Friday, July 29, 2011

New home buyers...Get off the fence! Average House Prices are Misleading

Average House Prices a Misleading Gauge of the Health of the Canadian Real Estate Market: CIBC
Images

Detailed analysis shows a highly segmented market that will see prices drop over time, but preconditions for a market crash don't exist

TORONTOJuly 7, 2011 /CNW/ - The Canadian housing market is becoming highly segmented and multi-dimensional which is making traditional measures, like average prices, increasingly irrelevant in gauging the health and state of the sector, finds a new report from CIBC World Markets Inc.

"Glancing at popular metrics such as the price-to-income ratio or the price-to-rent ratio, it is tempting to conclude that the housing market is already in clear bubble territory and a huge crash is inevitable," writes Benjamin Tal, Deputy Chief Economist at CIBC, in his latest Consumer Watch Canada report.

"Tempting, but probably wrong. When it comes to the Canadian real estate market at this stage of the cycle, any statement based on average numbers can be hugely misleading. The truth is buried in the details—and there the picture is still not pretty, but much less alarming."

He notes that while the average house price in Canada rose 8.6 per cent on a year-over-year basis in May, that number slows to 5.6 per cent if you take Vancouver out of the picture. Remove Vancouver and Toronto and the average price increase drops to 3.7 per cent.

By digging into the details on the high profile Vancouver market he found that the gap between average and median prices is reaching an all-time high. While the average house price climbed 25.7 per cent on a year-over-year basis to more than $800,000 in May, he found that by removing properties that sold for more than a $1 million there was a much more moderate price appreciation in the market. It also reduced the average sale price by $220,000 to just over $590,000.

"What makes Vancouver abnormal is the high end of its property market," says Mr. Tal. "And in this context many, including Bank of Canada Governor Mark Carney, point the finger at foreign—mainly Asian wealth—as the main driver here."

Data on the extent of the role that Asian investors have played in Vancouver housing prices is quite limited. Mr. Tal's analysis of data obtained from Landcor Data Corporation suggests that only 10 per cent of the nearly 4,500 transactions involving foreign money over the past five years were above the $1 million mark, with an average purchasing price of just under $600,000.

According to the information provided by Landcor, foreign money accounted for only 2.6 per cent of all sales during the same period. However, Mr. Tal believes that could be a serious underestimate, as it is based on where property tax assessments are mailed, and would exclude offshore buying on behalf of children or other local proxies. "There are many reasons to believe that a significant portion of what is perceived to be buying by offshore investors is, in fact, driven by Chinese immigrants that are integrated into the community but still maintain strong links to mainland China, with many residing and working in China while their family establishes roots in B.C."

"Looking beyond the average price numbers reveals a highly segmented and multi-dimensional market that is probably influenced by different forces," says Mr. Tal. "But even a multi-dimensional market can overshoot—and the likelihood is that prices in the Canadian market and its sub-segments are higher than what can be explained by factors such as income growth, rent and household formation. Given that, the housing market will eventually correct. The only question is what will be the mechanism of that correction."

Mr. Tal feels the price correction in Canada will be gradual as the two key triggers for a price crash - a significant and quick increase in interest rates and/or a high-risk mortgage market that is very sensitive to changes in economic factors - are not at play in Canada.

"In Canada, a sharp and brisk tightening cycle is unlikely. The market expects a gradual increase in short-term rates in the coming years. The rising number of mortgage holders that carry a variable rate mortgage will be the first to feel the pain. But if history is any guide, they will return quickly to the comfort of a five-year fixed rate the minute the Bank of Canada starts hiking."

He also believes that the country is in relatively good shape when assessing the two sub-segments of the mortgage market that traditionally account for most defaults: mortgage holders that carry a debt-service ratio of more than 40 per cent and those with less than 20 per cent equity in their house.

Just over six per cent of households have a debt service ratio of more than 40 per cent—a number that has risen by a full percentage point since 2008. "However, this ratio is still well below the ratio seen in 2003, when the effective interest rate on debt was more than a full percentage point higher, and no correction in house prices ensued," adds Mr. Tal.

"All other things being equal, even a 300-basis-points rate hike by the Bank of Canada would take this ratio to only just over eight per cent. Not surprisingly, Vancouver has the highest ratio of households with high debt-service ratio, followed by Toronto."

A little more than 17 per cent of the Canadian residential real estate pool is in properties with less than a 20 per cent equity position, a number that has been rising over the past few years. More than 80 per cent of households with less than a 20 per cent equity position are first time buyers.

"Digging deeper and looking at the households with both low equity positions and high debt-service ratios, we found that this fragile segment of the market accounts for only 4.6 per cent of total mortgages—a number that has been on an upward trend over the past few years," says Mr. Tal. "Shock the system with a 300-basis-points rate hike and that number would rise to a still-tempered 6.5 per cent. Historically, even in that group, the default rate has been well below one per cent. Thus, short of a huge macro shock, there does not appear to be the risk of large scale forced selling that would typically be the trigger for a precipitous plunge in the national average house price.

"As a result, while house prices are likely to adjust as interest rates eventually climb, the national pace of any correction is likely to be gradual. That could still entail a period in which housing underperforms other assets as an investment class, until rising incomes and a tame price trajectory bring the market back to equilibrium."

The complete CIBC World Markets report is available at: http://research.cibcwm.com/economic_public/download/cw-20110707.pdf.


TREVER FLORKO - Realtor
Century 21 Assurance Realty (Kelowna)
Cell: (250) 859-5990
Office: (250) 869-0101
Fax: (250) 869-0105
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Thursday, July 28, 2011

Now how is that for a sign...think it's big enough;-)

Photo1

Sent on the go from my iPhone
TREVER FLORKO - Realtor
Century 21 Assurance Realty (Kelowna)
Cell: (250) 859-5990
Office: (250) 869-0101
Fax: (250) 869-0105
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Could you take 2 minutes and answer these 5 Real Estate Questions.

Could you Please take 2 minutes and answer the following questions....click on the photo...thanks!

TREVER FLORKO - Realtor
Century 21 Assurance Realty (Kelowna)
Cell: (250) 859-5990
Office: (250) 869-0101
Fax: (250) 869-0105
Visit my WEBSITE
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PS. Your referrals to friends and family are always greatly appreciated and rewarded.

Property Transfer Tax: First Time Home Buyers

Property Transfer Tax: First Time Home Buyers
Mac-taxman-185x227-1

First time home buyers get an exemptions from paying the property transfer tax and this "tax break" can save FTHB thousands of dollars. However, First Time Home Buyers need to carefully ensure that they qualify for this tax savings. Persons claiming a FTHB credit are regularly audited by the PTT Office.

The Criteria to Qualify are as follows;

Purchaser must:
a)  be a Canadian Citizen, or a permanent resident as determined by Immigration Canada,
b) have lived in British Columbia for 12 consecutive months immediately before the date
you register the property, or you have filed 2 income tax returns as a British Columbia
resident during the 6 years before the date you register the property,
c) never owned an interest in land anywhere in the world at anytime,
and
d) you have never received a first time home buyers’ exemption or refund.

The Property you purchase must also qualify as follows:
a) the price must be less than $425,000
b) the land must be less than 0.5 hectares (1.24 acres), and
c)  the property will only be used as your principal residence. 

Importantly, if you sell the property or acquire a new principal residence within 12 months of purchase, you will lose the exemption and the Province will demand for the tax to be paid. 

More information here: 
http://www.sbr.gov.bc.ca/documents_library/brochures/firsttimehomebuyer.pdf

If you are thinking of buying or selling a home give me a call! I would love to help!!
TREVER FLORKO - Realtor
Century 21 Assurance Realty (Kelowna)
Cell: (250) 859-5990
Office: (250) 869-0101
Fax: (250) 869-0105
Visit my WEBSITE
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PS. Your referrals to friends and family are always greatly appreciated and rewarded.

Tuesday, July 26, 2011

NEW LISTING! Investor Alert! 2 Lots steps 2 the Lake! Medium Density Development Potential

Both_lots

For more information on these properties and the homes contained on them and to view 21 High Resolution Photos visit: please visit: 
http://467ospreyavenue.com

INVESTOR ALERT! GREAT HOLDING PROPERTY. OCP states MEDIUM DENSITY and  (POSSIBLE TOWNHOUSE DEVELOPMENT POTENTIAL?!?) This is 2 separate lots and 2 separate Titles. 2 467 & 459 Osprey. They must be sold together. Prime location in Pandosy Cultural District. Steps to the Beach, Lake Okanagan, shopping and transit. Back alley access. 3 separate houses on the property. Currently generating roughly $8500.00 a month in rental income. 

For more information on these properties and the homes contained on them and to view 21 High Resolution Photos visit: please visit: 
http://467ospreyavenue.com Or call Trever Florko @ 250.859.5990 or Jason Neumann @ 250.808.7700

TREVER FLORKO - Realtor
Century 21 Assurance Realty (Kelowna)
Cell: (250) 859-5990
Office: (250) 869-0101
Fax: (250) 869-0105
Visit my WEBSITE
Follow me on TWITTER
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Download my free BC REAL ESTATE LOCATOR iPhone/iPad application.

PS. Your referrals to friends and family are always greatly appreciated and rewarded.

Moving up the board

Img_0348

Well we moved up the board a bit....but we really do need to get to the top!!


TREVER FLORKO - Realtor
Century 21 Assurance Realty (Kelowna)
Cell: (250) 859-5990
Office: (250) 869-0101
Fax: (250) 869-0105
Visit my WEBSITE
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PS. Your referrals to friends and family are always greatly appreciated and rewarded.

Having trouble selling your home? Have a look at this!

Here is a quote from some clients:  "We were having a peek at all the different locations where our property is advertised - impressive.  Nice job guys!"

Sell_my_house

We do some very unique and creative things to sell our listings...have a look at this!

t&J What We Do To Sell.pages Download this file


TREVER FLORKO - Realtor
Century 21 Assurance Realty (Kelowna)
Cell: (250) 859-5990
Office: (250) 869-0101
Fax: (250) 869-0105
Visit my WEBSITE
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Follow my BLOG

PS. Your referrals to friends and family are always greatly appreciated and rewarded.

Wednesday, July 20, 2011

REPAIRING WET DRYWALL AND MOULD CONCERNS.

REPAIRING WET DRYWALL AND MOULD CONCERNS.
You can do-it-yourself... but be cautious

House-mold

Every now and then, you’ll get a water leak which has made it’s way into a drywall, gyprock or sheetrock wall - usually in a basement. This is classic scenario where black mould can establish itself... basement setting, limited air circulation, drywall material, etc. The longer the wall remains wet, the greater the chance of mould growth. If you have decided to explore the possibilities of fixing this yourself, here are a few guidelines you can follow.

It is best if the wall does NOT dry out before you start removing drywall. Dry mould spores are more likely to get into air flow in the home - so keep a spray bottle handy. Scribe a horizontal line with a sharp blade at about 2 inches above the finished floor, slightly higher than the 11⁄2" high wood sill plate behind the drywall, but not higher than typical baseboard (in some cases, you might have to go at least as high as the "wet" part of the wall). When you cut the drywall, try not to cut the vapour barrier that is behind the drywall. If the wall was built properly, there will be a vapour barrier on the warm side of the insulation.

Once a strip of drywall material is carefully removed, examine it for mould-like material. If you see a black substance*
, isolate the area, put on a Hepa mask and slowly and carefully place the material into a plastic garbage bag. With drywall removed at this height, interior wall insulation should be visible on top of the sill plate. Probe behind the vapour barrier and see if there is any wet insulation. If any wet material is found, you'll want to take another strip of drywall material off.
The next strip should be at about 121⁄2 inches off the floor. Again, try not to cut the vapour barrier. If you do cut or remove the vapour barrier, it will have to be replaced later and taped at the seams - not always an easy task.

If this new area is dry along the cut, bag the removed drywall. If there is any wet insulation, this should be cut out and carefully removed and bagged as well. To get at the insulation, split the vapour barrier vertically, preferably along one of the wall studs - makes for easier taping later. Once you are down to bare wood and concrete, and there is no sign of moisture or black staining, then let the area dry out. You can use a fan to help speed the process, first making sure there are no signs of mould.

After a few days of drying, you can replace any removed insulation, fix and tape any damaged vapour barrier and replace and tape the removed drywall.

* black mould-like material on wet drywall is one of the the worst kinds of mould and can be hazardous to your health. If in doubt, now is the time to decide if you want to do-it-yourself, or call in a professional.

I HOPE THIS HELPS!

TREVER FLORKO - Realtor
Century 21 Assurance Realty (Kelowna)
Cell: (250) 859-5990
Office: (250) 869-0101
Fax: (250) 869-0105
Visit my WEBSITE
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PS. Your referrals to friends and family are always greatly appreciated and rewarded.

Super 5.23 acre lot for sale near New Denver! Only $129,000!!!

Lot 6, Red Mountain Rd. 

Only $129,000!!!


Pristine mature timbered wilderness. Fully treed 5.23 acres overlooking snow peaked Mtns. Benched property. Road access on Red Mtn Rd. or Cedar Drive. Many springs on property. South West facing. Power at Road side. Very desirable piece of paradise.



Century 21 Assurance Realty (Kelowna)
Cell: (250) 859-5990
Office: (250) 869-0101
Fax: (250) 869-0105
Visit my WEBSITE
Follow me on TWITTER
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PS. Your referrals to friends and family are always greatly appreciated and rewarded.

Monday, July 18, 2011

OMREB Central Okanagan/Kelowna Real Estate Stats for June 2011 are out!!

Guy-holding-house-and-money


06_-_co_statistics_june_2011.pdf Download this file


TREVER FLORKO - Realtor
Century 21 Assurance Realty (Kelowna)
Cell: (250) 859-5990
Office: (250) 869-0101
Fax: (250) 869-0105
Visit my WEBSITE
Follow me on TWITTER
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PS. Your referrals to friends and family are always greatly appreciated and rewarded.

OMREB MEDIA RELEASE for July - Housing Market More Stable Moving into Summer

MEDIA RELEASE
For Immediate Release:
July 6, 2011

Kelowna, BC – The Central Zone of the Okanagan Mainline Real Estate Board (OMREB) reported June 2011 sales
activity of all MLS® property types were down compared to sales reported at this time last year but improved over
May as the market shows more stability moving into summer.

During June, overall sales dipped by 5.51% over last year to 343 from 363, with sales volumes of $133.1 million
compared to $156.8 million in 2010. However, sales improved 1.78% over May’s 337. While total residential
sales last month declined 6.89% compared to June 2010 (to 311 units from 334), single family unit sales were in
line with last year (182 compared to 181), and improved 13.75% over May (160). Inventory continues to decline
over 2010 down by 8.11% to 5,301 units in June compared to 5,769 last year. New listings for the month fell by
7.21% over last June (to 1,094 from 1,179) – a 9.48% decline over last month (from 1,212 in May).

“The slight rebound and gradual improvement in June is promising. We hope to continue to see modest gains in
sales if activity picks up with the warm weather and an influx of out‐of‐town buyers,” says Kent Jorgenson,
OMREB Director and REALTOR® in the Central Zone. “While many factors have affected consumer confidence,
created buyer hesitation, and deterred potential recreation, investment and retirement property buyers to date,
it is still too soon to tell if there will be a slow down over the summer. This next month (July) will be a good
indicator as to an ongoing trend.”

“Although inventory is on the decline, serious buyers enjoy an excellent selection of homes in the Central
Okanagan, and are taking advantage of good prices and wide choices while they are still available. Properties that
are priced to reflect current values in this competitive market are selling relatively quickly. Sellers can benefit
from working with a professional REALTOR® to price strategically and make the most of summer buyer activity.”

Jorgenson notes the results of OMREB’s Board‐wide monthly Buyers Survey – launched in September 2010 to
profile who the buyers are, what they are buying and where they are from – shows that the majority of buyers are
from within the Board area. Survey results indicate that buyers are leveraging the positive purchasing power
afforded by attractive prices and low interest rates, before inventory narrows and borrowing costs rise. First‐time
buyers are a driving factor and they stimulate the chain of ownership.

The Central Zone of OMREB covers an area from Peachland to Lake Country and east along Highway 33 to
Westbridge (including the Christian Valley). The Okanagan Mainline Real Estate Board (OMREB) is comprised of
1,151 member REALTORS® and 86 real estate offices in the Southern Interior of BC.

For the most comprehensive source of all real estate listings, home buying and selling information, visit our
national websites at www.realtor.ca
and www.icx.ca
. To find out about the advantages of using a REALTOR®
,
check out
www.howrealtorshelp.ca

All OMREB listings are published in the MLS® Real Estate Review magazine available at all real estate offices and
various locations in the Central Okanagan, North Okanagan, the Shuswap and Revelstoke areas. For
comprehensive Board‐wide statistical information, please visit our local public site: www.omreb.com

If you are thinking of, or know someone who is thinking of buying or selling a home please give me a call!

TREVER FLORKO - Realtor
Century 21 Assurance Realty (Kelowna)
Cell: (250) 859-5990
Office: (250) 869-0101
Fax: (250) 869-0105
Visit my WEBSITE
Follow me on TWITTER
Follow/LIKE me on FACEBOOK
Follow my BLOG

PS. Your referrals to friends and family are always greatly appreciated and rewarded.

Tuesday, July 12, 2011

Court Ordered Sale in Rutland South! 3bed 1.5 bath. .33 acre. unfinished basement.

Court Ordered Sale in Rutland South! Only $349,900

To view 21 high definition photos and get much more info on this property please visit www.260davieroad.com To set up an appointment to view please call Trever Florko @ 250-859-5990

Court Ordered Sale! 3 bedroom and 1.5 bath home located on a quiet street in a family friendly neighbourhood.  Close to all amenities with suite potential. Home is on a large lot with fruit trees, small shed and offers great floor plan just need to bring your renovation ideas!  Official Community Plan supports low density multi-family in the area.  Home is on a large lot and offers great floor plan, so bring your renovation ideas!

Nearby schools are: Quigley ElementaryRutland Middleand Rutland Senior Secondary.

Nearby amenities include: YMCA/YWCABoys and Girls ClubRutland Arena  BMX TrackRutland Family TaeKwon DoOkanagan GymnasticsMcCurdy BowlingGrand 10 TheatreEnergy PlexRutland Parks, Kelowna Public Transit and so much more!

TREVER FLORKO - Realtor
Century 21 Assurance Realty (Kelowna)
Cell: (250) 859-5990
Office: (250) 869-0101
Fax: (250) 869-0105
Visit my WEBSITE
Follow me on TWITTER
Follow/LIKE me on FACEBOOK
Follow my BLOG

PS. Your referrals to friends and family are always greatly appreciated and rewarded.

Monday, July 11, 2011

Bahahahaw

Photo1

Sent on the go from my iPhone
TREVER FLORKO - Realtor
Century 21 Assurance Realty (Kelowna)
Cell: (250) 859-5990
Office: (250) 869-0101
Fax: (250) 869-0105
Visit my WEBSITE
Follow me on TWITTER
Follow/LIKE me on FACEBOOK
Follow my BLOG
Download my free BC REAL ESTATE LOCATOR iPhone/iPad application.

Saturday, July 9, 2011

Filling the pool...lol

Well I won't be doing any laps but at least my beer is close;-)

Photo

Sent on the go from my iPad
TREVER FLORKO - Realtor
Century 21 Assurance Realty (Kelowna)
Cell: (250) 859-5990
Office: (250) 869-0101
Fax: (250) 869-0105
Visit my website: www.florko.ca
Follow me on TWITTER: (@TreverFlorko) http://twitter.com/treverflorko
Follow/LIKE me on Facebook: (Trever Florko - Realtor)
http://www.facebook.com/pages/Trever-Florko-Realtor/56708391718

Friday, July 8, 2011

Kelowna Real Estate Market Statistics for June 2011 are out!!

Images

06_-_co_statistics_june_2011.pdf Download this file


TREVER FLORKO - Realtor
Century 21 Assurance Realty (Kelowna)
Cell: (250) 859-5990
Office: (250) 869-0101
Fax: (250) 869-0105
Visit my WEBSITE
Follow me on TWITTER
Follow/LIKE me on FACEBOOK
Follow my BLOG

PS. Your referrals to friends and family are always greatly appreciated and rewarded.

Kelowna Real Estate MEDIA RELEASE for July 2011

MEDIA RELEASE
For Immediate Release:
July 6, 2011

Images

Housing Market More Stable Moving into Summer

Kelowna, BC – The Central Zone of the Okanagan Mainline Real Estate Board (OMREB) reported June 2011 sales
activity of all MLS® property types were down compared to sales reported at this time last year but improved over
May as the market shows more stability moving into summer.

During June, overall sales dipped by 5.51% over last year to 343 from 363, with sales volumes of $133.1 million
compared to $156.8 million in 2010. However, sales improved 1.78% over May’s 337. While total residential
sales last month declined 6.89% compared to June 2010 (to 311 units from 334), single family unit sales were in
line with last year (182 compared to 181), and improved 13.75% over May (160). Inventory continues to decline
over 2010 down by 8.11% to 5,301 units in June compared to 5,769 last year. New listings for the month fell by
7.21% over last June (to 1,094 from 1,179) – a 9.48% decline over last month (from 1,212 in May).

“The slight rebound and gradual improvement in June is promising. We hope to continue to see modest gains in
sales if activity picks up with the warm weather and an influx of out‐of‐town buyers,” says Kent Jorgenson,
OMREB Director and REALTOR® in the Central Zone. “While many factors have affected consumer confidence,
created buyer hesitation, and deterred potential recreation, investment and retirement property buyers to date,
it is still too soon to tell if there will be a slow down over the summer. This next month (July) will be a good
indicator as to an ongoing trend.”

“Although inventory is on the decline, serious buyers enjoy an excellent selection of homes in the Central
Okanagan, and are taking advantage of good prices and wide choices while they are still available. Properties that
are priced to reflect current values in this competitive market are selling relatively quickly. Sellers can benefit
from working with a professional REALTOR® to price strategically and make the most of summer buyer activity.”
Jorgenson notes the results of OMREB’s Board‐wide monthly Buyers Survey – launched in September 2010 to
profile who the buyers are, what they are buying and where they are from – shows that the majority of buyers are
from within the Board area. Survey results indicate that buyers are leveraging the positive purchasing power
afforded by attractive prices and low interest rates, before inventory narrows and borrowing costs rise. First‐time
buyers are a driving factor and they stimulate the chain of ownership.

The Central Zone of OMREB covers an area from Peachland to Lake Country and east along Highway 33 to
Westbridge (including the Christian Valley). The Okanagan Mainline Real Estate Board (OMREB) is comprised of
1,151 member REALTORS® and 86 real estate offices in the Southern Interior of BC.

For the most comprehensive source of all real estate listings, home buying and selling information, visit our
national websites at www.realtor.ca
and www.icx.ca
. To find out about the advantages of using a REALTOR®
,
check out
www.howrealtorshelp.ca

All OMREB listings are published in the MLS® Real Estate Review magazine available at all real estate offices and
various locations in the Central Okanagan, North Okanagan, the Shuswap and Revelstoke areas. For
comprehensive Board‐wide statistical information, please visit our local public site: www.omreb.com

TREVER FLORKO - Realtor
Century 21 Assurance Realty (Kelowna)
Cell: (250) 859-5990
Office: (250) 869-0101
Fax: (250) 869-0105
Visit my WEBSITE
Follow me on TWITTER
Follow/LIKE me on FACEBOOK
Follow my BLOG

PS. Your referrals to friends and family are always greatly appreciated and rewarded.

Kelowna is a windy city right now! Here is something you don't see everyday!

Img_0316



TREVER FLORKO - Realtor
Century 21 Assurance Realty (Kelowna)
Cell: (250) 859-5990
Office: (250) 869-0101
Fax: (250) 869-0105
Visit my WEBSITE
Follow me on TWITTER
Follow/LIKE me on FACEBOOK
Follow my BLOG

PS. Your referrals to friends and family are always greatly appreciated and rewarded.

Wednesday, July 6, 2011

Is buying a student condo for my child a good investment?

Is buying a student condo for my child a good investment?
Student-loan

Sometimes a parent decides to buy a place for their children while they hit the books in university or college. It can be a good alternative to paying thousands of dollars toward residence fees or rent. Just look at the math:

Student rent of $500 a month = $6,000 a year = $24,000 over 4 years of school.

That money could go to your mortgage instead as an investment for you.

In Kelowna, for example, you can buy an NEW one-bedroom condo for about $195,000. (HST included!) Or, buy a 2-bedroom for $240,000 and let your child's roommate help cover the mortgage by paying rent. Let's assume you pay 20 per cent down. Here's an example of what your monthly costs could total when mortgage rates are low:

Cost
1-bedroom
2-bedroom
Mortgage payment
$800
$1,000
Condo fees
$350
$450
Property taxes, maintenance
$300
$400
Total:
$1,450
$1,850
Think about it: if your child rents a place, your money is helping the landlord pay his or her mortgage and other costs. If you buy a place instead and rent it to them, you have a real estate investment with a guaranteed tenant: your child. If the investment goes up in value, you will make money. Just remember that those gains will be taxed.
Also remember, mortgage rates and other costs change, and these changes will impact the numbers and your decision.

Things to consider before you decide:
You can buy the property in your name, in your child's name, or both. If you buy the property in your name, you should consider:
  • The rental income you charge can pay a lot of your costs. Just remember you have to declare that income on your tax return.
  • As a landlord, you can also claim many of your expenses, including mortgage interest. Assess your costs carefully before you buy. They will vary with the local real estate market, mortgage rates and other factors.
  • Plan for some vacancies. Your child (or their roommate) may not stay in the condo over the summer break. Are you really going to ask them to pay rent if they are living somewhere else for a few months?
  • Remember that you will own a greater share of the equity as you pay off the mortgage. And, the value of the condo may rise over time. This can offset your costs. But whether you do more than break even depends on what happens to housing prices in the area.

There are other benefits, too. Your child won't need to look for a different place to live each year. They also won't have to worry about subletting every summer. And their furniture won't be coming back with them if they live at home over the summer break. Not a bad deal.
Remember: you may not make money if you buy a student condo.
But there are other reasons you may decide to go ahead. At the very least, you can provide your child with a nice place to live in a good neighbourhood while they go to school.

TREVER FLORKO - Realtor
Century 21 Assurance Realty (Kelowna)
Cell: (250) 859-5990
Office: (250) 869-0101
Fax: (250) 869-0105
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