The Chase: two sisters dive into the income-property game with a rowhouse in Riverside
The buyers: Thuyen Nguyen, the 24-year-old general manager of Pacific Junction Hotel, a Corktown bar, and her sister, Hoa Nguyen, a 23-year-old real estate analyst.
The story: In 2011, Thuyen bought a three-bedroom townhouse in Riverdale, with a little help from her family (she lives with Hoa and another roommate). A year later she and Hoa decided it was time to start looking at properties again—this time as an investment. They wanted something nearby and figured one of the buildings along Gerrard or Broadview would provide a good way to maximize the income potential, since they could collect rent from a commercial unit on the ground floor as well as residential units upstairs. The sisters set a budget of $550,000 and began a six-month search that would teach them a lot about the precarious world of real estate investment.
OPTION 1
686 Gerrard St. E. Listed at $579,980, now off the market.
Thuyen and Hoa were smitten with the first place they saw, a recently renovated building with three apartment units. They decided to bid even though it was out of their price range, and their offer of $575,000 was accepted. But their lender wouldn’t approve them for anything more than $540,000, so they had to walk away.
OPTION 2
362 Broadview Ave. Listed at $520,000, now off the market.
This place needed some work—and a downstairs tenant—but the sisters thought the property was worth the extra headaches, since the upstairs apartment was a rare three-bedroom. Thuyen and Hoa made a low offer, but the sellers suddenly found a tenant and decided not to sell after all.
THE BUY
821 Gerrard St. E. Listed at $449,000, sold for $455,000.
After seeing 20 places, the Nguyens were just about ready to give up, when they found this two-storey unit with a storefront downstairs and a studio apartment upstairs. It was small, and so was the price. Thuyen and Hoa offered the asking price—and two competing offers spurred a bidding war. The Nguyens tried to counter at $452,000, but they couldn’t get approval from their lenders in time. Luckily the bidding dragged on and, after another bidder’s financing fell through and theirs was finally approved, the sisters were able to snag the place for $6,000 over asking.
. A year later she and Hoa decided it was time to start looking at properties again—this time as an investment. They wanted something nearby and figured one of the buildings along Gerrard or Broadview would provide a good way to maximize the income potential, since they could collect rent from a commercial unit on the ground floor as well as residential units upstairs. The sisters set a budget of $550,000 and began a six-month search that would teach them a lot about the precarious world of real estate investment.
OPTION 1
686 Gerrard St. E. Listed at $579,980, now off the market.
Thuyen and Hoa were smitten with the first place they saw, a recently renovated building with three apartment units. They decided to bid even though it was out of their price range, and their offer of $575,000 was accepted. But their lender wouldn’t approve them for anything more than $540,000, so they had to walk away.
OPTION 2
362 Broadview Ave. Listed at $520,000, now off the market.
This place needed some work—and a downstairs tenant—but the sisters thought the property was worth the extra headaches, since the upstairs apartment was a rare three-bedroom. Thuyen and Hoa made a low offer, but the sellers suddenly found a tenant and decided not to sell after all.
THE BUY
821 Gerrard St. E. Listed at $449,000, sold for $455,000.
After seeing 20 places, the Nguyens were just about ready to give up, when they found this two-storey unit with a storefront downstairs and a studio apartment upstairs. It was small, and so was the price. Thuyen and Hoa offered the asking price—and two competing offers spurred a bidding war. The Nguyens tried to counter at $452,000, but they couldn’t get approval from their lenders in time. Luckily the bidding dragged on and, after another bidder’s financing fell through and theirs was finally approved, the sisters were able to snag the place for $6,000 over asking.){kind=link}
what are the rental rates and expenses that make this the better choice? It is much harder to get good financing terms for these commercial properties than residential. It may be a better income property than the pure residential play, but selling it is also harder down the line. And commercial property taxes are a killer in Toronto.