Templar Flats - 6 floors - redevelopment/infill project on King William

[Dr Awesomesauce]

^And $1000/ mo. might well be worth it.

My comment was directed more at myself than the development per se.

It's a great looking project and I'm sure they will have no problem selling out...er renting out.

[HillStreetBlues]

$950 plus utilities isn’t too expensive. Where are you going to find a comparable unit (brand-new or nearly so) that carries for less? Even at 3% (and of course the rate’s not staying there forever), $950 a month serves only a $210,000 mortgage, and if you want to pay it down on a more reasonable schedule, a lot less than that. This not taking into account property taxes, condo fees, maintenance/depreciation, and market risk. For the type of person who rents for less than a thousand dollars, that’s big- why would I as a young person buy when I might get a great job offer in another market and have to sell, perhaps at a bad time? (By the same token, why buy if I’m a young person and I might not have extremely secure employment?)

By the way, davidcappi’s point is a great one: when apartment units like these are sold as condos, a significant proportion of them are bought to serve as rentals anyway. A professionally-managed building can keep costs down for tenants, and (probably) quality up.

Anyway, I love the scale of the building, and the fact that there are to be restaurant units on the ground floor. I generally like the way Urban West turned out; my only gripe is the lack of street-level commercial.

[flar]

That's not bad, but you do have to weigh it against mortgage cost in the Hamilton context. You can't really rent anything decent for under $1000 in most cities of Hamilton's size.

[king10]

As a 25 year old looking to move out to a condo. I'd rather rent than buy. Renting is like a no strings attached relationship. I also want to experience different areas and not be tied down to one area of the city. Not to mention not worrying about property taxes, maintenance fees etc.

[fizzle]

Originally Posted by davidcappi

I legitimately don't understand why there is such angst towards these being high end rentals. What's the difference between this and a condo being bought by a speculator and renting it out for a similar price? We'll likely see lots of that with Bella Tower and the Connaught.

This is roughly the price that units in Urban West and Stinson are renting for, so why the huge uproar?

Price isn't really my issue- a downtown condo for $1k is pretty good value. But then again, I'm used to Toronto pricing- where the same scenario would fetch $2k.

[fizzle]

Originally Posted by king10

As a 25 year old looking to move out to a condo. I'd rather rent than buy. Renting is like a no strings attached relationship. I also want to experience different areas and not be tied down to one area of the city. Not to mention not worrying about property taxes, maintenance fees etc.

I get the 'ability to move' bit, but most leases are 1 year anyways.

And here's the thing- renting for a year at $1k per month is $12k annually just gone. Yes, you got a residence for it. But that's it.

Conversely, if you can swing the down payment of 5% on a $230-250k condo (about 10k give or take) and are paying $1k in mortgage monthly, at the end of the year at least you're putting about half of it back into what you already own. I'm not one to rely on housing as an income generator, so even if the property value remains flat, you're still up $6k that first year in dollars you've kept in your basket.

With this market, and money being so cheap, I don't see many scenarios where renting makes sense if you have a down payment available to you, especially factoring in the ridiculous affordability of most Hamilton condos.

Just my opinion though.

[HillStreetBlues]

Originally Posted by fizzle

I get the 'ability to move' bit, but most leases are 1 year anyways.

I’m not saying that one year is a long time, but even if you have to move within a year, it’s not onerous to assign a lease. After a year, you get to leave a rental with sixty days’ notice. Contrast that with selling a place, which is very variable in how long it takes.

Originally Posted by fizzle

And here's the thing- renting for a year at $1k per month is $12k annually just gone. Yes, you got a residence for it. But that's it.

If you own an apartment like this, you might pay $2500 in property taxes a year- gone. You might have maintenance outlays, which will be gone. You will have to pay for insurance of the unit in addition to the contents, which will be gone.

Originally Posted by fizzle

Conversely, if you can swing the down payment of 5% on a $230-250k condo (about 10k give or take) and are paying $1k in mortgage monthly, at the end of the year at least you're putting about half of it back into what you already own. I'm not one to rely on housing as an income generator, so even if the property value remains flat, you're still up $6k that first year in dollars you've kept in your basket.

I hope you’re not really suggesting anyone should opt for 20:1 leverage on anything; maybe you are. Let’s say you put $12,500 down on a $250,000 apartment. You now have a mortgage of $237,500. Since you put 5% down, the CMHC insurance premium (to insure the bank, not you) is $7,500. That money is truly gone, but since you’ll roll it into the mortgage, you’ll wind up paying for it several times over. The mortgage payment will actually be $1160 a month, $13,920 in a year. After the first year, you’ll have paid down about $8,500 of the loan. If you sell the (now-no-longer-brand-new) place in a year, realtor fees alone will be $6,250 (not including carrying costs while it might briefly be vacant, or not so briefly if you take a while to sell).

[king10]

^^^ not to mention condo feeds and property taxes

[fizzle]

Originally Posted by HillStreetBlues

If you own an apartment like this, you might pay $2500 in property taxes a year- gone. You might have maintenance outlays, which will be gone. You will have to pay for insurance of the unit in addition to the contents, which will be gone.

I don't pay $2500 in property taxes and I live in a decent sized unit in Toronto. I'd be surprised if it was that much on a 225k condo.

I hope you’re not really suggesting anyone should opt for 20:1 leverage on anything; maybe you are. Let’s say you put $12,500 down on a $250,000 apartment. You now have a mortgage of $237,500. Since you put 5% down, the CMHC insurance premium (to insure the bank, not you) is $7,500. That money is truly gone, but since you’ll roll it into the mortgage, you’ll wind up paying for it several times over. The mortgage payment will actually be $1160 a month, $13,920 in a year. After the first year, you’ll have paid down about $8,500 of the loan. If you sell the (now-no-longer-brand-new) place in a year, realtor fees alone will be $6,250 (not including carrying costs while it might briefly be vacant, or not so briefly if you take a while to sell).

What I'm suggesting is that in a renting scenario you lose all of your rent money, everysingle month. There is no option to recoup, there is no option to resell, you own nothing at the end of the year, you own nothing at the end of two years.

Yes, you have portability. But that's it.

If you're not moving every year (and I don't think most people move every 12 months), even in a worst case scenario where you only have a 5% down payment and with minimal to no increase in housing prices, you will come out ahead if you plan on staying in your place of residence for more than a year- essentially by keeping more of your own money. Giving $1000 every month in rent to your landlord is a suckers bet in the long term. The hard part is getting that down payment, but once you do, I think it's a no brainer for most people.

And the reality is that good properties DO appreciate in value and will continue to do so.

[flar]

There are online rent vs buy calculators that take into consideration taxes, realtor fees, financing, market conditions, etc.

A while back I did one for my situation in Ottawa and it told me I would have to live in a home for six or seven years before I could break even by selling it.

[HillStreetBlues]

Originally Posted by fizzle

I don't pay $2500 in property taxes and I live in a decent sized unit in Toronto. I'd be surprised if it was that much on a 225k condo.

You should do some research on Hamilton. We have some pretty high property taxes here. My estimate was pretty conservative.

Originally Posted by fizzle

What I'm suggesting is that in a renting scenario you lose all of your rent money, everysingle month. There is no option to recoup, there is no option to resell, you own nothing at the end of the year, you own nothing at the end of two years.

Yes, you have portability. But that's it.

If you're not moving every year (and I don't think most people move every 12 months), even in a worst case scenario where you only have a 5% down payment and with minimal to no increase in housing prices, you will come out ahead if you plan on staying in your place of residence for more than a year- essentially by keeping more of your own money. Giving $1000 every month in rent to your landlord is a suckers bet in the long term. The hard part is getting that down payment, but once you do, I think it's a no brainer for most people.

And the reality is that good properties DO appreciate in value and will continue to do so.

I know that most people find this "rent is throwing your money away" argument compelling. Most people don't move every year, but the average is every four of five. I'm guessing that's more often for younger folks. I think that, if you used one of the rent-versus-buy calculators that flar suggests, and put in honest assumptions, you would find that it takes longer than that to come out ahead by buying.

Since you brought up the fact that "properties DO appreciate in value" (this is not a rule, and sometimes they don't), it's worth pointing out that, when you leverage 20:1 on an asset, your downside is infinite. Actually, a person would be underwater on day one in his apartment under your plan: if he were to have or want to sell, his transaction costs would eat away what little equity he has.

[fizzle]

Originally Posted by HillStreetBlues

I know that most people find this "rent is throwing your money away" argument compelling. Most people don't move every year, but the average is every four of five. I'm guessing that's more often for younger folks. I think that, if you used one of the rent-versus-buy calculators that flar suggests, and put in honest assumptions, you would find that it takes longer than that to come out ahead by buying.

If you're not planning to move, you come out ahead in the first year. The estimates of 'loss' come when you bring selling the property after 1 year of living in it with a 5% down payment. Yeah, you'll lose money then. Of course you will.

Otherwsie, you will have put a hypothetical $8500 back into a property and your pocket vs. the renter who is just putting $12k (in this $1k a month scenario) into the pocket of a landlord. Even if you account for property taxes of $2500 and condo fees of $250 per month, you're about even if not slightly up by owning in year 1.

Go ahead an pop it into a calculator- even at 1% property value increase, you're winning with owning versus renting in this scenario, even if you assume you're putting any savings made on the buy/rent difference into an investment that will net you a 5% annual return (which I think is a reasonably high rate to be honest).

Since you brought up the fact that "properties DO appreciate in value" (this is not a rule, and sometimes they don't), it's worth pointing out that, when you leverage 20:1 on an asset, your downside is infinite. Actually, a person would be underwater on day one in his apartment under your plan: if he were to have or want to sell, his transaction costs would eat away what little equity he has.

The owner is underwater in that first year ONLY if they need to sell. And even then, the risk is short term and reasonable (in my opinion) in light of the longer term benefits of owning. And no one can predict the future, but I don't think it's crazy to predict that the Hamilton market will see property values continue to increase, just like they are everywhere else. Especially in parts of the city that are on the upswing.

But I didn't want to derail the thread. It's a good looking project.

[drpgq]

Yeah I don't get why people are arguing that the rent is too high. These will be brand new units. That's worth a premium in a city that basically has see no new rental apartment buildings since the 70's.

So did LIUNA end up selling the empty lot to Core Urban or are they involved? It is great something is going to happen with that lot. I was wondering if that would remain vacant for decades.

Also this probably puts pressure on doing something with the big parking lot at King William and James.

[Dr Awesomesauce]

According to the Spec, this project also includes the building to the west which housed the Framing Gallery all those years - that's news to me. Great stuff.

Also from the Spec article: 'The project is called Templar Flats, in recognition that the corner building, 37-39 King William, was called the Templar Building at the turn of the 20th century.'

[The Gore]

Originally Posted by drpgq

Yeah I don't get why people are arguing that the rent is too high. These will be brand new units. That's worth a premium in a city that basically has see no new rental apartment buildings since the 70's.

So did LIUNA end up selling the empty lot to Core Urban or are they involved? It is great something is going to happen with that lot. I was wondering if that would remain vacant for decades.

Also this probably puts pressure on doing something with the big parking lot at King William and James.

Agree, that parking lot at King William / James has been there way too long

[davidcappi]

I also think it's important to note that this will be Hamilton's first mid rise infill project constructed out of wood, which is becoming a huge player across the world due to it's affordability and quickness of construction.

[CRSAutomotiveOakvill]

When something you value, it must justify that price.

[The Gore]

Originally Posted by davidcappi

I also think it's important to note that this will be Hamilton's first mid rise infill project constructed out of wood, which is becoming a huge player across the world due to it's affordability and quickness of construction.

To a max of 6 floors in the City of Hamilton - I believe.
Hoping we'll see many more projects like this in the core.

[Jon Dalton]

Originally Posted by fizzle

I don't pay $2500 in property taxes and I live in a decent sized unit in Toronto. I'd be surprised if it was that much on a 225k condo.
[/qoute]

It would be about that much. Taxes are way high here, it's a counterbalance to our low house prices. Insurance tends to be high as well. Condos don't get a break either. I was shocked to hear what the taxes were for the City Square development.



[qoute]
What I'm suggesting is that in a renting scenario you lose all of your rent money, everysingle month. There is no option to recoup, there is no option to resell, you own nothing at the end of the year, you own nothing at the end of two years.

About 20% of that rent goes to the city in taxes that you would be paying anyways, although apartments do pay higher tax than houses and condos.

You also have to consider the opportunity cost of the down payment - it could be making interest if you were renting.

Another part of that rent could be considered expensive insurance against a leaky roof, plumbing and heating issues, or anything that could possibly go wrong that your landlord has to fix out of pocket.

I agree it makes sense to own in Hamilton, but the argument that rent is 'throwing your money away' is simply not true. Either way, you are throwing about half of your money away.

[Dr Awesomesauce]

Originally Posted by Jon Dalton

About 20% of that rent goes to the city in taxes that you would be paying anyways, although apartments do pay higher tax than houses and condos.

You also have to consider the opportunity cost of the down payment - it could be making interest if you were renting.

Another part of that rent could be considered expensive insurance against a leaky roof, plumbing and heating issues, or anything that could possibly go wrong that your landlord has to fix out of pocket.

I agree it makes sense to own in Hamilton, but the argument that rent is 'throwing your money away' is simply not true. Either way, you are throwing about half of your money away.

True enough.

What's the answer then? Is it a van down by the river? I have contemplated pitching a tent at Bayfront Park. ;-)