Hello Everyone with Hamilton Real Estate Investments!
Itâ€™s been a busy week! Don R Campbell was live and on FIREÂ at the Real Estate Investment Networkâ€™s member event.Â He spoke on economics, making a difference and a bit on politics. All favourite subjects of mine! Mark Vosylius, host of Your Money & Real EstateÂ was also on hand to give a talk about alternative real estate investments with many tips on how to conduct your due diligence, a very important topic considering how many people I know are running into issues with their investments. This is the reason why there are only 2-3 alternative investment vendors that we recommend to friends and family.
Saturday was the Rock Star – Your Life Your Terms member event featuring keynote speaker Philip Mckernan who gave a moving talk about how each of us have a gift and many donâ€™t know it yet. He shared his favourite quote which Iâ€™ll share here: â€œThe meaning of life is to find your gift. The purpose of life is to give it away.â€ ~ Pablo Picasso
Host and co-owner of Rock Star, Tom Karadza, gave an update on world economics with business advice on how to capitalize on this crazy economic world we live in. These are historic times and thus requiring historic actionÂ if you want to come out ahead.
I will be compiling my notes to share at our October 22nd Mr Hamilton Inner Circle event. If you are a serious action taker or have friends and family interested, please let them know because we already have 53 RSVPâ€™d but only seats for 54.Â We will start a waitlist shortly.
Speaking of Picasso and giving away, Iâ€™m donating $1,000 towards this Thanksgivingâ€™s Hamilton Basket Brigade and my wife Cherry has raised $2,000 by donating her time and expertise to give an class on Accounting and Incorporation. To be honest, Iâ€™m not looking to impress you but rather impress upon you that you all have a gift. Especially our successful clients and friends who have made hundreds of thousands in their businesses or whileÂ investing in Hamilton real estate, andÂ just so happen to make up a significant portion of our donors. Iâ€™d like nothing more than for you all to be successful at investing in Hamilton real estate so you may support the church or charity of your choice, because you can be the change or you can wait for the government to enact change.
FYI for our charity, The Hamilton Basket Brigade, 100% of the donations goes directly to the families. All overhead is donated: the delivery truck, scissors, tape, gas, mileage, labour etc,.. Hereâ€™s our website: www.hamiltonbasketbrigade.com
The Latest Mortgage Rule Changes and How It Affects Hamilton Real Estate Investments
I had plans to write about student rentals thanks to the questions pouring in from a recent radio interview I did for 102.7FM. You can listen to it here: http://lifestylehousing.ca/ep-053-student-rentals-with-erwin-szeto-mr-hamilton/
However our Finance Minister made some important announcements that indirectly affect us Hamilton Real Estate investors so I figured Iâ€™d share my thoughts on the subject.
Link to article: http://www.cbc.ca/news/business/ottawa-housing-tax-real-estate-1.3788725
“Overall, I believe the housing market is sound, but as minister of finance, I want to make sure we are proactive in assessing and addressing the factors that could lead to excess risk,”Â Finance Minister BillÂ MorneauÂ said
Starting now,Â “an individual who was not a resident in Canada in the year the individual acquired a residence will not be able to claim the exemption for that year,”
Fair enough since everyone needs to payÂ their fair share of tax to fund our public health and education systems.
â€œall insured mortgages must undergo a “stress test” that ensures aÂ borrower’s ability to make their mortgage payments at a higher interest rateâ€¦. if actual rates were as high as the big bank’sÂ five-year posted mortgage rates, whichÂ the Bank of Canada says currently average 4.64 per cent.Â â€œ
If your down-payments are the standard 20% for investment properties, the above changes have NO AFFECT on you. However, this will have a significant impact on anyone with less than 20% and will reduce the number of buyers out there in all markets including Hamilton and St. Catharines.
Here is an example from the article:
â€œAccording to interest rate-comparing website RateHub, a hypothetical borrower with $100,000 in annual income and $40,000 to put down on a house today could qualify for a house worthÂ $665,435 with a mortgage at 2.17 per cent,Â which three lenders are currently offering, according to the site.
But under the new rules, that same buyer couldÂ only qualify to buy a homeÂ forÂ $505,762, orÂ 24 per cent less than before the rules kick in.â€
The borrower still gets the lower rate offered by the lender but can only borrow much less.
In my humble opinion, I like these rule changes and they areÂ overdue as the market’s increasing prices have been unsustainable for some time. Â TheseÂ Changes will limit chances for a correction in the market and create balance in the market between buyers and sellers.Â Balance is healthy and good for us investors as it allows us less risk when buying (conditional offers, improved pricing), and less competition for houses (this week we lost when competing as one of seven offers).
Well done, government! If not a little slow to enact change. 😉
Historically, I have witnessed buying frenzies in the market following major announcements to mortgage rules.Â This one goes live Oct 17th which is a very short turnaround compared to previous changes but I still imagine a short frenzy for the next two weeks and thatâ€™s good news for our investor clients who have properties listed for sale.
Thanks for reading and happy Hamilton real estate investing everyone!
Erwin Szeto |Â MrHamilton.ca
Sales Representative, Owner of Hamilton Real Estate Investment Property
Rock Star Real Estate Inc., Brokerage
PS:Â If you are just starting out investing, start byÂ spending more time with like minded people and take guided tour of Hamilton by joining us for the next Mr. Hamilton Inner Circle by clicking here!!!
PPS:Â If you can not make it in person, join us for our monthly FREE Webinar where we discuss topics and issues related to Hamilton and surrounding area