Real Estate Insider: August 2019 News Report

Owning a home is a goal everyone is striving for. These days more than ever, the stress that Millennials put on themselves to own a home is negatively impacting a large portion of young adults everywhere, especially since it is statistically the most expensive time to get into the market. Read here who’s to “blame” and why owning a home early isn’t as necessary as most of us think.

Do you ever go out of town for a weekend, a week, or even a month? Why leave your house sitting empty when you could make some cash by turning your home into a short-term rental! No lake house cottage needed! Read here on a few tips to make sure you’re heading in the right direction!

Thinking of selling and not sure whether to spend your hard earned money on fixing it up first? Will the ROI be worth it? Read here why making your home “Move in ready” can make all the difference to young millennial buyers, and other tips to max out the sale price.

Millennials trying to break into the real estate market are getting creative now that prices are skyrocketing out of reach. Here are testimonies of 14 millennials on how they got into the housing market (Hint: be nice to your relatives).

Real Estate experts found and ranked the top 35 cities for buying real estate in Canada, and this is how they did it.

If you’re buying or selling, you should read this article on disclosers and the classic “as is” clause and what you should do to make sure you’re protected.

Mortgages are expensive, and so are getting out of them! Make sure when you make all the necessary calculations to see if breaking your mortgage is worth it in the end. Here’s what you should know. >>

Paying off your mortgage vs investing, the age old debate that everyone has an opinion on. Thankfully, this guy put his money where his mouth is! Clay has shared with us real data on his months of doing both and how the results influenced his decision for future money allocation.

Deciding how to invest your extra money can be difficult, luckily mortgage investing has just become easier thanks to Fundscraper – read about it here!

If you’re looking to buy a cottage, first of al congratulations! Second of all here are some legal issues to consider, because we always want to ensure you are prepared and protected!

Rental Property Investing - Confirming the Data

When we consider investment property options, doing the math is generally straightforward as we determine  ROI’s, cashflow projections, and the like. It’s how those numbers are arrived at and the ‘legitimacy’ of them, that is the next important exercise.

On the income side, we need to review the current lease agreements in place and confirm the rental amounts, in order to reconcile the gross revenue numbers which are represented.  The lease will contain the balance of the term(s) remaining with the lease - including future increases, balance of time  remaining, renewal details, and deposits which may apply. As a matter of best practice, time should be taken to review all leases in their entirety, to ensure there are not provisions which you may not be aware of (ie. early termination clause, additional rent caps, expiration of personal guarantees - just to name a few).

On the expense data, year end reports are typically provided and are ok for the initial review.  But best practice is to verify the amounts against the owner’s income tax return(s), depending on the corresponding years being considered.  Three years history is probably a reasonable period and again, we are looking for the figures to balance against what has been represented.

Just a further note on the tax return request – this would generally be something that would be incorporated in to the Offer to Purchase and form part of the Due Diligence process. The Seller needs to know that a deal is at hand and that the providing of such confidential details, is ultimately leading towards a sale of the property.  Strict confidentiality provisions may also be required by the Seller.

In any type of rental property investing, as they say -- ‘the devil is in the details’.  Make sure you verify those details, before proceeding to finalize any purchase.

Next up…discussing strategies and objectives with rental properties. Again, seek out experienced commercial realtors within your market to assist in finding the best rental properties available.

Real Estate Insider: July 2019 News Report

With the increasing number of hoops the banks are requiring people to jump through to qualify for a mortgage, private lending is becoming more and more popular for many, especially the self-employed! Is a private lender advantageous for you and your business? Find out here! >>

Owning a cottage is a dream many of us have, and for good reason! But just because you can afford the mortgage payments, is it really the best idea for your short & long-term goals? Read here for tips and strategies to help determine if the relaxing weekend at the cottage outweighs the hit to your bank account. >>

The never-ending “Rent vs. Buy” debate continues! Read here about 10 lessons this couple learned after losing money on their home.

Windsor was named “The Best Place To Buy Real Estate” in 2019, but a lot of people are convinced we are sitting on a bubble that’s about to burst. What stage of the real estate cycle is Windsor currently in?  Read here about the 4 stages of the real estate cycle and indicators of each and decide for yourself!

This Toronto lawyer thinks the government is very one-sided when it comes to dealing with developers and consumers contracts, with the consumers are getting the short end of the stick! But who’s really to blame? Read more here! >>

Interest-only mortgage payments are making a return to the Canadian market, this may be a viable option for those having difficulty qualifying for a traditional mortgage. >>

If the above article sparked your interest regarding interest-only mortgages, this article is for you! Read more about these mortgages and how they are taking the mortgage channel by storm. >>

Disclosure and “As Is” clause advice from a top real estate lawyer! What needs to be disclosed by a Seller and what doesn’t? Find out here. >>

A good way to make a cottage more affordable is to rent it out when you’re not using it! To help make this as advantageous as possible, here is a list of 11 tax-deductible expenses you should consider to save more of your money! >>

Having a pet can impact the sale price of your home in a negative way, so are they really worth it? Just kidding, of course they are! Be sure to follow these tips to make sure your lovable friend doesn’t turn away potential Buyers! >>

Rental Property Investing - Establishing Objectives

Assuming you are considering rental property investing as a way to make money, then the next step is to establish a set of objectives. If you know what you want in terms of investment properties – you should try to focus your efforts on the best options within the market that fit.

Typical investment objectives should include:

• Type of Property – residential, commercial/office/retail, vacant land
• Types of Tenancies  – single/freestanding building, multi-tenanted
• ROI and CAP rate expectations
• Growth/Appreciation expectations
• Capital Available to be invested  (aka – down payment)
• Risk Issues – personal liability/financial guarantees/level of acceptable risk
• Locational Preferences – core district, new/growth area, transitional area
• Quality of the Buildings – older, newer, potential rehab and improvement costs
• Management – self manage vs. professional management
• Hold Strategy – buy & hold, buy/renovate/sell, buy&flip

This list should help you paint a pretty good picture of what sort of rental property best ‘fits the bill’. As with everything in the business world, compromises must and will be made. But this will allow you to search the rental property market from the outset, with a defined set of objectives.

Just a final note as you investigate your market of choice - all markets are local and operate based on their own local set of dynamics. Your investment objectives should be based in reality, to the market you are looking to invest in. It never hurts to review recent rental property sales, to see how likely you are to succeed - based on the set of objectives which you’ve established.     

Again, seek out experienced commercial realtors to match your investment objectives to the rental property market in your area.

Real Estate Insider: June 2019 News Report

Talk about attention to detail! This real estate investor kept track of 10 years worth of cash flows and headaches in their investment property all for the purpose of informing you! If you are thinking of investing in real estate, the phrase “hoping for the best, but expecting the worst” should always be in the back of your head. This article can explain why. >>

Are you ready to take your banking completely online? Read about Motusbank and its recent launch into Canada. How competitive do they have to be to get you to switch? >>

Reason #1374 why you shouldn’t cheap out on insurance! Could you imagine paying a mortgage on a house that didn’t exist anymore?? This family is living this nightmare after their house was swallowed by a sinkhole! Read more here. >>

There are some big changes coming to the Real Estate Industry in 2019! Make sure you and your Real Estate Agent are staying informed! Topics such as increased government assistance for first time home buyers, increased RRSP withdrawal limit, bidding wars are just some you should stay up to date on!  This article is a great place to start. >>

You probably know that being close to public transit or highway access can increase the value of a property, but do you know how much? This article reveals the formula some investors use to perfectly time and calculate their purchases to get the most out of their investments. >>

Raise your hand if you’ve been personally victimized by a bully offer! OREA is fighting back against the bully offers by suggesting they be banned altogether! Do you think pre-emptive offers are just part of doing business, or a morally questionable tactic? Read this article and decide. >>

The rule of thumb when buying a house is to not have the yearly costs be more than 30% of your income. However it seems 4/10 Canadians are breaking that rule to get into the housing market. Are you willing to wait? Or is being “house poor” worth owning your own home? >>

Most “Condo Vs House” debates are about living quality and price, this article goes a different route and is looking at them from an investment standpoint. Which do you think is a better investment in your city? >>

While not having a mortgage is a great goal to have, other priorities can get in the way of quickly paying it off. Enjoying life should be one of those priorities! Read here why you shouldn’t stress if paying off your mortgage isn’t top 3 on your priorities list. >>

Read here about the large US Lender that is investing in Canadian business! >>

Rental Property Investing - Due Diligence on Yourself

Investing in rental properties can be a lucrative way to create wealth, by not only providing an income stream, but also by creating an opportunity for capital growth – AKA -- an increase in the property’s value during your period of ownership. Types of properties can include – residential (single unit & multi-family), retail/commercial buildings (single unit & strip centres), office buildings (single unit & multi-complex), mixed use (ground floor commercial & above ground residential), industrial buildings (single unit & multi tenant complexes), and even raw land that generates some level of income.

After assessing the various property categories, determine the type that best fits with your objectives and will best meet your criteria. It isn’t one-size-fits-all in considering rental property investments and you need to do some necessary due diligence on yourself before moving forward – due diligence on the properties/market will follow later. Markets throughout Canada are littered with investment property ventures ‘gone bad’ and the best advice here is to ‘walk before you run’.

Some key questions to ask yourself:

• Am I more interested in residential or commercial/industrial properties?
• What locations/neighbourhoods are of interest?
• Am I hands on, or will I require a property manager?
• What are my cash flow/return on investment objectives?
• What type of financing is required and what % downpayment can I put up?
• What sort of financial implications can I expect due to vacancies?
• What sort of maintenance & capital improvement costs am I willing to accept?
• Will I incorporate?  How can I best limit any liability?
• What sort of market am I comfortable buying in?
• Is liquidity an issue if I need to sell (quickly)?

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

Real Estate Insider: May 2019 News Report

Whether it’s your first time or your 30^th time buying a home, you should be striving to possess as many of these traits of successful home buyers as possible! Read about all 9 here.  >>

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If you own an older home and have been lucky enough to have never flooded, chances are you eventually will have to deal with that issue (hopefully on a small scale). But are you aware of what is covered under your current insurance? If not, you should be! Read this article to get started now and make sure you aren’t one of the many misinformed so it won’t cost you big later!  >>

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The classic "Rent vs Buy" debate continues! This couple kept track of every penny they spent on their home over a 3-year period up until they sold, and compared it to renting. Which do you think was more expensive overall? Read here to find out!  >>

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Younger generations are finding it harder and harder to break into the housing market. To help combat this, the growing trend seems to be “Friends with (housing) benefits!” Read here to learn some tips on buying a house with a friend!  >>

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Don’t believe everything you read on the internet! Read here why that mortgage rate you saw advertised online most likely won’t apply to you.  >>

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Just because a house or condo is new, doesn’t mean it is without risks! Make sure you take the phrase “Buyer Beware” just as seriously on new builds as you do on re-sale. Read here why!  >>

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If you had a $50,000 budget, would you rather renovate your current home or relocate? And no, you can’t use the money for vacation! Read here if your answer is similar to most other Canadians.  >>

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Should you aggressively pay off your mortgage? Everyone has probably thought about it, but no one seems to have a clear-cut answer. This may be because they aren’t looking close enough at the Yield curve. Read here why whether the curve is inverted or not should be a major deciding factor for you!  >>

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Selling your home can be very stressful, but it doesn’t have to be! Follow these 8 strategies to guarantee a positive experience next time you go to Sell your biggest investment.  >>

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Another great article on the Stock Market vs Real Estate debate!  >>