Archive for Home Ownership

How to Create House Appeal in the Fall

selling my home in Waterloo

Making Your Home Look Appealing in the Fall Months

Spring may be the season for cleaning, but Fall is the perfect time for working on your exterior house appeal. It makes sense to put off some tasks during July and August since it’s likely you are on vacation or it’s simply too hot to work outside comfortably. The invigorating energy of Fall can get you back on track in many different ways!

Tackling The Bigger Exterior Projects

There’s still time before winter sets in to tackle some large projects. If you can spare a sunny day, consider patching and sealing your asphalt or concrete driveway. Daytime temperatures are still warm enough to allow sealants to cure properly, and getting a good surface on before winter snow and ice arrives will not only keep your property looking nice, but it will also prevent costly and more time- consuming repairs later on.

The same applies to any roofing issues you may have noticed earlier but have not yet addressed. If it’s an irritant in September, it will be a catastrophe in January. Leaks, loose shingles, and even nesting birds in your eaves can expose your home to serious damage. If your roof is getting a little older or if you’ve spotted something that doesn’t look quite right, call a professional to take a look around and advise you on necessary repairs. While you’re checking the roof, take a look at your gutters as well – even before the leaves start falling, they may be clogged or have sections that need to be replaced.

The next thing you want to do is to check all trees on your property for dead or damaged limbs. If your property is especially large or predominantly forested, check trees within a wide radius of your house as well as those near vehicles, fences, or property lines. If entire trees or limbs more than ten feet from the ground need to be removed, you will want to call a professional.

Fall Fun

If what I described above sounds like dreary work, take heart – there are FUN Fall projects to do around your Kitchener-Waterloo home’s exterior as well. Fall is a season of vivid colors – bright blue skies, yellow leaves, apples ripening to shades of red, pumpkins in their distinctive orange. Do you feel that your home looks a bit dingy in comparison? Have no fear, we can help boost your house appeal!

If you have any siding on your house, dust and heavy pollen that was in the air can mean your paint or siding may not be looking its best. While you may not want to take on a full-scale house-painting project, you can make a big difference in your home’s exterior appearance with a few simple fixes. Pressure washing will reveal your home’s true colors from under the obscuring layer of summer grime. Painting the trim and any larger but easily accessible areas of your porch will make the entire front of the house pop – an astonishing change for relatively little effort and cost. Still sound too arduous? Pick a vibrant new colour for your front door and take an afternoon to spruce it up with a couple of coats of paint. Then stand back and …….. enjoy!

The Benefits of Gardening in the Fall

Fall is also the perfect time of year for gardening. As growth slows in your garden and landscaping, you may lose the hectic variety of summer plants but what remains is richer, deeper, and more textured. Now is the perfect opportunity to rip out annuals that are past their prime. The removal of exhausted foliage and drooping blooms will perk up the outside appearance of your home. Now you have room to revel in colourful fall landscaping. This time of year shrubs and trees do well when if they are planted now; the reduced demands from leaf, flower, and fruit allow their root systems to become established before the next flush of growth. Hardy ornamental versions of common winter crops such as kale, mustard, and even cabbage now come in a stunning array of colors and patterns. Don’t forget, while you’re doing all that digging to plant bulbs such as daffodils, crocus, tulips, and hyacinth.

Once your garden is all tucked in for the season, you can move on to the all-important decision: which decorations will enhance your front steps? Think ….. “abundance!” There is nothing skimpy about the season of harvest. Fall is the perfect time for arrangements overflowing with vines, grasses, late-blooming flowers, interesting sculptural seed pods, and nearly anything else you can imagine. Consider large, luxurious pots with ornate details echo the plants’ lush textures. Paired with wreaths in shades of burgundy, sienna, mustard, and gold, they can put summer to shame.

If you’re crafty and/or creative, half of the fun will come in making some of these items from scratch. If not, prepare to enjoy hours of browsing at your local home and garden center – options abound! And, of course, two huge potted mums (I saw some BIG ones at Home Depot yesterday for only $11.99) and an array of well-placed pumpkins are a classic combination for good reason. Their simple cheerfulness expresses the true, irrepressible spirit of fall.

Find out how I’ve helped more than 2,000 families buy and sell homes in Kitchener-Waterloo by getting a copy of my free eBook here. Also for great real estate videos you won’t find anywhere else, subscribe to my YouTube channel. I love to share my expert knowledge so if you have any real estate questions feel free to call me at 310-SOLD or email me at mark@maurerteam.com.

Making Extra Mortgage Payments Can Be Beneficial. But Should You Do It?

Should You Be Making Extra Mortgage Payments?

Should You Be Making Extra Mortgage Payments?

Perhaps you have had your home in Waterloo Region for a few years now. You’ve purchased all of the necessities that didn’t originally come with your home – a lawnmower, gardening tools and maybe you have updated your furniture and you’re pretty much settled in. Now you’re realizing you have a little extra money each month and it occurred to you that you could knock some time off your mortgage if you made an additional payment here and there. What if you put a portion of every pay aside just for this purpose – is it a good idea? You’re not the first person to come to me and ask for my advice on this. I’ve had this question asked of me while couples are putting in an offer on a home as well as past clients contacting me years after I’ve helped them buy a home in Kitchener-Waterloo to discuss this option. Initially, it seems like a rather sound idea: make an extra mortgage payment or two every year and potentially save tens of thousands of dollars in interest over the lifetime of your mortgage.

The Benefits of Making Extra Mortgage Payments

Just one extra mortgage payment a year has advantages. Yes, you can pay off your mortgage in a shorter period of time and take a few years off the term of your mortgage. Let’s take as an example, a $250,000 mortgage over a 30-year term with let’s say a fixed rate of 4%. If you made one additional payment every year, you would save approximately $27,724 over the lifetime of your mortgage. This one extra payment per year would also shorten the term of your mortgage by somewhere around four years and a bit.

The Downside of Making Extra Mortgage Payments

Yes, there is a downside to everything in life. Let’s look at the disadvantages of using income you have freed up, to contribute to your mortgage. If you use this extra cash to put toward your mortgage, you are tieing up funds that could be used to put aside for emergencies. Everybody has one at some point or another. One of the big ones is automobile repairs. You need your vehicle and if it were to break down, do you have money put aside for repairs? Financial investment specialists I have spoken to over the years have told me we should have 3-6 months of salary put aside for emergencies. Another smart use for extra money is putting it toward retirement through a specific type of retirement investment. If you have children, you’re going to want to contribute to an RESP for college or university tuition. I have a step-daughter who is enrolled at McMaster University in the fall and it sure hit home how expensive an education is when we sat down and made out an itemized budget. Thankfully, an RESP was started for her when she was a baby and at least her tuition and book costs are covered every semester.

If you have decided to make additional payments toward your mortgage, the first thing you will want to do is to contact your mortgage broker. Here are the questions you will want to ask:

  1. Do they allow extra payments?
  2. Do the extra payments go toward the principal and NOT the interest?

If extra payments are allowed and the amounts you will pay go toward your principal, now you need to decide which is the best approach to making these extra payments. You can pay a little extra every month, pay a lump sum at the end of the year (or at any specific time during the year), or you can make your mortgage payments bi-weekly which at the end of a year works out to one extra mortgage payment. In any case, speak to your mortgage broker about all of this and ask for the answers to your questions in writing so that you’re clear on what you can and cannot accomplish by making extra payments on your mortgage.

Find out how I’ve helped more than 2,000 families buy and sell homes in Kitchener-Waterloo by getting a copy of my free eBook here. Also for great real estate videos you won’t find anywhere else, subscribe to my YouTube channel. I love to share my expert knowledge so if you have any real estate questions feel free to call me at 310-SOLD or email me at mark@maurerteam.com.

Mark

The Pros and Cons of Renting out Part of Your Home

PROS and CONS

Know the PROS and CONS Before Taking the Plunge

On the surface it seems like a fabulous idea: Carve out a portion of your home, rent it out and use the rental income to pay your mortgage. You get to live basically “rent free” while at the same time reaping the tax benefits of writing off some of the costs associated with accommodating a rental apartment in your home.

With the Canada Mortgage and Housing Corp.’s recent announcement of relaxing the rules for how homeowners looking to rent out apartments in their principal residences can borrow money, getting some rental income seems like a sure bet.

In reality, however, it is not. From difficult tenants and unanticipated costs to insurance claims to the simple and sometimes inevitable experience of not being able to find a stable, long-term renter, there are many things that homeowners need to consider before taking on the role of landlord.

The Pros

Second source of income
The most obvious gain is the extra money that you will be receiving each month. This money can help you pay your mortgage, property taxes or other bills, which is a sweet deal if you are renting out a part of your home you rarely use anyway.

Renovations increase value
Aside from the monthly payoff that you receive from your new tenants, the renovations that you make may also be a future investment. At the time, you may renovate to make areas of your home accessible to tenants, for example finishing your basement, but such renovations will also increase your home’s resale value.

The Cons

Investing and responsibility
First of all, it is an investment before it is a benefit. In order to rent out part of your home you need to ensure that it is in prime condition. This means that renovations will most likely have to be made. It also means that every problem that your tenant has becomes your problem. There is no putting off a repair; you are now a landlord and have inherited a responsibility to your tenant(s).

Impact on resale value
There is also re-sale valuation to consider. While you may have no intention to sell your home now, you still need to consider what it will be valued at with a rental suite later. While many potential buyers will appreciate having a turnkey rental apartment that they too can reap the economic benefits from, some may not want the same kind of setup, reducing the prospect of a sale.

Reliability
It seems like the great idea to be able to rent your home, but you are now depending on someone else to pay you. Not all tenants are reliable, and it can be difficult to trust a stranger to hold up their end of the bargain. A quick glance through the Landlord and Tenant Act can provide a good snapshot of some of the issues landlords face.

The Pitfalls

Regulations
While it differs by province and city, renting out part of your home automatically puts you under numerous provincial and municipal regulations, many of which if not followed can result in hefty fines. When a landlord can enter the area rented differs across the country, as one example, as does the types of property that fall under provincial or territorial tenancy legislation — a detached home versus a duplex or condominium, for instance. Both landlords and tenants should inform themselves of the laws applicable to their location.

Repairs
Repairs can be extremely expensive and seem to occur a lot more often when housing tenants. You can potentially avoid recurring repairs by calling professionals the first time around, but try to budget for repairs when renting out your home.

Six key things any homeowner considering renting out a portion of their residence needs to consider:


1) Know the laws and follow them
: Before renting your home, look into the provincial and municipal laws to ensure to take the appropriate steps. Always draft a contract that acknowledges the regulations set by the Canadian Mortgage and Housing Corporation that are applicable to your location.

2) Have a backup fund:
 Do not depend on rental money as a primary source of income. Always have some extra money in the piggy bank for possible repairs or tenant issues and, of course, to cover your own bills.

3) Mortgage flexibility:
 A flexible mortgage is recommended when renting out part of your home. It can give you wiggle room on the requirements for monthly payments should something go wrong. This allows homeowners to avoid penalties that occur in a fixed mortgage rate when a monthly payment is missed. Flexible mortgages also give homeowners the opportunity to pay off their mortgage sooner as you can accelerate payments.

4) Have rules in place:
 Renting out part of your home should be seen more as a business deal then a simple rental agreement. Always have written and signed documentation to cover all your bases. This ensures liability on both your end and the renters.

5) Check-in
: Make a habit of checking in with your tenants on a regular basis to ensure both your happiness and theirs. You can have monthly visits to ensure that your property stays in good shape and they are properly accommodated.

6) Hire professionals: A real estate lawyer should be at the top of your list, as well as a mortgage expert and other professionals who can help navigate the legalities and other circumstances of being a landlord.

Overall, renting your home can be a viable source of income if you do it properly. Following the rules and maintaining your property are extremely important and necessary. Renting property comes with responsibility and patience, and should not be done as a get-rich-quick scheme.

This article was written and published with permission on this website by: Samantha Brooks, Founder and CEO of Mortgages of Canada with 14 years of experience specializing in mortgages, debt consolidation, and refinancing. You can find Samantha on Twitter as @Mortgagesof Can. For mortgage questions or advice, you can visit Samantha at www.mortgagesofcanada.ca

Find out how I’ve helped more than 2,000 families buy and sell homes in Kitchener-Waterloo by getting a copy of my free eBook here. Also for great real estate videos you won’t find anywhere else, subscribe to my YouTube channel. I love to share my expert knowledge so if you have any real estate questions feel free to call me at 310-SOLD or email me at mark@maurerteam.com.

Mold Facts and Myths Every Homeowner Should Understand

Our good friends at Restoration 1 Kitchener have spent a great deal of time dealing with mold caused by water damage AND the myths and misconceptions surrounding mould. Recently it occurred to them that they should collect some of the most repeated of their little nuggets of mouldy wisdom into an article of some kind, so that they could get the word out to even more people. The following was written by these fine folks – we thought it would be useful to you as a homeowner in Waterloo Region.

There Are Different Types of Mold

Not All Black Mould is Bad

There has been a lot written and talked about over the last few years regarding black mould and how dangerous it is to both your house in Kitchener-Waterloo and your health. And there are such things as toxic moulds and yes, a lot of them are black. But not all black moulds are toxic.

The fact is that mould comes in all kinds of colours. We’ve seen white mould, bright yellow mould, brown mould, green mould, mould that is the kind of delicate pink that would actually make a rather nice paint colour and everything in between.

Whether or not a mould is toxic depends upon its chemical makeup, not on its colour. So if the mould you find in your home is black don’t panic and make plans to leave town immediately just yet. Call in a company like Restoration 1 Kitchener to come and perform professional mould testing to find out what kind of mould it really is, regardless of its hue.

Bleach Kills Mould. NOT.

OK, we admit it, this is the myth that drives us nuts. No, whatever you read online, or saw on a late night infomercial, bleach does not kill mould. It bleaches it, which means you probably won’t be able to see it anymore. It’s still there though and in fact it is probably really enjoying the tasty bleach you just fed it because that actually makes mould stronger and more resistant. There are indeed solutions that kill mould but bleach isn’t one of them.

Keeping an Area Dry Will Not Kill Existing Mould

OK, so you found a big patch of mould, figured out the problem was your leaky showerhead, had the local plumber come in and fix that and now everything should be great, the mould will go away.

Well no, it won’t. We all know that mould needs excess moisture to grow, but once it is past its ‘toddler’ stage, which only takes a few days, it can survive very well on the moisture in the air, and the air is moist everywhere. The less powerful ‘nutrition’ will probably mean that the existing mould won’t grow or spread very fast, but it will still have the ‘strength’ to carry on doing what it always has, eating away at whatever surface it calls home.

Initial Mould Testing is Not Invasive or Intrusive

In order to perform a mould test in your home we, or any other professional mould remediation service, are not going to come in armed with scissors and hammers to rip up your carpets or knock holes in your walls. Our testing methods are seriously more advanced than that and we can get to the root of any problem without creating a mess of any kind.

You Can Recover the Value of Your Property After a Serious Mould Problem

A serious mould problem is just that, serious, but it does not mean that all is lost or that your home is now ‘damaged goods’ that can never be resold for its proper value. As long as the mould remediation service you use is properly certified and experienced – ie a company like Restoration 1 Kitchener – and the problem, has been solved no one will ever be able to really tell it existed in the first place.

Any Home Can Fall Victim to Mould, However New and Clean

Contrary to popular opinion, mould, even though it is indeed a living organism, does not discriminate. Give it what it needs to grow and it will grow, even if your house is only six months old and a cleaning lady comes in every day.

Find out how I’ve helped more than 2,000 families buy and sell homes in Kitchener-Waterloo by getting a copy of my free eBook here. Also for great real estate videos you won’t find anywhere else, subscribe to my YouTube channel. I love to share my expert knowledge so if you have any real estate questions feel free to call me at 310-SOLD or email me at mark@maurerteam.com.

How You Can Make Your Home Look and Feel Bigger

 

staging your Kitchener-Waterloo home

Starting from Scratch: Furniture Placement Matters!

What we place in our homes and how we place these items can define any given space. The world is a crowded place these days, and living spaces are shrinking fast. No matter what the actual square footage of your Kitchener-Waterloo home may be, there are so many ways to open up your space and not only make it look larger, but feel larger, too!

No worries, opening up a space can be a lot of fun! We tend to get so used to where things are placed that they seem fixated. A certain joy exists in realizing that any of these items can be moved, rearranged, or perhaps even find a new place in which they seem to belong, creating a living space you’re certain to love.

It All Starts with Decluttering!

It’s hard not to be familiar with the concept of decluttering because it’s become a zeitgeist, but it can feel like a looming and overwhelming task to approach. So, how do you make it happen without the panic attack? Start with one room, and then begin with one part of that room. You can begin by clearing off surfaces (including the floor) and evaluating what can be discarded altogether. Organize like materials with bins or small boxes. Once you’re able to see how much more open a dining room can feel with nothing on its table or a living room with only one or two items on the coffee table, you’ll find natural motivation to declutter throughout your entire home.

Seek Out Space Savers

We tend to think more on the horizontal plane rather than the vertical when it comes to object placement, but the simple reality is that vertical methods of storage create more space in a room and can offer a more efficient method of organization. Over-the-door products are great for shoes, bathroom items, or even miscellaneous collections like mail. Also, you may want to consider shelves that go all the way up to the ceiling. You could place small boxes of belongings on some shelves and aesthetically pleasing items such as a vase or photographs on others. Ceiling height shelves not only take the burden off the floor and horizontal surfaces, but they also make the room appear taller.

Furniture Placement Matters!

Your furniture helps define the activities in each room. Sometimes just shifting pieces of furniture that have been in the same place for a long time to a new place will make the whole room feel new and more open. Consider how each piece of furniture interacts with other things in the room – other pieces of furniture, windows, doorways, etc. If any furniture blocks the light, try angling it so your window can do its job properly. Additionally, make sure furniture doesn’t block pathways in one room or from one room to another, as an interrupted flow can feel cramped. Keep doorways and walkways open– this creates more space visually and physically.

Add Rugs

Rugs can also open up space by drawing attention to all the room on the floor with its design. Rugs bring new definition to furniture and items with its particular lines and contours– like a painting on the floor that interacts dynamically with other objects in the space. Select rugs that are perfect for the size, space, and design of a room

Lighting is an Essential Factor

Light is key to opening space. Light allows every room in your house to breathe. Aside from not blocking natural light, there are also ways to attract light. Painting walls in reflective colors such as yellows, grays, and whites will give the room a larger feel. While there’s a place for beautiful, rich dark colors, if you’re trying to open up space, lighter ones are the way to go. Dark colors tend to define the space in a more confined way; lighter colors let the light move.

The Magic of Mirrors

Mirrors reflect light and give any room a more spacious feel. Hanging a mirror to reflect a window will give the appearance of another window in the room, and will make that room feel bigger as well as brighter. In a small bedroom, try placing a tall full-length mirror against the wall. While it doesn’t actually expand your physical walking space in a literal sense, it will feel as though it does, which makes a big difference. In places like the living room, try propping a small mirror against the wall or on an unused fireplace. In lieu of natural light, burn some candles in front of the mirror to reflect candlelight and see how that light softly opens up the space.

Creating a sense of openness is essential to a home feeling bigger, and these steps will create a more open home. In a poem, “stanza,” is Italian for “room.” Just like part of a poem, we want our rooms to be concise (not too many words, not too many items) and expansive (instead of items cluttering, they instead can draw attention to the open space). Each room can be a kind of artistic creation that you design yourself. We are partnered with Rooms in Bloom Home Staging to help our clients get the most out of their living spaces.

Find out how I’ve helped more than 2,000 families buy and sell homes in Kitchener-Waterloo by getting a copy of my free eBook here. Also for great real estate videos you won’t find anywhere else, subscribe to my YouTube channel. I love to share my expert knowledge so if you have any real estate questions feel free to call me at 310-SOLD or email me at mark@maurerteam.com.

Water Damage: What Will My Insurance Cover?

Water Damage to Your Kitchener Waterloo Home

This blog post was first published on the website of Restoration 1 Kitchener. We have modified it for   our readers - we hope you find it useful.

Water has damaged your home. And while that is in no way any fun at all, at least your homeowner’s insurance is going to cover the cost of the cleanup and remediation, right? That’s a relief at least. Except if you are not the kind of person who pays minute attention to the insurance coverage you buy and pay for then sadly, in some cases, the answer might be no.

The Basics

In Canada, your basic property owner’s insurance will cover certain kinds of water damage pretty much as standard. If a pipe burst on your washing machine and flooded the laundry room then yes, your insurance should help pay to fix the damage. By the same token if a particularly bad rainstorm causes water to enter your home (maybe because it breaks a hole in the roof or floods the basement), you will not be covered. According to Jack Tu of BDA Insurance, water coming from a rainstorm that floods your basement is NOT covered in Canada.  Jack says, “We are currently the only G8 country in the world that does not offer flood coverage.  Flood is defined as overland water coming into the home – for example through a window well, doors, etc.  Additionally, water coming in through cracks in your foundation is not covered.”

In very basic terms almost all standard property owners’ insurance policies will cover “clean water damage.” What does that mean? Water that has not come from below ground or from a sewer, which is the case in both of the examples we cited above.

One thing to watch out for though; damage from frozen pipes. Technically this would be a clean water incident and you would imagine it would be covered. However, for many insurance companies this is a really grey area and coverage is not assured, especially if it can be proved you were away on vacation or something similar at the time.

Dealing with Dirty Water Damage Costs

A standard property owner’s insurance policy may or may not automatically cover ‘dirty water’ damage. Dirty water damage would be considered to be things like toilet overflows or flooding caused by a sewer pipe backup, even if the fault was not yours and the municipality you live in was actually responsible for maintaining the sewers involved.

Go through the small print on your policy and if you are not sure if dirty water damage is covered, give your insurance company a call to check. Even if it’s not though you can purchase add on insurance at a low cost to cover these kinds of dirty water incidents and it is something well worth considering given how much damage such things could cost.

Overland Floods

Believe it or not right now, in Canada, you can’t actually purchase specific insurance that covers overland flooding. According to the Insurance Bureau of Canada only a very small number of properties are at risk for such a thing. Therefore, in the eyes of the insurers there would be too few people paying in to such insurance to make it worth their while offering a specific overland flood insurance policy in the way that insurers in the United States may.

So Do I Have the Right Insurance Coverage?

The only way you can accurately answer that question is to have a chat with your insurance broker. As your home is such a huge investment it always pays to be on top of things like this – and make sure you understand every last word of the fine print regardless. It’s always better to be safe than sorry after all.

We recommend that you take a few moments to review the insurance policy you have in place before you need to know the specifics about your coverage. You’re going to want to make sure you have the right coverage for the biggest asset you own, your home in Kitchener Waterloo.

If you have any questions about home insurance we recommend Jack Tu of BDA Insurance to our customers. You can contact Jack at 226.606.9622 or email him at jtu@teambda.ca. We hope you never have to deal with water damage to your home but if you do – contact the experts in water damage, Restoration 1 Kitchener. You can reach them through their 24 hour emergency hotline at 519.505.4785 or visit their website at http://www.kitchener.restoration1.ca.

Find out how I’ve helped more than 2,000 families buy and sell homes in Kitchener-Waterloo by getting a copy of my free eBook here. Also for great real estate videos you won’t find anywhere else, subscribe to my YouTube channel. I love to share my expert knowledge so if you have any real estate questions feel free to call me at 310-SOLD or email me at mark@maurerteam.com.

A Guide to Sustainable Plumbing in the Home

A Guide to Sustainable Plumbing in the Home

A Guide to Sustainable Plumbing in the Home

Are you thinking of updating or upgrading some of the plumbing fixtures in your home? If so, this guide from the Canada Mortgage and Housing Corporation is for you. This guide is intended to provide interested homeowners, licensed plumbers, and building contractors with an overview of fixtures, appliances and actions that can help homeowners conserve water and energy in different areas in the home.

This plumbing guide for the home covers:

  • About Sustainable Housing
  • The House as a System
  • Water-efficient Plumbing in the Kitchen
  • Water-efficient Plumbing in the Bathroom
  • Water-efficient Plumbing and the Hot Water System
  • Water-efficient Plumbing in the Laundry and Mechanical Rooms
  • Rainwater and Greywater

There is increasing strain on urban water sources across the country. Making homes more sustainable will help to reduce energy and water consumption, enhance the indoor environment, reduce the environmental impact and make housing more affordable for Canadians. Using less water means that:

  •  less water has to be pumped, treated or distributed, which leads to reduced energy consumption;
  • existing water supplies and infrastructure can support growing populations and economies (which could avoid having to build bigger storage facilities and treatment plants, or having to secure additional water sources).

To access the Guide to Sustainable Plumbing in the Home click here.

 

Taking Control of your Financial Future

How to make more money on your investments

How to make more money on your investments

You’re thinking of the future and how you will pay for your retirement. Maybe you just want to have a small secondary income to pay for vacations, buy that new vehicle or plan your child’s education. What are the types of investments that give the best rate of return and who do you trust to invest your money for you?  You can invest in mutual funds, ETFs, RRSPs and the like but the bottom line is you are rolling the dice and holding your breath hoping for a positive result. In many cases you aren’t even the person earning the most return on your financial investments in the first place. As I’m sure you are aware – you, your spouse, or a financial planner cannot control the stock market. The worst part of this scenario is that you have no control over these types of investments.

The Good News

I have some good news for you that will provide you with a great deal of comfort: you are the best person to invest your hard-earned money. You don’t need to study financial planning for months, read the financial section of The Globe and Mail every day, or watch the stock market with an eagle-eye looking to spot trends. Take charge of your financial future by being the person who is in control of your investments. This is entirely possible by investing in real estate in the form of rental properties.

One of the first things you need to know is what the qualifications are for a mortgage for investment purposes.

Rental Property Program

Borrower Qualifications. The majority of lenders will allow you to finance up to 5 rental properties (that are not owner-occupied). Unfortunately there are fewer lenders who will accept you to finance this many student properties. However, if you meet their criteria, Magenta Mortgage Investment Corporation will work with you.

Rental Income Confirmation. In order to qualify for a mortgage for an investment property, you will need to confirm the income you will receive from your rental property through the following: current signed lease agreement with your tenants; a copy of your T1 General (your personal income tax return); and a copy of your Notice of Assessment from the Canada Revenue Agency. Lenders will allow you to use anywhere from 50% to 100% of rental income as part of the income confirmation portion of your application. You are more likely to receive an allowance for 100% of the rental income if you have a minimum credit score of 680 and if income is validated using a two-year average based on lease agreements OR income for new or existing units can be confirmed via fair market rent from an appraisal.

Down Payment. The minimum down payment that lenders will accept for a rental property is 20%. Gifted down payments are acceptable as well. The maximum loan-to-value on units where you don’t yet have tenants is 65%. This means you will need a 35% down payment.

Loan Amount. If you live in Metro Toronto, Metro Calgary or Metro Vancouver, the maximum amount that you can borrow for investment properties is $750,000. The maximum amount for the rest of Canada is $600,000.

Qualifying Property Types. Properties that you can mortgage for investment purposes include condominiums or non-owner occupied houses/dwellings that are anywhere from one to four units. Lenders will always require an appraisal for these properties.

Next Steps for Investors

If you are thinking investing in real estate could be for you, there are steps you can take on your own to start the process. First of all, apply for a mortgage. When you are pre-approved by a lender it puts you in a strong negotiating position when you find the property you want to purchase. Additionally, a pre-approved mortgage locks in your rate for 90-120 days. This is a good idea if an interest rate increase is looming. If the interest rate decreases between the time you were approved and your purchase date, you will receive the lower of the two rates. Keep this in mind: two weeks prior to closing, the lender will run another credit check on you (and any additional co-applicants) and conduct an employment verification. If there have been any changes to your employment status it can affect your mortgage application. Right before you are going to close on the purchase of an investment property is not the ideal time to make major purchases (e.g. car, furniture) as this could affect your credit check.

If you need further convincing about the stability and value of real estate investing, do some preliminary calculations about the rate of return. You can start with the capitalization rate (or “cap rate”). The cap rate (which is the ratio of a property’s net income to its purchase price) allows you as an investor to compare properties by evaluating a rate of return on the investment made in the property. Here is how you calculate the cap rate.

If you want a further in-depth idea of what it takes to successfully invest in real estate, you can call our Investment Specialist Andrej Micic at 310-SOLD or email him at andrej@maurerteam.com.

Andrej Micic, Investment Specialist

Andrej Micic, Investment Specialist

Mark

 

 

 

 

 

Tips for Single Female Home Buyers

 

buying a home in Kitchener-Waterloo

Dreaming of Owning Your Own Home?

There was a time when homebuyers were a predictable bunch as far as demographics were concerned. Most were married; many had children. All of the agents on my team could often tell just by our buyers’ ages and the ages of their children what kind of home they would purchase. Single buyers used to be rare and single female buyers were practically nonexistent. That time is over!

Single women aren’t waiting for husbands and children to dictate their home ownership goals anymore. They are becoming homeowners in greater numbers than ever before. Today, more than 25% of Canada’s home buyers are single.

Why should a single person buy a home?

Buying a home will give you the space and privacy you want along with a sense of personal pride in your home that you just don’t get when you’re renting. You have more control over your space too. You can paint, decorate and alter the space in whatever way you see fit (as long as it conforms to local codes, of course). It’s also a sound investment that even your parents will approve J

It only makes sense to buy in today’s market. If you’re currently renting you already know that rent isn’t cheap in Kitchener-Waterloo. If you’re paying between $1000 and $1500 each month in rent, you could feasibly be carrying a mortgage of around $250,000 instead of supporting your landlord’s real estate investment. Having a mortgage builds equity; it’s an investment in your own future.

Interest rates are still affordably low and there are more options than ever for single buyers. Single-family homes of the right size, despite the moniker, are a classic choice. Houses with rental potential are particularly popular since becoming a landlord is smart way to get part (or all) of your mortgage covered. Condos in Waterloo Region are also a good way to break into the real estate market without as many maintenance woes. You can resell a condo when you want a change or retain it as an investment/rental property.

As a single buyer, you’ve never had so many choices. Banks are much more open to lending to single buyers now than in the past so it’s a great time to make home ownership a priority. If you are single and looking to buy, you need to be as educated as possible about the process and I’m going to help you with that.

Take a look at our Buying Guide to begin your home ownership education. Here’s one very important thing you should know right away: as the buyer, having a real estate agent represent you costs you nothing. The seller is the one who pays the real estate fees. Begin realizing your dream of owning your own home by choosing a Realtor who will represent you, ensuring all your needs are met, and protect you as you purchase. 

Tips for Single Female Home Buyers

If you are single and a considering buying a home, there are a few things you should consider a little more closely than if you were buying in tandem with another person. Since you will be the individual solely responsible for the home, you need to be even more careful about these key points.

  • Know what you can afford. Again, you will be the only one making the mortgage payments. It’s even more critical that you know exactly how much home you can afford. As the only person responsible for the mortgage payments every month, it’s better to err on the side of caution. Don’t count on your lender to dictate to you how much you can afford. Calculate the costs of your lifestyle and decide for yourself how much you are willing to commit to your mortgage payment.
  • Understand the whole cost of ownership. In considering how much you can afford, don’t forget the details. Home ownership is more than the mortgage payment. You will also have taxes, insurance and maintenance costs to consider. Your Realtor will be able to help you consider and calculate these costs.
  • Set up an emergency fund. Home repairs can occur suddenly and some of them are costly. It’s a good idea to put money aside in an emergency fund for these unexpected emergencies.
  • Protect your investment. Insurance coverage is no joking matter when you are a homeowner. You will definitely want to consult your insurance agent to inquire about how home ownership will change your coverage needs. Click here to read an article we published about what insurance covers if you have water damage. What coverage should you have on the structure itself? Do you need liability insurance on your home? Outside of coverage for your new home you will want to find out – who will pay my mortgage if I become injured or disabled? Make an appointment with your insurance agent or broker before your home purchase and be sure all of your questions are answered so that you protect your income and your home.
  • Avoid costly mistakes. Don’t rush into your home buying decision and don’t compromise your budget. Mistakes in the process of purchasing a home can be financially devastating; take your time and get expert real estate advice throughout the process.

This is an excellent time to be a single homeowner. Read over our Buying Guide and give us a call to start making your home ownership dreams come true.

For home selling tips you won’t find anywhere else, subscribe to my YouTube channel.

Are You Financially Ready to Buy a Home?

Financial Preparedness

Financial Preparedness

So many of your hopes and dreams rest on finding the perfect place to live, a setting for all those plans you’ve made. Your dream home could be a luxury condo in Uptown Waterloo or a rustic rural homestead. Either way, you’ll need to be financially ready to buy that dream home.

Determining your financial readiness is a crucial stage in the home buying process. For some homebuyers, that process may only last a few weeks but for others it can last much longer. Every journey to home ownership is different. The first step is always asking yourself, “Am I financially ready to buy a home?”

Some homebuyers will be ready to call a Realtor as soon as they have a few thousand dollars saved up. While calling a Realtor is a great place to begin your journey, having a down payment is not all there is to buying a home. A good Realtor can educate, guide and assist you but you’ll likely need more than a small down payment to be truly “ready.” There are also online tools and calculators that will help you assess what you can reasonable afford to purchase. Canada Mortgage and Housing Corporation’s website has some calculators and tools that will give you a better perspective on your debt-to-income ratio, the estimated upfront costs of a home purchase, as well as mortgage payments and types.

We have put together a few items for you to consider as you determine your financial readiness.

Down Payment

Of course the down payment is no small matter and should be your #1 financial priority. Saving for your down payment takes discipline and effort – you can do it! This is a good starting point towards home ownership. Your down payment is the portion you will pay towards your home that does not come from your mortgage loan. This is the portion you will have to have in a readily available form (like a checking or savings account) when you close on the purchase of your dream home.

The size of this payment will vary depending on the mortgage issuer you choose and the price of the home. Most mortgage companies would like to see you make a down payment of at least 5% of the home’s selling price before they will issue a traditional mortgage. You may be able to make a smaller percentage payment if you purchase mortgage loan insurance (through CMHC, Canada Guaranty or Genworth) which will raise your monthly payments slightly.

Deposit

When potential buyers make an offer on a home, a deposit is required to assure the buyer that they are indeed quite serious about buying that particular home. The size of the deposit will vary depending on the situation. If the buyer backs out of the deal, he may lose this deposit unless his contract states that the deposit is contingent upon certain factors such as findings from the home inspection or securing financing. Deposits are usually rolled into the down payment at closing.

Fees

A home purchase will require you to pay certain fees above and beyond the down payment on the home. Here a few fees to make yourself aware of:

  • Appraisal fee. Paid out-of-pocket by the buyer, and appraisal is often required by the lender. This is a valuation of the home (including its features, recent comparable sales and recent market conditions) by an independent party.
  • Home Inspection Fee. Your lender most often requires a home inspection and this is an item you should absolutely include in your budget. An inspection tells you the condition of the home including all of its major systems. The inspector can alert you to any problems before you buy.
  • Mortgage Broker Fees. If you have chosen to use a broker to help you find the most favorable mortgage, his fees will likely be due at closing.
  • Pre-paid taxes. A prorated portion of the year’s property taxes may be due as soon as your close on a new home.
  • Estoppel Certificate Fee (for condos only). Also called a Status Certificate, this certificate outlines the financial and legal condition of a condo corporation so you can determine if a unit is a safe financial risk.
  • You lender will require your to have property insurance in place as soon as the home is in your possession on closing day.
  • Closing costs. There are numerous fees due at closing that are collectively called “closing costs”. Underwriters’ fees, title searches and insurance, survey fees and origination fees all fall under this heading.
  • Moving costs. Don’t forget to include the cost of a mover. Even if you plan a DIY project (renting a truck and packing it yourselves), get a quote ahead of time to ensure you have put aside funds for the fun!

This list is by no means exhaustive but you can see that you will need a little more than your down payment in hand by closing day.

Once the Home is Yours

A home will require more than a monthly mortgage payment. There will be other costs involved so be sure your budget can handle these added costs. Taxes are a major consideration and so is basic maintenance.

Don’t let this list of costs discourage you from your dream of home ownership! Talk to a financial counselor or a Realtor on The Mark Maurer Team and learn what it will take for you to be ready to buy a home. You might be surprised that you are in a better position that you imagined!