In today's uncertain market, there are a lot of things going through an investor's mind.
There are 3 things that investors want to accomplish, but at the same time, there are also 3 things that they want to avoid.
So when there are products that can satisfy all these 3 Do's and 3 Don'ts in investors' minds, they sell like hotcakes.
Let's start with the 3 Do's first.
#1 You Do Have Some Extra fund
You have saved up some money that you don't really need for your day to day life.
You can choose to put that money in the bank and earn almost 0 interest.
For most people, they do want to grow the money by investing.
#2 You Do Want to Invest
Real estate is by far the most popular investment for Canadians.
In fact, 50% of Canada's total household wealth is tied in real estate.
In order to be eligible for a real estate investment in Toronto today, you need to have at least $50,000 that you can put aside right now.
And you expect to have another $50,000 available in 3 to 4 years.
#3 You Do Feel Confident about the Long Term Market
Despite all the temporary market disruption, you understand the side effects of money printing and you see that the government is putting immigration as a top priority for our economic recovery...
So you feel confident about the long term Toronto market outlook.
If you have a lot of things to worry about and you are pessimistic about the market outlook, then this is not a good time for you to invest. And that's OK. You can skip this now.
Otherwise, let's move on to the 3 Don'ts in investors' minds nowadays.
#1 You Don't Want to Tie Up Too Much Fund
You do have the extra money and you want to invest, but you want to keep the money in your pocket longer during this uncertain time.
So what you're looking for is a greater than usual leverage.
Instead of the usual 20% down, projects that only require 10% or 15% down would be much more desirable.
#2 You Don't Want to Find a Tenant Now
Rental transaction volume showed strong improvement during the first half of June, rising 43% from the second half of May.
But we still need the border to be reopened for all the international students and immigrants to come in before we can see a full rental market recovery.
So if you don't want to stress about a couple months of vacancy, then you would be better off investing in pre-construction because the unit won't be ready until 4 years later.
#3 You Don't Want to Get a Mortgage Now
It's true that many people are applying for a mortgage now to take advantage of the low interest rate.
But depending on your situation, you may not be ready to get a mortgage now.
The rental income is also not particularly attractive at the moment.
So if you have the above 3 Don'ts in your mind, what you really want to is buy time with the minimum amount of cash.