# $165,000 for 189 square foot home..........



## sags (May 15, 2010)

Since this home sale got picked up in the media, it has spread like wildfire, with most comments talking about how ridiculously "stupid" the purchase was.

It is apparent that most of the posters, judged the sale solely by the picture of the small shed like home. It does need work.

I went to the actual realtor site and had a look.

Maybe not so "stupid" a purchase after all, I am thinking.

Located in a nice neighborhood (from what I have read), the home is directly across the street from a high school, and is a few blocks from Lake Ontario. I don't know TO well........but it is advertised as steps from the subway.......or a bicycle or scooter would suffice most of the time.

The home has to have water and sewer hookups from the road and a kitchen installed............but that can be done.

What I am thinking is a person could do the basics, save some money and build a much bigger home.......perhaps a home over the top of a large 2 car garage or carport...........or they could lift the roof and add a loft style bedroom or two, if it has a solid enough foundation.

Note the municipal taxes are listed as $168 a year. It does have new electrical installed already.

The house sold for $165,000 and was originally listed for $229,000.

http://www.vallis.ca/listings/1257119-30-hanson-st-toronto-ontario-e2718298

Serviced building lots, even in our city are going for $150,000 or more........and we aren't Toronto.

What do you think...............smart investment by someone thinking outside the box............or are most people right and it proof of ridiculously high real estate prices?


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## indexxx (Oct 31, 2011)

sags said:


> What do you think...............smart investment by someone thinking outside the box............or are most people right and it proof of ridiculously high real estate prices?


A little from column A, a little from column B. It's a smart investment by someone thinking outside the box BECAUSE real estate is ridiculously high.


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## My Own Advisor (Sep 24, 2012)

Nuts. Almost $1,000 per square foot. As a comparable, that would put most single family homes in the city well over $1 M for > 1,000 sq. feet. Only a handful of people could afford that in the city. Nuts.


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## MoreMiles (Apr 20, 2011)

My Own Advisor said:


> Nuts. Almost $1,000 per square foot. As a comparable, that would put most single family homes in the city well over $1 M for > 1,000 sq. feet. Only a handful of people could afford that in the city. Nuts.


As of right now, almost every homeowner without mortgage in Toronto and Vancouver is a millionaire. If you own a detached house in GTA, it would be worth around $700k-$1.5 million on average... So just look around how many detached houses are there in the city, and that is how many millionaires out there.

So over $1 M? No big deal... they are a dime a dozen these days :tongue-new:


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## NotMe (Jan 10, 2011)

My Own Advisor said:


> Nuts. Almost $1,000 per square foot. As a comparable, that would put most single family homes in the city well over $1 M for > 1,000 sq. feet. Only a handful of people could afford that in the city. Nuts.


There are many homes of around 1000 sq. ft selling for over a million dollars. I think it comes down to what the buyer expects to get out of it, and how much he/she wants to do it. It could be a nice little purchase or it could be a disaster. "Nuts" is a subjective thought. I have coworkers who 'saved' hundreds of thousands of dollars by buying big homes out in Pickering and Ajax and Brampton, but spend 4 hours a day commuting (20 minutes to train station; 10 minute wait; 1 hour train; 5 minute walk to subway, 5 minute wait, 20 minute train, 10 minute walk) and then back again. I think that's nuts, but they don't. C'est la vie.


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## Potato (Apr 3, 2009)

sags said:


> [...]the home is directly across the street from a high school[...]


I'm not sure "drug den" is such a smart reason to purchase (and there is no other reason to want to be directly across the street from a high school with no space to actually have a teenager of one's own).



> What I am thinking is a person could do the basics, save some money and build a much bigger home...Serviced building lots, even in our city are going for $150,000 or more...


I'm not sure about that hypothesis. According to that link the _lot_ size is only 20x14. With a set-back needed I think the only way to build up on that would be to use it to bridge the neighbouring lots.


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## donald (Apr 18, 2011)

Maybe mow the house down and create a couple parking spots(not sure if it could be zoned for that or not)hope the land itself appreciates.You always read how parking in Toronto is stupid,that would be my thought(corner lot)bargain with the teachers.Charge 10.00 dollars a day x 2=600 math=7200 hun a year.


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## My Own Advisor (Sep 24, 2012)

@NotMe,

A 4 hour commute is also nuts


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## Just a Guy (Mar 27, 2012)

The idea of purchasing houses for "lot value" isn't that unusual. Not something I'd do personally, but I know plenty of people who do it.


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## brad (May 22, 2009)

MoreMiles said:


> As of right now, almost every homeowner without mortgage in Toronto and Vancouver is a millionaire. If you own a detached house in GTA, it would be worth around $700k-$1.5 million on average... So just look around how many detached houses are there in the city, and that is how many millionaires out there.


This of course depends on whether you define people with a net worth of $1 million as millionaires, or whether you define "millionaire" by net financial assets. Wikipedia's entry on "millionaire" has a discussion of this distinction:

"According to [the net worth] definition, a household owning an $800k home, $50k of furnishings, two cars worth $60k, a $60k retirement savings account, $45k in mutual funds, and a $325k vacation home with a $250k mortgage, $40k in car loans, and $25k in credit card debt would be worth about $1,085,000; and every individual in this household would thus be a millionaire. However, according to the net financial assets measurement used for some specific applications (such as evaluating an investor's expected tolerance for risk for stockbroker ethics), equity in one's principal residence is excluded, as are lifestyle assets, such as the car and furniture. Therefore the above example household would only have net financial assets of $80,000."

It's funny, when I was a kid I always assumed "millionaire" meant someone who earned more than $1 million/year. My current next door neighbour is one of those, most years anyway...that kind of millionaire is a lot more rare than net-worth millionaires, which are very common (there are well over 10 million net-worth millionaires around the world today).


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## sags (May 15, 2010)

If home equity didn't count as net worth..........average Canadian household finances would look like Kramer's face...........

http://www.youtube.com/watch?v=Ka1PeNNi6dg


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## Koala (Jan 27, 2012)

I think our garage is bigger than the lot. Understandable if someone owns the adjacent property, otherwise what do you do with something that small?


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## brad (May 22, 2009)

Potato said:


> I'm not sure "drug den" is such a smart reason to purchase .


Maybe the owner is planning to sell it to Rob Ford as his future retirement home. ;-)


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## My Own Advisor (Sep 24, 2012)

The problem I have with any house as part of net worth, although technically correct to include it is, you have to live somewhere. 

Sure, those folks in Toronto or Vancouver might be millionaires if they include their house values as an asset, but in terms of liquid assets, even more impressive would be to have portfolio worth more than the house they live in.


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## Xoron (Jun 22, 2010)

The thing is essentially a converted shed into a one bedroom structure. I use the word structure because it has NO plumbing.

This isn't a house, it's a hang out spot for a couple of guys drinking beer. Come to think of it, it probably doesn't even have electricity, so the beer can't even be cold


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## Rusty O'Toole (Feb 1, 2012)

Where are these people when I have a house to sell.


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## Homerhomer (Oct 18, 2010)

If I am not mistaken it is a garage converted into a house.
And there are some parking spots in TO selling in this price range. crazy.


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## sags (May 15, 2010)

I would like to see what sits on that lot in a year or two. Maybe a multi-level modern urban home......valued at 1 Million or more.


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## Homerhomer (Oct 18, 2010)

Homerhomer said:


> If I am not mistaken it is a garage converted into a house.
> And there are some parking spots in TO selling in this price range. crazy.


My apologies, here is a listing for two car parking spot for $129k, not quite $165 but not far off.
http://www.realtor.ca/propertyDetails.aspx?propertyId=13188039&PidKey=-1718959604

In London ON you can have a decent house for that price ;-)


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## Spudd (Oct 11, 2011)

sags said:


> I would like to see what sits on that lot in a year or two. Maybe a multi-level modern urban home......valued at 1 Million or more.


The lot size is only 290 sq ft, it would have to be a very tall and narrow home!


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## Berubeland (Sep 6, 2009)

The real estate market has jumped the shark. :rolleyes2:


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## NotMe (Jan 10, 2011)

Berubeland said:


> The real estate market has jumped the shark. :rolleyes2:


I hope that shark eats Garth Turner on that jump.


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## none (Jan 15, 2013)

The thing is Garth is right, by monetary fundamentals and historical interest rates the market will go down. Belief is a powerful thing though, even stronger than fundamentals - look at diamonds (or even gold right now).

Time will tell. My money is on the RE market doing what it has always done everywhere but I'm willing to concede I could be wrong. Not something I would bet a half million dollars of leveraged cash though. 

I just wish I had bought 5 houses in 2002. Either that, or leveraged 500K of Tesla stock 8 weeks ago. Oh well, everything always looks so clear in hindsight.


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