Real Estate Insider: 2017 Summer Report

Welcome back, real estate readers! We are going to be adding a new monthly series to our blog. In addition to interesting real estate blogs, we'll be including helpful articles and subjects we think you'll benefit from reading. Last month, we found a treasure trove of insider info we just can't help but share.

Worrying about your credit score? Make it a thing of the past! CIBC is set to launch an easy-access platform for all clients to check their credit scores whenever they want, indicating the importance of everyone being comfortable and up to date with their financial situation. >>

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How much do you know about your condominium’s governance? After investigating some questionable practices in downtown Toronto, this article gives tips on what you should be doing to ensure that your condo is well-managed. >>

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Are we digging ourselves into a deeper hole with the Foreign Buyers Tax? The Montreal Economic Institute says that public decision makers are “missing the mark” and that this tax will do the opposite of what it was imposed to do. >>

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Trying to halt the train! Chief economist at the Canadian Real Estate Association says Torontonians should prepare for a possible tax on speculative home purchases to try and stop outrageous house prices, but will it work? >>

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What goes up, must come down. Home sales dropped 6.2% from April to May 2017, signifying the largest drop since August 2012. This could possibly mean the market is beginning to balance itself out once again. >>

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Is your house under seven years old? Make sure you know about the new home warranty program in Ontario and the changes coming! >>

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Could the legalization of cannabis affect the real estate business? Who should be responsible for all the costs and risks associated with growing marijuana plants? This commentary discusses some of the legal implications that could come with the industry. >>

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Risk big, win big. With interest rates set to rise, are variable rate mortgages worth the risk? Locking in your mortgage rate now might be the way to go for the more cautious homeowner. >>

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Canada has a historically moderate financial situation. In the wake of the recent housing boom, learn how the economy is protected with policies like the Foreign Buyers Tax to ensure Canada’s economy is safe now and in the future. >>

We hope you enjoy our findings -- happy summer and happy reading!

Title Insurance - Is It Needed and Who Does It Protect?

This is an area generally covered by your lawyer, but it plays a prominent role in a high percentage of real estate sales. Occassionally problems and defects regarding the property are not discovered prior to closing, but become major issues after you complete the purchase. Such matters are often costly to remedy, but more importantly can make the property less marketable when you subsequently look to sell. In short, TITLE INSURANCE provides coverage against such problems and helps cover the financial consequences which arise as a result.

Title insurance can be issued on behalf of both the purchaser and the lender, or both. Lenders will often require title insurance as a condition of approving a mortgage. Types of risk typically covered include:

• Survey irregularities
• Removal of existing structures
• Unregistered easements
• Set back or side yard non-compliance
• Zoning restrictions
• Right-Of-Way matters
• Fraud or forgery
• Fundamental Title Issues

As with any type of insurance, certain risks may not be covered. Be sure to discuss with your lawyer what risks are covered/excluded, and take the time to read the policy. Premiums will vary, but it is relatively inexpensive and well worth the investment.

Title insurance can often help ensure that a closing is not delayed due to a defect in title, especially one that arises right at the time of closing. It has become a widely accepted practice throughout the Ontario real estate industry and one that we strongly endorse.

We welcome any feedback that you may have had with Title Insurance – good or bad! And as always just reach out to us, if you would like to get connected to Windsor-Essex and learn more about our local market opportunities.

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

Self Due Diligence - Which Real Estate Is For You?

Industry professionals love to promote the fact that investing in income properties is a legitimate way to wealth creation. It can not only provide an income stream, but capital appreciation as property values grow over time. The types and categories can include – residential (both single & multi –family), commercial buildings/strip centers (retail & office), mixed use (commercial & residential), industrial buildings (production & warehouse types), and even land that generates income (agricultural & solar farm).

As you consider the various categories, you also need to assess the type that not only best fits your objectives but best SUITS YOU. Investment property markets are littered with acquisitions which have ‘gone bad’, often times because the investor did not do sufficient SELF DUE DILIGENCE.

Some key questions to consider include:

• Am I more interested in residential or commercial/ industrial properties?
• Locational / neighbourhood criteria?
• Do you intend to be ‘hands on’, or will you require a property manager?
• Can you accept cash flow/return declines in the operation of the property?
• Are you in a position to re-capitalize a property if circumstances change?
• What are the risk factors which you cannot accept?
• How can you best limit any liability?
• What are the market expectations? The read of the current market?
• Is liquidity an issue if you need to sell quickly?
• Type of financing required and initial cash (downpayment) capability?

Any investment comes with its share of risk and income properties are no different. Good preliminary planning - starts with an honest assessment of YOU, your objectives, capabilities, comfort zone and so on. Once that’s figured out, it’s time to move on to the market in a direction that fits best.

Always looking to network with investors and other professionals in the broker community. We’d welcome your comments and feedback. And as always, would be pleased to discuss the opportunities here in Windsor-Essex!

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