Nothing cash flows in Toronto anymore. I just want a good investment. I work full-time. I can't spend all day looking at this stuff. What I do Batman if that sounds like you or your friend make sure to stay tuned to this episode of prime properties TV. I promise it will be worth it.
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How to Invest in Real Estate in Toronto with a Full-time job
Good day Toronto, welcome to another episode of prime properties TV. So glad you could join us for this episode today what we go over in our problem that a lot of investors have been left in the past few years. If you haven't been following my videos about how to retire real estate make sure you watch them because it talks about the fundamentals.
I'll put them in the links in the description below or you can click on the little eye up here. If you have been investing or speculating about the investment Market in Toronto, you'll realize that a lot of properties do not cash flow. This means that every month the amount of rent you receive after you pay your mortgage taxes and expenses do does not the property does not pay you and you have to pay out of pocket to keep this asset. And frankly, at this point, it's not an acid anymore. So today I'll be covering an asset class. I called Cash Flow condos.
It's got a ring, right? This is a condo unit at the end up after each month after expenses. You still have money on a page to put in your pocket. Okay.
Now, remember what I'm about to tell you is my opinion and opinions are like feet some of them stink. Now there are some condos and thrown that because of the area they are in demand a higher rental rate, but they are still avoidable to the average person and some of these reasons. I've been telling a lot of Clients that they should start looking into Investments. And the reason why this works I'll list them out for you is one the average selling price in Toronto is nuts. It's over $600,000 when you include freeholds and condos. This means a lot of people are completely priced out and they are settling for renting. This means there's a lot more of this to the larger cohort people who are deciding to rent rather live closer to work which is coincidentally where all the amenities are, which is also clinically where all the condos are being built.
Three in 2016 the Canadian government created a ton of renter's by putting on the new mortgage rules the stress test. Thank you Canada for you can believe it or not, but there will be a condo Boom coming with the shortage of Freehold houses.
Remember condos take longer to build 50 stories, right some appreciation. They're going on 5 although condos have a maintenance fee that you have to pay for you do not have to worry about structural repairs and there's an on-site Property Management takes care of it, which is fantastic if you work full time. As it's less of a burden six with higher demands because of more renters there's opportunity to increase threats, especially if you have a great layout in your condo and seven. This is the most important reason why all this investment cash flows and pays you now, I'm going to be over some of the numbers of a sample casual deal we dud for privacy Reasons. I'm not going to disclose the address if you want to learn more about where to find them. Make sure you give me a call number is right here.
Now, this sample exact example is a downtown property that is situated in a nice area with some serious upside because the city's going to put some money into this area to develop some stuff. Now the property sold for three hundred thirty-six thousand dollars and change back in October 2016.
This property rented for $1,800 a month. I frankly think we've got another extra 50 bucks your mortgage at 2.5% which is fairly reasonable for 30 years is 950 thousand nine started nine hundred fifty dollars a month. Your property tax is about 200 your insurance on the unit's about 75 and your condo fee. It is a little bit under 350 bucks now, totalling all of that up at the end of the month. This condo is paying you $227.
This asset pays you and the cash flow protects it from any increases and maintenance fees or insurance rates. So, it's a good investment.
After first your first year your total cash flow that's in your pocket is $2,700.
The mortgage does get paid down by the tenant and has created almost fifty-five hundred dollars in wealth in your pocket.
And if we're going to be conservative on appreciation will say 4% This area was more like 8.9 last year you looking at $12,000 in appreciation and when you take all that tallied up together, you're twenty thousand dollars and change your return on investment, which is your total profits / your investment the investment on this one was about $75,000 after closing fees and transfer taxes and all the shebangs you looking at a cool twenty-nine point eight four percent return on money. That's pretty good for a conservative now wondered from service. Earth no wonder people invest in real estate.
Thank you guys for watching this video If you learned something or enjoyed watching this video. Make sure you subscribe to Prime properties teal down here and on our YouTube channel and click on the little bells will be notified when I put out new content if you have any questions or any comments or looking for a free consultation call me numbers right here and make sure you share this the family friends. Like I always say an educated consumer is the best consumer. I'll see you next time, Toronto.