Investment

Eric Skicki

New Tax Coming on AirBnB Condos in Mississauga

Written by Eric Skicki Thursday, April 12th, 2018
  • tax

    Over 3 years ago, we covered in a blog, what was then the current state of short term rentals in Mississauga. The article did spark some interesting debate on whether short term rentals should or should not be allowed. We even had some major news outlets reach out to us to get more information.

    Since then, the condo short term rental market has grown significantly. To put into perspective, the leader in this space, website AirBnB, has currently 122 listings for short term apartment rentals in the Square One area, which is a lot considering that a lot of buildings have a no short term rental policy and have started to shut them down.  At the same time, there are only 87 listings on REALTOR.ca which are available for lease for a one year term.

    Why is this a growing concern for many?

     

    There are 3 main reasons.

    Given that there are more and more apartments rented on short term, it is really starting to affect the supply of apartments for those who wish to stay on a long term basis. This in turn drives prices up to a point where many can no longer afford to pay rent. Right now the average 2 bedroom unit in Square One is around $2000/month.

    Secondly, people who would typically stay in hotels are now treating these condos as viable alternatives. This is hurting the hotel industry, which have to pay hefty taxes to rent out their space.

    Lastly, the residents who live in these buildings argue that they do not want their buildings being treated as hotels by those who rent out units on a weekend basis. It not only creates an unpleasant environment but also puts strain on all the amenities, elevators etc. Owners of units claim that the value of their own units suffer through short term rentals through both wear and tear on amenities, elevators, hallways as well as the image that it gives off.

     

    The Proposed Solution – A New Tax.

    Starting July 1st 2018 the City of Mississauga will impose a mandatory 4% tax on all short term rentals.

    The money raised from this (which is estimated at almost $10 million a year) will be reinvested in building incentives, to strengthen tourism and to showcase many celebrated attractions – Mayor Crombie announced.

    Under this new law, anyone renting for a period that is less than 28 days, will be charged the new tax. It is also important to note that this will affect homeowners who rent out their primary residence including secondary suites and basement apartments.

    The fine details of this proposal are yet to be finalized and will be released soon.

    Toronto and Vancouver have already put similar tax measures into place and Mississauga being one of the ever fast growing cities will only naturally follow suit.

    We encourage all short term condo hosts to speak to their accountants to understand the tax implications this may have on them.

    Some condo investors are not happy with the new announcements, citing that this will affect their net profits.  How do you feel about this tax? Share your opinion below.

     

     

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    • This entry was posted on Thursday, April 12th, 2018 and is filed under ALL Articles, Investment.

    Eric Skicki

    4 Reasons to buy a Pre-construction Condo in Mississauga

    Written by Eric Skicki Monday, June 1st, 2015
    • should-i-buy-a-condo

      Prices are still low – Mississauga pre-construction condos are often below $500 a square foot, which is much cheaper than other major cities. By default, pretty much all pre-construction condos sold today in Mississauga come with one locker and one parking spot. In places like Toronto, parking spots are often reserved for only 2 bedroom units and buyers have to pay upto $50,000 (or more!) to actually get a parking spot.

      With each new building coming up, prices set by the builder tend to increase slightly. Buying early at the VIP stage ensures that you get the first pick of a unit at the lowest possible price.

      The downtown core is still growing – The number of condos in towntown Mississauga has almost doubled in the last 12 years.  Over the next decade we can see as much as fifteen additional condos within the Square One area getting constructed. With the expanding downtown Mississauga core we not only see more condos, but also more roads, transportation and places to entertain. The recent opening of the Bier Markt has created a lot of buzz online.

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      • This entry was posted on Monday, June 1st, 2015 and is filed under ALL Articles, Investment.

      Eric Skicki

      Should I Buy a 1 Bedroom or 2 Bedroom Condo as an Investment?

      Written by Eric Skicki Sunday, October 26th, 2014
      • 1-bedroom-vs-2-bedroom

        Perhaps, the number one question asked by any investor looking to purchase a condo in Misisssauga for investment is whether they should buy a one bedroom or a two bedroom condo. Although both have their advantages and disadvantages it’s important that the buyer is aware of all the pros and the cons that come with each choice. In this blog post, we will examine how a one bedroom vs. a two bedroom apartment purchase, affects the bottom line of any investor.

        Appreciation

        Capital appreciation is the price appreciation each condo owner gets simply by owning a condo over a period of time.  With real estate prices in Mississauga universally going up by a 2-5% year over year, the idea of leveraging a small downpayment, against a large purchase price is attractive to investors. To put into perspective; if a one bedroom condo which sells for $275,000 goes up in price by 10% over a four year period, the owner made $27,000 in appreciation. On the other hand, if a two bedroom unit which sells for $350,000 goes up by 10% in the same four years, the unit has appreciated by $35,000.

        Two bedrooms appear to be the better choice over one bedrooms, when looking at the appreciation rate.

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        • This entry was posted on Sunday, October 26th, 2014 and is filed under ALL Articles, Investment.

        Eric Skicki

        Parents Helping Their Kids Buy Condos

        Written by Eric Skicki Friday, September 5th, 2014
        • HelpingKidsBuyCondos

          Will parent-investors become the new type of condo investors?

          Over the past year we have seen more and more parents buying condos for their kids to enjoy in the future. The most common purchase is a pre-construction one bedroom/ one bedroom plus den condo, which typically goes for about $270,000-290,000 depending on the size, floor and layout.

          What makes the parent investor different from your traditional condo investor, is that they are in it for the long term. Typically this means anywhere from 5-10 years.

          When the parents initially purchase these pre-construction condos, the kids are sometimes as young as 14-16 years. Once the pre-construction condos are ready, parents hope to rent them out for a few years, and have their kids move in once they have finished school and land a good job.

          If the parents, for whatever reason, decide that the kids should not move in, then they can continue to rent out the condo (so that it pays itself off), or sell it for an anticipated profit. Parents see this as a “win-win” situation.

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          • This entry was posted on Friday, September 5th, 2014 and is filed under ALL Articles, Investment.

          Eric Skicki

          Landlords Satisfied With Mississauga Rental Condo Market

          Written by Eric Skicki Friday, August 23rd, 2013
          • condo-for-lease

            “My Square One Condo” has an entire rental team dedicated exclusively to working with rentals in the Square One area.  We continuously aid tenants looking to secure properties, as well as landlords looking to lease out their properties. Over the last few months I started monitoring rental properties closely and how they ended up getting leased out. I decided to publish a short blog based on these observations.

            5 cool facts about Square One condo rentals

            – The most common request from a tenant is for us to find them a “clean unit with an open concept layout”

            -Young people tend to go for newer stylish condos such as The Onyx or One Park Tower , while families prefer older spacious condos such as The Phoenix

            – About 75% of potential tenants ask if the hydro is included

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            • This entry was posted on Friday, August 23rd, 2013 and is filed under ALL Articles, Investment.

            Eric Skicki

            Is There A Market For Studio Condos In The City Centre Area?

            Written by Eric Skicki Friday, July 19th, 2013
            • NO DEADLINE DATE SUBMITTEDThis is something that I have wondered for a very long time, but not until recently have I decided to dig a little deeper, in order to find out. By my definition, a “bachelor pad” or “studio” is any condo which is less than 499 square feet and which does not have a dedicated bedroom. Interestingly enough, in Toronto there are many condos which are less than 499 square feet that have a separate bedroom, making them not count under my definition. However, here in Mississauga, we are still fortunate enough to have condos relatively decent in size as compared to other cities such as Tokyo and New York.

               

              The Data

              – Currently Daniel’s is the only builder in the Mississauga area, who has recently built studio condos, and there are no pre-construction studio condos planned for the near future

              – Around Square One, studios can only be found in 2 condos: Limelight and Chicago

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              • This entry was posted on Friday, July 19th, 2013 and is filed under ALL Articles, Investment.

              Eric Skicki

              Losing $23,000 On A Pre-Construction Condo

              Written by Eric Skicki Sunday, August 26th, 2012
              • pre-construction condo money lost

                Over the past eight years or so, many pre-constriction condos in Mississauga served as great investment tools for investors. As previously mentioned on this blog, I personally know clients who made $30k, $40k or even $50,000 on a single condo investment venture. Many of these clients have bought and sold several condos and each time they have managed to come out with substantial profits.

                However, this is not to say that all condo projects are great investments. To illustrate this, I decided to use a real life case study to show how one person managed to come out financially negative when trying to sell their condo investment. For privacy reasons, the person’s name and the builder’s name are not disclosed in this post. I hope this case study will help some first-time home buyers and first time condo investors overcome some of the biggest mistakes made by amateurs.

                The Case Study

                Last week I met with a client who was interested in selling her pre-construction condo which she took possession of less than a year ago. Her initial plan was to buy a pre-construction condo, live in it for a year, sell it and then move out east to a smaller town in Ontario. Her search for a condo started in late 2010, when she began looking for a condo by herself, without the assistance of a Realtor. The clients’ requirements were as follows:

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                • This entry was posted on Sunday, August 26th, 2012 and is filed under ALL Articles, Investment.

                Eric Skicki

                An Investor’s Guide To Flipping A Condo In Mississauga

                Written by Eric Skicki Monday, July 23rd, 2012
                • mississauga condos fixer uper

                  The terms “flipping a property” or “flipping a condo” refer to buying real estate at a lower price, with no intention of actually living in the place. The main objective of flipping is to generate profit.

                  There are two ways one can flip a condo in Mississauga. The more popular way is to buy a pre-construction condo that will generate profit in the future. But rehab properties, fixing them up and then reselling them is another way this can be achieved. In this blog post I want to cover these two methods and provide an insight to anyone who might be interested in condo flipping.

                  Flipping A Pre-construction Condo

                  As mentioned above, most investors (I would estimate over 90%) who want to get into real estate turn to pre-construction condominiums. Over the years pre-construction condos have come to be known as “easy investments”, which generate great profit. For further information on pre-construction condos read this article.

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                  • This entry was posted on Monday, July 23rd, 2012 and is filed under ALL Articles, Investment.

                  Eric Skicki

                  Toronto Condos VS Mississauga Condos

                  Written by Eric Skicki Tuesday, May 29th, 2012
                  • Mississauga condos vs Toronto Condos

                    With the U.S. experiencing a major economic downfall and the stability in Europe not looking any better, many investors are pulling their money out of stocks and bonds, and investing it into the Canadian real estate market. While the media; such as the Toronto Star, Toronto Sun and The National Post have been forecasting the Canadian real estate market crash since 2005, recent condo sales data indicate otherwise. The latest report, published by the Toronto Real Estate Board, indicated that the average selling price of a GTA (Greater Toronto Area – which includes cities such a Mississauga and North York) condominium apartment in the first quarter of 2012 was $334,495. This was a healthy 3.7 per cent increase from the first quarter of 2011.

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                    • This entry was posted on Tuesday, May 29th, 2012 and is filed under ALL Articles, Investment.

                    Eric Skicki

                    Is Mississauga Expanding Too Fast For Its Own Good?

                    Written by Eric Skicki Sunday, May 6th, 2012
                    • Mississauga future real estate

                      Mississauga is recognized as Canada’s 6th biggest and fastest growing major city. A key contributor to this exponential growth, are the downtown core condominiums. However, with so many condos being constructed around Square One, valid questions are being raised. Can the infrastructure in downtown Mississauga support this new population? Is there going to be an oversupply of condos? How will the real estate market respond to such changes?

                      All these questions spark interesting debates and everyone seems to have an opinion. If you were to ask five different realtors what they think about the future of Mississauga’s condo market, I guarantee everyone would have a different response.

                      I think the future of downtown Mississauga depends on 5 key factors:

                       

                      1. Public Transportation – A lot of residents who live in downtown Mississauga need to commute to work by public transit. Mississauga has already taken measures to improve its own transit system by introducing the MiWay, as well as adapting a new system, known as the LRT system, which envisions connecting Toronto, Mississauga and Brampton. The success and integration of these two transportation systems will be a key contributor to how the downtown real estate market will respond.

                       

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                      • This entry was posted on Sunday, May 6th, 2012 and is filed under ALL Articles, Investment.