Advice For Buyers | TorontoLivings - Toronto Real Estate

Jun 08

Toronto Condo Reserve Funds: Top 5 Red Flags Every Buyer Should Spot

By Mark Savel Advice For Buyers

What Is a Reserve Fund and Why It Matters

When you buy a condo in Toronto, you’re not just purchasing a unit—you’re buying into a community with shared responsibilities. That includes footing the bill for repairs to common areas like roofs, parking garages, and elevators. Enter the reserve fund: a legally mandated savings account that every condo corporation must maintain to cover the cost of major repairs and replacements.

Ontario’s Condominium Act requires that this fund be reviewed at least every three years by a professional engineer through what’s known as a Reserve Fund Study. A healthy reserve fund protects owners from sudden “special assessments”—those dreaded lump-sum charges when there’s not enough money saved for big-ticket items.

Want to know learn more about why we review status certificates in the first place? Check out our blog post on: Understanding the Importance of Status Certificates

Red Flag #1 – A Reserve Fund That’s Way Too Low

How low is too low?

While there’s no official benchmark, experienced buyers and agents know what to look for. In Toronto, a mid-size condo building should ideally have at least $500,000–$1,000,000 in its reserve fund—more if it’s older or has luxury amenities. Anything substantially below that could spell trouble.

What it tells you

A low reserve balance often means the condo has been under-saving for years. That raises the odds of surprise costs falling to unit owners. It could also mean that major repairs are overdue—or being deferred to avoid raising fees.

What About New Condos?

It’s totally normal for brand-new condos to have relatively low reserve fund balances in their early years. Most developers seed the fund with an initial contribution, but the bulk of future savings comes from monthly fees paid by owners over time.

That said, even in a new building, the initial Reserve Fund Study should outline a detailed contribution schedule that shows the fund growing gradually—and sustainably. Be wary if:

The fund balance stays flat for several years
Contributions are delayed or minimized
There’s no clear funding plan for long-term repairs

A low balance alone isn’t a red flag in year one—but a poorly planned trajectory is.

Red Flag #2 – No Recent Reserve Fund Study

Condo boards are legally required to commission a Reserve Fund Study every three years. If a building hasn’t updated its study in that timeframe, it’s out of compliance.

Even worse: the older the study, the less accurate it is in predicting upcoming expenses. Without current data, you’re flying blind as a buyer.

Learn more on Ontario.ca’s Reserve Fund overview.

Red Flag #3 – The “Contribution Holiday” Trap

Some condo boards try to keep monthly fees artificially low by taking a so-called “contribution holiday”—pausing regular payments into the reserve fund. While this may look good on paper, it’s a short-term fix that can lead to long-term pain.

We once had a buyer eyeing a charming boutique condo downtown. The unit was gorgeous. But when we reviewed the financials, the reserve fund was barely funded—just $220,000 for a 25-year-old building with aging infrastructure. Worse still, the Reserve Fund Study warned of upcoming shortfalls of $15,000 per unit. The board had been on a contribution holiday for two years.

The buyer walked. Smart move.

Red Flag #4 – History of Special Assessments

If a building has a history of levying special assessments, take notice. These one-time fees—sometimes $10,000 to $30,000 per unit—usually mean the reserve fund was underfunded when a big repair came due.

Ask to see previous AGM (Annual General Meeting) minutes or speak with the property manager. Frequent assessments may point to chronic mismanagement.

Red Flag #5 – Expensive Repairs Coming, No Money Saved

What’s worse than a low reserve fund? A low reserve and a big-ticket repair right around the corner. We’re talking about:

Elevator replacements
Parking garage membrane repairs
Roof and window overhauls

These aren’t optional. And if the building hasn’t budgeted for them? Owners will be footing the bill.

Pro Tip – What Smart Buyers Should Always Check

Ask to see the Reserve Fund Study

It should be recent, realistic, and detail how the fund will grow over time.

Read AGM minutes for hidden clues

Sometimes future problems are only hinted at in board meeting notes. Don’t skip them.

Have your lawyer review the Status Certificate

Yes, every time. A good real estate lawyer knows exactly where to look.

Final Thoughts: It’s Not Just About the Unit

You might fall in love with the layout, the finishes, or that view—but none of that will matter if your building’s finances are in rough shape.

Spotting these red flags early can save you tens of thousands—and a lot of future stress.

Ready to Buy Better?

Before you commit to a condo, make sure you’re not inheriting someone else’s financial mess. The lawyers we work with, have reviewed hundreds of status certificates—and know what to look for (and when to walk away).
Contact us today or send us a message below, for a no-pressure chat about your next move!

May 29

Love0

Toronto Downpayment Guide for Homebuyers

By Mark Savel Advice For Buyers

How Much Money Do I Need to Put Down?

One of the most common questions Toronto homebuyers ask is: “How much downpayment do I need to buy a house in Toronto?” And the answer? Well, it depends. Your down payment hinges on the price of the home you’re eyeing—and in Toronto, where prices regularly push past $1 million, the amount required can be significantly higher than the national minimums.

Let’s break it down so you can better understand what you’ll need to save.

Minimum Down Payment Rules For Buying in Toronto

Here’s how the Toronto (and Canadian) down payment structure works:

5% on the first $500,000 of a home’s purchase price
10% on the portion from $500,001 to $1,500,000
20% for homes priced over $1.5 million (and no CMHC insurance allowed)

As of 2024, the government increased the insured mortgage limit to $1.5 million—up from the previous $1 million cap—giving buyers in expensive markets like Toronto more breathing room with lower down payment thresholds.

What Does That Mean for Toronto Buyers?

The average home price in Toronto hovers around $1.1 million. That puts many buyers in the zone where they’ll need to put down at least $80,000 to $100,000 (a mix of 5% and 10%).

But if you’re buying above the $1.5 million mark, it’s 20% minimum—meaning a $300,000 down payment on a $1.5M home. That’s a steep climb for most buyers, especially first-timers. That’s why we often advise clients to get pre-approved early and understand what their budget truly allows.

CMHC Insurance: When It Applies and What It Costs

If your down payment is less than 20%, your mortgage must be insured through the Canada Mortgage and Housing Corporation (CMHC) or similar providers. This insurance protects the lender—not you—but is required to secure your mortgage.

Here’s what it typically costs:

4.00% of your loan if you’re putting just 5% down
3.10% if you’re putting 10%
2.80% if you’re putting 15%

You’ll also pay Ontario provincial sales tax on the premium (not added to the mortgage). You can use a CMHC calculator to estimate your costs.

Common Questions from Toronto Buyers

These are the questions that come up most often during buyer consults:

“Can I use gifted money?” Yes. You’ll need a signed letter confirming the funds are a gift and not repayable.

“I’m self-employed—does that change things?” Lenders will want to see at least two years of business income. You might face stricter scrutiny, but it’s not a deal-breaker.

“Are there any programs to help me?” Yes! And we’ll cover them next.

Down Payment Assistance Programs

If saving for a down payment feels out of reach, you’re not alone—and fortunately, there are programs specifically designed to help Toronto buyers get into the market:

First-Time Home Buyer Incentive (FTHBI): This shared equity program lets the federal government contribute 5%–10% of your purchase price. You repay the same percentage later, based on your home’s future value.
Home Buyers’ Plan (HBP): Withdraw up to $35,000 from your RRSP ($70,000 as a couple) tax-free to buy your first home. You’ll have 15 years to pay it back.
First Home Savings Account (FHSA): A new account that allows you to save up to $8,000/year ($40,000 lifetime) tax-free. Contributions are tax-deductible, and withdrawals for a qualifying home purchase are also tax-free.
Land Transfer Tax Rebates: First-time buyers can claim a rebate of up to $4,000 from Ontario’s LTT and up to $4,475 from Toronto’s municipal LTT—for a potential $8,475 in savings.

These programs can shave thousands off your upfront costs and make homeownership far more attainable. Each has its own fine print, so it’s best to chat with a mortgage specialist or real estate professional to see which ones you qualify for.

Other Cost Considerations Beyond the Down Payment

Your down payment isn’t the only cost you’ll need to budget for. When buying a home in Toronto, a handful of additional expenses can add up quickly:

Legal Fees: Typically range from $1,500 to $2,500 depending on your lawyer and the complexity of the transaction. This covers title searches, document review, registration, and disbursements.
Land Transfer Tax (LTT): Ontario and Toronto both charge LTT. Use a land transfer tax calculator to estimate your exact amount.
Home Inspection: A professional inspection usually costs $400 to $600 and is worth every penny for peace of mind.
Appraisal Fee: If required by your lender, expect to pay about $300 to $500.
Title Insurance: Often recommended and sometimes mandatory—costs roughly $250 to $500.
Moving Costs: Whether it’s a DIY truck rental or a full-service move, budget at least $500 to $2,000.
Adjustments and Prepaid Costs: These include utilities, property taxes, and condo fees that the seller may have prepaid. You’ll need to reimburse them for your share at closing.

Having a well-padded buffer—say 1.5% to 4% of your home’s purchase price—can help cover these expenses without stress.

Final Thoughts — Planning Your Path to Homeownership

In a city like Toronto, where real estate prices can feel overwhelming, planning ahead is your best ally. Know the numbers. Use the tools. And contact us to help build a strategy that works for your budget and timeline.

Need help estimating your down payment and closing costs? Let’s talk. A smart plan today could be the key to owning tomorrow.

May 24

Love0

Should You Go Fixed or Variable on Your Mortgage in Toronto?

By Mark Savel Advice For Buyers

Let’s talk about one of the biggest questions plaguing buyers (right after “Do we really need a powder room on the main floor?”): fixed or variable mortgage?

It’s not just a financial decision—it’s emotional. It’s about your risk tolerance, your long-term goals, and what kind of sleep you want at night. And in Canada’s current rate environment, it’s more relevant than ever.

The Basics: What’s the Difference?

Let’s start with the basics.

A fixed-rate mortgage locks in your interest rate for the entire term. You get predictability. Your payment doesn’t change, which makes budgeting a breeze. Whether rates skyrocket or sink, your monthly payment stays the same.

A variable-rate mortgage fluctuates with the lender’s prime rate, which is tied to the Bank of Canada’s overnight rate. That means your interest costs—and sometimes your payment—can rise or fall during the term. Some lenders offer variable products with fixed payments, where more or less goes toward the principal depending on rates.

What’s Happening in 2025?

As of spring 2025, the Bank of Canada has already started trimming rates after a prolonged tightening cycle. Inflation has cooled somewhat, and there’s widespread speculation that rates will ease further into 2026.

That’s got many Canadians thinking: should I ride the wave down with a variable rate, or lock in now just in case we’re in for more surprises?

When Fixed Rates Make Sense

Choose a fixed rate if:

You’re risk-averse and don’t want to gamble with future payments.
You’re stretching your budget and can’t afford payment fluctuations.
You expect interest rates to rise again, or at least stay high.
You need certainty—say, you’re buying your first home and just want one less thing to worry about.

Fixed is the vanilla ice cream of mortgages. Safe, stable, and not likely to ruin your day.

When Variable Rates Might Be the Smart Play

Consider a variable if:

You have room in your budget and can handle short-term bumps.
You believe rates will drop over the next 12–24 months.
You want to take advantage of prepayment privileges (variable mortgages often come with lower penalties).
You’re planning to sell or refinance in the near future and don’t want to get dinged with steep fixed-rate penalties.

Some of the savviest investors and seasoned buyers opt for variable—but they’re also the types who read Bank of Canada statements like bedtime stories.

Reality Check: What About Hybrid Mortgages?

If you’re feeling indecisive (no shame!), you could split the difference. Some lenders offer hybrid mortgages, where part of your loan is fixed and part is variable. It’s a bit more complex, but could offer a best-of-both-worlds solution for buyers with one foot in each camp.

Mortgage Strategy Should Match Your Life Strategy

Maybe you’re a new homeowner with tight margins. Maybe you’re upgrading and renting out your old condo. Maybe you’re a serial mover chasing the next hot neighbourhood. Your mortgage should match your life—not just market forecasts.

Here’s the truth: both fixed and variable rates can be the “right choice” depending on your situation.

What We’re Telling Clients in Toronto

Right now, many of our buyers are leaning toward shorter-term fixed mortgages—think 1 to 3 years. That way, they lock in predictability but keep the door open to refinance if rates drop.

Others are sticking with variable rates with the confidence that they’ll see savings over the next few years—especially if they’re not planning to break the mortgage early.

The key? Talk to a mortgage broker you trust. Get the real numbers, not just the sales pitch. We’ve worked with some excellent brokers across Toronto, and we’re happy to introduce you.

Final Thought

Listen, the decision between fixed and variable isn’t just about the math—it’s about peace of mind. Don’t pick the product that looks smartest on paper. Pick the one that lets you sleep well and move forward confidently.

Want help running the numbers or connecting with a great mortgage pro? Reach out to us here and we’ll guide you every step of the way.

Nov 13

Love1

a red brick house with ivy growing up the side of it

Toronto Vacant Home Tax 2024-2025: Complete Guide & Important Changes

By Mark Savel Advice For Buyers, Advice For Sellers

Hey there, Toronto property owner! If you’re scratching your head about the Vacant Home Tax (VHT), you’re not alone. As someone who’s spent countless hours researching and writing about Toronto’s Real Estate scene, I’m here to break down everything you need to know about this hot topic in our city’s housing policy.

body of water near trees and high rise buildings during daytime

What’s New with the Vacant Home Tax in 2025?

Let me start with some fresh updates that might affect your wallet: Toronto has increased the VHT rate to 3% of your property’s Current Value Assessment for 2024. That’s right – if you’ve got a $1 million property sitting empty, we’re talking about a $30,000 tax bill. Yikes!

But don’t panic just yet. I’ll walk you through everything you need to know to either comply with or legitimately avoid this tax.

Key Program Changes for 2024-2025

The City of Toronto has just rolled out some major updates to the VHT program. Here’s what’s changing:

Extended Declaration Period: You now have from November 1, 2024, to April 30, 2025, to submit your declaration
Increased Tax Rate: The rate has jumped from 1% to 3% of your property’s Current Value Assessment
New User-Friendly Portal: Launching November 1, 2024, making declarations easier than ever
Multilingual Support: A dedicated Customer Care Centre through 311 offering support in 180 languages
Email Confirmations: You’ll receive confirmation of your declaration via email (if provided)

What Counts as “Vacant”?

A property is considered vacant if it was unoccupied for more than six months during the previous year and it was NOT your principal resident. Now heres where it gets confusing, so to keep it simple, heres 2 considerations to ask yourself:

Is the property considered your principal residence for at least 6 months
If it’s not – was it occupied or was it vacant during last calendar year for longer than 6 months?

If it is NOT your principal residence and HAS been vacant for 6 months or more THEN ITS CONSIDERED VACANT. Important to note, it doesn’t have to be a continuous 6 months either. It can be spread across the year – important for those with short term rentals.

If it IS your principal residence, and as long as a property remains your principal residence, you can declare the occupancy status as occupied and the tax will not apply. This applies even if you leave for extended periods of time due to travel or work (e.g. snow birds). To claim this occupancy status, the property must be your principal residence for at least six months of the taxation year. Also, don’t try an be smart – You can only have one principal residence.

But don’t panic – there are several valid exemptions!

Legitimate Exemptions (Yes, They Exist!)

Here are some situations where you might be off the hook:

Medical Care: If you or your tenant is receiving long-term medical care and is out of the house for it.
Principal Residence: The property was your main home
Death of Owner: The property owner passed away during the year
Renovations: Major renovations with valid permits (but there are specific requirements)
Legal Issues: Court orders preventing occupancy
Transfer of Legal Ownership: Property was sold during the year

Be sure to check the exact details with City of Torontos Vacant Home Tax portal

Important Dates to Mark in Your Calendar

? Here’s your timeline for 2024-2025:

November 1, 2024: Declaration period opens
April 30, 2025: Final deadline for declarations
June 1, 2025: VHT bills mail-out begins
September 15, October 15, November 17, 2025: Tax payment due dates
December 2025: Deadline for Notice of Complaint submissions

How to Make Your Declaration (It’s Easier Than You Think!)

I remember my first time filing a property declaration – it seemed daunting until I actually did it. Here’s your step-by-step guide:

Visit the MyToronto Pay portal
Have your property tax roll number ready
Choose your property’s occupancy status
Provide any supporting documentation if claiming an exemption
Submit and keep your confirmation number
Pro Tip: Keep your confirmation number! The city has made this easier by providing email confirmations or printed confirmations upon request.

What Happens If You Don’t Comply?

I hate to be the bearer of bad news, but the consequences of non-compliance are steep:

Fines starting at $250
Potential tax rate of up to 3% of your property’s value
Risk of audit
Legal penalties for false declarations

Disputing a Vacant Home Tax Assessment

If you believe you’ve been incorrectly assessed, you have until December 2025 to submit a Notice of Complaint. Here’s what you need to do:

Gather your evidence
Submit your Notice of Complaint form
Provide supporting documentation
Wait for the review decision

Need Help? Where to Get More Information

Still have questions? Don’t worry, we’ve all been there. Here are your best resources:

City of Toronto VHT Page
Call 311 for direct assistance
Consult with a property tax specialist
Check the latest VHT news updates

Conclusion

This beefed-up VHT program is Toronto’s way of saying “let’s get serious about housing.” The goal? To nudge property owners toward renting or selling their vacant properties, ultimately feeding into the city’s affordable housing initiatives.

Remember, whether you’re a seasoned property owner or new to the game, staying on top of these requirements isn’t just good practice – it’s essential for avoiding costly penalties. Keep these dates in your calendar, and make sure you’re ready to declare when the time comes.

Want to stay ahead of the curve? Start gathering your documentation now and keep an eye out for that online portal launch in November. Your future self (and wallet) will thank you.

Frequently Asked Questions (FAQ)

General Questions

Q: Do I have to declare even if I live in my property?

A: Yes! All residential property owners in Toronto must declare annually, even if you live in the property as your principal residence.

Q: What is the tax rate for 2024?

A: The Vacant Home Tax rate has increased to 3% of your property’s Current Value Assessment (CVA), up from the previous 1%.

Q: How many properties in Toronto need to declare?

A: Approximately 820,000 properties within Toronto require an annual declaration of occupancy status.

Declaration Process

Q: When can I submit my declaration for 2024?

A: The declaration period opens November 1, 2024, and runs until April 30, 2025.

Q: What happens if I miss the declaration deadline?

A: While late declaration fees are currently waived, your property could be deemed vacant by default. It’s best to declare on time to avoid any complications.

Q: How do I get proof of my declaration?

A: You can:

Receive an email confirmation (if you provide your email address)
Print or save the confirmation page with your confirmation number
Request a printed confirmation by calling 311

Property Status Questions

Q: How long can my property be empty before it’s considered vacant? A: A property is considered vacant if it’s unoccupied for more than six months during the calendar year, unless it qualifies for an exemption.

Q: Does the six-month period need to be consecutive? A: No, the six months don’t need to be consecutive. The total time throughout the year is what counts.

Q: What if I’m traveling but this is my main home? A: If the property is your principal residence, it’s exempt from the Vacant Home Tax even if you’re away for extended periods.

Payment and Financial Questions

Q: When do I need to pay the Vacant Home Tax? A: For 2024, payments are due in three installments:

September 15, 2025
October 15, 2025
November 17, 2025

Q: How much revenue does the tax generate?

A: The program generated $56.5 million in 2022 and $50.6 million in 2023. With the new 3% rate, the city expects approximately $105 million annually.

Exemptions and Special Cases

Q: Will the city check my utility usage to verify occupancy?

A: While utility data may be used in audits, it’s not the primary verification method since approximately 45% of residential properties don’t have individual meters.

Q: What if I’m renovating my property?

A: Properties under renovation with proper permits may qualify for an exemption. Be sure to maintain all documentation related to your permits and renovation work.

Support and Help

Q: How can I get help with my declaration?

A: You have several options:

Call 311 to reach the dedicated Customer Care Centre (support available in 180 languages)
Visit Tax and Utility counters at Toronto City Hall or civic centres
Use the online portal at toronto.ca/VacantHomeTax

Q: What if I disagree with my tax assessment? A: You can submit a Notice of Complaint until December 2025 for the 2024 tax year. Be sure to gather all supporting documentation before submitting your complaint.

Program Impact

Q: What happens to the money collected from this tax?

A: Revenue supports various housing initiatives including:

The HousingTO Plan
Toronto Community Housing Corporation improvements
The Multi-Unit Residential Acquisition (MURA) program
Other affordable housing initiatives

Important Disclaimer

⚠️ Please Note: While we strive to keep this guide up-to-date, tax regulations and programs can change. This article is for informational purposes only and should not be considered legal or financial advice. The information provided is based on the City of Toronto’s Vacant Home Tax Program as of November 2024.

For the most current and authoritative information about the Vacant Home Tax Program, including:

Latest tax rates
Declaration deadlines
Exemption criteria
Program updates
Official forms and documentation

Please visit the City of Toronto’s official Vacant Home Tax webpage: https://www.toronto.ca/services-payments/property-taxes-utilities/vacant-home-tax/

Always consult with qualified tax professionals or contact the City of Toronto directly through 311 for advice specific to your situation.

Resources and Support

For the most up-to-date information, visit:

Nov 08

Love1

Toronto Housing Market Surges 44% After Bank of Canada Rate Cuts

By Mark Savel Advice For Buyers, Advice For Sellers, Real Estate, Toronto

The Toronto Housing Market is Heating Up: Here’s What You Need to Know About Rate Cuts

If you’ve been following the real estate scene in the Greater Toronto Area, you’ve probably noticed something interesting happening. Remember all that doom and gloom from last year? Well, things are starting to look pretty different, and it’s largely thanks to the Bank of Canada’s recent moves.

The Game-Changer: Rate Cuts

Let’s talk about what’s really stirring the pot. The Bank of Canada has been on quite a roll lately, slashing rates four times in a row since last June. The latest cut was a big one – dropping the key rate from 5% to 3.75%. And guess what? The market is definitely taking notice.

The Numbers Don’t Lie

Here’s where it gets exciting. October 2024 saw some pretty impressive numbers:

Home sales jumped by a whopping 44.4% compared to last year
We’re talking about 6,658 properties changing hands
Even month-over-month, we saw a solid 14% increase

What’s Hot and What’s Not

Want to know what’s really flying off the market? Townhouses are the surprise winner here, with sales skyrocketing by 56.8%. But honestly, everything’s moving:

Detached homes? Up 46.6%
Semi-detached? Up 44%
Even condos are getting in on the action with a 33.4% increase

The Price Tag Story

Now, here’s the interesting part – despite all this activity, prices haven’t gone completely bonkers. The average home will set you back about $1.1 million, which is only up about 1.1% from last year. Not too shabby, considering all the action we’re seeing… that being said, in October – the average price for a detached home was over $1.7 million sooooo context is important!

What This Means for You

If you’re thinking about jumping into the market, here’s the scoop: There’s still plenty of inventory out there, which means you’ve got options. But (isn’t there always a but?), experts are saying this sweet spot might not last forever. As more buyers jump back in and inventory gets snapped up, we might see prices start to climb, especially by spring 2025.

The Bottom Line

Here’s my take: The market is definitely warming up, but we’re not seeing the crazy bidding wars of years past – at least not yet. The rate cuts have brought buyers back to the table, but they’re being smart about it. If you’ve been sitting on the fence, now might be the time to start looking seriously.Just remember, real estate is always local, and what’s happening in one neighborhood might be completely different from another.

My advice? Keep an eye on those interest rates, do your homework, and maybe start booking some viewings.

P.S. Don’t forget to subscribe to our newsletter for more real estate insights and market updates!

Nov 05

Love1

Status Certificate Ontario: Complete Checklist & Key Details

By Mark Savel Advice For Buyers, Advice For Sellers, Real Estate

Making a smart condo purchase doesn’t have to feel like a shot in the dark. The status certificate serves as your crystal ball, providing crucial insights into a condominium’s health and future prospects.

What is a Status Certificate?

A status certificate is a comprehensive health report for a condominium, mandated by the Ontario Condominium Act. This vital document provides a detailed snapshot of the building’s financial and legal standing, making it an essential tool for informed decision-making in the real estate market.

Key Components

Financial Health
The status certificate reveals the building’s financial pulse through its reserve fund – essentially a savings account for future repairs and maintenance. A robust reserve fund indicates good financial management and reduces the likelihood of unexpected special assessments.

Legal Status
Understanding ongoing legal proceedings is crucial for potential buyers. While lawsuits aren’t always deal-breakers, particularly in newer buildings where construction-related claims are common, they can impact future costs and building operations.

Building Operations
The document outlines important operational aspects including:

Maintenance fees and potential increases
Parking arrangements
Pet policies
Insurance coverage
Building rules and bylaws

Professional Guidance

While the status certificate is publicly accessible, its interpretation requires expertise. Working with experienced real estate professionals can help you:

Identify potential red flags
Understand complex legal terminology
Evaluate the building’s financial stability
Navigate building-specific regulations

Best Practices

Timing Matters
Always ensure your status certificate is current – ideally no more than 30 days old. Real estate markets and building conditions can change rapidly, making recent information crucial for decision-making.

Due Diligence
Before making an offer, thoroughly review:

Reserve fund studies
Financial statements
Building maintenance history
Upcoming major repairs or renovations

Making an Informed Decision

The status certificate is more than just paperwork – it’s your protection against unforeseen issues and a tool for confident decision-making. By understanding its components and working with knowledgeable professionals, you can transform the condo-buying process from a mysterious venture into a well-informed investment decision.

Remember, a thorough understanding of the status certificate isn’t just about protecting your investment – it’s about ensuring peace of mind in your new home. Take the time to review this document carefully, and don’t hesitate to seek professional guidance when needed.

Oct 31

Love1

Current Trends in Toronto’s Condo Market: A 2024 Overview

By Mark Savel Advice For Buyers, Advice For Sellers, Real Estate

Toronto’s condo market has experienced significant shifts in 2024, presenting both challenges and opportunities for buyers, sellers, and investors. This overview examines the key trends shaping the city’s condo landscape, providing insights into market dynamics, pricing, and future projections.

Market Softening and Increased Inventory

The Toronto condo market has shown signs of softening in 2024, with a notable increase in available inventory. New condo listings surged by 30% compared to the previous year, reaching a record high of 9,951 units available for sale in May 2024. This influx of listings has shifted the market balance, creating more options for potential buyers.

Sales Volume and Pricing Trends

Despite the increase in inventory, condo sales have experienced a decline. In May 2024, condo sales were down 26% compared to the same period last year. This decrease in sales volume has had a modest impact on pricing:

The average condo price in the Toronto area was $754,526 in May 2024, down 3% from the previous year
The median condo price stood at $673,000, representing a 4% decrease year-over-year

Factors Influencing the Market

Several factors have contributed to the current state of Toronto’s condo market:

Interest Rates: Higher interest rates have increased mortgage payments, making condo investments less attractive for some buyers and investors
Rental Market Pressures: Declining rents have made it challenging for investors to cover mortgage, taxes, and maintenance fees through rental income
Record Completions: A significant number of new condo units are scheduled for completion in the coming year, potentially adding to the supply
Government Policies: Federal plans to reduce the number of non-permanent residents in Canada have impacted investor sentiment

Regional Variations

The condo market performance varies across the Greater Toronto Area:

All regions saw condo sales decline by over 20% in May 2024
Average prices decreased across the GTA, with some variations between regions
New listings and Months of Inventory (MOI) were significantly higher than the previous year in all regions

Investor Sentiment

The current market conditions have led to a shift in investor behavior:

Many investors are selling their properties, contributing to the increased inventory
Vacant condominiums listed for sale increased by 56%, indicating a trend of investors exiting the market

people crossing on pedestrian lane in front high-rise buildings — Downtown Toronto

Future Outlook

While the market has softened, there are potential factors that could influence future trends:

Recent interest rate cuts by the Bank of Canada may improve affordability, particularly for first-time buyers
Experts anticipate a potential market revival in the fall, driven by further interest rate cuts and increased buyer activity
The elevated listing inventory is expected to gradually decrease as demand picks up, potentially leading to moderate price growth in the future

Conclusion

Toronto’s condo market in 2024 presents a complex picture with increased inventory, softening prices, and changing investor dynamics. While challenges exist, opportunities are emerging for buyers who have been waiting for more favorable conditions. As the market continues to evolve, staying informed about these trends will be crucial for making informed real estate decisions in Toronto’s dynamic condo landscape.

For those considering entering the Toronto condo market, it’s advisable to consult with real estate professionals who can provide personalized insights based on your specific needs and the latest market data.

Oct 28

Love1

$Japanese male businessmen who do the math.$

6 Essential Real Estate Investment Calculations Every Investor Must Know

By Mark Savel Advice For Buyers, Real Estate

Are you looking to maximize your real estate investment returns? Understanding key financial metrics is crucial for making informed decisions in the property market. In this comprehensive guide, we’ll explore six essential calculations that every savvy real estate investor should master, complete with practical examples to illustrate their application.

1. Net Operating Income (NOI): The Foundation of Property Profitability

Net Operating Income is the cornerstone of any income-producing property’s financial health. It represents the annual income generated by the property after deducting all operating expenses.

Formula: NOI = Total Revenue – Operating Expenses

Example:
Imagine you own a small apartment building:

Annual Rental Income: $120,000
Other Income (laundry, parking): $5,000
Total Revenue: $125,000
Operating Expenses (taxes, insurance, maintenance, etc.): $50,000

NOI = $125,000 – $50,000 = $75,000

This $75,000 NOI represents the property’s profitability before accounting for mortgage payments or capital expenditures.

Planning, networking and black man in real estate with a tablet, reading email and search for prope

2. Capitalization Rate (Cap Rate): Estimating Investment Potential

The Cap Rate helps investors quickly assess the potential return on an investment property, assuming it was purchased with cash.

Formula: Cap Rate = (NOI / Property Value) x 100

Example:
Using the NOI from our previous example:

NOI: $75,000
Property Value: $1,000,000

Cap Rate = ($75,000 / $1,000,000) x 100 = 7.5%

A 7.5% cap rate suggests a solid return for a residential property in many markets.

3. Cash-on-Cash Return: Measuring Cash Flow Efficiency

This metric measures the annual cash flow relative to the initial cash invested, making it particularly useful for comparing properties with different financing structures.

Formula: Cash-on-Cash Return = (Annual Cash Flow / Total Cash Invested) x 100Example:
Assume you purchased the same property with a 25% down payment:

Purchase Price: $1,000,000
Down Payment: $250,000
Annual Cash Flow (after mortgage payments): $30,000

Cash-on-Cash Return = ($30,000 / $250,000) x 100 = 12%

A 12% cash-on-cash return is generally considered attractive for a rental property investment.

4. Debt Service Coverage Ratio (DSCR): Assessing Debt Repayment Ability

DSCR is crucial for both investors and lenders as it measures a property’s ability to cover its debt obligations.

Formula: DSCR = NOI / Annual Debt Service

Example:
Using our previous figures:

NOI: $75,000
Annual Debt Service (mortgage payments): $50,000

DSCR = $75,000 / $50,000 = 1.5

A DSCR of 1.5 means the property generates 50% more income than needed to cover its debt payments, which is typically acceptable to most lenders.

Real Estate Agent Evaluating Property Investment with Calculations — #image_title

5. Gross Rent Multiplier (GRM): Quick Property Valuation

GRM helps quickly estimate a property’s value based on its gross rental income.

Formula: GRM = Property Price / Annual Gross Rental Income

Example:

Property Price: $1,000,000
Annual Gross Rental Income: $120,000

GRM = $1,000,000 / $120,000 = 8.33

This GRM suggests that it would take about 8.33 years of gross rent to pay for the property. Lower GRMs generally indicate more attractive real estate investments.

6. Return on Investment (ROI): Measuring Overall Profitability

ROI measures the overall profitability of an investment, taking into account all sources of return.

Formula: ROI = (Net Profit / Total Investment) x 100

Example:
Assume after one year:

Net Cash Flow: $30,000
Appreciation: $50,000
Equity Buildup (loan principal paid): $15,000
Total Profit: $95,000
Total Investment (down payment): $250,000

ROI = ($95,000 / $250,000) x 100 = 38%

This impressive 38% ROI reflects strong cash flow, appreciation, and equity buildup in the real estate investment.

Pro Tips for Using These Calculations

Create a Property Analysis Spreadsheet
- Input these formulas
- Compare multiple properties
- Track actual performance
Consider Market Context
- Local real estate trends
- Property condition
- Neighborhood growth potential
Use Multiple Metrics
- Never rely on one calculation
- Compare results across metrics
- Update calculations quarterly

Common Mistakes to Avoid

❌ Forgetting to include all expenses in NOI calculations
❌ Using incorrect property values for cap rate
❌ Overlooking future capital expenditures
❌ Assuming best-case scenario numbers

FAQ About Real Estate Investment Calculations

Q: Which calculation is most important? A: Start with cap rate for initial analysis, then verify with cash-on-cash return for a complete picture.

Q: How often should I update these calculations? A: Review quarterly for existing properties and before any new purchase.

Q: What tools can help with these calculations?
A: Popular options include Excel, real estate investment apps, and property management software.

Q: How often should I update these calculations?
A: Review quarterly for existing properties and before any new purchase.

Q: What tools can help with these calculations?
A: Popular options include Excel, real estate investment apps, and property management software

Conclusion: Empowering Your Real Estate Investment Strategy

Mastering these six essential real estate investment calculations will empower you to make more informed decisions, compare opportunities effectively, and better assess your property portfolio’s performance. By incorporating these metrics into your investment strategy, you’ll be well-equipped to navigate the complex world of real estate investing and maximize your returns.Remember, while these financial metrics are invaluable tools for any real estate investor, they should always be used in conjunction with thorough market research and due diligence. Happy investing!

Oct 23

Love1

Understanding Kitec Plumbing: A Guide for Toronto Condo Owners

By Mark Savel Advice For Buyers, Advice For Sellers, Real Estate

Introduction

Toronto condo owners beware – if your building was built using a Kitec plumbing system, you may have a big problem behind your walls! This blog post highlights everything you need to know about identifying, managing, and mitigating the risks associated with Kitec plumbing in your property.

What is Kitec Plumbing?

Kitec plumbing, a system developed as a more cost-effective alternative to traditional copper plumbing, uses plastic pipes with zinc fittings. Initially seen as a promising solution for residential construction, Kitec plumbing systems have since been linked to significant failures. These failures are not just minor inconveniences but can lead to severe water damage as the pipes are notorious for bursting.

Common Issues with Kitec Plumbing

There are three primary issues that lead to Kitec plumbing failures:

Heat Sensitivity: Kitec pipes cannot withstand high temperatures. With a melting point of 82 degrees Celsius, they are unsuitable for the high-temperature hot water systems common in residential buildings.
Zinc Corrosion: The brass fittings containing zinc corrode over time, leading to blockages and eventual pipe failures. This process is accelerated by fluctuating water temperatures and pressure, causing the plumbing system to degrade faster.
High Water Pressure: Unfortunately, Kitec plumbing cannot endure the high water pressure typical in many buildings, leading to pipe bursts.

Identifying Kitec Plumbing

If your condo was built between 1995 and 2015, it might be at risk. The telltale signs include bright orange and blue tubing visible under sinks, typically in kitchens and bathrooms. However, these colors alone are not definitive indicators, as Pex plumbing shares similar hues. Check for the “Kitec” or “KTC” markings on pipes and fittings to confirm.

What to Do If You Have Kitec Plumbing

For those unfortunate enough to discover Kitec plumbing in their home, remediation is key. Buildings have generally followed one of two paths:

Individual Remediation: Condo management may ask each unit owner to replace their plumbing. This approach leaves some units at risk, as not all owners may comply, potentially affecting neighboring properties.
Building-wide Replacement: The more reliable option involves the entire building undergoing a comprehensive plumbing system overhaul, usually managed by a single contractor. While initially costly, this approach eliminates future risks and enhances resale value by addressing the systemic plumbing issues uniformly.

Protecting Your Investment

If you are in the market for a new condo, work closely with your realtor to ensure due diligence is performed. This includes:

Confirming the building’s construction dates and checking for any history of Kitec usage.
Asking management about any past remediation efforts.
Ensuring that your offer includes a clause requiring the seller to guarantee the absence of Kitec plumbing.

Conclusion

Living with Kitec plumbing is manageable but requires proactive steps to prevent catastrophic failures. By addressing these issues early and comprehensively, condo owners and buyers can protect their investments and ensure peace of mind, staying clear of the so-called “Danger Zone” of plumbing failures. Stay informed and work with knowledgeable professionals to steer clear of the pitfalls associated with Kitec plumbing.

Apr 30

Love1

Living in a Hotel/Condo in Toronto: Exploring the Pros and Cons of a Unique Lifestyle

By Joey Virgilio Advice For Buyers, Toronto

Toronto, a city known for its diversity, energy, and cultural richness, offers an array of housing options. One intriguing choice gaining popularity is the hotel/condo lifestyle. Blending the comforts of a hotel with the conveniences of a condo, this unique living arrangement comes with both advantages and challenges. In this blog post, we’ll explore the pros and cons and take a closer look at what living in a hotel/condo is all about!

Pros

Amenities Galore:

Luxurious Facilities: Hotel/condo living often provides access to upscale amenities such as fitness centers, spa services, concierge services, and sometimes even housekeeping. The spas are a big perk for us, as many hotel/condos have some of the best in the city!
Restaurants and Bars: Some developments feature on-site restaurants and bars, offering residents the convenience of dining options right in their building

Convenience and Services:

Concierge Assistance: The presence of a concierge can simplify daily tasks, from handling packages to making reservations or arranging for maintenance.
Housekeeping Services: Depending on the arrangement, residents may have the option to avail themselves of housekeeping services, reducing the burden of chores (at an extra cost)

Central Location:

Prime Locations: In Toronto – Hotel/condo developments are situated in prime, downtown locations within the city, offering easy access to entertainment, business districts, and cultural attractions.

Security:

24/7 Security: Enhanced security measures, including 24/7 concierge and surveillance, provide residents with a sense of safety and peace of mind.

Cons

Cost:

Higher Price Tag: The luxurious amenities and central location come at a cost. Living in a hotel/condo can be more expensive compared to traditional apartment living in Toronto. Plus, all the added services typically result in higher maintenance fees
Financing: Banks often treat hotel/condos as a higher risk, and as a result require higher downpayment compared to condos without a hotel component.

Limited Personalization:

Decor Restrictions: Residents may face restrictions on personalizing their living spaces due to furnished units or condominium rules, limiting the ability to make the space truly their own.

Potentially Transient Environment:

Changing Neighbors: The nature of short-term leases and the transient nature of hotel/condo living may result in a constantly changing community, potentially affecting the sense of neighborhood and community. Remember, you’re in a hotel so naturally there will be higher amount of turnover.

Noise and Crowds:

Busy Common Areas: Shared amenities and common areas, while convenient, can sometimes be busy and noisy, especially during peak hours or events hosted within the building. For most hotel/condos in the city, residents have their own private access.

Conclusion

Living in a hotel/condo in Toronto is an enticing option that combines luxury, convenience, and a central location. The decision to embrace this lifestyle depends on individual preferences, budget considerations, and the desire for a unique living experience.

Whether you prioritize the amenities, services, and central location or value the personalization and stability of a traditional home, carefully weighing the pros and cons will help you determine if hotel/condo living aligns with your lifestyle in the vibrant city of Toronto.