Real Estate Insider: March 2019 News Report

Spring is here! This month we've got loads of tips & tricks as the Real Estate season begins to heat up!


If you’re looking to invest in a vacation rental, make sure you buy where the people are going! Read this list of 2018’s most booked Canadian destinations. >>

----------

ROI isn’t just a formula to use when purchasing a property; it should be used for day-to-day decision making in all of your real estate investments! Read here how ROI can be used in anything from purchasing a home to separately metering the water in a duplex! >>

----------

Read here this Doctors testimonial in favour of real estate investing, and how he came to this conclusion only after trying many other methods of creating financial independence and long term wealth. >>

----------

Buying or Selling a home can take up a lot of time, so why waste your most precious resource reading through long descriptions of tons of pictures when only a few works better? Read here why “short and sweet” is the way to go when listing a home. >>

----------

Here are 10 questions you probably have or have had if you are thinking about buying your first home. These might lead to a number of follow-up questions, but luckily we are always available to help you answer them! >>

----------

If you’re lucky enough to have your grandparents around, be sure to listen to all their stories! They might have advice that could change your life! Read here how this man’s grandmother defied the odds and became wealthy through house hacking, and sparked a passion in him that is responsible for his success today! >>

----------

The debate of Buying vs Renting continues! This time, it is explained in a different way that most people don’t think of! >>

----------

If you’re young and thinking about retirement (which you should be), you are probably thinking whether RRSP’s or buying a home should be your first step to a comfortable retirement. This article can shed some light on that question. >>

----------

When applying for a mortgage, would you rather speak with an expert or go completely digital? Seems Canada is lagging behind other countries in the automation of mortgage applications department. Call me old fashioned, but I don’t think that’s a bad thing! >>

----------

Should you re-new your mortgage early? Not saying drop everything and run to the bank, but here are a few things to consider! >>

----------

Thank you for reading & keep an eye out for more to come from your Lalovich Real Estate team!

Real Estate Insider: November 2017 News Report

Wow, did we find some articles you won't want to pass up! This edition, we cover tax evasion, living with your parents, "jingle mail", and much more.

---------------------------------

Have an RRSP? Thinking about buying a home? Make sure you are up to date on the provisions of the Home Buyers Plan to make sure you are saving as much as possible! >>

---------------------------------

Watch this great video if you’re considering becoming a Landlord! Be sure to know all the tips and tricks before you make the big investment! >>

---------------------------------

There are many different ways to invest your RRSP; one of the lesser-known ways is to invest it in Real Estate! Learn how you can use your RRSP to your advantage when investing for your future. >>

---------------------------------

Buy or Rent? An age-old question associated mostly with cars and houses, but what about water heaters? Learn the pros and cons of buying versus renting a water heater for your home. >>

---------------------------------

Want to learn more about the upcoming stress test? Read these 10 ways that it will change the lending market. >>

---------------------------------

Tax Evaders beware! BC and Ontario to consider registry of pre-construction condo sales. >>

---------------------------------

Whether you are a Landlord or a Tenant, make sure you are up to date with the changes to Ontario’s Residential Tenancies Act so you can stay informed and protected! >>

---------------------------------

Still living with your parents? You’re not alone! Multi-generational households are becoming more common due to price growth and it is changing the way developers are planning for the future. >>

---------------------------------

American Real Estate Company “Zillow” to start showing Canadian Listings with goals to expose American buyers to affordable housing in Canada, mainly in big cities and vacation areas. >>

---------------------------------

“Think Canadians couldn’t abandon their mortgages like Americans did in 2008? Think again.” >>

4 Things You Need to Know About Holdbacks At Closing

So you are preparing to close on an investment property, and an unforeseen problem arises just prior to the closing date. The problem can be a physical building issue, title related, or potentially connected to a tenant matter.

Whatever the problem - often times the parties, and more specifically the lawyers closing the deal - will likely discuss the prospect of a ‘HOLDBACK’ at closing.

What? – It’s the option of holding back a specified amount of the purchase amount, in order to ensure the Seller completes the work or remedies the problem which has arisen. The holdback amount is then agreed to by both parties and is released and ultimately paid when the problem is corrected.

Why? – It comes into play, as a means to correct a matter that in most cases was unforeseen at the time a deal has gone firm, and after all conditions were waived. If the parties agree (not always the case), it allows the deal to still close and keeps the Seller ‘incentivized’ to correct the problem as quickly as possible. After all, they will want to recover the holdback amount in order to realize the full purchase price.

Benefits? – Holdbacks primarily benefit the Buyer, as it not only addresses the matter prior to closing, but it assumes the amount withheld would be able to correct the problem if the Seller chose not to. But again from the Seller’s standpoint, it does benefit them as it allows the deal to still close subject to the holdback – which often is a small percentage of the total purchase price.

Potential Problems – Firstly holdbacks are not a given or automatic, particularly if they were not included in the Agreement of Purchase and Sale. As such, the potential for resistance on the Seller’s part can arise and legally it is best to tread lightly (a.k.a. consult your lawyer). Holdbacks are a compromise after the fact with both parties in an agreement, otherwise you may still be contractually bound to close. Most often it depends on the scope of the problem and the holdback amount proposed.

As a final point, holdbacks should be ‘time-limited’, so the parties understand within what period of time the matter will be resolved. – 30/60/90 days. As this becomes a post-closing matter, best practice is always the ‘sooner-the-better’.

No HOLDBACKS here…… just a click/call away from discussing our latest investment opportunities here in Windsor-Essex.

---

Mark Lalovich
mark@lalovichrealestate.com
Office: (519) 966-0444
Cell: (519) 259-5434

Property Due Diligence

In considering the acquisition of a property, it's wise to take the time to evaluate the building/site on a top-down basis. Typically this is done during a 'conditional period' within your Agreement of Purchase and Sale, and it facilitates your investigation of the property on a number of fronts.

Some of the more common elements of a due diligence review can include the following:

Physical Condition - which should be undertaken by a qualified building inspector or possibly an engineer/architect. Normally this is centered around issues relating to the structural condition (i.e. roof) of the building, electrical/plumbing systems, heating/cooling equipment, and site improvements (i.e. parking lot). The goal is to do a 'top -down' review of the property to determine any deficiencies which will be assumed PRIOR to firming up your purchase agreement. Keep in mind that any deficiencies which are assumed, become expenses which ultimately get added to the acquisition cost.

Environmental Review - normally handled by an environmental consultant within your jurisdiction. Even though it is generally a requirement for mortgage financing purposies, it is generally a good idea to complete one in order to establish a 'base line' position on the property on a go-forward basis. The details of such reports will vary from property to property, as will the costs to complete them. Environmental problems can be expensive to remediate and correct after the fact, so the reviews are most often well worth the investment.

Title Review - this is an exercise best completed during the due diligence process. It should reveal any easements, property restrictions, and lien/encumbrances which affect the property and ultimately your use of it. The bottom-line here, you want to ensure that there are no title matters affecting the property that you are ultimately UNABLE or UNWILLING to accept. It's a good practice to complete it during the conditional period.

Other reviews might include building code/zoning matters, special designations (i.e. heritage), equipment inspections (i.e. cranes).

Dollars spent in conducting good due diligence, is generally money well spent and well worth the investment. 'Caveat Emptor' lives on in the real estate world ... be an Aware Buyer!

Feel free to comment on any of your recent experiences with property due diligence -- the good, the bad, and the ugly. Look forward to connecting with you on any investment opportunities here in Windsor-Essex -just give us a call or connect through our website.

---

Mark Lalovich
mark@lalovichrealestate.com
Office: (519) 966-0444
Cell: (519) 259-5434