What Type of Landlord Will You Be?

 Rentals aren’t one-size-fits-all. Before taking the cheques to the bank, you need to decide what kind of landlord you’re going to be.

Student Rentals
 There’s great income potential here, if you’re willing to roll up your sleeves and do the work.
PROS:

• Big rental potential: You can rent by the room, which increases your bottom line.
• Expensive finishes not needed: No need for granite and hardwood here; units need to be functional, clean, and well done, but high-end materials won’t give you a return on investment.
• School nearby = guaranteed tenants: I’ve yet to find a university/college town that didn’t lack student housing. You’ll have no problem finding tenants.
• Parents: You can ask that parents co-sign the lease, so the default rate is very low.
• Predictable rental cycle – school year starts, school year ends: Leases start and end at the same time every year, which means only having to deal with it once every 12 months.

CONS:

• High/constant turn-over: You might only need to worry about renting once a year, but depending on how many rooms you have available, that still means a lot of applications and a lot of screening.
• Not a lot of pride in rentership: It’s true, students aren’t always great a taking care of their temporary home, and not always the most responsible tenants. This isn’t always the case, but it’s something to keep in mind.
• Maintenance: Student rentals require a lot of it, mostly due to turnover and neglect.
• Tenants require more “babysitting”: You have to keep in mind that your tenants are often leaving mom and dad’s house and moving into yours. This means that even simple things like changing light bulbs or tripped breakers may result in a phone call or house visit.

Executive Rentals
Whether it’s a businessman in town for work, or movie crews on location, executive rentals can bring in big bucks, but also cost more up-front.
PROS:

• Big money: Executive rentals can demand double or even triple what the same space would rent for in a regular rental situation.
• Higher profile tenant: Generally speaking, you don’t have to be concerned about the quality of tenant you’re getting here.
• Guaranteed income: Depending on our provincial rules, you may be able to collect all your rent upfront (if it’s a short-term lease) and collect a damage deposit (refer to your provincial policies regarding landlord-tenant relationships).
• Profit: You usually only need to rent for half the year to make one.

CONS:

• High turn-over: Most executive rentals are short-term leases, so turn-over is constant.
• Unpredictable: Because of the nature of executive rentals, it won’t always be rented and there’s no certainty about when it will be.
• The bells and whistles: High-end finishes, nice furniture, linens, towels, dishes -- they all need to be included. Throw in utilities, cable, internet, and regular cleaning service, and costs really start to add up.
• Posting, applications and screening: Because of the high turn-over, landlord of executive rentals are constantly in a cycle of posting the apartment for rent, reviewing applications and screening tenants. Some people hire a placement/management company to take care of this, but if you choose to do so, that’s another cost that eats into your bottom line.

Secondary Suites
Secondary suites are apartments that exist within your own home.

PROS:

• Longest term rental scenario: Tenants are likely to stay longer and take better care of the space.
• Passive rental: Secondary suites don’t take a lot of time and energy.
• Instant rental situation: You don’t have to purchase another property to be in rental situation with a secondary suite. Have a basement you can make into a legal apartment? Great, you can be a landlord!
• Return on investment: Adding a secondary suite typically adds a lot of value to your property.
• High demand: When done legally and safely, these types properties attract tenants everywhere. You don’t have to be downtown, like an executive rental, or near a school, like a student rental.

CONS:

• Lower cash flow: You won’t bring in as much rent as you would with other types of properties.
• Learning to share: You’ll be sharing your home with other people, which can be inconvenient at times.
• Reno time: Unless there’s a secondary suite already existing, putting one into your home requires a significant renovation and may also require a zoning change.

Five Reasons why you need to close on a home by the end of the year

If you are debating on whether you should make an offer on a new home before the new year, now is the time to stop deliberating and submit your bid. Between 2013 tax benefits, and avoiding mortgage rate roulette and changing lending rules, closing before the end of the year can offer significant financial benefits. Top mortgage and real estate experts share five ways you will benefit if you buy a home by December 31, 2013.

1. Avoid Rising Rates: Mortgage interest rates, while still attractive, are up 1 to 2 percent over this time last year. It's possible to lock in a 30 year fixed rate mortgage at about 4.5%. According to the Mortgage Bankers Association's forecast, mortgage rates will likely rise to about 5% in 2014. If you buy now and the rates drop, you can always refinance. If you wait and the rates rise you are stuck.

2. New Year, New Lending Rule: Lending rules will change on January 1, 2014 and it could be harder to get a loan. 2014's rules will allow you to borrow less, at your same level of income, says. 2013's current mortgage rules allow for a 45% total debt to income ratio; in 2014 this ratio will go down to 43%. What does this mean? You need to make or reduce your debt in order to buy the same house.

3. Easier Financing: If you are waiting for home prices to decrease don't. 2014's  mortgage changes could make it harder to get financing. So if you are looking to save a few dollars by waiting for home prices to drop, you could miss you window to secure a mortgage entirely.

4. Lower Sales Could Mean Higher Inventory: It's an after- Christmas sale before Christmas! While 2013's housing theme was limited inventory and high prices, historically, the fourth quarter of the year usually slows down the housing market and this year is no different. Housing sales have been declining since September so inventory has increased. According to the National Association of Realtors, existing home sales declined for the second consecutive month in October, while constrained inventory means home prices continue to see double-digit year over year gains. You may get the deal of December!

5. Maximize Tax Deductions: It's important to remember that if you buy before the end of the year, you can begin deducting interest and building equity immediately.  Some closing costs and points are tax deductible in the year you buy a home. Buying now allows you to include them on your 2013 tax return. If you buy even one week later in January, you have to wait s year for your 2014 return to take the deduction.

The Inside Scoop on the Best Season to Sell Your Home

Common belief has held that the best time to sell a home is in the spring, and the best time to buy is in the fall. Although there is merit to this argument, not everything can be so definitive and concrete. There are so many variables at play that all must be weighed before jumping into the real estate ring.

1. The Best Time to Sell Spring is most commonly believed to be the best time to sell. It’s the most agreeable weather for showings, most people want to get settled before summer, it’s easiest logistically for moving (who wants to move boxes and furniture through snow?), provides longer days and daylight, avoids the school season and shifting schools mid year for kids, and shows off the landscaping and gardens. However, this is also statistically the time with the most competing sellers on the market. This will affect you most if your home is one of many identical houses in a subdivision. Consider professional staging as a way to make your home stand out if forced to sell in this high-competition season. 2. The Worst Time to Sell Yes, the holiday season is not the ideal time to sell. People are busy or stressed out and are prioritizing family and holidays rather than home buying or selling. Mid December to mid January is the highest travel season, and thus there are fewer buyers around to view homes. There’s also the perception that you are desperate or need to sell if you are listing your home during this time. Buyers will try to be more aggressive with you as a result. However, it is a misconception to say that January and February are not ideal months to sell. The Toronto market has shown great sales in these months and these tend to be high transaction periods for my team. There are tons of buyers and activity on the market, and especially if the weather is moderate. 3. Show Off Your Home’s Best Assets Sell when the features of your home have the most impact. If you have a pool with beautiful stone work or tiling, be sure to sell your home in appropriate weather. Buyers will love your pool when they are viewing on a hot day or be dazzled by pool lights at night versus a pool cover with piles of leaves or melted snow in the winter. If you have tons of windows and skylights, show your home when the sun is shining and you can have the longest showing days (spring and summer). If you have a small bungalow, but an amazing landscaped garden, show when your garden is in full bloom. Buyers may be swayed by the sight of your garden and overlook other shortcomings. If you don't have central air, and you like your house hot and use lots of standing fans, sell your home in the fall or early spring when the weather is more moderate and appealing to the general masses. You can have the windows open for fresh air and avoid the clutter and noise of fans. If you have a showpiece fireplace, have it burning for late fall and winter viewings. Buyers will want to make some cocoa and curl up in your living room. 4. The First Weeks of Summer—Take Caution Cocktails, patios, and cottages, in no particular order or combination, are the holy trinity for Torontonians once the weather shifts into summer. After being cooped up all winter and during the wet spring, Toronto becomes obsessed with the outdoors and socializing. Good luck tearing potential buyers away from their summer holidays to come view your home during early summer. You will have a lot less action on your listing during this time. 5. Condos and Lofts Typically, condos and lofts have a longer sales period as freehold homes, given that the buyers are typically first-time home buyers, or do not have kids. The buyers are not restricted by school seasons and landscaping issues, and moving is less impeded by weather, as they have loading bays and elevators. You can always sell you home, regardless of the season, but you need to be realistic about the circumstances of your sale. Sometimes life forces your hand, but as long as you are realistic with your expectations and smart about your strategy, you should be able to maximize your value.


Speak to your realtor to advise you about the sellable features of your home, what is sought after in your neighbourhood, and what season will best showcase your home!

Canada Leading the Way in the Mortgage Market

If you are looking to buy a property, the good news is that there are still worthwhile mortgage deals available, despite the Federal Government’s recent moves to tighten regulations over home loans. In fact, the changes have helped to boost the property market, with price rises over the whole of 2013 looking set to top previous forecasts. Summer saw the real estate market in Toronto surpassing expectations, and, by the end of the year, the Canadian Real Estate Association has forecast that the average home price will rise nationally by 3.6%.

Sales in British Columbia are predicted to take off next year, and the C.R.E.A. predicts that price rises in the region during 2014 could be as high as 6.7%, even though the rate of increase looks set to slow nationally. All this is by contrast to the US, where the market has continued to struggle, although there are now some hopeful signs. However, the UK is following in Canada’s wake, with house prices recovering and a rise in mortgage borrowing.

Rates on Hold

The Bank of Canada has signaled that it does not intend to raise rates in the near future. This means variable rates, which are in some cases as low as 2.4%, may now be more appealing, because there is less risk of them shooting upwards. Meanwhile, for those who prefer the certainty of a five-year fix, it is possible to get a deal around the 3.89% mark. Determined actions have recently been taken to avoid the market overheating, and Ottawa has made major changes to the regulations, with new guidelines decreeing that buyers must now have a deposit of at least 5%, or 20% for buy-to-let loans. There are also stricter rules about the amount that can be borrowed when refinancing, and the maximum length of loans has been reduced from 40 to 25 years. Despite all this, mortgage lending is still rising and Canadians are now estimated to owe more than $870 billion in home loans to the chartered banks, a rise of around $60 billion since the start of 2012.

Inspiring Other Economies

As Canada’s economy gathers strength, it is providing an inspiration to other countries, including the UK, where trade leaders are currently involved in a drive to win Canadian investment. The British market is also following Canada in terms of growth in the housing market, with things starting to heat up there too. Recent figures from the UK’s Office for National Statistics showed that the British economy is now growing at the greatest speed since mid-2010, with an annual growth rate of just over 3.3%. However, the housing market is growing faster still, with prices soaring in the south-east and London in particular. With interest rates at an historic low, there are attractive mortgage rates available, and according to money.co.uk, the best current market rate is 1.49% for a two-year fix. Like their Canadian counterparts, the UK Government may come under pressure to take the heat off the housing market and prevent a bubble developing. However, in the meantime, there are mortgage bargains to be had.

In the US, the housing market has been struggling by comparison, but there are now signs that it is starting to follow Canada upwards. Despite a rise in mortgage rates, and problems caused by the recent shutdown, the market is currently gaining strength, and new figures from the National Association of Realtors showed that prices rose in nearly 90% of US cities during the third quarter of 2013. There are even fears of a price bubble in some areas of California, with prices having risen by more than 40% in just a year in Sacramento. However, in some other states, such as Illinois, prices are still falling, and nationally they are still well below the figures reached back in 2007.

As the world fights its way out of the downturn, there are nerves about what the future holds for the housing market, but the current signs are looking good, in Canada in particular, where it seems as if prices will continue to rise in 2014, but at a sustainable level, with no overheating. The hope is that the same will be true for the UK and the US over the year ahead.