With so much uncertainty in the world, real estate seems to be one of the few things that Canadians are optimistic about. But insolvency consultants MNP suggest most home buyers are coming from a shrinking pool.
Here are some of my thoughts on real estate and mortgages with advice on opportunities and risks. Remember that the advice we give always has the aim to help our clients improve their financial position, regardless of their circumstance. Normally the mortgage is the easy part of our job! We love helping people “get ahead”.
The condo market in Toronto is in trouble: This could be good news for communities like Guelph, Kitchener/Waterloo/Cambridge!
People are moving out of Toronto and since many people are working from home, they have decided that commuting to T.O. a day or two during the week is worth the drive. It’s a trend that’s just been exacerbated by companies offering more “work-from-home” options. As many people are cashing in and selling their homes the question becomes, “Where do I move to once I sell my home?” I always thought that Chatham, Ontario was a nice place to live! 😊
Student rentals: Is now the time to sell?
Something like 25,000 students attend the University of Guelph. Most university cities have similar numbers. I recently read that only about a quarter of these students are physically back to campus. Although some students are still taking classes remotely, they migrated to the city where they go to university because they were stuck in leases. As the pandemic continues, we believe more students will stay at their parents’ home and save money, while going to school remotely.
Student rentals have also been problematic to finance. Now may be a good time to consider converting your student rental into a rental for a family or possibly selling on a high market to invest or purchase a cottage. Keep in mind there will be capital gains tax on the sale of the rental – so be sure to consult an accountant first!
Fixed versus variable: What’s the best option?
It depends. My “rule of thumb” is that if you don’t have any debt outside of your mortgage, (and maybe a car payment), a variable-rate-mortgage would be a good option. Fixed-rate mortgages offer security, but you tend to pay a little extra. We have also helped several clients revisit how they pay their mortgage. Manulife One Mortgages are becoming more popular as borrowers look at how to access the equity in their homes. This is a unique product that’s designed for people who review their personal finances on a regular basis. We’ve found that it has helped many of our clients pay off their mortgage faster.
To discuss more about your specific financial situation and goals, connect with us: