30 Jun

Buy? Sell? Should Canadians buy into real estate or not?


Posted by: Kimberly Walker

Buy? Sell? Should Canadians buy into real estate or not? On the plus side, interest rates remain at historic lows coupled with reduced unemployment, may encourage more Canadians into the market. And when they start looking, they’ll find that prices in most regions still haven’t recovered to their pre-recession highs. The drawback is knowing interest rates have only one direction to go-up. Today’s low 5 year fixed rate of 3.59% can provide security in that area of uncertainty for your on-the-fence clients.

  • TSX +83.96 to 13,188.94 (CP) its third consecutive day of solid gains as traders took in stronger than expected inflation data and news that Greece had passed an austerity bill that should help Athens avoid defaulting on its debt. The surprisingly strong inflation results could put pressure on the Bank of Canada to take a more hawkish tone on inflation in the next interest rate announcement in less than three weeks. The bank had warned it expected inflation to push above three per cent during the spring, but few expected it would hit such elevated levels
  • DOW +72.73 to 12,261.42   
  • Dollar +1.27c to 103.03c USD  
  • Oil +$1.88 to $94.77USD per barrel   Oil and gold prices appear to have moved past recent lows, a trend that bodes well for the performance of the resource-heavy TSX .  Over two days, oil has recovered the loss from last Thursday when the United States and other oil-importing countries said they would dump emergency oil supplies onto the market
  • Gold +$10.40 to $1510.20USD per ounce
  • Canadian 5 yr bond yields markets +.15bps to 2.30.  That’s an increase of 30bps since Monday! The spread (based on the MERIX 5 yr rate published rate of 3.79%) is now down  to the middle of the comfort zone at 1.49 as money moves away from bonds to stocks. The spread based on the quick close of 3.59% is well below the bottom of the comfort zone at 1.29 and is at risk of ending. http://www.tmxmoney.com/HttpController?GetPage=BondsAndRates&Language=en  

The rate of return on your bond, can be read through a yield curve, If the increase in bond yield continues to go up, the spread will continue to shrink and this could be a trigger for interest rates to rise. 1.40 and 1.60

24 Jun

How To Dominate Twitter And Facebook And Get Millions Of Business Followers


Posted by: Kimberly Walker

How To Dominate Twitter And Facebook And Get Millions Of Business Followers

Use targeted advertising on Facebook

Sure it’s pretty basic, but that’s for a reason. It’s the most effective tactic for growing your Facebook followers. These adds are relatively inexpensive, highly targeted, and can be customized to appeal to different prospective demographics

Pay for fans

Believe it or not, there are actual services out there that guarantee you a certain number of fans–if you’re willing to pay for them. FansAndInvites.com and SocioNiks are two such companies that offer these services. You can even target fans or followers by location.

Though the companies absolutely insist that the followers they bring are real, genuine people, beware: their interest in your company or intent to support your small business probably isn’t. Still, one Facebook “like” begets more, and this is one way to get the snowball rolling in hopes of an eventual avalanche.

Incentivize clicking “like” or following on Twitter

If you’re not willing to pay for followers directly, try offering free stuff, discounts, or other attractive items. But make them available only for people who “like” you on Facebook or follow your Twitter feed. 

Piggyback off hot-button issues

How did one little-known author get more Facebook fans than George Clooney? Completely by accident. But it serves as a good lesson for those looking to up their fans.

Gregory Levey’s memoir recounting his experiences as Israeli Prime Minister Ariel Sharon’s speechwriter was titled “Shut Up, I’m Talking.” Facebook users became fans of the book’s page for the title’s implications rather than the content of the book.

Sure, many of those fans aren’t likely to buy the book, but once again, it’s crucial to get the ball rolling. And going from 700 fans to 700,000 in a matter of months does exactly that. Consider using catchy headlines, or reference hot-button issues to garner attention for your Facebook page. The more popular it becomes the more likely you are to turn heads among people that actually might contribute to sales.

Notice trending hashtags

Maybe the popular #RIP2TheCompetition hashtag isn’t the best way to introduce the world to your business, but engaging in trending topics is an excellent way to get the word out.

For example, if you’re in the travel industry, be sure to chime in on the “Travel Tuesdays” hashtag and offer a discount to followers. Or, your company sells treats or luxury items, engage in the “TGIF” hashtag and tell all who are willing to “Like” your Facebook or follow your twitter that they’re eligible for weekend savings

Target popular tweeters

Say you’re opening a sandwich shop in your neighborhood. Seek out a popular local food blogger that tweets, and tell him about your business. Fatten him up with a free sandwich, and, if he likes it, he might fatten your social media following.

How? Be sure to tell him that any of his followers that follow your business on Twitter are welcome to a half-off sandwich. Remember, anyone interested in the blogger’s content is perfectly suited for your business. Or, for a quick gauge of your ROI, consider offering a discount to customers that mention the blogger’s name. 

For a mere $8 sandwich, you could potentially gain dozens of interested followers

Create good content

If people who discover your page find it boring or useless, all that hard work you put into getting them there in the first place will go to waste. Create beautiful, compelling content that invites visitors to click around, read, and truly “like” or want to follow your page.

Update frequently

Several digital media PR experts told us the number one mistake businesses make with their Facebook and Twitter pages is they don’t update enough. Social media is not rotisserie chicken—you can’t “set it, and forget it.”

Take advantage of Facebook’s news feed, and applications like TweetDeck, by constantly updating your social media pages. It will keep you fresh in your follower’s minds and, with a little luck, can appear on news feeds–or be retweeted–to prospective customers. 

Engage customers conversations

The beauty of social media is that customers truly believe they can have direct content with your company. Uphold this belief and create trust by responding to your customers who comment on your page or tweet to your account.

But don’t dare do so in PR-speak or corporatese. You’ll shatter their trust. Answer in an authentic voice that’s consistent with your values to keep existing followers happy and give reasons for new ones to hop on the bandwagon.

 Respond to complaints

Remember Domino’s recent campaign that urged customers to post photos of pizza delivered to their homes? Well, here’s a shocker: some of those pictures showed some pretty sloppy, nasty pies. Worse, some pizzas depicted orders gone wrong.

Yet Dominos used social media savvy to turn a disaster into more Twitter followers. One store manager-turned-social media expert, Ramon DeLeon, took matters into his own hand. He tweeted a link to a video to one unhappy customer, and has since garnered nearly 7,000 followers.


22 Jun

4 Ways To Value A Real Estate Rental Property


Posted by: Kimberly Walker

4 Ways To Value A Real Estate Rental Property

Stephan Abraham, On Tuesday June 21, 2011

During the first half of the 2000s, investing in real estate became more common for average Americans. With easily available financing and minimal down payment requirements many Americans made handsome profits by flipping homes. Well, as we are all aware of, this couldn’t go on forever, and the real estate bubble popped in 2007, leading to The Great Recession. Notwithstanding this fundamental change, real estate investment is certainly not unprofitable. Some economic factors such as high unemployment and very strict lending standards by financial institutions have contributed to low vacancies for rentals across the United States. Perhaps real estate investors should look at rental investments as an alternative to a buy and sell approach. So, how does one go about valuing real estate rentals? Here we will introduce at a high level some ways to value rental property.

Sales Comparison Approach
The sales comparison approach (SCA) is one of the most recognizable forms of valuing residential real estate. This approach is simply a comparison of similar homes that have sold or rented over a given time period. Most investors will want to see an SCA over a significant time frame to glean any potentially emerging trends.

The SCA relies on attributes to assign a relative price value. Price per square foot is a common and easy to understand metric that all investors can use to determine where there property should be valued. If a 2,000 square foot townhome is renting for $1/square foot, investors can reasonably expect a similar rental income based upon similar rentals in the area. Keep in mind that SCA is somewhat generic; that is, every home has a uniqueness that isn’t always quantifiable. Buyers and sellers have unique tastes and differences. The SCA is meant to be a baseline or reasonable opinion and not a perfect predictor or valuation tool for real estate. It is also important for investors to use a certified appraiser or real estate agent when requesting a comparative market analysis. This mitigates risk of fraudulent appraisals, which became widespread during the 2007 real estate crisis.

Capital Asset Pricing Model
The capital asset pricing model (CAPM) is a more comprehensive valuation tool for real estate. The CAPM introduces the concepts of risk and opportunity cost as it applies to real estate investing. This model really looks at potential return on investment (ROI) derived from rental income and compares it to other investments that have no risk, such as United States Treasury bonds or alternative forms of real estate investments such as real estate investment trusts (REITs).

In a nutshell, if the expected return on a risk-free or guaranteed investment exceeds potential ROI from rental income, it simply doesn’t make financial sense to take the risk of rental property. With respect to risk, the CAPM considers the inherent risks to rent real property. For example, all rental properties are not the same. Location and age of property are key considerations. Renting older property will mean landlords will likely incur higher maintenance expenses. A property for rent in a high crime area will likely require more safety precautions than say a rental in a gated community. This model suggests building in these “risks” before considering your investment or when establishing a rental pricing structure.

Income Approach
The income approach focuses on what the potential income for rental property yields relative to initial investment. The income approach is used frequently for commercial real estate investing. The income approach relies on determining the annual capitalization rate for an investment. This rate is simply the projected annual income from the gross rent multiplier divided by the original cost or current value of the property. So if an office building costs $120,000 to purchase and the expected monthly income from rentals is $1,200, the expected annual capitalization rate is 10%.

This is a very simplified model with few assumptions. More than likely there are interest expenses on the mortgage. Also, future rental income may be less or more valuable five years from now than they are today. Many investors are familiar with the net present value of money. This concept applied to real estate is also known as a discounted cash flow. Dollars received in the future will be subject to inflationary as well as deflationary risk and are presented in discounted terms to account for this.

Cost Approach
The cost approach to valuing real estate states that property is really only worth what it can reasonably be used for. It is estimated by summing the land value and the depreciated value of any improvements. Appraisers from this school often espouse the “highest and best” use to summarize the cost approach to real property. It is frequently used as a basis to value vacant land. For example, if you are an apartment developer looking to purchase three acres of land in a barren area to convert into condominiums, the value of that land will be based upon the best use of that land. If the land is surrounded by oil fields and the nearest person lives 20 miles away, the best use and therefore the highest value of that property is not converting to apartments but possibly expanding drilling rights to find more oil.

Another best use argument has to do with property zoning. If the prospective property is not zoned “residential,” its value is reduced since the developer will incur significant costs to get rezoned. It is considered most reliable when used on newer structures, and less reliable for older properties. It is often the only reliable approach when looking at special use properties.

The Bottom Line
Real estate investing isn’t out of vogue by any stretch of the imagination. Since the last crash, however, the housing market has changed dramatically. Flipping homes financed with no money down is an artifact of the past and possibly gone forever. But real estate rentals can be a profitable endeavor if investors know how to value real property. Most serious investors will look at components from all of these valuation methods before making a rental decision. Learning these introductory valuation concepts should be a step in the right direction to getting back into the real estate investment game.



15 Jun

TD Bank forecasts low interest rates this year


Posted by: Kimberly Walker

TD Bank forecasts low interest rates this year. However with current bond yields, they may not be as low as today’s 3.59%. Submit any applicable applications in to MERIX asap!

OTTAWA — The TD Bank says Canadians can expect borrowing costs to remain near record lows for the rest of the year.

That’s because the pace of the economic recovery is expected to slow sharply in Canada, the United States and much of the world.

As such, the Bank of Canada will likely refrain from raising its key interest rates until 2012, TD says.

The central bank has had its policy rate set at one per cent since September. The rate was set at all-time low of 0.25 per cent through much of the recession, to stimulate borrowing and spending, until a series of rate hikes began last summer.

The still-low rates have been a double-edged sword for Canadians who are already piling up debt at record levels, according to the Certified General Accountants Association of Canada.

The association says Canadian household debt has reached a record $1.5 trillion, and calculates that more than half of indebted Canadians are borrowing just to afford day-to-day living expenses such as food, housing and transportation.

Low interest rates will make it easier for Canadians to keep borrowing, setting them up for a fall further down the road.

Debt is partly contributing to a slowdown in Canadian growth, says the TD Bank, because households are too tapped out to spend and stimulate the economy.

The bank says Canada’s economy is believed to have already slowed to 1.3 per cent growth during this current quarter that ends at the end of the month, one-third the pace of the first quarter’s 3.9 per cent gain.

The rest of the year will see growth crawl along between two and 2.5 per cent, the bank says.

As the recovery moderates, so will job growth. The bank says it expects the unemployment rate in Canada will remain above seven per cent throughout its forecast period to the end of 2013.

With little help from consumers, Canada will need to depend on exports and business investment to fuel growth. http://www.therecord.com/news/business/article/547758–td-bank-forecasts-low-interest-rates-this-year


14 Jun

Recreational property markets bouncing back


Posted by: Kimberly Walker

Recreational property markets bouncing back: Re/Max

OTTAWA — Canada’s recreational property market appears to be bouncing back from a recessionary lull as buyers seek to capitalize on equity and stock-market gains, Re/Max says in a report Monday.

Demand rose 78% in the 46 markets across the country covered by the realtor’s Recreational Property Report, while sales had risen or were on par in 41% of those centres.

“Buyers who held off during the recession are back in recreational property markets from coast-to-coast,” says Pamela Alexander, chief executive of Re/Max for Ontario-Atlantic Canada. “Their patience has been rewarded with more affordable recreational values and greater inventory levels.”

While prices have remained stable in many markets, values could be found for higher-end properties, pushing luxury sales higher in almost half of the markets examined, Re/Max said in its report.

Opportunities were also to be found in Western Canada.

“Prices are down as much as 20% from peak levels reported in 2006-2007, bringing ownership within reach to many potential purchasers,” said Elton Ash, regional executive vice-president of Re/Max in Western Canada.

On British Columbia’s Salt Spring Island, for example, starting prices for oceanfront properties have fallen to $669,000 today from $1.3-million in 2008.

In the North Okanagan Valley, a three-bedroom, winterized recreational property on a standard-sized waterfront lot — the common measures used in Re/Max’s report — that sold for $1.5-million in 2008 now sells for $995,000.

Starting prices for similar properties on Alberta’s Sylvan Lake are now at $800,000 from $1.25-million previously and in the Rocky Mountain resort town of Canmore, a two-bedroom condo has fallen to $229,000 from $320,000.

“The strengthening oil sector has . . . brought Albertans back into mix, driving demand for both local and coastal B.C. properties,” Ash said.

Another factor influencing the recreational property market has been that Americans who bought when the Canadian dollar was at 65 U.S. cents are now cashing out, boosting inventories.

The report found that there has been some tightening for entry-level properties in about one-third of the markets covered. As well, it noted, the supply of properties has tightened considerably at the lower end in Ontario, Quebec and Atlantic Canada.

It also noted that recreational properties are moving more toward year-round homes, with fewer traditional cottages available for sale.

“These waterfront properties are disappearing from the landscape. Meanwhile, today’s average recreational getaways are truly earning the distinction as the “home away from home,” with many of the bells, whistles and comforts of their residential counterparts http://business.financialpost.com/2011/06/13/recreational-property-markets-bouncing-back-remax/

9 Jun

Top 8 House-Hunting Mistakes


Posted by: Kimberly Walker

Top 8 House-Hunting Mistakes

Amy Fontinelle,

Buying a home is a very emotional process, but if you allow those emotions to get the best of you, you may fall prey to a number of common home buyer mistakes. Since buying a home has many far-reaching implications – ranging from where you will live to how hard it will be to make ends meet – it’s important to keep your emotions in check and make the most rational decision possible.

There are eight common emotional mistakes that people make when buying a home. Avoiding these pitfalls will help you find the best home-sweet-home.

Mistake 1: Falling in Love With a House You Can’t Afford
Once you’ve fallen in love with a particular home, it’s hard to go back. You start dreaming about how great your life would be if you had all the wonderful things it offered – the lovely, tree-lined streets, the jetted bathtub, the spacious kitchen with professional-grade appliances. However, if you can’t or won’t be able to afford that house, you’re just hurting yourself by imagining yourself in it. To avoid the temptation to get in over your head financially, or the disappointment of feeling like you’re settling for less than you deserve, it’s best to only look at homes in your price range.

Start your search at the low end of your price range – if what you find there satisfies you, there’s no need to go higher. Remember, when you buy another $10,000 worth of house, you’re not just paying an extra $10,000 – you’re paying an extra $10,000 plus interest, which might come out to double that amount or more over the life of your loan. You may be better off putting that money toward another purpose.

Mistake 2: Assuming There’s Nothing Better Out There
Unless you are a high-end buyer looking at custom homes, chances are that for any home you find that you like, there are quite a few others that are nearly identical to it. Most neighbourhoods have multiple homes that are the same model. Further, most neighbourhoods are full of homes that were all constructed by the same builder, so even if you can’t find an identical model for sale, you can probably find a house with many of the same features. If you’re considering a condo or townhouse, the odds are also in your favour.

Even when you have a long list of must-haves, there are probably several homes out there that can meet your needs. If there are snags with the home you’ve decided you like – such as major repair issues, an inflexible asking price or a difficult possession date – consider moving on. Being open to keep looking will save you from making rash decisions you might regret later.

Mistake 3: Being Desperate
When you’ve been looking for a while and you’re not seeing anything you like – or worse, you’re getting outbid on the houses you do want – it’s easy to get desperate to get into your new house now. However, if you move into a house you’ll end up hating, the transaction costs to get rid of it will be costly. You’ll have to pay an agent’s commission (up to 5-6% of the sale price) and you’ll have to pay closing costs for the mortgage on your new house. You’ll also deal with the hassle and expense of moving yet again. If you decide not to move but to try to make the best of what you have, remember that alterations and renovations are expensive, time-consuming and stressful. If you have time on your side, it’s OK to wait until something that suits you comes along – as long as your demands are realistic for your budget, you are bound to find something you live with.

Mistake 4: Overlooking Important Flaws
For any of the three reasons we just discussed, you might be tempted to ignore major problems with the house that will be difficult, expensive or impossible to change. Carefully consider your options before you make a commitment, and consider waiting until something better comes along. New houses come on the market every day.

Mistake 5: Overestimating Your Handyman Skills
Don’t buy a fixer-upper that’s more than you can handle in terms of time, money or ability. For example, if you think you can do the work yourself then realize you can’t once you get started, any repairs or upgrades you were planning to make will probably cost twice as much once you factor in the labour – and that may not be in your budget. Not to mention the costs involved to fix anything you may have started and the fees to replace the materials you wasted. Honestly evaluate your abilities, your budget and how soon you need to move before purchasing a property that isn’t move-in ready.

Mistake 6: Rushing to Put In an Offer
In a hot market, it may be necessary to pull the trigger very quickly if you find a home you like. However, you have to balance the need to make a quick decision with the need to make sure the home will be right for you. Don’t neglect important steps like making sure the neighbourhood feels safe at night as well as during the day and investigating possible noise issues like a nearby train. Ideally, you’ll be able to take at least a night to sleep on the decision. How well you sleep that night and how you feel about the home in the morning will tell you a lot about whether the decision you’re about to make is the right one. Taking the time to consider the decision also gives you a chance to research how much the property is really worth and offer an appropriate price.

Mistake 7: Dragging Your Feet
It’s a tough balancing act to make sure you make a careful decision, but don’t take too long to make it. Losing out on a property that you were almost ready to make an offer on because someone beat you to it can be heartbreaking. It can also have economic consequences. Let’s say you are self-employed. Perhaps for you more than anyone else, time is money. The more time and energy you have to take out of your normal activities to search for a house, the less time and energy you have available to work. Not dragging out the homebuying process unnecessarily may be the best thing for your business, and the continued success of your business will be essential to paying the mortgage. If you don’t pull the trigger quickly, someone else might, and you’ll have to keep looking. Don’t underestimate how time-consuming and routine-disrupting house shopping can be.

Mistake 8: Offering Too Much
If there’s a lot of competition in your market and you find a place you really like, it’s all too easy to get sucked into a bidding war – or to try to pre-empt a bidding war by offering a high price in the first place. There are a couple of potential problems with this. First, if the house doesn’t appraise at or above the amount of your offer, the bank won’t give you the loan unless the seller reduces the price or you pay cash for the difference. If this happens, the shortfall on your bid as opposed to your mortgage will have to be paid out of pocket. Second, when you go to sell the house, if market conditions are similar to or worse than they were when you purchased, you may find yourself upside down on the mortgage and unable to sell. Make sure the purchase price for the home you buy is reasonable for both the house and the location by examining comparable sales and getting your agent’s opinion before making an offer.

It’s natural for emotion to come into play in the home-buying process. Buying a house is a big decision, but this is exactly why you need to ensure you are making rational choices, rather than getting wrapped up in the notion of a dream home. Slow down, overcome your emotions and, ultimately, make a home-purchase decision that’s good for both your feelings and your finances. http://ca.finance.yahoo.com/news/Top-8-HouseHunting-investopedia-617819117.html?&mod=pf-sp14e

9 Jun

Home Prices Could Fall 21% – June 2011 Report


Posted by: Kimberly Walker

Vancouver home prices poised for correction, could fall 21 per cent: report

By Sunny Freeman, The Canadian Press

TORONTO – Homes in Vancouver have become so expensive you might have to win the lottery to afford one, says a prominent economist — and with prices that sky-high, odds are the city is ripe for a big drop.

Overpriced homes in some Canadian cities, along with elevated household debt, suggest the real estate market is vulnerable to a correction — especially in Vancouver, senior economist Sal Guatieri said in a Bank of Montreal report released Tuesday.

“Riding a wave of wealthy immigrants, Vancouver’s house prices have nearly tripled in the past decade, spiralling beyond the reach of most first-time buyers or non-lottery winners,” Guatieri said.

Homes in that Pacific Coast city now cost 11.2 times median family incomes — a ratio that measures the median home price to median annual household disposable income. That’s more than double the current Canadian average of 5.1 times income.

Chinese demand for houses in Vancouver has been strong, on the back of looser travel restrictions, as well as stricter buying rules and lofty prices in China. A recent survey by Demographia rated Vancouver the third least affordable city in the world, behind Hong Kong and Sydney, two other cities influenced by Chinese demand, he said.

“While land-use restrictions and high quality-of-life rankings can justify elevated prices, current steep valuations could prove unsustainable if foreign investment ebbs or interest rates climb,” Guatieri said.

Past housing corrections have seen Vancouver home values fall an average of 21 per cent. But prices in the city are even higher today, averaging $815,000 in April, pushing the market further toward the brink of a housing bubble.

However, if interest rates stay low and foreign investment continues, the price correction could stabilize sooner than in the past, Guatieri said.

Even excluding Vancouver, average home prices have more than doubled in the past 10 years to a historically high level.

“Due to ultra-low interest rates, affordability isn’t a major issue yet, with first-time buyers allocating about one-third of their disposable income for mortgage payments, as is the norm,” Guatieri said.

“But high valuations suggest that even a moderate increase in interest rates will slow the market in coming years.”

Some triggers that could set off a broader collapse include a rapid rise in interest rates, a sharp increase in unemployment or a slowing of foreign investment.

High home prices in Toronto also mean the country’s biggest city is likely poised for softer prices in the near term, fuelled by a rising supply of condos that could soon outstrip demand, leaving a glut on the market.

Housing costs in the city eat up 6.7 times family income, comparable to costs in the late 1980s before prices slid 25 per cent. However, mortgage rates now are under four per cent, compared to 14 per cent in the earlier decade.

“That said, while high valuations might be sustainable in an ultra-low rate climate, they could come under pressure in a more normal rate environment,” Guatieri said.

Meanwhile, the report said energy-rich Calgary could see home prices rise in coming years. It is one of the few Canadian cities, along with Edmonton, where prices have not returned to pre-recession peaks, reflecting the fallout of overbuilding during the oil boom before the financial crisis hit. http://ca.finance.yahoo.com/news/Vancouver-home-prices-poised-capress-3105641674.html;_ylt=An.OF7eUa_4f1tw3uhpAmong2ppG;_ylu=X3oDMTFkaGliYW1yBHBvcwMxBHNlYwNuZXdzSHViQXJ0aWNsZUxpc3QEc2xrA3ZhbmNvdXZlcmhvbQ–?x=0

7 Jun

5 Factors That Impact The Value Of Your Home


Posted by: Kimberly Walker

5 Factors That Impact the Value of Your Home

Money Crashers, On Wednesday June 1, 2011

Selling your house can be a huge headache–especially when you’re selling it in today’s buyer’s real estate market. One of the most challenging aspects to deal with is determining your home’s value. When it comes to fixing a fair price, homeowners always shoot high. After all, you love your house and you know how much work you’ve put into it. Won’t someone else appreciate it as much as you do?

The short answer is no. An experienced real estate agent will take the emotional factor out of the equation and help you come up with a realistic market value for your house. But if you want to sell your house yourself without a realtor–or you just want to be prepared for the number they advise–here are five factors that can heavily skew the asking price of your home.

1. Location

We’ve all heard how important “location, location, location” is, and with good reason. A great house in a bad location can knock as much as 50 percent off the value. If you have the nicest, most expensive house in your average neighbourhood, then the value is also going to be much lower than it would be if you had the least expensive house in a nice neighbourhood. Other factors, like freeways, proximity to a landfill or sewage treatment center, and train tracks, can knock 10 to 15 percent or more off the value of your home. This is why it’s so important to shop location first when you’re buying a house; you can always add home improvements, but moving it to another neighbourhood isn’t going to happen.

2. Outdated Rooms

If your fridge is more than 15 years old and your oven isn’t black or stainless steel, then count on listing your house lower than you’d be able to if you had a fully updated kitchen. With the influx of homes on the market right now, people can easily get a home that doesn’t need any updating, so why would they choose one that does? If you don’t want to update your home in order to sell it, know that outdated rooms can affect the value of your home by up to 10 percent.

3. Renters

Many people don’t want to own a home surrounded by rental properties. Although it’s a stereotype, tenants often don’t keep up the property like an owner would. In this case, the value of your house can go down as much as 15 percent, depending on how many rentals are in close proximity to your home.

4. Major Upgrades

In this market, don’t count on getting more for your home if you just upgraded the plumbing, bought a new furnace, or replaced your roof. However, if your home does need those upgrades and you haven’t done them, then it’s going to knock as much as 20 percent off the value of your home, depending on how severe the upgrade is. Buyers simply don’t want to shell out for major upgrades – especially when there is a large pool of other properties to choose from.

5. Fencing

Most people looking to buy a house have kids or pets. If your home doesn’t have a fenced backyard, you’re going to alienate a huge portion of the market since fenced backyards are essential for keeping kids and pets safe and contained. Not having a fence can knock up to 10 percent off your home’s value.

Final Thoughts

Although many of these factors, like location and proximity to renters, are out of your hands, there are plenty of things you can do to increase the value and appeal of your home. For instance, buyers almost always choose light and airy homes over dark ones. Therefore, it’s beneficial to do whatever you can to bring a sense of light and space into your home. Other factors, such as fresh paint and a tidy lawn, make a great first impression as well. The important thing is to be realistic when deciding on a price for your home so that you can move it off the market as quickly as possible. http://ca.finance.yahoo.com/news/5-Factors-That-Impact-the-usnews-2641331434.html?x=0&mod=pf-sp14e

2 Jun

New Release Fraser Valley Real Estate Board June 2, 2011


Posted by: Kimberly Walker

News Release: June 2, 2011


Fraser Valley housing market shows local variation


(Surrey, BC) – The Fraser Valley Real Estate Board processed 1,608 property sales on its Multiple Listing Service (MLS®) in May, an increase of 9 per cent compared to 1,477 sold during May of last year, and an increase of 6 per cent compared to April’s 1,516 sales.


Sukh Sidhu, president of the Board, reports, “Overall, the Fraser Valley market is in a balanced position, however there are significant differences amongst individual communities and property types stressing the importance of getting local expertise if you’re thinking of buying or selling.


“For example, sales of single family detached homes in South Surrey/White Rock, Cloverdale and North Delta remain brisk with those markets favouring sellers, however in Abbotsford and Mission high inventory and downward pressure on prices is good news for buyers. In Langley, Surrey Central and North Surrey, conditions are balanced for sales of detached homes.”


Variation is also evident in home prices. In May, the benchmark price for Fraser Valley detached homes was $529,810, an increase of 2.8 per cent year-over-year. The benchmark price is the predicted sale price of a typical property in the Fraser Valley. Contrast that to May’s average price of $630,870 for detached homes, an 11.6 per cent increase compared to May 2010 – influenced by the sale of higher-end
homes or homes with larger lots.


Sukh Sidhu explains, “The average price and its percentage change often do not provide an accurate picture of the real market, which is why we talk about prices of “typical” homes that most people are buying or selling.”


In May, the benchmark price of Fraser Valley townhomes was $324,730, a decrease of 1.1 per cent compared to $328,295 in May 2010. The benchmark price of apartments was $250,988 in May, a decrease of 0.5 per cent compared to the $252,221 price in May of last year.


May finished with 2.9 per cent more active listings on the MLS® than it had in April – 9,978 compared to 9,697 – however, 12.6 per cent fewer than the 11,411 listings that were active during May of 2010. The Board received 3,070 new listings in May, an increase of 5.2 per cent compared to April and a decrease of 11.2 per cent compared to the 3,457 new listings received in May 2010.


Information and photos of all Fraser Valley Real Estate Board listings can be found on the national, public web site www.REALTOR.ca. Further market statistics can be found on the Board’s web page at www.fvreb.bc.ca. The Fraser Valley Real Estate Board is an association of 2,917 real estate professionals who live and work in the communities of North Delta, Surrey, White Rock, Langley, Abbotsford, and Mission.












2 Jun

Is buying a student condo for my child a good investment?


Posted by: Kimberly Walker

Is buying a student condo for my child a good investment?

Sometimes a parent decides to buy a place for their children while they hit the books in university or college. It can be a good alternative to paying thousands of dollars toward residence fees or rent. Just look at the math:

Student rent of $500 a month = $6,000 a year = $24,000 over 4 years of school.

That money could go to your mortgage instead as an investment for you.

In Ottawa, for example, you can buy an older one-bedroom condo for about $195,000. Or, buy a 2-bedroom for $240,000 and let your child’s roommate help cover the mortgage by paying rent. Let’s assume you pay 20 per cent down. Here’s an example of what your monthly costs could total when mortgage rates are low:




Mortgage payment



Condo fees



Property taxes, maintenance






Think about it: if your child rents a place, your money is helping the landlord pay his or her mortgage and other costs. If you buy a place instead and rent it to them, you have a real estate investment with a guaranteed tenant: your child. If the investment goes up in value, you will make money. Just remember that those gains will be taxed.

Also remember, mortgage rates and other costs change, and these changes will impact the numbers and your decision.

Things to consider before you decide:

You can buy the property in your name, in your child’s name, or both. If you buy the property in your name, you should consider:

  • The rental income you charge can pay a lot of your costs. Just remember you have to declare that income on your tax return.
  • As a landlord, you can also claim many of your expenses, including mortgage interest. Assess your costs carefully before you buy. They will vary with the local real estate market, mortgage rates and other factors.
  • Plan for some vacancies. Your child (or their roommate) may not stay in the condo over the summer break. Are you really going to ask them to pay rent if they are living somewhere else for a few months?
  • Remember that you will own a greater share of the equity as you pay off the mortgage. And, the value of the condo may rise over time. This can offset your costs. But whether you do more than break even depends on what happens to housing prices in the area.

There are other benefits, too. Your child won’t need to look for a different place to live each year. They also won’t have to worry about subletting every summer. And their furniture won’t be coming back with them if they live at home over the summer break. Not a bad deal.

Remember: you may not make money if you buy a student condo.
But there are other reasons you may decide to go ahead. At the very least, you can provide your child with a nice place to live in a good neighbourhood while they go to school.