Written by Vernon Clement Jones | Canadian Real Estate Magazine
The majority of property investors are already licking their chops, anticipating tighter mortgage rules will allow
them to bump up rents, suggests a new CREW poll.
Just under 60 per cent of those responding to an online survey this week answered “yes,” they will indeed raise
the rent because of the new mortgage rules. That, of course, is only where the law permits, most likely with empty
units and not sitting tenants.
The anticipation is based on an expected bump-up in the number of Canadians -- in particular, first-time buyers --
who'll now find themselves shut out of the housing market.
Such a development would be pegged to Ottawa’s decision to limit maximum amortizations to 25 years for
For first-timers in pricey markets such as Toronto and Vancouver, that may effectively block them from purchasing
even starter condos, which already strain affordability.
While economists expect some price declines because of the tighter mortgage rules that may not come soon
enough to encourage young Canadians to buy instead of rent.
Since the new rules were announced last week, investors have also been grappling with them, trying to decide
whether they afford a net negative or benefit to landlords, already enjoying relatively low vacancy rates in most
“Since rental properties require 20% down, therefore not a CMHC insured mortgage, the rule will have no effect on
most investors in terms of obtaining financing,” writes “shaune,” in responding to the CREW poll question. “The
upside is that less people can afford homes therefore more renters. The downside is that it may reduce prices if
the demand softens.”
The following article is from Canadian Real Estate Wealth Magazine.
Landlords and homeowners alike have long sought to improve the use and aesthetics of their properties through
Carrying out a home extension or addition, however, takes that commitment to the next level: the project timeline is
longer, the resources involved much more complex, and the funds required can reach six figures. For the
inexperienced renovator, this can create plenty of opportunities for costly mistakes.
But that doesn’t mean you should be dissuaded from taking on your own addition project. As professional
renovator Todd Senft explains, “The returns can be very rewarding – if the project is planned out well.”
“An addition to your home can be a very good way to add value, depending on what your home may be lacking. To
clarify the word ‘value’, I imagine the word to mean not only resale value, but also the existing homeowner’s
enjoyment of the added space,” says Mr. Senft, president of ReVision Home Custom Renovations Inc. in
“Working with a real estate agent who knows your neighbourhood is always a good idea, as they can tell you
where the best area would be to add space to your home.”
For instance, they may be able to tell you that many of your neighbours’ homes have four bedrooms, and that four-
bedders are most frequently sought out by the families that populate the suburb.
“If your home only has three bedrooms then adding a master bedroom and ensuite may be the best value addition
you can add to your home. You have to keep in mind what types of buyers and renters live in your neighbourhood.
Are they young couples looking to raise a family, people getting into a ‘step-up home,’ or is it investors? That
information will have an impact on your decision,” he says.
The agent may also be able to tell you about recent sales of four-bedroom homes, which would give you an
indication of how much you should spend to stay within the price parameters of your neighbourhood.
This was the case for a condo project Mr. Senft oversaw in 2011, in the centre of Vancouver, near Granville and
12th Ave. Neighbouring high-end condos were selling for upwards of $700,000, so when Mr. Senft’s client was
able to secure a rundown condo for $480,000, he knew they were on to a winner.
“The client invested $150,000 into their home with a full renovation, right down to the framing,” Mr. Senft says.
“After the reno was complete, their real estate agent came over and indicated that they could put the condo back
on the market for $725,000 to $750,000. That was a rough profit of $95,000 to $120,000, less the usual expenses
that transpire when selling a property. It just shows you what you can achieve with a well-planned renovation in the
Why not just upgrade?
Whether you feel like you need more space at home to cope with the needs of your growing family, or you’re
looking for ways to maximize the returns on your investment property, there is an easy way to avoid taking on a
huge renovation and extension project: just upgrade.
From a financial perspective, you could sell your current property and take the proceeds of the sale, plus the cash
you’ve earmarked to cover the costs of your addition, and use to it to fund the purchase of bigger, more expensive
home. But as designer and renovator Paul Denys from Denys Builds Designs explains, there’s more to consider
than simply purchase and sales prices.
Mr. Denys estimates that the cost of moving for an average home in equates to roughly 10 per cent of a property’s
purchase price, once you consider all of the costs involved in buying and selling.
“The average house price in Ottawa is around $340,000, and if the cost of moving is about 10 per cent of that
value, you’re spending $34,000 – and you don’t recover an of that,” he says.
“As an alternative, you could spend that 10 per cent on your property and make it more enjoyable to use and live in.
With $34,000 to spend, it would roughly cover the cost of a medium to higher-end bathroom, an ensuite bath or a
very small kitchen.”
The cost of moving
Average 2011 home sale price in Ottawa *
Land transfer tax (www.landtransfertaxcalculator.ca)
Real estate commissions and fees (5-6 per cent)
$17,165 – $20,600
$600 – $1,000
Legal fees and disbursements
$1,000 – $1,500
$250 – $275
$350 – $450
CMHC insurance premium, if using less than 20 per cent deposit
$6,980 (assume 10 per cent deposit)
$2,200 – $3,500
TOTAL – approx. 10 per cent the cost of the home
$32,170 – $37,930
Source: Paul Denys, www.denys.ca* Figure obtained from Ottawa Real Estate Board MLS Residential Sales
Where do you start?
If you’re keen to proceed with an addition to your home, you first need to carefully define what you want to
accomplish with your project, says Maribel Pelka, president and owner of Avant-Garde Properties.
“It may even be worth spending the money to have a basic blueprint of your idea created,” she says.
Mr. Denys, a licensed carpenter who has been in the industry for over 22 years, has overseen his fair share of
addition projects over the years and he has come up with one simple question to help you define your needs:
“What is your commitment to the property?”
“I’m told that in Europe, commitment to property is about five generations, as family homes get passed down.
Here, it is about seven to 10 years, and that is going to have a bearing on what you do and how you do it,” he
In other words, you need to consider your future plans before you get started. If you’re upgrading your dream
home, which you plan to live in for the next 20 years, then investing in a high-quality addition would increase your
home’s value, both financially and in terms of your enjoyment.
Alternatively, if you’re likely to move in the next few years, or you’re adding a room to your investment property in an
effort to boost your returns, you need to focus on the numbers to ensure your proposed addition makes financial
Upgraded kitchens and additional bathrooms are usually the best place to add value, Mr. Denys adds, even
though they are often the most expensive projects to execute, “because of materials involved, including tiles,
fixtures and appliances that drive costs up.”
“But, they are something we touch and use every day,” he says, “and they enhance our daily enjoyment.”
Budgeting for a new home can be tricky. Not only are there mortgage installments and the down payment to
consider, there are a host of other—sometimes unexpected—expenses to add to the equation. The last thing you
want is to be caught financially unprepared, blindsided by taxes and other hidden costs on closing day.
These expenses vary: some of them are one-time costs, while others will take the form of monthly or yearly
installments. Some may not even apply to your particular case. But it’s best to educate yourself about all the
possibilities, so you will be prepared for any situation, armed with the knowledge to budget accordingly for your
move. Use the following list to determine which costs will apply to your situation prior to structuring your budget:
- Purchase offer deposit.
- Inspection by certified building inspector.
- Appraisal fee:
Your lending institution may request an appraisal of the property. The cost of this appraisal is your
- Survey fee:
If the home you’re purchasing is a resale (as opposed to a newly built home), your lending institution may
request an updated property survey. The cost for this survey will be your responsibility and will range from
$700 to $1000.
- Mortgage application at your lending institution.
- 5% GST: this fee applies to newly built homes only, or existing homes that have recently undergone extensive renovations.
- Legal fees:
A lawyer should be involved in every real estate transaction to review all paperwork. Experience and rates
offered by lawyers range quite a bit, so shop around before you hire.
- Homeowner’s insurance:
Your home will serve as security against your loan for your financial institution. You will be required to buy
insurance in an amount equal to or greater than the mortgage loan.
- Land transfer (purchase) tax:
This tax applies in any situation in which a property changes owners and can vary greatly. First time home
buyers are exempt.
- Moving expenses.
- Service charges:
Any utilities you arrange for at your new home, such as cable or telephone, may come with an installation
- Interest adjustments.
- Renovation of new home:
In order to “make it their own,” many new homeowners like to paint or invest in other renovations prior to
or upon moving in to their new home. If this is your plan, budget accordingly.
- Maintenance fees:
If you are moving to a new condominium, you will likely be charged a monthly condo fee which covers the
costs of common area maintenance.
The Mark at 1372 Seymour Street;Vancouver;BC V6Z 2P7;corner of Pacific & Seymour is a proposed development by Onni;one of numerous condo projects either underway or in the works. Billed as the tallest tower in Yaletwon It will have 41 levels with 300 suites.
By Cheryl Chan, The Province
Vancouver is building on its reputation as a city of glass and steel.
Look around the skyline and you’ll see it dotted by cranes, and everywhere there seems to be another hole in the
ground making way for another apartment building.
Sixteen condo towers are under construction, according to a database by Skyscraperpage.com. and another 67
proposed high-rises are in the works.
Amid newly-tightened mortgage rules and concerns of an over-supply in the Toronto condo market that prompted
financial authorities including Bank of Canada governor Mark Carney to sound an alarm this week, we think we’ve
earned the right to ask: Is Vancouver oversaturated with condos?
Here’s some sobering figures.
Housing starts in Vancouver are up in the first five months of 2012 compared to the same period last year, driven
largely by multiple-unit dwelling construction – which is up by about 50 per cent from last year.
According to the Canada Mortgage and Housing Corporation, 5,503 condo units are under construction in
Vancouver in April, adding to the existing 230,000 units already in the city.
B.C. Real Estate Board economist Cameron Muir says the short answer to our question is no.
“Prices have been pretty flat since 2009,” Muir said. “There’s ample supply in the market place, but we are seeing
prices at a steady pace.”
The fact more condos than single-detached homes are being built in Greater Vancouver is nothing new, said Muir,
as condo starts have consistently made up about 75 per cent of all housing starts in the last several years. “It’s a
function of land supply.”
Consumer demand during the last several months is trending on a 10 to 15 year average, he added.
One indicator, says Muir, of the demand-and-supply balance in the marketplace is the sales-to-new-listings ratio.
In Vancouver last month, the ratio, at 15.3 per cent, inched closer to a buyer’s market — but sits within the
balanced range of between 15 to 20 per cent.
There hasn’t been a sustained buyer’s market since the recession hit, between late 2008 to early 2009.
As of April, 504 recently-completed units remain unsold. Overall, 3,017 units are listed on MLS.
Is Vancouver over-supplied with condos? The market will let us know.
Take a look for yourself at the condos currently under construction in Vancouver.
1 Wall Centre False Creek I, II, III, IV
100 W. 1st Avenue
• 556 units in four towers
• Completion: Early to mid-2014
1901 Wylie Street
• 253 units
• Completion: Fall 2012
3 James Living
289 W. 2nd Avenue
• 155 units
• Completion: August 2012
4 The Mark
1372 Seymour Street (at Pacific Boulevard)
• 300 units
• At 41 storeys, it is billed as the tallest tower in Yaletown
• Completion: Summer 2013
1308 Hornby Street
• 199 units
• Completion: June 2014
161 W. Georgia Street
• 253 units
• Status: Move-in ready
7 The Rolston
1300 Granville Street (site of the old Cecil Hotel)
• 187 units
• Completion: June 2013
1304 Howe Street
• 214 units
• Completion: December 2013
2788 Prince Edward
• 100 units
• Completion: Fall 2012
10 TELUS Garden
775 Richards Street
• 428 units in a 53-storey tower, which will be the second-tallest in the city after the Shangri-La
• Completion: 2015
11 Marine Gateway
8400 Cambie Street
• 415 units in two towers
• Completion: 2015
12 1153 West Georgia Formerly the Ritz Carlton
• 290 units (but should be confirmed independently, based on CBC report)
• Completion: XXX
13 Wall Centre Central Park Boundary Road and Vanness Avenue
1,114 units in three towers
Status: Rezoning application approved. Completion date: XX
14 Rize Mount Pleasant
Kingsway and Broadway
Status: Rezoning proposal approved by city council in April. If approved, completion date of XX.
15 Burrard Gateway
1290 Burrard Street (and 1281 Hornby Street)
About 589 units in two towers
Status: Proposed, awaiting rezoning approval. If approved, completion date of 2015 to 2016
Before you put your home on the market, take heed of these 10 valuable tips from the producers of HGTV's Buy Me.
1. Interview several agents before making your final choice.
2. Know your rights and obligations. Have your realtor explain the contract in detail or have a lawyer look at it with you.
3. Always base your price on market value rather than needs or emotions.
4. If the agent suggests your home needs some TLC, do the required fix-ups.
5. Make sure the agent is taking out advertisements to promote your property.
6. First impressions are important. Use attractive photos to advertise the listing.
7. Your house must have curb appeal. Make sure the outside is as attractive as the inside.
8. Keep your house clean and de-clutter before every open house and visit.
9. If the house isn't selling, think about lowering the price. A house that sits too long on the market raises suspicion
10. Take the first offer seriously. It's often the best.
By Pete Evans, CBC News
Finance Minister Jim Flaherty outlined new rules aimed at reining in a hot housing market today and ensuring
Canadians aren't taking on more debt than they can afford.
Flaherty outlined a series of changes to the rules that govern the Canada Mortgage and Housing Corporation, the
crown corporation that effectively oversees the housing market by insuring the vast majority of Canadian
The most important new change is that the maximum amortization period to 25 years, down from 30. The longer a
mortgage is spread out, the lower the monthly mortgage payments are — but the more the borrower ends up
paying overall over time.
The impact of the change is likely to be significant. It's about the same as a 0.9 percentage point increase on a
typical mortgage, Bank of Montreal economist Robert Kavcic noted.
Indeed, the numbers add up. A $300,000 mortgage spread over 30 years at 4 per cent would cost $1,426 a month
to pay back. That same mortgage amortized over only 25 years increases the monthly payment by $152 or 10 per
cent to $1,578 a month.
Ultimately though, the higher monthly payment saves the borrower money in the long run. The total interest
payments are $213,558.91 on the 30-year mortgage, but only $173,416.20 on the 25-year one.
The shortened amortization is also likely to affect a huge segment of the market, as about 40 per cent of all new
mortgages were amortized over 30 years last year, the Canadian Association of Accredited Mortgage
Anyone who needed or wanted a 30-year mortgage before is going to have to qualify under tougher 25-year
Ottawa has now moved three times to rein in the maximum mortgage term, since the CMHC briefly started
insuring mortgages with 40-year terms in 2006. The limit was brought down to 35 years, then 30 and now the
more traditional 25.
"The reductions to the maximum amortization period since 2008 would save a typical Canadian family with a
$350,000 mortgage about $150,000 in borrowing costs over the life of that mortgage," Flaherty said.
"Our government has encouraged Canadians to borrow responsibly," Flaherty said. "Most Canadians have done
At 25 years, the maximum amortization period for CMHC-backed loans is now back to where it had historically
been before the Harper government began raising the period after taking office in 2006.
Refinancing limit set at 80%
Flaherty also outlined a few other measures Thursday.
The government has lowered the total amount that Canadians can withdraw when refinancing their homes to 80
per cent of the home's value, from 85 per cent.
"This will promote saving through home ownership and encourage homeowners to prudently manage borrowings
against their homes," Flaherty said.
Flaherty also moved to cap the maximum gross debt service ratio at 39 per cent and the maximum total debt
service ratio at 44 per cent in order to get CMHC insurance. Banks calculate the former by adding up mortgage
payments and property taxes on a home loan, and dividing by the borrower's income. The latter adds in other debt
payments such as lines of credit and credit cards to the top side of the ledger.
Although they both have obscure, technical names, they're both effectively just limits on how much debt a borrower
is allowed to take on as a percentage of their overall income. That move, too, is aimed at making sure a borrower
can't bite off more than he or she can chew.
The final change was to limit CMHC insurance to homes priced under $1 million. "Wealthy people can borrow
whatever they want from banks, and they can work that out from banks," Flaherty said. "That is not my concern."
That effectively means that if a homebuyer wants to buy a home for more than $1 million, they can't get insurance
on it — which in turn means they'll have to come up with the 20 per cent down payment requirement in order to get
an uninsured mortgage.
So under any circumstance, any new borrower wanting to buy a home of $1 million or more is going to have to
have $200,000 down at a minimum. That's also likely to have a major impact on a comparatively small segment of
All of the changes will be in effect as of July 9, 2012. In the interim, the action in hot Canadian housing markets is
likely to get even hotter, experts say, as borrowers scramble to get in ahead of the more stringent rules.
"As we’ve observed around prior mortgage rule changes, some housing market activity will likely be pulled forward
ahead of the implementation date," Kavcic noted.
But there's likely to be a subsequent pullback, too, he says. The last time Ottawa tinkered with CMHC rules, home
sales fell by three per cent in the two months following the implementation date.
A glossary of crucial terms for first-time buyers and homeowners in Canada.
By Diane Jermyn | Yahoo! Finance Canada
What’s a mortgage broker?
A mortgage broker is a licensed mortgage specialist who can tell you what’s available in the marketplace from
banks and lenders across Canada and can guide you through the mortgage process. Mortgage brokers are also
able to pass volume discounts directly on to you because of the high quantities of mortgage products they acquire.
Tom Hogg, a mortgage agent at The Mortgage Centre, in Mississauga, Ont., describes his job as educating the
consumer on exactly what they’re signing. “My role is to create a buffet of products and help them choose,” says
Mr. Hogg. “We do a needs assessment and make sure the clients clearly understand the flexibility and features of
the mortgage that will enable them to get rid of this albatross as soon as possible.”
Mortgage brokers are an origination service. That means that the mortgage broker originates your mortgage
financing for you, but a bank or financial institution provides the money and services your mortgage after the
What’s the difference between a mortgage broker and a mortgage agent?
Mortgage brokers can have agents working underneath them. Each agent has to work under the license of a
mortgage broker. The brokerage is accountable for the agents’ work.
How are mortgage brokers paid?
Their commission is paid by the bank or lender providing the mortgage product based on how much money the
consumer borrows. Mortgage brokers aren’t compensated on the interest the bank makes, so they don’t receive a
higher commission if the client chooses a higher rate. It varies a bit, but the commission generally works out to an
average of $80 per $10,000 of the consumer’s loan.
What’s a fixed mortgage rate?
‘Fixed’ means your interest rate and regular payments will be the same for the duration of your mortgage term,
whether rates rise or fall. It offers you stability and the least financial anxiety. But if interest rates drop significantly,
you may be stuck paying a higher rate for the duration of your term, depending on the flexibility and features of your
What’s a variable mortgage rate?
Your mortgage payments will go up or down with the fluctuations in the ‘prime rate’, which is the market interest
rate. The danger here is that a significant increase in the ‘prime rate’ increases your interest payable as well. But if
it decreases, you’ll pay less.
What‘s better? Fixed or variable?
While over 60 percent of Canadians opted for a fixed mortgage rate in 2011, variable rates tend to be cheaper over
time. Conversely, you may sleep better knowing you’re not subject to interest rate fluctuations. Making the right
choice depends largely on the current rates at the time you’re taking out your mortgage. When interest rates are
low and aren’t expected to drop further, locking into a fixed rate may be your best option. However, if experts are
projecting that interest rates may fall, you’re probably better off with a variable rate, especially if there’s a significant
difference between the fixed and variable rates.
What’s a closed mortgage rate?
A closed mortgage can be fixed or variable. Closed mortgage rates are popular because they’re lower than open
mortgages rates but unlike an open mortgage, you’re restricted on how much principal you can pay down annually
and there will be a penalty to pay a closed mortgage out early. Terms range from six months to 10 years. Despite
their low rates and relative stability, there are disadvantages so read the fine print before signing.
“Some banks have introduced fully closed mortgages where during the term, other than an arms-length sale
[meaning the sale can’t be to a friend or relative] of the home, you can’t get out of the contract,” warns Tom Hogg, a
mortgage agent at The Mortgage Centre in Mississauga, Ont. “Even if you win the lottery and want to pay them out,
you can’t. A product like that is mortgage jail.”
What’s an open mortgage rate?
An open mortgage can also be fixed or variable. The interest rate will be higher than for a closed mortgage but it’s
more flexible. Generally, you can pay an open mortgage off anytime or make additional payments without
penalties. Terms range from six months to five years so you can’t lock in for as long as a closed mortgage. If you
want to get rid of your mortgage quickly, or think you may be selling or moving in the near future, this is a good
Why are mortgage rates so different?
Rates vary according to institutions. All of the banks have completely different products which is why their pricing is
different, explains Tom Hogg, a mortgage agent at The Mortgage Centre in Mississauga, Ont.
“The price you pay depends on what features you want on that mortgage,” says Mr. Hogg. “Prepayment features
are huge. The ability to give additional lump sums of money as often as you can is important because it all goes to
the principal. You can get a 2.99 five-year fixed but it’s only available on a 25 year max amortization, has limited
prepayment privileges, it’s closed to term so there are issues with it. The highest is going to have all the bells and
whistles but you may not need all those features. Once you understand each rate and each product, you’ll choose
what’s best for you – probably somewhere in the middle.”
What is CMHC?
Canada Mortgage and Housing Corporation (CMHC) is a Crown corporation that mainly provides mortgage loan
insurance to residential home buyers. It was originally set up in 1946 to arrange post-war housing for veterans.
Today it helps Canadians who can’t easily afford buying a house through their mortgage default insurance
What is mortgage default insurance?
It’s a type of mortgage insurance that’s mandatory in Canada if your down payment for a residential property is
less than 20 per cent. The major provider of this insurance is the Canada Mortgage and Housing Corporation.
The insurance costs you between 1.75 per cent to 2.95 per cent of your mortgage amount and you have to buy
and pay for this insurance on top of your mortgage. It protects the banks and the money lenders if a home owner
defaults on their mortgage but doesn’t protect the homeowner. However, lenders do offer lower mortgage rates
because their risk is decreased.
A couple months back we told you about the High End Premium outlet mall plans near YVR. Today, Vancouver
Airport Authority announced that it is planning to develop a luxury designer outlet centre on Vancouver International
Airport (YVR) land in partnership with London-based developer McArthurGlen Group, Europe’s leading owner,
developer and manager of designer outlets.
“This is an exciting project that will increase the region’s destination appeal for visiting travellers and encourage
local shoppers to spend within their own community,” said Larry Berg, President and CEO, Vancouver Airport
Authority. “Later this summer, you’ll start to see the lands on Russ Baker Way near BCIT being prepared for
eventual construction; evidence of some of the jobs that will be added to the more than 23,600 already in place at
The project reinforces the Airport Authority’s role in the economic development of the region with the creation of an
estimated 1,000 new jobs. YVR currently generates $11.7 billion in total economic output to the Canadian
“We are delighted to have this opportunity to create a premium retail destination in Vancouver, our first location in
North America. Already we are seeing very strong interest from our brand partners to open at the centre,” said Gary
Bond, McArthurGlen’s CEO of Development. “Vancouver combines location excellence, economic strength,
tourism potential and a strong partner – all elements that guarantee success when opening luxury shopping
The proposed new centre would open in phases, beginning in the fall of 2014, and feature European and North
American luxury, designer and mainstream brands. The company’s outlets in Europe are known for brands such
as Prada, Armani, Burberry, Gucci, Hugo Boss, Ralph Lauren, Salvatore Ferragamo, Ermenegildo Zegna and
Vancouver Airport Authority and McArthurGlen are committed to the proposed project being built and operated to
ensure environmental compatibility with the local area. Areas of the Fraser River that border the outlet centre
would be protected and environmental enhancement plans include the installation of foot and cycling paths that fit
into existing regional trail networks.
By Gail Johnson | Insight
Allison Bell is on a mission. The 29-year-old Surrey, B.C., resident is looking for a place to call her own. She's
determined topurchase a condo solo, but she has a big hurdle to jump to get there: scraping together enough
cash for a down payment.
"I'm at a place in my life where I'm ready to get into the market," Bell says. "I really want to do this on my own,
without having to go to my parents for help. But it's hard to save up this big lump sum."
Like so many Canadians entering the housing market for the first time, Bell is faced with a tough question: With
interest rates currently so low, do you get into the market at five-per cent down or wait and save for the conservative
20 per cent knowing rates can only go up?
How much do you need for a down payment?
Although you can break into the market with as little as five per cent down, the amount you put down determines
whether you'll have a conventional mortgage or an insured, high-ratio mortgage.
With at least 20 per cent of the home's purchase price as a down payment, you get a conventional mortgage.
A down payment that's less than 20 per cent, meanwhile, requires a high-ratio mortgage and has to be insured by
a third party (such as the Canada Mortgage and Housing Corporation, Genworth Financial Canada, or Canada
Guaranty) and involves you paying an insurance premium, which could run you thousands of dollars.
According to CIBC, the mortgage-default insurance premium you'll have to pay depends on how much you're
borrowing and the percentage of your down payment, but premiums typically range between 0.5 per cent and 2.75
per cent of your total mortgage amount.
This fee can be added to the principal balance and paid off as part of your mortgage or paid in a lump same when
you buy the home.
Do the math
Vancouver independent mortgage broker Karen Gibbard, of
Hoffart Financial Group, shares an example of the costs of getting into the market now with a high-ratio mortgage
and waiting to save a 20 per cent down payment to avoid that insurance premium.
She's assumed a 25 year amortization period with a five-year fixed term and a purchase price of $300,000. "I think
that's probably close to what first-time buyers are experiencing as average entry level purchase prices across
Canada," Gibbard says.
Take Scenario A, with a five-percent down payment:
Purchase price: $300,000
Less five percent down payment: - 15,000
= base mortgage: $285,000
+ high-ratio fee: + 7,837.50 (2.75 per cent of the loan amount)
= total mortgage: $292,837.50
"At today's near-historical low interest rate of 3.09 per cent for a five-year fixed term and 25-year amortization, the
monthly payment for this would be approximately $1,399.40 per month," Gibbard says.
And Scenario B, with a 20-per cent down payment:
Purchase price: $300,000
less 20 per cent down payment: - 60,000
= base mortgage: $240,000
"If the interest rates were six per cent by the time they could save up the money, their payments would jump up to
$1,535.54, approximately $136 per month more than in that first scenario with five per cent down.
"Over five years the difference adds up to about $8,168 which is just a little bit more than what the high-ratio fee
was in that first scenario, with five-per cent down [$7,837.50].
"Factoring the rise in potential home values and the possibility of higher rates in the future, there is a case to be
made to look at purchasing now," Gibbard says. "Can first-time buyers really save $60,000 after-tax dollars in a
few years or will it take even longer?"
She points to the projections of Canadian wealth advisor Gordon Pape, who, like most financial experts, says that
with interest rates so low, they can only go up.
"I have always believed that home ownership is one of the four pillars of financial security," Pape writes in his
BuildingWealth.ca newsletter. "So I would never discourage anyone from buying a primary residence as long as
they can afford it.
"When mortgage rates move higher, as they inevitably will, the market price of houses will fall. That is an historic
fact because affordability is a combination of house price and mortgage interest rates. As carrying costs go up,
fewer people can afford the payments.
"So if you are buying a residence now ... be sure you can afford an increase in payments when rates move higher,"
Potential home owners are always advised to sit down with a financial advisor — whether it's an independent
planner, someone through their bank, or a credit counsellor — to pore over their budget with an eye to the future.
You’ve been saving for awhile, weighing your options, looking around casually. Now you’ve finally decided to do it
—you’re ready to buy a house. The process of buying a new home can be incredibly exciting, yet stressful, all at
once. Where do you start?
It is essential you do your homework before you begin. Learn from the experiences of others, do some research. Of course, with so many details involved, slip-ups are inevitable. But be careful: learning from your mistakes may
prove costly. Use the following list of pitfalls as a guide to help you avoid the most common mistakes.
- Searching for houses without getting pre-approved by a lender:
Do not mistake pre-approval by a lender with pre-qualification. Pre-qualification, the first step toward being pre-
approved, will point you in the right direction, giving you an idea of the price range of houses you can comfortably
afford. Pre-approval, however, means you become a cash buyer, making negotiations with the seller much
- Allowing “first impressions” to overly influence your decision:
The first impression of a home has been cited as the single most influential factor guiding many purchasers’
choice to buy. Make a conscious decision beforehand to examine a home as objectively as you can. Don’t let the
current owners’ style or lifestyle sway your judgment. Beneath the bad décor or messy rooms, these homes may
actually suit your needs and offer you a structurally sound base with which to work. Likewise, don’t jump at a
home simply because the walls are painted your favourite colour! Make sure you thoroughly the investigate the
structure beneath the paint before you come to any serious decisions.
- Failing to have the home inspected before you buy:
Buying a home is a major financial decision that is often made after having spent very little time on the property
itself. A home inspection performed by a competent company will help you enter the negotiation process with
eyes wide open, offering you added reassurance that the choice you’re making is a sound one, or alerting you to
underlying problems that could cost you significant money in both the short and long-run. Your Realtor can
suggest reputable home inspection companies for you to consider and will ensure the appropriate clause is
entered into your contract.
- Not knowing and understanding your rights and obligations as listed in the Offer to Purchase:
Make it a priority to know your rights and obligations inside and out. A lack of understanding about your
obligations may, at the very least, cause friction between yourself and the people with whom you are about to enter
the contract. Wrong assumptions, poorly written/ incomprehensible/ missing clauses, or a lack of awareness of
how the clauses apply to the purchase, could also contribute to increased costs. These problems may even lead
to a void contract. So, take the time to go through the contract with a fine-tooth comb, making use of the resources
and knowledge offered by your Realtor and lawyer. With their assistance, ensure you thoroughly understand every
component of the contract, and are able to fulfill your contractual obligations.
- Making an offer based on the asking price, not the market value:
Ask your Realtor for a current Comparative Market Analysis. This will provide you with the information necessary to
gauge the market value of a home, and will help you avoid over-paying. What have other similar homes sold for in
the area and how long were they on the market? What is the difference between their asking and selling prices?
Is the home you’re looking at under-priced, over-priced, or fair value? The seller receives a Comparative Market
Analysis before deciding upon an asking price, so make sure you have all the same information at your fingertips.
- Failing to familiarize yourself with the neighbourhood before buying:
Check out the neighbourhood you’re considering, and ask around. What amenities does the area have to offer?
Are there schools, churches, parks, or grocery stores within reach? Consider visiting schools in the area if you
have children. How will you be affected by a new commute to work? Are there infrastructure projects in
development? All of these factors will influence the way you experience your new home, so ensure you’re well-
acquainted with the surrounding area before purchasing.
- Not looking for home insurance until you are about to move:
If you wait until the last minute, you’ll be rushed to find an insurance policy that’s the ideal fit for you. Make sure
you give yourself enough time to shop around in order to get the best deal.
- Not recognizing different styles and strategies of negotiation:
Many buyers think that the way to negotiate their way to a fair price is by offering low. However, in reality this
strategy may actually result in the seller becoming more inflexible, polarizing negotiations. Employ the knowledge
and skills of an experienced realtor. S/he will know what strategies of negotiation will prove most effective for your
The thousands of dollars in rent you’ve already paid to your landlord may be a staggering figure—one you don’t
even want to think about. Buying a house just isn’t possible for you right now. And it isn’t in your financial cards for
the foreseeable future. Or is it? The situation is common and widespread: countless people feel trapped in
home rental, pouring thousands of dollars into a place that will never be their own—yet they think they’re unable to
produce a down payment for a home in order to escape this rental cycle. However, putting the buying process into
motion isn’t nearly as impossible as it may seem. No matter how dire you believe your financial situation to be,
there are several little-known facts that may be key to helping you step from a renter’s rut to home-owning
Initially, of course, the most daunting factor involved in buying a house is the down payment. You know you’ll be
able to handle the monthly payments—you’ve done this for years as a renter. The hurdle, instead, seems to be
accumulating the capital needed to put money down. However, this hurdle may be smaller than you think. Take a
look at the following points and explore whether any of these scenarios may be possible for you:
Find a lender to assist you with your down payment and closing costs.
If you’re free of debt, and own an asset outright, your lending institution may lend you the money for a down
payment by securing it against your asset. In this case, you won’t need to have accumulated capital for a down
Buy a home even if your credit isn’t top-notch.
If you have saved more than the minimum for a down payment, or can secure the loan against other equity, many
lending institutions will still consider you for a mortgage, despite a poor credit rating.
Find a seller to assist you in buying and financing the home.
Some sellers may be willing to bear a second mortgage as a seller take-back. The seller then assumes the role
of the lending institution, and you pay him/her the monthly payments, rather than paying the price of the home in a
lump sum. This is an additional option if you have a poor credit rating.
Buy a home with much less down than you’d think.
Investigate local and federal programs, such as first-time buyer programs, that are designed to help people like
you break into the housing market. An experienced real estate agent will be equipped to give you all the
information you need about these programs, and counsel you on which options are best for you.
Create a cash down payment without going into debt.
By borrowing money for specific investments, you may be able to produce a large income tax return that you can
use as a down payment. Technically, the money borrowed for these investments is considered a loan, but the
monthly payments can be low, and the money you put into both the home and the investments will ultimately be
So, you know there are options out there. The next step is to educate yourself on what your own personal
possibilities might be, and how to follow through with the means to achieve these goals. Keep in mind, too, that
you can get pre-approved for a mortgage before you begin searching for a home. In fact, you should get pre-
approved—the process is free and doesn’t place you under any obligation. You can be pre-approved over the
phone. Or, take the next step and complete a credit application. Once a credit application is submitted, you’ll
receive a written pre-approval, which will guarantee you a mortgage to a specified level. When you have a
concrete price range, you’ll know where to begin looking. Make a commitment to yourself to break out of the
renting rut. Start today!
Mortgage lenders are chiefly concerned with your ability to repay the mortgage. To determine if you qualify for
a loan, they will consider your credit history, your monthly gross income and how much cash you'll be able to
accumulate for a down payment. So how much house can you afford? To know that, you need to understand a
concept called "debt-to-income ratios."
The standard debt-to-income ratios are the housing expense, or front-end, ratio; and the total debt-to-income, or
Front-end ratio: The housing expense, or front-end, ratio shows how much of your gross (pretax) monthly income
would go toward the mortgage payment. As a general guideline, your monthly mortgage payment, including
principal, interest, real estate taxes and homeowners insurance, should not exceed 28 percent of your gross
monthly income. To calculate your housing expense ratio, multiply your annual salary by 0.28, then divide by 12
(months). The answer is your maximum housing expense ratio.
Maximum housing expense ratio = annual salary x 0.28 / 12 (months)
Back-end ratio: The total debt-to-income, or back-end, ratio, shows how much of your gross income would go
toward all of your debt obligations, including mortgage, car loans, child support and alimony, credit card bills,
student loans and condominium fees. In general, your total monthly debt obligation should not exceed 36 percent
of your gross income. To calculate your debt-to-income ratio, multiply your annual salary by 0.36, then divide by 12
(months). The answer is your maximum allowable debt-to-income ratio.
Maximum allowable debt-to-income ratio = annual salary x 0.36 / 12 (months)
Take a homebuyer who makes $40,000 a year. The maximum amount for monthly mortgage-related payments at
28 percent of gross income is $933. ($40,000 times 0.28 equals $11,200, and $11,200 divided by 12 months
Furthermore, the lender says the total debt payments each month should not exceed 36 percent, which comes to
$1,200. ($40,000 times 0.36 equals $14,400, and $14,400 divided by 12 months equals $1,200.)
The following chart shows your maximum monthly payment and maximum allowable debt load based on your
gross annual income (remember, gross income is pretax income):
Debt-to-income ratio examples
Here's a look at typical debt ratio requirements by loan type:
- Conventional loans:
Housing costs: 26 percent to 28 percent of monthly gross income.
Housing plus debt costs: 33 percent to 36 percent of monthly gross income.
- FHA loans:
Housing costs: 29 percent of monthly gross income.
Housing plus debt costs: 41 percent of monthly gross income.
Taxes and insurance
In addition, lenders include the cost of taxes and insurance when calculating how much house you can afford:
- Real estate taxes: Because property taxes are part of your monthly mortgage payment, it is important to get an estimate of what yours would be. Ask your real estate agent or tax office for the rates that apply in the area you want to buy.
- Homeowners insurance: You must insure your property to obtain a mortgage. You can get an estimate of insurance costs from an insurance agent or insurance company. Be sure to inquire about special requirements for hazard insurance, such as mandatory coverage for floods, earthquakes or wind (in coastal areas). If you put down less than 20 percent of your home's value, you also will have to obtain mortgage insurance or take out a second loan, called a piggyback loan, to bring the first mortgage down to 80 percent of the purchase price. Both alternatives will raise your monthly payment.
You can scoop up raw oceanfront land for $11,500
Private, white sandy beach, 2,400 square-foot former bed and breakfast that sleeps eight comfortably. Huge windows, vaulted ceilings and a new kitchen. $639,000
BY SUZANNE FOURNIER, THE PROVINCE
As temperatures warm, urban dwellers are driven to check out rural real estate listings.
Growing young families, singles seeking investment and boomers nearing retirement pursue the romantic idea of
affordable vacation property.
However, cabin seekers will quickly discover the masses have already invested in the obvious choices of
Vancouver Island, Gulf Islands and the Sunshine Coast.
But there is one corner of B.C. where it's still possible to buy a piece of paradise for under $100,000. And it's experiencing a record flat market at the moment.
Haida Gwaii, the remote and stunningly beautiful island archipelago dubbed "Canada's Galapagos," is a buyers'
It's a scenic northern corner of B.C. where you can buy an older four-bedroom house for under $50,000, raw
oceanfront land for $11,500 or for less than the cost of a Dunbar bungalow you can scoop up a mansion on the
water for $689,000.
On offer to island dwellers: sport fishing, pristine sandy beaches, kayaking into world-renowned ancient Haida
villages or visits to naturally occurring hot springs.
"You can buy a three-bedroom home in good shape for $50,000 to $60,000 in Masset, or a beautiful bare 2.5 acre
lot with a view all the way to Alaska for $139,000," says Brian Bussiere, who has lived in Haida Gwaii for 16 years
and been a realtor with Royal LePage for five.
Bussiere admits the real estate market there is pretty darn flat.
"Properties stay on the market for a year, two years, that's not unusual in Haida Gwaii. The Europeans and
Americans aren't buying due to the economy.
"It's perked up a bit since last year, which was the worst ever, but for buyers who know what they want, it's still an
affordable vacation paradise."
The island community is home to notables such as writer Susan Musgrave, and ecologist Severn Cullis-Suzuki,
the daughter of famous broadcaster/biologist David Suzuki, who is married to a Haida man and learning the
Bussiere says many of his new buyers in the Haida Gwaii real estate market have connections to the Alberta
"In the winter, it's locals who buy, or just sell their houses to each other, moving around in a circle, but in spring,
it's mostly Albertans," he says.
"A huge part of our economy is now coming from the oilpatch, and their slow season is the summer. They want a
house and to moor a boat here for vacation."
Bussiere said the Albertan buyers with their higher-end incomes might be drawn to gems such as a custom-built
five-bedroom house on the ocean that had its price reduced in the last week by $50,000.
For $639,000, Bussiere says, this house has absolutely everything you could want, on a private white sandy
The 2,400-square-foot former bed and breakfast sleeps eight comfortably, has huge windows, vaulted ceilings
and a new kitchen.
A full-width deck on the oceanside fronts fully landscaped gated grounds complete with raised, irrigated beds, two
greenhouses and a shop.
It could be a "pocket-sized fishing or adventure retreat resort," says Bussiere, in a region known for salmon,
halibut and freshwater fishing.
And yet, the Masset mansion has languished on the market for more than a year.
In December 2009, the Queen Charlotte Islands were formerly changed by the B.C. government to Haida Gwaii, in
reconciliation with the Haida people who have lived there for at least 11,000 years, since before the last Ice Age.
Only 5,000 people live in Haida Gwaii, of which a third are of Haida ancestry.
The islands' population is rapidly shifting, as loggers and fishing families leave and are replaced by wilderness-
seekers, and the rapidly-growing Haida population. As the non-native population has declined by 12 per cent
during the past decade, the Haida population is up by 60 per cent.
"People who live here mostly recognize the place belongs to the Haida ultimately and frankly we'd rather pay taxes
to them," says Bussiere.
The Haida claim the whole archipelago, but most Haida live in two villages, Old Masset at the islands' northern tip
and Skidegate in the south.
Queen Charlotte is the largest village with about 1,000 people, followed by Masset at the northern tip, Port
Clements and Sandspit, with about 400 people.
Haida Gwaii consists of two main islands, Graham Island to the north, and Moresby Island to the south, along with
about 150 smaller islands.
At the opposite end of the price spectrum from custom-built mansions are 300 former military homes in Masset,
now marketed as very cheap vacation homes.
The village of Masset hosted an active military base, as a communications monitoring and relay station, from
1943 right through the Second World War.
It eventually became a Canadian Forces base, with hundreds of people, but by 1997 all military personnel had left
and the base was fully decommissioned.
About 70 per cent of the 300 boxy, basic federally built houses - the former Permanent Married Quarters - are
occupied, and many have been fixed up and resold as vacation homes.
"Some of them are for sale for as little as $40,000 but those might be a teardown due to mould," says Prince
Rupert realtor Dorothy Wharton.
She adds there are at least a dozen in the $50,000 to $80,000 range that are certainly livable, and are on the
doorstep of wild natural beaches and parks.
Haida Gwaii realtor Lynn Pineault says she has listed several "PMQs" for less than $150,000.
"They require little maintenance and are great vacation homes," says Pineault. In the mid-range, Pineault offers
her listing of an authentic log home in Masset for $165,000. Astute buyers are starting to sniff out deals.
Neil Goodwin, who runs a fishing lodge and has lived in Haida Gwaii about five years, said he and his wife just
bought a 2,400-square-foot house, on about an acre, in Sandspit for only $185,000.
"I know I couldn't buy anything in that price range in southern B.C., but as the loggers and their families leave, and
the tourism industry gears up, there are some very good real estate buys here," said Goodwin, whose wife works
for both their lodge and as an Air Canada booking agent in Haida Gwaii.
Merewyn and Wayne Nicol, originally from South Africa, were able to snag a four-bedroom home, on an acre and a
half, right on the ocean, just west of Port Clements, for only $250,000.
"We knew we wanted to be on the coast, because that's where we'd lived in South Africa," says Merewyn, 39, who
says she and husband Wayne spent three years ranching on leased land in Alberta but really wanted their own
"We looked all over Canada, even in Nova Scotia, but everywhere else was too expensive for our budget, which
was under $300,000," says Merewyn. "The only place that came up in our price range on the ocean was Haida
Gwaii," says Merewyn.
"We all love it here," says Merewyn, 39, who soon found work as an office administrator with O'Brien and Fuerst
Ltd., a diversified Haida Gwaii logging, excavating and roadbuilding company.
Her husband, Wayne, is a supervisor in the highways division of the same company and the couple has two
children, aged three and 10. "It's not for those who like the city life - you have to get used to having no ferry due to
the weather - but there are some amenities too, and it's very beautiful. We have no plans to move again," said
Pineault, who sold Neil Goodwin his house and is perhaps the islands' most active realtor and booster, says she
prefers to call Haida Gwaii a real estate market that is "waiting to be discovered."
Two-bedroom, large sundeck. Can be purchased with the lot next door. Kitchen shown above.
Rental properties are an excellent investment but they can be a lot of work. Here's what you need to know.
By Jasmine Miller
Converting your basement into an apartment can be a lucrative move, no question, but there are perks and perils
to using part of your home as a rental property. Here are eight things to keep in mind before taking the plunge.
1 Rental properties: Do it legally, or don't do it.
Just because you have space for a renter doesn't mean you're allowed to get one. Some municipalities don't
issue permits for secondary suites. If you build one anyway (there's always a contractor out there who will do work
without permits), and you're discovered, you can be forced to pay fines and even dismantle the rental property.
“We've heard of situations where disgruntled neighbours inform the city of illegal units next to them," says
Rebecca Isenberg, sales representative at Sutton Sadie Moranis Realty Brokerage in Toronto. She and her
business partner, Helene Katz, broker of record at the same agency, have 35 years combined experience and
have helped scores of homeowners become landlords.
Besides zoning issues, "a prospective landlord must verify that a second unit meets the requirements of the fire
code," says Rebecca. For example, are there two exits, and is the ceiling high enough? If something goes wrong
—a fire, for example—in an illegal dwelling, the landlord is on the hook. “If your insurance company isn't aware of
the second dwelling, they may not pay your claim, if you make one. They certainly will not cover the tenant's
possessions, and you might have a lawsuit from your tenants," says Helene.
If you've got permits for the space, there's no need to be anxious about notifying your insurance provider. "Your
premium might increase, and any new tenant will still be required to purchase their own insurance package in
order for the landlord to be fully, legally, covered," says Helene. It's just a phone call, and it could save you a lot of
2 You probably won't pocket the entire rent—it's taxable and there are expenses.
You'll need to issue a receipt to your tenants for the rent they pay on their rental property, and they may use it to
claim a deduction on their income tax. Even if they don't, you're expected to declare the rent as income and pay tax
on it accordingly.
Tax aside, landlords face other expenses. On average, plan to spend the equivalent of a couple months rent every
year on home maintenance and upkeep of the rental property (painting and cleaning services when tenants move
out, appliance repairs, and fixture upgrades or replacement).
3 The space you have might not attract the tenants you want.
Especially if you share common areas like a driveway, foyer or yard, you want to be extra careful about who you get
in there. To preserve your family's privacy, your rental property might need more than drywall and a new shower
stall. "A tenant in a fourplex we're familiar with was exposed to all kinds of noises from their neighbours directly
above. They could even hear them sneeze," says Rebecca. "Some sound-proofing would have helped that
Make sure your electrical service can accommodate more people (you might have to upgrade from 100 amps to
200); consider a larger water tank so the tenant won't knock on your door because they can't shower when you do
Don't spend lavishly on decor, but make sure the apartment is one you would want to live in—that way you're more
likely to land a tenant you want to live with. Landlord Beige might not work in your home, but it's a good choice for a
rental space. A subdued colour lets your tenant imagine their own life in the space and is one less thing for them
to ask you to contend with before moving in. Remember: like prospective homebuyers, prospective renters often
try to negotiate the rent and extras, like new paint.
4 Once they're in, it's hard to get tenants out.
Rules vary across the country, but all renters are protected by provincial legislation and governing bodies, and the
requirements for eviction are high for good reason: No one should feel their home could easily be taken away. "As
a landlord, you should be knowledgeable of the Residential Tenancies Act," says Helene. "Tenants are very
knowledgeable of their rights under this act."
Also, tenants can leave before a lease is up (usually by giving two months notice), so you want to ask questions to
determine that they're staying a while. Why? The longer you keep a tenant, the cheaper it is for you in the long run:
when tenants move out, you need to show the space, get repairs done and wait for the next appropriate candidate.
This can take weeks during which you won't be collecting rent.
Remember, too, that you can't protect yourself from all risk. You can—and should—ask for first and last month's
rent when your tenants move in, but a security deposit to cover holes in walls, broken appliances or ruined
hardwood, is not allowed in some provinces. Familiarize yourself with the rules in your area or you could
unwittingly break the law.
You should also know that not all clauses in a lease are binding. For example, if you write into the document that
there are to be no pets or children in your building, and your tenant agrees by signing, but later gets a four-legged
companion or a bundle of joy anyway, you can't evict them.
It's not that you don't have any rights as a landlord—if the dog is a menace to your safety, you can go to the
overseeing agency in your jurisdiction and make an application for eviction, but it won't be granted simply because
there is a pet in the house. (And you're just stuck with the baby; tenants can't be evicted for reproducing.)
5 Showing your space and finding the right tenants is tough work.
A prospective landlord, especially a first-timer, should consider the services of a realtor.
You'll pay her the equivalent of a month's rent, but the agent will assess your space to determine a realistic price;
she can draft a listings write-up and post it on realtor.ca and MLS, which is accessed by tens of thousands of real
estate professionals, many with clients who'd like to see your space. "We'll screen all the inquiries about your
apartment and the applications," says Rebecca. "That means credit checks, getting an employment letter and
contacting prior landlords to see if there is a history of NSF cheques, too."
If you decide not to use a realtor, be prepared to do that rigorous investigating on your own. And since time is
money, you should factor that legwork into your balance sheet.
6 A rental unit won't necessarily add to the value of your home.
Some home renovations are almost always worth the investment: an updated kitchen or bathroom, for example,
or new paint and floors. But some aren't: swimming pools or saunas, usually. So if you love and use them, go
ahead and install them for your own enjoyment, but don't think of them as an investment. Same goes for a rental
If you do construction without permits, future owners of your home will have to contend with that. If they can't rent
the space out, or don't want the risk since it's not legal, they'll have an extra kitchenthat's of no use to them and
space that's probably not easily integrated into a single-family home. They might use that as a negotiating tool to
get your asking price down.
7 Landlords should be handy.
You don't need to be able to re-wire your home, but if you can't deal with a blown fuse or a clogged toilet, if
standing on a ladder or bending under a sink freaks you out, you could have problems.
Here's why: if tenants confront even a small a problem (a leaky faucet, say, or a light that won't go on), they don't
have to solve it, they just have to call the landlord. If you can't handle the work yourself, you need to find someone
Before there's a problem, ideally before your apartment is rented, interview contractors who will take on small jobs
(they're tough to find). Explain that you'll have tenants and the potential problems that could arise based on the
condition of your home—plumbing issues, electrical shorts, aging radiators—and that you're looking for someone
who could do that work quickly if needed. Keep their numbers on hand and don't make tenants wait long after
making a complaint to fix problems. But the more you learn to do yourself, the more money you'll keep for yourself.
If you're buying new appliances, pay for the extended warranties. It's one thing to manage your own space and
problems, but add someone else's washing machine to the mix and it can get to be too much. Extended
warranties, besides being a tax write-off against rental income, mean fewer headaches for you.
8 Being a landlord isn't a lottery win—it's a part-time job.
But work can be rewarding, so if you do it right, it can pay off—and not just with the extra cash (although that's the
main reason, let's be honest). "We know a landlord and tenant who babysit each other’s pets and plants when
either one travels," says Rebecca. "Finding the right tenant is key, and as realtors, that's our goal."
3 worthy resources for prospective landlords
Check out the Provincial and Territorial Fact Sheet for rental authorities in your province, covering guidelines for
eviction, as well as rights and responsibilities of landlords and tenants.
2 Landlord's Self Help Centre
Membership allows you to access copies of rental applications and tenancy agreement forms.
3 Rent Check Credit Bureau
If you're not using a realtor, you may need to pay to access the information you need on prospective tenants. This
is a good place to start.
By Kristin Arnold | Bankrate.com
Intro: Credit has long been viewed by many as a mystery. We know what it is and we know we need it…we're just
not exactly sure how to best utilize it for our maximum benefit. Bankrate.com separates fact from fiction when it
comes to building better credit.
Many people may think that paying off delinquencies will restore their credit score. While paying a debt is a better
move than not paying it, the delinquency will stay on your credit report for seven years. To improve your credit
score, get current and stay current on your credit accounts.
There's a happy medium when it comes to the amount of credit you have. Opening too many accounts makes you
top heavy, creating more risk and your credit will reflect that.
SOT: Janna Herron, Credit/Credit Cards Staff Reporter, Bankrate.com
("If a lender sees that a borrower has opened a lot of accounts in a short period of time. The lender thinks "Is this
person having trouble financially and needs access to cash fast.")
On the flip side, closing accounts gives you a smaller amount of available credit - hurting your credit score. A good
strategy: Think long-term when it comes to credit.
Smart financial moves don't always help your credit score. Paying off your loan early saves you interest but it won't
provide much a boost to your credit rating. Make sure you have open credit accounts in good standing to keep
improving your credit.
If you pay your balance before the due date, it must raise your credit score, right? Wrong. That's because the balance of the account has already been reported to the credit agencies. Play the game smartly by paying the
balance before the statement closing date or by cutting back on your credit card spending.
Tag: Looking to learn more about improving your credit? Just log on to Bankrate.com. I'm Kristin Arnold.
By Marcia Passos Duffy | Bankrate.com
You want your stuff in the right hands
Many consider moving to be one of life's most stressful and least fun events, especially the actual
process of getting all your stuff from point A to point B. Once you've made the big decision to pull
up stakes and then figure out all those important details such as where you'll work, where you'll
live and where the kids will go to school, choosing a mover may just be an afterthought.
But don't skimp on this last detail. Why? While the right moving company can make for a smooth move, choosing
the wrong mover can make your relocation a nightmare.
Cliff O'Neill found this out the hard way when he moved from the Washington, D.C., area to Columbus, Ohio. The
Washington-area moving crew he hired needed help unloading the truck in Ohio, so without O'Neill's knowledge
they hired a panhandler off the street to do the job.
"I was aghast -- this guy now knew where I lived and all the contents of my home," says O'Neill, who added that the
panhandler later rang his doorbell asking for money. "I quickly got an alarm system."
How can you make sure that this -- or worse -- won't happen to you during your move? Here are some tips.
Can I see your license?
"(Licenses) are the 'it' factor when you are looking for a mover," says Stephen Bienko, owner of College Hunks
Moving of East Hanover, N.J.
A moving company's licenses and other requirements will differ depending on whether you are moving within your
state or to another, notes David Hauenstein, a vice president with the trade group the American Moving and
Storage Association, or AMSA.
To do business across state lines, the mover must be licensed with the federal government and have a U.S.
Department of Transportation, or DOT, number. You can find out if an interstate mover meets the requirements by
calling the Federal Motor Carrier Safety Administration or by looking up the moving company on the agency's
For local moves within the same state, AMSA recommends you contact your state moving association to check on
a mover's licenses and other requirements, which may differ from state to state.
Go local or go national?
While a national moving company is best for an interstate move, stick with a local business for a
move that's across town or anywhere within your state, says Laurie Lamoureux, founder of
Seamless Moves, a moving services company based in Bellevue, Wash.
"We often have very good luck getting problems resolved by local owners that may go unanswered by a large
corporation," she says.
However, just because you liked the mom and pop mover for your local move doesn't mean the company has the
appropriate licenses or experience to cross state lines.
Smaller companies may hire day labor or temps who are untrained or unknown to the company, which can result
in problems if there is any loss or damage, says Jim Lockard, owner of Denver-based moving company JL
Transport. But he adds that large companies may not offer the crews, insurance and services you need and can
sometimes transfer your property to another company or crew during transit.
"In the middle is a company that assigns permanent employees to travel with your property," Lockard says. "Good
research of the history (of the company) can avert problems and losses."
Do some detective work
Make sure you check government and independent sources -- not just the mover's website -- to verify licenses and
references, says Hauenstein. While the mover may boldly claim on its website to have the right credentials, that
may not be the case. "We find instances of movers using the BBB (Better Business Bureau) and AMSA logo, but
they aren't members," he says.
Do some digging of your own on a mover's social media pages, such as Facebook, to read comments from
customers. Also check testimonials on Angie's List, Yelp, Google Places and MovingScam.com. You might try an
online search pairing the company's name with the word "complaints" to find any blog posts about bad customer
experiences with a specific moving company.
"Every company has a few tough clients that may have felt they did not have the experience they were looking for,"
says Bienko. "However, take the average and base your decision on that."
Get an estimate, and get it in writing
You should get estimates from more than one moving company, says Lamoureux. And make sure those
estimates include everything in your home you want moved.
"That includes things in the attic, garage, backyard, shed, crawl space, basement, underneath and behind
furniture, and inside every closet and piece of storage furniture," she says. If you point to several things during the
estimating process and say, "That will be gone before the move," and they are not, your cost will be higher, she
The Federal Motor Carrier Safety Administration, or FMCSA, recommends that the estimate be in writing and
clearly describe all the charges. Do not accept verbal estimates.
Along with a binding estimate, the FMCSA recommends that you get these additional documents from the mover
on moving day:
- Bill of lading -- a receipt for your belongings and a contract between you and the mover. Do not sign it if there's anything in there you don't understand.
- Order for service -- a document that authorizes the carrier to transport your household items from one location to another.
- Inventory list -- a receipt showing each item and its condition prior to the move.
Be assured you're insured
While your mover is liable for your belongings as they're being handled and transported by the company's
employees, there are different levels of liability, or "valuation," says Hauenstein. "You need to understand the level
that will apply for your move."
Under federal law, interstate movers must offer their customers two different insurance options: "full value
protection" and "released value."
Under full value, a more comprehensive insurance that will cost you extra, the mover is liable for the replacement
value of any item that is lost or damaged during the move.
Released value protection comes at no additional charge and offers limited liability that will pay you just 60 cents
per pound for any items that disappear or are harmed.
You may opt to purchase your own separate insurance for the move. Or, your furniture and other stuff may already
be covered through your existing homeowners policy.
In-state movers are subject to state insurance requirements, so make sure you ask about coverage when using a
Don't ever sign anything that contains language about "releasing" or "discharging" your mover from liability.
Ask a lot of questions
Once you get all the licenses and paperwork checked and in order, moving experts say your job still isn't done.
Make sure the mover provides answers to the following questions.
How long has the company been in the moving business?
Does the company do background checks on the employees who do the moving?
Does the company hire day labor or temp help?
Will the company transfer the property to another company or crew during the move?
Does the company guarantee delivery on the date you want (or need)?
Does the mover have a dispute settlement program?
The bottom line is that you need to be comfortable with all the answers you get from the mover and trust the
company, says Diane Saatchi, senior vice president of Saunders & Associates, a real estate brokerage firm
based in Bridgehampton, N.Y.
"After all, they will be going through your personal things and be part of your life for a couple of days," says Saatchi.
"Moving is a stressful time, and the mover should be calm and make it easier for you."
June 2012 Monthly Report
After a strong run in the residential real estate market over the past several years, more and more people have begun
asking questions about commercial real estate and its viability as an investment product. The answer to this
question is that commercial real estate has proven to be a strong, stable investment, especially when compared to
the recent volatility in the stock market or the infinitesimal interest rate returns being paid out by banks.
BC, in particular, has seen a disproportionate number of fortunes being made in commercial real estate
(http://www.vancouversun.com/health/Cancer+donation+sets+record/6676983/story.html). In fact, 4 of the 8 BC-
based billionaires made their fortunes through commercial real estate investments
So what are the similarities and differences between residential and commercial real estate?
Residential and Commercial real estate share some commonalities and the licence to trade either asset category is
the same. That being said, because there are several key differences, real estate agents typically focus on one
category or the other. There are exceptions, of course, and in smaller markets, agents often need to sell all manner
of real estate. Macdonald Realty's sister company, Macdonald Commercial
(http://www.macdonaldcommercial.com) offers professional commercial real estate services in all seven (7) main
commercial real estate asset classes:
- 1) Land
- 2) Office
- 3) Retail (Stores, Malls, Shopping Centres, etc.)
- 4) Industrial (Warehouses, Distribution Centres, Industrial Manufacturing, etc.)
- 5) Multifamily (Apartments)
- 6) Leisure (Hotels, Sport Facilities, etc.)
- 7) Healthcare (Medical Centres, Nursing Homes, etc.)
Pros of Buying Residential Real Estate:
- It's the only investment product that you can also live in.
- The Principal Residence Exemption (http://www.taxtips.ca/filing/principalresidence.htm) is the single biggest tax loophole that the typical Canadian can take advantage of.
- The Realtor MLS system makes the residential market more liquid and transparent.
Because of this, buying a principal residence is one of the best investments you can make. That said, if you're
considering buying real estate as a pure investment, you may also want to consider commercial.
Pros of Buying Commercial Real Estate:
- Most commercial tenancies (except multifamily) are triple net, meaning the tenant(s) is responsible for paying (1) property tax, (2) insurance, and (3) common area maintenance of the leased property IN ADDITION to their negotiated lease rate. In residential, the landlord is primarily responsible for these three items and must pay it out of the rent he collects.
- Commercial leases are generally considered to have been negotiated between two equal parties, meaning that both sides need to adhere to the stipulations of the lease. In residential, the Residential Tenancy Act is heavily tilted in favour of the tenant, meaning that it is much more difficult to get rid of bad tenants in residential real estate.
- The commercial real estate market is generally more stable than residential real estate market because it is more likely to be based on 5- to 10-year prevailing lease rates rather than psychology or speculation. Economists have been calling Vancouver's residential real estate market 'overvalued' for 30+ years now because it can seem disconnected from prevailing economic principles.
The reason that many people shy away from commercial real estate is one of familiarity. Everyone has had the
experience of living in a residential property and therefore has at least a rudimentary knowledge of what it is. In
commercial, there are so many different asset categories that even seasoned commercial agents tend to focus on a
few of them. After all, a nursing home, a parking lot, and a hotel all require different management skill sets.
Fortunately, professional property management companies, like Macdonald Commercial
(http://www.macdonaldpm.com/), can help you manage a wide range of assets.
If you're interested in learning more about investing in real estate, either commercial or residential, feel free to
contact me at the address above.
||(Click chart to see larger image)
*This communication is not intended to cause or induce breach of an existing agency agreement.
*Although this information has been received from sources deemed reliable, we assume no responsibility for its
accuracy, and without offering advice, make this submission to prior sale or lease, change in price or terms, and
withdrawal without notice.
**Should you not wish to receive this communication, please reply to this email with "Please Unsubscribe" in the
By: Maya Millar | HGTV
You’ve taken the plunge and purchased your first home. While you may want to furnish every room immediately,
the wisest thing you can do is take time to properly budget and plan for everything you’d like to do in your home
over the next few years. Not to despair; there are a few essentials you can invest in now that will make your first
house truly feel like a home.
A good lighting scheme can make or break a place. Consider what type of fixture you’d like in the each room. A
quick change that will allow you to instantly change the mood of a space is to install dimmers on your lights.
Another inexpensive way to play with your lighting is to invest in some clean-lined candle holders (simple clear
glass holders are always classic) and a substantial supply of white candles. If you tend to host dinners or parties
that last for hours, consider votives instead of tealights (votives burn longer than tealights so you can spend the
evening with your guests rather than replacing tealights throughout the night).
Stocking your linen closet with a full set of thick, luscious quality towels, is worth the comfort and pleasure you’ll
get from them every day. The best way to shop for towels is to touch them in the store and examine the texture;
look for a heavy weight all-cotton terry that is soft against your skin. In terms of colour, white is classic and clean,
but if your bathroom is neutral, adding a juicy vibrant shade of towels is a simple, noncommittal way to experiment
with colour. And while you’re in the linen department, pick up some cloth napkins—they’re more eco-friendly than
the paper variety and will add polish to your table setting.
The mismatched set you own does have a certain charm for a more whimsical place setting, but a proper set of
cutlery is essential if you plan on hosting dinner parties in your new home. Besides looking for a design you like,
pick up the cutlery to check if its weight is pleasing to use. A basic set of quality knives will also do you well. A
chef’s knife, a paring knife and a bread knife is all most of us need.
What gadgets you need in your kitchen depends on your cooking and entertaining habits, but a few must-haves
include: a rabbit-ear style wine opener, a salad spinner, an electronic can opener and a knife sharpener.
If you’re still using the old couch from your parents basement or that starter couch from your very first apartment,
it’s time for an upgrade. This is a substantial buy but It’s worth investing in now as you use it everyday, from
reading the newspaper to catching your favourite TV show, and it will help establish your living area. Check for
comfort and size (ensure it fits not only the space you’ve set out for it, but that it can also get through the doorway
and stairwell to your place), but also ask about the sofa’s frame (a hardwood frame is preferable) and springs
(avoid the wire coil type).
In the first quarter of 2012, there were 299 deals worth more than a million in Vancouver for a total of $1.2-billion, according to recent research. Photograph by: Mark Van Manen , Vancouver Sun files
BY GARRY MARR, FP
It was the second best first quarter ever for Greater Vancouver commercial activity, according to RealNet Canada
The research company said they were 299 deals worth more than a million in the first quarter for a total of $1.2-
billion. The only better first quarter was recorded in 2007.
“Although a decrease in pace was recorded in the first quarter [from the fourth of quarter of 2011], the results are
now consistently in line with results witnessed during 2006 and 2007,” said George Carras, president of RealNet.
“The Greater Vancouver market has now posted five quarters in excess of $1-billion, a run equalled only once
A bit chunk of the investment was just land with 52 per cent of all of the activity purchases for residential and
RealNet said the first quarter was the best ever for deals over $10-million in a quarter with the total of 24 beating
the record set in fourth quarter of 2009.
There were eight deals alone in residential land component worth more than $10-million, five of which were in the
city of Vancouver.
Some of the other big deals included the city of Surrey’s $22.14 million purchase of 58 acres of industrial land to
complete a subdivision it will market for sale. Canada Post also bought 1.78 acres of land in Vancouver for
$13.35-million that it plans to redevelop to accommodate a new state-of-the art mail processing centre.
On the office side, it recorded the largest climb in pure dollar numbers with six deals worth more than $10-million.
CPP Investment Board scored the biggest deal by acquiring a 50 per cent interest in two office towers for $115-
million. The total for all six deal was almost $200-million at average price of $496 per square foot and average cap
rate of 4.7 per cent.