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First-time home buyers: Brace yourself for extra costs


 8 Ways Real Estate Is Your Smartest Investment

Check out this great article about how investing in real estate is a great choice.

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3 questions to ask before you become a landlord

Think cash-flow and hard work when you consider investing in rental properties


Owning a rental property can be profitable—but it comes with risk. As a landlord, you can get dodgy tenants, catastrophic home repairs can quickly eat up your contingency budget and day-to-day problems, such as mice in the house, can eat up evenings and weekends. So, before you crunch your numbers and take that first step to becoming a landlord, ask yourself these three questions:

1) Do you want a second job?

While a realistic financial budget is vital to the profitability of a rental property, so is factoring in the time and energy that’s required to running a smooth investment property.  For instance, will you have the time (or money) to pay for a flood clean-up? Do you have the patience to follow-up on a tenant’s complaint regarding rodents or bugs? Have you factored in who will go to the rental property to change the smoke alarm batteries, clean out the drains and gutters and change the furnace filters (among other tasks)? And what’s your emergency-preparedness plan should an unexpected repair occur?

It’s like having a second job, explains Michael Currie, owner of the Fort Nova Group, a real estate investment and education company based out of Nova Scotia. As an experienced landlord and real estate investor, Currie says: “There’s work to be done as a real estate investor and your cash flow can quickly be eaten up because of a bad tenant or an emergency repair.” Currie advises new landlords to invest in a good maintenance and emergency plan—one that includes knowing where the money will come from to pay for repairs, as well as who is responsible for making sure the work gets done.

2) Do you want to be an active investor?

A real estate investment is not a passive investment. “For a relatively small amount down, you get ownership of a big asset,” says Currie, “but the return on that investment is not passive.”

To keep a property cash-flow positive, you need to:

→ find a good tenant

→ keep that good tenant (address tenant issues)

→ update the property (maintain the property and remodel/update when needed)

→ address emergency or unexpected issues as they come up

“I have to work for my return,” says Currie. And that work doesn’t stop at your rental unit’s door.

You’ll need to report all income to the Canada Revenue Agency. The good news is you can offset this taxable income with the expenses incurred from maintaining and repairing the unit. Keep track of utility bills, maintenance costs, repair bills, home insurance, property tax, and even mortgage interest—all these expenses can be used to reduce the taxable income earned from your rental property. But keep your receipts, as any expense you use to reduce your taxable income needs to be backed up with a receipt or invoice.

3) Can you get a better return with a different investment?

The last question you should ask yourself is whether or not you can invest your money elsewhere and achieve the same, or even better, results.

To answer this question honestly, you’ll need to factor in the time-commitment of being a landlord, as well as the potential future returns (based on past performance). But don’t forget to take into consideration the power of leverage.

“If I went into a bank and asked to put $10,000 down on $100,000 worth of stock, they’d show me the door,” says Currie. “But with real estate investments, I can leverage my $10,000 to own a $100,000 property—making it a great, long-term, active investment.”


If you answer all three of these questions honestly and accurately and still think a real estate investment is the best bet for your money, then it’s time to start educating yourself. Because the more you know about being a landlord and investing in property, the better chance you have of building a successful real estate portfolio.



Tips on Winning a Bidding War

By Scott McGillivray

With over a decade of investing in real estate under my belt, I’ve learned a few things about the buying and bidding process. Whether you are a first time buyer, looking for a bigger home, or downsizing, investing in real estate is a smart decision – but only if you do it wisely.  Bidding wars, unfortunately, may be here to stay, so here’s some advice that may help you to secure your next property.

Crunch the Numbers
One of the most important elements in the process of buying a home, particularly if you enter a bidding war, is getting pre-approved by your bank or mortgage company so you know exactly what you can carry - and how high you can go in your offer.

Do your Homework
Buying a property is the most expensive financial decision most people will ever make in their lifetime so spending time to research the neighbourhood is so critical. There is so much emphasis on house inspections, and there should be, but the same amount of care should also be spent checking out local schools, transportation links, parks, crime rates, medical offices, family activities, seniors programs, daycares and even future housing developments.

Nail the Timing
I try to get into properties on a Wednesday so I can put in an offer on Thursday and avoid the weekend open house competition -  or before they are on MLS. By beating out the weekend competition, I might not have to enter into a bidding war. There’s no law that states that you can’t make an offer before the official offer date and a good agent should send you properties as soon as they are available and preferably before they go public.

Pick the Right Agent
Having an agent who has your best interest in mind is key to winning a bidding war. Your job as a buyer is not to seal the deal, it’s your agent’s job and they need to know what your limit it is – and respect it. If your agent tries to up sell you on the price and encourage you to go beyond your budget, it’s time to find a new agent.

Keep your offer clean
Surprisingly, not everyone is after top dollar when it comes to selling their home. I’ve put in a lot successful offers that may not have been the highest, but they were the cleanest. A clean offer with pre-approved financing, especially in a multiple offer scenario, shows the seller that you are serious.  Conditional sales and offers that are contingent on financing just don’t fly when there are other offers on the table.



5 Mistakes of First Time Buyers (And How to Avoid Them)

By HGTV.ca Editorial Team

Buying your first home can be exciting and amazing, and scary. But knowing the common mistakes of first-time buyers will ensure you don’t make the same ones, and can help make the transition to "New Home Owner!" that much smoother.


1) Spending Too Much

It’s important to be realistic about what you can afford. The final sale price isn’t the only cost to take into account when owning a home. Houses come with plenty of bills like heating and property taxes, future renovations and occasional unforeseen costs like burst pipes or city trees needing to be trimmed.



What you can do about it: Take a close look at your finances. Be aware of your current fixed costs and always leave some breathing room. Ask the homeowners what they spend in a year on their bills so there aren’t any surprises. Canada Mortgage and Housing Corporation has plenty of useful online budget calculators to help. As a general rule your monthly housing costs (mortgage, property tax and heating expenses) should be no more than 32% of your gross monthly income.


2) Spending Too Little

Yes, this can also be a mistake! If you spend too little on a home that you’ll outgrow quickly, you’ll incur the expense of moving (which can be quite pricey) perhaps before you need to.


What you can do about it: Think ahead. Are you planning on starting a family soon? Will you outgrow the house? Perhaps stretching your money a little bit to stay in a house for longer is a more sound financial decision.



3) Buying With Your Heart

Sure the house is gorgeous, fully renovated and painted your favourite shade of cream and has an ensuite bathroom for every bedroom. But it’s on a busy road and you have three young kids and two cats who like to run outside.


What you can do about it: Be smart! Visit the house at least twice (you’d be surprised at how your opinion can change on a second and third visit) and think critically. Go through every aspect of the house, every room, every floor, its location and neighbourhood and really try to picture yourselves in the house for years down the road.


4) Missing Hidden Closing Costs

The final sale price of the house isn’t the only cost of buying a home. There are many "closing costs" that should be taken into account when deciding what price range you can afford. Your realtor’s commissions, lawyer fees, transfer taxes and moving costs can all add up.


What you can do about it: Closing costs can be anywhere from 1.5-4% of the final sale price, so be aware and take this into account when determining your budget.


5) Not Doing Your Research

Blindly buying a home can be a big mistake. Whether you’re paying too much attention to your realtor and family “who just LOVE the place!” or are feeling the pressure to make a quick buy, moving into a house that hasn’t been thoroughly vetted can be a big, expensive, regretful mistake.


What you can do about it: Do your research! And do it first-hand. No realtor or family member can know exactly what you want more than you. Spend a day walking the neighbourhood, learn about your neighbours, research the local school and visit the parks. As for the house itself, get an inspection report. These can uncover unseen things like termites and flooding, two expensive undertakings.


Buying a home is exciting and daunting. But doing your due diligence can make the process a little easier, and get you into your dream home with (little) stress.




How to buy a propterty in a hot market

written by Dustin Graham

Whether you’re a first-time homebuyer or veteran investor, the process of locating and buying a property isn’t always an easy task. What can compound matters is attempting to buy a home in a strong sellers’ market – the current reality for many parts of Canada, particularly in the Great Toronto Area.

So then, how do we navigate the buying process when we’re up against strong buyer competition?

1. Educate yourself

Before going out to view your first home, talk with your Realtor and other expert sources to learn as much as you can about the market you’re buying in. If you’re investing, understand what is currently driving the market demand, current inventory, how fast homes are selling, list versus sell price, frequency of multiple offers, and rental-related information.

2. Have your finances in order

Whether we like it or not, if you end up in a competitive multiple offer situation there may be pressure for you to exclude certain conditions, such as mortgage financing and home inspection. In these situations, it is imperative that you have the utmost confidence that you’ll be approved for a mortgage for the home you’re trying to purchase.

Also, be sure not to make any major financial changes prior to closing (e.g. taking on more debt, leaving a job, etc). Firming up a deal without obtaining mortgage approval prior to closing is a recipe for a potential lawsuit – at minimum you could lose your deposit.

3. Know how to recognize certain home defects  

As with the above point, multiple offer situations may require you to exclude a home inspection condition. Therefore, it is important that you do your homework on what to look for regarding potential defects in a home (e.g. water issues, foundation issues, proper construction, fire hazards, etc). Preferably you bring someone with you during showings who has this background.

4. Remove emotion

Purchasing a home in a hot market may mean that you will lose during negotiations. It’s not uncommon for some buyers to have to put in offers on a few homes (at different times of course!) before they actually get an accepted offer. Attaching too much emotion prior to a firm deal can lead to a feeling of disappointment and frustration in the event an offer is lost.


Strategies to create cash flow

Written RicOne of the biggest obstacles investors face is finding properties that cash flow.  The solution is not to buy cheap properties or put more money down.  There are better ways to create cash flow. Rich Danby from Rich Ottawa Investments Inc. outlines his five key strategies...

1.    Start with you…
Before you buy more properties review your existing portfolio.  There are likely many things you can do to save money and increase cash flow. 
A.    Clean house… Tenants will pay more for cleanliness.
B.    Be aware of current market rents in the area and what other landlords are writing in their ads to attract tenants (padmapper.com).
C.    Review your bills to see if there are any spikes or patterns.  Compare against other properties in your portfolio.
D.    Visit the property at least twice a year and do a thorough walk around with notepad in hand.
E.    Maintenance today saves money tomorrow.  Cash flow will suffer in the short-term, but real estate investing is a marathon, not a sprint.
F.    Shop for better mortgage and insurance rates a few months before renewal.
G.    Talk to experienced investors for advice and referrals to help you build your team and learn from their experiences.

2.    Buy more units
Just like shopping at Bulk Barn buying properties with more units lowers the cost, compared to buying individually. Typically the more units you have the higher the potential for cash flow.  Having only one roof, one furnace and one property to manage significantly decreases your expenses and lowers your risk.  If you own a fourplex and one unit is vacant, you’re still collecting 75 per cent of the rent. If you’re not financially in a position to buy multiple units on your own you may want to consider finding an investment partner to help you fund the deal.

3.    Create more units
Another popular strategy to create cash flow is adding secondary suites in single- family homes. For example, if an entire house rents for $1,600/month and you’re able to divide it into two apartments renting for $1,200 (upper unit) + $1,000 (lower unit) you’re now cash flowing an extra $600/month.  I highly recommend working with the city to ensure you’re renovating the property legally.  All it takes to get shut down is one complaint from a neighbour. Also keep in mind that every city has different rules. Make sure to obtain a professional opinion on the subject property prior to waiving conditions to ensure you can legally add a secondary suite.  

4.    Pick a different city
Would you continue to eat at the same restaurant if the prices were always going up?  Some would if they really loved the food; while others would try the new place their friends have been raving about.  The grass isn’t always greener on the other side, but it could be depending on where you live.  If your monthly rental income isn’t enough to cover the expenses and you have to manage the property yourself, it may be time to consider a different city.  Most people invest where they live because it’s familiar and they want to be able to get there quickly if there’s an issue.  That’s totally understandable, but could be extremely limiting depending on market conditions in your area.  There are many real estate professionals that can help you manage an out-of-town investment.  In fact, with the right property you’ll have enough money to pay a property manager and still have cash flow left over for you.


5.    Change strategies

If you’re not willing to change cities maybe it’s time to change strategies?  A traditional rental may not be producing enough income to cash flow.  Student rentals is a great way to increase monthly cash flow because you can charge more per room, although it’s still recommended to have everybody on the same lease.   Adding Mom and Dad as guarantors is a great way to ensure the rent is paid every month, but expect a little extra wear and tear.  Rent-to-Own (RTO) is another fantastic strategy to increase cash flow and help others live in their dream home today.  It’s designed for people who are unable to secure a mortgage, but will be able to in the near future, typically one to three years.  RTO is similar to leasing a car.  You put down some money up front and have the “option” to buy the car in the future.  The tenant pays market rent, but the cash flow is higher because the tenant is also saving additional money for the future down payment.  That money goes directly to you to ensure the tenant will have enough money to buy the house at the end of the term.  Basically, you’re collecting some of the profits along the way in the form of an “option credit” in the event that the tenant decides to buy the property.

Many investors are unsure of the real numbers are they should be calculating.  To find out if your property is truly cash flowing send an email to Rachel or connect on facebook 


Spruce up exterior to attract long-term renters

Written by Olivia D'Orazio 

   You’ve got a house on your hands that isn’t quite a diamond in the rough. It’s got a modern-ish kitchen, some hardwood. In short, it’s nothing special. What can you do to attract long-term renters?


 Jazzing up the exterior of the home will attract renters looking for a place to call home – before they even set foot inside the house. And many of the fixes outside the home won’t cost nearly as much as those inside. Here are a handful of easy renos that can enhance a property.

1.    Doors
Doors are one of the first things a person notices about a house. Changing the front door can change the entire look of the home. Add a door with more windows for a light and airy look, or try a steel door for better security. Plus, lots of doors are customizable, making it easy to set your property apart from other rentals on the block.

2.    Gates and Fences
Just as there are several different types of doors, there are a slew of different styled fences and gates that your clients can choose from. And like doors, these fences can be used to compliment the style of the home. A quaint property might benefit from a traditional picket fence, while a large stone house might be completed with a wrought iron gate.

3.    Front Yard
You don’t need us to tell you how important curb appeal is to a home. Simple landscaping can go a long way. Lay new sod, if necessary, or add colourful plants to a flowerbed. Ensure the front of the property is well-groomed: the lawn is mowed, the weeds are pulled, the plants are watered and the walkway or porch is clean. Potential renters should feel proud of the house they can call home.

4.    Back Yard
Canada’s wonderful summers make outdoor living spaces almost mandatory. There are several ways you can play up the house’s backyard space. Again, ensure the lawn and flower beds are well-groomed. If the property has a pool, clean it of any debris before showings. Show potential renters what their summers can be like if they’re lucky enough to live in this house.



“So how do you get started with no money and no bank assistance”?

Great question. The answer is easy….but the process takes work, time, and devotion!That is something that most people are not willing to do!

Education is key! You must invest more in yourself then you do in anything else. Most people hear that and think about college, university, or some high end expensive real estate course!

Check out these investing tips from WAM Properties!




Check out this short video to see why real estate investing is better that gold! WAM Properties explanatory video breaks it down!

Check it out!




Looking to invest? Check out this video and see the perks of investing, retiring or living in Niagara!

Check it out!



Why wealthy investors are cutting back their bond holdings

Have you wondered why investing leaders like Warren Buffet are now turning to real estate? Click the link below and read about the low returns investors have historically received on bond holdings…then compare those returns with real estate…

Check out this article here!


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