REAL ESTATE DEVELOPMENT SERVICES

When Renting An Apartment.

Consider The Furnished Alternative.

Are you thinking about an executive apartment in Toronto or the Greater Toronto Area (GTA), for yourself or one of your employees? Have you considered rental housing in a furnished corporate suite? This article explores the comparative advantages of furnished and unfurnished apartments, in order for you to make an informed decision. There are several rules of thumb you can apply when considering which type of residence is best for you. In general,

• If your company is paying for you to stay in a location from 3 to 36 months, or anticipate several moves over the next 5 years, it is more economical, and convenient, to rent a furnished suite, with storage rental for your existing furniture, appliances etc.
• If you are planning to stay more than 5 years, it is probably better to rent an unfurnished apartment and furnish it yourself.
• Furnished rental housing is more appropriate for those making over $85k. (The recommended rent should not pass 36% of your gross income, with average prices of monthly furnished rent at $3000/month)
• • you want a new and modern environment for life and work, but your workload is such that you can’t be bothered with the hassle of setting up and maintaining such a lifestyle, you would probably benefit from the convenience of a furnished apartment.
  Yes, the basic rent for a furnished suite is more than for an unfurnished equivalent. But when all factors are considered, the furnished alternative can actually save you money. Along with furniture, utilities and appliances, the best furnished apartments include artwork, housekeeping, parking and many other conveniences. Click here for a detailed comparison of typical furnished vs. non-furnished executive suites in Toronto and the GTA. Of course money is important, but the main benefits of furnished housing come from the time you save.
  Moving to a new residence is always a hassle. You need time to set up, move, hire, relocate, acclimatise, and finally just get back to work. And once you’re settled in, you need work downtime and personal time. Your home should be a place of recovery from work, where you can rest, relax and recharge. Your physical, emotional and spiritual health depend on it. You shouldn’t have to be worrying about the trivia of everyday things.
  There is always something emotional about ownership. Most people aspire to own a home, for example, or a vacation property. They may have treasured belongings such as art or antique furniture. But if your career is at a stage where frequent moves are the norm and living in your own home is not an option, there are many necessary items that are just not worth owning. Everyday furniture and household appliances, for example, have to be moved regularly, depreciating all the while. It is much more convenient to have all these things waiting for you in your new apartment every time you make that move. And rather than carting around and possibly damaging your valued possessions, they can be stored safely and economically, awaiting your return to a more settled life.

  Other factors to consider:

  • Who is paying – is the company or are you? how will this affect cashflow, budgeting and timing of your move?
  • Find out what your industry, position is getting in terms of “relo” packages.
  • Neighbourhood selection (a pre-move visit to your destination city to uncover an ideal location, agents, communities)
  • • dentify transportation routes, business, retail centers, and any safety concerns)
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      • Are you analyzing cost or are you looking for value? A higher price point may save you more money in the medium or long term. Do you need more flexibility and a shorter term lease? if so, be prepared to pay a bit more for a short-term lease because of additional service provider transaction costs (re-renting fees, agent commissions, leasing costs).
      • Requirements vs preferences – understand how your requirements affect your business, work or health and cost considerations. If your budget is tight, reconsider what your needs truly are and reframe them as “wants”.
      • If your budget is easing up, then a little less scrimping will make you a happier person. This in turn will probably make you more effective at work, and your mental and physical health will improve as well.
      • In summary, there are many factors when deciding whether a furnished or an unfurnished apartment is more suitable for you or your employees. A balanced approach is suggested, weighing multiple alternatives before making the final decision.

        About Toronto

        Toronto is North America’s fifth largest metropolitan center after Mexico City, New York, Los Angeles, and Chicago. It is also North America’s third largest financial center. The city’s population, including the GTA, is roughly 5.6 million citizens. It is home to Canada’s largest immigrant population where over 100 languages are spoken… second only to Miami, Fl. Toronto is known as the world’s condominium capital, surpassing Florida, and has strong biosciences, design, arts and entertainment, financial services and manufacturing clusters. The province of Ontario is home to the three top educational institutions: Queens, University of Toronto and York University, ranked 1, 2 and 3 worldwide by BusinessWeek. These are some of the best places to live if you are looking for an apartment:
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ALTERNATE SOLUTION

Alternate Solution

Alternate Solution: Sale and Leaseback by Banks and Leasing Companies
Sale and leaseback is an arrangement in which one
party sells a property to a buyer and the buyer
immediately leases the property back to the seller.
This arrangement allows the initial buyer to make
full use of the asset while not having capital tied up
in the asset. Leasebacks operate in finance lease
structure and may provide tax shield.
It is apparent from the proposed recommendations
that it will take some time before REITs can actually
operate in Pakistan. However, this should not hinder skilled investors such as banking and non-banking
financing who would like to take real estate exposure. Therefore an alternate solution is the sale and
leaseback agreement between the Lessee and Lessor, where the underlying is a property or land.
The key advantages to the sale and lease back agreement are:
1. Negates the need to raise potentially more expensive capital in the marketplace to finance
expansion etc.
2. Leasing normally represents 100% financing whereas a mortgage company will not provide more
than say two-thirds of the value of a project.
There are certain disadvantages to this arrangement:
1. Lessee acts much as the owner of the property rather than as a tenant paying for all repairs,
maintenance, insurance and property taxes during the currency of the lease.
2. Improvements to the property and any increase in land value inure to the benefit of the landlord at
the expiration of the lease.
The sale and leaseback agreement is also available in Islamic
Financing Modes and is known is “Ijarah”. In this case, the
term ‘Ijarah’ is analogous to the English term ‘leasing’. Here
the lessor is called ‘Mu’jir’, the lessee is called ‘musta’jir’ and
the rent payable to the lesser is called ‘ujrah’. Since the sale
and leaseback agreements can be structured in an Islamic
mode, the appeal of such products will be higher.
Therefore the sale and leaseback agreements would allow
banking and leasing companies to write real estate leases and
therefore sale and le asebacks should be authorized.
Another advantage of sale and leaseback is that it can also be used both in Management and Hybrid REIT
model. The figure represents how sale and leaseback agreements would operate in REITs.
1. The investors in hybrid/development
REIT will get low risk rental yield.
2. The lessee will capitalize the capital gains
that he would obtain on selling his
property, and as a result this will be a
structure similar to paghri system
whereby a rental will be paid by the
lessee to the lessor.
This alternate solution to real estate investments
Vendor
Customer Financier
Property Rights &
Installments
Asset Price
Sale and Leaseback Agreement
Developer Asset Price Individuals
Investment
Institutions
Installments
Corporates
Households Property
Rights
Rental
Income
Pension Funds
Sale and Leaseback Agreement in REIT
Management / Hybrid
REIT
Developer
Institutions
Households
Banks and Leasing
Companies
Sale and Leaseback Agreement
Asset Price
Property Rights &
Installments
Research Paper: Real Estate Investment Trust
12
will provide a way to obtain exposure in real estate, thus improving the number of products available for.

INVESTMENT TRUST

Research Paper: Real Estate Investment Trust

Taxation,

eminent

domain,

police power

EQUITY REIT

INVESTOR

Property

Rights,

Cash Flow

TENANT

Leasehold

Use of

Property

Lease

Document

MORTGAGE

LENDER

Mortgage

Document

Debt

Service

Promissory Note

GOVERNMENT

Restrictions on

Tenants

Landlord –

Tenant Laws

Restrictions on Lenders

Mortgage

Laws

Income and

Wealth Taxation

Operating Environment for a REIT

rojects, however, the structure is not viable in traditional business environment, and is only
suited for Islamic transaction. On the contrary, existing AMC structure can be used with significant
modifications to investment restrictions. In the following section we present an overview of benefits of
using AMC Structure for a REIT.
Transparent Taxation
Investment in REIT is one of the investments that does not face a double taxation issue. In addition to
this, under the Income Tax Ordinance, the income of a mutual fund or an investment company registered
under the NBFC Rules 2003, or a unit trust scheme constituted by an assets management company
registered under Assets Management Companies Rules, 1995, is not taxable if not less than ninety
percent of its accounting income of that year, as reduced by capital gains whether realized or unrealized,
is distributed amongst the unit or certificate holders or shareholders as the case may be. In the case
dividend income is received by a public company or an insurance company, 5% of the gross amount of
the dividend; or in any other case, 10% of the gross amount of the dividend. Therefore the AMC structure
will be optimal in terms of tax transparency.
Repatriation
There are no restrictions or repatriation issues for foreign investors as long as they invest in securities
whether listed or unlisted. The money can be routed through SCRA channel.
Optimal Structure for Pakistan
The optimal structure REIT is the one that allows tax transparency, transfer of capital in and out of the
country for investment, and operational efficiencies. The AMC Structure is the only vehicle that suits the
Research Paper: Real Estate Investment Trust.

Investing in your down payment money

If you're like most people who are working towards buying a home, you are probably going to need access to your down payment money within the next few years. Getting enough money together to make a down payment can be a long and difficult task requiring discipline and patience. Most lenders prefer that you pay about 20% of the purchase price as a down payment in order to protect themselves in case of foreclosure.

It's clear enough that a significant down payment is going to be necessary if you want to qualify for the best loan possible. Chances are you don't have this kind of money just lying around and will need to spend some time (probably several years) saving for this expense. What exactly should you do with this money in the meantime? Should you invest in the stock market? What about bonds or mutual funds?

If you are planning to purchase your home within the next few years, then we recommend that you avoid riskier investment accounts such as those involving the stock market

It may not seem too exciting (and the interest rates may not be very impressive especially now that the Federal Reserve is keeping interest rates low) but you need to find a safe place to accumulate your down payment money. A good option is a money market mutual fund because this type of account does not put your original investment at risk.

These types of funds tend to invest in very safe investments including certificates of deposit, treasury notes, and commercial paper by highly reputable companies. You may be confused when we say that money market funds are safer because many people think that mutual funds are always investing in the stock market. However, a money market fund is required to stay with low risk investments by the Securities and Exchange Commission.

This has to be a better option than simply opening a savings account at your local bank. Your bank will probably not be able to offer the same interest rate because of the overhead costs of maintaining various branches and advertising.

You should also note that many money market accounts give you check writing privileges so you can withdraw money more easily than you would in a stockmarket account. You may want to consider an automated investment plan such as a direct deposit from your checking account in order to force you to save your down payment money.

Another important consideration when choosing a money market fund is the cost of operating expenses. The best companies typically have an annual operating expense rate below 1%. This means that you don't have to worry about your current interest being eaten up by high operating costs.

It's true that these kinds of investments do not offer a great return on investment. At the time of this writing, as a matter of fact, interest rates are very low in both money market funds and savings accounts at your local bank. However, if you need access to this money for a down payment, you'll come to appreciate the little risk involved and will take whatever small amount of interest you may receive along the way.