Real Estate

Is this not cheap rent?

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  • Mar 23rd, 2017 11:44 am
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[OP]
Member
Jan 31, 2016
311 posts
69 upvotes
Toronto, ON

Is this not cheap rent?

Just came across this ad. You can rent a brand new 50 ft lot 2500 sq ft + home for $1800 in Clarington ?? I was paying 1200 for a 3bd top floor of a bungalow 15 years ago not far form there.
This person has 3 for rent in the same block it appears. I ask as we are considering an investment property in the area.

http://www.kijiji.ca/v-house-rental/osh ... nFlag=true
15 replies
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May 6, 2015
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Ketchenany wrote:
Mar 17th, 2017 1:48 pm
Just came across this ad. You can rent a brand new 50 ft lot 2500 sq ft + home for $1800 in Clarington ?? I was paying 1200 for a 3bd top floor of a bungalow 15 years ago not far form there.
This person has 3 for rent in the same block it appears. I ask as we are considering an investment property in the area.

http://www.kijiji.ca/v-house-rental/osh ... nFlag=true
I think this is standard considering the area. Even in oshawa a full house goes for that much. I'm sure if you raised it past like 2500 you'd have less interested parties. I think anything less than 2k seem affordable. Not sure what the market even is for people wanting to rent bigger properties so far from the city unless they work within the vicinity.
[OP]
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Jan 31, 2016
311 posts
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Toronto, ON
Thank you. Large number of rentals in this area were usually leased by employees from OPG here on contract. Not so the case now. Large number of investors bought in the area. You can find listings for properties they just bought available for occypancy on the closing date.
Went to an open house this weekend for a very small old bungalow. It was jammed with people.
We will look further east.
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Jul 14, 2002
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Ketchenany wrote:
Mar 20th, 2017 7:51 am
Thank you. Large number of rentals in this area were usually leased by employees from OPG here on contract. Not so the case now. Large number of investors bought in the area. You can find listings for properties they just bought available for occypancy on the closing date.
Went to an open house this weekend for a very small old bungalow. It was jammed with people.
We will look further east.
looks like everyone wants to be a landlord and existing landlords will continue acquiring more properties as long as credit is available.
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Ketchenany wrote:
Mar 20th, 2017 7:51 am
Thank you. Large number of rentals in this area were usually leased by employees from OPG here on contract. Not so the case now. Large number of investors bought in the area. You can find listings for properties they just bought available for occypancy on the closing date.
Went to an open house this weekend for a very small old bungalow. It was jammed with people.
We will look further east.
Just wondering about the profile of the investor out east. I too considered it after realizing Toronto was too expensive (that's after several years of considering and then never pulling the trigger since I have a matrimonial home but no mortgage tied to me). The fact that I considered an area that I never even looked at before says to me there must be tons of other people like that. I wrote in another post previously that there's definitely a sort of 'bubble' with investors in Oshawa and east just be looking at the listings on Kijiji (10 pages worth!). My friend's co-workers have bought some pre-built towns/semis in bowmanville to either flip or rent out once it's built.

Alot of people moving ahead to lock in their position due to the GO expansion. Even some older lady calling in to the radio last week, who had bought a house last year, realizing her house went up 130K, decided that you can take the 'equity' from the house and use it for an investment property in Oshawa. Said there were 14 bidders which she obviously didn't win. Said it was crazy there. Sure people are actually moving there due to limited options, but the size of 'investors' or 'speculators' is very noticeable in Oshawa and beyond.

I seriously am wondering who are all these renters? What spurred others to act now? Is this a plan they always had, or more recent to take advantage of their own house blowing past the $1 mil mark.
[OP]
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Jan 31, 2016
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Toronto, ON
at1212b wrote:
Mar 20th, 2017 10:40 am
I seriously am wondering who are all these renters? What spurred others to act now? Is this a plan they always had, or more recent to take advantage of their own house blowing past the $1 mil mark.
People are starting to realize the commute to TO from out east (Bowmanville/Newcastle) is comparable to Aurora/Newmarket etc. In fact it takes me the same time to commute to Downtown TO from Clarington as a colleague from Markham.
A couple just moved into a rental across the street from us, 2800 sq ft brand new build. He is a TTC employee and works at Wilson Rd, she works for the TDSB (they came from Markham). Another neighbour is a U of T prof and his wife works at Scarborough General (came from TO). Across the street from them is a lady who rents a new 2500 sq ft home and works in Richmond Hill. There are also 3 larger 2800+ sq ft homes empty on the street. I assume for rent.
Just a snap shot... that being said there are a lot of people who also work at OPG in the neighbourhood. As well as other first responders, mostly from TO.
If it wasn't for OPG, it would be > 90% bedroom community.
[OP]
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Jan 31, 2016
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Toronto, ON
dantey wrote:
Mar 20th, 2017 9:54 am
looks like everyone wants to be a landlord and existing landlords will continue acquiring more properties as long as credit is available.
Had a guys pokers night on Saturday and RE was the big topic. The guys house we were at in Whitby is worth 1.1 mil now. Insane! Even he said he should borrow some equity and get a rental out east and that was echoed by 2 or 3 other guys at the table. I think that is a common thought in most peoples mind who's properties have boomed in GTA.
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Jul 14, 2002
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at1212b wrote:
Mar 20th, 2017 10:40 am
Just wondering about the profile of the investor out east. I too considered it after realizing Toronto was too expensive (that's after several years of considering and then never pulling the trigger since I have a matrimonial home but no mortgage tied to me). The fact that I considered an area that I never even looked at before says to me there must be tons of other people like that. I wrote in another post previously that there's definitely a sort of 'bubble' with investors in Oshawa and east just be looking at the listings on Kijiji (10 pages worth!). My friend's co-workers have bought some pre-built towns/semis in bowmanville to either flip or rent out once it's built.

Alot of people moving ahead to lock in their position due to the GO expansion. Even some older lady calling in to the radio last week, who had bought a house last year, realizing her house went up 130K, decided that you can take the 'equity' from the house and use it for an investment property in Oshawa. Said there were 14 bidders which she obviously didn't win. Said it was crazy there. Sure people are actually moving there due to limited options, but the size of 'investors' or 'speculators' is very noticeable in Oshawa and beyond.

I seriously am wondering who are all these renters? What spurred others to act now? Is this a plan they always had, or more recent to take advantage of their own house blowing past the $1 mil mark.
Quite possibly coming from the people that have sold downtown and moving further out?
Other factors are immigration, new would be buyers that are priced out of the market.

What radio station was that? I know of other people leveraging RE in that manner, which is really building up a house of cards.
Those will be the first to collapse when the market goes south.

In my opinion, that should answer the question of supply vs demand. Yes, supply is not keeping up. But it is because of the huge investor demand increase in the past two years.
Houses don't get approved and built overnight, whereas you could have a horde of people that decide that being a landlord is the best way of investing with cheap credit.
I don't have statistics on home investors in the past two years, but I think Toronto being the world class city, is just smoke and mirrors.

I am watching China as the trigger. A lot of cheap credit over there, has made it's way worldwide and influenced local cheap credit to boost up their local markets.
How their government handles their next RE downturn will have implications on the RE market worldwide.
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Ketchenany wrote:
Mar 20th, 2017 11:13 am
People are starting to realize the commute to TO from out east (Bowmanville/Newcastle) is comparable to Aurora/Newmarket etc. In fact it takes me the same time to commute to Downtown TO from Clarington as a colleague from Markham.
A couple just moved into a rental across the street from us, 2800 sq ft brand new build. He is a TTC employee and works at Wilson Rd, she works for the TDSB (they came from Markham). Another neighbour is a U of T prof and his wife works at Scarborough General (came from TO). Across the street from them is a lady who rents a new 2500 sq ft home and works in Richmond Hill. There are also 3 larger 2800+ sq ft homes empty on the street. I assume for rent.
Just a snap shot... that being said there are a lot of people who also work at OPG in the neighbourhood. As well as other first responders, mostly from TO.
If it wasn't for OPG, it would be > 90% bedroom community.
Ahh, good to know. Makes sense. You get great value in a nice suburban neighbourhood. Not as crazy dense or busy as Markham. Especially if you want to raise a family in a rental or try to save up for your place while enjoying a good quality of life. I always thought those type of workers would have bought a place. But I guess as each newer generation of those workers start (non-core Toronto), it gets harder to buy a place out there and therefore, rent rates are great value to pass up.

I'm guessing the current explosion of investors are being emboldened by their own property values skyrocketing, increased confidence in the economy in general, and FOMO on utilizing ones' existing assets to further gains (why not right?). That's what helped drive me at least.

I'll be renting out a place in Ajax in the summer so thanks for the detailed tenant profiles. I have a friend who's friend just started a contract in the OPG and said they would post it in the internal board once I have my ad up. But it's good to know the type of renters out there from someone who sees it first hand.
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Dec 30, 1969
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Toronto, ON
Remember when donnie or watever that realtor name was said you can rent a home in Oshawa that costs 400k for 3k a month? I guess Oshawa is the magical place that defies all logic!
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dantey wrote:
Mar 20th, 2017 11:33 am
Quite possibly coming from the people that have sold downtown and moving further out?
Other factors are immigration, new would be buyers that are priced out of the market.

What radio station was that? I know of other people leveraging RE in that manner, which is really building up a house of cards.
Those will be the first to collapse when the market goes south.

In my opinion, that should answer the question of supply vs demand. Yes, supply is not keeping up. But it is because of the huge investor demand increase in the past two years.
Houses don't get approved and built overnight, whereas you could have a horde of people that decide that being a landlord is the best way of investing with cheap credit.
I don't have statistics on home investors in the past two years, but I think Toronto being the world class city, is just smoke and mirrors.

I am watching China as the trigger. A lot of cheap credit over there, has made it's way worldwide and influenced local cheap credit to boost up their local markets.
How their government handles their next RE downturn will have implications on the RE market worldwide.
It was the morning show Talk AM 640 (Matt Gurney and Supriya Dwivedi). The topic was real estate, which obviously was interested, heated. etc., The caller was a women who sounded like she was in her 40s. Maybe even 50s. Said they re-advanced their mortgage after being surprised at how much their house went up in value in just a year after they bought it. So they went looking to buy more property with the gains. Oshawa was the best option. But said it was nuts how many bidders there are on a given house. She sounded like a novice. Really made sense and also worried me as to "Ohh, that explains alot of it". It had that feel of "Ohh, my Nortel stock went up. I'm going to take out a margin loan against it and buy some Cisco stock!"

Me, I've been studying considering additional housing 'investment' for significant amount of years, in specific markets, tying it into social observations and trends. So I have a specific thesis. We also have risk management scenarios outlined and considered. Have had our house for about 10 years now so got it many paradigms ago. Family close by, also have a long-term tenant. Basically many 'outs'. Which is why we were comfortable into getting a certain type of market. It's along-term play so we feel we can withstand some volatility. But even me, found myself getting caught up in what everybody else is doing, so I can only imagine how bad it is for those less aware and prepared. Desperation to 'exploit' these gains from their own housing gains. I definitely agree there are significant risk factors, and the China credit bubble is a real real deal and threat that will happen at some point. All that is needed is a catalyst and it will be a stampede. I also posted and linked a bloomberg article graph at how how the gov't there pushes it's loans, has a direct impact the GTA housing market here.
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Dec 18, 2016
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Ketchenany wrote:
Mar 20th, 2017 11:13 am
People are starting to realize the commute to TO from out east (Bowmanville/Newcastle) is comparable to Aurora/Newmarket etc. In fact it takes me the same time to commute to Downtown TO from Clarington as a colleague from Markham.
Not really. What's happening is that people are being priced out.
Jr. Member
Feb 23, 2009
144 posts
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Oshawa
Ketchenany wrote:
Mar 17th, 2017 1:48 pm
Just came across this ad. You can rent a brand new 50 ft lot 2500 sq ft + home for $1800 in Clarington ?? I was paying 1200 for a 3bd top floor of a bungalow 15 years ago not far form there.
This person has 3 for rent in the same block it appears. I ask as we are considering an investment property in the area.

http://www.kijiji.ca/v-house-rental/osh ... nFlag=true
The houses are in Newcastle, so you are getting quite a bit farther east than Whitby or Oshawa. You will also have to drive for a while to get to the GO train. Of course as shown in the posted ad, you get more house for the same $1,800/mth.
What has happened in the last year is that house prices out to here have eclipsed the cash flow positive, 20% down rental investment model that I (and most people) would use.
You either have people renting out their owned-long term places (with more equity and smaller mortgages) at market rates (which are increasing) or the new landlords are simply putting more money down and over-paying for new and resale places to rent out.
There has been a marked increase in the "3+1", "4+1" type of places for sale that are easier to carry with multiple tenants.
This has also been happening in Hamilton over the last 2 years.
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Jul 14, 2002
613 posts
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at1212b wrote:
Mar 20th, 2017 12:36 pm
It was the morning show Talk AM 640 (Matt Gurney and Supriya Dwivedi). The topic was real estate, which obviously was interested, heated. etc., The caller was a women who sounded like she was in her 40s. Maybe even 50s. Said they re-advanced their mortgage after being surprised at how much their house went up in value in just a year after they bought it. So they went looking to buy more property with the gains. Oshawa was the best option. But said it was nuts how many bidders there are on a given house. She sounded like a novice. Really made sense and also worried me as to "Ohh, that explains alot of it". It had that feel of "Ohh, my Nortel stock went up. I'm going to take out a margin loan against it and buy some Cisco stock!"

Me, I've been studying considering additional housing 'investment' for significant amount of years, in specific markets, tying it into social observations and trends. So I have a specific thesis. We also have risk management scenarios outlined and considered. Have had our house for about 10 years now so got it many paradigms ago. Family close by, also have a long-term tenant. Basically many 'outs'. Which is why we were comfortable into getting a certain type of market. It's along-term play so we feel we can withstand some volatility. But even me, found myself getting caught up in what everybody else is doing, so I can only imagine how bad it is for those less aware and prepared. Desperation to 'exploit' these gains from their own housing gains. I definitely agree there are significant risk factors, and the China credit bubble is a real real deal and threat that will happen at some point. All that is needed is a catalyst and it will be a stampede. I also posted and linked a bloomberg article graph at how how the gov't there pushes it's loans, has a direct impact the GTA housing market here.
I personally am quite worried about the debt that canadians have taken on. We have borrowed to the tilt compensating with our precious time.
As for the renters, I just realized that another source could be local canadians from other economic slumping provinces, e.g. alberta, newfoundland, etc.
I have a friend that moved from alberta to the GTA, although he's not renting (couch surfing).
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dantey wrote:
Mar 23rd, 2017 10:45 am
I personally am quite worried about the debt that canadians have taken on. We have borrowed to the tilt compensating with our precious time.
As for the renters, I just realized that another source could be local canadians from other economic slumping provinces, e.g. alberta, newfoundland, etc.
I have a friend that moved from alberta to the GTA, although he's not renting (couch surfing).
Interesting point. In the city center, people with less money like to congregate there because it provides easier access to everything. Stores, transit. Might not get what you want, but there's alot of efficiency in plugging in the holes. Renters, owners will gladly do what it takes to get that extra $$ resulting in 'everybody' winning. In other words, a 'crash' might occur, but the city and GTA in general has alot of flexibility. Lower income and migrants (Canadians and non-Canadians) play a huge factor into it.
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