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Durham - General For residents of and soon-to-be residents of Ajax, Oshawa, Pickering, Uxbridge, and Scugog


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  #1  
Old 2014-06-15, 07:51 PM
Ajaxnewby Ajaxnewby is offline
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Smile Investment Purchase in Durham Region

Hello,

From reading many threads, I have noticed that many people have purchased a home with long closing date for investment purposes.

I am requesting readers to recommend builders/projects that would be ideal for investment with long closing date and low down payment and ofcourse ideal area where prices are sure to increase.

(no condos please)

Thank you to all that reply! :-)
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  #2  
Old 2014-06-17, 10:43 AM
walter8299 walter8299 is offline
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99% of the time you cannot assign a purchase agreement on a freehold home. So you're forced to close the home, pay HST, pay all legal fees, then when you sell, you pay capital gain tax, legal fees again.

So you don't really bank on the appreciation of the 1-1.5 or 2 years really. Holding it for 5 years would be ideal, as you can claim a portion of HST back if you lease it out for a minimal 1 year period. The theory of average will make sure you gain enough to offset any high cost from short term flipping.

I noticed most houses in Durham region has been increasing gradually at a good rate, but it is still not strong enough that you're talking about a 100-150k compare to some division in Markham or Aurora.

A 50k increase in Durham is very good number on a 400k-450k home. But when you pay HST, Tax, etc etc. Your gain could be less than 10k possibly without getting into all the dirty maths.

Unless the builder is willing to allow you to "assign", then its a different story. And even if they allow, it comes at a cost, nothing is free to builder.
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Old 2014-06-17, 02:47 PM
Ajaxnewby Ajaxnewby is offline
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Thank you Walter! I must agree with you and your assessment of invesment difference between condos and homes.

In your opinion what is the best project in Druham right both price vise and investment growth vise

Thanks again!
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Old 2014-06-17, 03:10 PM
walter8299 walter8299 is offline
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Out of Pickering/Ajax/Whitby/Oshawa, I would bank on Oshawa to have the most potential because with all the new projects (residential, commercial, highway, school, etc.) that are either in-progress or soon-to-have shows Oshawa is definitely heading in the right direction in terms of future growth. When the city is well-prepared for the next population boom, you know its going to hit big when the day comes.

The only downside today is the property tax to be relatively high, but that's quite normal IMO for an expanding area. Once there's enough population (aka homes) to share the expenditures, I believe taxes should come down.

Also the builders in Oshawa right now all seem to be quite decent.

Just make sure you invest in a detached home, the widest lot you can get with your budget. Land will only become scarce, and so your land value becomes the key part of the growth.
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  #5  
Old 2014-06-17, 03:12 PM
walter8299 walter8299 is offline
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btw, I personally liked the charing cross project by lancaster.
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  #6  
Old 2014-06-17, 03:38 PM
Ajaxnewby Ajaxnewby is offline
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Thank you much appreciate it you words of advise.

Actually I was planning to go visit the builders in the area of Simcoe and Winchester.

I heard that Sundial homes in Ajax prices had gone up drastically as well.

I am thinking for 36"ft + lot detach home with late 2016 closing.

Do you know anyone in Oshawa offering assignment

Thanks again.
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  #7  
Old 2014-06-17, 11:11 PM
Buyer Buyer is offline
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HI

We have purchased our first home at Oshawa. We felt that was the only area is GTA where we could find a decent size house for worth the price. For sure the Property tax is very high.

We also had considered the Sundial homes, in fact I loved the Trent model. However, my husband did not like the area when we drove by.

After all the research in the entire GTA, we finally signed the agreement with Kingmeadows. Our closing is Aug 2016.

Hope this helps.

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  #8  
Old 2014-06-18, 03:53 PM
walter8299 walter8299 is offline
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Buyer: Ajax would be closer to Toronto, but not that much closer. I think Oshawa would become nicer and the infrastructure would be better prepped in the long run. Congrats!

Ajaxnewby: Honestly, I haven't heard of one builder on freehold homes offering free assignment or even mentioning the availability of an assignment. I guess one legit reason to them is, they don't want your completed home a few years later be a competition to the remaining or new lots they are selling in later phases (assuming they have future phases... since builders like to built in phases so they do not flood the area with hundreds of houses at once). Now someone would think, just your "1" house would not hurt, but when you have a bunch of investors doing the same thing, then it would hurt. That's why builder do not mention "assignment" rights at all, unless you specifically "offer" them money through your lawyer, let say $10000 or $15000. Then maybe yes.

My best suggestion for you would be to ask them when you're at the sales office, most likely the offer you put into the builder, ask them to add an assignment right condition to the offer. They might come back rejecting it or ask you to add a value to it, or maybe accepting it "who knows".

Condo is different story, they give out assignment rights to motivate investors to buy from them since they are selling a few hundred units on a single plot of land, and even if they come in "phases", the phases would've been all rolled out before completion. Their assignment right could include a clause saying condo building must xx% sold, roof is on, 90-days before interim occupancy, etc. to avoid investor competition with builder to clear out their inventories.

I think if you really want the builder to allow you an assignment right, most likely they want one or more of the following:
(1) good amount of money
(2) you cannot assign, unless the entire phase (or all phase) has been sold out, or you can add a certain % that is to be sold
(3) you cannot assign at a price lower than what builder is selling at the time of assignment

Those are really all advantages to the builder, really doesn't help you, but I don't see any builder would be generous like that.

Do keep in mind, there are actually some new subdivisions now where builders will have a condition that you must close your sale, no assignment at all. In another thread, I read this post that someone heard some builders would make you even live in the home for x-number of years before you're allowed to sell. Getting crazy! The point is, if you don't buy, someone will, so builders don't need investors to buy their homes. There are enough end-user to eat up their inventories.
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  #9  
Old 2014-06-19, 09:02 AM
Ajaxnewby Ajaxnewby is offline
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Hi Walter,

Thank you for your detailed advise. I 100% agree with you. My concern is not as much as Assignment clause. We are ofcourse willing to close and may be even keep the home for a year or two.

I am just having a hard time determing the builder and the area in durham. I am from west end and I dont know much about this region.

Also, trying to determing which builder is giving the best bang for the buck.

Thanks again!.
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  #10  
Old 2014-06-19, 05:11 PM
walter8299 walter8299 is offline
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Another advice is, best bang for buck is important, but the actual piece of land the builder is building on is critical too.

I recall Lancaster has the better land. Their lots are nicer too. But from my last email update, I think they only have a few lots left, so you won't have many options remaining. You might bargain for some extra upgrade dollars and/or lower the purchase price slightly. The worse that can come back is a no.
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