting year and a half since the re-introduction of rent control to the Toronto real estate market. Despite the “goodwill” of the Wynn-led Liberal government, rent control completely decimated the rental market and has resulted in rent increasing by more than 10% last year (and even higher in the downtown core). In today’s Insight Article, we’re going to provide you with an unbiased opinion on this topic, with no political slant.

The New Rules – Effective November 15th, 2018, rent control will be lifted on ALL NEW unoccupied buildings. But let’s make this crystal clear – rent control has NOT been lifted on all existing properties; it has only been lifted on all properties that have NEVER BEEN LIVED IN before.

Answers to the FAQ – Here are the answers to some frequently asked questions that we have received over the course of last week:

  • You cannot increase the rent above 1.8% on existing tenants
  • There will be no rent control for properties being constructed right now (i.e., all current pre-construction properties)
  • This new ruling applies to new basement suites and secondary suites under construction as well.
  • You are still allowed to increase rent above 1.8% on tenants on a NEW HOME (At this moment, they would be the first tenants).

Two Cents – My initial thoughts upon hearing about this new ruling was literally [BREAK] “FINALLY!” with a sigh of relief. This is not because I think increasing rent above what a tenant can pay is fair, but because rent control has absolutely decimated the rental supply market by incentivizing people to never move from their existing rental units.

If you want to read the actual legislation, I’ve included it for you below.

Headline Reactions – Everyone’s initial thoughts when they read the headlines of rent control being removed will either be:

“HOLY GEEZ, WHAT?!” – Tenants


“YES! FINALLY!” – Landlords

Well, unfortunately, if you break down the details, nothing has really changed. Since rent control has only been lifted for properties occupying (i.e., finishing) after November 15th, 2018, the only people who will be benefiting from this are pre-construction investors. This was an early Christmas gift to you if you’re a pre-construction investor! If your new pre-construction property is ready for occupancy now, you are free to increase rent on lease renewals as much as you want.

Two Sides of the Coin – It’s been a bit of a double-edged sword last year with regards to rental pricing on new pre-construction units that were ready for occupancy. On one end, landlords wanted to make sure that they got the highest possible rent from putting their first tenant in the unit (because of rent control), but on the other hand, they didn’t want to risk the property being vacant when so many other units in the same building were ready for occupancy at the same time. Now with the new rent control rules, you don’t have to worry about that dilemma any longer. You can have your cake and eat it too!

Does this mean that there will be a huge influx of pre-construction investors coming to the market again? We’ll see in 2019. Rent control wasn’t the only reason for the slow down in pre-construction sales.

What About Tenants? On the other hand, if you’re a tenant, you don’t have to worry about your existing lease. Landlords are not allowed to increase your rent above 1.8%. However, if you do decide to move and lease a brand new, never lived in before property, beware – you would no longer be under rent control.

How Does This All Affect the Market? In actuality, it doesn’t really affect the market as much as you may think it would. I honestly think this was a strategic, political move. This doesn’t affect any of the existing inventory of homes. It only affects new-build properties, which is a very tiny fraction of the market to start with. Furthermore, most people purchase a pre-construction house for personal use. So boiling it all down, this means that only pre-construction condo investors are affected, which is a very, very small percentage of the real estate market.

Winning Votes, Seemingly? The only thing I will applaud the PC government for attempting is trying to increase the rental supply. The removal of rent control on new builds is “supposed” to incentivize pension funds and developers to build more purpose-built rental buildings. However, as part of the new housing policies, the PC government also removed some of the development charge rebate programs, which is counterproductive to incentivizing developers to build.

At the end of the day, even if developers do build more properties, the rental rates will still remain high. Toronto is not going to get any cheaper. Thumbs up to the PC government for trying to address the supply issue. However, it’s just not enough to have any real significant, lasting impacts.

The Wrap – To close off on the bright side, as investors, if you have any pre-construction units coming onto the market, it’s time to jump for joy! If you’re on the sidelines debating on whether to invest in pre-construction condos, this might just be the right opportunity for you to get rolling with your plans. Not many Realtors will tell you this, but the honest truth is that not all pre-construction projects are worth investing in. If you want to ensure that you only invest in the right project(s), please reach out to us and we’ll let you know all of the do’s and don’ts!

Rental Rates Are Higher Than You Think!

Published on 15th November 2018

As real estate investors, I find that we’re always swimming upstream (that is, metaphorically speaking). We’re always trying to go against the current because what we do is oftentimes out of the ordinary. Unique. Different. Sometimes even considered weird and strange.

Mortgage Classification – Where Do you Fit In? New CMHC consensus numbers indicate that only about 3-4% of mortgages are classified as “investments”. This means that out of 100 mortgages, 97 are likely going to be “owner-occupied”. Having your mortgage classified as an investment is difficult to accomplish, both mentally and financially, because everything is against you. You’re never going to read a headline that is positive about landlords or see headlines indicating that it is a safe time to invest in real estate. You will always be going against the norm, but when you do it successfully, you are well-rewarded.

When Everyone Zigs, You Zag – Everyone focuses on the sale price, but as investors, when everyone is zigging, we need to be zagging and monitor the rental market to make sure that our numbers work.

Expectations Vs. Reality – Recently, I’ve had a lot of first-time investors express to me that, “You can’t get that kind of rent for such a small condo downtown, for that price point!”. In those situations, I’ve had to politely course-correct their expectations.

Landlords Are Laughing – The rental market is, for a lack of a better term, ridiculous! Landlords are the winners in this type of market. The downward pressure from the stress test, priced out buyers, and the lack of inventory in rental units have created this perfect storm of ridiculous rental hikes. The amount of money that people spend on housing hasn’t changed much over the years, but what has changed is the size of this housing. Have you noticed that chocolate bars are still a $1.25, but they have been getting smaller over the years? I know… unbelievable, right?!

Recent Revelations – In this week’s Insight Article, I have some charts from some recent studies that I wanted to share with you that will knock your socks off!

First, let’s start off with a 300,000 mile high bird’s eye view of Canada.


Ontario On Its Own – With rental rates at $2.76 per square foot in Ontario, that is the highest rate in all of Canada. Let’s just say that Ontario is in a whole league of its own.

According to, you can see below that the average 1-bedroom condo is priced starting at $2,466/month. That number is higher than renting a single/semi-detached home! Just take a look at the graphs below for more details.


Breaking it down some more, you can see the average rent in each Toronto neighbourhood in the chart below.


The Big Three – From the chart above, you can see why I have been putting such a huge emphasis on investing in neighbourhoods such as the Entertainment district, Waterfront and King West areas. As a reminder, that’s where a lot of the tech money will be headed to!

Here is a breakdown of the top 3 neighbourhoods from the previous chart and the average rent in each building of each respective neighbourhood. If you’re an experienced condo investor, you will know exactly which buildings are yielding the $4,000/month rent.




Those numbers above are crazy right?! Many people cannot even comprehend paying more than $2,000 per month in rent to live downtown, let alone a 1-bedroom unit for almost $2,500 right now.

What About The Others? So far, we’ve highlighted the downtown areas for the most part because so much of the growth in Toronto is happening in those areas. However, there are also a lot of other condo areas in Toronto that are in high demand as well. The spillover from the downtown core is real. Take a look at the graph below for the average rent of 1-bedroom units across the GTA.

Mind the Gap – As you can see in the graph above, nothing (on average) is less than $2,000 right now, irregardless of where you are in the city. Also, do you see the gap between the 2 purple bars? Dark purple is 2018 and light purple is 2017. That gap represents a 10%+ increase in every area, across the board!

From the Trading Desk – If you are curious to see what price downtown condos are trading at these days, take a look at the numbers below (stats include numbers up to the end of October 2018).

Shrinking in Size – You can see that the 1-bedroom units downtown are getting really close to the $600,000 mark. Again, what people can afford doesn’t change over the years, but what they can afford becomes smaller. I wouldn’t be surprised if bachelors become the new entry-level product at $500,000 in the coming years.

One Bedrooms Take the Cake – The following is a breakdown of sales by unit type in the downtown core. 1-bedroom units (including 1+1’s) make up more than 60% of all sales, with 1+1’s trading in the $550,000-$700,000 range (which is what the above-average Torontonian can afford).

Furthermore, from the chart above, we can see that there were a total of 1,499 condo units that were sold by adding up the sales from each unit category.

Supply Speaks – Now comes what I think are the most interesting graphs – the supply of rentals. Have a look at the graph below to see how many properties in Downtown Toronto are being rented out in Q3 2018. Per the graph below, that’s close to 4,000 units being rented out in the Downtown Core, which is 4 times the amount in North York and almost 7 times the amount in Mississauga!

Wait A Minute… What?! There are close to 4,000 units being rented out in the Downtown Core, but from the chart prior to the one above, we saw that there was only a total of 1,499 condo units that were sold in the Downtown Core. Crazy isn’t it? The number of units being rented out is more than 2.5 times the number of units being sold!

Oh, and here’s the kicker to all of this as well. Take a look at the chart below.

More properties were listed for rent in 2017 than 2018, but we had more units rented in 2018 than 2017. This tells us that the supply is tightening very fast in the rental market right now, even despite prices being up 10% from last year.

No Vacancy – The final chart that I wanted to share with you is the vacancy rates in the GTA condo market.

Looking across each region in the GTA, not just downtown, every region has a vacancy rate under 1%, with the exception of Halton. Keep in mind though, even at a vacancy rate of 1.5%, that is incredibly low despite it looking very large on the graph above (it’s all relative).

The Wrap – We seriously are in a rental crisis with the number of rental listings going down, the number of units rented going up (despite a 10% increase in rents), and the vacancy rates at an all-time low in the GTA.

Investors, if you can make your investment cash flow positive, then owning a rental property is a no-brainer right now. Combine that with the lack of supply PLUS the slow down in condo developments, this is a golden opportunity to be owning real estate! If you don’t own any investment real estate right now, I would highly recommend for you to consider picking one up before it becomes even more unaffordable. Give us a call to see what type of cash flow positive asset class works best for you!

TINDER for Real Estate?!

Published on 8th November 2018

About a month ago, I watched the movie Crazy Rich Asians in theatres; I wouldn’t be surprised if you did as well given all of the buzz surrounding this movie. I was told by many fellow Asians to “support” the movie. Of course, I’m not here to write about my opinion on the movie (because that’s what movie critics are for), but I do want to highlight the conversations of cultural significance with the Asian ethnicity that was sparked by this movie. More specifically, I wanted to shed light on the Asian cultural significance of real estate.

Success Measured by Real Estate – Generally speaking, there is a reason why Asians are more aggressive with real estate, be it for investing or for personal home ownership. Believe it or not, it plays a significant role in the Asian culture. Owning real estate is seen as “making it” in our culture (I say “our” because I’m Chinese). If you tell Chinese aunties and uncles that you rent a place, more often than not, they’ll think less highly of you. True story.

I can tell you for certain that I have seen traditional Chinese buyers extend themselves further financially in order to afford a larger home than the average buyer with a western mindset. It is ingrained in the Chinese culture that real estate is a good investment and that it’s okay to be a little house poor.

Full Disclosure – Real estate is so important that it even matters in the dating world! It matters so much that on this Chinese dating website, whether you own real estate is publicly disclosed. If you’re really curious, click on the image below to see a screenshot of this dating website that I speak of.

Yes, that is a legitimate Chinese dating website. When I saw this website, I was 100% amused and literally laughed out loud. It’s completely ridiculous but at the same time, I’d imagine it’s quite effective.

Culturally, all of the important questions you would ask someone on a first date are already provided. Some of these questions such as income may seem like a private thing that you wouldn’t dare to ask nor share, but in the traditional Chinese culture, it’s quite common to ask someone what they make (I get it all the time from my family back home in China, so nosy!).

What’s the Point? Well, after having a good laugh with the fiancée about the situation of Chinese online dating, it immediately dawned upon me that…

“HOLY CRAP this information is basically a goldmine for determining ownership to income”.

Breaking It All Down – So I immediately opened my Excel spreadsheet and started crunching away at the numbers like a real nerd! The following is what I arrived at:

  • Total sample size was 1,888 (the Chinese superstition is real with all those 8’s!)
  • 50% of the people on the list does not own any real estate
  • 18% or 340 people owned condos, while 32% or 611 people owned houses

Now here are even more interesting, interpretive stats:

  • Those who did not own real estate had an average income of $43,655
  • Condo owners had an average income of $60,353
  • House owners had an average income of $83,879

Assessing Averages – Hopefully, that helps to shed some light on the type of income bracket you need to be at in Toronto to own real estate. Those average income numbers sound about right for average home ownership in Toronto, for both condos and houses. It’s incredibly difficult to own any kind of real estate in the GTA with an income of approximately $43,000, which is the average income in Toronto. There are a lot of other variables at play when it comes to real estate ownership, but with a sample size this large, those resulting averages provide a good basis. Those numbers align quite well with what I have been seeing in the past year for people who are single.

The Wrap – The cost of real estate ownership will likely require more income in the future, so if you are near these income levels and do not own any real estate, now maybe the time to consider it. If you’d like to get a property under your name, let us know how we can help. We can determine what works best for you, whether it be for personal home ownership or investment purposes. Give us a call today! We’re here to help.

P.S., Here are a few more stats if you’re curious!

  • 64.3% of this sample size graduated university. Asians staying in school – how stereotypical, right??
  • 2.34% of the people on this list were non-Asian (but are obviously interested in dating an Asian)
  • Surprisingly, there are more females on this site than there are males (typically, it’s the other way around for dating sites).
  • If for whatever reason you’re interested in browsing the site yourself, reach out to us and we’ll give you the link. No questions asked ;).

Why the Price of Real Estate May Not Matter!

Published on 1st November 2018

In the past week, there has been a lot of talk and worry about real estate prices. A lot of this is the direct result of the Bank of Canada increasing the overnight interest rate last week.

Panic at the News – Having been in real estate investing long enough, I see patterns when interest rates go up. Frankly, whenever anything newsworthy happens, everyone panics (true story). This applies to mortgage rule changes, media headlines, and stats.

The announcement itself, be it positive or negative, actually doesn’t affect the market in the long run because after a few weeks, everything goes back to normal and people forget what happened. It’s always just a minor hiccup in people’s daily lives until they are distracted by the next wave of media headlines. Announcements have more of a psychological, temporary effect than anything else.

It’s the initial shock factor and herd mentality that has everyone scared. As real estate investors, if you understand the fundamentals, then you will know exactly why I always preach cash flow, cash flow, cash flow and why any announcement, whether it’s positive or negative, does NOT really matter at the end of the day.

What I’m about to share with you today is pure… GOLD! As Investors, always remember that


Take a few seconds to absorb that.

Generally, we often hear people say cash is king. Quite frankly, that is 100% true. In real estate investing terms, the same applies as cash flow is king.

Show Me the Money – Allow me to explain. If you are cash flow positive every month, this means REAL HARD CASH is deposited into your bank account. You can spend it, invest it, and/or save it. Essentially, you can do whatever it is that you want with this extra cash – to your heart’s content.

Got An Opinion? On the other hand, the price of real estate is just an opinion. Yes, an opinion. It doesn’t matter if it comes from me, another realtor, your family member, or the newspaper – it’s just an opinion. If someone tells you what your property is worth, it is JUST AN OPINION. If it gets bought/sold at a particular price, then that becomes a fact.

What’s the Difference? You cannot take the price of your property to your nearest grocery store in exchange for food. You cannot take the price of your property to your nearest Starbucks to get a coffee. You cannot take that opinion of how much your property is worth to fill your car up with gas. You get the point here. These are all opinions that, at the end of the day, have no monetary value. However, you CAN take your cash flow to the nearest grocery store to buy food, or Starbucks to get a coffee, or gas station to fill up your car.

Turning Paper Gains Into Cash – When you have appreciation from your properties, you have what accountants and finance whizzes call “unrealized gains“. This is the same principle as when you have stocks that have gone up in price but you are still holding onto them. You have profit on paper, but have yet to realize the gain because it has not yet been sold to get a cash return.

In real estate terms, the only way to realize your gains and turn that property appreciation into cash is by selling your property (which I don’t recommend very often under these market conditions) or by refinancing your property (which I would recommend).

If you understand the concept above, then you are truly a savvy, veteran real estate investor. Hats off to you.

How to Survive a Crash and Sleep Comfortably – If the market completely crashed and real estate prices dropped 100%, I would still be able to comfortably sleep like a baby at night. Why, you may ask? If my portfolio is worth $100, $1, or even $0.01 tomorrow, I would still have all of my tenants paying for my property’s carrying cost (building equity) and at the same time, generating positive cash flow. I ONLY LOSE money if I sell my property during a cash, or in other words, if I opt to realize the loss by selling my asset during a downturn. However, if I don’t sell and carry the unrealized loss on paper, then I’m still making positive cash flow each month during the downturn!

Is it all starting to make sense now?

How You Lose Money in Real Estate – The unfortunate mistake that I always see too often is when people buy cash flow negative properties and do not prepare themselves for the worse case scenario (i.e., a market crash). When a crash does happen, the people in this category would freak out from these negative headlines, and it is only then when they realize that their property is cash flow negative, taking a few hundred bucks from their pockets each month while they are IN a market downturn. In a state of panic and worry, these people would go on to list their property and eventually sell it at a loss. That, my friend, is how you lose money in real estate.

Losing a few bucks each month in a market that is trending upwards is fine. In fact, you may even still seem like a genius investor to everyone else. This situation changes dramatically though if the market changes and takes a turn for the worst. The best thing you can do to protect yourself as an investor is to always ONLY buy a property with positive cash flow. That is my rule of thumb, and what I always recommend to my clients. If the numbers work, then buy it. If it is positive cash flow investment, then the juice is worth the squeeze.

Having a cash flow positive property during a crash is how you survive it. It is also how you create generational wealth in real estate – by holding onto your properties and surviving the ups and downs of the market while still pumping cash flow into your pockets at the same time.

The Wrap – So there you have it. Cash flow is king and the price of real estate is just an opinion. I hope this week’s Insight Article has been a nugget of gold for you. I know its a huge mindset shift but if you can understand it, you are on your way to becoming a successful and wealthy real estate investor.

If you are looking for cash flow positive properties in Toronto (they are very rare by the way!), then make sure you reach out to me ASAP. There are some limited properties yielding MASSIVE cash flow that will become available on the market very soon. Be sure to get yourself onto my ‘Massive Cash Flow’ mailing list if you want to score some of these awesome rare finds!


Yes, I want Massive Cash Flow.  Click Here to Stay Updated Now!

New Mayor and Interest Rate Increase – What Does This All Mean?

Published on 25th October 2018

Monday night was election night, and Wednesday morning was the Bank of Canada’s announcement on the interest rate. It seemed inevitable that I would write something about either one of the two, but lo and behold, I decided to ambitiously tackle both topics simultaneously. Hurrah! Let’s go!

I typically write these Insight Articles early on in the week to get my creative juices flowing for the rest of the week. So as I currently write this (it’s Tuesday morning right now), one day in advance of the Bank of Canada’s interest rate announcement, I’m fairly confident that the rate will be going up [on Wednesday]. Thursday update: Unfortunately, the interest rate did indeed go up on Wednesday, as anticipated. Sometimes, being right sucks.

If you didn’t already hear, John Tory had a commanding win on Monday night as he was re-elected as the Mayor of Toronto.

So what does this all mean for the real estate market in the coming months?

Simply put, Toronto is not going to get more affordable any time soon. Let’s take a look at Tory’s platform as it relates to real estate. I’ll put my thoughts in italics for you.

Tory’s Plans:

1) Continue to keep property taxes low

Great – people who own properties are not impacted, and they likely won’t sell or move.

2) Create affordable housing

Tory plans to increase the number of homeless shelters. Great!

Tory also plans to build 40,000 affordable rental units over 12 years or 3,333 per year. To date, Tory has successfully created a combination of 2,465 “affordable” rental and home ownership units in his tenure in the last 4 years.

I’m not exactly sure how he’s going to hit 3,333 units per year when he has only successfully created 2,465 units over the past 4 years combined (none of these units are completed right now by the way). Furthermore, many are calling his “affordable” units still “unaffordable”. Many of these units are geared towards lower income families. He has not created any “affordable” housing to date for the middle-class average income earners.

Tory also hopes to attract “social impact investors” to create new affordable housing and appoint an “affordable housing secretariat”.

The keyword here is HOPE.  The writing is on the walls for this one folks. It doesn’t sound like there isn’t any money or real, robust plan in place to make housing more affordable.

3) 200,000 tech, film and banking jobs created and he continues to increase the number by keeping commercial property taxes low.

Tory has actually done a great job in increasing the number of jobs, especially high income jobs. This means that there will be more money flowing into the real estate market, and as a result, real estate prices are likely going to keep increasing as well. So hopefully you can score one of these high paying jobs that Tory has created!

In a Nutshell – In short, there is really nothing in his campaign that will affect the real estate market substantially. I would have been delighted if he addressed the supply issue or reducing the red tape for development, but that was never even talked about. It sounds like he’s praying that money will come in to help build affordable homes, but other than that, he’ll just keep property taxes low in the hopes of keeping housing expenses where they are now.

For investors, this all sounds great because property taxes can stay low, thereby effectively keeping your cash flow high. Tory is also going to keep the push for increasing the number of high paying jobs, so as an investor, the pool of tenants will only get better. No need to worry as an investor under Tory’s reign, not one bit at all!

What About Those Interest Rates? Yes, the interest rate went up. If you’re worried about your payment, take a look at the chart below to see the increased mortgage payment you will be making if you’re on a variable interest rate mortgage.

Numbers above are based on 25-year amortization rate

It’s approximately $12.50/month for every $100,000 of mortgage that you owe.

My recommendation is still the same. If you plan to sell, refinance, upsize, or downsize your property in the near future, then do not lock in your mortgage to a fixed rate for of the sole reason of being scared of another interest rate increase. Go with a variable rate in this case. The penalty to break your fixed rate mortgage will far exceed the cost of an interest rate increase.

On the other hand, if you do not plan to do anything with your property in the next 5 years and the difference between the fixed and variable rates that you are being offered is less than 0.75%, then I would take the fixed rate mortgage. You’ll sleep easier at night. By the way, I suspect the fixed interest rate will be going up in the near future.

The Wrap – In summary, neither Tory’s continuing platform nor the interest rate increase will make owning real estate easier, for the average Torontonian. Do not pray for a hail Mary from the government to make home ownership easier – it’s simply just not going to happen, especially since qualifying for a mortgage will be more difficult now as well.

As a player in the real estate market, my suggestion here is to read this Insight Article, give it some thought, acknowledge it, and just carry on with your day. None of this changes the fact that if you can find a good cash flow positive property in the GTA, you will be in good shape. All of this media coverage is just white noise. If you’re looking to find your next positive cash flow investment in Toronto, we can help eliminate that white noise and guide you along the right path.

Is It a Good Time to Buy? Part 2

Published on 18th October 2018

This week’s insight will be a continuation from last week – Is it a Good Time to Buy? In case you missed last week’s Insight Article on whether it is a good time to buy for downsizers (smart-sizing) or first-time home buyers, you can click on the link here: Is it a Good Time to Buy (Part 1)?

“Investors” – Is It a Good Time to Buy?

Most of my clients have actually been investors, and I’m always grateful to be working with these like-minded individuals. It makes what I do so much fun.

So the cliché answer that I usually give to the question “is it a good time to buy?” is: “if the numbers work, then yes.

Nobody (well, almost nobody; I know a few people) wakes up in the morning and tells themselves, “I can’t wait to be a landlord and deal with my tenants“. In reality, real estate provides a proven system to accelerate your financial wealth creation. I would break it down into two camps: 1) Lifestyle options and 2) wealth creation.

Looking for Lifestyle – Those who are looking for lifestyle options are looking at real estate as a vehicle to help with the following:

  • Leaving their 9-5 corporate job
  • Retiring early
  • Creating a Plan B for security
  • Retiring their partner
  • Travelling the world
  • Following their actual passion

If that sounds like you, then you are very likely looking for cash flow. Understand that in order to fulfill any of those lifestyle options above, you are essentially buying back time for yourself or someone else using the power of real estate. To buy this time back, you would need a constant and steady stream of passive income from rent, which would come from positive cash flowing properties. If that is something that you are looking for, do consider my Massive Cash Flow Condo Opportunities

Looking for Wealth – If you love what you do and don’t necessarily need to buy back time, then you are likely looking for real estate to help you create wealth, whether that is for:

  • Creating a legacy
  • Leaving money/properties behind for your kids
  • Building an empire
  • Having extra money/equity to invest

If you are in this camp, then you’re likely looking for properties that have the upside to grow and appreciate more than the cash flow component itself. Of course, you should ideally still buy properties that pay for themselves (i.e., cash flow positive properties), but it may be okay to sacrifice a little bit of cash flow in this situation. Think about it – would you rather have an extra $200/month cash flow (in other words, $2,400/year extra spending money), or another 1-2% appreciation on your $500,000 property (translates to $5,000-$10,000 in appreciation)? Obviously, comparing the numbers, you would want the higher appreciation.

“Upsizers” – Is it a Good Time to Buy?

I saved this for last because this one is so segmented and so situational that it’s almost hard to provide a generic answer for you. However, I will try to do my best with this one.

If you are in the position to be considering the upsizing of your home, congratulations!

The Shrinking Gap – Currently, as I write this in October of 2018, if you are considering the upgrade from a condo to a freehold (specifically a freehold over $1,000,000), I would suggest taking action on it, especially if you need the space for a growing family. The gap going from a condo to a freehold is relatively small right now. Currently, going from a 2-bedroom condo to a 3-bedroom detached in the 416 is approximately another $300,000 to $400,000. This gap used to be significantly higher in the past. The smaller gap these days is due to the rapidly increasing price of condos and the stagnant detached prices. You could even get more bang for your buck if you’re going to the 905. So if you’re in the category to upsize your home, then this is the most opportune time to do so.

Better Options – If you are considering the upsizing of your home just because you can financially afford it but you don’t actually need the space, then I advise against taking this approach. Why carry more debt and deal with a move when you don’t really need it (wanting it is another story). What I would recommend instead is to use your existing property’s equity to buy an investment property so that when you do need the extra space and/or decide to upsize, you have more equity and assets to work with. This would effectively let you get a larger house or have more financial options with the investment. This is especially true if you have bought a condo to live in 3+ years ago. Most of you in this situation are sitting on about $100,000 worth of equity that could be deployed into an investment property.

The above two situations are the most common upsizing scenarios, but there are many more that I didn’t cover, such as buying a larger pre-construction condo, creating a secondary suite, buying a duplex/triplex, etc.

The Wrap – Hopefully this 2-part Insight Article series gives you a better idea on whether it is a good time to buy right now. As you now know, the answer to that question is very situational as there is no “one size fits all” answer. If you have more specific questions regarding your own personal situation, please do reach out to us to see how we could help further you along in your real estate journey.

Is It a Good Time to Buy? (Part 1)

Published on 11th October 2018

It’s always a good time to buy!” — Ah, the old adage that Realtors will always say.

Imagine over Thanksgiving long weekend a family member asking the Realtor in the family, “Is it a good time to buy right now?“. Nine out of ten times, I bet you the Realtor will say, “Yes, its always a good time to buy.” Chances are, that Realtor would also very likely have what’s known as “commission breath” (I had a good chuckle when I heard that term being tossed around!). Thankfully, I did not get asked that question over the long weekend.

Despite the mix of headlines that we have been seeing from the media combined with everyone’s incredibly strong opinion on the real estate market, I’ll answer that question for you (truthfully) in today’s Insight Article.

Fully Loaded – The question “Is it a good time to buy?” seems like a very loaded question at first, and also way too broad generally speaking. Well before I start working with a client, I always try to figure out what exactly it is that they are trying to accomplish and achieve with real estate – be it investing, upsizing or downsizing, and specifically, why they are thinking about that specific route.

It’s All About YOU! You’d be surprised to know (or maybe not!) that most Realtors will start off by telling you about how great the market is right now and regardless of what it is, you should get your feet wet immediately. I’m 100% against this approach. Whether or not you should buy really depends on your own personal situation first and foremost. If you are not in a position to buy, then whether the market is doing well is an irrelevant point. If you are truly ready to buy, then the next step is to analyze if there are any good opportunities available on the market (that is, opportunities that are relevant and work for you).

In the sections that follow, I will break down my answer to the question “Is it a good time to buy” into 4 main categories* for you:

  1. Downsizers (or as the industry is now calling it: Smart-sizing)
  2. First-time Home Buyers
  3. Investors
  4. Upsizers

*If you don’t exactly fall into one of the above categories, and you want a more personalized assessment of your situation, please send an email over to and we’ll be more than happy to provide you with an analysis of your situation!

“Smart-Sizers” – Is It a Good Time to Buy?
My answer is going to shock you. I honestly think this is going to be a no. I’ve had many clients looking to smart-size their home in preparation for retirement and they have all given me a similar answer after I’ve spoken to them and shown them a few options. “I can’t buy what I want for the money that I’m comfortable spending.

Sitting on Equity – Allow me to explain: Most smart-sizers are baby boomers who bought their detached 40-foot+ lot house more than 20 years ago for $250,000 to $400,000 (seeing these numbers today are just absurd!). 90% of the time, their house is worth more than $1,000,000 AND that house has ZERO mortgage on it. So most Realtors will tell the people in this category to sell their house, buy a condo and call it a day (that would net them 2 deals).

That is Absolutely WRONG! While the lifestyle change to a condo is great, the condo that these people would want to buy (i.e., 800-900 square feet 2-bedroom, 2-washroom with 1 parking spot condo) doesn’t exactly exist at a very affordable price range right now relative to what their house was purchased for back in the days.

Most smart-sizers in this situation want to use the appreciation and equity from their home to have a comfortable retirement. Selling your million dollar house to buy an $800,000 condo with approximately $600/month condo fees doesn’t exactly leave you in the best financial situation for retirement.

The Smarter Way – Instead, what I would recommend for smart-sizers is to buy an investment property that would PAY YOU a monthly cash flow (net of the mortgage and all other expenses). This approach is even better if you are still working and can qualify for a mortgage. If you are in this category, I would highly suggest for you to consider our Massive Cash Flow Condo Opportunity

By taking this approach, you are replacing and/or supplementing part of your income in preparation for when you retire and potentially have another asset to either move into or provide you with more liquidity to retire and smart-size.

“First-time Home Buyers” – Is It a Good Time to Buy?
If you are a first-time home buyer, this is a very, very exciting time for you. At the same time though, it could also be quite scary and tumultuous. You’re about to be a homeowner, which in and of itself is very exciting, but you’re also about to carry a load of debt!

I would break this down into two subcategories:

    1. You have downpayment assistance (i.e., family or friends)
    2. You’re funding the purchase by yourself

If You Have Downpayment Assistance – Awesome, this will make it a whole lot easier for you financially. The answer is yes, BUY! This is a GREAT time for you to buy, as long as you can carry the subsequent mortgage and expenses with your current income. I would suggest to use all of your downpayment funds – whether that is a larger dream home if you’re about to have kids or get married, or buy 2 properties (a smaller one for yourself and an investment property). Deploy all of those downpayment funds wisely!

The reason for this is simple – property ownership is going to get SO much more difficult in the future. If you have been gifted downpayment funds and you also qualify to buy one or two properties, do it now! Obviously, this is dependent on budget and what you are ultimately looking for. Give us a call and we can help you navigate through the market.

If You are Funding the Purchase by Yourself – Congratulations! Even though you may not have downpayment assistance, you have saved up a lot of money in order to set yourself up well to get your first property. You should definitely be buying. Do the math on how much monthly mortgage payment and home carrying costs you are comfortable with, and then let’s go house hunting! Even if you do not have the full 20% down payment, you should still consider buying. I say this only because in most cases, the price increases in the entry-level real estate market will outpace the speed at which you can save up the last bit of that 20% downpayment.

In both of the first-time home buyer scenarios above, paying down a mortgage is simply just a financially better and more responsible thing to do than paying rent (rents are going up really fast). Additionally, it’ll help build up your real estate portfolio faster .

The Wrap – Read Part 2 of this week’s Insight Article to find out whether it is a good time to buy for Investors and Upsizers.

P.S., Quite often, pre-construction condos do not work well for first-time home buyers. If you’re a first-time home buyer and you are considering the pre-construction condo strategy, do give me a call first to hear why it may not be the most ideal purchase for you.

Until Next Time, Happy Real Estate-ing,
(416) 436 – 9436