Cell: 604-779-8699 |

10 Staging Secrets From the Pros for a Quick Home Sale at Top Dollar

 

 

According to the National Association of Realtors, staging a home prior to listing it can result in a faster and more profitable sale.1 In fact, the Real Estate Staging Association estimates that professionally staged properties spend 73 percent less time on the market, receive more foot traffic, and typically sell for more money.2

 

 

Source: National Association of Realtors

 

 

Following are 10 tips you can use to get your home “show ready” prior to hitting the market. These easy and cost-effective ideas will help your house look its best—and help buyers visualize themselves living there. Even if you’re not currently in the market to sell, you can use these tactics to breathe new life into your existing home decor.

 

To get a plan customized for your particular property, give us a call to schedule a free consultation. We’d be happy to share our insider knowledge of the buyer preferences in your neighborhood … so you’ll know where to focus your time, money and energy to maximize your results.

 

 

1. REMOVE CLUTTER

 

Decluttering is typically the first thing we tell clients to do to prepare their home for sale. And according to the National Association of Realtors, a whopping 93 percent of agents agree.1 Decluttering is the act of removing excess “stuff” from your home to make it appear clean and spacious.

 

Overflowing closets and cluttered countertops can make your house feel small and cramped. In contrast, sparsely-filled closets and clear countertops will make your home appear larger and assure buyers that there will be plenty of room to store their belongings.

 

Don’t neglect drawers, cupboards and even your refrigerator in your decluttering efforts. Serious buyers will check out every nook and cranny of your home, so pack up anything you don’t use on a daily basis and store it off site. The same goes for jewelry, sensitive documents, prescription medication, firearms and other items of value. Store them in a locked safe or storage unit before opening your property to buyers.

 

Make sure any items that remain are clean, tidy and well organized. The good news is, when it comes time to move, a large portion of your packing will be done!

 

 2. DEEP CLEAN AND DEODORIZE

 

From carpets to bathrooms to appliances, having a clean home is a MUST. If you’ve ever checked into a dirty hotel room, you can imagine how buyers can be turned off by a home that hasn’t been thoroughly cleaned.

 

If you have a large home, or are short on time, you may want to invest in a professional cleaning service. And if you have carpet, we generally recommend you rent a steam cleaner or hire a company to clean your carpets for you.

 

In addition to cleaning, it’s equally important to neutralize odors in your home that can be off-putting to buyers, especially pet smells and cigarette smoke. If the weather allows, open your windows and let in fresh air. Empty the trash frequently, and especially before a showing. Avoid cooking any strong-smelling food such as fish or heavy spices. You may need to clean (or remove) drapes and upholstery if odors are particularly strong.

 

Try to keep your home in clean, show-ready condition while it’s on the market. You never know when a potential buyer will want to drop by for a viewing.

 

 

3. DEPERSONALIZE

 

Your family photos and personal mementos are often your most treasured possessions. For many of us, they are what make a house a home. However, buyers will have a hard time envisioning themselves living in a place if it feels like YOUR home.

 

Pack up any items that are personal to you and your family, such as photos, books, children’s artwork, travel souvenirs and religious items. Collectibles and excessive knickknacks can be distracting to buyers. Instead, keep your decor items minimal and generic to appeal to the largest number of buyers.

 

 

4. NEUTRALIZE YOUR COLOR PALETTE

 

Along those same lines, bold color choices may not appeal to all buyers. By incorporating a neutral color palette throughout your home, buyers can better visualize the addition of their own furniture and decor, which may contrast with your current color scheme.

 

But don’t limit yourself to white and beige. Incorporating earth tones and midtone neutrals—like mocha and “greige” (grey-beige)—can add a touch of modern sophistication to your decor.3

 

 One of the quickest and most cost-effective ways to neutralize your home’s decor is with paint. Walls painted in dark, bold or bright colors can turn off buyers. A fresh coat of paint in a neutral color like greige (try Benjamin Moore’s Revere Pewter) or warm white (such as Kelly-Moore’s Rotunda White) offers a clean palette upon which buyers can visualize adding their own personal touches.4

 

If your sofa is worn, stained or has a bold pattern, consider purchasing a neutral-colored slipcover. Dated or overly busy window coverings should be taken down or replaced. Instead, bring in tasteful pops of color with throw pillows and accessories.

 

 

5. INCREASE YOUR CURB APPEAL

 

You only get one chance to make a first impression. According to a 2017 report by the National Association of Realtors, 44 percent of home buyers drove by a property after viewing it online but did NOT go inside for a walkthrough.5 That means if your curb appeal is lacking, buyers may never make it through the door.

 

Walk around your home and look for any neglected areas that might seem like “red flags” to buyers, such as missing roof shingles or rotted siding. Trim trees and shrubs if needed, and make sure your lawn and flower beds are well maintained. Add some colorful flowers to your front beds and/or flower boxes to brighten up your landscaping.

 

Make sure the exterior of your home is as clean as the interior. This can often be accomplished with a simple garden hose. But if your siding, walkway, or driveway are stained or dingy, you may want to rent a pressure washer.

 

Thoroughly wash windows and screens, and remove and store dark solar screens if you have them. Open shutters, curtains and blinds, which will not only make your house look more inviting from the outside, it will brighten the inside.

 

Consider a fresh coat of paint on your front door, trim and shutters. And small, cosmetic improvements like new house numbers, a colorful wreath and a clean front doormat can have a big impact.6

 

 

6. FRESHEN KITCHENS AND BATHS

 

Kitchens and bathrooms will show better and appear larger if all items are cleared from the countertops, except for one or two decorative pieces.7 You should have already packed up non-essentials during your decluttering process, and the remaining items should be neatly stored in pantries and cupboards.

 

If your cabinets are dingy or outdated, adding a fresh coat of paint and new hardware is an easy and inexpensive way to make them modern and bright. Consider purchasing new shower curtains, bath mats and towels for the bathrooms and new dish towels for the kitchen.

 

Before each showing, make sure kitchens and baths are spotless and trash cans are empty and out of sight. To add a comforting aroma, try baking cookies, or in the fall, simmer some cinnamon sticks and cloves in a pot of water before you leave the house. In the spring, try a vase of fresh cut lilacs.7

 

 

7. SET THE TABLE

 

Buyers often imagine hosting family gatherings in their new home, and the dining room plays a large role in that vision. If your dining room chairs are stained or outdated, you may want to recover them or use slipcovers. In most cases, an imperfect table can be camouflaged with a neutral and stylish tablecloth.

 

Be sure the table is centered underneath the chandelier and on the area rug if you’re using one. If your dining room is small, remove all other furniture and leave only four chairs.8

 

Dress up the table using nice tableware and cloth napkins or a table runner and centerpiece. For a long table, try lining up a series of small vessels down the middle.

 

 

8. REARRANGE FURNITURE

 

Start in your living room and think about what you want to emphasize (and de-emphasize) about the space. For example, do you have a beautiful fireplace or a stunning view? If so, arrange the furniture with that focal point in mind. Use a symmetrical seating arrangement to create a cozy conversation area adjacent to the focal point.

 

If the room is small, consider removing some of the furniture to make it feel larger, especially oversized pieces. That includes oversized television sets, unless it’s a designated media room. Pulling furniture away from the wall can make the room feel more spacious, and placing your largest furniture piece in the far-left corner (as opposed to near the entry) can create the illusion of a larger space.9

 

For small bedrooms, remove all the furniture except the bed, bedside tables and a dresser. If it’s a large room, add one or two chairs and a table to create a seating area. Place lamps on the bedside tables and seating area if you have one.10

 

Make sure each space in your home has a clearly defined purpose. For example, if you’ve been using an extra bedroom as a catch-all storage space, stage it as a guest room or office instead. Turn an awkward alcove into a workstation or a reading corner. Help buyers imagine how they could use the space themselves.3

 

 

9. LIGHTEN UP

 

Lighting can have a drastic impact on the look and feel of a home. Few buyers seek out a dark house; most prefer one that’s light and bright. Make sure windows are clean, and open curtains and blinds to let in the maximum amount of daylight.

 

Each room should have three types of lighting: ambient (general or overhead), task (such as a reading lamp or under-cabinet light), and accent (such as a floor or table lamp). Aim for a goal of 100 total watts per 50 square feet.11 If your mounted light fixtures are dated, replacing them with something more modern is an easy and inexpensive upgrade that can have a big impact.


Strategically placed landscape lighting can add a dramatic effect to your home’s exterior. Welcome evening visitors with a lighted walkway, or use a spotlight to accentuate trees or other landscaping features. Solar lights require no wiring; simply place them in a sunny spot and they will turn on automatically at dusk.

 

 

10. HIGHLIGHT YOUR BACKYARD’S BEST FEATURES

 

While your home’s interior often takes center stage, don’t forget about staging your home’s outdoor areas to help buyers imagine how they could utilize the space.

 

Even a small patio can become a selling feature with the addition of a cafe table and chairs. Add a tray of plates and coffee cups to help buyers envision a peaceful breakfast on the back porch. Place chairs and wine glasses around an outdoor firepit or hang a hammock with a book in your favorite shady spot.3 These small, simple additions can help buyers visualize the possibilities your backyard has to offer.

 

 

BEFORE YOU GET STARTED

 

If you’re in the market to sell your home, this list provides a great starting point for your preparations. But nothing beats the trained eye and expertise of a real estate agent. Before you do any work, we recommend consulting a professional for advice about your particular property.

 

We offer free, no-commitment seller consultations and will walk through your home with you to help you assess which projects and upgrades are worth your time and money, and which ones you can skip.

 

As local market experts, we are intimately familiar with buyer preferences in your area. We’ll run a comparative market analysis to find out how your home compares to others currently on the market, as well as those that have recently sold. Then we’ll tailor a custom plan to suit your particular property, budget and needs.

 

Please call or email us today with questions or to schedule a free consultation!

 

 #realestate #realestateagent #homebuyer #homeseller #homesearch #realtor #homestaging #staging #staginghomes #realestatesales #petepandher

 

Sources:

 

  1. National Association of Realtors –
    https://www.nar.realtor/sites/default/files/migration_files/reports/2017/2017-profile-of-home-staging-07-06-2017.pdf
  2. Real Estate Staging Association –
    http://www.realestatestagingassociation.com/content.aspx?page_id=22&club_id=304550&module_id=164548
  3. Houzz –
    https://www.houzz.com/ideabooks/2661221/list/sell-your-home-fast-21-staging-tips
  4. HGTV –
    https://www.hgtv.com/design/outdoor-design/landscaping-and-hardscaping/10-curb-appeal-tips-from-the-pros-pictures
  5. National Association of Realtors –
    https://www.nar.realtor/sites/default/files/reports/2017/2017-home-buyer-and-seller-generational-trends-03-07-2017.pdf
  6. The Spruce –
    https://www.thespruce.com/must-try-neutral-paint-colors-797983
  7. HouseLogic –
    https://www.houselogic.com/sell/preparing-your-home-to-sell/home-staging-checklist/
  8. StageMyOwnHome.com –
    http://www.stagemyownhome.com/staging-the-dining-room.html
  9. Realtor.com –
    https://www.realtor.com/advice/sell/small-living-room-staging-tricks/
  10. SFGATE –
    http://homeguides.sfgate.com/stage-master-bedroom-34573.html
  11. HGTV –
    https://www.hgtv.com/shows/designed-to-sell/15-secrets-of-home-staging-pictures
Read full post

HOUSE CARE CALENDAR: A Seasonal Guide to Maintaining Your Home

 

From summer vacations to winter holidays, it seems each season offers the perfect excuse to put off our to-do list. But be careful, homeowners: neglecting your home’s maintenance could put your personal safety—and one of your largest financial investments—at serious risk.

 

In no time at all, small problems can lead to extensive and expensive repairs. And even if you avoid a catastrophe, those minor issues can still have a big impact. Properties that are not well maintained can lose 10 percent (or more) of their appraised value.1


The good news is, by dedicating a few hours each season to properly maintaining your home, you can ensure a safe living environment for you and your family ... and actually increase the value of your home by one percent annually!1 You just need to know where and how to spend your time.

Use the following checklist as a guide to maintaining your home and lawn throughout the year. It's applicable for all climates, so please share it with friends and family members who you think could benefit, no matter where their home is located.

Spring

After a long, cold winter, many of us look forward to a fresh start in the spring. Wash away the winter grime, open the windows, and prepare your home for warmer weather and backyard barbecues.

Inside

  • Conduct Annual Spring Cleaning: Be sure to tackle those areas that may have gone neglected, such as your blinds, baseboards and fan blades—as well as appliances, including your refrigerator, dishwasher, oven and range hood. Clear out clutter and clothes you no longer wear, and toss old and expired food and medications.
  • Shut Down Heating System: Depending on the type of heating system you have, you may need to shut your system down when not in use. Check the manufacturer’s instructions for proper procedures.
  • Tune Up A/C: If your home has central air conditioning, schedule an annual tune-up with your HVAC technician. If you have a portable or window unit, be sure to follow the manufacturer's instructions for proper maintenance.2
  • Check Plumbing: It’s a good idea to periodically check your plumbing to spot any leaks or maintenance issues. Look for evidence of leaks—such as water stains on the ceiling—and check for dripping faucets or running toilets that need to be addressed. Inspect your hot water heater for sediment build up. Check your sump pump (if you have one) to ensure it’s working properly.3
  • Inspect Smoke Alarm and Carbon Monoxide Detectors: Check that your smoke and carbon monoxide detectors are functioning properly. Batteries should be replaced every six months, so change them now and again in the fall. Follow the manufacturer’s instructions to test your individual devices. And even properly functioning devices should be replaced at least every 10 years, or per the manufacturer’s recommendation.4
  • Inspect Perimeter of Home: Walk around your house and look for any signs of damage or wear and tear that should be addressed. Are there cracks in the foundation? Peeling paint? Loose or missing roof shingles? Make a plan to make needed repairs yourself or hire a contractor.
  • Clean Home’s Exterior: Wash windows and clean and replace screens if they were removed during the winter months. For the home’s facade, it’s generally advisable to use the gentlest method that is effective. A simple garden hose will work in most cases.5
  • Clean Gutters and Downspouts: Gutters and downspouts should be cleaned at least twice a year. Neglected gutters can cause water damage to a home, so make sure yours are clean and free of debris. If your gutters have screens, you may be able to decrease the frequency of cleanings, but they should still be checked periodically.6
  • Rake Leaves: Gently rake your lawn to remove leaves and debris. Too many leaves can cause an excessive layer of thatch, which can damage the roots of your lawn. They can also harbor disease-causing organisms and insects.7 However, take care because overly vigorous raking can damage new grass shoots.
  • Seed or Sod Lawn: If you have bare spots, spring is a good time to seed or lay new sod so you can enjoy a beautiful lawn throughout the remainder of the year. The peak summer heat can be too harsh for a new lawn. If you miss this window, early fall is another good time to plant.8
  • Apply a Pre-Emergent Herbicide: While a healthy lawn is the best deterrent for weeds, some homeowners choose to use a pre-emergent herbicide in the spring to minimize weeds. When applied at the right time, it can be effective in preventing weeds from germinating. However, a pre-emergent herbicide will also prevent grass seeds from germinating, so only use it if you don’t plan to seed or sod in the spring.
  • Plant Flowers: After a long winter, planting annuals and spring perennials is a great way to brighten up your garden. It’s also a good time to prune existing flowers and shrubs and remove and compost any dead plants.
  • Mulch Beds: A layer of fresh mulch helps to suppress weeds, retain moisture and moderate soil temperature. However, be sure to strip away old mulch at least every three years to prevent excessive buildup.9
  • Fertilize Lawn: Depending on your grass type, an application of fertilizer in the spring may help promote new leaf and root growth, keep your lawn healthy, and reduce weeds.10
  • Tune Up Lawn Mower: Send your lawn mower out for a professional tune-up and to have the blades sharpened before the mowing season starts.11
  • Inspect Sprinkler System: If you have a sprinkler system, check that it’s working properly and make repairs as needed.
  • Check the Deck: If you have a deck or patio, inspect it for signs of damage or deterioration that may have occurred over the winter. Then clean it thoroughly and apply a fresh coat of stain if needed.
  • Prepare Pool: If you own a pool, warmer weather signals the start of pool season. Be sure to follow best practices for your particular pool to ensure proper maintenance and safety.

Outside

Summer

Summer is generally the time to relax and enjoy your home, but a little time devoted to maintenance will help ensure it looks great and runs efficiently throughout the season.

Inside

  • Adjust Ceiling Fans: Make sure they are set to run counter-clockwise in the summer to push air down and create a cooling breeze. Utilizing fans instead of your air conditioner, when possible, will help minimize your utility bills.
  • Clean A/C Filters: Be sure to clean or replace your filters monthly, particularly if you’re running your air conditioner often.
  • Clear Dryer Vent: Help cut down on summer utility bills by cleaning your laundry dryer vent at least once a year. Not only will it help cut down on drying times, a neglected dryer poses a serious fire hazard.
  • Check Weather Stripping: If you’re running your air conditioner in the summer, you’ll want to keep the cold air inside and hot air outside. Check weather stripping around doors and windows to ensure a good seal.
  • Mow Lawn Regularly: Your lawn will probably need regular mowing in the summer. Adjust your mower height to the highest setting, as taller grass helps shade the soil to prevent drought and weeds.
  • Water Early in the Morning: Ensure your lawn and garden get plenty of water during the hot summer months. Experts generally recommend watering in the early morning to minimize evaporation, but be mindful of any watering restrictions in your area, which may limit the time and/or days you are allowed to water.
  • Weed Weekly: To prevent weeds from taking over your garden and ruining your home’s valuable curb appeal, make a habit of pulling weeds at least once per week.
  • Exterminate Pests: Remove any standing water and piles of leaves and debris. Inspect your lawn and perimeter of your home for signs of an invasion. If necessary, call a professional exterminator for assistance.

Outside

Fall

Fall ushers in another busy season of home maintenance as you prepare your home for the winter weather ahead.

Inside

  • Have Heater Serviced: To ensure safety and efficiency, it’s a good idea to have your heating system serviced and inspected before you run it for the first time.
  • Shut Down A/C for the Winter: If you have central air conditioning, you can have it serviced at the same time as your furnace. If you have a portable or window unit, ensure it’s properly sealed or remove it and store it for the winter.
  • Inspect Chimney: Fire safety experts recommend that you have your chimney inspected annually and cleaned periodically. Complete this task before you start using your fireplace or furnace.
  • Seal Windows and Doors: Check windows and doors for drafts and caulk or add weatherstripping where necessary.
  • Check Smoke Alarm and Carbon Monoxide Detectors: If you checked your smoke and carbon monoxide detectors in the spring, they are due for another inspection. Batteries should be replaced every six months, so it’s time to replace them again. Follow the manufacturer’s instructions to test your individual devices. And even properly functioning devices should be replaced at least every 10 years, or per the manufacturer’s recommendation.3
  • Plant Fall Flowers, Grass and Shrubs: Fall is a great time to plant perennials, trees, shrubs, cool-season vegetables and bulbs that will bloom in the spring.12 It’s also a good time to reseed or sod your lawn.
  • Rake or Mow Leaves: Once the leaves start falling, it’s time to pull out your rake. A thick layer of leaves left on your grass can lead to an unhealthy lawn. Or, rather than raking, use a mulching mower to create a natural fertilizer for your lawn.
  • Apply Fall Fertilizer: If you choose not to use a mulching mower, a fall fertilizer is usually recommended. For best results, aerate your lawn before applying the fertilizer.13
  • Inspect Gutters and Roof: Inspect your gutters and downspouts and make needed repairs. Check the roof for any broken or loose tiles. Remove fallen leaves and debris.
  • Shut Down Sprinkler System: If you have a sprinkler system, drain any remaining water and shut it down to prevent damage from freezing temperatures over the winter.
  • Close Pool: If you have a pool, it’s time to clean and close it up before the winter.

Outside

Winter

While it can be tempting to ignore home maintenance issues in the winter, snow and freezing temperatures can do major damage if left untreated. Follow these steps to ensure your house survives the winter months.

Inside

  • Maintain Heating System: Check and change filters on your heating system, per the manufacturer's instructions. If you have a boiler, monitor the water level.
  • Tune Up Generator: If you own a portable generator, follow the manufacturer’s instructions for proper maintenance. Make sure it’s working before you need it, and stock up on supplies like fuel, oil and filters.
  • Prevent Frozen Pipes: Make sure pipes are well insulated, and keep your heat set to a minimum of 55 degrees when you’re away. If pipes are prone to freezing, leave faucets dripping slightly overnight or when away from home. You may also want to open cabinet doors beneath sinks to let in heat.
  • Drain and Shut Off Outdoor Faucets: Before the first freeze, drain and shut off outdoor faucets. Place an insulated cover over exposed faucets, and store hoses for the winter.
  • Remove Window Screens: Removing screens from your windows allows more light in to brighten and warm your home during the dark, cold winter months. Snow can also get trapped between screens and windows, causing damage to window frames and sills.
  • Service Snowblower: Don’t wait until the first snowstorm of the season to make sure your snowblower is in good working order. Check the manufacturer’s instructions for maintenance or have it serviced by a professional.
  • Stock Up on Ice Melt: Keep plenty of ice melt, or rock salt, on hand in preparation for winter weather. Look for brands that will keep kids and pets safe without doing damage to your walkway or yard.
  • Watch Out for Ice Dams: Ice dams are thick ridges of solid ice that can build up along the eaves of your house. They can do major damage to gutters, shingles and siding. Heated cables installed prior to the first winter storm can help.14
  • Check for Snow Buildup on Trees: Snow can cause tree limbs to break, which can be especially dangerous if they are near your home. Use a broom to periodically remove excess snow.15

Outside

While this checklist should not be considered a complete list of your home’s maintenance needs, it can serve as a general seasonal guide. Systems, structures and fixtures will need to be repaired and replaced from time-to-time, as well. The good news is, the investment you make in maintaining your home now will pay off dividends over time.

 

Keep a record of all your maintenance, repairs and upgrades for future reference, along with receipts. Not only will it help jog your memory, it can make a big impact on buyers when it comes time to sell your home … and potentially result in a higher selling price.

 

Are you looking for help with home maintenance or repairs? I have an extensive network of trusted contractors and service providers and are happy to provide referrals! Call or email me, and I can connect you with one of my preferred vendors.

 

 

Sources:

  1. HouseLogic.com –
    https://www.houselogic.com/organize-maintain/home-maintenance-tips/value-home-maintenance/
  2. Home Advisor –
    https://www.homeadvisor.com/r/servicing-your-air-conditioner/
  3. Keyes & Sons Plumbing and Heating –
    http://keyes-plumbing.com/things-to-check-in-spring/
  4. Allstate Insurance Blog –
    https://blog.allstate.com/test-smoke-detectors/
  5. Houzz –
    https://www.houzz.com/ideabooks/17268616/list/how-to-wash-your-house
  6. Angie’s List –
    https://www.angieslist.com/articles/why-gutter-cleaning-so-important.htm
  7. Angie’s List –
    https://www.angieslist.com/articles/what-thatch-and-how-does-it-impact-my-lawn.htm
  8. HGTV –
    http://www.hgtv.com/design/outdoor-design/landscaping-and-hardscaping/lawns/top-spring-lawn-care-tips-pictures
  9. This Old House –
    https://www.thisoldhouse.com/more/may-mulching
  10. Lowes –
    https://www.lowes.com/projects/lawn-and-garden/fertilize-your-lawn/project
  11. The New York Times –
    https://www.nytimes.com/guides/realestate/home-maintenance-checklist
  12. Better Homes and Gardens Magazine –
    https://www.bhg.com/gardening/yard/garden-care/what-to-plant-in-the-fall/
  13. The Spruce –
    https://www.thespruce.com/late-fall-fertilizing-2152976
  14. This Old House –
    https://www.thisoldhouse.com/how-to/how-to-get-rid-ice-dams
  15. Houzz –
    https://www.houzz.com/ideabooks/55572864/list/your-winter-home-maintenance-checklist
Read full post

The Home Buyer's Guide to Getting Mortgage Ready

Don’t wait until you’re ready to move to start preparing financially to buy a home.

 

If you’re like the vast majority of home buyers, you will choose to finance your purchase with a mortgage loan. By preparing in advance, you can avoid the common delays and roadblocks many buyers face when applying for a mortgage.

 

The Office of the Superintendent of Financial Institutions (OSFI) issued new mortgage guidelines, which went into effect at the beginning of the year and raised the standards for mortgage applicants. The requirements may seem overwhelming, especially if you’re a first-time buyer. But we’ve outlined three simple steps to get you started on your path to approval.

 

It’s never too early to start preparing to buy a home. Follow these three steps to begin laying the foundation for your future home purchase today!

 

 

STEP 1: CHECK YOUR CREDIT SCORE

 

Your credit score is one of the first things a lender will check to see if you qualify for a loan. It’s a good idea to review your credit report and score yourself before you’re ready to apply for a mortgage. If you have a low score, you will need time to raise it. And sometimes fraudulent activity or erroneous information will appear on your report, which can take months to correct.

 

There are five factors that impact your credit score: history of payments (35%), debts (30%), credit length (15%), new inquiries (10%), and diversity (10%).1

 

Credit scores range from 300 to 900. A higher credit score will help you qualify for a lower mortgage interest rate, which will save you money.2

 

The two major credit bureaus in Canada are Equifax Canada and Transunion Canada. For information on how you can request a free copy of your credit report from each bureau, visit https://www.canada.ca/en/financial-consumer-agency/services/credit-reports-score/order-credit-report.html. The bureaus may charge you a fee to access your actual credit score.

 

Minimum Score Requirements

 

The new OSFI rules require a minimum credit score of 600 for a mortgage under $1,000,000. However, many lenders prefer to see a score of at least 650.

 

Generally speaking, banks and other traditional financial institutions have the strictest requirements. If you have a credit score below 600, you may still be able to secure a loan through a credit union or private lender, however you should expect to pay a higher interest rate and additional fees.3

 

Increase Your Credit Score

 

There’s no quick fix for a low credit score, but the following steps will help you increase it over time.4

 

1. Make Payments on Time

At 35 percent, your payment history accounts for the largest portion of your credit score. Therefore, it’s crucial to get caught up on any late payments and make all of your future payments on time.

 

If you have trouble remembering to pay your bills on time, set up payment reminders through your online banking platform, a free money management tool like Mint, or an app like BillMinder.

 

2. Avoid Applying for New Credit You Don’t Need

New accounts will lower your average account age, which could negatively impact your length of credit history. Also, each time you apply for credit, it can result in a small decrease in your credit score.

 

The exception to this rule? If you don’t have any credit cards—or any credit accounts at all—you should open an account to establish a credit history. Just be sure to use it responsibly and pay it off in full each month.

 

If you need to shop for a new credit account, for example, a car loan, be sure to complete your loan applications within a short period of time. The credit bureaus attempt to distinguish between a search for a single loan and applications to open several new lines of credit by the window of time during which inquiries occur.

 

3. Pay Down Credit Cards

When you pay off your credit cards and other revolving credit, you lower your amounts owed, or credit utilization ratio (ratio of account balances to credit limits). Some experts recommend starting with your highest-interest debt and paying it off first. Others suggest paying off your lowest balance first and then rolling that payment into your next-lowest balance to create momentum.

 

Whichever method you choose, the first step is to make a list of all of your credit card balances and then start tackling them one by one. Make the minimum payments on all of your cards except one. Pay as much as possible on that card until it’s paid in full, then cross it off your list and move on to the next card.

 

Debt

Interest Rate

Total Payoff

Minimum Payment

Credit Card 1

12.5%

$460

$18.40

Credit Card 2

18.9%

$1,012

$40.48

Credit Card 3

3.11%

$6,300

$252

 

 

4. Avoid Closing Old Accounts

Closing an old account will not remove it from your credit report. In fact, it can hurt your score, as it can raise your credit utilization ratio—since you’ll have less available credit—and decrease your average length of credit history.

 

Similarly, paying off a collection account will not remove it from your report. It remains on your credit report for seven years, however, the negative impact on your score will decrease over time.

 

5. Correct Errors on Your Report

Mistakes or fraudulent activity can negatively impact your credit score. That’s why it’s a good idea to check your credit report at least once per year. The Financial Consumer Agency of Canada posts instructions for disputing errors on your report.

 

While it may seem like a lot of effort to raise your credit score, your hard work will pay off in the long run. Not only will it help you qualify for a mortgage, a high credit score can help you secure a lower interest rate on car loans and credit cards, as well. You may even qualify for lower rates on insurance premiums.

 

 

STEP 2: SAVE UP FOR A DOWN PAYMENT AND CLOSING COSTS

 

The next step in preparing for your home purchase is to save up for a down payment and closing costs.

 

Down Payment

 

When you purchase a home, you typically pay for a portion of it in cash (down payment) and take out a loan to cover the remaining balance (mortgage). 

 

The minimum amount you'll need for your down payment depends on the purchase price of the home.

 

 

PURCHASE PRICE

MINIMUM DOWN

$500,000 or less

  • 5% of the purchase price

$500,000 to $999,999

  • 5% of the first $500,000 of the purchase price

AND

  • 10% for the portion of the purchase price above $500,000

$1 million or more

  • 20% of the purchase price

Source: Financial Consumer Agency of Canada

 

It’s important to note that these are the minimum requirements for securing a mortgage. If you're self-employed or have a low credit score, your down payment requirements may be higher.

 

Generally speaking, the higher your down payment, the more money you will save on interest and fees. For example, if your down payment falls below 20 percent, you will be required to purchase mortgage loan insurance, which will cost you between 0.6 to 4.5 percent of the overall mortgage amount.5

 

If you don’t have the minimum requirements for a down payment, the Home Buyers’ Plan (HBP) might be an option for you. It enables you to withdraw up to $25,000 (or $50,000 if you are buying as a couple) from your Registered Retirement Savings Plan (RRSP) to buy or build a qualifying home. You have up to 15 years to repay the amount you withdrew. Click here for more information and to find out if you are eligible to participate.6

 

Current Homeowners

If you’re a current homeowner, you may have equity in your home that you can use toward your down payment on a new home. We can help you estimate your expected return after you sell your current home and pay back your existing mortgage. Contact us for a free evaluation!

 

Closing Costs

 

Closing costs should also be factored into your savings plan. These typically include legal fees and other administrative fees associated with the purchase of your home. Closing costs typically range between 1.5 to four percent of the purchase price.7

 

If you don’t have the funds to pay these outright at closing, you can often add a portion to your mortgage balance and pay it over time. However, you’ll have a higher monthly payment and pay more over the long term because you’ll pay interest on the fees.

 

 

STEP 3: ESTIMATE YOUR HOME PURCHASING POWER

 

Once you have the required credit score, savings for a down payment and a list of all your outstanding debt obligations via your credit report, you can assess whether you are ready and able to purchase a home.

 

It’s important to have a sense of how much you can reasonably afford—and how much you’ll be able to borrow—to see if homeownership is within reach.

 

Your gross debt service ratio (GDS) and total debt service ratio (TDS) are the two primary measurements mortgage companies use to determine how much they are willing to lend you.

 

Gross Debt Service Ratio

 

Your GDS ratio is the percentage of your income that would go toward housing each month, including principal, interest, taxes, heat and 50 percent of condo fees (if applicable).

 

To calculate your GDS ratio, a lender will add up your expected housing expenses and divide it by your gross monthly income (income before taxes). The maximum GDS ratio most conventional lenders will accept is 32 percent.8

 

Total Debt Service Ratio

 

The TDS ratio takes into account all of your monthly debt obligations: your expected housing expenses PLUS credit card bills, car payments, child and spousal support, and any other debt that shows up on your credit report.

 

To calculate your TDS ratio, a lender will tabulate your expected housing expenses and other monthly debt payments and divide it by your gross monthly income (income before taxes). The maximum TDS ratio most conventional lenders will accept is 44 percent.8

 

New “Stress Test” Requirements

 

Under OSFI’s new rules, all mortgages issued by federally-regulated lenders are required to undergo a “stress test.” Under this test, applicants must fall below the GDS and TDS ratio maximums at either the Bank of Canada’s five-year benchmark interest rate, or at their qualified contract interest rate plus two percent, whichever is higher.8

 

The purpose of the stress test is to ensure that home buyers will still be able to afford their mortgages if interests rates rise.

 

Home Affordability Calculator

 

To get a sense of how much home you can afford, visit the Canadian Real Estate Association’s Affordability Calculator at https://www.realtor.ca/Residential/calculator.aspx?tab=3.

 

This handy tool will help you determine how much you can afford to borrow depending on your income, debt, property taxes, condo fees, heating costs and interest rate. It also offers a projection of your monthly mortgage payment. Add the “maximum mortgage” estimate to your down payment amount to find out your total home purchasing power.

 

When you enter the interest rate, be sure to use either the Bank of Canada’s five-year benchmark rate or two percentage points above your estimated rate (whichever is higher) to ensure you can meet the “stress test” requirements.

 

If the monthly cost estimate is significantly higher than what you’re currently paying for housing, you need to consider whether or not you can make up the difference each month in your budget.

If not, you may want to lower your target purchase price to reflect a more conservative TDS ratio.

 

(Note: This tool only provides an estimate of your purchasing power. You will need to secure pre-approval from a mortgage lender to know your true mortgage approval amount and monthly payment projections.)

 

Can I Afford to Buy My Dream Home?

 

Once you have a sense of your purchasing power, it’s time to find out which neighbourhoods and types of homes you can afford. The best way to determine this is to contact a licensed real estate agent. We help homeowners like you every day and can send you a comprehensive list of homes within your budget that meet your specific needs.

 

If there are homes within your price range and target neighbourhoods that meet your criteria—congratulations! It’s time to begin your home search.

 

If not, you may need to continue saving up for a larger down payment … or adjust your search parameters to find homes that do fit within your budget. We can help you determine the right course for you.

 

 

START LAYING YOUR FOUNDATION TODAY

 

It’s never too early to start preparing financially for a home purchase. These three steps will set you on the path toward homeownership … and a secure financial future!

 

And if you are ready to buy now but still aren’t sure if you meet the minimum requirements, don’t get discouraged. You may be able to secure a loan through a credit union or a private lender. We can connect you with one of our trusted mortgage providers.

 

Want to find out if you’re ready to buy a house? Give us a call! We’ll help you review your options and determine the ideal time to begin your new home search.

 

 

 

The above references an opinion and is for informational purposes only.  It is not intended to be financial advice. Consult a financial professional for advice regarding your individual needs.

 

 

Sources:

  1. Loans Canada –
    https://loanscanada.ca/credit/what-your-credit-score-range-really-means/
  2. Office of Consumer Affairs (OCA) –
    https://www.ic.gc.ca/eic/site/oca-bc.nsf/eng/ca02179.html
  3. Loans Canada –
    https://loanscanada.ca/mortgage/minimum-credit-score-required-mortgage-approval-2018/
  4. Office of Consumer Affairs (OCA) –
    https://www.ic.gc.ca/eic/site/oca-bc.nsf/eng/ca02178.html
  5. Financial Consumer Agency of Canada  –
    https://www.canada.ca/en/financial-consumer-agency/services/mortgages/down-payment.html
  6. Government of Canada  –
    https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/rrsps-related-plans/what-home-buyers-plan.html
  7. Which Mortgage –
    https://www.whichmortgage.ca/article/the-truth-about-closing-costs-118698.aspx
  8. Deposit Financing –
    http://depositfinancing.ca/mortgage-stress-test-calculator-canada-2018/
Read full post

Home Design Trends to Watch in 2018

 

 

We frequently get questions from clients who are taking on decorating and remodeling projects and want to ensure their dollars are invested wisely.

 

Which looks will last for years to come, and which ones will feel dated quickly? What colors and styles are most popular among buyers in our area? How can I add the most value to my home?

 

So we’ve rounded up some of the hottest trends in home design to help guide you through the process. Whether you’ve planned a simple refresh or a full-scale renovation, making smart and informed design choices will help you maximize your return on investment … and minimize the chance of “remodeler’s remorse” down the road.

 

 

WHAT’S HOT NOW

 

While 2017 was all about millennial pink, brass fixtures and bright white kitchens, this year we expect to see a move toward warmer, cozier elements throughout the home.

 

1. Warm Colors

 

A cool color scheme has dominated home design in recent years, but this year warm neutrals like brown and tan are back, along with rich jewel tones. While the pastel craze of last year is still hanging on, expect to see alternative color palettes featuring deep, saturated shades of red, yellow, green and navy. Grey will remain popular, but in warmer tones, often referred to as “greige.”

 

 

 

2. Cozy Elements

 

Along with warmer colors, we can expect to see a shift from stark, modern design to cozier looks. Velvet upholstery, woven textures and natural elements, like wood and stone, will heat things up this year.

 

3. Mixed Metals

 

It used to be considered gauche to mix finishes, however the look of mixed metals will be very big in 2018. Brass will continue to trend, along with matte black and classics like polished chrome and brushed nickel.

 

 

 

4. Bold Patterns

 

Expect to see a lot of bright, bold patterns in the form of geometric shapes and graphic floral prints. These will be featured on everything from furniture to throw pillows to tile.

 

5. Natural Elements

 

Look for the use of natural elements throughout the home, including wood, stone, plants, flowers and grass. Botanical patterns will also be seen in prints, wallpaper and upholstery. Concrete accents will complement these additions in an effort to bring the essence of the outdoors inside the home.

 

 

 

6. Feature Walls

 

Also called an accent wall, a feature wall is one that exhibits a different color or design than the other walls in the room. Expect to see an increased use of feature walls showcasing rich paint colors, bold patterned wallpaper, and textures brought in through millwork and shiplap.

 

7. Statement Lighting

 

Lighting will take center stage with distinctive fixtures, including local artisan and vintage pendants and chandeliers. And smart lighting technology will enable homeowners to customize their lighting experience based on time of day, activity and mood.

 

 

 

8. Hardwood Floors

 

Hardwood floors will continue to dominate the market. The trend is toward either very dark stains paired with light-colored walls or light stains with darker walls. Greyish tones will remain popular, as will matte finishes, which are easier to maintain than high gloss. Expect to see frequent use of wider and longer wood planks, as well as distressed and wire-brushed finishes, which add texture and dimension.

 

9. Smart Homes

 

Everything is getting “smarter” in homes, from locks and lights to thermostats and appliances. And with devices like Google Home and Amazon Alexa, you can control many of these with voice activation from a central hub. We will see continued integration of and advancements in smart-home technology in 2018.

 

 

KITCHEN TRENDS

 

While white kitchens will remain popular in 2018, expect to see more color this year in everything from cabinets to tile to appliances.

 

1. Two-toned Cabinets

 

Two-toned cabinets are quickly overtaking the white-on-white look that has dominated kitchen design for the past few years. While white remains a classic, grey and bleached-wood cabinet variations are surging in popularity, along with darker neutrals like navy and green.

 

 

 

2. Quartz Countertops

 

Granite reigned as the top countertop choice for many years, but quartz is now king. It’s highly durable, low-maintenance and comes in a wide variety of styles and colors. It’s also heat resistant, scratch resistant and non-porous (unlike granite and marble) so it doesn’t need to be sealed.

 

3. Bold Backsplashes

 

After years of dominating backsplash design, the white subway tile is officially on its way out. Expect to see it replaced with more elaborate shapes, patterns, colors and textures. Tile that mimics the appearance of wood, concrete and wallpaper is also gaining in popularity.

 

 

 

4. Statement Sinks

 

While stainless steel and white porcelain are always safe bets, the trend is moving toward sinks that make more of a statement. Look for unexpected pops of color and materials like natural stone and copper. Touch-free faucets are expected to gain favor with homeowners this year, too.

 

5. Brass is (Still) Back

 

Brass fixtures came back in a big way over the past couple of years and will continue to be a popular choice in 2018 along with matte black, black nickel, polished chrome and brushed nickel. Missing from the list? Rose gold, which is decidedly “out” this year.

 

 

 

6. Multi-purpose Islands

 

Kitchen islands have evolved from simple prep-stations into the “workhorse” of the kitchen. Many feature sinks, built-in appliances and under-counter storage while also serving as a casual dining area. They have become the focal point of the kitchen, and we expect to see more of them in 2018 and beyond.

 

7. Black Stainless Steel

 

Black stainless steel is the hot new finish option for appliances, and it’s hitting the market in a big way. It offers a cutting-edge look and is easier to keep clean than traditional stainless steel. However, it’s harder to match finishes amongst different brands, so it’s probably only feasible as part of a complete appliance package.

 

8. Appliance Garages

 

Appliance garages are counter-level compartments designed to house small appliances like blenders, toasters and stand mixers. They make it convenient to have these items readily accessible, without the look of a cluttered counter.

 

 

 

 

BATH TRENDS

 

Expect to see many of the same kitchen design preferences carry over into bathrooms this year, including two-tone cabinets, quartz countertops and brass fixtures.

 

1. Neutral Tones

 

Neutral shades will continue to dominate in the master bathroom as homeowners seek a soothing and relaxing retreat atmosphere. But expect to see more options than just white. Shades of brown, grey, blue, green and tan will help to warm things up.

 

 

 

2. Natural Elements

 

Natural materials are particularly hot right now in bathroom design. This includes the use of wood and stone on walls, cabinets, counters and backsplashes, as well as the incorporation of botanical design elements.

 

3. Large Tiles

 

We expect to see a lot more large and slab-sized tiles in bathrooms, which have less grout so they are easier to clean and maintain. Wood-look porcelain tiles are also a favorite in wet areas, as they offer the warmth and rustic appeal of wood with the durability of tile.

 

 

 

4. Stone Sinks

 

Sinks will continue to be an area where homeowners like to exhibit creativity, and hand-carved stone sinks are especially fashionable right now. These may be more suited to powder rooms, where functionality isn’t as crucial.

 

5. Freestanding Tubs

 

There’s been a tub resurgence in bathroom design after years of preference for stand-alone showers. Modern tastes are gravitating toward freestanding tubs that serve as a showpiece for the bathroom.

 

 

 

6. Smart Features

 

Smart technology has entered the bathroom with the addition of features like wireless shower speakers and high-tech toilets, as well as digital shower controls that automatically adjust to your preferences in temperature and spray intensity.

 

 

OUR ADVICE

 

Style trends come and go, so don’t invest in the latest look unless you love it. That said, highly-personalized or outdated style choices can limit the appeal of your property for resale.

 

For major renovation projects, it’s always a good idea to stick to neutral colors and classic styles. It will give your remodel longevity and appeal to the greatest number of buyers when it comes time to sell. It will also give you flexibility to update your look in a few years without a total overhaul. Use non-permanent fixtures – like paint, furniture and accent pieces – to personalize the space and incorporate trendier choices.

 

If you’d like advice on a specific remodelling or design project, give us a call! We’re happy to offer our insights and suggestions on how to maximize your return on investment and recommend local shops and service providers who may be able to assist you.

 

 

Sources:

  1. Country Living –
    http://www.countryliving.com/home-design/decorating-ideas/g3988/kitchen-trends
  2. Elle Decor –
    http://www.elledecor.com/design-decorate/trends/g14486069/kitchen-trends-2018/
  3. Gates Interior Design  –
    https://gatesinteriordesign.com/hottest-interior-design-trends-for-2018/
    https://gatesinteriordesign.com/biggest-kitchen-bath-trends-for-2018/
  4. HGTV.com –
    http://www.hgtv.com/design/rooms/kitchens/17-top-kitchen-design-trends-pictures
  5. House Beautiful –
    http://www.housebeautiful.com/room-decorating/kitchens/g2664/kitchen-trends/
    http://www.housebeautiful.com/design-inspiration/g13938283/2018-decor-trends/
    http://www.housebeautiful.com/design-inspiration/g13820501/best-and-worst-decor-trends-from-2017/
  6. Houzz –
    https://www.houzz.com/ideabooks/93399913/list/interior-design-trends-expected-to-take-hold-in-2018
  7. Huffington Post – http://www.huffingtonpost.com.au/2017/09/25/the-kitchen-and-dining-trends-to-look-out-for-in-2018_a_23222693/
  8. Kitchen and Bath Design News –
    http://www.kitchenbathdesign.com/123995/year-end-look-and-new-trends-for-2018/
  9. MSN.com –
    https://www.msn.com/en-us/lifestyle/home-and-garden/12-flooring-trends-for-2018/ss-AAtp7QA
  10. Realtor.com  –
    https://www.realtor.com/advice/home-improvement/interior-design-trends-to-ditch-2018/
    https://www.realtor.com/advice/home-improvement/hottest-interior-design-decor-trends-2018/?is_wp_site=1
  11. Realty Times – http://realtytimes.com/advicefromagents/item/1007993-kitchen-design-trends-in-2018?rtmpage=MattLawler
  12. Sebring Design Build –
    https://sebringdesignbuild.com/top-trends-in-bathroom-design/
  13. The Flooring Girl –
    http://theflooringgirl.com/hardwood-flooring/hardwood-flooring-trends-2018/
  14. Vogue –
    https://www.vogue.com/article/interior-design-trends-according-to-expert-designers-decorators

 

Read full post

Real Estate 2018: What to Expect

 

 

As we head into a new year, the most common question we receive is, “What’s the outlook for real estate in 2018?”

 

It’s not just potential buyers and sellers who care; current homeowners also want reassurance about the value of their investment. No one knows exactly what 2018 will bring, but we’ve outlined expert predictions on where the market is headed and how government interventions are expected to impact the Canadian housing market in the year ahead.

 

 

HOUSING PRICES WILL REMAIN HIGH IN URBAN CENTRES

 

Although the Toronto real estate market did experience a slowdown in 2017, housing affordability will remain a major issue in both Toronto and Vancouver in 2018. According to the Royal Bank of Canada’s most recent Housing Trends and Affordability Report, as of Q2 2017 it cost more than 75 percent (Toronto) and 80 percent (Vancouver) of median household income to cover the average cost of owning a home.1

 

In an effort to stabilize prices, both the Ontario and British Columbia governments enacted a 15 percent tax on foreign investments in housing. However, according to the PricewaterhouseCoopers report on Emerging Trends in Real Estate: Canada and the United States 2018, “Industry players are skeptical that recent tax moves … to curtail foreign investment will have a long term cooling impact on housing affordability in Toronto and Vancouver.”2

 

In its Canadian Regional Housing Outlook, TD Economics predicts ”The decline in sales activity in both Vancouver and Toronto has helped to redistribute the balance of power from a pure seller’s market, back towards buyers, as evidenced by the sales-to-listing ratios. But, first-time homebuyers sitting on the sidelines waiting for higher interest rates to trigger a market crash may be holding their breath for a while. Prices are likely to only reset back to levels that existed prior to a year of exorbitant gains.”3

 

The high cost of living has forced a growing number of millennials to seek alternatives to traditional housing. The 2016 census found 47.4 percent of young adults in Toronto and 38.6 percent in Vancouver live with a parent. PricewaterhouseCoopers predicts a rise in multi-generational and multi-family homes, a move towards larger condominiums to suit growing families, and a flight from urban cores as new public transit projects make commuting more feasible.2

 

What does it mean for you? If you’re a current homeowner, you can expect your investment to hold its value and continue to appreciate over the long term. And if you’re considering selling this year, contact us to request a free Comparative Market Analysis to find out how much you can expect your home to sell for under current market conditions.

 

If you’re a potential buyer who has been waiting for real estate prices to drop, don’t expect a fallout any time soon. Governmental bodies have taken steps to slow down skyrocketing prices, which has helped to balance the market. Now is a great time to buy. And if traditional housing options don’t fit your budget, we can help you find alternatives to meet your needs.

 

 

GOVERNMENT INTERVENTIONS WILL HELP TO STABILIZE THE MARKET

 

Skyrocketing real estate prices have caused Canadians to take on a growing amount of debt. The federal Parliamentary Budget Office (PBO) reports that the average household indebtedness is up to 174 percent of disposable income, and they predict it will reach 180 percent by the end of 2018. Coupled with rising interest rates, the share of income that will go towards debt payments is expected to reach historic proportions.4

 

Regulators at the Office of the Superintendent of Financial Institutions (OSFI) have attempted to curb the potential fallout with interventions, the latest of which went into effect on January 1. These new regulations raise the requirements for mortgage borrowers with down payments of 20 percent or more. They are now required to qualify for a mortgage at an interest rate two percentage points higher than their current rate to ensure they can manage payments when interest rates do inevitably rise.

 

A similar “stress test” was enacted in 2016 for borrowers who put down less than 20 percent, but that regulation impacted a much smaller percentage of buyers.

 

According to Jeremy Rudin, the head of OSFI, “We clearly see the potential risks caused by high household indebtedness across Canada, and by high real estate prices in some markets. We are not waiting to see those risks crystallize in rising arrears and defaults before we act.”5

 

All federally regulated financial institutions will be obligated to utilize these requirements for both new mortgages and mortgage renewal applications of borrowers applying to switch lenders. It is not mandatory to apply the test at mortgage renewal for existing borrowers. Since credit unions are regulated provincially, they are not required to follow the new OSFI rules, although some may choose to out of prudency.

 

What does it mean for you? With new rules in effect, if you’re a buyer, your purchasing power may be impacted. If you’re concerned you may not be able to meet these requirements, securing your mortgage through a credit union may be an option. We are following this issue closely. Give us a call so we can discuss how these new rules will affect your home search.

 

If you’re considering selling your home this year, these regulations could alter the type of buyer who will be willing and able to purchase your home. We have expertise in this area and know how to market your home to a changing demographic.

 

 

5 YEAR MORTGAGES WILL MAKE A COMEBACK


Expect interest rates to rise in 2018. Bank of Canada has indicated that borrowers should expect to see rate increases this year … and notably, nearly half of Canadian mortgage holders are set to renew their mortgages in the next 12 months. Combined with the new, more stringent “stress test” requirements, a greater number of homeowners will be opting for five-year-fixed rate mortgages over the historically popular variable rate mortgages.6

 

According to LowerRates.ca, “Since January 2014, 56% of Canadian borrowers who applied for a mortgage through LowestRates.ca have gone variable, compared with 43% of those who got a five-year fixed. But this past August, there was a shift, where the five-year-fixed rate mortgage saw a sharp increase in applicants, with 59% of users on the LowestRates.ca site opting for this option versus only 39% opting for the variable mortgage.”7

 

What does it mean for you? If you’re in the market to buy, act now. Rising interest rates will decrease your purchasing power, so act quickly before interest rates go up. Give us a call today to get your home search started.

 

And if you’re a current homeowner who is set to renew your mortgage, you may want to consider locking in a five-year-fixed rate. Contact us if you would like assistance navigating your options.

 

 

2018 ACTION PLAN


If you plan to BUY this year:

 

  1. Get pre-approved for a mortgage. If you plan to finance part of your home purchase, getting pre-approved for a mortgage will give you a jump-start on the paperwork and provide an advantage over other buyers in a competitive market. The added bonus: you will find out how much you can afford to borrow and budget accordingly.
  2. Create your wish list. How many bedrooms and bathrooms do you need? How far are you willing to commute to work? What’s most important to you in a home? We can set up a customized search that meets your criteria to help you find the perfect home for you.
  3. Come to our office. The buying process can be tricky. We’d love to guide you through it. We can help you find a home that fits your needs and budget, all at no cost to you. Give us a call to schedule an appointment today!

 

If you plan to SELL this year:

 

  1. Call us for a FREE Comparative Market Analysis. A CMA not only gives you the current market value of your home, it’ll also show how your home compares to others in the area. This will help us determine which repairs and upgrades may be required to get top dollar for your property … and it will help us price your home correctly once you’re ready to list.
  2. Prep your home for the market. Most buyers want a home they can move into right away, without having to make extensive repairs and upgrades. We can help you determine which ones are worth the time and expense to deliver maximum results.
  3. Start decluttering. Help your buyers see themselves in your home by packing up personal items and things you don’t use regularly and storing them in an attic or storage locker. This will make your home appear larger, make it easier to stage ... and get you one step closer to moving when the time comes!

 

 

WE’RE HERE TO HELP

 

While national real estate numbers and predictions can provide a “big-picture” outlook for the year, real estate is local. And as local market experts, we can guide you through the ins and outs of our market, and the local issues that are likely to drive home values in your particular neighbourhood. If you have specific questions, or would like more information about where we see real estate headed in our area, please give us a call! We’d love to discuss how issues here at home are likely to impact your desire to buy or a sell a home this year.

 

Sources:

  1. Royal Bank of Canada’s Housing Trends and Affordability Report -
    http://www.rbc.com/newsroom/_assets-custom/pdf/20170929-ha.pdf
  2. PricewaterhouseCoopers Emerging Trends in Real Estate 2018  –
    https://www.pwc.com/ca/en/real-estate/assets/Real_Estate_ETRE_2018_PDF.pdf
  3. TD Economics Canadian Regional Housing Outlook –
    https://economics.td.com/canadian-regional-housing-outlook-aug-2017
  4. Office of the Parliamentary Budget Officer -
    http://www.pbo-dpb.gc.ca/en/blog/news/HH_Vulnerability
  5. Financial Post
    http://business.financialpost.com/personal-finance/stricter-osfi-rules-on-mortgage-lending-will-do-more-harm-than-good-fraser-institute
  6. Bank of Canada Financial System Review November 2018  –
    https://www.bankofcanada.ca/wp-content/uploads/2017/11/fsr-november2017.pdf
  7. Maclean’s  –
    http://www.macleans.ca/economy/money-economy/canadians-rushing-to-lock-down-five-year-fixed-rate-mortgages/
Read full post

20 Home Gadget Gift Ideas to Fit Any Budget

 

 

Looking for the perfect present for a loved one this holiday season? We’ve rounded up 20 of our favorite gift ideas. And since we work in real estate, we focused on items that add enjoyment, comfort and, in some cases, major value to your home.

 

From music lovers to home chefs, we’ve got something for everyone. And we’ve included a range of price points to suit any budget, from under $100 to major splurge … in case you’re feeling extra generous this year. We hope you find this list useful in identifying gifts your friends and family will love. And maybe some of these items will make your wish list this year, too!

 

 

Approximate Price Ranges

$ - under $100

$$ - $101 to $300

$$$ - $301 to $700

$$$$ - Splurge

 

 

LET IT SNOW

 

Heat things up this holiday season! Keep your loved ones cozy all winter with these gifts that add warmth and a touch of luxury.

 

Tabletop Fireplace - $

On cold nights, nothing beats the comfort and glow of a fire. Whether you’re looking to cozy up on the couch with a good book, or enjoy a relaxing night in the backyard with family and friends, a tabletop fireplace is an easy way to light up your evening. The HOMCOM Ventless Tabletop Bio Ethanol Fireplace runs on bio ethanol and can be used indoors or outdoors, no vent required.

 

Towel Warmer - $$

Who wouldn’t love to wrap themselves in a warm towel when they step out of the shower on a cold morning? While heated towel racks are available in a variety of styles and price points, the Amba RWP-CB Radiant Plug-In Curved Towel Warmer is an entry level version that gets good reviews. Modern and elegant, this model plugs into a nearby outlet for easy installation and is made of rust-resistant stainless steel. Turn your daily shower into a spa-like experience!

 

Smart Thermostat - $$$

Now you can wake up to a warm house, even if you like it cool while you sleep. After using the Nest Learning Thermostat for a week, it will start to recognize your patterns and adjust the temperature automatically to your preferences. In its third-generation, Nest claims to pay for itself over time in energy savings. It uses sensors and your phone’s location to check if you’ve left the house, then sets itself to an Eco Temperature. And this smart-thermostat knows when you typically get home from work and can heat things up before you return. If your schedule changes, you can even adjust the temperature remotely from your smartphone.

 

Radiant Floor Heating - $$$$

Radiant heating has been a popular alternative in new construction to traditional forced-air heating systems. And new technology has made it easier and less expensive to retrofit existing homes with radiant heating. According to BobVila.com, “radiant floors are heated either with electric resistance cables or hot water flowing inside tubing” beneath the floor. It’s energy-efficient, effective, and doesn’t blow dust and allergens around the way forced-air systems do. Not only will you love stepping onto a heated floor on a cool morning, you’ll be adding value to your home, as this is an appealing upgrade to buyers when it comes time to sell.

 

 

ROCK AROUND THE TREE

 

It’s holiday music time! Music lovers are sure to appreciate these gifts guaranteed to enhance their listening experience throughout the home.

 

Showerhead Speaker - $

Whether you enjoy singing in the shower, or listening to your favorite podcast, the Morpilot Rainfall Shower Head with Waterproof Music Jet syncs with any bluetooth-enabled device so you can stream your favorite audio directly into the shower. It even includes a dual microphone so you can answer phone calls. And the waterproof speaker easily detaches from the showerhead so you can bring it with you from room to room while you get dressed.

 

Voice Controlled Smart Speaker - $$

Google Home not only streams music on demand via voice control, it can also serve as a central hub for numerous other smart-home devices. Now you can change the channel on your TV, make a phone call, turn on your lights, set your thermostat and lock your front door, all without lifting a finger.

 

High-End Wireless Speaker - $$$

If you prefer a premium speaker, the Sonos Play:3 is the mid-range option in the brand’s line of wireless speakers. It delivers rich and robust sound with a sleek design that can placed horizontally or vertically to fit almost any space. Sonos speakers sync with Amazon Echo and Alexa, which enable you to control the speaker with voice commands. And you can easily add additional speakers from the Sonos line for an enhanced, surround-sound experience.

 

Whole Home Audio System - $$$$

The sky’s the limit when it comes to whole-home audio systems, and for a premium sound system you can expect to make a significant investment. Companies like Yamaha offer a wide variety of components, all designed to work in conjunction to give you a customized whole-home audio and home theater system to suit your needs.

 

 

ADD SOME SIZZLE TO THE SEASON

 

Home chefs will love these gifts, perfect for holiday entertaining and home cooking all year long. Not only will they bring excitement to the recipient, everyone in the family will benefit from the delicious dishes these gifts are sure to inspire!

 

Bread Maker - $

Warm, fresh bread can make any meal feel special. With a bread machine like this one from Hamilton Beach, you can enjoy fresh rolls, pizza dough, cakes, jams, flatbreads and croissants with minimal effort. Plus, there’s a gluten-free setting, which makes this a perfect gift for anyone avoiding gluten in their diet.

 

Air Fryer - $$

Air fryers are one of the hottest new cooking gadgets this year, and for good reason. With the Philips Airfryer, you can fry your favorites foods using only a tablespoon of oil (or less). It also grills, roasts, steams and even bakes, giving you more quick and easy options for feeding your family and entertaining guests.

 

Smart Sous-Vide Machine - $$$

Sous vide is a method of cooking in which food is vacuum-sealed in a plastic pouch and then placed in a water bath to cook at a precise temperature. The new Mellow Smart Sous Vide Appliance hits the market this holiday season and promises to make sous vide as easy and foolproof as a slow cooker. Its built-in cooling system keeps your food cold until it’s ready to be cooked … so you can stick a piece of salmon in before you leave for work, choose the time you want it to be ready, and dinner will be done when you get home.

 

High-End Oven Range - $$$$

To really heat things up in the kitchen, any home chef would love a new high-end range, like this 36” Dual Fuel Range with Six Burners from Sub-Zero Wolf. With ten custom cooking modes—including one for proofing dough and one for dehydrating—and a temperature probe alert, this oven makes cooking almost foolproof. And the timeless stainless steel design will enhance the beauty of any kitchen. Investing in a high-end range not only adds enjoyment to meal preparation, it’s highly-desired by home buyers … something to consider if you plan to list your home within the next few years.

 

 

SPARKLE AND SHINE

 

Holiday lights aren’t the only way to make a home sparkle. These cleaning gadgets and appliances will keep your home clean and shiny all year long … and hopefully bring some joy to the cleaning process!

 

Portable Deep Carpet Cleaner - $

Anyone who has pets or young children will love the convenience of a cordless and portable spot cleaner like the Bissell Little Green Cordless Portable Spot/Stain Cleaner. Spray, scrub, and suction to remove spills and stains from carpet, furniture, rugs, auto interiors, and other upholstered items.

 

Robotic Vacuum Cleaner - $$

Robotic vacuum cleaners have been around for years, but new technology has made them more effective and lowered the cost significantly. The ECOVACS DEEBOT N79 Robotic Vacuum Cleaner provides a good mix of features and value. It offers several cleaning modes and moves easily from rugs to tile to carpet. You can also control it with your smartphone using the ECOVACS App.

 

Dishwasher - $$$

While a high-end dishwasher with all the bells and whistles can certainly be a good investment, there are some great values on the market for those with a more modest budget. For example, the Maytag Built-In Undercounter Dishwasher in Stainless Steel gets consistently great reviews for its powerful motor that disintegrates bits of food to deliver sparkling clean dishes, even without rinsing. And its elegant exterior will upgrade the look of your kitchen … all without breaking the bank.

 

Washing Machine - $$$$

If anything can make laundry exciting, it’s a new washing machine like the Samsung Front Load Washer with AddWash. Its innovative door-within-door design allows you to add to the wash mid-cycle if you forget something, and its Smart Care error-monitoring technology enables easy trouble shooting using a smartphone app. And best of all, its SuperSpeed feature cuts down on the time it takes to wash a load.

 

 

KEEP THE GRINCH AWAY

 

Nothing is more important than the safety of you and your family. Protect your loved ones—and deter intruders—with gifts that keep you and your home safe and secure.

 

Smart Light Bulbs - $

The Philips Hue White A19 Starter Kit is a good entry-level investment in smart lighting technology. Now you can automate your lighting and control your lights from your smartphone using the Philips Hue App. Deter burglars by making it look like someone’s home when you turn your lights on remotely. And stay safer by never entering a dark house again. Plus, it has several options to enhance the look and ambiance of your home lighting.

 

Video Doorbell - $$

Watch over your home and greet visitors from your computer or smartphone with a video-enabled doorbell, like the Ring Video Doorbell Pro.  Adjustable motion sensors alert you when someone is approaching your door, and live video and audio allow you to see and talk to visitors without opening the door, even if you’re away from home. The best part is, they’ll never know you’re not home if you don’t tell them.

 

Smart Lock - $$$

Control and monitor your locks from anywhere with a smart lock like the August Smart Lock Pro + Connect. Now there’s no need to leave a key under the doormat or give a copy to the housekeeper. You can activate keyless access remotely, and even lock up when they leave, all from your computer or smartphone. And no more fumbling around for your keys in the dark. Similar to keyless entry for your car, Smart Lock Pro automatically unlocks your door when you approach.

 

Security System - $$$$

An in-home security system is still one of the best ways to protect your home and family from intruders and alert you to the presence of smoke or carbon monoxide. Some companies, like Vivint, can integrate your security system with video monitoring, a doorbell camera, smart locks, garage doors and even your thermostat. Prices vary depending on the options you select, and a monthly monitoring service is required, but a home security system can bring peace of mind knowing your family and home are protected.

 

 

WE’RE HERE TO HELP

 

As real estate professionals, we get to visit people’s homes every day and talk to buyers and sellers about their favorite features. So we have a unique insight into the elements that truly make a house special, bring joy to homeowners and add value to a home.  Did we miss your favorite home-related gift? If so, we’d love to hear about it. Please share in the comments below!

 

If you do decide to “splurge” on a home upgrade, contact us for recommendations on the best options for your particular home. Buyer expectations and preferences vary depending on price point, style of home and neighborhood. We can run a comparative market analysis to find out how the upgrade you're considering will impact the value of your home, before you make the investment.

Read full post

Welcome Home: 10 Tips to Turn Your Neighbourhood
Into a Hometown Haven

 

 

"Communities work better (students perform better, crime rates are lower, kids are safer, people live longer) when neighbours know one another better. Knowing your neighbour on a first-name basis...is a surprisingly effective first step." 
-
Robert Putnam, Harvard Public Policy Professor and author of Bowling Alone

 

 

While advancements in technology have made it possible for us to connect with people from around the world, numerous studies show that it has led to a decline in face-to-face interactions.1

 

Places where we used to strike up casual conversations—such as a doctor’s office waiting room, bus stop or grocery line—are now filled with people looking at their smart phones, barely acknowledging those around them.

 

Even many families dining together or relaxing in the evenings can be caught spending more time focused on screens than each other. Is it any surprise that we’ve experienced a steady decline in community involvement?

 

In his book Bowling Alone, Harvard Public Policy Professor Robert Putnam “draws on evidence including nearly 500,000 interviews over the last quarter century to show that we sign fewer petitions, belong to fewer organizations that meet, know our neighbours less, meet with friends less frequently, and even socialize with our families less often.”2

 

How is this shift impacting our overall well being? A study by Oregon Health & Science University researchers found that having limited face-to-face social contact nearly doubles an individual’s risk of depression.3

 

 

CONNECTING WITH YOUR COMMUNITY

If you’re considering a move to a new city or neighbourhood, you may be worried about replacing the comfort and support of family and friends you’ll leave behind. Or perhaps you have completed a move but would like to meet more people, build friendships and strengthen your support system.

 

In this blog post, we’ll explore 10 ways you can utilize technology to foster in-person connections with your neighbours, make friends and get engaged in your local community.

 

 

1. JOIN YOUR NEIGHBOURHOOD’S SOCIAL NETWORK

 

A growing number of neighbourhoods are utilizing private social networks like U.S.-based Nextdoor and Canadian-based GoNeighbour. These platforms are designed specifically to connect neighbours and include an address verification process.

 

Residents post about a variety of topics, including neighbourhood news, recommendations for local businesses, lost pets, etc. These platforms are a great way to stay up-to-date on what’s happening in your neighbourhood, but don’t just use them to connect virtually. Extend an invitation to your neighbours to attend an in-person event, such as a park playdate for families, an informal soccer game or a potluck block party.

 

 

2. ATTEND A PLACE OF WORSHIP

 

If you have a religious affiliation, joining a local place of worship is great way to meet people and get involved in your community. Aside from attending services, most religious institutions also host extracurricular activities to foster fellowship amongst the congregation.

 

Whether you are looking to join a church, synagogue, mosque or temple, there are a variety of online resources available to help you find a match in your area, including:

 

 

To make the most of your affiliation, look for opportunities to meet in smaller group settings. It’s a great way to form interpersonal relationships with people who share your beliefs and values.

 

 

3. FIND AN INTEREST GROUP

 

Whatever your favorite hobby or pastime, you’re guaranteed to meet people who share your interests when you join an interest group!

 

The website Meetup.com has over 32 million members in 288,000 groups in 182 countries. You can search for a group in your area that appeals to you … from book clubs to running groups to professional networking, they have it all.

 

If you don’t find what you’re looking for, you can start your own group for a monthly fee. The site makes it easy to ask (or require) members to pitch in to cover the cost. It also enables you to promote a corporate sponsor on your page, so you may be able to find a local business to cover the cost.

 

Most people who join Meetup are there for the same reason you are … to meet people who share their interests. So it’s a great place to make like-minded friends in your community.

 

 

4. LEND A HAND

 

Volunteering your time and talents is another good way to get engaged in your community and meet those who share a similar mission.

 

Most nonprofit organizations rely heavily on volunteers. Find one with a cause you’re passionate about by visiting VolunteerMatch.

 

You can search by cause, location and keywords, and filter your results to include opportunities that are suitable for kids, seniors or groups. Another option is to search for volunteer positions that require specialized skills. Perhaps you’re musical or maybe you’re good with computers. There could be an organization in your area that needs your talents or skills.

 

Lotsa Helping Hands is another site focused on connecting volunteers with those in need. Members can request help or search for opportunities to assist others in their area. Most of the volunteer opportunities involve aiding neighbours who are ill or elderly by delivering meals, offering rides to appointments or just stopping by for a visit. This can be a great way to make a direct impact on your neighbours who need a helping hand!

 

 

5. TAKE A CLASS

 

Taking a class is a wonderful way to develop a skill while meeting people who share your interests and passion for learning.

 

Whether you want to brush up on your Spanish, finish your novel, or learn how to tango, most community colleges offer inexpensive, non-credit classes on a variety of topics.

 

And if you are pursuing a degree, forego taking your courses online. Opt for the traditional route instead. There’s no substitute for being part of a live community of your peers.

 

To search for a community college in your area, visit the American Association of Community Colleges or SchoolsInCanada.com.

 

 

6. ATTEND AN EVENT

 

Attending a live event is another way to engage with members of your community. From festivals to fundraisers to retreats, Eventbrite is a great place to search for events in your area. You can filter your search by category, event type, date and price to find something that fits your interests, schedule and budget.

 

Be strategic about the type of event you choose. For example, while attending a large festival might be a fun way to feel engaged with your community, it might also be harder to meet people. A retreat or a networking event may offer more opportunities for one-on-one interaction.

 

 

7. SHARE YOUR STUFF

 

Everyone’s talking about the rise of the “sharing economy” with the popularity of Uber and Airbnb. But there’s also been a rise in “sharing communities,” which facilitate the free exchange of goods among neighbours to reduce consumption and keep usable items out of landfills.

 

Nonprofit groups like The Freecycle Network are made up of people who are giving (and getting) stuff for free in their own towns and neighbourhoods. Members can post “offers” of free items or “wanted” items they need.

 

The company Peerby has a similar goal of reducing consumption by encouraging neighbours to lend and borrow items they don’t often use. For example, you can offer to share your blender, rake or ladder. Maybe you need to borrow a drill, cake pan or moving trolley. Peerby enables you to request items to borrow from your neighbours and encourages you to register items you are willing to lend.

 

The Little Free Library is another innovative way neighbours are participating in a sharing community. Stewards build or purchase a box to house the library and fill it with books they are willing to give away. The library is usually placed in their front yard or in a public outdoor space. Visitors are encouraged to take a book they’d like to read, and in exchange leave a book for someone else to enjoy. With over 60,000 libraries in 80 countries, the organization estimates millions of books are exchanged annually among neighbours.

 

 

8. SUPPORT A COMMUNITY GARDEN

 

Community gardens have become increasingly popular in both urban and rural areas across North America. Not only do they beautify a neighbourhood, they also foster community, encourage self-reliance, reduce family food budgets, conserve resources, and provide opportunities for recreation and exercise.

 

The mission of the American Community Gardening Association is to build community by increasing and enhancing community gardening and greening across the United States and Canada. The organization’s website enables you to search for existing community gardens in your area. If there isn’t one nearby, you might considering starting one. The site provides helpful tips and resources for organizing a garden in your neighbourhood.

 

 

9. CARPOOL WITH A COWORKER

 

In the spirit of joining a “sharing community,” carpooling offers many similar benefits. It presents an opportunity to form a bond with coworkers and/or neighbours during your daily commute. Additionally, you can save money on gas, reduce wear-and-tear on your vehicle, lower carbon emissions, and in many cities reduce your commute time by taking advantage of high-occupancy vehicle (HOV) travel lanes.

 

The success of ridesharing companies like Uber and Lyft has spurred a new wave of carpooling websites and apps that aim to revolutionize the way we commute by making it easier and more convenient to carpool. While many of these are still in their infancy stages, they are expanding into new markets and improving functionality at a rapid pace.

 

Kangaride Local, Scoop and Waze Carpool are just a few examples, and more are popping up every day. They are currently available in limited markets throughout the United States and Canada, but are becoming prevalent in more cities as residents opt-in. Check to see if any of these are available in your local area.

 

Alternatively, you can try posting on your neighbourhood’s social network to see if one or more of your neighbours are commuting to a nearby location. Take turns driving and start benefiting from all that carpooling has to offer!

 

 

10. PARTICIPATE IN WORLD NEIGHBOURS DAY

 

The organizers behind World Neighbours Day promote it as “an invitation to share a moment with your neighbours, to get to know each other better and develop a real sense of community.”

 

In Canada it’s held on the second Saturday in June, and in the United States it’s held on the third Sunday in September. Participants are encouraged to organize gatherings with their neighbours to build relationships that “form the fabric of our communities.”

 

You can participate by attending or organizing a gathering in your neighbourhood. Examples include: a block party, outdoor movie screening, book exchange, charity bake sale, volleyball game, etc. Anything that brings neighbours together in a fun and relaxed setting is a good choice!

 

Gatherings can be promoted through your neighbourhood’s social media network, blog or listserv, or you can go the old-fashioned route and hand out flyers door-to-door. Whatever you do, be sure to make your gathering inclusive and welcoming to all.

 

 

BE A GOOD NEIGHBOUR

 

As with anything in life, you will get out what you put in. It can take time to build lasting and meaningful friendships with your neighbours, but the effort you make is likely to pay off tenfold.

 

The tried-and-true way to make friends, expand your circle, grow your support system and get engaged in your community? Be a good neighbour yourself.

 

 

What are the best ways you’ve found to meet and engage with your neighbours? Share your success stories or challenges in the comments below!

 


Sources:

  1. Lengacher, L. (2015) Mobile Technology: Its Effect on Face-to-Face Communication and Interpersonal Interaction. Undergraduate Research Journal for the Human Sciences –  
    http://www.kon.org/urc/v14/lengacher.html
  2. Putnam, R. (2000) Bowling Alone. New York: Simon & Schuster –
    http://bowlingalone.com/
  3. Bergland, C. (2015 October 5) Face-to-Face Social Contact Reduces Risk of Depression. Psychology Today 
    https://www.psychologytoday.com/blog/the-athletes-way/201510/face-face-social-contact-reduces-risk-depression

 

 

Read full post

Why Real Estate Investing Makes (Dollars and) Sense

 

 

INTRODUCTION

 

Turn on the television or scroll through Facebook, and chances are you’ll see at least one advertisement for a group or “guru” who promises to teach you how to “get rich quick” through real estate investing. The truth is, much of what they’re selling are high-risk tactics that aren’t a good fit for the average investor. However, there is a way to make steady, predictable, low-risk income through real estate investing. In this blog post, we’ll examine the tried-and-true tactics that can be used to increase your income, pay off debt … even fund your retirement!

 

 

WHY INVEST IN REAL ESTATE?

 

One of the basic principles of real estate investment lies in this fact: everyone needs a place to live. And according to the Government of Canada’s Average Household Expenditures data, housing is typically a Canadian’s largest expense.1

 

But there are other reasons why real estate is a great investment choice, and we’ve outlined the top five below:

 

1. Appreciation

Appreciation is the increase in your property’s value over time. History has proven that over an extended period of time, the value of real estate continues to rise. That doesn’t mean recessions won’t occur. The real estate market is cyclical, and market ups and downs are natural. The Teranet–National Bank of Canada House Price Index shows a steady increase in Canadian home values since its inception in 1999.2

 

Source: Teranet-National Bank House Price Index2

 

 

While Canada made out relatively unscathed, most of us can recall the sharp downturn the United States housing market took in 2008. Properties there took several years to recover their value. However, in the vast majority of markets, the value of real estate does grow over the long term. In fact, the Case-Shiller National Home Price Index recently reported that U.S. home prices are now at an all-time high.3

 

While no investment is without risk, real estate has proven again and again to be a solid choice to invest your money over the long term.

 

2. Hedge Against Inflation

Inflation is the rate at which the general cost of goods and services rises. As inflation rises, prices go up. This means the money you have in your bank account is essentially worth less because your purchasing power has decreased.

 

Luckily, real estate prices also rise when inflation increases. That means any money you have invested in real estate will rise with (or often exceed) the rate of inflation. Therefore, real estate is a smart place to put your money to guard against inflation.

 

3. Cash Flow

One of the big benefits of investing in real estate over the stock market is its ability to provide a fairly steady and predictable monthly cash flow. That is, if you choose to rent out your investment property to a tenant, you can expect to receive a rent payment each month.

 

If you’ve invested wisely, the rent payment should cover the debt obligation you may have on the property (i.e. mortgage), as well as any repairs and maintenance that are needed. Ideally, the monthly rental income would be great enough to leave you a little extra cash each month, as well. You could use that extra money to pay off the mortgage faster, cover your own household expenses, or save for another investment property.

 

Even if you only take in enough rent to cover your expenses, a rental property purchase will pay for itself over time. As you pay down the mortgage every month with your rental income, your equity will continue to increase, until you own the property free and clear … leaving you with residual cash flow for years to come.

 

As the owner, you will also benefit from the property’s appreciation when it comes time to sell. This can be a great way to save for retirement or even fund a child’s college education. Purchase a property when the child is young, and with a little discipline, it can be paid off by the time they are ready to go to college. You can sell it for a lump sum, or use the monthly income to pay their tuition and expenses.

 

4. Leverage

One of the unique features that sets real estate apart from other asset classes is the ability to leverage your investment. Leverage is the use of borrowed capital to increase the potential return of an investment.

 

For example, if you purchase an investment property for $100,000, you might put 10% down ($10,000) and borrow the remaining $90,000 in the form of a mortgage.

 

Even though you’ve only invested $10,000 at this point, you have the ability to earn a profit on the entire $100,000 investment. So, if the property appreciates to $120,000 – a 20% increase over the purchase price – you still only have to pay the bank back the original $90,000 (plus interest) … and you get to keep the $20,000 profit.

 

That means you made $20,000 off of a $10,000 investment, essentially doubling your money, even though the market only went up by 20%! That’s the power of leverage.

 

5. Tax Advantages

An often overlooked reason to invest in real estate is the tax benefit. When you record your income from a rental property on your annual tax return, you get to deduct a number of expenses associated with the investment. This includes “rental expenses, such as homeowner’s insurance, property taxes, maintenance fees, advertising, mortgage interest, utility costs and property management fees.”4

 

You may also qualify for the Capital Cost Allowance (CCA), which is depreciation that can be claimed on your property. Be sure to consult a tax professional, as you may be responsible for repaying this deduction when you sell the property.

 

Even if you’re not interested in owning a rental property, your personal residence can serve as a tax-free investment vehicle. Generally, when you own an investment property you pay a capital gains tax on any profits you make when you sell the property. However, when you sell a principal residence, you are exempt from paying these taxes. That means, you can purchase a property, live in it while you remodel it, and then sell it for a tax-free profit a couple of years later. This can be a great way to get started in real estate investing.

 

 

TYPES OF REAL ESTATE INVESTMENTS

 

While there are numerous ways to invest in real estate, we’re going to focus on three primary ways average investors earn money through real estate. We touched on several of these already in the previous section.

 

1. Remodel and Resell

HGTV has countless “reality” shows featuring property flippers who make this investment strategy look easy. Commonly referred to as a “Fix and Flip,” investors purchase a property with the intention of remodeling it in a short period of time, with the hope of selling it quickly for a profit.

 

This is a higher-risk tactic, and one for which many of the real estate “gurus” we talked about earlier claim to have the magic formula. They promise huge profits in a short amount of time. But investors need to understand the risks involved, and be prepared financially to cover additional expenses that may arise.

 

Luckily, an experienced real estate agent can help you identify properties that may be good candidates for this type of investment strategy… and help you avoid some of the pitfalls that could derail your plans.

 

2. Traditional Rental

One of the more conservative choices for investing in real estate is to purchase a rental property. The appeal of a rental property is that you can generate cash flow to cover the expenses, while taking advantage of the property’s long-term appreciation in value, and the tax benefits of investing in real estate. It’s a win-win, and a great way for first-time investors to get started.

 

And according to the Canada Mortgage and Housing Corporation Rental Market Report, Canada has continued to see steady year-over-year growth in the rental market, spurred in part by an influx of immigrants and an aging population.In fact, Canada is home to some of the hottest rental markets in the world.

 

3. Short-term Rental

With the huge movement toward a “sharing economy,” platforms that facilitate short-term rentals, like Airbnb and HomeAway, are booming. Their popularity has spurred a growing trend toward dual-purpose vacation homes, which owners use themselves part of the year, and rent out the remainder of the time. There are also a growing number of investors purchasing single-family homes for the sole purpose of leasing them on these sites.

 

Short-term rentals offer several benefits over traditional rentals, which many investors find attractive, including flexibility and higher profit margins. However, the most profitable properties are strategically located near popular tourist destinations. You’ll need an experienced real estate professional to help you identify the right property if you want to be successful in this highly-competitive market.

 

 

DOES REAL ESTATE INVESTING SOUND TOO GOOD TO BE TRUE?

 

We’ve all heard stories, or maybe even know someone, who struck it rich with a well-timed real estate purchase. However, just like any investment strategy, a high potential for earnings often goes hand-in-hand with an increase in risk. Still, there’s substantial evidence that a well-executed real estate investment can be one of the best choices for your money.

 

Purchasing a home to remodel and resell can be highly profitable, as long as you have a trusted team in place to complete the remodel quickly and within budget … and the financial means to carry the property for a few extra months if delays occur.

 

Or, if you buy a house for appreciation and cash flow, you can ride through the market ups and downs without stress because you know your property value is bound to increase over time, and your expenses are covered by your rental income.

 

In either scenario, make sure you’re working with a real estate agent who has knowledge of the investment market and can guide you through the process. While no investment is without risk, a conservative and well-planned investment in real estate can supplement your income and set you up for future financial security.

 

If you are considering an investment in real estate, please contact us to set up a free consultation. We have experience working with all types of investors and can help you determine the best strategy to meet your investment goals.

 

Sources:

  1. Government of Canada Average Household Expenditure  –
    http://www.statcan.gc.ca/tables-tableaux/sum-som/l01/cst01/famil130a-eng.htm
  2. Teranet and National Bank of Canada House Price Index  –
    https://housepriceindex.ca/#chart_compare=c11
  3. S&P Dow Jones Indices Press Release –
    https://www.spice-indices.com/idpfiles/spice-assets/resources/public/documents/574349_cshomeprice-release-0829.pdf?force_download=true
  4. Intuit TurboTax  –
    https://turbotax.intuit.ca/tips/dos-and-donts-cca-for-rental-property-explained-6377
  5. Canada Mortgage and Housing Corporation Rental Market Report 2016 –
    https://www.cmhc-schl.gc.ca/odpub/esub/64667/64667_2016_A01.pdf?fr=1505674487269

 

Read full post