Younger Canadians are in no rush to buy a home, preferring to wait until they have saved enough to be able to get the home they really want. A survey by BMO found that although 60 per cent of millennials say they are tired of renting, 70 per cent will wait until they can afford a home that meets their requirements.
"More than the intangibles, the return on a home purchase is important to millennials and they take a thoughtful approach to how their home will fare in the current housing market. These are all areas where a mortgage specialist can help guide them through," commented BMO’s director of home financing Damon Knights.
The survey also found that millennials view a home purchase as an investment and will not be pressured into buying to achieve the Canadian Dream; they are cautious about buying when prices may impact the return on the investment.
More than a third (38 per cent) are concerned that buying a home will leave them without disposable income; 31 per cent say paying down debt is a higher priority than homebuying; just 26 per cent of respondents are planning to buy a home within 2 years.
Source: http://www.canadianrealestatemagazine.ca/market-update/millennials-holding-back-on-homebuying-206395.aspx
Thursday, April 28, 2016
Monday, April 25, 2016
Canadians may be forced to sell homes for retirement funds
Homeowners approaching retirement may be forced to sell their homes to fund their retirement. That’s according to a report from Re/Max which shows that 56 per cent of 55 to 64-year-old homeowners are considering selling as they need the equity.
However, there is an additional issue for those soon-to-retire Canadians who live in the hot markets of Vancouver and Toronto – where do they move to?
The report suggests that sellers in those areas are reluctant to become buyers there due to high prices. However, there is high expectation among younger Canadians that their parents will help them to fund their home purchase, putting further pressure on equity released from parents’ home sales.
Source: http://www.canadianrealestatemagazine.ca/market-update/canadians-may-be-forced-to-sell-homes-for-retirement-funds-206163.aspx
However, there is an additional issue for those soon-to-retire Canadians who live in the hot markets of Vancouver and Toronto – where do they move to?
The report suggests that sellers in those areas are reluctant to become buyers there due to high prices. However, there is high expectation among younger Canadians that their parents will help them to fund their home purchase, putting further pressure on equity released from parents’ home sales.
Source: http://www.canadianrealestatemagazine.ca/market-update/canadians-may-be-forced-to-sell-homes-for-retirement-funds-206163.aspx
Thursday, April 21, 2016
How to protect yourself against provincial offences
The biggest worries for most landlords is a bounced rent cheque, an unexpected major repair or damage to the property caused by the tenant. However, all of these concerns pale in comparison to receiving a summons indicating that the landlord has been charged with provincial or criminal offences.
Although there are a variety of offences that a landlord could be charged with, the most likely to occur is a charge under the provincial fire code or related statute. Many landlords might assume that a fire code offence is not a serious concern, but the penalties can be steep.
In Ontario, for example, an individual can be charged up to $50,000 per count. If the owner is a corporation then the fines can be up to $100,000 against the corporationand $50,000 against individual officers and directors of the company per count.
Although rare, both individuals and officers and directors can be imprisoned for fire code offences. Compounding the severity of the penalties is the fact that, in most cases, multiple infractions are discovered at once. I have seen many cases where the landlord is looking at a cumulative fine of $500,000 or more.
So, what do landlords need to know to protect themselves against these types of charges?
1. How can I protect myself?
First and foremost, landlords should become familiar with what the law requires of them. This will depend on the type of unit they own. A legal rooming house, for example, will have different requirements than a one-bedroom condominium, which will in turn have different requirements than an apartment building. When the property is acquired the landlord should ensure that it is legally compliant.
Additionally, investors should be inspecting the parts of the property that can lead to charges whenever they are at the property for any reason, and at a minimum on a bi-annual basis. It only takes 30 seconds to make sure that hallway doors are properly latching, exits are clear of debris and smoke alarms are properly functioning. Failure to stay on top of the small things can lead to a massive fine which can erase years of profit from the landlord’s bank account.
2. Assume the property will at some point be subject to an inspection
Anything that might put the fire department in the vicinity of the property could lead to an inspection. If there is a fire, big or small, at your property you can safely assume that your property is going to be inspected afterwards. Although one could argue that the chance of a fire is rare, it is still a possibility and an event that is completely outside of the landlord’s control.
Additionally, a fire in the property is not a prerequisite to an inspection. For example, perhaps an accident occurs at the property and something catches the eye of EMS or the fire department while they are on site. A landlord has no way of protecting themselves from being inspected, so the best protection is to operate under the assumption that an inspection could occur at any time, because it can.
3. What to do If you get charged
Contact a lawyer as soon as possible. While this may sound obvious, many landlords will delay contacting counsel either because they are unsure of what to do or, worse yet, think that they can rectify the situation on their own.
Many offences are extremely difficult to defend given their nature. For example, there is almost no defence available for failing to have functioning smoke alarms in the property. In cases where there is no defence, the landlord will need to go into damage control as quickly as possible in order to mitigate the ultimate penalty that they will have to pay.
Most prosecutors (with whom you may ultimately try to arrange a plea) and adjudicators (who have the final say on the nature of the punishment) are looking to see that the problems have been rectified and in a timely fashion. Even though the offence has already been committed, time is of the essence and getting prompt legal advice is imperative.
In addition to rectifying the problems, prosecutors and adjudicators will want to see how diligent the landlord was in maintaining and inspecting the property. As stated above, regular inspections can be a life-saver for the investor. Even in cases where the tenant is directly responsible for the offence (for example, if they remove a smoke alarm, or improperly prop open stairwell doors) fault will still rest on the landlord’s shoulders unless they can demonstrate that the problems occurred even in the face of their diligent inspections and property management.
Most investors pay no mind to the thought of being charged with an offence until after the charges have been laid, by which time most of the damage has been done. While it is understandable to believe that it could never happen to you, the reality is that it certainly could. Given that the consequences are so severe, it is a risk that no prudent investor should take.
Source: http://www.canadianrealestatemagazine.ca/expert-advice/how-to-protect-yourself-against-provincial-offences-197471.aspx
Although there are a variety of offences that a landlord could be charged with, the most likely to occur is a charge under the provincial fire code or related statute. Many landlords might assume that a fire code offence is not a serious concern, but the penalties can be steep.
In Ontario, for example, an individual can be charged up to $50,000 per count. If the owner is a corporation then the fines can be up to $100,000 against the corporationand $50,000 against individual officers and directors of the company per count.
Although rare, both individuals and officers and directors can be imprisoned for fire code offences. Compounding the severity of the penalties is the fact that, in most cases, multiple infractions are discovered at once. I have seen many cases where the landlord is looking at a cumulative fine of $500,000 or more.
So, what do landlords need to know to protect themselves against these types of charges?
1. How can I protect myself?
First and foremost, landlords should become familiar with what the law requires of them. This will depend on the type of unit they own. A legal rooming house, for example, will have different requirements than a one-bedroom condominium, which will in turn have different requirements than an apartment building. When the property is acquired the landlord should ensure that it is legally compliant.
Additionally, investors should be inspecting the parts of the property that can lead to charges whenever they are at the property for any reason, and at a minimum on a bi-annual basis. It only takes 30 seconds to make sure that hallway doors are properly latching, exits are clear of debris and smoke alarms are properly functioning. Failure to stay on top of the small things can lead to a massive fine which can erase years of profit from the landlord’s bank account.
2. Assume the property will at some point be subject to an inspection
Anything that might put the fire department in the vicinity of the property could lead to an inspection. If there is a fire, big or small, at your property you can safely assume that your property is going to be inspected afterwards. Although one could argue that the chance of a fire is rare, it is still a possibility and an event that is completely outside of the landlord’s control.
Additionally, a fire in the property is not a prerequisite to an inspection. For example, perhaps an accident occurs at the property and something catches the eye of EMS or the fire department while they are on site. A landlord has no way of protecting themselves from being inspected, so the best protection is to operate under the assumption that an inspection could occur at any time, because it can.
3. What to do If you get charged
Contact a lawyer as soon as possible. While this may sound obvious, many landlords will delay contacting counsel either because they are unsure of what to do or, worse yet, think that they can rectify the situation on their own.
Many offences are extremely difficult to defend given their nature. For example, there is almost no defence available for failing to have functioning smoke alarms in the property. In cases where there is no defence, the landlord will need to go into damage control as quickly as possible in order to mitigate the ultimate penalty that they will have to pay.
Most prosecutors (with whom you may ultimately try to arrange a plea) and adjudicators (who have the final say on the nature of the punishment) are looking to see that the problems have been rectified and in a timely fashion. Even though the offence has already been committed, time is of the essence and getting prompt legal advice is imperative.
In addition to rectifying the problems, prosecutors and adjudicators will want to see how diligent the landlord was in maintaining and inspecting the property. As stated above, regular inspections can be a life-saver for the investor. Even in cases where the tenant is directly responsible for the offence (for example, if they remove a smoke alarm, or improperly prop open stairwell doors) fault will still rest on the landlord’s shoulders unless they can demonstrate that the problems occurred even in the face of their diligent inspections and property management.
Most investors pay no mind to the thought of being charged with an offence until after the charges have been laid, by which time most of the damage has been done. While it is understandable to believe that it could never happen to you, the reality is that it certainly could. Given that the consequences are so severe, it is a risk that no prudent investor should take.
Source: http://www.canadianrealestatemagazine.ca/expert-advice/how-to-protect-yourself-against-provincial-offences-197471.aspx
Monday, April 18, 2016
No photos! Court rules against landlord’s access to photograph property
A panel of three Ontario Divisional Court Judges have held that residential landlords are not permitted to photograph a property while it is occupied by a tenant unless the lease explicitly permits such photographs to be taken, or the landlord obtains the express consent of the tenant.
The Ontario Landlord and Tenant Board ordered a tenant to be evicted when she refused to allow the landlord access to the property for the purpose of photographing it so that it could be listed for sale. The tenant refused on the basis that her privacy would be invaded if photographs of her and her children’s personal possessions would be disseminated to the public via the Internet to advance the sale of the property.
The Landlord and Tenant Board held, erroneously, that the lease in question provided the landlord with entry “in any circumstances” and that the landlord was therefore permitted to enter and take pictures. On appeal, the Divisional Court judges noted that the lease did not contain any such provision.
The Divisional Court reviewed the relevant sections of the Residential Tenancies Act, 2006 that pertain to a landlord’s right to enter the rental premises and found that none of the statutory provisions permitted entry for the purpose of taking photographs to market the property for sale or lease.
Sections 26 and 27 of the Residential Tenancies Act, 2006 provide that a landlord may enter a rental unit for, among other reasons:
- in cases of emergency;
- to clean the unit if the lease requires the landlord to do so;
- to show the unit to prospective tenants (if notice has been given to end the tenancy);
- to carry out a repair, replacement or to do work;
- to allow a potential mortgagee or insurer to view the property; and
- to carry out an inspection of the unit.
A landlord is also permitted to enter a property if they have the consent of the tenant or “for any other reasonable reason for entry specified in the tenancy agreement.”
The Divisional Court noted that the lease in question allowed the landlord to enter on notice “for showing the premises to prospective tenants or purchasers,” but also pointed out that “there is no clause permitted entry by an agent to take photographs in furtherance of a sale.”
The Divisional Court held that the landlord had no right to enter to take photographs without the tenant’s consent (although they could take measurements) and overturned the eviction order that was made on the basis of the tenant’s refusal to allow entry.
Interestingly, the Divisional Court distinguished the current case from a past case where a landlord took photographs of a property in connection with a damage inspection. In that case, the photographs were permitted due to the fact that they were taken in connection with an inspection, which is expressly allowed by the legislation and presumably also due to the fact that the photographs would not impact the tenant’s privacy rights given that they would not be published on the Internet.
This recent decision is another reminder of how a little forethought when drafting a lease can avoid complications down the road.
Source: http://www.remonline.com/no-photos-court-rules-against-landlords-access-to-photograph-property/?utm_source=REM+Inbox+Update&utm_campaign=070e64a949-15_April_20164_15_2016&utm_medium=email&utm_term=0_3f4c7c7b65-070e64a949-62536693
Source: http://www.remonline.com/no-photos-court-rules-against-landlords-access-to-photograph-property/?utm_source=REM+Inbox+Update&utm_campaign=070e64a949-15_April_20164_15_2016&utm_medium=email&utm_term=0_3f4c7c7b65-070e64a949-62536693
Thursday, April 14, 2016
Toronto considers licensing of landlords
Landlords may require a license to operate residential rentals in Toronto under a city council proposal. Rental buildings with at least 10 units would be covered by the scheme but condos and co-ops would not. The plan has been revealed in a city staff report.
The proposal is due to be discussed at a meeting Thursday, thestar.com reports, and if agreed the scheme could be in place by January 2017. It could mean a charge of around $15 per year per building to cover the cost of operation and landlords could face fines of up to $100,000 for failing to comply with regulations.
The proposal is due to be discussed at a meeting Thursday, thestar.com reports, and if agreed the scheme could be in place by January 2017. It could mean a charge of around $15 per year per building to cover the cost of operation and landlords could face fines of up to $100,000 for failing to comply with regulations.
Monday, April 11, 2016
Rationality is the best tool during purchase season – expert
Canada’s red-hot housing markets have traditionally seen the strongest transaction volume during the warmer months, and the top official of a leading refinancing solutions provider advised would-be buyers and sellers to keep a cool head throughout the process to avoid any missteps.
“To make the most of this hot buying season -- play it smart, and play it safe,” Mortgages of Canada CEO and founder Samantha Brookes wrote in an analysis piece for HuffPost Business Canada.
Brookes warned that diving headlong into the bustling sector—which has been projected by CREA to grow by 1.1 per cent in terms of sales this year—is an approach rife with unnecessary risks.
“First and foremost, it is important to stay rational,” Brookes stated. “Yes, people will tell you that you have to buy quick when you are competing against several other buyers -- but you also have to buy smart.
Brookes recommended prospective market participants to balance their assumptions with the guidance of an industry professional.
“In order to do so, your best bet is to speak to a mortgage broker ahead of time and ask all the questions you can. You may have Googled anything and everything about the housing market, but a mortgage broker lives and breathes mortgages and can help you understand what information is important and what is just plain clouding your judgment,” she said.
In addition to solid advice, an expert could keep market participants up to speed on trends in the mortgage market and point consumers to the locale or property best suited to their needs.
“Get a handle on the local market without the pressure of feeling like you need to make an offer. You'll also learn more about the kinds of homes and neighbourhoods you like, or don't, and which features matter to you,” Brookes explained.
The analysis also warned sellers of the possibility of delinquent clients.
“It's also important to think ahead in order to take into account the implications of not taking the appropriate steps when navigating a hot market. Indeed, beyond not putting enough down, the other common mistake homebuyers make is not saving enough for their down payment in the first place,” Brookes wrote.
Source: http://www.canadianrealestatemagazine.ca/news/rationality-is-the-best-tool-during-purchase-season--expert-205540.aspx
“To make the most of this hot buying season -- play it smart, and play it safe,” Mortgages of Canada CEO and founder Samantha Brookes wrote in an analysis piece for HuffPost Business Canada.
Brookes warned that diving headlong into the bustling sector—which has been projected by CREA to grow by 1.1 per cent in terms of sales this year—is an approach rife with unnecessary risks.
“First and foremost, it is important to stay rational,” Brookes stated. “Yes, people will tell you that you have to buy quick when you are competing against several other buyers -- but you also have to buy smart.
Brookes recommended prospective market participants to balance their assumptions with the guidance of an industry professional.
“In order to do so, your best bet is to speak to a mortgage broker ahead of time and ask all the questions you can. You may have Googled anything and everything about the housing market, but a mortgage broker lives and breathes mortgages and can help you understand what information is important and what is just plain clouding your judgment,” she said.
In addition to solid advice, an expert could keep market participants up to speed on trends in the mortgage market and point consumers to the locale or property best suited to their needs.
“Get a handle on the local market without the pressure of feeling like you need to make an offer. You'll also learn more about the kinds of homes and neighbourhoods you like, or don't, and which features matter to you,” Brookes explained.
The analysis also warned sellers of the possibility of delinquent clients.
“It's also important to think ahead in order to take into account the implications of not taking the appropriate steps when navigating a hot market. Indeed, beyond not putting enough down, the other common mistake homebuyers make is not saving enough for their down payment in the first place,” Brookes wrote.
Source: http://www.canadianrealestatemagazine.ca/news/rationality-is-the-best-tool-during-purchase-season--expert-205540.aspx
Thursday, April 7, 2016
Student turned investor bullish on hometown investment options
He learned about the opportunities provided by real estate investment while in school, and his properties in that market may soon help him become a full-timer.
“In London you can get 4- and 5-bedroom properties for around $175-300,000,” London-based investor Kevin Miller told Canadian Real Estate Wealth. “So we specialize in that market. It’s still obtainable to get your 300- and 400-dollar-a-month cash flows, even upwards to 800-dollar-a-month cash flow, in a single-family home.”
Miller, who is 24, started investing almost straight out of school.
“I got a job in an office right out of school but I didn’t really like that. When I lived at Fanshawe, I was charged $400 for my room per month,” Miller said. “I did the math; there were six rooms in that building, so the landlord was making $2,400 a month. So my very first year at school I thought, ‘This is definitely what I want to do.’”
Currently, Miller owns four separate investment properties but, perhaps surprisingly, he has been focusing mostly on single-family homes in London.
“To manage single-family homes, it seems a little bit easier to do it by myself; when I do expand, diversify, get a few more people working on my team, then I definitely think I’ll be able to jump into student rental,” he said. As of now, I do have one up at Fanshawe College area that’s a student rental, but it’s right on the verge. So it could be a single-family rental or it could be a 4-bedroom, and we’re getting $1,200 a month there.”
“So I got into that one at a $125,000,” Miller continued. “I’ve put about $15,000 into it, bringing me to about $140,000, and now I’m renting it out for $1,400 a month, which is a great return on investment considering that it was the first home that I bought when I was 20, so I only had to put 5 per cent down.”
Source: http://www.canadianrealestatemagazine.ca/news/student-turned-investor-bullish-on-hometown-investment-options-205413.aspx
“In London you can get 4- and 5-bedroom properties for around $175-300,000,” London-based investor Kevin Miller told Canadian Real Estate Wealth. “So we specialize in that market. It’s still obtainable to get your 300- and 400-dollar-a-month cash flows, even upwards to 800-dollar-a-month cash flow, in a single-family home.”
Miller, who is 24, started investing almost straight out of school.
“I got a job in an office right out of school but I didn’t really like that. When I lived at Fanshawe, I was charged $400 for my room per month,” Miller said. “I did the math; there were six rooms in that building, so the landlord was making $2,400 a month. So my very first year at school I thought, ‘This is definitely what I want to do.’”
Currently, Miller owns four separate investment properties but, perhaps surprisingly, he has been focusing mostly on single-family homes in London.
“To manage single-family homes, it seems a little bit easier to do it by myself; when I do expand, diversify, get a few more people working on my team, then I definitely think I’ll be able to jump into student rental,” he said. As of now, I do have one up at Fanshawe College area that’s a student rental, but it’s right on the verge. So it could be a single-family rental or it could be a 4-bedroom, and we’re getting $1,200 a month there.”
“So I got into that one at a $125,000,” Miller continued. “I’ve put about $15,000 into it, bringing me to about $140,000, and now I’m renting it out for $1,400 a month, which is a great return on investment considering that it was the first home that I bought when I was 20, so I only had to put 5 per cent down.”
Source: http://www.canadianrealestatemagazine.ca/news/student-turned-investor-bullish-on-hometown-investment-options-205413.aspx
Monday, April 4, 2016
Airbnb objections intensify in Vancouver—councillor
A Vancouver city councillor noted that calls for regulation and investigation of Airbnb have intensified among locals, many of which have voiced concerns that the rental-lodge network is using a disproportionate amount of the city’s low cost housing.
“The number of complaints is starting to rise,” Councillor Geoff Meggs told The Globe and Mail.
Recent studies revealed that Vancouver saw the number of listings shoot up to 4,728 at the end of 2015, from just 2,900 the year before. Nearly 70 per cent of these rentals are tagged as “whole unit” or “whole house”, a development which has led housing advocates and other local officials to petition for a deeper look into Airbnb’s system.
“We want as quick a timeline as possible,” added Meggs, who is championing a request this week for the city council to initiate further studies on the home rental giant.
“People are making the connection now between diminishing housing and the Airbnb listings, but one thing that hasn’t changed is the city’s policy and enforcement,” according to a local advocate who declined to be named.
Certain Vancouverites have taken their stances a step further, with an apartment near City Hall on West 10th Avenue even going so far as to add “No Airbnb” signage due to protests raised by the tenants.
But while many locals have welcomed Airbnb’s newfound position in the spotlight, some doubt the possibility of significant progress.
“I’m skeptical that Airbnb is going to be willing to co-operate. I’m wondering how are they going to collect this data,” Simon Fraser University graduate student Karen Sawatzky said. Her research involves the rental network’s impact on the local market.
Source: http://www.canadianrealestatemagazine.ca/news/airbnb-objections-intensify-in-vancouvercouncillor-205269.aspx
“The number of complaints is starting to rise,” Councillor Geoff Meggs told The Globe and Mail.
Recent studies revealed that Vancouver saw the number of listings shoot up to 4,728 at the end of 2015, from just 2,900 the year before. Nearly 70 per cent of these rentals are tagged as “whole unit” or “whole house”, a development which has led housing advocates and other local officials to petition for a deeper look into Airbnb’s system.
“We want as quick a timeline as possible,” added Meggs, who is championing a request this week for the city council to initiate further studies on the home rental giant.
“People are making the connection now between diminishing housing and the Airbnb listings, but one thing that hasn’t changed is the city’s policy and enforcement,” according to a local advocate who declined to be named.
Certain Vancouverites have taken their stances a step further, with an apartment near City Hall on West 10th Avenue even going so far as to add “No Airbnb” signage due to protests raised by the tenants.
But while many locals have welcomed Airbnb’s newfound position in the spotlight, some doubt the possibility of significant progress.
“I’m skeptical that Airbnb is going to be willing to co-operate. I’m wondering how are they going to collect this data,” Simon Fraser University graduate student Karen Sawatzky said. Her research involves the rental network’s impact on the local market.
Source: http://www.canadianrealestatemagazine.ca/news/airbnb-objections-intensify-in-vancouvercouncillor-205269.aspx
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