Experts have indicated Canada will need to build millions more homes in the next 10 years to meet our growing needs. To the casual observer the problem is easy to solve: just build more homes. For those in the real estate development field, the problem is much more complicated than this.
When Bruce Stewart was planning to develop the Founders Residences, he wanted to create a model that was a win-win for its senior residents and for the clients who purchased condominiums there. It’s for that reason that Stewart brought on a management company with a unique program called TermVest™.
If opted into, the TermVest™ structure allows the development purchasers to benefit from the three most important pillars of real estate: rental income, market appreciation and mortgage pay-down. All day-to-day property management tasks are taken care of including the payment of property taxes and maintenance fees.
The TermVest™ program delivers monthly cash flow to each purchaser with a five-year condominium lease in place from day one. Upon expiration of the lease, the management company will then purchase the units from the owner at the then current market value with a stipulation it will be for no less than the original purchase price. This commitment creates a safety net and gives purchasers peace-of-mind going into the sale. It also helps to avoid being surprised by a lot of typical things that can go if purchasers decided to lease the unit themselves.
Stewart believes the TermVest™ structure is perfect for real estate buyers that believe real estate is a great wealth building product but don’t want to be hands-on with all duties and responsibilities. The program combines monthly cashflow, mortgage paydown, and the potential for market appreciation while limiting the downside if we see a market correction.
While there has been a deceleration in new home sales, we must keep the pedal to the metal and continue to train skilled trades workers for the future.
Many jurisdictions in the U.S. have been thinking outside the box to boost the housing supply. Here in Ontario, we’d be wise to follow suit.
This free summit will feature top experts in Canadian real estate who will share their knowledge on a broad range of topics. It will be presented on Sat. Jun. 18th from 12pm-3pm.
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CREW has compiled a group of investment real estate agents that we think stand out for their quality service and dedication to the world of real estate investing.
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