Potential Purchaser

[ekisielewski]

I purchased a Condo Townhouse in a complex where everyone else is also an investor. As a result, this turns out to be a "rental complex". It is a great investment because of a number of reasons including V & R fund, fully managed, Guaranteed low Condo fees for three years, # 1 town in Ontario, 5 mins from the 401 etc, etc. Avg price is 145K.
My concern is that " the rental complex" concept will keep buyers away when i decide to sell.
How valid is my concern?

Your opinion/advice is greatly appreciated.
Elisabet Kisielewski - Oakville - Ontario

 

[lestersingh]

QUOTE (ekisielewski @ Sep 4 2007, 09:33 PM) I purchased a Condo Townhouse in a complex where everyone else is also an investor. As a result, this turns out to be a "rental complex". It is a great investment becasue of a number of reasons including V & R fund, fully managed, Guaranteed low Condo fees for three years, # 1 town in Ontario, 5 mins from the 401 etc, etc. Avg price is 145K.
My concern is that " the rental complex" concept will keep buyers away when i decide to sell.
How valid is my concern?

Your opinion/advice is greatly appreciated.
Elisabet Kisielewski - Oakville - Ontario

Idid the same in calgary and yes home owners are reluctant to buy.In addition CMHC will not insure unless approx 60%owner accupy.

Lester Singh-Toronto

 

[ekisielewski]

QUOTE (3118138 @ Sep 5 2007, 11:20 AM) Idid the same in calgary and yes home owners are reluctant to buy.In addition CMHC will not insure unless approx 60%owner accupy.

Lester Singh-Toronto


Thanks Lester. I had no idea about the CMHC issue.
Elisabet

 

[Anonymous]

QUOTE (ekisielewski @ Sep 5 2007, 09:11 PM) Thanks Lester. I had no idea about the CMHC issue.
Elisabet

I wonder if you could begin to coordinate the group of owners and work to understand their exit strategy. Does it align with your`s? I know from personal experience that we work in condos where there is a lower investor group.

One other suggestion is to possibly become a board member and begin to change the bylaws to say that in 5 years (good timing) maybe only 50% of the units are allowed to be rented.

If the market value for condos in the area outpaces the market rent, one might have no other alternative than to sell to new owners and your problem is solved!!!!!!!

Good luck.

 

[RussellWestcott]

The first question I would ask is what is your holding period? If you are planning to hang on to the property for at least 3- 5years, that ratio of renters to owners will definitely change one unit at a time. In complexes that we have owned in that were upon purchase 100% rentals have over time (5 years) have turned into more home owners. If your hold period is a shorter term these odds of transitioning to more home owners will be lessened.

Plus you do have other options, right now you as an investor are looking to buy the property. When you get ready to sell, you may be able to sell to another investor and they continue renting out. As well, you may want to consider selling it to your tenant after you are finished with your holding period. Rent to Own for example (you become the bank),and there may be options of using RRSP second VTB mortgages (which you provide, and collect the interest), and your homeowner gets their own 80% LTV first mortgage, and you provide second mortgages. etc.. etc...

The above comment about CMHC is a very valid one, and one you will want to do more research into, however with 3 more insurance options moving into the Canadian market place, plus CMHC having to sharpen up their game and compete. I would not be surprised that this has changed or will change over the course of time. There are other choices if you sell to a home owner and they require insurance to finance, and this is only assuming that the purchaser will need high ratio mortgage insurance (greater than 80% LTV).

 

[smallfry]

QUOTE (ekisielewski @ Sep 4 2007, 06:33 PM) I purchased a Condo Townhouse in a complex where everyone else is also an investor. As a result, this turns out to be a "rental complex". It is a great investment because of a number of reasons including V & R fund, fully managed, Guaranteed low Condo fees for three years, # 1 town in Ontario, 5 mins from the 401 etc, etc. Avg price is 145K.
My concern is that " the rental complex" concept will keep buyers away when i decide to sell.
How valid is my concern?

Your opinion/advice is greatly appreciated.
Elisabet Kisielewski - Oakville - Ontario