Quote:
Originally Posted by Gerbs
A majority of the people purchasing the new apartments already paid off their houses that they bought in the early 2000's. I feel like for a majority of people, housing is the only investments they've ever known. So they mortgage the new apartments with their disposable income and rental income.
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I think the more common route is HELOC on the house for a 20% down payment.
Given what people are prepared to pay for rental housing, you can actually make money or be cash flow neutral with prices approaching $1000/ square foot. Owning real estate is easier to understand than index investing for a lot of people. Real estate is tangible, unlike investing in equities.
If they don't want the rental income, they can assign the unit before it completes and hopefully profit without paying GST.