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MyDaddyHomes Blogs on Real Estate in the Brampton and Mississauga areas
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 The annual inflation in Canada rate
hit 5.1% in January – the first time it has surpassed the 5% mark for
over 30 years, according to Statistics Canada.
That increase, which followed a 4.8% rise in December, marked the
highest rate of inflation since September 1991, the national statistics
agency said this morning.
StatCan noted that housing was one of the sectors most significantly
affected by rising prices for goods and services, with Canadians also
feeling the squeeze on food and gasoline costs.
Shelter costs – the average monthly total of expenses paid by
households that own or rent their dwelling – were up 6.2% over last
year, setting the quickest pace for 32 years.
“Higher prices for new homes contribute to higher costs associated
with the upkeep of a property, or the homeowners’ replacement cost,” the
body said. “Higher home prices also tend to raise other owned
accommodation expenses.”
The owned accommodation index, measuring the continuing costs of home ownership, had seen a 6.1% increase over January 2020.
Read next: Canada housing crash – how likely is it?
The price of gasoline, meanwhile, increased by nearly 32% in January
compared with the same month last year, StatCan said. The annual rate of
inflation would have totalled 4.3% if gasoline prices were excluded.
Ongoing supply chain snarls across the world contributed to higher
shipping costs, in turn ramping up the cost of food. Grocery prices had
increased by 6.5% over January 2020, representing the largest
year-over-year increase for nearly 13 years.
The news arrives two weeks to the day before the Bank of Canada is
scheduled to make its second policy rate announcement of the year, with a
hike to that benchmark rate widely anticipated.
In its last statement on January 26, the Bank acknowledged that core
measures of inflation had edged up since October and consumer price
index (CPI) inflation was “well above” its target range – but opted
against introducing a rate increase.
The Bank said that it expected inflation to “decline reasonably
quickly” to about 3% by the end of 2022, indicating that it would use
its monetary policy tools to “ensure that higher near-term inflation
expectations do not become imbedded in ongoing inflation.” Article provided by:
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Investing In a Rental Property: Where to Start?
Explore your options before making the leap to being a landlord
Many of us are interested in learning more about buying an investment property and renting it out. Having an investment property with a positive cash flow is a great hedge for the retirement years. But where to start?
While this can prove to be a good way to steadily build wealth, this
type of investment is a major commitment and is certainly not for
everyone. Making the leap to being a landlord requires careful
consideration. Understanding the risks involved, as well as collecting
sound information and advice are the keys to planning a successful
venture. Here are some things to bear in mind as you explore your options:
Research the local market:
Get
up-to-date information about your local rental and real estate markets
so you can make an accurate estimate of how much you can charge for
rent, as well as how much you should pay for the property. Your real
estate agent has expertise on local conditions and can provide solid
guidance in this area.
Make
sure you add up all the costs. In addition to expenses such as a
mortgage and taxes, the longer you plan to own the property, the more
you'll most likely need to invest in maintenance and repairs. For
maintenance, a rule of thumb is to set aside about two percent of the
home's value per year. A home equity line of credit is a good way to
have access to contingency funds should you need to pay for repairs,
gaps between tenants, or other expenses.
Don't
forget to factor in the cost of fire insurance, and for recreational
property potentially other types of insurance (against floods or
windstorms) depending on the location. Liability insurance for
landlords can cover risks such as malicious or accidental damage to your
property by a tenant, any legal liability should a tenant injure
themselves, and lost rental income should tenants move out without
paying.
Learn the tax implications:
Mortgage interest and many costs associated with
buying the property may be written off. Your accountant can provide
full details on the tax consequences of such an investment.
Know the law:
You should study up on the rental property laws
in your jurisdiction, including fair housing laws, to make sure you know
your rights and obligations and also those of your tenants.
Seek advice on financing:
There are unique aspects to financing rental
properties: lenders typically expect a down payment of at least 10-15%
if the mortgage is insured and 20% for a conventional mortgage. Another
option is to draw on the equity from another of your properties. In
qualifying for this mortgage, a maximum of 50 to 80% of rental income
may be used as "other income" in your mortgage application.
Many
investment property buyers use the equity in their primary residence
for a down payment. Options for doing this include a "cash-out"
refinance, a home equity loan or an equity line of credit.
A
mortgage broker can offer a range of unique products and professional
advice on the ins and outs of financing investment properties.
Ask yourself: Are you willing to be a landlord?
This can be time-consuming and for some it can be
hard to remain emotionally detached when they have to rigorously screen
tenants to make sure they're reliable, track down overdue rents and
field repair calls. You may decide to let a professional property management service
handle the nitty gritty of dealing with tenants. If you choose to rent
your property through a management company, expect them to take
anywhere from 10 to 15 percent of the rental income.
Take the long view.
Having a long-term investment strategy in place can help you ride out
any difficulties, such as a dip in the price of the property, periods
with no tenants, or having to pay for unforeseen maintenance. When it comes to rental properties, wealth is earned over time, not overnight
For informational purposes we have included within this blog the average rental prices for Brampton and Mississauga rentals.
Brampton And Mississauga Average Rental Prices As of July/2021
Rental Type |
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Brampton |
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Mississauga |
One Bedroom Condo apartment |
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$2000.00 plus |
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$2000.00 plus |
Two Bedroom Condo Apartment |
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$2200.00 plus |
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$2400.00 plus |
Freehold Townhouse Whole House |
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$2400.00 plus |
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$2400.00 plus |
Semi-Detached |
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$2300.00 plus |
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$2300.00 plus |
Detached Whole |
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$2500.00 plus |
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$2500.00 plus |
Executive Detached |
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$2700.00 plus |
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2800.00 plus |
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Equifax and Trans Union are two large bureaus which collect your score. A credit score is a number between 300 and 900; the higher your number the better. A credit score of over 700 is considered very good. Generally, the better your credit rating the lower the interest rate at which you will be able to access loans. Here are six tips on how to improve your credit score.
1) Pay every account on time-
This sound really simple but there is real beauty in simplicity. If you
cannot make payments, make sure you are never 60 days past due. Some
creditors will not report you if you are under 30 days past due but they
will definitely report you for 60 days over-due. So play it safe and
pay on time. Any late payment reported on your credit history can remain
there for seven years.
2) Activity counts on
each and every account- A lot of people have credit cards that they
never use. I am advised that this actually hurts your credit score since
your file isn't "active" on particular accounts. Activity generally
means that you are using a particular account every 3 months or so.
3) If you have to, cancel the newest credit instrument first:
Remember that credit history and debt to credit ratios count. If you
cancel a long standing account (assuming its in relative good shape) you
are erasing credit history and increasing your total debt to credit
ratio since the available amount of credit to you just decreased pushing
your ratio up.
4) Divide the cost of large purchases among several accounts:
If you buy a dishwasher and max out one credit card to do it, your debt
to credit ratio increased to 100% on that account which decreases your
credit score. Split the purchase of big ticket items between several
credit cards and try to keep the debt to credit ratio on each card under
50% (i.e. only use 50% of the credit available under each card).
5) Do not apply for a lot of credit at once:
This is a particularly important tip for students who have just
graduated or recent immigrants without a domestic credit history. If you
do need credit, try to consolidate it with one institution which only
has to run your credit score once. For example, apply for a credit card
and a line of credit at one bank or at the same institution that is
administrating your student loan; it will only require one credit check
and, if you subsequently apply for more credit at that same institution,
at least they will know that all the new accounts are with them.
6) The Two-Two-Two Rule:
For fairly good credit history most lenders would like to see at least
Two active trade lines on your credit report, with a credit limit of at
least Two thousand dollars ($2,000), and for a period of at least Two
years. If
you re thinking of applying for a mortgage, start creating a good
credit history on each account. You should ideally keep several accounts
in good standing (and with a low debt to credit ratio) for at least 6
to 12 months minimal. It will increase your score and save you money!
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On April 22, 2015, City Council approved new policies permitting second units (basement apartments)
in the City of Brampton. Second units are now permitted in detached,
semi-detached and townhouse dwellings, subject to zoning requirements.
Second units
- also known as accessory or basement apartments, secondary
suites/units, two-unit housing, “granny flats” and in-law flats - are
self-contained residential units with kitchen and bathroom facilities
within dwellings or within structures accessory to dwellings, with a separate
entrance. Second units offer Brampton residents another option for safe, affordable housing, but in order to be legal, they must be registered with the City of Brampton.
Under the new policies:
- Only one second unit is permitted per house.
- In a bungalow, the second unit can be up to 75 per cent of the
primary unit’s gross floor area (GFA). For all other houses, the second
unit can be up to 45 per cent of the primary unit’s GFA.
- There must be one parking space for the second unit, in addition to the required parking for the primary unit.
- There must be a 1.2 metre clear path of travel to a door in the side or rear yard that provides access to a second unit.
Before registration is approved, the following must be done:
- Units must be inspected by the City to ensure they comply with the Ontario Building Code and/or Fire Code.
- Approval from the Electrical Safety Authority is also required.
- Units must also meet all Zoning and Property Standards regulations.
Registration Fee: There will be a one-time registration fee and applicable building permits.
Fines For Non-Registration:
Homeowners who do not register their second unit with the City may be subject to a fine of up to $25,000
for individuals or $50,000 for a corporation.
Registration Start Date: 06/22/2015
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Consider The Pros and Cons:
In today's highly competitive market there is a vast array of
choices to be made when deciding on the type of dwelling you wish to
reside in. This article will focus on the advantages and disadvantages
of buying a new home versus a resale home.
Advantages of a New Home:
One of the primary advantages of buying a new home is the ability
to decorate your home from the beginning exactly the way you want. You
can pick all the colors, which range from paint to flooring. You can
also make the tile and cabinetry selection for the kitchen and
bathrooms.
Often times, new homes will have more modern conveniences, better insulation and can be more energy efficient.
Disadvantages of a New Home:
Unfortunately, with a new home purchase you should be prepared for
the on-going construction you will find around you. Chances are that
your lawn will not be in, your driveway will be gravel and your street
will turn into a sea of mud whenever it rains or snows. If things are
going to go wrong with a newly constructed house, they will appear in
the first one to two years. As the house settles you may find cracks
appearing in the walls of the basement.
There are additional expenses associated with new homes that you
will not typically find in a resale home. For example, you may have to
spend money for appliances, curtains, drapes, landscaping, air
conditioning, etc.
Closing costs are typically higher for new homes. The purchaser
will pay for such additional costs as the New Home Warranty Program,
tree planting, utility hook ups and paving of the driveway.
Usually, when you buy a new home, you don't have an opportunity to
see the actual layout. All that is provided is a blueprint and in many
cases the end product may be a disappointment to the purchaser.
Additionally, there is the uncertainty as to who will be your
neighbors.
Advantages of a Resale Home:
The major advantage of buying a resale home is that you are moving
into an established neighborhood. Your lawn is green, your shrubs are
growing, your driveway is paved and your trees are well enough
established to give your street a feeling of permanence.
In terms of investment, a resale home will often give you more for
your value than a brand new home. Many owners put thousands of dollars
into home improvements ranging from small items, such as landscaping,
to major projects, such as a finished basement. Although these
improvements will make the home more attractive to potential buyers,
they may not increase the market value of the home. A $30,000 swimming pool or a $20,000
finished basement or even $5,000 worth of shrubs may make the home
very attractive. However these additional costs incurred may not
necessarily increase the market value of a home. The buyer gets the
home at its real market value, which is based on comparable homes for
sale or sold in the neighborhood. All those expensive extras may come
to the buyer at at a lower cost.
With a resale, the
vendor's asking price is almost always negotiable downwards unlike the
builders list price which is usually firm. Any extras or changes are
added to the list price of a new home.
Also keep in
mind resale homes less than 10 years are still fairly new so you get
the advantages of having a newer home at a lower resale price.
Disadvantages of an Older Resale Home:
When looking at the disadvantages of buying an older resale home you need to consider the following:
- Is the home in move-in condition?
- Is the heating, cooling, roof, electrical, windows, plumbing systems, kitchen and bathrooms updated?
- Does the purchase price reflect the condition of the home?
- Once
you have considered the above items you would be well on you way on
making a decision to buy or not to buy an older resale home.
Summary:
Both
new and resale homes have their advantages and disadvantages, you would
need to evaluate each option and make an educated decision based on
your particular needs.
MyDaddyHomes: Working hard for you today, so you can have a better tomorrow!
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Buying a Home? Consider These Critical Items: How long do you plan to live in the home. If
you purchase a home and get a job transfer or decide to move after
only a short time, you may end up paying money in order to sell it. The
value of your home may not have appreciated enough to cover the costs
that you paid to buy the home and the costs that it would take you to
sell your home. The
length of time that it will take to cover those costs depends on
various economic factors in the area of the home. Most parts of the
country have an average of 5% appreciation per year. In this case, you
should plan to stay in your home at least 3-4 years to cover buying and
selling costs. If the area you buy your home in experiences an
economic up turn, the length of the time to cover these costs could be
shortened, and the opposite is also true.
How long the home will meet your needs. What
features do you require in a home to satisfy your lifestyle now? Five
years from now? Depending on how long you plan to stay in your home,
you'll need to ensure that the home has the amenities that you'll need.
For example, a two-bedroom dwelling may be perfect for a young couple
with no children. However, if they start a family, they could quickly
outgrow the space. Therefore, they should consider a home with room to
grow. Could the basement be turned into a den and extra bedrooms? Could
the attic be turned into a master suite? Having an idea of what you'll
need will help you find a home that will satisfy you for years to
come.
Your financial health - your credit and home affordability.Is
now the right time financially for you to buy a home? Would you rate
your financial picture as healthy? Is your credit good? While you can
always find a lender to lend you money, solid lenders are more
skeptical if your credit history is not good. Generally, a couple of
blemishes on a credit report will make you a good credit risk and could
qualify you for the lowest interest rates. If you have more than a
couple of blemishes on your report, lenders may still provide you with a
loan, but you may just have to pay a higher interest rate.
Some say that you should refrain from borrowing as much as you
qualify for because it is wiser not to stretch your financial
boundaries. The other school of thought says you should stretch to buy
as much home as you can afford, because with regular pay raises and
increased earning potential, the big payment today will seem like less
of a payment tomorrow. This is a decision only you can make. Are you in
a position where you expect to make more money soon? Would you rather
be conservative and fairly certain that you can make your payment
without stretching financially? Make sure that whatever you do, it's
within your comfort zone.
To determine how much home
you can afford, you can take advantage of the MyDaddyhomes Free mortgage
service, it is fast and hassle free. You get to speak to an
experienced mortgage professional.or you can go online and use a "home
affordability" calculator. Good calculators will give you a range of
what you may qualify for. While some may say that the "33/40" rule
applies, in today's home mortgage market, lenders are making loans
customized to a particular person's situation. The "33/40" rule means
that your monthly housing costs can't exceed 33 percent of your income
and your total debt load can't exceed 40 percent of your total monthly
income. Depending on your assets, credit history, job potential and
other factors, lenders can push the ratios up to 44% or higher. While
we're not advocating you purchase a home utilizing the higher ratios,
its important for you to know your options.
Where the money for the transaction will come from.
Typically home
buyers will need 5% for a down payment and 2.0% for closing costs.
However, with today's broad range of loan options, having a lot of money
saved for a down payment is not always necessary - if you can prove
that you are a good financial risk to a lender. If your credit isn't
stellar but you have managed to save 10-20% for a down payment, you will
still appear to be a very good financial risk to a lender.
The ongoing costs of home ownership.
Maintenance,
improvements, taxes and insurance are all costs that are added to a
monthly house payment. If you buy a condominium, townhouse or in certain
communities, a monthly homeowner's association fee will be required.
If these additional costs are a concern, you can make choices to lower
or avoid these fees. Be sure to make your realtor and your lender aware
of your desire to limit these costs.
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The Importance
Of Housing Stats Information
When you are buying or
selling a home, not knowing housing statistical information can cause you
to pay more for a home or sell your home for less. Be informed, when
you are you ready to buy or sell a home, make the right move, contact MyDaddyHomes
today for key housing information for Brampton and Mississauga. Don't
Delay Contact Us Today!
Summary Of All House Types
City
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Average
Price
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Median
Price
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Avg.
SP/LP
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Avg.
DOM
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Brampton
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$447,000
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$420,000
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98%
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31
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Mississauga
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$477,000
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$441,000
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98%
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31
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Legend:
Avg.
SP/LP:
Average sale price to list price
Avg.
DOM:
Average days on the market before being sold
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Summary By House Type:
Detached
City
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Average
Price
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Median
Price
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Avg.
SP/LP
|
Avg.
DOM
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Brampton
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$526,000
|
$519,000
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98%
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31
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Mississauga
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$740,000
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$686,000
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98%
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28
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Semi-Detached
City
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Average
Price
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Median
Price
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Avg.
SP/LP
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Avg.
DOM
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Brampton
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$390,000
|
$382,000
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98%
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24
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Mississauga
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$486,000
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$473,000
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99%
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22
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Freehold Townhouse
City
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Average
Price
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Median
Price
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Avg.
SP/LP
|
Avg.
DOM
|
Brampton
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$407,000
|
$385,000
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99%
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28
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Mississauga
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$503,000
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$491,000
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98%
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26
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Condo-Townhouse
City
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Average
Price
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Median
Price
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Avg.
SP/LP
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Avg.
DOM
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Brampton
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$296,000
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$304,000
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97%
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49
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Mississauga
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$357,000
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$368,000
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98%
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25
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Condo-Apartment
City
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Average
Price
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Median
Price
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Avg.
SP/LP
|
Avg.
DOM
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Brampton
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$234,000
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$224,000
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97%
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37
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Mississauga
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$276,000
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$255,000
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97%
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44
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Buying
a small business can be very rewarding and also can be a lot of
headaches. You must ask yourself, if you have the time, are you able to
do the hard work, do you know what you are getting into? So tread
carefully before you make the jump into being a small business owner.
You will work long hours, if you get by the first five years you are on
your way to success.
In
this article MyDaddyHomes will try and provide you with information to
help guide you in buying a small business. The article is not intended
to be the complete tutorial on buying a small business but an insight
into the details of becoming a small business owner.. Let's get started!
A FEW BUSINESS BASICS: 1) What is a business: An
undertaking carried on for the purpose of gain or profit and includes
an interest in any such undertaking and without limiting the generality
of the foregoing, includes a boarding house, hotel, beauty salon, pizza store, etc.
2) How Many Type Business Are There? Essentially there are three types of business structures: - Sole Proprietorship
- Partnership
- Corporation
3) Can A Residential Property Be Classified As A Business Property? Yes!
The income or potential for income can make a property have business
status. Generally investment/Income producing properties are all
businesses.
What Information Does The Seller Need To Provide To The Buyer: - A profit and loss statement for the preceding 12 months or since the acquisition of the business by the person disposing it.
- A statement of the assets and liabilities of the business
- A
statement containing a list of all fixtures, goods, chattels, other
assets and rights relating or connected with the business that are not
included in the trade.
- Lists of customer, suppliers and contracts
- List of employees, including a breakdown of salaries, benefits and years of service
Because the above information is confidential the seller may ask the buyer to sign a non disclosure agreement
to prevent the buyer from using it for any purpose other than buying
the business. You will need to have your lawyer review all documents
that you sign to ensure you are not making any unwise legal commitments.
Seller Disclosures:It is important that the buyer get from the seller the following: - Terms and conditions under which the seller of the property holds possession of the premises
- Any sublets of the premises
- All liabilities of the business
- A statement that the person disposing of the business has made available the books of the account of the business.
- Check out if there are any any liens on the business assets; whether there are unpaid taxes.
- Get information on the flow of business activity, peak times. slow times, days of the week.
- Find out what competition is there within the area
- Find out what similar properties have sold for in the area
Should The Business Be Purchased As A Company Or Personally Own?It
is always better to buy a business as a company instead ofbeing
personally own. When you the business as a company you shield your
personal assets out of reach from creditors of the business. Also buying
as a company you have certain tax advantages and less risks. When you
buy a businees as a company you will need to know what you are buying, the assets or the shares of the business. Both have different ramifications. Buying The Assets or The SharesBuying
the assets of a company gives you a better sense of the value of the
business, you know exactly what assets and liabilities that you have
purchased. If you are buying the shares of the company, you better do
due diligence, because the shares may or may not have unknown or
undisclosed liabilities. How Can The Market Value Of A Property Be Determined: Thee are three fundamental ways to measure what a business is worth: - Asset Approach
- Market Approach
- Income Approach
1) The asset approach: Views
the business as a set of assets and liabilities that are used to
determine the value of the business. The asset approach is based on the
so-called economic principle of substitution which addresses this question
2) The market approach:Relies on information from the current market about what similar properties sold for.
3) The income approach:Is about what income one can expect if an investment of dollars is made.
All three valuations methods will be explained in detail in future newsletters. How Will The Purchase Be Financed:A) Borrowing:Taking
on debt to finance a property is fairly common, you need to crunch the
numbers and look at all scenarios to ensure you can repay the debt. The
lender will evaluate your business plan to ensure that your company has a
chance of success. Here are some ways debt can be financed: Line of Credit Credit Cards Business Term Loan Leasing
B) Equity Financing: Equity financing is sourced from your own personal savings and investors.
Investors typically receive a portion of your company's equity in
return for their investments. You must demonstrate to the investors that
your business plan is strong and you can make them a profit money for
their investment. Own Personal Savings: When
you invest your own money, investors will be more readily to invest, as
they see you are taking the risk of investing your money. - Using Funds From Friends And Family:
Getting
help from friends and family is another way of getting funding. When
you use friends and family, ensure you do it in a businneslike manner,
you do not want to lose friends and have your family upset with you if
the business is a bust. - There are
many professional investors who seek out businesses to invest in. They
want to make a profit and they also like to be involved in the
management and planning of the business.
Making your intentions known to the Seller: Letter Of Intent: Before an agreement of purchase and sale is drawn up, a document called a " LETTER OF INTENT" is created.
This document is very important as it starts the process of formulating
how the agreement of purchase and sale will take place. It should state
that the agreement is non binding to either party. It states the
intention of the Buyer to purchase the business.
What is the structure of a letter of Intent?
Outline: Due Diligence: Due diligence is a way of preventing unnecessary harm to either party involved in a transaction. Check! Check! Check! What needs to be done? Reviewing of all financial records It is critical that a background check is done to ensure no problems with City By-Laws, Environmental issues Property inspections, know what you are buying A check by the seller to determine if the buyer has the ability to purchase the property.
Financial Information: The Agreement Of Purchase and Sale: The
letter of intent has now been satisfied and it is now time to formulate
the official document of agreement of purchase and sale. The agreement
of purchase and sale stipulates what the sellerr and bnuyer has agreed
upon and includes conditions if things don't go as planned. Two important parts of the agreement are: - Non-Competition Clause: This
assures the buyer that the seller will not start-up a new business
within a radius of a certain distance of the premises for a certain
amount of time after completion of the transaction.
- The Seller Represents and Warrants: One of the most important parts of this agreement for will be the seller's "representations and warranties".
This effectively puts the seller on the hook for the information given
to you about the business and aims to ensure that you are getting what
you are paying for. The description of the business assets and liabilities related to the business that you will assume are another important part of this document. They are usually included in "schedules" attached to the main agreement.
Other
clauses may be required based on the type of business being purchased,
you will need to consult with your lawyer to ensure all bases are
covered.
FINAL STEPS TO BE AWARE OFF: - Keep Your Mind Focus On The Details Of The Agreement Of Purchase And Sale
Do
not be so eager to become a business owner and ignore sound principles
of buying a business. Before you sign on the dotted line, make sure you
sit down with your advisors and review the details of the contract.
Don't be a passenger on the boat of success, be at the controls. I f the Deal Does Not Feel Right. Walk Away! If
you believe the seller is not trustworthy, not providing the needed
information in a timely manner, has excuses after excuses, these are red
flags telling you to WALK AWAY!
Lastly retain A Lawyer Who Is Experienced In Small Business Purchases To Help You With Your Purchase.
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Studies and surveys
indicate that more than 50 per cent of Canadian adults do not have a will, and
about 70 per cent of Canadian adults do not have a signed Power of Attorney.
I believe that number would drop
significantly if people truly understood the significant consequences of dying
or becoming incapacitated without these legal documents.
Let’s start with a will. What will
happen if you died without one? Under the law that governs this situation
(which is called an “intestacy”), your estate assets will be frozen until the
courts appoint someone to administer your estate, known as an “Estate Trustee
Without a Will”. This involves making a formal application to the court and
always involves a certain amount of delay that is inherent in the process. This
in turn could cause financial hardship for your family.
Eventually, your estate will be distributed
by the Estate Trustee according to provincial intestacy laws, which vary by
jurisdiction. Typically, they provide a set dollar-amount to a surviving spouse
(in Ontario it is $200,000), with the balance divided in line with a graduated
formula among your spouse and each of your biological or adopted children.
If you have no surviving spouse or children,
then your assets would go to your next-of-kin, in a prescribed order that is
set out by legislation. In contrast, common-law spouses and step-children may
not he recognized by legislation as having any entitlement at all.
In these various scenarios, the Estate
Trustee has very little discretion in distributing your assets. This means that
– absent a will that expressly directs the distribution of your estate in the
most tax-advantageous manner – you will have missed many opportunities to
reduce taxes both before and after your death.
Similarly, without a will any preferences
you have concerning the guardianship of your minor children or dependents may
not be recognized. Payments to minor children would be held in trust by the
courts, but only until they reached the age of majority. At this point, they
would have a legal right to the money to spend as they wish – a thought that
many parents find disconcerting and even abhorrent!
If you don’t have a will, these are just a
few of the ways that your family and next-of-kin could be subject to delays,
additional expenses, angst and potential conflict amongst themselves at an
already stressful and emotional time.
Why do I need a Power of Attorney? – Like wills, a Power of Attorney is an
often-overlooked legal document that you can have drafted to dictate the manner
in which various matters will be dealt with in the event you become mentally
incapacitated (for example due to an accident or illness) and therefore unable
to make decisions on your own.
There are three kinds of Power of Attorney
in Ontario:
General Power of Attorney for Property (to
manage your finances and property, usually on a short-term or temporary basis);
Continuing Power of Attorney for Property
(for managing your property on an ongoing basis); and
Power of Attorney for Personal Care (for
appointing someone to make decisions about your current and future medical and
personal care).
If you have the appropriate Power of
Attorney document in place, you can choose who will act on your behalf. If you
do not, the court may choose one for you. This means you may be leaving
important decisions in the hands of family or others who are not fully familiar
with your situation or your wishes, and more importantly, may not want to take
on the responsibility of handling your affairs.
Even worse: Without written guidance in
place as to your preferences and expectations, your family’s ability to arrange
for your appropriate medical, shelter, nutrition and clothing needs might be
impaired, to the point where costly and time-consuming litigation may commence.
This is especially undesirable in cases where you have become suddenly and
unexpectedly incapacitated and need prompt and proper medical care.
People often resist turning their minds to
drafting a will for many reasons: they consider themselves “too young”, or feel
that there are not wealthy enough to need to bother with having a will drawn up
or are superstitious that having one drawn up will actually hasten their
demise. The need for a Power of Attorney is often dismissed for similar
reasons.
The truth is that it is never too early and
an estate is never too modestly sized to make a will unnecessary or premature.
As long as you own real estate, investments (regardless of size), vehicles, a
business or any personal property, you have an estate that should be dealt with
by way of a will.
Likewise, there is never a downside to
formally choosing a trusted family member or friend who will deal with your
assets and arrange for your medical and other personal needs in the manner that
you wish, in the (hopefully unlikely) event that you become mentally or
physically incapable of doing so.
Toronto lawyer Martin Rumack’s practice
areas include real estate law, corporate and commercial law, wills, estates,
powers of attorney, family law and civil litigation
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First-time buyers may want rental income but must be aware of restrictions. Many homebuyers consider purchasing a property with an existing or potential for a second suite. First-time homebuyers in particular often hope to take advantage of the extra income of a second suite, often a basement apartment, can generate. Financial advantages can be great, but the buyer needs to know the legal implications. Prospective buyers should ask their agents many questions regarding the legalities and financial implications of creating or operating a rental unit. Clients should ask lawyers or accountants for legal or financial advice, but REALTORS� still have an obligation to disclose material facts. Whether a suite is a legal second suite will depend on building code and fire code issues and municipal zoning bylaws. Although bylaws across Ontario are generally similar, each municipality has its own variations. For example, while the town of Bolton encourages basement apartments, in Brampton, only basement apartments built before November 16, 1995 are legal, and these units must be registered with the city. Basement apartments in Brampton built after that date are illegal. Any landlord that violates this bylaw faces fines of up to $50,000 and one year in prison. Prospective buyers should visit a municipality's website, or to speak to a lawyer located in the area. If a buyer intends to create a second suite, he needs to determine whether the home qualifies under the bylaws of the specific municipality. If the home does not meet these requirements, the potential buyer must determine whether he is willing to make the necessary changes to create a legal apartment. A building permit is always needed, even in cases where construction will not be taking place.
Any construction plans are approved based on zoning requirements, safety systems and building issues. Once a second suite is introduced into a home, a General Inspection for Fire Code Compliance must be completed by the Electrical Safety Authority. The inspection reviews both the owner's unit and the rental unit for fire code compliance.
If a home currently has a second suite, it is important to determine whether the existing unit meets the municipality's requirements. The municipality will inspect the unit to determine whether it is fit for habitation and whether it meets established standards. Both new and existing units require a General Inspection for Fire Code Compliance.
Return on investment: The cost of retrofitting a home depends on the home's condition. Assuming a renovation expense of $25,000 and net rental income of $500 a month, the return on investment will be 24 per cent. The investment will pay itself back in just over four years. Rent collected from a second suite must be declared as income. However, landlords can deduct direct expenses (directly related to operating the rental unit, e.g. replacing appliances) and indirect expenses (costs shared with the entire house, e.g. utilities and mortgage interest) needed to operate the suite. Direct expenses are 100 per cent deductible; indirect expenses are deducted on the portion of the home assigned to the rental unit. Landlords can also deduct capital cost allowance (CCA), commonly known as depreciation, from their income. CCA is permitted on any long-term purchase, such as renovations or appliances. The consequences of claiming CCA must be
considered carefully. The equity earned when selling a principal residence is not taxed. However, once CCA is claimed, the area dedicated to the second suite is no longer considered personal residence. Therefore, a homeowner would forego any tax benefits from the sale of the property on the second suite portion of the home. A second suite can increase a property's value between two to five per cent. Property taxes are based on a Current Value Assessment (CVA), which usually does not increase unless the home's value increases by at least $10,000 or five per cent. So, most second suites do not add enough value to increase taxes. The exception is a second suite created by an addition, which can add significant value to a property, and can increase property taxes.
REALTORS� need to be sure to provide clients with information that is accurate and not misleading. In the Ontario Superior Court case Malpass v Morrison (2004 ONSC 12542), the judge found that the agent had failed in his duty of care to his buyer clients. The buyers were looking for a home with four bedrooms or space that could be converted to a bedroom. They made an offer on a bungalow that was accepted. They later discovered the fourth bedroom was illegal and decided not to proceed with the purchase, which cost them over $60,000. They sued their agent for the losses, alleging their agent failed to advise them with respect to a municipal by-law prohibiting a basement bedroom.
The judge found that it was a material fact known to the agent that the basement "fourth bedroom" was not compliant, and that the buyers considered this room to be a bedroom and he did not correct their impression. He found that in this case, the breach of fiduciary responsibility amounted to a breach of duty of care. Agents should always disclose any material facts, including whether a suite is legal or not.
Article complements Of The Ontario Real Estate Associati
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Finding the right home at the right price in the right location is a detailed, time-consuming venture. At the same time, it's an emotional period laden with difficult choices. Before you rush out to start looking at homes be aware of the Real Estate term "Buyer Agency" and the impact it can have on you. Sellers always have agents to represent their best interests, you as a buyer must also do the same and seek out an agent to represent your best interests. During an offer negotiation a seller would love to have the advantage over a buyer who does not have buyer representation. By asking a realtor to work for you exclusively, you create an "Agency Relationship" and become the realtor's client, you now have "Buyer Agency" protecting you. Not having buyer representation can have dire consequences when purchasing a home. Caveat Emptor "Let The Buyer Beware. The Legal Obligations Of A Buyer Agent: With Buyer Agency, the realtor is committed under Real Estate law to do whatever it takes to find the client the ideal home that suits their needs. It takes endless hours of searching the MLS, previewing and providing market analysis of homes, advising the client on what is a good or bad choice and working with other agents. A Buyer Agent representing a client is obligated not just to find all homes that matches the client needs, but to negotiate the best deal for the client. A buyer agent is legally obligated under law to do the following for the client: - Loyalty: Total and undivided loyalty to the client
- Confidentially: To never disclose the client's confidential details to any other party to a transaction
- Obedience: To obey the client's lawful instructions
- Accountability: To be accountable to the client for all actions taken by the Buyer Agent
- Reasonable Care: To use expertise, knowledge, negotiating skills for the benefit of the client
- Disclosure: To disclose to the client, both the positive and negative facts about a property
Buyer agency is designed to help protect buyers during the purchase of a home. Don't buy a home without it.
Compliments of MyDaddyHomes: Because We Care!
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The Importance Of Housing Stats Information When you are buying or selling a home, not knowing housing statistical information can cause you to pay more for a home or sell your home for less. Be informed, when you are you ready to Buy or Sell a home, make the right move, contact MyDaddyHomes today for key housing information for Brampton and Mississauga. Don't Delay Contact Us Today! Toronto Real Estate Board June 2012 Housing Statistics Summary Of All House Types City | Average Price | Median Price | New Listings | Avg SP/LP | Avg DOM | | | | | | | Brampton | $404,104 | $383,500 | 8,366 | 98% | 21 | Mississauga | $459,508 | $411,000 | 10,358 | 98% | 21 |
Legend: Avg SP/LP: Average sale price to list price Avg DOM: Average days on the market before being sold |
Summary By House Type: Detached City | Average Price | Median Price | New Listings | Avg SP/LP | Avg DOM | | | | | | | Brampton | $479,510 | $455,000 | 1,032 | 98% | 20 | Mississauga | $670,723 | $605,625 | 753 | 98% | 17 |
Semi-Detached City | Average Price | Median Price | New Listings | Avg SP/LP | Avg DOM | | | | | | | Brampton | $368,273 | $360,000 | 321 | 99% | 18 | Mississauga | $431,041 | $436-,800 | 261 | 100% | 14 |
Freehold Townhouse City | Average Price | Median Price | New Listings | Avg SP/LP | Avg DOM | | | | | | | Brampton | $348,835 | $342,000 | 155 | 98% | 19 | Mississauga | $425,454 | $426,000 | 73 | 99% | 15 |
Condo-Townhouse City | Average Price | Median Price | New Listings | Avg SP/LP | Avg DOM | | | | | | | Brampton | $245,214 | $230,500 | 81 | 98% | 17 | Mississauga | $333,739 | $329,000 | 336 | 99% | 19 |
Condo-Apartment City | Average Price | Median Price | New Listings | Avg SP/LP | Avg DOM | | | | | | | Brampton | $214,225 | $210,000 | 83 | 97% | 33 | Mississauga | $273,428 | $256,000 | 565 | 98% | 30 |
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Toronto Real Estate Board Complete Housing Report All Districts Click On A Month To View |
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Should You Manage Your Rental Property Yourself Or Have A Professional Property Management Company Do It For You? If you have a home or condo to rent or an investor renting out a property, you need to ask yourself if you are prepared to manage the property yourself or ask a professional property management company to do it for you. Both choices have advantages and disadvantages, here are some factors you need to consider. Location Of The Property: - If you are hundreds of miles away from the property, it will be in your best interest to have someone else manage the property for you. It could be a family member, a friend, or you can hire a property management company.
- If you are close to the property you may be able to do it yourself, you should be able to handle any required needed repairs or emergency situations in a timely manner. But are you willing to do it? You won't have to pay a fee for the managing of the property.
Do You Have The Time To Manage It Yourself: - Renting a property takes a lot of time, do you have the time to:
- Look for good tenants
- Screening the tenants
- Checking rental applications information for accuracy
- Taking care of plumbing, heating and other problems that go along with a rental unit
- Preparing the home for rent
- Ensure the monthly rent is paid on a timely basis
- Knowing and understanding the Landlord and Tenant Act
- If you have a problem tenant you would need to know how to deal with the situation. You could spend endless hours resolving issues.
Using a Professional Management Company: - Professional mangers are the experts, they manage hundreds of property on a yearly basis.
- They can smooth out all the problems and remove the hassles of trying to do it yourself.
- They have the expertise and the knowledge to get you good tenants and the going rent rate.
- They know how to write-up leases to protect you, not the tenant.
- They know the landlord and tenant act and know how to evict tenants according to the law. All of this does come with a price and you have to be prepared to pay it.
What Does It Cost To Hire a Management Company? Property managers will charge you 10-12% of monthly rent for ongoing management and charge you a one-time fee to get a property leased. You as an investor or landlord may find that amount quite high, but here is how property managers add value to your investment: - They may get you higher than normal rent
- Reduce vacancy rates
- They screen all prospective tenants
- Attend to any maintenance problems immediately, before they become major problems
- Property managers by keeping down vacancy rates will help your bottom line by not having property sit vacant for months.
Summary: Anyone can own a a rental property, but not everyone has the ability to manage one. So If you have more important things to do than chase down tenants for rent and call the plumber and electrician to fix problems, then use a professional property management company to manage your property. Compliments if the MyDaddyHomes Sales Team: We are experts in renting properties. Contact us Today If You Have Property To rent
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• 3 bath 2 story - MLS® $345,000 Fletcher's Creek South, Brampton - Just Can't Be Beat! Come One! Come All! Immaculate 3 Bedroom Freehold Townhouse Situated On A Quiet Cres, Featuring: Hardwood Floors In Lr/Dr, Porcelain Tiles In Hallway And Kitchen. Ceramic Backsplash. Breakfast Area With Walkout To Covered Deck. Finished Basement With A 2 Pc Bath And Fireplace. Cold Cellar And Wet Bar. Stone Entrance Way, Home Looks Fantastic, Don't Miss Out On This Deal. Extras: Newer Windows, Newer Furnace, Newer Cac, Newer Carpet. Include All Appliances. Close To All Amenities. Just Move Right In, Nothing To Do To This Gem Of A House. Security Alarm System
Property information
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Explore your options before making the leap to being a landlord.
Many of us are interested in learning more about buying an investment property and renting it out. But where to start? While this can prove to be a good way to steadily build wealth, this type of investment is a major commitment and is certainly not for everyone. Making the leap to being a landlord requires careful consideration. Understanding the risks involved, as well as collecting sound information and advice are the keys to planning a successful venture. Here are some things to bear in mind as you explore your options:
Research the local market. Get up-to-date information about your local rental and real estate markets so you can make an accurate estimate of how much you can charge for rent, as well as how much you should pay for the property. Your real estate agent has expertise on local conditions and can provide solid guidance in this area.
Make sure you add up all the costs. in addition to expenses such as a mortgage and taxes, the longer you plan to own the property, the more you'll most likely need to invest in maintenance and repairs. For maintenance, a rule of thumb is to set aside about two percent of the home's value per year. A home equity line of credit is a good way to have access to contingency funds should you need to pay for repairs, gaps between tenants, or other expenses. Don't forget to factor in the cost of fire insurance, and for recreational property potentially other types of insurance (against floods or windstorms) depending on the location. Liability insurance for landlords can cover risks such as malicious or accidental damage to your property by a tenant, any legal liability should a tenant injure themselves, and lost rental income should tenants move out without paying.
Learn the tax implications. Mortgage interest and many costs associated with buying the property may be written off. Your accountant can provide full details on the tax consequences of such an investment.
Know the law. You should study up on the rental property laws in your jurisdiction, including fair housing laws, to make sure you know your rights and obligations and also those of your tenants.
Seek advice on financing. There are unique aspects to financing rental properties: lenders typically expect a down payment of at least 20%. Another option is to draw on the equity from another of your properties. In qualifying for this mortgage, a maximum of 50 to 80% of rental income may be used as "other income" in your mortgage application. Many investment property buyers use the equity in their primary residence for a down payment. Options for doing this include a "cash-out" refinance, a home equity loan or an equity line of credit. A mortgage broker can offer a range of unique products and professional advice on the ins and outs of financing investment properties.
Ask yourself: Are you willing to be a landlord? This can be time-consuming and for some it can be hard to remain emotionally detached when they have to rigorously screen tenants to make sure they're reliable, track down overdue rents and field repair calls. You may decide to let a professional property management service handle the nitty gritty of dealing with tenants. If you choose to rent your property through a management company, expect them to take anywhere from 10 to 50 percent of the rental income. Take the long view. Having a long-term investment strategy in place can help you ride out any difficulties, such as a dip in the price of the property, periods with no tenants, or having to pay for unforeseen maintenance. When it comes to rental properties, wealth is earned over time, not overnight.
Compliments Of Carlo Carpino Mortgage consultant A MyDaddyHomes Contributing Writer Contact MyDaddyHomes Today For a List Of Investment Properties
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