After a weekend of gender innuendo, gay-baiting, misogyny, femininazism and machismo, let’s get this pathetic blog back on track. Or maybe it was. Hard to tell anymore when, like me, you’re sexually cultured and used to Amazonian sponge baths. One thing’s for sure. There will be more pictures of babes on skates. For a while.
While we all measuring hormone levels and gland size, some interesting queries found their way to the 24-hour GreaterFool help desk. From high above Toronto’s west end, here’s Mark:
If you don’t mind, would like to get your opinion and insight on Toronto’s condo market. I purchased a nice PH unit at Lakeshore and Parklawn – about 1262sq feet 2 bedrooms, 2 bathrooms, balconies, parking spot, etc for about 486k in August of 2009. It has some exposure to the Lake, but also faces the Gardiner. The unit has received good reviews, but the Gardiner exposure has been the turned off some buyers. I originally had the price in the high 500’s, but have brought it down to 535k with still no solid offers. I have a decent realtor, but I’m debating whether I should considering renting or focusing on selling? That area has more and more condo development on the lake, but with the Gardiner exposure and maintenance fees close to $800.00, I’m leaning towards getting out. It’s a beautiful condo, great layout, well-done, but no serious offers for quite some time. Would like to hear your advice on what to do. I do live in the condo, but don’t necessarily need all that space and with that type of overhead.
Mark, I too am disgusted. Why doesn’t everyone understand what a deal it is to pay just half a million dollars for a used condo facing the spewing, fumy Gardiner Expressway, and shell out only $800 a month (plus taxes) in fees? What the hell do they want for $500,000? Actual, like, land?
The choice is obvious. Bail. There are almost 40,000 new condos in the GTA pipeline with 23,000 coming to market this year. If you can get out of that thing now for five hundred (after commission), consider yourself a lucky man. Of course, it also means that factoring in closing costs back in 2009, you made absolutely no money on this investment, while shelling out more than a grand a month. But you did have a lovely view and likely shortened your life.
My son sent me the link to your Greater Fool website in August 2011 and since then I have been following and enjoying your blogs. My husband and I are both Chinese (with no HAM), in our late 50s, living in Edmonton, Alberta since we immigrated to Canada 31 years ago. Our wealth, little there is, came from lifelong saving and from always living under our means.
I have been working for the Provincial Government for 28 years and when I retire, I will be entitled to a small pension of approx. $2,300/month. My husband has been self-employed for the past 18 years, running a repair business out of the main floor of a 2-story commercial building that we own. We live on the 2nd floor apartment of the same building. My husband does not have a work pension and when he turns 65, will have a very small CPP income.
For more than 5 years, the advisor at the bank handled our investments. However, we closed our accounts in June 2011 because he failed to produce results and safe-guard our hard earned money. We’re very disappointed and can’t decide what to do next. Currently all the funds are sitting in the banks in low interest GICs and saving accounts. Yikes! But the recent stock market volatility really scares us.
Below is a summary of what we own:
$440K – Commercial building (appraised in August 2011), mortgage free
$260K – Condo in BC for retirement (included closing costs in 2009), mortgage free
$190K – RRSP ; $40K – TFSA; $230K – Cash in bank
Since January 2012, the commercial building has been listed on MLS for sale but has no offer yet. My husband and I would really appreciate your opinion on our financial status and whether we could afford to retire soon. Also, we would really appreciate your advice on how to strategically invest the little we have to improve our retirement income. Thanks! Fay
At least you have a pension. And a genius son. Right now 60% of your $1.16 million net worth is in real estate, and the other 40% seems to be earning you nothing. This is not a good retirement strategy, especially since the commercial building has turned illiquid. So, Fay, gotta fix that – and don’t let your experience with the bank guy paralyze you.
If your building hasn’t sold or attracted any nibbles in four months, then it’s the wrong price. Change that. You’ll not like what happens to the real estate market later in 2012. The sooner you are able to convert the $400,000 there from lazy equity into hard-working assets, the better. With almost $1 million invested in a conservative income-producing portfolio (you should expect 6% or close to it from a 60/40 fixed income/growth account), you’ll see a family income of more than $90,000 – and still have a million liquid.
But get out of those damn GICs. Find a smart fee-based advisor. Stop being scared. You’re richer than you think. (Did I just say that?)
Hi Garth, Jimmy here. I’ve been reading your blog for a long while and tend to agree with your analysis. My fiancé and I have decided to sell our Toronto condo and rent until the market feels safer to buy in. We have quite a bit of equity right now – based on similar units sold this week in our building and our current mortgage, I believe we will come out with $195k in our pockets after selling costs.
We’re not clear what to do with the $195k. We’d like to see it grow while we rent for the next 18-24 months, after which time we’re hoping the market is in a better place for home ownership. We would use this money as a down payment on a house at that time. So the money will need to be accessible. Any suggestions what we might invest in?
Selling the condo to harvest a capital gain is smart. Planning to buy again in 18 months isn’t. Thinking you can invest in assets which are totally safe, completely liquid and will augment for sure over the next year and a half is naive. Would you like a pony with that?
If I’m remotely right about the housing market in the messed-up GTA, the upward momentum of prices will continue until the number of listings starts to swell, and the first round of rate increases hits. Then we’ll be into a quick correction, followed by a lengthy flat or declining market. This is classic sucker territory – when a 10% or 15% plop looks like a buying opportunity, only to turn into a miserable decision as prices continue to erase.
Plan to stay out of this thing for at least three years. Even then there’s a good chance houses will still be fading, thanks to the Boomers, mortgage hikes and debt fatigue. As for investing, be serious about it or forget it. You and the squeeze won’t secure your future with real estate. Those days are done. If you’ve got two hundred large to use, then do it right. Ten years from now it could be doubled, and ten after that about $800,000.
Houses are easy to come by. You don’t need money anymore to get one. Cash is rare. Don’t blow it. She will never, ever forgive. Man, you know how women are…