Real estate investors looking to buy, fix and flip housing for profits in Toronto are increasingly finding it difficult to sell their upgraded properties, let alone make the kinds of margins that justify the risky ventures. Some are now turning their property portfolios into rental accommodations to help them weather the slowing market.
“They were asking me for financial advice for how to handle their builds. They were making about $400,000 per sale. If you build a home in a year, or even every two years, that’s a good paycheque,” Mr. Pontes said. “Over time, with rule changes, finance rates going up, the whole situation that’s going on, the spread to make margins is very low now … you’re down to about $150,000 [margin]; it’s not as desirable.
The house at 114 Sheridan Ave. was purchased in 2014 for $649,000. After a thorough renovation, the home was sold for $1,645,000 on Jan 31.Imran and Winnie Latif have followed a similar path: as the Toronto real estate market neared the end of its decade-long hot streak they left office jobs behind – she was an accountant with KPMG and he was a financial advisor – and began investing in real estate together. In 2014, they paid $649,000 for 114 Sheridan Ave.
“No one realized it was the peak. Right up to 2017, that’s when it popped around April-May. We had renovated for a client, he listed in April and that week was when everything fell down,” Imran said. “Three people showed up [for the showing], our seller didn’t get the price he was looking for so he decided to wait. It took another six months to sell and the initial offers were maybe $50,000 under what he wanted. What he finally sold for was $100,000 below [his ideal price].