A rendering of the proposed 8-storey mixed-use development at 1866 Rymal Rd. E. in Stoney Creek. The Hamilton Design Review Panel will assess the proposal at their meeting on Thursday, February 9.
This week witnessed good transaction levels in all subject markets.
The largest transaction occurred in Kitchener as ONE Properties sold a relatively new retail plaza for $18.75 million ($240/sq. ft). It’s great to see the retail asset class rebounding from its pandemic lull.
The largest Hamilton transaction occurred on the Mountain, where Winzen Group purchased 8.44 acres of land for $11.2 million ($1.3 million/acre). Although it’s currently zoned agricultural, the property looks primed for a residential infill project.
Lots of news: The DRP will discuss an 8-storey proposal, the proposed towers project by Stoney Creek Battlefield House Museum and Park is headed to the OLT, and CBRE released their Q4 2022 cap rate report.
There’s no doubt that real estate is a great investment. Over time, it has proved to be one of the most stable and reliable ways to grow your wealth. But is real estate immune to inflation? And if not, what can you do to protect yourself against rising costs?
In this article, we’ll explore the relationship between real estate and inflation, and give you some tips on how to stay ahead of the curve.
what is inflation?
Inflation is defined as a sustained increase in the prices of goods and services. It’s usually measured by the Consumer Price Index (CPI), which tracks the cost of a basket of everyday items. When inflation is high, your money doesn’t go as far as it used to. You might not notice it at first, but over time, the prices of things start to creep up.
why are we currently seeing inflation?
There are a number of reasons why inflation is on the rise. One of the main drivers is the global pandemic in 2020. The shortage of goods and materials and the increased demand for them have led to inflationary pressures.
Additionally, central banks around the world have been pumping money into the economy through quantitative easing (QE) programs. This is often referred to as “printing money,” and it can lead to inflationary pressures similar to what we’re seeing now.
how does inflation affect real estate?
Inflation affects real estate in two ways: home prices and mortgage rates.
When inflation is high, home prices tend to rise as well. This is because demand for housing is usually high when there is economic growth, and prices go up when there aren’t enough homes to meet that demand. Mortgage rates also tend to rise during periods of inflation, because lenders are looking to protect themselves from the potential for higher prices down the road.
Inflation can have a number of different effects on real estate. One of the most direct is on real estate prices. When inflation is high, prices for both commercial and residential real estate tend to increase. This is because as the cost of goods and services goes up, so does the cost of land and buildings.
In addition to prices, inflation can also affect real estate buying behavior. When inflation is low, buyers are more likely to purchase real estate, since it’s a relatively safe investment. However, when inflation is high, buyers may be more hesitant to invest, since the value of their money is decreasing.
Despite these effects, real estate is still considered a relatively safe investment during periods of inflation becauseit’s a physical asset that can’t be devalued by inflationary pressures. Additionally, real estate tends to appreciate over time, which can help offset the effects of inflation.
what does this mean for investors?
If you’re thinking of buying a home, it’s important to be aware of how inflation might affect your purchase. You’ll need to budget not only for the purchase price of the home but also for the higher mortgage payments that come with inflation. And if you’re already a homeowner, you’ll need to be prepared for your property taxes and insurance premiums to go up as well.
is real estate a safe investment during inflation?
Real estate is generally considered to be a safe investment during periods of inflation. This is because home prices tend to rise along with inflation. Since real estate is a physical asset, it’s not as susceptible to the volatility that can occur in the stock market.
However, there are some risks to consider. If inflation is high, interest rates are likely to rise as well. This means that your mortgage payments will go up, even if your home’s value doesn’t increase. And if you’re carrying a lot of debt, rising interest rates can make it difficult to keep up with your payments.
Let’s look at the main reasons why real estate is a great investment during periods of marketing instability and inflation:
It’s a physical asset: Real estate is a physical asset, which means it’s not as susceptible to the volatility that can occur in the stock market.
It tends to appreciate in value: Over time, real estate has tended to appreciate in value, even during periods of inflation.
It can provide a steady income stream: If you choose to rent out your property, you can generate a steady income stream that can help offset the effects of inflation.
It can be a hedge against inflation: Since real estate tends to appreciate in value during periods of inflation, it can be a good way to protect your wealth from the effects of rising prices.
The bottom line is that real estate is a great investment during periods of inflation. It’s a physical asset that tends to appreciate in value, and it can provide a steady income stream. However, there are some risks to consider, such as the potential for higher mortgage payments and the difficulty of carrying debt in an inflationary environment. But overall, real estate is a safe investment during periods of market volatility and inflation.
so, is real estate inflation proof?
Yes and no; here are some of the reasons real estate is not technically inflation-proof:
Home prices don’t always go up: While home prices have tended to appreciate over time, they don’t always go up. In fact, there have been periods of deflation (when prices fall) in the real estate market.
You still need to make mortgage payments: Even if home prices go up, you’ll still need to make mortgage payments. In an inflationary environment, these payments will likely become more expensive.
You could still lose money: If you need to sell your home in a hurry, you could end up selling it for less than you paid for it.
It’s not a liquid asset: Real estate is not a liquid asset, which means it can be difficult to sell quickly.
Despite these risks, real estate is still a great investment during periods of inflation. Just remember to consider the risks before investing, and to consult with a financial advisor to get the most accurate advice for your situation.
If you’re thinking of buying a home or investing in real estate, it’s important to do your research and understand how inflation might affect your purchase.
Make sure you budget not only for the purchase price of the home but also for the higher mortgage payments that come with inflation. And if you’re already a homeowner, be prepared for your property taxes and insurance premiums.
how can you invest in real estate during periods of inflation?
If you’re thinking of investing in real estate, there are a few things to keep in mind. First, remember that real estate is a long-term investment. This means you’ll need to be prepared for periods of market volatility and inflation. You can also consider investing in real estate securities, such as REITs, which are designed to provide investors with exposure to the real estate market without the hassle of owning and managing property.
There is also fractional ownership, which can help inventors get started in real estate with a minimal budget. If you’re interested in this model, visit our friends at BuyProperly to learn more.
Finally, make sure you do your research and understand how inflation might affect your investment. By being prepared and knowing what to expect, you can protect yourself from the most common pitfalls.
No matter what your real estate goals are, it’s important to be aware of how inflation can affect your plans. By being prepared and knowing what to expect, you can protect yourself from the most common pitfalls.
In conclusion, real estate is a great investment during periods of inflation because it’s a physical asset that tends to appreciate in value, and it can provide a steady income stream. Just remember to consider the risks before investing, and to consult with a financial advisor to get the most accurate advice for your situation.
Bad credit refers to a person’s history of not paying bills on time, as well as the possibility that they would do so in the future. A bad credit score is frequently the result. Companies can also have bad credit if their payment history and current financial status are not in good standing.
Because they are deemed riskier than other borrowers, a person (or company) with negative credit will find it difficult to borrow money, especially at competitive interest rates. This is true of all forms of loans, including both secured and unsecured ones, but the latter has some options.
Understanding Bad Credit
Most people who have ever borrowed money or applied for a credit card have a credit file with one of the three major credit bureaus: Equifax, Experian, or TransUnion. The information in those files is used to calculate their credit score, which is a figure that serves as an indication to their creditworthiness and includes how much money they owe and whether they pay their payments on time. The FICO score, named after the Fair Isaac Corporation, is the most widely used credit score in the United States.
35%—payment history. This is given the most importance. It simply shows whether the person with the FICO score has paid their payments on time. Even a few days late can count, yet the longer the payment is late, the worse it is viewed.
30%—total amount an individual owes. Mortgages, credit card balances, vehicle loans, any bills in collections, court judgments, and other debts fall under this category. The person’s credit usage ratio, which compares how much money they have available to borrow (such as total credit card limits) to how much they owe at any given time, is essential. A high credit usage ratio (say, greater than 20% or 30%) can be interpreted as a red flag and result in a worse credit score.
15%—length of a person’s credit history.
10%—mix of credit types. Mortgages, vehicle loans, and credit cards are all examples of this.
10%—new credit. This includes any jobs or internships that someone has recently started or applied for.
Examples of Bad Credit
FICO scores range from 300 to 850 and debtors with scores of 579 or lower are typically considered having poor credit.
Fair is described as a score between 580 and 669. These borrowers are significantly less likely to default on loans, making them far less hazardous to lend to than individuals with poor credit scores. However, consumers in this range may incur higher interest rates or have difficulty obtaining loans than borrowers with credit scores closer to the top 850.
How to Improve Bad Credit
There are things you may take if you have low credit (or fair credit) to raise your credit score above 669 and keep it there. Here are some pointers on how to do just that.
Set Up Automatic Online Payments
Do this for all of your credit cards and loans, or at the very least, sign up for the lenders’ email or text reminder lists. This will ensure that you pay at least the monthly minimum on time.
Pay Down Credit Card Debt
Whenever workable, pay more than the minimum payment due. Set a reasonable payback target and strive toward it over time. Paying more than the minimum due will help you increase your credit score if you have a lot of total credit card debt.
Check Interest Rate Disclosures
These disclosures are provided by credit card accounts. Concentrate on paying off the debts with the highest interest rates first. This will free up the most money, which you can then use to pay down other obligations with lower interest rates.
Keep Unused Credit Card Accounts Open
Keep your unused credit card accounts open. Also, don’t create any new accounts that you don’t require. Either action has the potential to harm your credit score.
If you’re having trouble getting a conventional credit card because of your bad credit, consider applying for a secured credit card. It works in the same way as a bank debit card in that you can only spend the amount you have on the deposit. Having a secured card and making timely payments on it can help you rehabilitate your credit and eventually qualify for a regular card if you have a low credit history. It’s also a wonderful approach for young individuals to build their credit history.
It’s true, you can absolutely purchase property with little or no money available. How? By using some of the following creative financing techniques.
Before we dive in, have you considered fractional real estate investing? This is a new, but very attainable way to invest in real estate.
Why alternative forms of real estate investing are becoming more popular
In recent years, alternative forms of real estate investing have become more popular with investors who are looking to buy a property with little or no money down. This is because traditional forms of financing, such as bank loans, are becoming harder to obtain.
With house prices rising across Canada and the United States, it’s becoming increasingly more difficult for people to “buy in” to the real estate market.
To purchase an investment property, most lenders require a 20-30% down payment. This could be anywhere from $20,000 up to $200,000 or more just for a single-family, residential property!
On top of land transfer taxes, surveys, inspections, and lawyer’s fees, these expenses are enough to push many investors out of the market.
Ongoing real estate expensesAside from your down payment and closing costs, investing in real estate also comes with monthly expenses. These include:
Fractional investing is a newer concept that’s gained popularity in recent years. It allows investors to pool their money together to purchase a share of an investment property.
This type of investment is often made through a real estate crowdfunding platform, which connects investors with developers who are looking to finance their projects.
With fractional investing, you can spread your investment amount over multiple properties, which also helps to mitigate risk and increase your diversification.
Another option for investors looking to buy a property with little money down is seller financing.
With this type of financing, the seller agrees to act as the bank and provide you with a mortgage. This could be in the form of an interest-only loan or a balloon payment loan.
Seller financing can be a great option for both buyers and sellers. The buyer gets to purchase the property with little money down and the seller gets their asking price for the property.
REITs
REITs, or real estate investment trusts, are another way to invest in real estate without having to put down a large amount of money. REITs are companies that own and manage income-producing properties, such as office buildings, shopping malls, apartments, and warehouses.
REITs are traded on stock exchanges and can be bought and sold just like any other stock. This makes them a liquid investment, which is ideal for investors who want to cash out quickly if needed.
Since REITs are traded on stock exchanges, they also offer the potential for growth through capital appreciation.
The downside of investing in REITs is that they’re subject to the ups and downs of the stock market. This means that your investment could lose value if the stock market declines. In addition, there are fees associated with owning a REIT and you often don’t have any transparency about the properties that you are investing in.
Lease-options
A lease option is another creative way to invest in real estate with little money down. With a lease option, you agree to lease a property from the owner for a set period.
The length of the lease will depend on the agreement between the buyer and seller, but it’s typically 1-5 years. During the lease period, the buyer has the option to purchase the property, but they’re not obligated to do so.
Lease options are a great way to get into a property without having to put down a large amount of money. The downside is that you’re not guaranteed to purchase the property at the end of the lease period.
Wraparound mortgages
A wraparound mortgage is another financing option for investors looking to buy a property with little money down. With a wraparound mortgage, the buyer agrees to make payments on the existing loan and takes over responsibility for the property.
The buyer then charges their own tenant a higher rent amount and uses that money to make the monthly payments on the mortgage.
Wraparound mortgages can be a great way to get into a property with little money down, but they’re not without risk. If the tenant doesn’t pay their rent on time, the investor could be responsible for making the mortgage payments.
House hacking
House hacking is a strategy that allows investors to live in the property they’re purchasing while renting out the other rooms to tenants.
This is a great way to get started in real estate investing as it allows you to live in the property while someone else helps to pay the mortgage.
House hacking can be done with any type of property, but it’s most commonly done with multifamily properties, such as duplexes and triplexes.
The downside of house hacking is that it can be a lot of work. The investor is responsible for finding tenants, collecting rent, and maintaining the property.
Subject-to properties
A subject-to-property is a property that’s purchased with the existing mortgage in place.
With this type of purchase, the buyer takes over responsibility for making the monthly mortgage payments, but the seller remains on the hook for the loan.
Subject-to properties can be a great way to get into a property with little money down, but they’re not without risk. If the buyer stops making the mortgage payments, the property will go into foreclosure and the seller will be responsible for any deficiency.
Contract for deed
A contract for deed is an agreement between a buyer and seller that allows the buyer to purchase a property while making payments over time.
The buyer doesn’t take ownership of the property until the contract is paid in full.
Contracts for deeds are a great opportunity for buyers, but they’re not without risk. If the buyer stops making the payments, the seller can cancel the contract and evict the buyer from the property.
Joint ventures
A joint venture is an agreement between two or more people to work together on a specific project.
In the context of real estate investing, a joint venture is an agreement between two or more people to purchase a property and share in the profits.
Joint ventures are a great way to get into a property with little money down as they allow you to pool your resources with another person or group of people.
The downside of joint ventures is that they can be complex and there’s always the risk that one party will default on the agreement.
Crowdfunding
Crowdfunding is a way of raising money from a large group of people.
In the context of real estate investing, crowdfunding allows investors to pool their resources and invest in a property together. Although similar to a fractional model, crowdfunding focuses more on raising capital as opposed to investing in fractional shares of a property.
Crowdfunding platforms such as RealtyMogul and Fundrise make it easy for investors to get started in real estate with little money down.
The downside of crowdfunding is that it’s often a hands-off investment and you’re relying on the platform to manage the property.
Sweat equity
Sweat equity is the value of the work that you put into a property.
For example, if you purchase a fixer-upper and put in the time and effort to renovate it, your sweat equity would be the value of the renovations that you did.
Sweat equity can be a great way to get into a property with little money down since it opens up opportunities to get lower-priced properties with huge potential for appreciation. Keep in mind, if the property doesn’t appreciate in value or if the renovations take longer than expected, you could end up losing money on the deal.
Options
An option is a contract that gives the buyer the right, but not the obligation, to purchase a property at a set price within a certain period.
Options are a great way to get into a property with little money down as they allow you to control the property without having to put up all the cash for the purchase price.
The downside of options is that they can be complex and there’s always the risk that the property will decrease in value, leaving the buyer with an option that’s worth less than the purchase price.
There are several ways to get into real estate with little money down.
Whatever route you decide to take, do your research and understand the risks involved. Ready to get started? Take a look at our newest opportunity here and learn how you can get started for only $2,500.
Collateral is a term used to describe an asset that a lender accepts as security for a loan. Depending on the purpose of the loan, collateral can be real estate or other types of assets. For the lender, the collateral serves as a type of insurance. If the borrower defaults on their loan payments, the lender can seize and sell the collateral to recoup some or all of their losses.
how collateral works
A lender wants to ensure that you’ll be able to repay the loan before giving it to you. As a result, many of them require some level of protection. Collateral is a type of security that reduces the risk for lenders and ensures that the borrower fulfills their financial obligations. If the borrower defaults, then the lender has the option to seize the collateral and sell it, with the proceeds going toward the unpaid amount of the loan. To reclaim any leftover balance, the lender can take legal action against the borrower.
As previously stated, collateral can take many forms. It usually refers to the type of loan; for example, a mortgage is secured by the residence, but a car loan is secured by the vehicle in issue. Other assets can be used to secure non-specific personal loans. For example, a secured credit card can require a cash deposit equal to the credit limit, such as $500 for a $500 credit limit.
Collateral-backed loans often have lower interest rates than unsecured loans. A lien is a legal right or claim on an asset to satisfy a debt that a lender has on the collateral of a borrower. The borrower has a powerful incentive to repay the loan on time because, if they don’t, they risk losing their home or other collateralized assets.
types of collateral
The type of loan frequently determines the nature of the collateral. Your home becomes the collateral when you take out a mortgage. If you take out a car loan, the car becomes the loan’s collateral. Cars, bank savings deposits, and investment accounts are all frequent forms of collateral that lenders accept. In most cases, retirement accounts are not accepted as collateral.
Future paychecks can also be used as security for very short-term loans, not just payday loans. Traditional banks provide such loans, which are typically for a few weeks. Even if you have a true emergency, you should read the fine print and compare rates before taking out one of these short-term loans.
COLLATERALIZED PERSONAL LOANS
A collateralized personal loan is a type of borrowing in which the borrower pledges an object of value as security for the loan. The collateral must be worth at least as much as the loan amount. If you’re looking for a secured personal loan, your best bet is to go with a financial institution with which you already do business, especially if your collateral is your savings account. If you already have a relationship with the bank, it will be more likely to approve the loan and provide you with a reasonable interest rate.
Examples of collateral loans
RESIDENTIAL MORTGAGES
A mortgage is a loan that uses your home as collateral. If a homeowner fails to pay their mortgage for more than 120 days, the loan company can initiate legal action, which could result in the lender taking possession of the home through foreclosure. The property might be sold to satisfy the remaining principal on the loan once it has been transferred to the lender.
HOME EQUITY LOANS
A home can also be used to secure a second mortgage or a home equity line of credit (HELOC). The loan amount will not exceed the available equity in this scenario. For example, if a home is worth $200,000 and the primary mortgage balance is $125,000, a second mortgage or HELOC will only be available for up to $75,000.
MARGIN TRADING
Margin trading also considers securitized loans. An investor uses the balance in his or her brokerage account as collateral to borrow money from a broker to gain shares. The loan increases the number of shares an investor can purchase, hence boosting the potential gains if the value of the shares rises. However, the risks are amplified as well. If the value of the shares drops, the broker will demand payment of the difference. If the borrower fails to cover the loss, the account acts as collateral.
While stock market trading may be dangerous, and real estate investing can be time-consuming, Buy Properly combines the best of both worlds. Buy Properly, a fractional real estate company, lets anyone with just $2,500 participate in real estate. This novel idea is similar to stock investment but without the hassles of real estate ownership. Interested? We knew you would be. Check out our latest opportunity – the Karma Candy Building – on Buy Properly (limited availability, don’t wait to invest!).
Accredited investing opens up a whole shiny new world of investing made available to you. These include private equity, venture capital, angel investing, and hedge funding.
WHAT IS AN ACCREDITED INVESTOR?
The accredited investor is someone who has a special status so that they can have investments that are typically more high-risk. While this definition varies from country to country, it also varies from province to province. While there’s no formal process inOntario, legislation requires that you meet specific criteria to participate in certain investments. This simply means you’ll need to be prepared to provide documentation proving you meet the criteria.
Net income before taxes of more than $200,000 in each of the two most recent calendar years and expected net income of more than $200,000 in the current calendar year.
Net income before taxes combined with a spouse of more than $300,000 in each of the two most recent calendar years and expected combined net income of more than $300,000 in the current calendar year.
Financial assets, alone or with a spouse, of at least $1 million before taxes but net of related liabilities
Financial assets include cash and bank deposits but not the value of a house.
Net assets, alone or with a spouse of at least $5 million. Net assets generally include all of your assets after subtracting your debt.
The average sale price for a detached home in Hamilton was $1.06 million in April.
By Fallon Hewitt, Spectator Reporter
Thu., May 19, 2022
New data from the Teranet-National Bank shows that Hamilton house prices have soared by nearly 30 per cent in the last year.
Released Wednesday, the monthly composite house price index report showed Hamilton’s rate of skyrocketing prices trailed only Halifax among 11 urban areas across Canada last month. READ MORE >>
A report released last week from the Canada Mortgage and Housing Corporation stated the average home in the Hammer is expected to cost over $1 million beyond 2024. The average single-family home in the city is currently $992,500.
With that in mind, here are Hamilton’s least and most expensive homes listed on Zoocasa, as of April 26.
Five lowest-priced homes
28 Northcote St.
Listed for $399,000, this recently renovated home sold at $550,000 after eight days on the market. Located around the corner from Dofasco, the four-bedroom, two-bath house has a open-concept main floor and a unique loft space that can be transformed into whatever tickles your fancy. READ MORE >>
Hamilton is now the 18th most expensive city to rent an apartment in Canada.
If that’s got you considering home ownership, here’s a rundown of Hamilton’s least — and most (for the fantasy) — expensive house listings from March, according to Zoocasa.
Five lowest-priced homes
187 Lottridge St.
First-time home buyers looking for a detached house in the lower city will be intrigued by this $449,900 price tag. READ MORE >>
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