Just last month Forbes magazine named Canada as The Best Place in the world to do business. I am not surprised, our resource rich Canada is world's No.1 and why not, Canada has a lot to offer. Not only does Canada attract the best people from all over of the world, big Canadian cities including their surrounding suburbs are highly multicultural, where different cultures thrive and proudly adapt to Canadian values.

Foreign individual investors from Europe, Middle East and Africa, as well as the growing middle class in India and China are investing in Canada. In my real estate business, I have witnessed an increase in my overseas client portfolio in 2011.

These investors find a safe haven in our Canadian currency. Many people are sending their children to Canadian Universities and colleges. Not only do foreign students get topnotch education, on completion of their studies our Canadian government helps them secure work permit to gain work experience in Canada.

What I can offer to an International Investor

• Help you buy easily rentable properties in good neighbourhoods (one can book pre-construction or buy resale)
• Assist you in opening non-resident bank account and secure mortgage approval (foreigners can buy with only 35% down payment)
• Put you in touch with lawyers (real estate, business and immigration)
• Put you in touch with property management companies to take care of your investment
• Put you in touch with tax advisors and accountants who will file your rental income tax

You will be required to come here for 1-2 weeks to select your property and complete the above formalities.

I do not and cannot provide any legal, accounting or tax advice, but can refer you to some professionals.

A short holiday-cum-business trip may well be on the cards for you to get a glimpse of our beautiful Canada, as well as to explore investment opportunities!

Related Topics

Downtown Mississauga Investment
Investing in Condo
Non-Resident Investor FAQ

Its simple math & logic – but nothing without a little risk!

This is a story of five old pals, Kumar, Roger, Cindy, Harry and Jessica. In 2008, each decided to invest $100,000 somewhere. They all already owned homes worth around $400,000 and incidentally, everyone had about $100,000 left on their mortgage. Like anyone else, they all had their own wants and needs, and a strategy they thought was best in their given situation.

Kumar, lured by the charm of a larger home for his family, decided to move to a bigger house. He used his $100,000 savings, bought a house for $500,000 and continued to live there happily. After three years, Kumar’s home is worth around $600,000 or 20% gain over last three years. Kumar’s gain = $100,000. 

Roger, being conservative by nature, decided to pay off his balance mortgage loan. He was happy, and why not, he is one of the lucky Canadians who celebrate a mortgage burning party early in life. After all, he now lives in a debt free home. His house increased in value over these three years. What else could he ask for? After three years, the value of Roger's property has gone up to $500,000. That is a whopping 25% overall appreciation. Roger’s gain = $100,000.

Cindy on the other hand, invested her $100,000 in two condos rather than paying off her mortgage loan. She put $50,000 in each property and bought two condos worth $200,000 each. She is a keen real estate investor, and prefers to make her money work harder for her in terms of returns. The two condos, once rented, practically paid for themselves. On a side note, she may even choose to hand her keys over to her adult children, giving them a head start their life. In these three years, all her properties grew up in value. Her original residence is worth $500,000 now. With an overall gain of 20%, both her condos are worth $240,000 each, as of today. Cindy’s gain = $180,000.

Harry decided to invest his $100,000 in stocks and mutual funds. We all know that since 2008 the stock market has had its ups and downs. After losing almost half of the value of his well diversified portfolio, Harry is yet to recover in full. Should Harry decide to cash in today, Harry would end up losing almost $10,000 out of his total investment of $100,000. Harry’s gain = negative $10,000.

All of the above gains or losses are only on paper, before other expenses, and not actual returns on investment. Profit and loss incurs when investments are cashed in. Both stock and real estate incur buying and selling costs, broker’s commission, management fees, capital gain taxes etc. Rental properties involve maintenance expenses, repairs, property taxes etc.

During these three years, principal portion build up has also helped to increase equity in all of the above properties. Even better, in case of rental properties, tenants helped in paying off landlord’s properties (as in the case of Cindy).

Jessica did not have any savings of her own, but she had over $200,000 room in her secured line of credit. On her financial advisor’s advice, Jessica borrowed to invest $100,000 from her secured line of credit into two pre-construction builder condominiums worth $200,000 each. Though delivery of these two condominiums is yet to happen, Jessica knows that the market value of these condos in today’s market is no less than $240,000 each. Jessica plans to put 25% down payment in each of these properties and does not want to incur negative cash flow after renting them. By the way, her final installment before closing ($40,000) is due on occupancy. So in a way, to date, Jessica has only borrowed $60,000 from her line of credit. Jessica has some three options and she has not yet decided. Jessica might sell both her condos and cash in her profits, sell one and rent the other or rent both her condos.

POLL QUESTION: What is YOUR investment personality?

Moral of the Story

Moral of the story, women are smarter than men! Just kidding – it is important and pays to be open-minded towards at least evaluating different options available to you if you have some extra cash to invest. Everyone has a different perspective on life, and everyone is right in making their own decision. I do personally believe in the potential of real estate in making you rich! And, I practice what I preach!

Finally, remember, before you venture out into investments, it is prudent to speak to professionals (lawyer, financial advisor, tax accountant, Realtor etc.) first.

Contact me if you’d like to learn more about real estate investment opportunities and to discuss options that might be right for you.

Rental market

Looking at the condo rental comparison, it is evident that the rental market has increased by almost 70% for 1 bedroom suites, but the corresponding price increase has gone up merely by 2%. The highest no. of rental units increase has been in 1 bedroom category. Unfortunately, no data is available for 1 bedroom + den units in the Toronto MLS Data report.

There has been approx. 30% increase in no. of rentals, compared to same period last year. Rents however, have merely increased by 2-4%.

Resale market

In condo sales side there has been a substantial drop of 28% in the number of listings, 1 bedroom units in Square One area is an exception. The price has also increased, and the highest increase has been seen in the 2 bedroom + 2 washroom units.

In my opinion, Mississauga has a strong growth prospect as prices are still very low compared to downtown Toronto. Mississauga condo market thus might make a better sense as buying price to rent ratio looks attractive in comparison to downtown Toronto. In other words, an investor will require a smaller down payment to invest in a Mississauga condo in comparison to one in downtown TO (obviously same size and type). And mind you, one does not pay extra to buy a parking space when buying pre-construction condos in Mississauga.

Downtown Toronto vs. Downtown Mississauga

Recently, Moneyville.ca came up with an interesting report about Downtown Toronto condos. The gist of this report is that the prices have shot up much steeply and much faster, than the rentals have grown. While the prices have increased by 3.5% (resale condos) and 8.4% (new condos), as per the report, the rent has only gone up only 1.1%. It has become less attractive for investors to keep buying condos and putting them on rent unless investors choose to move their territory, from expensive downtown Toronto, to more affordable downtown Mississauga, where the growth prospects are better. Like Toronto, there is also a demand and supply issue here as there is not much supply of land available in Mississauga.

There are a lot of renters who look at downtown Mississauga living as a luxury lifestyle not far from downtown Toronto. This, coupled with a good inflow of affluent immigrants and children of baby boomers who have started to work and want to buy or rent in the heart of Mississauga fuel popularity and demand for this area.

I have seen many non-resident foreign investors, come to Mississauga and invest in pre-construction projects. If you are looking at pre-construction projects or a resale condo, contact me. 

Disclaimer: My blog post does not dispute benefits of Downtown Toronto living and its value for people who live and work (users) in Downtown Toronto. I am just discussing investment aspect for condo investors and flippers. Do you think prices will keep going up?

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Downtown Toronto vs. Downtown Mississauga condo investors survey

Also read: Downtown Mississauga investment