Category: lethbridge real estate (9)

The residential rental market is now the fastest-growing segment of the housing market. In the United States, the demand for single-family rentals, defined as either detached homes or townhouses, has risen 30 percent in the past three years.1 And in Canada, rental units now account for nearly one-third of the country’s homes, with particular demand for multi-family units, including apartments and condominiums.2

At the same time, the short-term, or vacation, rental market is also booming. The popularity of online marketplaces like Airbnb, HomeAway, and VRBO has helped the short-term rental market become one of the fastest-growing segments in the travel industry.3

Now, more than ever, there is an abundance of opportunity for real estate investors. But which path is best: leasing your property to a long-term tenant, or renting your property to travelers on a short-term basis?

In this post, we examine the differences between the two investment strategies and the benefits and limitations of each category.

 

 

WHY INVEST IN A RENTAL PROPERTY? The Top 5 Reasons

Before we delve into the differences between long-term and short-term rentals, let’s answer the question: “Why invest in a rental property at all?” There are five key reasons investors choose to real estate over other investment vehicles:

 

Appreciation

Appreciation is the increase in your property’s value over time. And history has proven that over an extended period, the cost of real estate continues to rise. Recessions may still occur, but in the vast majority of markets, the value of real estate does grow over the long term.

 

Cash Flow

One of the key benefits of investing in real estate is the ability to generate steady cash flow. Rental income can be used to pay the mortgage and taxes on your investment property, as well as regular maintenance and repairs. If appropriately priced in a solid rental market, there may even be a little extra cash each month to help with your living expenses or to grow your savings.

Even if you only take in enough rent to cover your expenses, a rental property purchase will pay for itself over time. As you pay down the mortgage every month with your rental income, your equity will continue to increase until you own the property free and clear … leaving you with residual cash flow for years to come.

 

Hedge Against Inflation

Inflation is the rate at which the general cost of goods and services rises. That means as inflation rises, the money you have sitting in a savings account will buy less tomorrow than it will today. On the other hand, the price of real estate typically matches (or often exceeds) the rate of inflation. To hedge or guard yourself against inflation, real estate can be a smart investment choice.

 

Leverage

Leverage is the use of borrowed capital to increase the potential return of an investment. You can put a relatively small amount down on a property, finance the rest of the investment with a mortgage, and then profit on the entire combined value.

 

Tax Benefits

Don’t overlook the tax benefits that can come with a real estate investment, as well. From deductions to depreciation to exemptions, there are many ways a real estate investment can save you money on taxes. Consult a tax professional to discuss your particular circumstances.

 

These are just a few of the many perks of investing in real estate. (For more detailed information, visit our previous post: Why Real Estate Investing Makes (Dollars and) Sense.) But what’s the best strategy to maximize returns on your investment property? In the next section, we explore the differences between long-term and short-term rentals.

 

 

LONG-TERM (TRADITIONAL) RENTAL MARKET

When most people think of owning a rental property, they imagine buying a home and renting it out to tenants to use as their primary residence. Traditionally, investors would use their rental property to generate an additional stream of income while benefiting from the property’s long-term appreciation in value.

In fact, that steady and predictable monthly cash flow is one of the key advantages of owning a long-term rental. And as an owner, you don’t usually have to worry about paying the utility bills or furnishing the property—both of which are typically covered by the tenant. Add to this the fact that traditional tenants translate into less time and effort spent on day-to-day property management, and long-term rentals are an attractive option for many investors.

However, there are also limitations to long-term rentals, which often come down to your ability to control the property. Perhaps the most obvious one is that you do not get to use the home or closely monitor its upkeep (this is different from a short-term rental, which we’ll share in the next section).

In addition, while you can usually generate a steady, predictable income stream with a long-term rental, you are limited in your ability to adjust rent prices based on increasing or seasonal demand. Therefore, you may end up with a lower overall return on your investment. In fact, according to data from Mashvisor, in the 10 hottest real estate markets, short-term rentals produced “significantly higher rental income” than long-term rentals.4

 

SHORT-TERM (VACATION) RENTAL MARKET

Short-term rentals are often referred to as vacation rentals, as more and more travelers enjoy the benefits of staying in a home while on vacation. In fact, according to Wells Fargo, vacation rentals are steadily growing and predicted to account for 21% of the worldwide accommodations market by 2020.5

Investing in a short-term rental or funding your second-home purchase by renting it out can offer many benefits. If you purchase an investment property in a top travel destination or vacation spot, you can expect steady demand from travelers while taking advantage of any non-rented periods to enjoy the home yourself. In addition to greater control over how your property is used, you can also adjust your rental price around peak travel demand to maximize your returns.

But short-term rentals also have risks and drawbacks that may dissuade some investors. They require greater day-to-day property management, and owners are typically responsible for furnishing the property, upkeep, and utilities.

And while rental revenue can be higher, it can also be less predictable based on seasonal or consumer travel trends. For example, a lack of snowfall during ski season could mean fewer bookings and lower rental revenue that year.

In addition, laws and limitations on short-term rentals can vary by region. And in some areas, the regulations are in flux as residents and government officials adapt to a new surge in short-term rentals. So make sure you understand any existing or proposed restrictions on rentals in the area where you want to invest.

Urban centers or suburban communities may be more resistant to short-term renters, thus more likely to pass future limitations on use. To lower your risk, you may want to consider properties in resort communities that are accustomed to travelers. We can help you assess the current regulations on short-term rentals in our area. Or if you’re interested in investing in another market, we can refer you to a local agent who can help.

 

WHICH INVESTMENT STRATEGY IS RIGHT FOR YOU?

Now that you understand these two real estate investment options, how do you pick the right one for you? It’s helpful to start by clarifying your investment goals.

If your goal is to generate steady, predictable income with less time and effort spent on property management, then a long-term rental may be your best option. Also, if you prefer a less-risky investment with more reliable (but possibly lower) returns, then you may be more comfortable with a long-term rental.

On the other hand, if your goal is to purchase a vacation or second home that you’ll use, and you want to defray some (or all) of the expense, then a short-term rental may be a good option for you. Similarly, if you’re open to taking on more risk and revenue volatility for the possibility of greater investment returns, then a short-term rental may better suit your spirit as an investor.

But sometimes the decision isn’t always so clear-cut. If your goal is to purchase a future retirement home now to hedge against inflation, rising real estate prices, and interest rates, then both long- and short-term rentals could be suitable options. In this case, you’ll want to consider other factors like location, market demand, property type, and your risk tolerance.

 

HERE OR ELSEWHERE … WE CAN HELP

If you’re looking to make a real estate investment—whether it’s a primary residence, investment property, vacation home, or future retirement home—give us a call. We’ll help you determine the best course of action and share insights and resources to help you make an informed decision. And if your plans include buying outside of our area, we can refer you to a local agent who can help. Contact us to schedule a free consultation!

 




 

The above references an opinion and is for informational purposes only.  It is not intended to be financial advice. Consult the appropriate professionals for advice regarding your individual needs.

Sources:

  1. USA Today –
    https://www.usatoday.com/story/money/personalfinance/real-estate/2017/11/11/renting-homes-overtaking-housing-market-heres-why/845474001/
  2. The Globe and Mail –
    https://www.theglobeandmail.com/real-estate/the-market/article-demand-for-rental-housing-in-canada-now-outpacing-home-ownership/
  3. Phocuswright –
    https://www.phocuswright.com/Travel-Research/Research-Updates/2017/US-Private-Accommodation-Market-to-Reach-36B-by-2018
  4. com –
    https://www.rented.com/vacation-rental-best-practices-blog/do-long-term-rentals-or-short-term-rentals-provide-better-investment-returns/
  5. Turnkey Vacation Rentals –
    https://blog.turnkeyvr.com/short-term-vs-long-term-vacation-rental-properties/

 

According to the National Association of Realtors, staging a home prior to listing it can result in a faster and more profitable sale.1 In fact, the Real Estate Staging Association estimates that professionally staged properties spend 73 percent less time on the market, receive more foot traffic, and typically sell for more money.2

Source: National Association of Realtors

Following are 10 tips you can use to get your home “show ready” prior to hitting the market. These easy and cost-effective ideas will help your house look its best—and help buyers visualize themselves living there. Even if you’re not currently in the market to sell, you can use these tactics to breathe new life into your existing home decor.

If you’re thinking of moving in the next 3 to 12 months, schedule a free consultation to help you decide which projects and upgrades are worth your time and money, and which ones you can skip. Schedule Now!

1. REMOVE CLUTTER

Decluttering is typically the first thing we tell clients to do to prepare their home for sale. And according to the National Association of Realtors, a whopping 93 percent of agents agree.1 Decluttering is the act of removing excess “stuff” from your home to make it appear clean and spacious.

Overflowing closets and cluttered countertops can make your house feel small and cramped. In contrast, sparsely-filled closets and clear countertops will make your home appear larger and assure buyers that there will be plenty of room to store their belongings.

Don’t neglect drawers, cupboards and even your refrigerator in your decluttering efforts. Serious buyers will check out every nook and cranny of your home, so pack up anything you don’t use on a daily basis and store it off site. The same goes for jewelry, sensitive documents, prescription medication, firearms and other items of value. Store them in a locked safe or storage unit before opening your property to buyers.

Make sure any items that remain are clean, tidy and well organized. The good news is, when it comes time to move, a large portion of your packing will be done!

 

 

 

2. DEEP CLEAN AND DEODORIZE

From carpets to bathrooms to appliances, having a clean home is a MUST. If you’ve ever checked into a dirty hotel room, you can imagine how buyers can be turned off by a home that hasn’t been thoroughly cleaned.

If you have a large home, or are short on time, you may want to invest in a professional cleaning service. And if you have carpet, we generally recommend you rent a steam cleaner or hire a company to clean your carpets for you.

In addition to cleaning, it’s equally important to neutralize odors in your home that can be off-putting to buyers, especially pet smells and cigarette smoke. If the weather allows, open your windows and let in fresh air. Empty the trash frequently, and especially before a showing. Avoid cooking any strong-smelling food such as fish or heavy spices. You may need to clean (or remove) drapes and upholstery if odors are particularly strong.

Try to keep your home in clean, show-ready condition while it’s on the market. You never know when a potential buyer will want to drop by for a viewing.

 

 

3. DEPERSONALIZE

Your family photos and personal mementos are often your most treasured possessions. For many of us, they are what make a house a home. However, buyers will have a hard time envisioning themselves living in a place if it feels like YOUR home.

Pack up any items that are personal to you and your family, such as photos, books, children’s artwork, travel souvenirs and religious items. Collectibles and excessive knickknacks can be distracting to buyers. Instead, keep your decor items minimal and generic to appeal to the largest number of buyers.

 

 

4. NEUTRALIZE YOUR COLOR PALETTE

Along those same lines, bold color choices may not appeal to all buyers. By incorporating a neutral color palette throughout your home, buyers can better visualize the addition of their own furniture and decor, which may contrast with your current color scheme.

But don’t limit yourself to white and beige. Incorporating earth tones and midtone neutrals—like mocha and “greige” (grey-beige)—can add a touch of modern sophistication to your decor.3

 

 

 

One of the quickest and most cost-effective ways to neutralize your home’s decor is with paint. Walls painted in dark, bold or bright colors can turn off buyers. A fresh coat of paint in a neutral color like greige (try Benjamin Moore’s Revere Pewter) or warm white (such as Kelly-Moore’s Rotunda White) offers a clean palette upon which buyers can visualize adding their own personal touches.4

If your sofa is worn, stained or has a bold pattern, consider purchasing a neutral-colored slipcover. Dated or overly busy window coverings should be taken down or replaced. Instead, bring in tasteful pops of color with throw pillows and accessories.

 

 

5. INCREASE YOUR CURB APPEAL

You only get one chance to make a first impression. According to a 2017 report by the National Association of Realtors, 44 percent of home buyers drove by a property after viewing it online but did NOT go inside for a walkthrough.5 That means if your curb appeal is lacking, buyers may never make it through the door.

Walk around your home and look for any neglected areas that might seem like “red flags” to buyers, such as missing roof shingles or rotted siding. Trim trees and shrubs if needed, and make sure your lawn and flower beds are well maintained. Add some colorful flowers to your front beds and/or flower boxes to brighten up your landscaping.

Make sure the exterior of your home is as clean as the interior. This can often be accomplished with a simple garden hose. But if your siding, walkway, or driveway are stained or dingy, you may want to rent a pressure washer.

Thoroughly wash windows and screens, and remove and store dark solar screens if you have them. Open shutters, curtains and blinds, which will not only make your house look more inviting from the outside, it will brighten the inside.

Consider a fresh coat of paint on your front door, trim and shutters. And small, cosmetic improvements like new house numbers, a colorful wreath and a clean front doormat can have a big impact.6

 

 

6. FRESHEN KITCHENS AND BATHS

Kitchens and bathrooms will show better and appear larger if all items are cleared from the countertops, except for one or two decorative pieces.7 You should have already packed up non-essentials during your decluttering process, and the remaining items should be neatly stored in pantries and cupboards.

If your cabinets are dingy or outdated, adding a fresh coat of paint and new hardware is an easy and inexpensive way to make them modern and bright. Consider purchasing new shower curtains, bath mats and towels for the bathrooms and new dish towels for the kitchen.

Before each showing, make sure kitchens and baths are spotless and trash cans are empty and out of sight. To add a comforting aroma, try baking cookies, or in the fall, simmer some cinnamon sticks and cloves in a pot of water before you leave the house. In the spring, try a vase of fresh cut lilacs.7

 

7. SET THE TABLE

Buyers often imagine hosting family gatherings in their new home, and the dining room plays a large role in that vision. If your dining room chairs are stained or outdated, you may want to recover them or use slipcovers. In most cases, an imperfect table can be camouflaged with a neutral and stylish tablecloth.

Be sure the table is centered underneath the chandelier and on the area rug if you’re using one. If your dining room is small, remove all other furniture and leave only four chairs.8

Dress up the table using nice tableware and cloth napkins or a table runner and centerpiece. For a long table, try lining up a series of small vessels down the middle.

 

 

8. REARRANGE FURNITURE

Start in your living room and think about what you want to emphasize (and de-emphasize) about the space. For example, do you have a beautiful fireplace or a stunning view? If so, arrange the furniture with that focal point in mind. Use a symmetrical seating arrangement to create a cozy conversation area adjacent to the focal point.

If the room is small, consider removing some of the furniture to make it feel larger, especially oversized pieces. That includes oversized television sets, unless it’s a designated media room. Pulling furniture away from the wall can make the room feel more spacious, and placing your largest furniture piece in the far-left corner (as opposed to near the entry) can create the illusion of a larger space.9

For small bedrooms, remove all the furniture except the bed, bedside tables and a dresser. If it’s a large room, add one or two chairs and a table to create a seating area. Place lamps on the bedside tables and seating area if you have one.10

Make sure each space in your home has a clearly defined purpose. For example, if you’ve been using an extra bedroom as a catch-all storage space, stage it as a guest room or office instead. Turn an awkward alcove into a workstation or a reading corner. Help buyers imagine how they could use the space themselves.3

 

 

9. LIGHTEN UP

Lighting can have a drastic impact on the look and feel of a home. Few buyers seek out a dark house; most prefer one that’s light and bright. Make sure windows are clean, and open curtains and blinds to let in the maximum amount of daylight.

Each room should have three types of lighting: ambient (general or overhead), task (such as a reading lamp or under-cabinet light), and accent (such as a floor or table lamp). Aim for a goal of 100 total watts per 50 square feet.11 If your mounted light fixtures are dated, replacing them with something more modern is an easy and inexpensive upgrade that can have a big impact.

Strategically placed landscape lighting can add a dramatic effect to your home’s exterior. Welcome evening visitors with a lighted walkway, or use a spotlight to accentuate trees or other landscaping features. Solar lights require no wiring; simply place them in a sunny spot and they will turn on automatically at dusk.

 

 

10. HIGHLIGHT YOUR BACKYARD’S BEST FEATURES

While your home’s interior often takes center stage, don’t forget about staging your home’s outdoor areas to help buyers imagine how they could utilize the space.

Even a small patio can become a selling feature with the addition of a cafe table and chairs. Add a tray of plates and coffee cups to help buyers envision a peaceful breakfast on the back porch. Place chairs and wine glasses around an outdoor firepit or hang a hammock with a book in your favorite shady spot.3 These small, simple additions can help buyers visualize the possibilities your backyard has to offer.

 

BEFORE YOU GET STARTED

If you’re in the market to sell your home, this list provides a great starting point for your preparations. But nothing beats the trained eye and expertise of a real estate agent. Before you do any work, we recommend consulting a professional for advice about your particular property.

We offer free, no-commitment seller consultations and will walk through your home with you to help you assess which projects and upgrades are worth your time and money, and which ones you can skip.

As local market experts, we are intimately familiar with buyer preferences in your area. We’ll run a comparative market analysis to find out how your home compares to others currently on the market, as well as those that have recently sold. Then we’ll tailor a custom plan to suit your particular property, budget and needs.

 

If you’re thinking of moving in the next 3 to 12 months, schedule a free consultation to help you decide which projects and upgrades are worth your time and money, and which ones you can skip. Schedule Now!

 

Sources:

 

  1. National Association of Realtors –
    https://www.nar.realtor/sites/default/files/migration_files/reports/2017/2017-profile-of-home-staging-07-06-2017.pdf
  2. Real Estate Staging Association –
    http://www.realestatestagingassociation.com/content.aspx?page_id=22&club_id=304550&module_id=164548
  3. Houzz –
    https://www.houzz.com/ideabooks/2661221/list/sell-your-home-fast-21-staging-tips
  4. HGTV –
    https://www.hgtv.com/design/outdoor-design/landscaping-and-hardscaping/10-curb-appeal-tips-from-the-pros-pictures
  5. National Association of Realtors –
    https://www.nar.realtor/sites/default/files/reports/2017/2017-home-buyer-and-seller-generational-trends-03-07-2017.pdf
  6. The Spruce –
    https://www.thespruce.com/must-try-neutral-paint-colors-797983
  7. HouseLogic –
    https://www.houselogic.com/sell/preparing-your-home-to-sell/home-staging-checklist/
  8. com –
    http://www.stagemyownhome.com/staging-the-dining-room.html
  9. com –
    https://www.realtor.com/advice/sell/small-living-room-staging-tricks/
  10. SFGATE –
    http://homeguides.sfgate.com/stage-master-bedroom-34573.html
  11. HGTV –
    https://www.hgtv.com/shows/designed-to-sell/15-secrets-of-home-staging-pictures

We frequently get questions from clients who are taking on decorating and remodeling projects and want to ensure their dollars are invested wisely.

Which looks will last for years to come, and which ones will feel dated quickly? What colors and styles are most popular among buyers in our area? How can I add the most value to my home?

So we’ve rounded up some of the hottest trends in home design to help guide you through the process. Whether you’ve planned a simple refresh or a full-scale renovation, making smart and informed design choices will help you maximize your return on investment … and minimize the chance of “remodeler’s remorse” down the road.

 

 WHAT’S HOT NOW

While 2017 was all about millennial pink, brass fixtures and bright white kitchens, this year we expect to see a move toward warmer, cozier elements throughout the home.

 

1. Warm Colors

A cool color scheme has dominated home design in recent years, but this year warm neutrals like brown and tan are back, along with rich jewel tones. While the pastel craze of last year is still hanging on, expect to see alternative color palettes featuring deep, saturated shades of red, yellow, green and navy. Grey will remain popular, but in warmer tones, often referred to as “greige.”

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2. Cozy Elements

Along with warmer colors, we can expect to see a shift from stark, modern design to cozier looks. Velvet upholstery, woven textures and natural elements, like wood and stone, will heat things up this year.

 

3. Mixed Metals

It used to be considered gauche to mix finishes, however the look of mixed metals will be very big in 2018. Brass will continue to trend, along with matte black and classics like polished chrome and brushed nickel.

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4. Bold Patterns

Expect to see a lot of bright, bold patterns in the form of geometric shapes and graphic floral prints. These will be featured on everything from furniture to throw pillows to tile.

 

5. Natural Elements

Look for the use of natural elements throughout the home, including wood, stone, plants, flowers and grass. Botanical patterns will also be seen in prints, wallpaper and upholstery. Concrete accents will complement these additions in an effort to bring the essence of the outdoors inside the home.

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6. Feature Walls

Also called an accent wall, a feature wall is one that exhibits a different color or design than the other walls in the room. Expect to see an increased use of feature walls showcasing rich paint colors, bold patterned wallpaper, and textures brought in through millwork and shiplap.

 

7. Statement Lighting

Lighting will take center stage with distinctive fixtures, including local artisan and vintage pendants and chandeliers. And smart lighting technology will enable homeowners to customize their lighting experience based on time of day, activity and mood.

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8. Hardwood Floors

Hardwood floors will continue to dominate the market. The trend is toward either very dark stains paired with light-colored walls or light stains with darker walls. Greyish tones will remain popular, as will matte finishes, which are easier to maintain than high gloss. Expect to see frequent use of wider and longer wood planks, as well as distressed and wire-brushed finishes, which add texture and dimension.

 

9. Smart Homes

Everything is getting “smarter” in homes, from locks and lights to thermostats and appliances. And with devices like Google Home and Amazon Alexa, you can control many of these with voice activation from a central hub. We will see continued integration of and advancements in smart-home technology in 2018.

 

 

KITCHEN TRENDS

 While white kitchens will remain popular in 2018, expect to see more color this year in everything from cabinets to tile to appliances.

 

1. Two-toned Cabinets

Two-toned cabinets are quickly overtaking the white-on-white look that has dominated kitchen design for the past few years. While white remains a classic, grey and bleached-wood cabinet variations are surging in popularity, along with darker neutrals like navy and green.

 image

 2. Quartz Countertops

Granite reigned as the top countertop choice for many years, but quartz is now king. It’s highly durable, low-maintenance and comes in a wide variety of styles and colors. It’s also heat resistant, scratch resistant and non-porous (unlike granite and marble) so it doesn’t need to be sealed.

 

3. Bold Backsplashes

After years of dominating backsplash design, the white subway tile is officially on its way out. Expect to see it replaced with more elaborate shapes, patterns, colors and textures. Tile that mimics the appearance of wood, concrete and wallpaper is also gaining in popularity.

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4. Statement Sinks

While stainless steel and white porcelain are always safe bets, the trend is moving toward sinks that make more of a statement. Look for unexpected pops of color and materials like natural stone and copper. Touch-free faucets are expected to gain favor with homeowners this year, too.

 

5. Brass is (Still) Back

Brass fixtures came back in a big way over the past couple of years and will continue to be a popular choice in 2018 along with matte black, black nickel, polished chrome and brushed nickel. Missing from the list? Rose gold, which is decidedly “out” this year.

image

 

6. Multi-purpose Islands

Kitchen islands have evolved from simple prep-stations into the “workhorse” of the kitchen. Many feature sinks, built-in appliances and under-counter storage while also serving as a casual dining area. They have become the focal point of the kitchen, and we expect to see more of them in 2018 and beyond.

 

7. Black Stainless Steel

Black stainless steel is the hot new finish option for appliances, and it’s hitting the market in a big way. It offers a cutting-edge look and is easier to keep clean than traditional stainless steel. However, it’s harder to match finishes amongst different brands, so it’s probably only feasible as part of a complete appliance package.

 

8. Appliance Garages

Appliance garages are counter-level compartments designed to house small appliances like blenders, toasters and stand mixers. They make it convenient to have these items readily accessible, without the look of a cluttered counter.

 image

BATH TRENDS

 Expect to see many of the same kitchen design preferences carry over into bathrooms this year, including two-tone cabinets, quartz countertops and brass fixtures.

 

1. Neutral Tones

Neutral shades will continue to dominate in the master bathroom as homeowners seek a soothing and relaxing retreat atmosphere. But expect to see more options than just white. Shades of brown, grey, blue, green and tan will help to warm things up.

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2. Natural Elements

Natural materials are particularly hot right now in bathroom design. This includes the use of wood and stone on walls, cabinets, counters and backsplashes, as well as the incorporation of botanical design elements.

 

3. Large Tiles

We expect to see a lot more large and slab-sized tiles in bathrooms, which have less grout so they are easier to clean and maintain. Wood-look porcelain tiles are also a favorite in wet areas, as they offer the warmth and rustic appeal of wood with the durability of tile.

image

 

4. Stone Sinks

Sinks will continue to be an area where homeowners like to exhibit creativity, and hand-carved stone sinks are especially fashionable right now. These may be more suited to powder rooms, where functionality isn’t as crucial.

 

5. Freestanding Tubs

 There’s been a tub resurgence in bathroom design after years of preference for stand-alone showers. Modern tastes are gravitating toward freestanding tubs that serve as a showpiece for the bathroom.

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6. Smart Features

 

Smart technology has entered the bathroom with the addition of features like wireless shower speakers and high-tech toilets, as well as digital shower controls that automatically adjust to your preferences in temperature and spray intensity.

 

 

OUR ADVICE

Style trends come and go, so don’t invest in the latest look unless you love it. That said, highly-personalized or outdated style choices can limit the appeal of your property for resale.

For major renovation projects, it’s always a good idea to stick to neutral colors and classic styles. It will give your remodel longevity and appeal to the greatest number of buyers when it comes time to sell. It will also give you flexibility to update your look in a few years without a total overhaul. Use non-permanent fixtures – like paint, furniture and accent pieces – to personalize the space and incorporate trendier choices.

If you’d like advice on a specific remodelling or design project, give us a call! We’re happy to offer our insights and suggestions on how to maximize your return on investment and recommend local shops and service providers who may be able to assist you.

 

Sources:
  1. Country Living –
    http://www.countryliving.com/home-design/decorating-ideas/g3988/kitchen-trends
  2. Elle Decor –
    http://www.elledecor.com/design-decorate/trends/g14486069/kitchen-trends-2018/
  3. Gates Interior Design –
    https://gatesinteriordesign.com/hottest-interior-design-trends-for-2018/
    https://gatesinteriordesign.com/biggest-kitchen-bath-trends-for-2018/
  4. com –
    http://www.hgtv.com/design/rooms/kitchens/17-top-kitchen-design-trends-pictures
  5. House Beautiful –
    http://www.housebeautiful.com/room-decorating/kitchens/g2664/kitchen-trends/
    http://www.housebeautiful.com/design-inspiration/g13938283/2018-decor-trends/
    http://www.housebeautiful.com/design-inspiration/g13820501/best-and-worst-decor-trends-from-2017/
  6. Houzz –
    https://www.houzz.com/ideabooks/93399913/list/interior-design-trends-expected-to-take-hold-in-2018
  7. Huffington Post – http://www.huffingtonpost.com.au/2017/09/25/the-kitchen-and-dining-trends-to-look-out-for-in-2018_a_23222693/
  8. Kitchen and Bath Design News –
    http://www.kitchenbathdesign.com/123995/year-end-look-and-new-trends-for-2018/
  9. com –
    https://www.msn.com/en-us/lifestyle/home-and-garden/12-flooring-trends-for-2018/ss-AAtp7QA
  10. com –
    https://www.realtor.com/advice/home-improvement/interior-design-trends-to-ditch-2018/
    https://www.realtor.com/advice/home-improvement/hottest-interior-design-decor-trends-2018/?is_wp_site=1
  11. Realty Times – http://realtytimes.com/advicefromagents/item/1007993-kitchen-design-trends-in-2018?rtmpage=MattLawler
  12. Sebring Design Build –
    https://sebringdesignbuild.com/top-trends-in-bathroom-design/
  13. The Flooring Girl –
    http://theflooringgirl.com/hardwood-flooring/hardwood-flooring-trends-2018/
  14. Vogue –
    https://www.vogue.com/article/interior-design-trends-according-to-expert-designers-decorators

As we head into a new year, the most common question we receive is, “What’s the outlook for real estate in 2018?”

It’s not just potential buyers and sellers who care; current homeowners also want reassurance about the value of their investment. No one knows exactly what 2018 will bring, but we’ve outlined expert predictions on where the market is headed and how government interventions are expected to impact the Canadian housing market in the year ahead.

 

HOUSING PRICES WILL REMAIN HIGH IN URBAN CENTReS

Although the Toronto real estate market did experience a slowdown in 2017, housing affordability will remain a major issue in both Toronto and Vancouver in 2018. According to the Royal Bank of Canada’s most recent Housing Trends and Affordability Report, as of Q2 2017 it cost more than 75 percent (Toronto) and 80 percent (Vancouver) of median household income to cover the average cost of owning a home.1

In an effort to stabilize prices, both the Ontario and British Columbia governments enacted a 15 percent tax on foreign investments in housing. However, according to the PricewaterhouseCoopers report on Emerging Trends in Real Estate: Canada and the United States 2018, “Industry players are skeptical that recent tax moves … to curtail foreign investment will have a long term cooling impact on housing affordability in Toronto and Vancouver.”2

In its Canadian Regional Housing Outlook, TD Economics predicts ”The decline in sales activity in both Vancouver and Toronto has helped to redistribute the balance of power from a pure seller’s market, back towards buyers, as evidenced by the sales-to-listing ratios. But, first-time homebuyers sitting on the sidelines waiting for higher interest rates to trigger a market crash may be holding their breath for a while. Prices are likely to only reset back to levels that existed prior to a year of exorbitant gains.”3

The high cost of living has forced a growing number of millennials to seek alternatives to traditional housing. The 2016 census found 47.4 percent of young adults in Toronto and 38.6 percent in Vancouver live with a parent. PricewaterhouseCoopers predicts a rise in multi-generational and multi-family homes, a move towards larger condominiums to suit growing families, and a flight from urban cores as new public transit projects make commuting more feasible.2

 

What does it mean for you? If you’re a current homeowner, you can expect your investment to hold its value and continue to appreciate over the long term. And if you’re considering selling this year, contact us to request a free Comparative Market Analysis to find out how much you can expect your home to sell for under current market conditions.

If you’re a potential buyer who has been waiting for real estate prices to drop, don’t expect a fallout any time soon. Governmental bodies have taken steps to slow down skyrocketing prices, which has helped to balance the market. Now is a great time to buy. And if traditional housing options don’t fit your budget, we can help you find alternatives to meet your needs.

 

GOVERNMENT INTERVENTIONS WILL HELP TO STABILIZE THE MARKET

Skyrocketing real estate prices have caused Canadians to take on a growing amount of debt. The federal Parliamentary Budget Office (PBO) reports that the average household indebtedness is up to 174 percent of disposable income, and they predict it will reach 180 percent by the end of 2018. Coupled with rising interest rates, the share of income that will go towards debt payments is expected to reach historic proportions.4

Regulators at the Office of the Superintendent of Financial Institutions (OSFI) have attempted to curb the potential fallout with interventions, the latest of which went into effect on January 1. These new regulations raise the requirements for mortgage borrowers with down payments of 20 percent or more. They are now required to qualify for a mortgage at an interest rate two percentage points higher than their current rate to ensure they can manage payments when interest rates do inevitably rise.

A similar “stress test” was enacted in 2016 for borrowers who put down less than 20 percent, but that regulation impacted a much smaller percentage of buyers.

According to Jeremy Rudin, the head of OSFI, “We clearly see the potential risks caused by high household indebtedness across Canada, and by high real estate prices in some markets. We are not waiting to see those risks crystallize in rising arrears and defaults before we act.”5

All federally regulated financial institutions will be obligated to utilize these requirements for both new mortgages and mortgage renewal applications of borrowers applying to switch lenders. It is not mandatory to apply the test at mortgage renewal for existing borrowers. Since credit unions are regulated provincially, they are not required to follow the new OSFI rules, although some may choose to out of prudency.

 

What does it mean for you? With new rules in effect, if you’re a buyer, your purchasing power may be impacted. If you’re concerned you may not be able to meet these requirements, securing your mortgage through a credit union may be an option. We are following this issue closely. Give us a call so we can discuss how these new rules will affect your home search.

If you’re considering selling your home this year, these regulations could alter the type of buyer who will be willing and able to purchase your home. We have expertise in this area and know how to market your home to a changing demographic.

 

5 YEAR MORTGAGES WILL MAKE A COMEBACK

Expect interest rates to rise in 2018. Bank of Canada has indicated that borrowers should expect to see rate increases this year … and notably, nearly half of Canadian mortgage holders are set to renew their mortgages in the next 12 months. Combined with the new, more stringent “stress test” requirements, a greater number of homeowners will be opting for five-year-fixed rate mortgages over the historically popular variable rate mortgages.6

According to LowerRates.ca, “Since January 2014, 56% of Canadian borrowers who applied for a mortgage through LowestRates.ca have gone variable, compared with 43% of those who got a five-year fixed. But this past August, there was a shift, where the five-year-fixed rate mortgage saw a sharp increase in applicants, with 59% of users on the LowestRates.ca site opting for this option versus only 39% opting for the variable mortgage.”7

 

What does it mean for you? If you’re in the market to buy, act now. Rising interest rates will decrease your purchasing power, so act quickly before interest rates go up. Give us a call today to get your home search started.

And if you’re a current homeowner who is set to renew your mortgage, you may want to consider locking in a five-year-fixed rate. Contact us if you would like assistance navigating your options.

 

2018 ACTION PLAN
If you plan to BUY this year:
  1. Get pre-approved for a mortgage. If you plan to finance part of your home purchase, getting pre-approved for a mortgage will give you a jump-start on the paperwork and provide an advantage over other buyers in a competitive market. The added bonus: you will find out how much you can afford to borrow and budget accordingly.
  2. Create your wish list. How many bedrooms and bathrooms do you need? How far are you willing to commute to work? What’s most important to you in a home? We can set up a customized search that meets your criteria to help you find the perfect home for you.
  3. Come to our office. The buying process can be tricky. We’d love to guide you through it. We can help you find a home that fits your needs and budget, all at no cost to you. Give us a call to schedule an appointment today!

 

If you plan to SELL this year:
  1. Call us for a FREE Comparative Market Analysis. A CMA not only gives you the current market value of your home, it’ll also show how your home compares to others in the area. This will help us determine which repairs and upgrades may be required to get top dollar for your property … and it will help us price your home correctly once you’re ready to list.
  2. Prep your home for the market. Most buyers want a home they can move into right away, without having to make extensive repairs and upgrades. We can help you determine which ones are worth the time and expense to deliver maximum results.
  3. Start decluttering. Help your buyers see themselves in your home by packing up personal items and things you don’t use regularly and storing them in an attic or storage locker. This will make your home appear larger, make it easier to stage … and get you one step closer to moving when the time comes!

 

WE’RE HERE TO HELP

While national real estate numbers and predictions can provide a “big-picture” outlook for the year, real estate is local. And as local market experts, we can guide you through the ins and outs of our market, and the local issues that are likely to drive home values in your particular neighbourhood. If you have specific questions, or would like more information about where we see real estate headed in our area, please give us a call! We’d love to discuss how issues here at home are likely to impact your desire to buy or a sell a home this year.

 

 

Sources:

  1. Royal Bank of Canada’s Housing Trends and Affordability Report –
    http://www.rbc.com/newsroom/_assets-custom/pdf/20170929-ha.pdf
  2. PricewaterhouseCoopers Emerging Trends in Real Estate 2018 –
    https://www.pwc.com/ca/en/real-estate/assets/Real_Estate_ETRE_2018_PDF.pdf
  3. TD Economics Canadian Regional Housing Outlook –
    https://economics.td.com/canadian-regional-housing-outlook-aug-2017
  4. Office of the Parliamentary Budget Officer –
    http://www.pbo-dpb.gc.ca/en/blog/news/HH_Vulnerability
  5. Financial Post
    http://business.financialpost.com/personal-finance/stricter-osfi-rules-on-mortgage-lending-will-do-more-harm-than-good-fraser-institute
  6. Bank of Canada Financial System Review November 2018 –
    https://www.bankofcanada.ca/wp-content/uploads/2017/11/fsr-november2017.pdf
  7. Maclean’s –
    http://www.macleans.ca/economy/money-economy/canadians-rushing-to-lock-down-five-year-fixed-rate-mortgages/

The current trends are all about utilizing rich color, maximizing texture and creating comfortable interiors you can’t wait to relax in. Use these trends to get inspired to makeover your home’s interiors and create spaces you love that also appeal to your personal style. Remember, if you plan to sell in the next few years, you may want to avoid doing anything dramatic and instead incorporate small changes that would appeal to buyers.

 

Why are these trends gaining popularity?

The underlying theme of these trends is creating a home environment you love; one that appeals to your emotions and feels like a retreat from the stresses of the world. Although the home is a place where you can relax and spend time with loved ones, work expectations are beginning to blur the line between work and home. Even if people don’t work from home specifically, many are stretching their work hours into their evenings and weekends to complete work projects.

It’s no wonder the Nordic concept of hygge (most often pronounced “hoo-gah”) has become a hot trend. A centuries-old concept, incorporating hygge in the home means creating simple and comfortable spaces that make you feel cozy and safe and appeal to your senses.1 The emphasis is on simplicity and fostering positive experiences, whether you’re spending time with family, reading a good book or catching up on work emails.

 

WARM AND RICH COLORS.

Whether you want to play with a bold color or stick with neutrals, one thing is clear—paint is the foundation of a great design. Painting your interiors has a return on investment of about 75 percent and is a relatively inexpensive project to complete, costing between $25 to $100 for paint alone.2 If you’re thinking of refreshing your home’s interiors with a coat of paint, popular colors include warm taupe, fresh green and dark tones. These colors are popular choices because they evoke feeling of warmth and coziness when you walk into a room.

Wondering how to pair these colors? Taupe is the perfect alternative to traditional neutrals, such as gray and white, and goes well with cool blues, earthy greens and deep shades of wine.  Green goes well with other earthy shades, such as copper and moss, as well as deep plum and bright pink. If you’re hesitant to paint your walls green, incorporate it into your home by way of accent pillows, rugs, lamps, vases and other accessories or add a few house plants.  

If you’re interested in adding more drama to a room, include bold, dark colors.  Dark shades add color and sophistication to any space. Plum and dark gray pair well with pale blues, warm whites and light gray.

 

Try one of these Colors of the Year:

Poised Taupe – Sherwin Williams

Greenery – Pantone

Shadow – Benjamin Moore

 

RICH MATERIALS.

Lux materials create a space in which you can’t wait to kick off your shoes and relax at the end of the day. The Danes use a mixture of materials and pattern as a way of adding character and interest; however the overall look still needs to adhere to a color palette to prevent it from looking distracting.

Natural materials and textures allow you to maximize the comfort of the bedroom, living room or family room. Wood accents give rooms an earthy feel. Incorporate rustic wood sculptures, trays and furniture into your space. Choose furniture made with sustainably harvested wood certified by the Forest Stewardship Council (FSC) or use reclaimed wood for an environmentally friendly alternative.

If natural elements aren’t your style, but you want to add more visual interest to your room, try mixing patterns. Although it may have been avoided in the past, mixing stripes, florals and geometric prints actually help ground a space as long as the patterns feature complimentary colors or different shades of one color. If you’re worried about going overboard and making your room look “busy,” focus your mix in one area of the room. For example, add throw pillows in a variety of patterns to your sofa.

 

GOING GREEN.

According to a recent study from the American Psychological Association, people are more stressed than ever, with 24 percent of adults reporting they’re experiencing “extreme stress.”3

Top sources of stress include work and money. By incorporating small changes, like making your house more energy efficient, you can start to lower your bills and get back to relaxing and enjoying life like the Danish do (who consistently top the polls as the happiest people).

Save money on your energy bills by sealing the “envelope” of your home, which includes the windows and doors, walls, floor and roof. The better insulated your home is, the less heat will escape and the lower your energy bill (and stress level) will be.

The most heat loss occurs through the walls of the home: up to 35 percent of heat loss, to be exact.4 Ceramic insulating paint is a space-inspired coating of paint mixed with ceramic compounds and applied to interior or exterior surfaces. It seals your walls and prevents heat from escaping, which means reduced energy bills all year long.

 

THE FUNCTIONAL HOME OFFICE.

Twenty-four percent of employed people do some or all of their work at home.5 Since more people are working remotely than ever, home offices are becoming more popular. Even if you don’t plan on working from home, a home office gives you a place to pay bills, work on personal projects, plan your family’s schedule and more. Home offices tend to be multifunctional, serving as a guest room when family and friends visit, and have the potential to meet other needs that arise.

The key idea behind hygge is to enjoy the environment around you and for each room to be a sanctuary to sink into at any given moment. Your home office is no exception! Maximize your productivity, efficiency and focus by painting the walls shades of green or blue.6 If space is an issue, create a nook by installing docking and tech cabinets that are big enough to store a printer and other small office equipment and files without taking over the room.

If you don’t have room in your home for an office, look no further than your backyard. Shedquarters, small structures or sheds built in the backyard for use as an office or home-based business, are an attractive option for homeowners who don’t have a room to dedicate to an office and don’t wish to add on their homes. while the jury is out on how much value these structure add to a home, they can convert easily into a storage shed if you plan to sell in the future.

 

SPLURGING ON KITCHEN RENOVATIONS.

The kitchen is often the busiest, most hectic room in the house and one of the top renovation projects with a high return on investment.7 We do more than cook meals there; it’s where homework is done, bills are paid, weeks are planned and more.

Kitchen remodels consistently show a respectable return on investment. According to the 2017 Cost vs Value Report from Remodeling magazine, a minor kitchen remodel touts an 80.2 percent return on investment.8 You don’t need to overhaul your entire kitchen to make it more hygge. Smaller additions can transform it into a relaxing and functional space you enjoy spending time with friends and family in.

What does a “minor kitchen renovation” entail? In addition to replacing the fronts of your cabinets and drawers, it also includes replacing out-of-date appliances and fixtures. You may also consider replacing countertops. Quartz and quartzite are becoming more common as are other green laminate options, including ones that mimic stone, wood and concrete. Laminates install in less time, often over the existing countertop, make it an ideal choice for busy homeowners as well. Other hot kitchen trends include incorporating sustainable materials like bamboo into your countertops and floors and water filtration systems.

 

Want to improve the look and feel of your home’s interior? Are you thinking of upgrading to a home that better fits your changing needs?

Call us—we’d love to help you achieve all of your home-related dreams.

 




 

 

 

 

Sources:

  1. Time, Hygge, the Nordic Trend That Could Help You Survive 2016
  2. Quality Smith
  3. American Psychological Association, 2015 Stress in America
  4. Department of Energy
  5. Department of Labor
  6. Entrepreneur, How the Color of Your Office Impacts Productivity
  7. Realtor.com
  8. Remodeling Magazine, 2017

A common thought in real estate is never list your home in the winter off-season. Perpetuated by industry experts, agents and repeat sellers alike, this saying encourages many would-be sellers to wait until the spring peak to list their homes. However, studies show that homes listed in the winter off-season not only sell faster than those in the spring, but sellers can also net more at this time.1 Don’t wait until spring to sell. If you’ve been thinking of selling your home, here are five compelling reasons to list now.

 

1 | Take advantage of low inventory.

Since most sellers are waiting until spring to list, local inventory falls during the off-season. However, there are still motivated buyers who are ready to move now and don’t want to wait that long to purchase a home. According to the National Association of Realtors, 55 percent of all buyers purchased their home at the time they did because “it was just the right time.”2 These eager buyers may flock to your home. You may not need to try as hard to make your home stand out in the sea of other similar homes. With less competition, more buyers, some of whom may have otherwise overlooked your home if you listed during the peak, will express an interest to buy. While you’ll likely have fewer showings in the off-season, buyers who do visit will be more serious about writing an offer. Your home will likely sell faster than it would have during the peak season.

 

2 | Sell closer to listing price.

Homes sold during the off-season sell at a higher price, on average, than those sold during the spring and summer peak. There are many reasons for this. First, motivated buyers are willing to pay closer to the asking price for a home. Second, homes are more likely to be priced right and reflect the economics of not only the local market, but the neighborhood as well. Often, homes listed during the peak may be priced to compete with other homes in the area and neighborhood. Sellers may be pressured to sell for less than the list price in order to encourage buyers to choose their home out of the others on the market.

 

3 | You’ll receive more attention.

While our team always strives to give you the personal attention you deserve, when you list during the off-season, we’re able to work more closely with you to ensure your home is prepared for its debut on the market. We can also take more time to answer your questions, address your concerns and prepare you and your home for the sale.

Additionally, if you’d like to hire a trades person to handle routine maintenance or undertake a minor home renovation before you list, you may be able to take advantage of flexible scheduling and cheaper rates. Many of these professionals experience a winter off-season as well, and will be able to focus their time and attention on you and your project.

 

4 | Easier to maintain curb appeal.

Curb appeal is intended to attract the buyers who are just driving by as well as those who saw your home online and wanted to see it in-person. It sets the stage for what interested buyers can expect when they step foot in the home during a showing or open house. If you list your home during the peak of the selling season, you may exhaust your time your energy maintaining curb appeal. You’ll likely spend most of your free time mowing the lawn, weeding, trimming shrubs and hedges, planting flowers in pots and in flowerbeds, pulling spent blooms and watering it all to ensure it looks lush and healthy on a daily basis. After all, a lush landscape will attract potential buyers and set your home apart from other similar homes in the area.

The off-season eliminates the pressure to maintain a picture-perfect front landscape. Since most grass, shrubs and plants go dormant at this time of year, you’ll have less to maintain. If you live in an area that experiences a traditional winter, your landscape will be covered with snow. Even if you live in a milder climate, you may not have to mow as often, if at all. It’s still important to ensure your exterior appears well-tended, so make sure your walkway and front porch remains free of snow, ice and debris.

 

5 | Tap into the life changes of buyers.

Many buyers receive employee raises and bonuses at the end of the year. If they’ve been saving to buy a home, this extra money may allow them to reach their goal for a down payment and put them on the path to becoming a homeowner. Additionally, companies often hire new employees and relocate current ones during the first quarter of the year, creating a stronger demand for housing. If you live in an area that’s home to a large company or has a strong corporate presence, this may be the perfect time to list.

Considering listing in the off-season?

 

3 Things to Do
Before You List

Get your home ready to list by following these tips.

 

 

1 | Schedule maintenance.

Buyers, especially first-time buyers, want a home they can move into right away; they don’t want to repair the roof or the furnace or replace windows with blown thermal seals before they move in. Do the scheduled maintenance and make repairs before you list your home for sale.

In some cases, it may help to have an inspector do a pre-inspection of your home. A pre-inspection will make you aware of any major, potentially deal-killing issues that will have to be addressed before you list. It also gives you an idea of minor issues that a potential buyer may want repaired. Overall, it helps you to accurately price your home and may protect you from claims a buyer might make later.3

 

2 | Create light.

Balance out the lack of natural light outdoors by turning the lights on inside. Since people naturally tend to buy emotionally, turning on the lights helps create a sense of warmth and coziness. Light a fire in the fireplace, if you have one, fill your home with the scents of the season, such as vanilla or fresh baked cookies, and put a throw blanket on your sofa.

If you plan to paint the interior of your home before you list, consider an off-white shade to create consistency throughout your home and make the space feel larger and brighter. If you have photos of your garden or the home’s exterior in the spring or summer, display them so interested buyers can get a glimpse of what the home looks like in other seasons.

 

3 | Give your home a thorough cleaning.

Cleaning puts your home in its best light. Clean and polish all the horizontal surfaces of your home, including countertops, window sills and baseboards; have the curtains dry cleaned or otherwise laundered; wash windows, glass doors and their tracks; vacuum carpeting and polish all wood surfaces, including the floor.

Additionally, this is a great time to pack any personal items and family photos as well as sort through your belongings and donate items you no longer use. This not only eliminates any clutter, but it also gives you less to pack and move when you sell.

 

If you’re thinking of selling, give us a call! We’d love to help you position your home to sell in our market!




 

 

 

Sources:

  1. Time, October 30, 2015
  2. National Association of REALTORS, 2016 Profile of Home Buyers and Sellers
  3. Forbes, August, 27, 2013

 

 

One of the most common questions we get at this time of year is, “What’s going on in the market?” It’s not just potential buyers and sellers who are curious; homeowners always want reassurance their home’s value is going up. While the state of the real estate market depends on where you live, one thing is for sure: Overall, the real estate market is healthy in most areas.

We often use national real estate numbers to give us a clearer view of our local market. However, real estate is local, and while statistics and predictions help us understand the overall real estate market, our local market may be different. If you’re thinking of buying or selling, or just want to know how much your home is worth, give us a call!

 

What to Expect in the Real Estate Market in 2017

Experts are “cautiously optimistic” about the Canadian housing market in 2017. The overall outlook for the Canadian economy is good, despite falling oil prices. According to PricewaterhouseCoopers (PwC), job losses within the natural resources sector were offset by gains in manufacturing and construction in 2016. However, this has created dramatic differences in housing markets across Canada, with hot markets in Toronto and Vancouver continuing to see high demand and tight inventory and areas impacted by falling oil prices experiencing little growth. Nationally, housing starts are expected to fall below the 20-year average due to factors including housing affordability, limited income growth and increasing consumer debt.

 

The national market will moderate, but regional markets will vary.

According to RBC Economics, there’s minimal chance of a widespread and steep downturn occurring in the next year. Markets including Toronto, Vancouver, and Montréal will remain strong in 2017 due to strong local economies, immigration and low interest rates. Additionally, prices in these markets will continue to increase. These cities are responding to the hot market in different ways. Vancouver issued a 15 percent tax on home purchases by foreign buyers in hopes of tempering the market. In Toronto, since many homeowners are choosing to remain in their homes and renovate, inventory will remain tight. Montréal is focusing on turning condominiums into mixed-used development, which is appealing to buyers of all ages, particularly millennials. In hot markets, like Toronto and Vancouver, experts have noticed some signs of cooling in 2016, which will improve the affordability of homes in 2017 if present trends continue, according to RBC Economics.

Other parts of Canada are recovering from the fall in oil prices. While Ottawa’s economy is growing modestly, the residential market is stagnant due to reduced demand for single-family homes. In Edmonton, the real estate market has softened due to low oil prices. However, sales here are faring better than in other markets in Alberta. Although Calgary experienced a recession due to the drop in oil prices, the economy is expected to grow in 2017. Many homeowners in Calgary are waiting to sell until the economy improves. Additionally, demand for smaller residential properties and townhouses have increased as millennials tend to prefer the advantages of small-space living.

 

Nationally, housing remains affordable.

RBC Economics measures housing affordability at 42.8 percent, meaning there’s greater-than-average market stress for buyers. RBC deems anything above 45 percent to be in the “danger zone” of affordability.  However, national housing affordability takes into account the Vancouver and Toronto housing markets. In most markets across Canada, homes remain affordable and on par with historical norms.

 

Demand will continue to increase as immigration significantly increases over the next five years.

Housing demand is high in Toronto and Vancouver, especially for condos, due to increased demand of foreign buyers and urban migration. According to PwC, in these markets, where demand for single-family homes is high, there’s an opportunity for condo and rental markets to absorb those who are now priced out of buying. Developers in Vancouver are beginning to turn their attention to mixed-use developments and high-density condos to meet growing housing demand.

 

How will the property transfer tax impact foreign buyers in British Columbia?

In 2016, the government of B.C. enacted a property transfer tax for foreign buyers purchasing property in the province. The tax is intended to help temper the market and prevent it from overheating. However, the experts at PwC say the tax may not impact foreign buyers, who are able to afford the area’s rising prices, regardless of new taxes imposed.

 

What’s the impact of new mortgage rules?

At the end of 2016, the Canadian government announced tighter rules on mortgage insurance. The new measure included an increase in the interest rate used to qualify borrowers with a down payment of less than 20 percent who selected a fixed rate mortgage with a term of five years or longer, which impacts a large share of the Canadian mortgage market. According to Mortgage Professionals Canada, 75 percent of new mortgages were fixed-rate with a five-year term. Qualifying standards for fixed-rate mortgages with terms of five years or more and portfolio-insured mortgages will be subject to the same “stress tests” as those for fixed-rate mortgages with terms less than five years and variable-rate mortgages.

While we’ve yet to see how the rules will impact the housing market, it’s expected they may impact home resales and prices in 2017. While the rules are unlikely to cause a crash, there is a chance they may dampen any growth in the market and may cause declines of 11 percent in home sales across Canada.

 

What does it all mean to you?  

If you’d like to know more about our local market and how it compares to national predictions and trends, give us a call! We’d love to discuss our local market with you.

 

3 Things to Do Now if You Plan to Buy This Year
  1. Get pre-approved for a mortgage. If you’re like most buyers who plan to finance part of the home purchase, getting pre-approved for a mortgage will allow you to put in an offer on a home and may give you an advantage over other buyers. The added bonus: you can see how much home you can afford and budget accordingly.
  2. Start looking. While most buyers start their searches online, be sure to look at homes in neighbourhoods you’d like to live in as well. Keep a notebook to write down what you like and dislike about each home you view in person or online. This will help you narrow down where to look and what to look for in your next home.
  3. Come to our office. The buying process can be tricky. We’d love to guide you through it. We can help you find a home that fits your needs and budget. Give us a call to make an appointment today!

 

3 Things to Do Now if You Plan to Sell This Year
  1. Make repairs. Most buyers want a home they can move into right away, without having to make extensive repairs. While the repairs may or may not add value, making them will give your home a competitive advantage over other similar homes on the market.
  2. Get a Comparative Market Analysis (CMA). A CMA not only gives you the current market value of your home, it’ll also show how your home compares to others in the area. This will help us price your home to sell in our market. Call us for your free CMA!
  3. Start packing. Help your buyers see themselves in your home by packing up items you don’t use regularly and storing them in an attic or a storage space. This will make your home easier to stage as well as make it easier to move later on.

 

Are you thinking of buying or selling?

Whether you’d like to buy or sell a home this year, want to know how much your home is worth, or have general questions about our local market, give us a call! We’d love to discuss the market with you.

 

Okay, you made one of the most important decisions in your life: you’re buying a home! You found your ideal home. It’s in your desired neighborhood, close to everything you love, you dig its design and feel, and you’re ready to finalize the deal.

But, whoa … wait a minute! Buying a home isn’t like buying a toaster. If you discover something’s wrong with your new home, you can’t return it for a refund or an even exchange. You’re stuck with your buying decision. Purchasing a home is an important investment and should be treated as such. Therefore, before finalizing anything, your “ideal” home needs an inspection to protect you from throwing your hard-earned money into a money pit.

A home inspection is a professional visual examination of the home’s roof, plumbing, heating and cooling system, electrical systems, and foundation.

There are really two types of home of inspections. There is a general home inspection and a specialized inspection. Most general inspections cost around $400. The cost of a specialized inspection varies from type to type. If the inspector recommends a specialized inspection, take that advice because buying a home is the single most important investment you’ll make and you want extra assurance that you’re making a wise investment.

By having your prospective new home inspected, you can:

  • Negotiate with the home seller and potentially get the home sale-ready at no cost to you
  • Help prevent your insurance rates from rising
  • Opt-out of the purchase before you make a costly mistake
  • Save money in the short and long run

 

How Much Money Can a Home Inspection Save You?

A home inspection helps to find potential expenses beyond the sales price, which puts homebuyers in a powerful position for negotiation. If there are any issues discovered during the home inspection, buyers can stipulate that the sellers either repair them before closing or help cover the costs in some other way. If the sellers do not want to front the money to complete the repairs, buyers could negotiate a drop in the overall sales price of the home!

Perhaps even more importantly, a home inspection buys you peace of mind. Your first days and months in a new home will set the tone for your life there, and you don’t want to taint that time with worries about hidden problems and potential money pits.

To help you understand how much money a home inspection can save you, here are some estimated cost from HomeAdvisor to drive the point home … so to speak.

Roof – Roofing problems are one of the most common issues found by home inspections. Roof repair can range between $316 and $1046, but to replace a roof entirely can cost between $4,660 and $8,950.

Plumbing – Don’t underestimate the plumbing. Small leaks can cause damage that costs between $1,041 and $3,488 to repair. Your home inspector will look for visible problems with the plumbing such as leaky faucets, water stains around sinks and the shower, and noisy pipes. Stains on walls, ceilings, and warped floors show plumbing problems.

Heating and Cooling – Ensuring the home’s heating and cooling system is working properly is very important. Your home inspector will make you aware of any problems with the existing system and let know you whether the system is past its prime and needs replacing. You don’t want to throw down $3,919 to replace an aged furnace. Nor do you want to spend $5,238 replacing an ill-working air conditioner. Replacing and repairing a water heater gets pricey too. Wouldn’t you rather use your savings for a vacation?

Electrical Systems – When thinking of the electrical system, no problem is better than even a small problem. Electrical problems might seem small, but they can blossom into thousand-dollar catastrophes. Make sure your home inspector examines the electric meter, wires, circuit breaker, switches, and the GCFI outlets and electrical outlets.

Foundation – If your home inspector sees that the house is sinking, that means water is seeping into the foundation; cracks in walls, sticking windows, and sagging floor also indicate foundational problems. The foundation is so important that if the general inspection report shows foundation problems, lenders will not lend money on the home until those issues are solved. Foundation repairs can reach as high as $5,880 to repair.

As you can see, a small investment of a few hundred dollars for a general home inspection can save you tons of money and future headaches. To save even more money, you might consider investing in a specialized home inspection as well. A specialized inspection gets down to the nitty-gritty of all the trouble spots the general home inspection might have located.

 

How Much Money Can a Specialized Inspection Save You?

A general home inspection can trigger a need for a specialized inspection because the general home inspector spotted something off about the roof, sewer system, the heating and cooling system, and the foundation. If humidity is high where you’re buying your home, a pest inspection is recommended. Usually, a pest inspection will check for mold as well as pests. Some homebuyers have a Radon test done to ensure air quality.

Roof – Roof specialists examine the chimney and the flashing surrounding it. They also look at the level of wear and tear of the roof. They can tell you how long the roof will last before a new one is needed. They’ll inspect the downspouts and gutters. The average cost of a roof inspection is about $223. Most roof inspections will cost between $121 and $324.

Sewer System – Making sure your sewer system has no problems should happen before the closing because what might look like a small problem can turn into a large problem in the future. If any issues pop up, you can negotiate with the seller about needed repairs or replacements before closing. Cost of inspection will vary; on the low side, it might cost you around $95, and on the high side, it might cost you $790. Compare these numbers to repairing a septic tank, which can cost, on average, $1,435 (though it could reach as high as $4,459), and you can see that the cost of an inspection is worth it when you catch the problem before you buy.

Heating and Cooling System – A HVAC specialist will check the ducts for blockage and for consistent maintenance of the unit. The repairs needed might be small or they might be big, but this small investment will save you headaches and lots of money down the road.

Foundation – A foundation specialist will pinpoint the exact problem with the foundation. The specialist will look at the grade or slope of the home. The ground should slope away from the home in all directions a half inch per foot. Most homeowners have spent between $1,763 and $5,880 to repair their foundation. And the average cost to re-slope a lawn is at $1,705. Most homeowners paid between $933 and $2,558 to re-slope their lawn.

Pest Inspection – Termites eat a home’s wood structure from inside out and can cause thousands of dollars worth of damage to your home. Other pests can turn your dream home into a nightmare. Depending on the humidity of where you live, you should a pest/termite inspection every two years or so. You can start with your potential new home. Most inspections are extensive and cost between $109 and $281. The good news is that most pest management company will guarantee the pest inspection if bugs show up.

Radon Test – Radon is a naturally occurring invisible odorless gas that is the second leading cause of cancer. A radon test is a good test to have done as a good habit. The cost of radon test is low and its cost varies from state to state. Here’s more information about Radon.

Steps You Can Take to Save Money Using a Home Inspection

To help yourself save with a home inspection, you will need to:

Attend the inspection – Attending the inspection is important because it’s an opportunity for you to ask questions.

Check utilities – Checking utilities let’s know the energy efficiency of your potential home.

Hire a Qualified Home Inspector – We work with home inspectors all the time! If you’re not sure who to call, we can recommend bona-fide home inspectors to you.

 

While the decision of who you work with is always yours, we can educate you so that you make a wise homebuying decision. Feel free to contact us with any questions; we’re here to help!

 




 

Despite somewhat grim predictions for the greater Canadian housing market, economic fundamentals in Lethbridge remain strong.

The city enjoys low (4%) unemployment. Housing demand shows a year-over-year increase, with both the number of properties sold (14.9%) and average home values (17.3%) up versus June 2015. Conversely, supply is slightly down (4.7 months of inventory in June versus 5.9 in June 2015) with 12.1% fewer listings coming on the market versus June of last year. Homes under $300,000, in particular, are selling quickly and average selling prices overall are within 97% of the asking price.

These trends means that real estate may be a smart place for you to make an investment and grow your wealth. A housing shortage means that flipped homes tend to sell quickly and for high prices, and a growing population and increasing demand for rental properties makes finding tenants for your buy-and-hold properties easier.

Of course, real estate investment is a long-term investment strategy. If you want to make a foray into real estate investing, you’ll need to educate yourself and be strategic in who you work with and where you look for investment opportunities. Read on for our beginner’s guide to real estate investing.

 

Assemble your real estate team before you buy

Building relationships with your team will empower you to make serious offers that will more likely get accepted by sellers. Among your team members, you will want to include:

● A mortgage broker or banker, who can help you get the financing for your deal
● A real estate attorney to protect you by reviewing and revising contracts
● An appraiser who can help you get a correct appraisal for your potential property
● An accountant who is well versed in real estate investments
● A good contractor, for repairs whether you’re renovating or buying rental property

 

How to find real estate deals

You can buy properties to fix up and resell (flip) or you can buy and hold properties that you rent out for monthly cash flow.

The advantage of flipping properties is that you can end up with a good return on investment (ROI) in the short term. For example, you buy a property for $100,000, and invest $50,000 into repairs. Once it’s renovated, your property is valued at $200,000, and you sell it for a $50,000 profit.

This is an extremely simplified version of ROI. There are many other factors that you need to determine to see if the numbers work in your favor — that is, you’re not overpaying initially when you buy the properties or for the renovations or holding costs.

Flipping properties means that you will need to spend more time looking for fixer uppers that may be under market value. These may be more difficult to find in a hot market with rising property prices. Beyond the actual purchase price, you will also need to factor in fixed purchase costs for inspections, closing, and lender fees.

You’ll also need to factor in holding costs. Your budget should include funds for making repairs, whether you are doing them yourself or hiring contractors. While you’re upgrading the property, you’ll need to carry mortgage payments, property taxes, utilities, and insurance.

In markets with rising property values, fix-and-flip deals in good neighborhoods can be hard to find. But once you know where to find flip-worthy opportunities, you can easily repeat the process by reinvesting proceeds from a previous flip into the next property, which can be bigger, in a more desirable neighborhood, or finished out more luxuriously, and therefore sold for more cash!

Working with the right real estate professionals will help you learn which neighborhoods to consider and determine where you should focus your search. We can help you find the right fixer-uppers that may be under market value. Also, a Realtor may have access to properties that are not publicly available.

Finding buy-and-hold rental properties

A buy-and-hold rental property is one that your purchase with the intent of renting it out to tenants. If you find the right long-term buy-and-hold rental property, you can earn consistent cash flow each month, which can be a great source of supplemental income.

You’ll need to carefully review the operating expenses on the property and what tenants are willing to pay for the space to know if you’ll make or lose money each month. For example, say your total costs to buy a duplex was $20,000, including down payment and closing costs. You can rent each of the units for $600. Assuming your building is 100% occupied, you’ll make $1200 per month in income. Your expenses include mortgage payments, taxes, insurance, utilities, and management fees, and you want to set aside some cash each month for capital expenditures and routine repairs. You calculate that your expenses add up to $1100 per month. Once you subtract your expenses from your income, you’ll have a positive cash flow of $100 per month.

Of course, this is a very simplified example, and it doesn’t take into account that problems will inevitably arise. Emergency roof repairs, heating system breakdowns, broken windows that need replacing, and other unexpected expenses can eat away at your profits. One of your units may be vacant for a month or more — for example, vacancies are high in the summer months in buildings around universities — or you could have a tenant who fails to pay their monthly rent.

The more you can anticipate problems before they happen, however, the easier it will be for you to recover from setbacks! Moreover, rent isn’t the only way to make money on a buy-and-hold property. You can also add amenities, such as coin laundry and vending machines, to increase your potential monthly income. If your property has space to add a billboard, you can earn advertising revenue from renting that space, too. And when you decide to sell, your property’s value will likely have increased both from the overall rising property values and by the improvements you made to increase the cash flow.

Once you find and invest in your rental property, you’ll need to decide how you want it managed from month to month.

 

Getting the right property manager

Do you want to manage your own property or hire a manager? Property management can become a full-time job. As a property manager, you’ll have to deal not only with maintenance, repairs and tenant issues, but also with insurance, landlord-tenant regulations, and building code compliance. So if you’re not an expert in these areas, managing your own properties may not be worth your time and effort.

Hiring a professional manager can save you headaches over the long term. While you’ll have to factor in management as a fixed expense, your property manager will likely know how to better take care of routine repairs, tenant issues, and keeping your property near 100% occupancy.

Your real estate professional can refer you to reputable property management companies to help you take care of your investment.

 

Where should I start investing in local real estate?

Work with a knowledgeable real estate professional who knows about the different neighborhoods. We can help you find properties that will fit into your budget and your overall goals. Whether you’re seeking a duplex or multifamily property so you can maximize your rental income or whether you want a condo or single-family home to improve for resale, we can guide you to the best property to suit your needs.

 

Contact us to learn more about investment properties in our area.