JUST LISTED! The Perfect Downtown Loft

LOFT, a unique space with 16 foot high ceilings. The open and smart deign leave room for extra storage and a den. LOCATION, conveniently located home, close to shopping, transit, and all that downtown has to offer. LIFESTYLE, this 14th Floor sky-loft has bright soaring windows! The current owner updated some appliances and painted and updated the floors 2 years ago. This building has great amenities including a gym, 360-degree view from the common rooftop deck, a second patio BBQ area and party room. INVESTOR ALERT! Reasonable Strata Fees, Rentals and Pets allowed. Current tenant would love to stay and is on a month -month lease.
027-2

Vancouver Real Estate and the Episode of the 15% Foreign Buyers Tax

Many of our Team Andruff clients want to know what the impact of the 15% Foreign Buyers Tax will be. One month in we are on a quest to find an appropriate answer. We listen to economists, review similar instances and rely on our experience to guide our clients and here is what we see so far:

Blog at a glance:

  • Markets were cooling before the tax was instituted.
  • We have seen a similar scenario with the transition from GST/HST – the market will adjust and rebound.
  • Higher end homes (one-million-dollars-plus) will be slowed down – Resale condo market still robust.
  • The fundamentals of supply have not changed while demand is on the sidelines in some cases but not in others.
  • BC Government was politically motivated to make this move but foreign buyers will have ways around the 15% tax and this may push affordability problems to other markets.
  • A strong Greater Vancouver and BC Economy with continued in-migration will still make Vancouver’s affordability a challenge over the long run.

 

The Rest of the Story

On an anecdotal note, leading up to summer, there was a sense of a turn in the market. The market was taking a more “traditional approach” or what would have been a more typical response to a hard press in pricing than what we had seen in the last few years of accelerated prices. There was some seasonality to the market where people took a step back and simply enjoyed their summer (which a few years ago was normal).

The Senior Economist with Central 1 Credit Union, Bryan Yu, indicated the tax will put further downward pressure on a market that already had a slowing, after a very strong spring. He further prognosticated the new tax on foreign buyers will cause a substantial but temporary 10 per cent drop in Metro Vancouver sales that will extend into 2017.

This is not unlike the transition from the GST to HST scenario in 2010.  The market pulled back to see what would happen and then slowly returned to business as before.

We again get back to the tale of two markets (foreign and domestic). What we are seeing today is the higher end of the one-million-dollar-plus homes are slowing considerably (mainly affected by foreign money).  While my experience over the last month is the resale condo market (read local market) remains fairly robust.  The reasoning behind this is many (of course not all) foreign buyers were more involved in the higher end of the market and the new construction coming to market.

The 15% tax therefore is having less impact on the…let’s say…one-million-dollars-or-less type of properties, (mainly condos and mainly “locals”) and so we are still seeing things move at a fairly strong pace.  The fundamentals of supply and demand are still driving the resale condo side of the market for the most part.

 

I dare say that The Foreign Buyer Tax was not all that well conceived. It appears to be a political, knee-jerk response by the BC Government. Dr. Sherry Cooper, Chief Economist for Dominion Lending Centres share this sentiment stating, “Housing affordability is a hot-button political issue, so it is not surprising that the B.C. Government, facing an election in less than a year, has felt compelled to do something to dampen the fervor.”

A few of the flaws as I see it:  It will have a mushrooming effect on non-Metro-Vancouver areas like for example Kelowna, and Victoria on Vancouver Island. By pushing the foreign money further out from Metro Vancouver, this potentially is passing the buck and creating affordability issues in these other areas too, perhaps even as far away as Toronto. Also, some of the buyers of presale condos are finding local friends or family members in order to assign their contracts, and hence sidestepping the 15% tax.

At the end of the day, some foreign funds will still be invested in the Vancouver Real Estate market. They still can and will.  For now, there will be a shock to the system.  Arguably the market is naturally correcting already which is good and healthy for the market.  Remember there are always two sides to the story, and while Sellers have had their turn with a Sellers’ Market, now Buyers may see some opportunity. As density remains a focus at city hall and in-migration remains a reality with a strong local economy both in Greater Vancouver and BC, the underlying lack of affordability will likely remain.  However, at this time the pace of the market will be slower.

New Property Transfer tax, can cost foreign buyers an additional 15% on the purchase of a home in Vancouver

Effective August 2, 2016, an additional property transfer tax applies to residential property transfers to foreign entities in the Greater Vancouver Regional District.trasfer tax

The additional tax applies on all applicable transfers registered with the Land Title Office on or after August 2, 2016, regardless of when the contract of purchase and sale was entered into.

The Greater Vancouver Regional District includes Anmore, Belcarra, Bowen Island, Burnaby, Coquitlam, Delta, Langley City and Township, Lion’s Bay, Maple Ridge, New Westminster, North Vancouver City and District, Pitt Meadows, Port Coquitlam, Port Moody, Richmond, Surrey, Vancouver, West Vancouver, White Rock and Electoral Area A.

The additional tax does not apply to properties located on Tsawwassen First Nation lands.

 

Who this effects:

-Foreign corporations or taxable trustees

– Foreign nationals are transferees who are not Canadian citizens or permanent residents, including stateless persons.

It also included Foreign corporations:

– Not incorporated in Canada

– Incorporated in Canada, but controlled in whole or in part by a foreign national or other foreign corporation, unless the shares of the corporation are listed on a Canadian stock exchange

-Taxable trustees that are a foreign national or foreign corporation, or a beneficiary of a trust that is a foreign national or foreign corporation.

When does it apply?

The additional tax on property transfers to foreign entities is 15% of the fair market value of the foreign entity’s share of a residential property

This tax applies in addition to the general property transfer tax.

The additional tax does not apply to non-residential property. The value of the residential portion of a transfer is calculated in the same way as for the property transfer tax.

The additional tax does not apply to trusts that are mutual fund trusts, real estate investment trusts or specified investment flow-through trusts.

The additional tax must be paid with the general property transfer tax at the time the property transfer is registered with the Land Title Office.

Municipalities are also perusing the thought of vacant home tax so stay tuned there may it more to come!

Buying a Grow-Op in Vancouver, Still an issue?

The biggest issue with homes that used to be Maharajah Grow Operations would be your financing. Banks are less likely to finance a former grow op home because of the grow opunknown factors that the grow op could have caused to the home and the stigma behind them. Often there are holes cut into floor joists and ceilings, and they tamper with the wiring of the home which can cause a high risk for fires. Moisture caused by the growing of the plants is another issue the banks have with the homes, no matter how much the home has been repaired, or remodeled mold can still be present and pop up whenever conditions are right. Even with remediation of the home it still will also carry the grow op title, thus causing resale on a grow op homes to be significantly lower and much harder of a sell. Banks today are very conservative and stingy with funds regardless of an issue like a grow op so when you add that extra complication into a deal they are often unwilling to give the buyers financing.

With people trying to think of “outside the box” ways to get into the housing market in Vancouver, it is buyer beware when purchasing a former grow op home. If you dot your I’s and cross your T’s it could be the right option for you.

Vancouver Real Estate Numbers are Being Manipulated by the Liberal Government

I think it’s pretty clear to see that Mike de Jong and the Liberals are “Gerrymandering” or foregin buyersmanipulating the numbers to suite their agenda and get a good head line.  Since when was 3 weeks in the month a good measurement of time. June 10-29th clearly is cutting out the most active period of time that Vancouver Real Estate transactions happen (the beginning and end of the month.) Oh and by the way, the BC Land Titles Office is closed on weekends so Saturday’s and Sunday’s don’t count for evaluating when transactions are recorded so by starting on the 10th (a Friday) it makes the sample size of days look bigger but they really just padded their timeline. As well, why only look at June when March, April and May are much stronger months for sales?  The government has the data why not give a larger sample? This is very hollow attempt to look at numbers and I think it’s pretty plain to see the Liberals are doing everything but look at the Elephant in the room when it comes to Vancouver Buyers and the Foreign Investor. They are trying to say that Foreign Buyers are only 3% of the market when it’s really more like 10% or possibly even more according to the recent Business in Vancouver article. Mike de Jong and the Liberals are controlling the message due to conflicts of interest like Bob Rennie being the campaign fund raiser for the Liberal party and it is wrong.

How to be a battle hardened Vancouver Property Buyer

In the current marketplace there are many stories about the unsuccessful multiple bids of some bkeysuyers. Clearly they have every reason to feel jaded toward the Vancouver real estate market. The following is a prescription for curing the “I don’t got no Vancouver real estate blues”. While this list is primarily aimed at the condo buyer, most of it will also relate to detached properties.

 

 

How to be a battle hardened Vancouver Property Buyer

  • Have your realtor show up with a bank draft attached to your offer (you’re committed right?)
  • Be prepared to spend upfront money, with risk for appraisals and property inspections
  • Have your offer include the sellers preferred dates (or provide the offer with blank dates)
  • Make a non-subject offer (with appropriate buyer protection clauses)
  • Prepare to “slay the dragon”, depending on the number of offers, you may have to spend $000’s over the list price
  • Get into the property ASAP (sneak previews get you off and running)
  • Prior to offer day, have your finances in order, read all strata documents, and inspect.

If mentally and financially, you are not into this type of (the few, the proud, the brave) buying, and hey, this is not every ones’ cup of tea, there is a work around. A capable buyer’s agent can help steer you through the Vancouver real estate battle field. Ask us how we help our clients buy real estate.

 

Depreciation Reports – Questions and Answers

Depreciation ReportHere are some key questions that my clients have been asking regarding strata corporations and depreciation reports that you too may have an interest in knowing.

First off, a Depreciation report (or sometime also know as a Reserve Fund Study) assist strata corporations, to plan for future repair, maintenance and replacement of strata common property, limited common property and common assets. The report will look at a 30 year period and the report must contain, a physical inventory of the common property, assets, maintenance, repair and replacement costs through financial forecasting with at least three cash flow funding models.

Why all of a sudden do we need depreciation reports?

As of December 12, 2013, the provincial government is requiring all strata corporations (stratas), of more than 4 units, to start the process of composing a depreciation report.  Some have chosen to defer creating one (by a ¾ majority vote at an AGM or SGM), which for the time being, is not a significant concern.  Why is this?  Whenever there is a change to the regulations governing stratas it takes time to implement the changes, in addition to there being a certain level of cost involved which some strata’s many need to save for. However, this abstinence should not persist much past 2015.  If it does, be warned that prospective buyers, mortgage lenders and insurance companies could wonder what the strata is possibly “trying to hide.”

Who can create these reports?

Should the drafting of the report be done by a home inspection service, an engineering company or is it possible for the strata to create it themselves?  What is the difference? The truth is all of these groups can create a depreciation report, if they have the expertise to meet the requisite depreciation report guidelines.  Nevertheless, stratas looking to do it themselves should exercise caution, seriously evaluating if they have the skill set required to make a report that is legally binding.  Engineering work does have to be done under “seal” which does hold engineers to a high standard, requiring them to ensure all work is done to proper regulatory standards.

When do depreciation reports expire or how often do we need to update them?

These reports will need updating every three years.  Therefore, it may be a good idea to build a relationship with a company that will get to know your building as the next report would only need to be a follow up or update of the first report and depending on upkeep and maintenance, time lines for replacements could improve or deteriorate. Also, keep in mind that while certain items have a known life span, such as a roof lasting about 25 years, other parts of the infrastructure will have multiple components in the complex that need replacing at different times.  For instance,  windows or decking might not be done all at once, so be aware that some big expenses may be taken care of in smaller financially manageable phases.  When buying strata real estate, if possible have a professional review the report with you to help explain the nuances of the building and the report as some of the details may be overwhelming.

Does this mean my strata fees will go up?

The short answer is not necessarily. It is fact, that no building is perfect and all buildings need to be maintained. These reports should not be feared.  They are simply a tool to give a reasonable expectation of how a buildings condition will progress over time. Introducing this new process to BC real estate, it could be a wakeup call for some buildings that have been differing maintenance or could be validation that a building is on track and well cared for.

Depreciation reports will assist in planning for future costs and depending on how a particular strata chooses to use this information will depend on how they choose to fund future projects.  This does not mean that all strata fees will now suddenly have to go up!  Many strata’s currently pay special assessments for work to be done and others choose to build up their Contingency Reserve Funds (CRF) through higher monthly fees or work with a combination of these two methods.  At the end of the day a new roof will still cost the same whether your strata saved for it or not. So while current strata funding doesn’t have to change, with the empowerment of knowledge, some strata’s may choose to change their fee payment structure when deciding future expenses.  This is a trend that we are starting to witness in the Vancouver real estate market.

Final Thoughts

Many other provinces already have these types of reports. As there is a transition currently happening in BC, it is important for people to understand what depreciation reports represent.  They signify a greater resource of building knowledge for owners, potential buyers and other groups that have a vested interest in the health and welfare of a building.

For a sample of what a Deprecation report looks like please click here.

Pre-Sales: Is “Buying Off the Plans” a Good Idea in Vancouver?

New ConstructionRecently a conversation on pre-sale properties was a hot topic for discussion by our Andruff Team members. We have clients looking to purchase brand new properties and get into the property game. There are many variables to be aware of in advance of this type of purchase.

There is a pre-conceived notion that there is a savings or perhaps a deal to be had from buying pre-sale condos. However, say for instance two years later when the project is now built and ready for occupancy, the market price to sell it really all depends on the real estate cycle and whether prices will be up, down, or the same …Supply versus demand is so important. Currently, we are seeing developers complete construction without being fully sold and the deals are to be had once the buildings are up as developers need to move unsold units.

Did you realize when buying off the plans, the purchasers are not buying a condo at the point of pre-sale but an agreement and the agreement can change anytime through the process to completion?  Square footage is not guaranteed and finishing’s beautifully displayed in the show suite may not be available in a few years when the developer is actually building.

Along with this process is the very real possibility of a developer going bankrupt! A buyer could lose buying power in the market if a developer cannot go ahead to complete the project, and if no other developer wants the risk of taking it over, then the project fails.  In the case of The Sophia (in the Soma Area, ie South Main), the Eaton Group went bankrupt and another developer did take over the project but buyers were asked to either pay an additional deposit on top of what they had already paid, in order to go ahead; or, had the option to walk away. The market is always in various phases and typically the builders will build until there is an over-supply. Sometimes things get messy, for example the economic downturn in 2008 when some developers were in a most unfortunate credit crunch.

When you buy a brand new home, a premium is paid for new and new may not mean perfect.  New buildings can have just as many issues as old ones unfortunately.  Recently a client moved into a new building downtown. During his first week of residency, one elevator had already broken down and new residents were still moving in. Shortly after this the storage locker room flooded.  “Stuff” can happen and new construction is no guaranty of things going perfectly (although one expects the warranty will cover these challenges!)

Be prepared with new construction for the opportunity of only one deficiency review and sometimes surprisingly there can be significant damage to your suite before you even move in to it. Some developers agree to fix up the deficiencies no problem…and some will really fight you on fixing things, using ignore tactics to delay, hoping eventually you and your complaint(s) will just go away. Here is a case example: Our clients could not move in for a week, even after paying their final payment and receiving their occupancy move-in date…because the home was so badly damaged (floors badly scraped, needing removal and replacement, damaged walls, damaged mouldings, doors and door jambs, painting touch ups). Imagine the shock and disappointment when it’s supposed to be your brand “new” home, not to mention the hotel bill for a week while waiting!

As a buyer, buying in a new development, flexibility is very important in your current housing arrangement as the developer may delay the occupancy date several times, and could be months and months delayed. Recently, a client was supposed to have occupancy in February and move-in but was delayed until September; and because of this almost lost their favourable mortgage rate-hold with the bank. The bank granted an extension, luckily, after the numerous delays on the completion and occupancy. When trying to contact the developer to get any idea on time-lines it was next to impossible to get in touch with anyone from the development. Sometimes clients have needed to sell, then vacate their current home in order to buy the new home … leaving them stranded without a place to live, moving twice, with extra storage fees, and having to live at hotels or with family and friends for extend periods of time since the expected completion dates failed to happen.

Once a new project is occupied, be aware that strata fees start out very low but jump up after a few months due to things like the expenses of commencement of regular garbage/recycling/waste removal, warranty reviews and security upgrades. Typically, builders only put in the basics, and trouble makers will test out any security weaknesses in newly constructed buildings.  Be security minded as much as possible as you enjoy your new home, as there may be multiple break-in attempts for about six months or so, until all of the weak points are found and addressed.

Looking at the overall big picture and into the future …consider your needs over the long term. Think carefully about your time-lines and expectations. Often you will have to wait some time (say two years) for the construction of the building, and then live there for at least one year (sometimes stipulated by the Developer’s contract). So, in order to realize enough lift to make a profitable sale price, or sometimes just even hold the property value, expect typically to hold on to your new place for a long period of time, at least 3 years and typically 5 years. Think seriously if a six-to-eight-year commitment is okay in your long term plan. There is a chance of taking a loss on your investment if your time horizon is less than this. Of course it could be a shorter or longer time frame too. This is just a rough guideline for buyers to have a realistic approach.

Here is an example of why this could be the case. Added to the purchase price of new construction are two major expenses for the buyer: The Property Purchase Transfer Tax (PPT) and the Goods and Services Tax (GST). (Note: GST is applied to “new homes.” It is not applied to re-sale homes, homes “lived in for more than one year.”)

Both of these expenses, the PPT and GST, are payable up front on the purchase side. Then, some time passes and at some point it becomes time to sell. This could be right away or after a few years. The property will have had to appreciate significantly to cover your sunk costs (taxes), plus the selling commission, to be able to sell and get your original investment money out.  So just be very aware that paying GST and PPT do nothing for your property value. It is money paid to the government and is never seen again. And secondly, your “new” property is not new anymore. It has depreciated …It is sort of like driving a car off the lot!

To use an example of the rapidly rising real estate cycle of the late 1990s, buyers were selling contracts or assigning them to other buyers prior to completion and occupancy dates. Yes, because the prices of condos were climbing up so fast! However, in our current environment of 2013, this is not as likely to happen as many pre-sale buildings are not even selling out before they are built.

Developers often use their own “Contract of Purchase and Sale (CPS)” as opposed to the standard BC Real Estate Boards’ “CPS,” a very commonly used Sales Agents’ form to purchase residential property. There is a very good reason for this. Developers want to do everything they can to protect their position and will stack the deck in their favour. This is not always a problem but you need to know what is in the fine print.

Some examples to be aware of are:

Deposits – Developers often require multiple advance payments, requiring more than only a single, typical, five percent down payment, with succeeding payments and amounts spread out over a specified time table.

There may be tricky clauses in Developers’ contracts such as: no rentals; or no sales within one year of purchase; and/or no Assignments of contracts (CPS). This is to protect the Developers’ interest to ensure the Developer can sell out the building. They don’t want re-sale competition against units in their buildings which have not yet sold after construction finishes.

As well, there can be other issues as to what is included or not included! Here’s a good one: there was no washer or dryer noted in the contract , and was deliberately left out. It turns out the builder was expecting to have the appliance package paid for separately. The buyer was not made aware of that detail or it was somehow missed. Representing our clients we made sure that this was included in the sale price (as we added the washer and dryer to the contract).

TIP: Here is an important suggestion. Developers have their side covered with their sales team, contracts and marketing. Make it known to the sales centre that you are working with your own realtor the minute you walk in the door! Make sure you let them know THE NAME of your agent and ensure YOU have someone on your side. An experienced realtor knows what to lookout for so you don’t get any surprises.

If you want to buy from a developer please give it careful consideration. Don’t get caught up in the hysteria that many marketers so expertly create. Stay calm! There are always more projects being built and more condos to buy! Be aware of the issues you may face up front. It can be a challenging and frustrating process but you can also move into a stunning home!

Before buying off the plans take a good look around and compare with other options. Look at newly built neighbouring buildings already constructed. Also view a home or building already built by the same developer. Due the research so you can see the quality of construction; or, perhaps look at one to two year old buildings nearby, which would already be through the start up period and hassles of crime, plus the seller already paid the GST!

Clients we have worked with on these types of purchases, plan to make their new purchase their home for life and not move out for a long time.  There is risk and reward when purchasing off the plans. So get some advice and do what is right for you. Although it may not be for everyone, it can still be a good move and very satisfying!

Purchase Plus Improvements: Don’t buy your dream home! Create it!

Lego HouseDo you want to get your dream home without having to fight other buyers in a bidding war? Want to get a deal? Want to create value? Do you want a nice home but it seems just out of your reach? Do you find that places just aren’t…right? Do you ever say this would be so much better if…?

What if you found out you could make those changes and create your ideal space?

With the new mortgage rules decreasing amortizations, many buyers need a larger down payment. So then they have less or no funds available to be creative with when it comes to making that nice newly purchased home revitalized so it feels like their “own” home.

With interest rates at all time lows, look at the options of older, beat up, tired properties that no one else wants to update, and turn it into a modern comfortable home for you and your family. If you are willing to put in the time renovating an older home, using a Purchase Plus Improvements mortgage you may be able to not only get a good deal but create the space you want! There are a few different ways to do this. The basic idea is the bank will lend you the majority of your mortgage upfront and hold back a portion of the funds to cover the extra costs of your improvements.

This type of mortgage used for a property purchase does require the buyer to take a few extra steps. You will need appraisals both before and after the renovation. As well, a third party contractor’s quote (on the cost of the work before you go ahead with the project) will likely be required. This means you are going to want to have some good professionals on your side that understand this process and will work with you to achieve your goal.

Let’s work through an example:

Let’s say you buy the home that really needs updating…so you get a great deal because it has a Sunflower Yellow bathtub and toilet, with Avocado Green appliances in the kitchen and shag carpet that looks like it is ready to get up and walk away. Because of the distressed or dated nature of the property, you make a great deal and purchase it for let’s say $800,000. With your contractor and appraiser, you determine after renovations are completed, the home would be worth $860,000. So the bank agrees to funds for the future value of the home, using a purchase plus improvement mortgage allowing you to purchase the home first, with additional money set aside to then cover the costs of renovations. What the bank basically does is provides the regular funds to purchase the home at $800,000 (as they would for any normal transaction) and then allow an extra $60,000 to be held in a lawyers’ trust account to pay for the renovations. As part of this process, the updating must be verified by an appraiser, or via receipts, once all of the renovations are complete.

This type of strategy is done slightly differently by each lender but is a very real option for people in today’s market. It does take some extra work or sweat equity with good planning but it will allow you to take advantage of low interest rates when most of your money is going into your down payment. Use bank financing to your advantage and create a space you truly can call your own.

How to get ahead with new mortgage rules!

If you are you still “stretching” or “saving up” to buy into the Vancouver real estate market? Here are some tips!

stretch-your-dollar

At first glance, the new mortgage rules appear to be stretching some people right out of their targeted housing market. However, a great young mortgage broker pointed out the silver lining in the new mortgage rules. If you will be making a down payment anywhere from 5% to 19.9%, with the new rules, you will be paying down more principle in 25 years than you would have paid in a 30 year amortization period according to the previous rules (which means less interest paid to the banks or mortgagor). I know this is a cold consolation if you can’t even get into the Vancouver market! Here are some tips for those of you working and saving hard to reach your goal of buying into the Vancouver real estate market and helping you once you get there.

Pay your-self first!

 

Many books have talked about this, for example: The Wealthy Barber, and The Richest Man in Babylon. Here is the basic idea: For each and every pay cheque make sure to save a portion of it off the top before doing anything else with the money. Many banking institutions like Tangerine and Ally (go to https://www.tangerine.ca/en/index.html or http://www.ally.ca/en/index.html) have accounts with better interest rates than the traditional banks, which sometimes advertise “high interest savings accounts.” It is possible if desired, to set up an automated savings plan to regularly transfer money to the savings account without fail.

 

Vendor Take Back Financing

In slower markets there is more opportunity for Vendor take back financing. Essentially the seller provides a private mortgage out of their own equity for all or part of the funding to the buyers. This may eliminate some or all of the need to borrow from the bank or mortgage companies. You still pay interest and still buy the house but it is more like buying a car with financing provided by the dealership instead of your bank. This type of lending may not work for all sellers but it doesn’t hurt to ask the question!

Talk to your family and close friends about buying real estate.

Often times they will have been through the process before and may be able to provide valuable advice. From a financial side I am not necessarily suggesting you ask for charity but they may be able to help loan funds at a better rate than the bank, especially if you need just a bit more to get in the game. (Banks are not offering much in the way of interest on GIC’s, bonds or money market funds these days so setting up a private loan with someone you know could be a win- win situation.) If you do choose to look at creative options like this, it is a really good idea to spend a bit of money on an accountant and use a lawyer to draw up the documents just to keep everything above board and clear for all involved.

Agree on Costs and Write it into the Agreement for Sale Contract

While we are talking about creative ideas, consider writing it into your contract “the costs” related to your property purchase, to help lower your out of pocket expenses. For example, if the seller is really motivated they may pay for your legal fees, or you could ask for them to pay for the inspection?! It is not all that common to do but don’t be afraid to negotiate – just ask the question! It may turn out to be one less expense for you in the long run.

Fixer Uppers

Buying an older home that needs a lot of work may be an option as well. Often older homes can be bought for a discount, or comparatively less money, due to all of the extra work required to up-grade the property. If you are considering buying a property with expectations of renovating it, did you know that you can get a mortgage that will cover the renovation costs? There is a process that needs to be followed so make sure you know a good agent that can work through the particulars with you. The idea here is to buy a home for less and redecorate it the way you would like it!

Revenue Income

 

Once you own a piece of property look for mortgage payment relief in revenue opportunities from your properties. Most people automatically think about a rental suite, but in some area’s storage is highly sought after or maybe parking … so look at renting out an extra parking space, garage or of course the suite to make extra revenue on the latent value in the property.

Budget

Set up a budget! Yes, I know, I know. These are not fun to deal with but if you analyze what you are spending the money on, you may be surprised at where your money all goes! Start by first keeping all your receipts for a month and then you can work out where and how to flow your money.

What is your latte factor?

Review your spending and find your latte factor. This phrase was coined by David Bach in his book called The Automatic Millionaire . I don’t drink coffee but the principal applies to anything. I love pizza so instead of ordering in pizza we buy it at Costco instead. If you eat out for lunch a lot perhaps brown bag it or if you do drink coffee make it at home instead of buying it at your favourite coffee place. Briefly the idea is that if you pay $3.50 a day x 5 day a week ($17.50) x 52 weeks a year that is $910 a year!

Cash is King

Try just paying cash. Credit cards and debit cards are very convenient but I find that I am not all that good with budgets. If I only have cash to spend it helps from over spending because when the cash is gone, it’s gone.

Garage sale Anyone?

Consider having a yard or garage sale – it’s not that difficult. If it is stuff you own that is not being used liberate it and pocket a few extra bucks. Then collect interest instead of dust!!! Also consider selling higher value items on Craig’s List or eBay if you don’t want to practically give it away at a yard sale.

At the end of the day, collectively all of these little creative ideas together start to have a large impact. Mostly what we are talking about is using a bit of smarts, asking a few extra questions and using a bit of discipline. It can be uncomfortable but any place worth going is worth the effort.

If you have any questions or comments please feel free to get in touch with me as I am always here to help.