1. What if we have problems with tenants – or can’t get one?Make sure you have landlord insurance set up which will cover you for damage or loss of rent. You should also line up a good property manager as soon as possible – ideally prior to settling – to help you get a tenant in as soon as possible, and to do the hard work of tenant screening, lease agreements and liaison.
2. What if I buy the wrong property?
There’s no substitute for research here – buy a property in an area where you know it can be rented, and where capital growth is likely. Remember, too, that property is a very forgiving investment – I have clients who’ve made every mistake in the book, and they’ve still made money.
3. What if I can’t meet the mortgage payments?
Get your finances in order before you start investing: principally, make sure that you can cover the payments, and that you’ve got a cash buffer to cover you for unexpected circumstances. You should also get acquainted with techniques to make things more affordable, such as negative gearing and depreciation allowance. Finally, buy a property in an area where you know you can sell it if you have to, so that you’ve got the ultimate get-out clause if it all goes wrong.
4. What if I end up losing money?
Be proactive about adding value – consider renovations, even if it’s just repainting and putting in new carpets. Take control of your asset – don’t just leave it down to market forces.
5. What if it’s a scam?
Again, this comes down to research. Scams typically trade on ignorance: as long as you are thorough about investigating your chosen areas, you should be fine. And remember, if it seems too good to be true, it probably is!
Want to know more about investing in homes? Contact us via: roy@callcleeves.com to get information on our monthly seminar on how to invest.
Wednesday, May 28, 2014
Wednesday, May 14, 2014
6 touch-ups that can devalue your property
Not every renovation or fix-up project ends in smiles and a pat on the back. If you want to know the six renovation undertakings to avoid at all costs, read on…
1. Removing all the trees: It might be tempting to pull out the chainsaw and sought that depressing looking willow tree out once and for all, but be cautious. Contrary to many people’s belief, removing trees can sometimes cause more damage to the value of a home than simply leaving them there. A large attractive tree can add $10,000 - $15,000 to the value of a property in some areas.
2. Expensive, but unnecessary fittings: A reno that gives you the best house on the street, won’t necessarily get you the best price. If you are an owner occupier in an area where there are a lot of rental properties that have been neglected and not well-looked after, it won’t matter how much you spend on improvements, the rest of the neighbourhood will drag the value down.
3. DIY fails: Homeowner-installed wiring and plumbing often spell instant devaluation on a property. It is illegal and dangerous and may be picked up by a pre-purchase inspection. Unless, you’re a professional yourself, leave complex projects to those who know what they’re doing.
4. Pulling out the ugly stick: Renovations should be sympathetic to the original building. Starting an extension without considering the form or visual impact of the exterior materials being used so that the renovation appears as an add-on rather than part of the house, can potentially devalue your property by at least $28,000 on average.
5. No playground, no barbeque: Poorly considered site planning, including extensions that can leave unusable outdoor spaces or are overwhelmed by fences and retaining walls close to important rooms will devalue the whole property.If you look at the new home designs that are current at the moment, you’ll see that there’s a really big emphasis on lifestyle or an outdoor living. Whether you’re buying a new home or an old home, people are looking for these features these days.
6. Illegal building and faulty structures: Undertaking construction work without a permit normally results in an instant fail. A prospective buyer having a pre-purchase inspection when you try to sell usually picks this up. Illegal building ultimately costs some owners $30,000 or more to make it comply with regulations. The same can be said for installing new kitchens and bathrooms without first checking that the sub-floor structures are sound. Many new kitchens are virtually destroyed in the first four years by floor subsidence.
1. Removing all the trees: It might be tempting to pull out the chainsaw and sought that depressing looking willow tree out once and for all, but be cautious. Contrary to many people’s belief, removing trees can sometimes cause more damage to the value of a home than simply leaving them there. A large attractive tree can add $10,000 - $15,000 to the value of a property in some areas.
2. Expensive, but unnecessary fittings: A reno that gives you the best house on the street, won’t necessarily get you the best price. If you are an owner occupier in an area where there are a lot of rental properties that have been neglected and not well-looked after, it won’t matter how much you spend on improvements, the rest of the neighbourhood will drag the value down.
3. DIY fails: Homeowner-installed wiring and plumbing often spell instant devaluation on a property. It is illegal and dangerous and may be picked up by a pre-purchase inspection. Unless, you’re a professional yourself, leave complex projects to those who know what they’re doing.
4. Pulling out the ugly stick: Renovations should be sympathetic to the original building. Starting an extension without considering the form or visual impact of the exterior materials being used so that the renovation appears as an add-on rather than part of the house, can potentially devalue your property by at least $28,000 on average.
5. No playground, no barbeque: Poorly considered site planning, including extensions that can leave unusable outdoor spaces or are overwhelmed by fences and retaining walls close to important rooms will devalue the whole property.If you look at the new home designs that are current at the moment, you’ll see that there’s a really big emphasis on lifestyle or an outdoor living. Whether you’re buying a new home or an old home, people are looking for these features these days.
6. Illegal building and faulty structures: Undertaking construction work without a permit normally results in an instant fail. A prospective buyer having a pre-purchase inspection when you try to sell usually picks this up. Illegal building ultimately costs some owners $30,000 or more to make it comply with regulations. The same can be said for installing new kitchens and bathrooms without first checking that the sub-floor structures are sound. Many new kitchens are virtually destroyed in the first four years by floor subsidence.
Friday, May 9, 2014
Real estate outlook lifts consumer confidence
Canadian consumer confidence surged to the highest in more than three years amid rising optimism over the outlook for real estate and the economy.
The Bloomberg Nanos Confidence Index climbed to 60.0 in the week ended April 18 from 59.0 the previous period, the highest level since March 2011. Declines in measures of job security and personal finances tempered the gain.
Buyers are returning to Canada’s real-estate market after one of the harshest winters in decades. Existing home sales rose at their fastest pace in seven months in March, led by transactions in Alberta, the Canadian Real Estate Association reported last week.
“The one-week gain was largely fueled by more positive perceptions on the projected future strength of the Canadian economy and the value of real estate,” said Nanos Research Group Chairman Nik Nanos. “Both of these measures were up about three percentage points in one week.”
Optimism about housing reached a two-year high, with the share of respondents who see higher property values over the next six months climbing to 42.2, the highest since March 2012, according to the Nanos report.
Respondents who see the economy strengthening in the next six months rose to 25.7 per cent, the greatest in more than a year, from 22.8 per cent, while those who see it weaker dropped to 16.3 per cent, the lowest since 2010.
The Bank of Canada said last week it continues to see a “gradual strengthening” of the world’s 11th largest economy, even as it trimmed its forecast for growth this year to 2.3 per cent from 2.5 per cent. The country’s recovery hinges on an upturn in exports and investment, the central bank said in keeping its benchmark interest rate at 1 per cent.
While warning that elevated household debts represent a “significant risk,” the central bank reiterated its call for Canada’s housing market to make a “soft landing.”
Canada’s inflation rate rebounded in March as rising energy prices triggered the biggest gain in shelter costs in more than three years, Statistics Canada reported April 17. “Inflation appears to have bottomed out and we believe that it should gradually drift higher for the rest of the year,” Charles St- Arnaud, Nomura Securities International Inc. senior economist, said in a research note after the report.
Statistics Canada will report wholesale sales for the month of February on April 22, followed the day after by February retail sales. Poloz is scheduled to speak in Saskatoon, Saskatchewan on April 24.
The Nanos data are based on phone interviews with 1,000 people, using a four-week rolling average of 250 respondents. The results are accurate within 3.1 percentage points, 19 times out of 20.
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