Archive for buying a condo in Kitchener

You’ve Outgrown Your Home. Do you Buy First or Sell First?

Real Estate Tips: How to Buy and Sell Real Estate in Kitchener-Waterloo

Real Estate Tips: How to Buy and Sell Real Estate in Kitchener-Waterloo

Moving up from a starter home is an exciting prospect, especially as it often comes with a big change in your life, such as a new partner, child, or a new job. Once you start to look at the logistics, the process can become a daunting one. Apart from the joy of packing, at some point you realize that you’ll have to find and buy a new home in addition to selling your current one. Perhaps the most important question is: Which one do you do first?

If you can afford to straddle two places at once, there are benefits to buying a home before selling your current one. You don’t have to worry about temporary housing and moving twice, which can be costly as well as stressful – not to mention that in some places, rental markets are extremely competitive. If there are other people in your household, moving more than once can be disruptive to your school/work routines, especially if the temporary location isn’t ideal. If you want to buy a home before selling your current one but don’t have the necessary cash, you have the option of applying for a bridge loan. A bridge loan is a short-term financing tool that helps purchasers during the period between closing dates. Bridge financing allows you to use the equity in your current home as a down payment for your new home while waiting for the sale of your existing home to close. These loans are a very short-term solution, though, typically for only 90 days, and are generally only an option when a sale agreement is already in place for your current home.

If you buy your new home first, you can move as soon as you would like to set the closing date and get the keys. This eliminates the need for storage rentals that you might need if you decide to sell your current home first. In certain markets, it’s also expected that you stage your home. Even if staging isn’t expected, it can boost the final sale price or help it sell faster than it would otherwise. If you buy a home before selling your current place, you don’t have to worry about keeping your home pristine for weekend open houses and surprise showings; you can move out and leave the place clean and clutter-free without feeling that you’re living in a showroom.

Get help from a professional real estate agent or mortgage expert

Working with a mortgage professional will help you determine the financial implication of buying or selling first, and working with a real estate professional will help you figure out the climate of the areas where you’re looking to buy or sell. Sellers’ markets can work for you when buying and selling. Right now we are in a hot market in Waterloo Region and you don’t have to feel as much pressure to wait for your home to sell because desirable inventory is low (I wish it wasn’t this low). In this current real estate climate you may feel that you have to jump on submitting on offer on a property that you like because you can be fairly confident if you don’t snatch it immediately, someone else will. While a soft market gives you more time to look and make a decision, it often means longer wait times for the right buyer to come along for your property.

Conventional wisdom, however, is that you sell your existing home before buying a new one.

The obvious advantage to selling your home first is that you don’t have to carry two mortgages. Not only are two mortgage payments expensive, but if you aren’t porting your mortgage and are getting a new one, then you have to go through the application process again and already owning a property might impact your borrowing capacity and/or interest rate for your new mortgage. Additionally, if you’re getting a new mortgage the sale price of your current home probably has some bearing on what you can afford for your next home. Even if you think you and your Realtor have listed your home at fair market value, you ultimately won’t know what that sale price is until you accept an offer.

If your home sells quickly like the majority of our clients’ homes do, finding temporary housing with friends or family or even renting isn’t always a bad thing. Doing so can mean that you can put an offer on a new home without the condition of sale of your current home, making your offer more attractive to sellers. You may also be more flexible in terms of closing dates. Of course you want to get settled into your new home as quickly as possible, but being able to tailor your needs to that of the seller can make the difference between your offer beating another.

When you sell first, you also have a little more freedom than you would if you buy another home first. You don’t have to settle if you don’t see the perfect property right away. Or you can sell your home, get a long closing when buying another home and take some time off before you get the keys. If you’re in a situation where your things are in short-term storage until you find a new home anyway, maybe you can even take the opportunity to travel, even if it’s just for a short period of time. You’ll come back relaxed, refreshed, and ready to unpack in your new home.

I also answer this question in my video

 

Find out how I’ve helped more than 2,000 families buy and sell homes in Kitchener-Waterloo by downloading my free eBook here: bit.ly/MMSelling. Also for more 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 New Era of Condo Living in Kitchener-Waterloo

buying a home in Waterloo, buying a home in Kitchener, buying a condo in Kitchener-Waterloo

Benefits of Condo Living

The Growing Condo Population in Waterloo Region

Condos have a lot to offer for many different categories of buyer. From first-time buyers to downsizers and from singles to families, there are good reasons to think about condo living. They offer an ease of living that everyone can appreciate.

The Kitchener-Waterloo area has a huge student and post-grad population and this group is often attracted to condo living. The lower price point of a condo over a single-family home is typically a strong selling point. The communal atmosphere and added luxuries some condos offer (such as pools, fitness facilities and rooftop decks) are also very attractive to those just transitioning from dorm and apartment life to homeownership. It’s a good way to make the move from university to adult life.

Twenty-somethings love living in the areas where condos are most populous, too. Living near nightlife as well as work makes commuting so much easier. Our thriving tech sector is providing a healthy pool of buyers that’s only going to grow in the next several years so a condo could also be an excellent investment.

The millennials may love condos and we are finding that adults with a little more life experience are also becoming condo buyers. Empty nesters and retirees are buying condos now too. The ease of letting someone else do the gardening or paint the shared hallways can make a condo life much easier than a single-family home. A few less square feet means that much less to clean and maintain so many of these folks are making the switch to condos later in life.

Benefits of Condo Living

Condo life offers more than just the square footage within your walls. Here are just a few of the benefits of condo living that you might not have considered.

  • Security. Many buildings have security features you won’t get in a single-family home or apartment. Features like car-only access and paid security staff on-site 24-7 in addition to nearby neighbors to make you feel more secure. Condos have a lower rate of break-ins when compared to other form of housing.
  • Location. Condos are often located in the trendiest areas close to the best shopping and restaurants. This is definitely the case in Kitchener-Waterloo! Any of our condos are just a short stroll from some of the hottest hotspots in town.
  • Maintenance. It would be more accurate to say “lack of maintenance” because if you buy a condo, most of the hardest work will be handled for you! Landscaping, roofing and the upkeep of common areas will be performed by professionals and covered by your monthly fees.
  • While condo pricing has a wide range based on location, size, and amenities, the price per square foot is typically lower than a single-family home. This makes homeownership a little more reachable for more buyers.
  •  Amenities. A great condo has features outside your own walls. Many have 24-hour fitness facilities, pools, beautiful common areas for large-scale entertaining, secure parking and perhaps even concierge services.
  • Community. Perhaps one of the best features of condo life in the sense of community that you often find in these buildings. The shared spaces give you a feeling of being part of a larger family of residents that is often missing in our modern lives.

This affordable, innovative approach to creating a community could be the best move you’ve ever made. If you haven’t considered a condo yet, perhaps it’s time you called your Realtor. Take a look at how you could be living if you choose a Kitchener-Waterloo condo property.

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.

 

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