What to do with your money in 2022

As much as I’d love to tell you that Toronto is still the land of amazing opportunity, I would be lying if I did.

And this is coming from someone who is a true optimist and lifelong fan of the city! My head and my heart know the days of opportunistic buying real estate in Toronto are behind us. It happened in a flash, and just like that, it’s over.

It’s upsetting, and it’s best to know this up front so we can deal with it and move on, right?

We’ve heard the cries. Some of us have even made the cries (figuratively or physically) about just the ability to own any real estate - let alone 2nd, 3rd, 4th properties. All of it is true. It’s super difficult to buy real estate right now anywhere near Toronto. There, it’s been said. Now let’s move on and focus on things we CAN do to explode our wealth creation rather than sit and reminisce on the good old days.

There’s a golden rule of sorts when it comes to investing in real estate: Lead with cash flow. What that means is when considering owning an income property, at the very least we should be analyzing what incomes (rents) are and making sure that they more than cover the expenses (mortgage, taxes, maintenance - all of it). That way if the market ever shifted and prices depreciated, you’d still be in fine shape as the property owner to buy yourself time for the market to start appreciating again. If you were making money each and every month regardless of the market value at any given time, you’re winning.

When you own real estate, you get paid in 3 ways

1. Cash flow (which we just described). This is fully taxable in your income tax payable at end of year.

2. Principal pay down, or mortgage pay down. As you pay down your monthly payment, what you owe to your lender drops.

3. Appreciation. This is the whole buy-low-sell-high type of deal. When the asset goes up in value, you earn the appreciation. The best part of this is that it’s usually large and only HALF is taxable. So it’s a big number and is taxed much lighter. This last category is why people have been buying in Toronto, and how they’ve been rewarded handsomely.

Buying a place in Toronto today

Let’s assume one was looking at getting into the income property ownership today. In order to have positive cash flow, one would need to analyze properties for a)

what they cost to buy which would also help you determine your costs and expenses, and b) what you can expect for revenues, or rent. For each place you are interested in, you’d do this research and analyze the ratio between the purchase price and rents hoping to find a place that would provide a positive net cash flow.

I definitely would encourage you to go through this exercise. I’ll gladly send you a copy of the spreadsheet I use to quickly plug in these numbers to see what the cash flow numbers come back at. Trust me when I say: if we’re judging a real estate investment in Toronto against the cash flow goal, you’ll be thoroughly disappointed. The results are terrible when looked at through this lens. More like horrendous.

A couple of years ago, it was totally possible to find places that were winners. And then Covid happened. People started moving. They left the condos, they left the small apartments and the vacancies piled on. A nice little bonus (I’m being sarcastic) was the change of the AirBnb rules that prohibited much of these short-term rentals from being on the market. When they couldn’t list on AirBnb, they joined the supply of places available for rent. The market was absolutely flooded with empty apartments. Total chaos.

At the same time, sale prices (not rent prices) started picking up a whole whack of steam! Normally, rents go up when sale prices do. This time around, the opposite was happening! Cash flow wasn’t great before Covid. Rent prices plummeted because of all the empty apartments and sale prices spiked. Being an investor meant you had to accept a hefty loss each month in cash flow. You’d have to break the cardinal rule!

I tell ya, that didn’t stop a lot of investors from buying. Maybe they’re listening to Realtors recommending investment albeit with a brutal cash flow situation clearly looming. Not sure they cared? Not sure they fully understood? Either way, I think it’s gross. This is exactly what speculative investing means. It’s a strategy loaded with risk.

Revisiting rents now in mid-2022: prices did eventually bottom out and then started rising again. Doesn’t really matter, though. This late increase hasn’t made a dent towards what sale prices have done. All this to say: cash flow in and around Toronto is brutal. Consider yourself lucky if you’re out of pocket “only” $500/per month each and every month. Doesn’t sound like much of an investment to me.

Is Pre-Construction a viable option?

No. In a single word, no.
Before all the Realtors that are bullish on new construction and bullish on “the fundamentals of Toronto still being at play” attack me, I would like to say that I understand why Toronto is amazing. I understand that immigration is fully open in Canada and that historically half of all immigrants end up in the GTA. Yes, I know. I also know that we can’t keep using that same narrative forever. It’s because of these reasons that the GTA has seen the massive gains it has. We’re the highest-priced real estate in the country. We should be. Toronto is the cultural heart and financial hub of the country (with all due respect to our other great cities).

Those fundamentals contributed to great gains and appreciation. The demand for Toronto is large, no doubt. It can’t go on forever and at some point, the pricing lies beyond the fundamentals that would be needed to support it. Incomes play a role here, and incomes have not moved anywhere close to real estate pricing.

New condos certainly are sexy and tempting. “I only need to put down 5% today? Sign me up!” Realtors will send me all the marketing materials they want that show how undervalued this project is, or how much that project will turn around a formerly-despicable corner. It won’t matter to me. As I write this in April of 2022, ALL pre-construction is overpriced in comparison to what you can buy in the resale market. And ALL homes (condo and freehold) can only be bought at numbers that are devastating to a balance sheet. That’s it.

Yes, you’re not out of pocket each month - yet. You will be when it closes, and by a large number.

We’re seeing interest rate hikes almost weekly now, and it’s proving all of those marketing sheets worthless. Keep that in mind and work on your own projections, don’t rely on theirs.

Could a real estate partnership get me in the game?

People generally look to partnerships when they want to share the risk (and reward) of an investment. Lately, people that want to buy investment properties anywhere near Toronto have been partnering because they can’t afford the 20% down payment that would be needed for these high-priced assets. Partnering allows people to get a foot in, in exchange for giving up total control.

Partnerships are great. It’s like raising a child: it takes a village to be successful. With that said, I am a believer in partnerships. In this case - buying in/near Toronto - it doesn’t matter. You’re looking at the same spreadsheets with the same awful results. Partnerships don’t take away any of the stings.

If you’ve gotten to this part and you still disagree with my opinions, it’s all good! Just know that if you still want to buy an investment property in Toronto, you’re not buying the way the pros do. You’re not buying with cash flow in place. You’re

buying purely on speculation. And that’s fine! It’s not for everyone, though it could be fine for you. I do wish you luck and I’d love to be wrong. God speed, my friend.

If not here, then where? What does it look like?

My plan is to go back to basics, to implement a time-tested strategy. Slow and steady wins the race, right? I’m starting by looking at cash flows first in my next investments. Call me selfish, I don’t want to contribute any more than my initial down payment in any real estate investment. What that means in my world is that I may look away from real estate that may appreciate more or have more upside (what Toronto has been successful at), because that to me means relying on speculation and I don’t want to. Not today, and not in this environment.

I believe Toronto will return and at some point, it will make sense to be an investment buyer here again. Maybe resale prices fall? Maybe rents increase? Maybe both? I think it would be foolish to wait for that to happen and miss out on our most precious asset: time. I’ll be back, Toronto. I just need to leave for a while until you make more sense as an investment.

ANYWHERE IN ONTARIO?

I won’t be spending much time looking at anything in Ontario that was occupied prior to 2019. It may seem random, it’s not and here’s why: In 2017, then-Premier Kathleen Wynne expanded the scope of rent control (limits on rent increases imposed by landlords) to all rentals in Ontario. Prior to that, the majority of rentals weren’t subject to rent control. Rent control = mandated limits made by government policy on allowable rent increases. In Ontario last year, that limit was 1.2%. If, for example, property taxes increased by a good chunk, or if the owner’s mortgage rate increased, or insurance costs soar, the property owner may want to match that expense with an increase in rent. Makes business sense.

Alternatively, if market rents increased a landlord may want to participate in that wave and change the rent to match the market, rather than continue to charge legacy rents. It’s an investment, and it was a right the landlord had if they wanted to maximize their returns.

Prior to 2019, if a landlord needed (or wanted) to increase rent they charged to their tenant they could. It was as simple as issuing notice to the tenant. If the tenant didn’t agree to the increase, they would have to move out. Increasing rent essentially created a lawful justification for a landlord to evict a tenant. The problem is many unethical landlords abused this right. It was a loophole that could be used. Wynne’s decision to introduce rent control across the board sought to remove that right for landlords. There are many, many parts of the Landlord and Tenant Board (LTB) in Ontario that solely favour tenants and provide tenant rights.

This was one for the landlords, and it has since been taken away.

This entire decision by Wynne’s cabinet was enacted to make housing more affordable. The unintended consequences of that decision ironically include more expensive rents and hyper-scrutiny (and discrimination) by landlords during tenant application/selection - for fear of partnering with a bad tenant. However, this is a discussion for another day.

When a landlord in Ontario discovers they have the wrong tenant living in their property, it is extremely difficult and expensive to remove that tenant. Effectively, introducing rent control in Ontario removed the landlord’s ability to remove their tenant from their property using the rent increase provision, should all other options fail. It was quick and clear.

A dishonest tenant could squat in a home (not paying rent) for a long, long time in Ontario and they are protected from eviction by the LTB. As the property owner of this home, if you decided you wanted to renovate and perhaps sell it because of want or need, you can’t. It’s not as simple as that. If you lost your job and need to sell your house and move into your rental, the tenant can dispute your intentions to the LTB and they won’t have to go anywhere. Many landlords have been financially devastated from being in this exact position. A dishonest and irresponsible tenant can tie up all of this in the LTB and live for a long time on your dime. They can stop paying and you wouldn’t be able to do much about it for a long time. In Ontario, essentially the rights to the home are shared between the owner and the tenant.

After Kathleen Wynne, Doug Ford came in as Premier and a year later partially removed rent control. Units first occupied after November 15, 2018, were no longer under rent control regulations. If the unit/home existed before that date, it will forever be subject to rent control in Ontario. Ones originally occupied (by anyone, not just the current tenant) are not.

For these reasons, the prudent investor wouldn’t buy anything that existed in Ontario before 2019, at least not at market value. The risk of partnering with the wrong tenant is too great. One would need a very compelling reason to accept all of the risks that comes with it. These reasons do exist, sure, just in very specific cases.

To sum this up: when I’m working with clients or analyzing an investment decision for myself, I am not interested in buying a property in Ontario that was lived in prior to 2019.

Is Canada the

right place?

I want to stay in Canada. Call me a homer. I feel better and safer keeping my money here. Between access, control and taxes, I am comfortable keeping my stuff local that way. Don’t get me wrong, I’d love an AirBnb in Costa Rica that makes $10,000/week! I just don’t know the laws, the liquidity, the people... I’ll stick with Canada, thank you.

My eyes are looking towards provinces not called Ontario that carry less risk for the landlord. There are some great options when I scan the country. I’ve identified places where there are:

• Lower costs to entry

• Better rent-to-purchase price ratios

• Depressed market over the last 5-10 years, finally seeing signs of gains

• The economy is moving away from being singularly focused

• Net migration is positive

In comparison to larger markets such as Toronto, Montreal, and Vancouver - there are more affordable places for tenants. New immigration targets are lofty in Canada, I believe 2nd tier cities in Canada will see much of that benefit.

Staying closer to home

I’m still a believer in new-ish places in Ontario! Yes, still. Just need to protect yourself from exposure. I have been looking at a couple of municipalities for much of the same reasons I discuss above in other provinces.

One of the markets I’m most excited about has experienced very little growth over the last 10 years. Jobs were lost, residents moved out. And that’s changing. The city I’m most keen on took the time to get better, including announcing some massive growth plans. It is liveable and affordable and is a stone’s throw from true amenities. Condos and towns will be hitting the market soon (and they’ll be built after November 15, 2018). If you want something more local, this could be it for you.

NOTE: I’m going to be buying something(s) soon. I’m happy to share specific locations I’m most interested in with you on a call, I just don’t want to share all of my thoughts on a public platform. That may increase demand and pricing and I don’t want that until after I’ve bought :)

Any other suggestions?

I think a lot of you/us don’t pull the trigger on buying real estate as an investment because we’re confused. A confused mind doesn’t act. We spend so long trying to figure out why we shouldn’t do it, then we forget all the reasons why we should.

Next thing you know, the opportunity is missed. I see it so often, it’s super frustrating.

Just be honest with yourself. If you’re not up for ownership, take it as a sign. You know yourself best. If you’re going to get anxiety when a tenant calls or be nervous about the mortgage payment (despite all the reasons to suggest you’ll be fine), maybe ownership isn’t for you and that’s okay.

One thing I’ve been doing a bit more of is getting involved as a partner for others buying real estate. Basically, I provide some money in exchange for more money in return.

By going this route, it has the benefit of still being tied to real estate investing, and gives much more assurances on rates of return (hello, cash flow!) with amazing results. It just limits your risk or your exposure. Which is both good and bad. How? I’m glad you asked...

Good: there are no tenants to manage or roof leaks. You’re not the point contact, so you’re free to be you. Other than moving money through your bank, there’s not much else you need to do to be involved. This strategy is easy. Pure and simple.

Bad: you’re not the owner, so if and when real estate appreciates, you don’t get to benefit. You know those 3 ways you earn money discussed above? You’re only getting the one way in this method - straight cash flow.

Earlier I mention how cash flow earned is fully taxable. When you own real estate, it is. This applies when you lend money in this space as well, mostly. Sometimes the project you invest or lend on allows you to do so through your RRSP or TFSA. When that happens, that’s pretty special. If you lend $50,000 through your TFSA, and you make $5,000 in a year, it’s all tax-free. That’s like earning $10,000 more in your job! Not too shabby.

I’ve been working on building my network with people that I can lend/participate with as a straight-up investor. I’ve had money cycled in and out - it works. No 2 deals are exactly the same. Some have paid me:

• 7% interest along with ownership in the end result,

• 2%bonus when money is lent and then an on going 10% annual return

  within TFSA, or

• 14% straight annual payment with my name tied to mortgage for collateral

There are tons of scenarios and tons of valid reasons why people need your investment dollars. If you’re into something like this, reach out to me and I can start making some introductions. None of this is risk-free, sure. You have to take chances and make a change if you want change.

Conclusion

I am always going to be a student of my craft. I made a decision long ago to use money to make money. I tell my kids all the time that there are 2 ways we all make money: 1) we give up our time and work for it (this is a job), or 2) we use our money to work for it. The first way needs us to be present. The second does not and is scalable.

When I look at my real estate market in Toronto right now, I don’t see a lot of great options for earning the way that I’ve earned on my investments in the past. And I can’t settle for that. Not for me, and not for those close to me.

I’m still the right person to help you build your wealth and to get you in shape for an early retirement! The solution just looks a bit different. I’m not going to stop, nor should you. You ready to do something/do some more? Let’s get to work. Email me.

Love you all!

Buying your 2nd property first

There’s amazing content that follows this, though if you’re a classic TL;DR skimmer, here’s the point of this piece: using real estate as an investment really speeds up your savings, and will get you into your own home, eventually, a lot quicker. Buying your 2nd place first is the winning strategy for 2022 and beyond.

Unless you’ve been living under a rock or stuck in a basement in Toronto over the past year (or longer), you’ve likely heard about the runaway train that is Toronto housing prices. You’ve been seeing headlines since forever about how it’s unaffordable, or worse - unachievable - to become a property owner in Toronto. Disclosure: I’m a Realtor. I’m also very much a realist. (Note - If you’re going to read this as though there’s a bias, I prefer if you would consider reading this though my realist position.)

More than half of young potential buyers in Toronto have given up on ever owning a home, survey finds - thestar.com

We hear about it and read about it so often, that we’ve now taken this position as reality, and most of us are quitting before even attempting.

Unachievable. Are you kidding me? We’re letting headlines and naysayers tell us what we can and can’t achieve now? C’mon guys, we’re better than that.

I’m a dad. Never - and I do mean never - will my kids ever hear me utter these words. It’s so limiting and so defeating. 

I was a first-time home buyer 25 years ago. My immigrant parents were first time home buyers in their late 20s. It wasn’t easy for them, it wasn’t easy for me either. Though I will admit, it’s a lot harder today IF you were trying to do what we did: buying your first place and calling it home. I will concede, it is definitely more difficult for you all today.

Why is it more difficult today? You can look at many things here, though the simplest and most accurate reason is that home prices have increased more than the pace of salaries. That’s it. 

There are plenty of reasons why it’s happened this way - most of them come down to straight supply and demand issues. Economics 101, baby. Tie that in with government policy that seems to consistently backfire, a steady stream of population patterns that bring in people that just want to make Toronto home, and you have the foundation you need to mostly account for the price hikes in Toronto and surrounding areas.

So, yes, if you still look at things through the eyes of someone born in the 70s and 80s, things are pricier today. Maybe it’s time for you to stop looking at real estate as if the world is still stuck in those decades and consider a different strategy?

HOME OWNERSHIP IS ACHIEVABLE FOR FIRST-TIMERS

Let’s clean the slate. Let’s start fresh. We’re living in the now, not in the past. Home ownership is absolutely still achievable. I absolutely know this to be true. And it’s important that you do, too. You know the expression “if you think you can or think you can’t, you’re right!” Same applies here. It’s harder than it was, granted. This is exactly what we help people do on our real estate team. In fact, this is a speciality of ours.

For this next part, it’s best if you just forget what you think you know about real estate ownership for first-timers. Don’t bring baggage with you on this part of the discussion. Bear with me, I swear I’ll make this all make sense!

I’m a property investor. As an investor in real estate (in Toronto), my life and my future is infinitely better. I have created wealth, I hold tangible investments that I directly control, and I can make decisions about every part of these properties. These investments reward me over and over again.

I followed the old rule: own your first home, and then you can add to your real estate portfolio. Your 2nd property should be your first investment property. I accepted it for what it was, it made sense to me. What’s not often discussed is the fact that there are some massive tax planning opportunities that open up to you when you’re a property investor (when you own a home that you don’t live in).

Typically, when buying any property, you show up with some of yours and likely a lot of someone else’s (bank) money AKA, a mortgage. It’s pretty typical to see buyers put down 20% of what the purchase is and borrow 80% to make up the difference. In exchange for that 80%, you agree to hold a mortgage and commit to paying back what you owe over a 25-30 year period.

Maybe it makes more sense to use dollars for this example? Let’s do that.

Scenario: buyer buys a property for $600,000.
Her down payment of 20% = $120,000 (normally comes from savings, and/or the Bank of Mom and Dad)
Mortgage = $480,000 (monthly payments at 3% would be $2,272)*
*see end of article for all the math of this post
[I’ll refer back to this scenario as we progress through the chat, so park these numbers in your mind.]

It’s likely she can rent this place for less: let’s call it $2,000. Renting is cheaper than owning in this case and that’s why a lot of renters stay renters, and won’t make the leap into ownership. 

A lot of renters CAN afford, to buy something/somewhere, just not the home they want to live in. She dismisses home ownership entirely because she’s only considered buying the home she’ll live in. Years pass, properties appreciate - and she gets further and further away from grabbing on to that property ladder. Not sure if you’ve noticed, home prices have grown waaaaaaaaaaaaay more than salaries/savings. Waiting isn’t a winning formula.

Let’s stay in this scenario, just 5 years later. If rents weren’t increased (and rents do increase, by the way), this non-buyer would have paid $2000 per month for 60 months = $120,000 just in rent. All that money will go towards paying the landlord’s mortgage. 5 years in, she essentially made a choice to trade $272 monthly savings in rent (total “savings” of $16,320 during that time) in exchange for not owning for these 5 years. She paid rent of $120,000 that went to paying down a big chunk of the home - all to the benefit of someone else.

This is the classic “biting off your nose to spite your face” tale. To save $16,320, she was happy to pay $120,000 in rent dollars. Money that is all gone. Well, she nets out at only $104,680 gone - she did “save” $16,320, after all.

This happens ALL THE TIME, because we really only consider the one option of living in the first home we buy. Why can’t we separate out the wealth creation side of real estate from the “home” side?

We should. And we can.

This is where things get super interesting, buckle up!

If the property we’re talking about here increased in value 5% per year for each of those 5 years (FYI: the Toronto real estate market has appreciated on average 9.5% per year over the last 5 years**), that property that could have been bought for $600,000 is now worth $765,769. A gain of $165,769 in value.

If her landlord from above bought this property years ago for - call it - $500,000 a few years before this non-buyer moved in, with a 3% mortgage rate with a 25-year amortization, this landlord paid down $67,429 on her mortgage while this tenant lived there.* The tenant contributed $120,000, and nearly $70,000 of that went directly to paying down the mortgage for the landlord.

Another if here: If the property appreciated 5% per year during these 5 years (years 6-10 of ownership for the landlord), the property owner has seen appreciation during these 5 years of $176,307.*

Let’s go even further. Assume the landlord made no money each month - if rent just covered all carrying costs for the landlord without net profit each month, for example - this landlord just increased her equity by $67,429 + $176,307 = $243,736.

$243,736. In 5 years. With no effort.

You think this landlord may be able to do something pretty friggin’ awesome with $243,736 in 5 years? Like, perhaps, using that as the 20% she’d put down on her $1,000,000 home in the neighbourhood she’d love to live in?

Is there any reason why we can’t buy our 2nd property first? Absolutely not. It defies common knowledge, sure, though it makes complete sense!

If that tenant switched roles, and became the property owner on a home she herself did NOT live in, the landlord story could belong to that tenant instead.

Yes, if you could have you should have bought property sooner. And yet NO, not all hope is lost.

So, what do you do to make this a reality for yourself? You buy something. You figure out a way. You talk to people. You ask for help! 

You don’t need to move. Keep living where you’re living. You’re happy there, right? Just stay there. And make a plan to buy something less expensive than the home you’d be happy with, and rent it out. Start building your wealth in the exact same way your landlord is.

If the real estate market where the property you are buying takes off and appreciates 10% (as it has done in Toronto for each of the last several years), your $80,000 investment will turn into equity growth of $40,000+ each year, just in property appreciation alone. Remember, the tenant is also paying down your mortgage which directly increases your own net worth/equity.

It’s not easy, though it’s simple. We can’t do what our parents did. Accept it and move on. There are alternative paths to achieving the same goals. You CAN own your home. It’s not a straight line anymore. Who says it needs to be? I don’t.

Full disclosure, and to elaborate on a point above: I do run an amazing real estate team that helps people achieve this very goal in Toronto. We are open, honest, friendly and genuine. If there’s a will, there’s a way. I’ve shown you it’s possible. The next step is yours. We’re ready to plan with/for you (at no cost to you, by the way). You just need to ask -> info@teammangos.com.

*Math from above:

Purchase price of $600,000.

• Typical down payment is 20%, which equates to $120,000. Mortgage for remaining $480,000 priced in a 5-year term, 3% mortgage amortized over 25 years. Monthly mortgage payment is $2,271.58, made up of principal and interest. In 5 years principal pay down is $69,722 and total interest paid is $66,573.

• Appreciation is compounded annually. If this property appreciates 3% per year, here is where values would be after each year:
  End of year 1 - $618,000.00
  End of year 2 - $636,540.00
  End of year 3 - $655,636.20
  End of year 4 - $675,305.29
  End of year 5 - $695,564.4
  Gain in appreciation in 5 years is $695,564.45 - $600,000 = $95,564.45

Purchase price of $500,000 - 5 years before tenant moved in (when the landlord originally bought the rental property).

• Typical down payment is 20%, which equates to $100,000. Mortgage for remaining $400,000 priced in a 5-year term, 3% mortgage amortized over 25 years. Monthly mortgage payment when purchased was $1,892.98, made up of principal and interest. We’re looking at years 5-10 of ownership if we are matching the 5 years the tenant lived in the property. Whatever happened in the first 5 years (owner rented to someone else, owner lived in it) doesn’t matter. In the 5 years the tenant we are talking about lived in this property the principal paid down is $67,429 and total interest paid is $46,150.

• Appreciation is compounded annually. If this property appreciates 5% per year, here is where values would be after each year:
  End of year 1 - $525,000.00
  End of year 2 - $551,250.00
  End of year 3 - $578.812.50
  End of year 4 - $607,753.13
  End of year 5/Start of year 6 - $638,140.78
  End of year 6 - $670,047.82
  End of year 7 - $703,550.21
  End of year 8 - $738,727.72
  End of year 9 - $775,664.11
  End of year 10 - $814,447.31
  Gain in appreciation from year 5-10 is $814,447.31 - $638,140.78 = $176,306.53

**Market price appreciation from Toronto Real Estate Board over the last 5 years
2017: 12.7%
2018: -4.2%
2019: 3.9%
2020: 13.5%
Nov 2020-Nov 2021: 21.7%
Average of these is 9.5%  

Making the Move to Riverdale: One of Toronto’s Most Exciting Neighbourhoods

Riverdale is a vibrant neighbourhood just east of Toronto’s downtown core. The majority of Riverdale is made up of peaceful residential suburbs, with a wealth of different housing options. Just a short drive away from Downtown Toronto, Riverdale is unique in that it maintains its intimate community feel while also being directly adjacent to a major urban centre. Riverdale is broken up into several smaller neighbourhoods, each with their own unique characteristics and style. 

Where is Riverdale?

Riverdale is located just east of the Don River and has immediate access to the Don Valley Parkway and the Gardiner Expressway. The neighbourhood sits between the Don Valley Parkway and Greenwood Avenue, with the CN/GO train tracks following the southern boundary of the neighbourhood all the way down to Lakeshore Boulevard and Danforth Avenue serving as Riverdale’s northern boundary. 

The many neighbourhoods of Riverdale 

Riverdale is one of the largest neighbourhoods in Toronto, and over the years, distinct mini neighbourhoods have developed within Riverdale, each with their own unique personalities. 

Blake-Jones: This is the area between Pape Avenue and Greenwood Avenue in the northeast section of Riverdale. Blake-Jones also encompasses The Pocket, the area surrounding the TTC’s Greenwood Yard, which gives the area a more industrial feel. Blake-Jones is a tight knit, highly diverse community that attracts many families because of its proximity to transit and great schools. 

Greektown: This is the name given to the stretch of Danforth Avenue between Broadview and Jones Avenue. The name comes from the large Greek community in the area. This part of The Danforth is the central hub of food and entertainment for all of Riverdale with many local restaurants, shops, and pubs. There are over 70 different stores in this short 1km long stretch of road. 

East Chinatown: Located on Gerrard Street between Broadview and Carlaw, this is one of two Chinatowns in the city. As the name suggests, this area is home to a large Chinese community with some of the best Chinese restaurants in the city. 

Riverside: The largest of Riverdale’s subsections, Riverside is located between the Don River and Logan Avenue, with Gerrard Street to the north and Eastern Avenue to the south. It is a mixed income, multicultural neighbourhood attracting an eclectic selection of people. With an abundance of housing options from upscale detached houses to low rise apartments, and plenty of shopping, this neighbourhood is incredibly attractive for home buyers. 

Studio District: The southernmost section of Riverdale, the Studio District runs along Lake Shore Boulevard and is known for its loft style condos. This area is home to many creative industries, such as art galleries, animation houses, and music studios. Young professionals have been flocking to the Studio district in droves in the past few years. 

The types of homes in Riverdale

Riverdale has a tremendous selection of housing options. In the southern Studio District, you can find high rise condos with large open concept lofts. As you move north into the heart of Riverdale, you will find some low-rise apartment buildings and townhouses, but most houses will be two and three storied Edwardian and Victorian style detached homes built primarily from 1880-1924. 

Riverdale is often divided into Upper Riverdale, which is anything north of Riverdale Avenue, and Lower Riverdale, which is anything south of Riverdale Avenue. Lower Riverdale contains more original and classic designs from the late 19th century, whereas Upper Riverdale is more likely to have houses that have adopted a more modern design aesthetic. 

Making the Move to Riverdale

Riverdale has been one of the most popular neighbourhoods in Toronto in the last two decades, with many young professionals and families looking to move to the area. With the demand for property in Riverdale rising, if you have property in the area and are looking to relocate, this would be the ideal time to sell and make the most of an extremely competitive market. 

Side note: If you are trying to sell your home in Riverdale, it is likely that you will need to go through the process of home staging to make the house more appealing to the buyer (which Team Mangos can help you take care of!). Whether you are setting up your home for staging, moving into a new house or just needing to declutter your space, self-storage is a great solution. 

Right now, we’ve partnered with Storwell Self Storage to give our clients an exclusive offer of 4 weeks of free self storage. Storwell has locations in Mississauga, Etobicoke, and Scarborough. With its proximity to the highway, Riverdale is just a short drive away from Storwell’s Scarborough location at Markham Road and the 401. If you need storage for home staging or your next move, you can call or visit and demo a unit in person:

Storwell Self Storage 

85 Executive Ct, Scarborough, ON M1S 5W9

Phone: 416-534-5555

A brief history of Riverdale

Riverdale was a small village community until the mid 1850s when construction of the railway was completed. In the following years, housing was developed for the influx of workers moving to the area to work with the railway. In 1875, the House of Refuge was built; it was the first major health care institution in the area and would later be known as Riverdale Hospital. Riverdale was annexed by the city of Toronto in 1884; after annexation, development started north of Queen Street, which had largely been untouched before then.

In the following years, some of the most identifiable Riverdale landmarks were built, including the Broadview Hotel, which was built between 1891 and 1893 at the corner of Queen Street East and Broadview Avenue. 1918 saw a major step forward in Riverdale’s development with the building of the Prince Edward Viaduct, which was the largest bridge in Toronto at the time. The Viaduct connected Riverdale to the downtown core, making it a much more appealing place to live. 

Humanitarian Efforts in Riverdale

Riverdale has always been a neighbourhood with strong community ties. The people who live in Riverdale take pride in taking care of their neighbourhood and their neighbours, which is why Riverdale is home to so many community outreach programs and humanitarian efforts. Team Mangos is a proud supporter of one such organization that has its roots in Riverdale: The Red Door Family Shelter. The Red Door was started in 1982 in the basement of the Wood Green United Church on Queen Street East by a group of volunteers who saw that there was a need for more shelters in Toronto. The volunteers aimed to create a safe space for homeless families, families experiencing a housing crisis, women and children affected by domestic abuse, and refugees. The Red Door provides people with food, shelter, medical care, and counselling, not only to help them in the moment, but also to try and break the cycle of homelessness and abuse that so many families in crisis face. To find out how you can help donate to the Red Door Family Shelter, you can visit their website. 

Things to do in Riverdale

Riverdale has access to two major highways and several subway stations that can take you  anywhere in Toronto in under a half an hour. However, there is no shortage of exciting places to visit and things to do right in Riverdale itself. Danforth Avenue is the center of entertainment for Riverdale. You can spend hours walking up and down the street, exploring interesting little shops and boutiques and experiencing the cultural diversity of the area. Every August, over 200,000 people flock to this area to enjoy the Taste of Danforth, a three day long festival celebrating Toronto’s Greek community with dancing, music and food. 

Riverdale is also known for its active arts community. There are art galleries scattered throughout all of southern Riverdale. A notable gallery is The Gerrard Art Space on Gerrard and Coxwell Avenue, which highlights local artists and provides classes and workshops to the community. Riverdale is also home to the historic Opera House on Lewis Street. The venue fits 900 people, is over a hundred years old, and has seen some of the most influential bands of all time grace its stage. The Opera House is a fixture of Riverdale and one of the most important venues for music and performing arts in the entire city. Riverdale is also home to many public art projects; take a walk around and you’ll notice the many murals, paintings, and sculptures Riverdale is known for.

Parks and Recreation in Riverdale

Although there are portions of Riverdale, like The Pocket and the Studio District, that embrace a more industrial feel, there are still plenty of places you can visit to reconnect with nature. 

• Phin Park is located right in the heart of The Pocket just minutes away from Toronto Fire Station 323. It has a large playground structure, and outdoor ping pong tables. 

• Withrow Park is a large park in central Riverdale that has a soccer field, baseball diamond, outdoor rink, tennis courts, and water pad. It also has an off leash dog park for your furry friends to enjoy.

• Riverdale Park East is located on the west side of Riverdale, and it has a running track, baseball diamond, outdoor pool and seven well maintained tennis courts. This park also features a playground with specialized bodyweight exercise equipment, making it a perfect place to get an outdoor workout in the summer months.

• Jimmie Simpson Park is located on the south side of Riverdale on Booth Avenue. This park has two tennis courts, an outdoor rink, a baseball diamond, and is home to the Jimmie Simpson Recreation Center.

The Best Schools in Riverdale 

Riverdale’s strong school selection is one of the main things that attracts so many families to the area. The Toronto District School Board, Toronto Catholic District School Board, and Conseil Scolaire Catholique MonAvenir all operate schools in the Riverdale area. There are several good options for secondary schools in Riverdale including:

• Greenwood Secondary School

• Danforth Collegiate and Technical Institute 

• Riverdale Colligate Institute

A special mention to St. Patrick’s Catholic Secondary School located on Falstead Avenue, just west of The Pocket. St. Patrick’s received particularly high grades on the Fraser Institutes Annual Report Card for 2020 and ended up being ranked in the top 200 high schools in all of Ontario out of nearly 800 different schools.  

There is also a wide selection of highly ranked elementary schools in the area. Frankland Community School located at the corner of Danforth and Logan Avenue, received the highest grades by the Fraser Institute in 2020. Other amazing elementary schools in Riverdale include:

• Pape Avenue Junior Public School

• Wilkinson Junior Public School

• Holy Name Catholic School 

• Morse Street Junior Public School 

The best places to eat in Riverdale 

Riverdale has some of the best restaurants in Toronto, serving up dishes from all over the world. You cannot visit Greektown without stopping by Alexandros on Logan Avenue to try their world-famous gyros. Danforth Avenue has so many great restaurants and food options that it can be overwhelming at times. 

Simone’s Caribbean Restaurant on Gough Avenue provides a relaxing vibe with its patio seating and specializes in authentic Jamaican cuisine. Lalibela Cuisine on Greenwood Avenue is a long running family-owned business that serves traditional Ethiopian food with a wide array of vegetarian options. 

The residents of Riverdale are very health-conscious and environmentally minded and that is reflected in the food options in the area. Bare Market is Toronto’s first package-free grocery store that offers affordable and locally sourced body and home care products in bulk. Bare Market’s mission is to make sustainable and ethical living easy and accessible for everyone, a sentiment that resonates greatly with the people of Riverdale who have fully supported this effort.  

Riverdale is one of the most distinctive and exciting neighbourhoods in all of Toronto. Its excellent access to transportation, wonderful choice of schools, and wide selection of housing options makes it a popular destination for young professionals and families alike. Although Riverdale is just minutes away from Downtown Toronto, the area’s incredibly diverse and multicultural community has created an atmosphere that is wholly unique. Experience this neighbourhood for yourself and make the move to Riverdale today. 

Not making decisions is costing you!

I do a lot of my best thinking when I’m either in the shower or driving. For someone with great computational brains and an awful hard drive, this means a lot of my brilliant ideas (well, at least to me) never survive the shower or the drive. Although, I did just come out of a drive where I spent some time remembering an experience where I bought skis recently. The actual buy means nothing, though there are some real lessons from the way I remember how that all went down. Spoiler alert: when we make decisions, we do research and make a decision with at least some confidence. That’s how we decide (I just discovered).

Let me walk you through this simple buy and you’ll see what I mean, and how it applies to EVERYTHING!

I was going to the west coast (pre-Covid) to ski. I’m a snowboarder, and I decided I wanted to get back into skiing. I didn’t want to rent, so I decided to buy. That was step 1.

Next step was to go to the ski shop, check out skis, compare features and prices.

I wanted none of this. This is not how I enjoy spending time. In fact, I mostly hate shopping. I am great, though, at making decisions. I know this now as I reflect: I relied on others to do the things I didn’t want to do.. the research, the comparison, the pricing, the sizing. I really just wanted to get involved when it came time to walking to the cashier to buy and take the skis with me. Whatever those skis were.

The sales rep helping me was probably a minimum-wage (or slightly better) paid employee. He saw that I didn’t know enough to make a decision on my own. So I took his advice. On everything. The length of ski, the type of ski, the colour and price, the boots, the poles. You name it.

I bought it all on the spot.

I clearly trusted him with my wallet. I guess, looking back, I had to decide if I cared enough to learn about all of this stuff myself or if I was going to trust someone who convinced me he knew more about what I needed than I knew myself. He took over the research and selection part for me, and clearly I was fine with that.

The research had to be done, and I outsourced it.

Now that I’ve skied with this set a few times - maybe I would have made another choice if I personally had any part of deciding. Honestly, it’s fine though. I’m ok with the trade-off. I’ll never really know if what I bought was the right or the wrong thing for me. And here’s the thing: I don’t care! I don’t live in regret that way, ever.

I decided. I made my choice back then. Many of you will have never heard me say “I wish I [fill in the blank]…], because I don’t live there.

So, here’s what I learned about myself and about us - and how we decide. I can say, also with confidence, this is how I see things across any decision (yes, including big real estate decisions):

• When we set out to do something new, we want to learn about it first

• The bigger the stakes, the more time we spend learning and researching

• Researching goes on and on, at our own pace, in scale with the cost of the decision. The higher the stakes, the longer the decision - often.

• When we know enough, we should make the decision so that we can move on and start enjoying it, and then focus on our next decision.

• If we stay in research mode too long, at some point, we become indecisive. And this is where there are diminishing returns. The classic “over-thinking” pushed us too far, and now we can’t come back. We’ve spent sooooooo much time thinking about it, if we make the wrong choice now it’ll be a total disaster! Yikes! When this happens, the safest decision is to not decide. You can’t make the wrong decision if you don’t make one.

Here’s what we don’t often consider: choosing NOT to decide is in itself a decision, and it’s often the wrong one.

Keeping it simple, if I had to point to one thing above all us in creating personal wealth financially, it’s the fact that I decide. I make decisions. Right or wrong, I never beat myself up about it, and I’m right far more than I’m wrong.

I look at all the reasons why I should do something, sure. And of course I look at the reasons why I should NOT. I just won’t spend all my time in the “NOT” category, thereby missing or losing an opportunity. Because that’s what happens. I refuse to spend more time figuring out why something great may fall apart if Jupiter and Mars are in the 3rd quadrant, when I know it’s way more likely that all the good things I’ve found out about are going to make my life better than they are worse. 

Yes, of course, sometimes I’ll be wrong. We all will. If you go into a decision with clarity, though, and you’ve looked at the good and the bad - I think it’s important to stop yourself from looking for reasons why you shouldn’t when you should. Or worse, being indecisive.

Living with (and LOVING) Leverage

Quick: what’s the first thing you think of when you hear the word “leverage”?

I know most of you see DEBT (!) when you see that “L” word instantly. Somehow, someway we’ve all been told to avoid debt, to avoid leverage. We’re conditioned. We all read the same headlines..

“Canadians are over-leveraged!”

“Leverage is at an all-time high!”

It’s time we faced the truth, though… leverage is the key to happiness. Stick with me, I’ll explain why and share my own experience with my favourite word, leverage.

Leverage doesn’t mean debt. It includes debt. Sure. It’s just so much more than debt. 

I see leverage as this: sharing your responsibilities with others in exchange for your time and your money. You could also phrase it as “offloading your responsibilities” if that helps to understand it. If you want more time and you’re willing to pay for it, leverage lets you get away with NOT having to do what you don’t want to.

When you ask your neighbour to pick up your kids from school because you’re running late, you’re leveraging your relationship with your neighbour.

When you pay someone to shovel your driveway for you so you can stay in and cuddle by the fire, you are exchanging your money to save some of your time. That’s leverage.

When you buy real estate, and you take out a mortgage for 80% of the value of that home, that’s using leverage. This one is debt, sure. You’re also asking someone to pay that 80% up front (in exchange for monthly payments, of course) so that you don’t have to use your 80% right now.

Leverage.

It comes in all kinds of forms.

Growing up as the son of immigrant parents that cared for nothing more than to pay down what they borrowed (mortgage), I learned early and often that debt (/leverage) was a bad thing. I actually believed this lesson so strongly, that it probably set me back a few years in my financial evolution. We all likely have had that same programming installed in our minds.

My wife didn’t grow up with gold bars in her family, either. One of her biggest fears growing up was not having money. She would hear “debt” and panic. The thought of owing someone money still gives her jitters. Until she saw how we used "good debt” to build a lot of wealth.

Now, she tends to bring up teaching financial literacy at home with my 2 young daughters. She’s entrusted me with teaching this subject. I will teach the difference between good debt and bad debt. I won’t share the same lessons I’ve learned from my lovely parents, I can tell you that.

Why do we think debt is so bad? Or that all debt is bad debt? 

When you owe a friend some money, of course you should pay them back in full right away. However, if you’re borrowing money and that money is making you more money than it costs you, is that debt still bad? Is leverage the worst thing in that scenario?

When I shifted my perspective on using “other people’s money” (OPM) to make more money for myself, everything changed for me. OPM opens the door to making a lot of money.

Really quickly (I promise I’m not going to preach investing here) - I’ll share how this works using an example. If I borrow money to buy a property - I’m generally borrowing 80% of the value at, say, 3% interest (this is the mortgage). WHEN the property appreciates (not IF, but WHEN) call it 10% in my first year of ownership, it appreciates 10% on 100% of it’s value, not on the 20% I’ve invested. If this happened in a year, I would have earned over 10% and it would have cost me 3% to borrow that money to make that money. I traded 3% for 10% using leverage. See what I mean? I’ve simplified it, but you get the point.

At this stage in my life, leverage has added meaning. Leverage means way more than debt or “other people’s money”. Leverage of time is now the single most influential factor in my life.

We’ve heard this often, time is the one thing you can’t make more of or buy more of. It just doesn’t work like that. Time is our most precious commodity. 

So I’ve made a conscience decision to use leverage to keep my time to myself. So I can do the things that I want to. So I can apply my financial gains towards things that are most important to me. Family and freedom.

I could do everything on my own, and give up my time in exchange for earnings. Totally. It’s how I started my career and built a business worth having. It was what I needed to do, it was what I wanted to do. I still very much love to work.

What I have realized quite clearly is that I have to be selective on what I do with my time. Even if it means choosing to Netflix and chill. That’s time that I otherwise could be working or doing other things. 

When I choose to not do something - to trust others to do it for me (in exchange for money, often) - I’m using leverage to retain my own time.

It’s a tough pill to swallow. And don’t tell my parents who would write me off if they knew that I chose not to earn more when I could, so that I could Netflix and chill.

Leverage gives me time with my girls. 

Leverage lets me watch the Raptors game.

Pre-pandemic, leverage used to let me have date night with my wife while clients submitted offers.

Leverage is going to allow me to vacation - or work-from-away - for months at a time. I have the team of people in place here to make sure all of my promises and obligations are well looked after (probably even better than I, personally, could do).

Leverage has allowed me to help the next generation of earners that work with Team Mangos to stand on their own 2 feet, buy their own homes and exceed in their careers.

In fact, leverage has created better Realtors on my team than I could ever hope to have been on my own. I allow my team to learn and expose them to a lot, and now they are better than I am at everything!

Leverage made all of this possible.

So the next time someone tells you that you’re over-leveraged, maybe say “thanks”?

Investing during a pandemic, for the win!

Toronto: 2020.

When Coronavirus hit, it stopped everything. Lockdowns. Slowdowns. Panic. Concern. Anxiety. All of that happened. It’s how we reacted. Frankly, it’s how we react in general. I honestly feel that, as a society with access to social media and the internet and the endless scroll, all reactions have the ability to easily transform into over-reactions with very little effort (Natalia and I wrote about just this a little while ago). 

Real estate isn’t immune to those feelings. Real estate demand is always - and has always been - about the confidence we have in the market. There’s even a phrase for this in economics: consumer confidence. When it’s high, prices rise. When it’s low, prices fall.

I bought a vacant house in 2020. People thought I was nuts. It was May, we had just come out of a lockdown. People were genuinely worried about their jobs - and rightfully so. Some industries weren’t going to survive. Jobs were certainly going to be lost. Pessimism was on the rise. Consumer confidence was definitely low. The end was definitely not in sight.

To add to that, as a property investor looking at market rents, prices were falling. Then there was the fact that some tenants were holding back rents from their landlords, ignoring their contracts and obligations. 

Yup, consumer confidence was pretty low. 

As an observer of the market (and now serial property investor), I believed we were in classic “over-reaction” mode in real estate in Toronto. That over-reaction would be corrected in due time. That meant I had to act. I had to be a buyer of my next income property. And I had to tell my wife about “our” plans, gulp.

You see, I’ve seen the market over-react in both directions (oh, hello, early 2017 - I have not forgotten about you and your tremendous over-valuations). My team was there for that ride. I’m fortunate enough to be able to pull from that experience.

If you spoke with me about real estate in April, May and June, you would have heard me encourage you to buy an income property - “or move up” if you were thinking of expanding the size/type of your home. “Now” was the time, for sure.

Part of my excitement came from my gut. Yes. A lot of it also came from looking at facts. 

Prior to COVID-19, Toronto was on fire. The city kept growing and growing. Our immigration research shows that many (nearly half) of new immigrants end up in the GTA shortly after arrival. It’s where they are comfortable mostly because there are others just like them in Toronto. Definitely one of the benefits of being such a multi-cultural hub. My Greek parents ended up in Toronto because there were many other Greeks here. Some things never change.

Toronto’s economy isn’t big in any specific industry. It’s massive in every industry. It’s on the leading edge of the fastest growing industry (tech). It’s the financial heart of the country. And not just any country. Canada. Which, in 2021, is very different from the U.S. 

Canada is globally recognized as safe and clean and law-abiding and inclusive. There’s the thing about access to health care, of course. That also plays a role.

None of these fundamental aspects of Toronto had changed in 2020. Toronto in 2021 will be exactly what we think it will be. There will be a normal again. Toronto will be Toronto again.

When real estate showings dropped off a cliff (!!) and sellers still needing to sell for any number of reasons in the spring of 2020, I knew I had a job to do. I had to buy my next property.

So I bought a house. It is a semi-detached bungalow (yes, they exist). It had a renovated main floor with 3 bedrooms upstairs and a mostly unfinished basement. It was exactly what I was looking for.

The Buy:

Semi-detached bungalow in Scarborough
Purchase price $720,000
Down payment $144,000
Mortgage of $576,000

The home was sold by the estate of the deceased owner.

The plan:

I didn’t want this home for what it was. That’s not my style. I wanted it for what it could be. I saw an opportunity to add another multi-family home to my portfolio. That meant creating a legal 2nd suite in the basement. I also had a few reservations about the upstairs renovation, so I felt compelled to put my touches on that unit as well.

Upstairs:

I had 3 goals here. I wanted a new kitchen (with new kitchen appliances). I wanted to place a laundry suite somewhere in the unit so the new tenants would have private laundry. And I also wanted to introduce proper smoke/CO2 alarms that would integrate with the basement.

Achieving those goals cost me about $15,000. I also splurged and put in brand new windows. I couldn’t resist.

The upper suite was rented to a great family for $2,250 per month plus utilities.

Downstairs:

I had to do everything in this basement. There’s nothing I wanted to salvage really. When you hear about full-gut renovations, this was that. I even ran new underground drains just so I don’t reuse any old plumbing that may have been faulty. Last thing I want is to tear up the floors to fix a plumbing issue in the future.

We worked - and then reworked the layout for the basement. I settled on a 3 bedroom layout. There’s a great work-from-home space in one of the bedrooms. There is tons of storage space. Closets everywhere!

I spent much more money on this part of the house. All-in, I’m closer to $70,000.

The lower suite was just rented to a couple that have grandchildren in the area for $2,000 per month plus utilities.

Renovations completed

I closed my purchase on July 28. The home had passed final inspection by the city in December. The basement took about 3 months from start-to-finish. It was smooth, it was perfect.

Fast forward now to early 2021. Where are house prices in the area? Similar homes (including the attached neighbour to me in original condition) have been selling for $850,000 to $880,000. If I listed the home today for sale, I’m very confident I’d achieve close to $950,000 in market value. This home is going to play a large role in my future, I will not be selling any time soon.

I’m a big fan of the Buy-Renovate-Rent-Refinance (BRRR) strategy. I’ve modified to customize it for myself, it’s called the Mangos Method when I do it (shameless plug: I teach this to clients at mangosmethod.com if you were interested). 

I had completed the B, and the first two Rs. Now I wanted to move to the refinance. For those that aren’t too familiar with this strategy, I’ll explain why refinancing in this strategy is absolutely, positively, unequivocally ah-mazing.

The last “R”

When you first buy a place with 20% down, you’re borrowing 80% for the rest, right? In this case, I put down $144,000 and borrowed $576,000. I had to finance the renovations part as well (all from my home equity line of credit, or HELOC). When renovations were completed, it was time to refinance with an appraisal that would come in above the $720,000 I originally bought the house for, and for which the original mortgage was based on. 

The goal was to have the appraisal completed showing a market value of $950,000. If that happened, I would take a new mortgage to replace the original one. The new mortgage would have been for 80% of $950,000 = $760,000. 

That $760,000 would go towards paying down the original mortgage ($576,000) and to paying me back for my down payment ($144,000). Essentially, the $760,000 cheque I wanted to receive would have covered the entire purchase AND the first $40,000 (of the $85,000) of renovations. 

Having done this before, I honestly expected the appraisal would show $950,000 and the plan would be executed flawlessly.

Such was NOT the case, however. The appraiser decided that $880,000 was the appraised value. The same price that a nearby semi-detached bungalow sold for without a legal or renovated basement apartment. The appraiser clearly did not agree on market value. I fundamentally disagree, but that’s a discussion for another day. For now, suffice it to say that appraisers really aren’t accurate when you’re the best home on the street. They have internal informal limits that they apply so that they can’t ever come back with an appraised value above any recent sales. They don’t want to be challenged by their clients - the lenders.

I was up against the clock - having already spent this extra cash on the next project (more on that in the days/weeks to follow), so I had no choice but to work with this single - and unfair - appraisal. Closing on the next place was in a week, they had me right where they wanted me! I had no time to get a 2nd opinion on my 2nd suite renovation.

Still, let’s see what this refinance did, shall we?

80% of $880,000 is $704,000. That covered most of the $720,000 I paid for the house. I’m short just $16,000. Along with that, I’ve got my renovation money of $85,000 still in the house. For now. 

Final Results

I’m in for around $100,000 of my own money (well, from my HELOC, really). And I have 20% equity at this “lower” value of $880,000 - which is $176,000. Based on this lower valuation, I still turned $100,000 into $176,000 in a few months. In my honest opinion, that should have been more like $60,000 (if my purchase was covered and the first $40k of the $100k renovation) turned into $190,000 (20% of $950,000). But I’ll take it. It’s still a huge win.

I could sell today I’m sure for $950,000 or very close to this and realize that gain. This home will play a key role in my family’s future, so I won’t. It is nice to know, though.

Thinking long term

My plan was to buy when I saw an opportunity and hold for the long term. Even if I did not buy as well as I did, the results would still be amazing over the mid to long term. I know that. I’ve seen this first hand for years. 

Here’s the absolute truth: Time IN the market in real estate is way more important than timing the market. Always remember that. That’s where winners are made.

If you take anything from reading this, I hope you see real estate investing through a different lens. Investing in real estate has changed my life and given me the confidence to make choices in my life that are not born out of “lack”. I know I’ll have a fine future because of it.

Are you a real estate investor yet? If not, what’s holding you back? Call me. Let’s talk about this.

Not paying rent? You’ll end up with less. Here’s why.

Seemed like a normal time way back in March. I remember gearing up for March Break with the kids, plans in tow. In the days leading up to the final Friday before the Break, doubt started building about whether or not this “Coronavirus” thing that we keep hearing about was going to derail our plans.

That last Friday, we were told school wouldn’t be returning for a few weeks - this “Coronavirus thing” was forcing us to quarantine. We cancelled whatever plans we had for the break and bolted the doors to our home. Nobody in or out!

Then I had a thought: if I’m quarantining, and my wife is quarantining, and our peers are quarantining — everyone’s quarantining — was anyone working??

The answer was no. Nobody was working (not at first anyways - the infrastructure wasn’t ready in those early days). The entire economic output - the job force - was significantly reduced. Fewer people were able to work (and earn). With less/no income, expenses can’t be paid. That includes rent.

So what happened? Premier Ford realizes that without income, tenants may not be able to come up with rent. Well, if rent isn’t paid, evictions are inevitable. We all know this can’t be a real outcome - how can we stay home if we’re homeless! And so Ford announces a bit of a relief for tenants (it should be noted - there was no matching relief for landlords): the province defines rules that prohibit evictions of tenants that don’t pay rent.

And that’s when an idea emerges:

If I can’t be evicted for not paying rent, theoretically, I can choose not to pay rent without consequence!

Tenant groups form on social platforms and build a “Keep Your Rent” movement. Tenants encourage other tenants to withhold rent payments to their landlords. I see the logic here, from one perspective. There is certainly strength in numbers, after all. Tenants that have been hard hit by COVID-19 need a lifeline, and this idea of withholding rent from their landlord could be the solution they need to get by.

Many tenants definitely don’t want to execute on this strategy, but times are what they are and many are doing what they need to do to survive.

And of course, many other tenants simply have made a choice to not pay their rents. Because they don’t want to, and now they don’t have to.

In this “movement”, landlords are categorized (fairly or unfairly) as unfairly wealthy. Your landlord, the person you are NOT paying, is left without any assistance. Not paying their debt obligations isn’t an option. Without some source of additional income (rent), they can’t pay their expenses (mortgage/taxes/insurance), either.

Understanding each other’s position and operating in good faith, some landlords strike agreements with tenants on modified payments. Some don’t. Some tenants refuse to pay rent - since there is no risk of eviction. Because: “Screw you, rich landlord!”

Except, these missed payments are not ignored, or forgiven.

Debt is created.

Some tenants (including some of my own tenant partners - I’m not immune to this) choose to end their agreements and move back home. If work isn’t active, and you’re here for work - they don’t need to be here. Totally understandable. One of my tenants on a brand new lease did me a “favour” after consulting with his property manager father:

“Look Donny, I’m just trying to be honest here. I could just stay here and live for free, but I don’t want to do that to you. So I’ll just leave regardless of the agreement terms we agreed to a couple of months ago and you’re going to have to deal with it.”

Some tenants actually feel as though they have the option to pay rent, or not. And that’s a problem for everyone. I’ll explain more about this very point later in this article.

Back to increasing vacancies…

Many tenants are leaving or have left their rentals. These places are put back on the market. Flat out: supply is increased.

Fewer tenants are looking for rentals in light of the economic uncertainty.

Demand decreases.

This is straight up supply and demand at play. Economics 101.

When supply increases and demand decreases, prices fall. And that’s exactly what we’ve seen. Rental prices have dipped and more units sit on the market.

In time, the market will adapt. As of August - this is where we are in Toronto. A lot can and will change in the near term.

Very recently, a new bill was passed by provincial parliament that made some changes to this whole landlord and tenant dynamic. Many, many more tenant rights were given in this bill, and severe landlord penalties are now imposed under certain situations. However, tenant advocacy groups are particularly worried about the part of the bill that allows landlords to evict tenants for failure to pay rent. It’s now allowable to evict tenants for non-payment, and this can be applied retroactively all the way to March.

If you did not pay rent during the rent relief period, you face eviction right now.

Tenant advocacy groups are understandably now up in arms about the unfairness of this rule, and how it’s inhumane. They argue that tenants who entered good faith agreement with their landlords to make repayments or partial payments of rent are now at risk of being evicted. These groups choose to consider the fairness of this bill from a single angle.

Same deal with landlord advocacy groups. Their argument is that no mention is given to how non-payment has affected landlords and their inability to survive with multiple mortgages during an economic crisis. Their argument is that it’s assumed landlords are wealthy and can weather this storm.

Not all landlords are great people, and the term “slumlord” exists for a reason. But I know many landlords, and almost every single one of them is a small investor, and a perfectly fine human. The ones entering good faith repayment plans are not using this bill to evict tenants that they enjoy a good partnership with. I find that landlords are demonized among many tenant groups for some reason.

Landlords aren’t the boogeyman They’re people trying to make the best lives for themselves, just like everyone else. There are certainly some bad apples in the bunch. Same goes for any categorization of any human group.

Bottom line: I understand the perspective on both sides of this battle. And it is very much a battle.

I’m a landlord, and a tenant. I think I’m fairly level-headed. And I agree with every article written that tries to describe this tenant-landlord dynamic, and how the system is broken.

I believe in us. I believe in our country. I love living here. I love that there are rules and consequences and it’s not the Wild West. It levels the playing field and allows anyone to flourish.

I believe when a contract is violated there should be consequences. It’s applicable in all other parts of our amazing Canadian lives, except this. Some tenants are surprised when they are expected to follow through on promises they made. Why? If you don’t pay your phone bill, it gets cut off. If you don’t hold up your end of the bargain, you ruin your agreement.

My problem - and again, this goes to unfairness of application of laws - is that landlords can’t sever a contract because they changed their mind. I’ve seen first-hand how the wrong tenant becomes threatening and maniacal, and knows they can be because of provisions built-in by the current landlord-tenant guidelines.

The same rules that were put in to protect the vulnerable have become weapons in an arsenal for egregious, and often “professional”, tenants.

Evictions and pricing of future rentals

This new bill “threatens” (though it’s likely not realistic) to start a process of mass evictions. You failed to pay rent, you lived without any fear of losing your rental home, and now time’s up.

There may very well be a lot more places up for rent very soon, and certainly more tenants looking for a new home.

Trying to be the prognosticator, here’s a very possible outcome to all of this:

• Supply increases again, along with demand. We’ve seen evidence already start on this point.

• Increase in demand from tenants due to the number of evicted tenants seeking accommodation. Any landlord that does their research on a prospective tenant will reject tenants that are unemployed or who didn’t pay rent. These tenants will be under severe pressure to find a new home.

• Many small landlords will remove their apartments from the pool of available rentals, citing the tenant protections as their motivation for getting out of this business. These homes will go up for sale, thereby reducing supply for rentals.

• Tenants that have terrible qualifications (see “past non-payments” discussion above) will have to entice a landlord with money when competing against another tenant for the same apartment.

• There will be greater increase in demand than in supply in light of all of this.

• Rent prices increase significantly.

These very same tenants that sought to reduce their costs by withholding rent are going to have unintentionally created a surge in rent prices in Toronto.

This will serve as a classic tale of focus on short term over the long term, or cutting off your nose to spite your face.

I personally have held amazing relationships with my tenant partners. I value them as people and as partners. We win together. As long as they stay this way with me, I will do the same. Most landlords feel the exact same way.

I’ve been the exact same as a tenant.

The last thing any of us want or need is more friction in this already fragile world of landlord and tenant relations. I feel it’s about to get a whole lot worse.

Season 2 Episode 5: Airbnb, Toronto, COVID-19. All together.

Season 2 Episode 4: How much money are banks making off of us during Covid-19?

Season 2 Episode 3: From the Attic... Coronavirus and the Toronto real estate market

Season 2 Episode 2: Mortgage deferrals and NO APRIL RENT rally

Season 2 Episode 1: Toronto in 2030

The complicated truth about Airbnb and Toronto

**Note: I mention “Airbnb” in this article, though I generally mean any short term rental platform

Something happened in my neighbourhood over the weekend. It didn’t make the news (for some reason) and it was eerily similar to what we have seen elsewhere.

I woke up to early morning text and Facebook messages from a few neighbours sharing photos of yellow police tape blocking a section of street where I live with my family. In our very family-oriented and family-friendly pocket, gunshots were fired overnight from the street to a neighbour’s house. Casings found on the street. Bullet holes lodged in the house.

One of the houses on the street is used as an Airbnb rental. It’s a semi-detached house. The other side of that semi belongs to an amazing - AMAZING - woman, who also happens to be a single mom. She wasn’t home at the time, though she could have been and her kids were way too close to this for this to be ok.

The home that was shot at had been listed and rented on Airbnb and is rented often using that platform. This isn’t an Airbnb-specific issue, this is obviously a short-term rental type of problem. My friend (the attached neighbour) has had to call the police 3 times prior to this call for a few issues including domestic abuse and noise violation. The owner of this trouble home has seemingly chosen to overlook all the complaints, probably because the money is good on rentals as it is currently being used.

Another one of my best friends on the street sourced out and connected with some senior staffer at Airbnb to express his (and our) concern. Why are there gunshots at 3:30am near Christmas on a quiet street that’s usually loaded with kids, bicycles and wagons? Who are you enabling? How could you let this happen? Her response was immediate and she vowed “to take swift action”. What that action will be remains to be seen. Her handling of this up to this point was great, I will admit. Silence would have been met with more aggression.

You see, people looking to cause trouble could use platforms like Airbnb often. It provides them cover, shelter, and most importantly a lot of anonymity. They can do what they want and then move on. You could use your cousin’s brother’s grandkid’s nephew as the point person and profile that acts as the tenant, and then do what you want. Most rentals are absolutely, positively, totally fine and honest. Some aren’t, though. And that’s the problem.

As a user of Airbnb myself when I travel, I’ve never had any negative issues to report. I can see why travellers love this tool. I’m a fan, myself. In a world of online-reviews, it doesn’t look like there’s an opportunity to misbehave. What happens in Vegas won’t stay in Vegas if you’ve stayed at an Airbnb. And I like that. We should all be accountable for our actions and history.

In any case, from a tenant’s perspective - there’s a LOT to like about using short term rental platforms. It fills many needs. The bigger problem is with landlords using the platform in Toronto.

I think there’s a missed point that is clearly being made when it comes to the motivation on the part of the landlord to list using Airbnb. There’s been lots of attention at City Hall about recent decisions made by council to limit the way Airbnb is used by landlords.

Landlords want to be able to list many properties, full-time and in perpetuity. A part of the population in Toronto that rents wants these properties to be made available to long-term tenants. The hotel industry wants Airbnb to go away.

Let’s focus on this: Why are landlords so up in arms about being able to rent on Airbnb?? I have a strong opinion about it — as a landlord, as an investor, and as a real estate broker. My perspective may be a bit different than most.

Here’s the long answer…

Landlords (and tenants) are governed by the Landlord and Tenant Board (LTB) in Ontario. There are significant protections in place for landlords, and mostly for tenants. I won’t argue on either side of this position, just want to point out that landlords in general have a negative opinion about the rights afforded to tenants under these laws.

“Professional tenants” exist in hordes and they can use the rights in the LTB to live rent-free for months and months while skirting eviction. Landlords can make life difficult for tenants, and tenants can certainly make life difficult for landlords. I remember recently reading The Toronto Star, and there was an entire section dedicated to explaining to tenants how they can avoid paying rent if they’re unable to.

Landlords generally feel that tenants have unfair rights, at the expense of the landlord. It is because of this that landlords want to limit the risk of selecting the wrong tenant. Because once they’re in, they’re in.

When a landlord rents using short term platforms (STR = short term rentals), they operate outside the jurisdiction of the LTB. Evictions are swift because they’re not really evictions. Airbnb acts as an insurer of sorts if there is damage. Landlords can adjust prices as they so choose (there are rent control laws that severely limit what a landlord can charge via LTB).

I strongly feel that the decisions made by our past Liberal provincial leaders to place rent control limits has had many unintended effects - including the move of landlords towards STR and away from long term rentals.

Playing this out… that in turn has led to a reduction of availability of homes in the rental market, which has led to increased demand and reduced supply, which directly increases competition and, thus, prices for rentals.

The very same legislation intended to reduce housing costs has directly caused the increase of rental prices. And now we can see that it’s also had an effect on the fabric of our neighbourhoods.

This landlord that owns this home that was SHOT AT will likely defend his choice to continue to rent using STR because he doesn’t want to rent to someone with an agreement that is governed via the LTB. As far as I know, he has no intention of making any changes to his current rental structure. It’s still on Airbnb.

Renting on Airbnb does not necessarily mean you’re helping to commit a crime. Though it does enable crime and it does make neighbours feel a bit uneasy with the loads of unfamiliar faces in an otherwise familiar place. Would you agree?

**Update after publishing: Airbnb has suspended the listing after an initial investigation. The city councillor has reported the home as illegally operating under new city rules governing STR. As of December 18, this property is not an option as a short term rental.

HANDS-FREE Real Estate Investing

The further I get into investing in real estate, the more I discover that most people in general avoid investing in real estate. The question I keep asking myself is: Why??! 

I’m living, breathing, and walking proof that investing in real estate - even in small doses - can have a tremendous positive impact on financial freedom and independence. When I’m asked, I happily share what this focus has been able to provide for my family. Yet, I still see reluctance from many in my world when it comes to executing on real estate investing.

In Toronto, specifically, real estate has had amazing and consistent success. The growing metropolis takes on more net residents each and every year. It’s the largest city in a great, safe and inclusive country. When I analyze supply and demand as an economist does, it’s clear that there’s still every expectation that prices in Toronto real estate will continue to rise. There is no dispute that this is true for the next couple of years.

So why isn’t everyone that is ABLE to invest in an income property in Toronto choosing NOT to do so? I think I finally understand why.

I’m fortunate to speak with people exactly in this position. In my own personal research, more often than not, here’s the reason they don’t make real estate a category in their investment portfolio: They don’t want to be a landlord. It’s not so much about affordability.

Their expectation is that being a real estate investor means they have to agree to becoming a landlord. I think “landlord” somehow morphs into “slumlord” in the mind of the non-investor. And, of course, nobody wants to be thought of as one of those filthy creatures.

Most people choose to ignore the billion (or so) benefits that investing in real estate brings. They won’t consider for a moment what the effect of true passive income could do for themselves and their family. The tax benefits. The passive income. The financial control. And they can’t get past thinking of themselves as a - bleh - landlord.

Well, the problem-solver in me couldn’t live with this realization. I know too many wonderful people that are misinformed and misguided. I couldn’t sit idly by and watch as opportunity passes them by. You don’t want to be a landlord? You don’t have to be.

We created a property management company to be the landlord of your investment property. In exchange for a 5%-of-rent fee, Keep It Managed (that’s the company) deploys a certified property manager to handle your rental property. If you want details on this, send me a note and I’ll happily share more on this. Just know that it exists and “it” is the landlord of your property, so you won’t be.

I’m not going to let these good people - close friends, family, neighbours - throw away their chance for a better life with greater financial rewards because they don’t want to be landlords. I’m determined to make real estate investing accessible. Every challenge is an opportunity for me to create a solution.

I say this all the time, and I think it’s important to mention this here now: real estate as an investment is AMAZING for many reasons, including the fact that as an investor real estate pays you in 3 ways. 

So, assuming I can take away the burden of being a landlord and still allow you to retain all of the good that comes with owning property in a city that is growing short on it and the massive wealth that is going to be built, are you still going to choose to miss your chance to claim these rewards? 

Our investing plan at Team Mangos CONSERVATIVELY lays out how we expect to DOUBLE your investment dollars in under 5 years with very little (maybe even no) risk. Up to this point, we’ve done it in far less than 5 years (some under a year!). It’s been proven, and it works. And it can be done without you ever having to claim the “landlord” title you’ve been avoiding.

It’s not easy, but it’s simple. We want to explain it to you live and in person. Your first step is send me an email (donny@teammangos.com) to ask for a meeting. The rest is figured out with you and for you.

I think the question you have to ask yourself is this: if you had a chance to invest in real estate in much the same way you invest in other, more traditional investments - and knowing what you now know about the doubling your money without needing to be a landlord - are you still willing to avoid real estate and the amazing benefits it provides?

Completed our first collaboration with Suite Additions

The “P” Word: my love/hate relationship with it.

I’ve always hated this word, truth be told. I’ve tried to avoid using it for forever. The further I go into my business, and the more I speak with my wife at home about our life goals, it keeps popping up into the conversation, inevitably. This damn word: Plan. It comes up everywhere I turn these days. It’s even in some of favourite sayings, like “Failing to plan, is planning to fail.” Damn you.

I’m literally writing this from an airplane seat, en route from Barcelona to Athens (and no, I’m not in first-class). If my wife and I hadn’t have - um - planned for this trip, I wouldn’t be airborne over the Mediterranean Sea with my family. So, yes, I get the need to plan. It makes things happen. It provides purpose, and motivation, through the use of intention. I just don’t love living my life with a plan. I’ve resisted for as long as I can. Though the best things in my life took time, and a plan, to come to be what they are today.

Let me switch gears and go back in time, and maybe paint a picture of the deeper “me”. I’m really easy-going. I almost feel like a real-life Winnie the Pooh, in all fairness. I don’t every really feel high-highs, or low-lows. I’m almost always in the same mood. If you know me, you may have recognized that I’m always in a good mood, never really angry or sad. Always steady. I think that comes part and parcel with my reluctance to plan. I don’t feel like I’ve let myself down often. I don’t overthink things. What feels right, I’ll do. If it doesn’t, I won’t. To quote my boy Dwight Shrute from “The Office”, “When facing a decision, I ask ‘would an idiot do this’. If the answer is yes, I don’t do it.” In not planning out much of my life, I was able to not worry about not meeting expectations, simply because I had no expectations! Maybe, just maybe, my personality has taken the form it has BECAUSE I didn’t plan? Sounds like a theory to test out, perhaps in a future blog ;)

Not planning, though, has it’s drawbacks. Especially for a business owner, and for someone’s Daddy. So that part of my life is officially over. It’s not easy for me to say good bye to that. It hurts, truth be told. Planning makes my wife happy, and therefore, me happy. Another saying: “happy wife, happy life” is basically the mantra through my 30s and into my 40s.

So, from this point forward, my path is a planned one. It’s one driven by intention only. And here’s what I expect..

• Our family vacations will be great, and they’ll be long

• My real estate team will grow, and we’ll rock it. We’ll do so, not by counting the number of sales we make (ew!), but by counting the number of lives we’ve made better

• The number of solutions I offer to clients increases, because what we focus on expands

• I’ll be able to retire by the time I’m 50, with passive income streams I’ve planned for and built (I can do this for you too, by the way)

• My kids will not have to worry about renting or figuring out how to buy their first home. Because Daddy has planned for that, and solved their biggest financial problem in their adulthood.

Congrats PLAN. You win.

Signed,

Your newest fan.