10 Tips for Creating an Ideal Basement Apartment

 

A basement apartment can be a good investment.  But nowadays, any old basement apartment just won’t do. If you want to have a successful lower-level living space, you need to impress potential renters right from the start.

Separate Entrance
It goes without saying, that a basement without a separate entrance is no good. This is an expensive addition If you have to do it yourself, so look for a property that already has one.

High Ceiling
Ceiling height plays a huge role in the perception of space. The ceiling height should be no less than seven feet for more than 70% of the space, the higher the better. Using big pieces of art on the walls and Ceiling-to-floor curtains can give the impression of high ceilings. The idea is to draw the eye up and therefore give the illusion of height. 

Full Kitchen
A full kitchen that includes a dishwasher is the best way to impress and command a high price. Renters do not have to scarify functionality just because they live in a basement. Providing Proper ventilation is essential both for safety and comfort and do not compromise on kitchen storage. 

Separate Laundry
Even if space is tight, providing tenants with a washer and dryer that is exclusively their own is a huge plus, you can hide the machines in a closet or cupboard to save space. In fact, it can really make or break a rental agreement. If the laundry units can only be shared with the upper floors of the house, it’s not the end of the world. But, keep in mind, that a separate laundry will almost certainly fetch you a higher price.

Fireplace 
A gas fireplace is not a must-have, but it sure is a ‘nice-to-have’. Basements have a reputation for being cold. While you shouldn’t have any heat problems (as long as you have the right insulation and subfloor), a gas fireplace will impress renters and make the space feel cozier. 

Bath and Shower
Basement apartment bathrooms should have a toilet, sink, tub, and shower. Having either a tub or a shower isn’t ideal. A shower without a tub won’t appeal to families, and a tub without a shower is just plain inconvenient for a lot of people. In most cases, a shower/tub combo will do the trick.

Heated Floors
Like a fireplace, heated floors are an added bonus that can make a basement apartment much more appealing. Floor heating the entryway and bathroom are sufficient enough, if you don’t want to go to the trouble or expense of doing the entire space.

Updated Finishes
A basement apartment does not have to be plain! Updated hardware, light fixtures, faucets, and any other fixtures should be modern and stylish.

Open-Concept Layout
An open-concept layout that combines the kitchen, dining room, and living room in one shared space. work extremely well with a small basement apartment. It increases the view and natural light and makes the space look larger and better for entertaining. A half-high decorating partition can be used to separate the sleeping area to allow natural light and provide privacy.

Recessed Lighting
Since ceiling height is often at a premium, recessed lighting is always best. Chandeliers and pendants can look nice, but recessed lighting will get you the best bang for your buck, and it will look great. If you want to have a pendant over an island, or a decorative chandelier somewhere, go for it, but don’t do it at the expense of recessed lighting throughout. 

How to Avoid Defaulting on Your Mortgage

 

Some homeowners may stumble upon financial hardships that make it difficult for them to pay their mortgage payments. Once your mortgage loan defaults, the chance of foreclosure increases.

If you or your spouse has lost employment and no longer makes as much money, and you see meeting your mortgage payment obligations is going to be problematic, the first step is to take a deep breath. There are literally millions of people that face the same problem. You are not a bad person, so leave any feelings of guilt at the door. You do not have time for them. Instead, you need to focus on your options.

Fortunately, there are ways to avoid default and keep your home, so read on for more information on how to avoid a mortgage default.

1- Get moving on a solution
Your first option is to find a way to make up the back payments and continue fighting to make your payment on time every month. Although not an attractive option, it is an option.

Explore options to decrease expenses and increase income, such as an additional job, selling possessions, and look to community resources for help. You may have to temporarily cut back on things like dining out, internet and cable.

If you have a basement or spare room you may consider renting it out. The extra income could be up to 50% of your mortgage payment. True, there is some inconvenience, but it is a small price to pay for the extra income. If you are uncertain about taking in an extra lodger, remember, you can choose who lives with you. Make sure you meet them before they enter. If a spare room is not immediately available; be creative, and see whether there is another room you could cheaply convert.

2- Work with your lender
Contact your mortgage lender. Banks do not want to foreclosure on properties. The process is long and costly, and in the end, mortgage lenders lose money. Instead, they would rather work alongside borrowers that are slightly behind on payments, and come up with a practical solution.

Consider extending your mortgage term to reduce your monthly payments. The downside is that you will end up paying more in the long term. However, if it means you can continue meeting the minimum mortgage payments, it is worth doing.

Set up a repayment plan. If you are unable to pay your mortgage payment for one or more months, the lender may agree to a repayment plan. The mortgage lender adds additional money to each subsequent mortgage payment until the loan is up-to-date.

Your lender may also suggest an interest-only mortgage. This will also reduce your monthly mortgage payments, often quite substantially. However, again the disadvantage is that, in the long term, you will need to find an alternative investment plan to pay off your mortgage capital—which might be a good short-term option.

3. Refinance your mortgage
This is perhaps the easiest and most effective method. If you happen to be on your bank’s existing standard rate, you will probably be able to find a much better deal.

4. Talk to a Financial Advisor
If the situation is becoming overwhelming and you are really in danger of defaulting, you may need to consider speaking to a financial consultant or accountant. This will arm you with expertise and resources with which to approach planning your financial future and make the most of your current circumstances.

5. Resell - Downsize
This option is probably the most drastic and only to be undertaken when the others have failed. If you are able to sell your house, you can temporarily rent somewhere cheaper or buy a cheaper house in a different location. The money saved can be used to pay off your mortgage. This option is not easy, due to the costs involved in moving, but it might be worth doing in the long term.

If you can see that things are going to get bad in relation to meeting your mortgage payment obligations, take a deep breath then face up to the problem. Take action now, procrastination will not help you.

Important Considerations When Buying a Condo

 

Happy New Year! If you’re looking to make 2025 the year that you finally become a homeowner, then it’s time to make a few New Year’s resolutions. Your dream can be achieved with a simple plan and the desire to see it through all the way to your new home!

1- Save for a down payment
Saving money to buy a home doesn’t mean you have to make giant cuts from your monthly budget. The smallest cuts from your day-to-day routine are often the ones that can save you money because they all add up over time. Small changes in your lifestyle like making your coffee at home instead of buying from coffee chains, and preparing your lunch instead of eating out or buying fast food can save you a few hundred dollars each month.

2- Pay off debt within reason
If you’re sitting on debt, commit to paying off enough amount each month to improve your debt-to-income ratio. Eliminating debt altogether is ideal, but it may be unrealistic if you also need to save for a down payment and closing costs. Instead, focus on bringing your debt-to-income ratio below 36% which will still qualify you for favourable mortgage programs and rates.

3- Keep track of your credit score
Your credit score impacts whether or not you’ll get approved for the home of your dreams. If you haven’t monitored your credit score in the past, resolve to keep track of where you stand this year.

Get your free credit report and use it to check for errors in your history that can affect your score like delinquencies, late payments, liens, or fraud. 

4- Decide what is your housing need
This next resolution is figuring out what you need in a home. Here’s a basic list that can help you decide. The number of bedrooms, bathrooms, neighbourhood, proximity to schools, Local traffic/Public transportation, or shopping centre. 

5- Get prequalified 
Prequalifying for a mortgage is the first thing you should do to start your home search. A prequalification letter gives you an estimate of the mortgage amount you can get approved for. You can use the estimate while searching for a home to narrow down your options. 

6- Budget like a homeowner
Once prequalified for a home, start simulating a budget that includes paying your mortgage and other costs. This is crucial for first-time home buyers since owning a home comes with more financial responsibility than renting.

Add expenses like insurance and taxes into your budget to simulate payments. You’ll know you can comfortably afford the mortgage if you can manage payments and have money left over for living expenses. If not, adjust the price of the homes you’re shopping for to make sure you can afford them.

6 New Year's Resolutions for a First-Time Homebuyer

 

Happy New Year! If you’re looking to make 2025 the year that you finally become a homeowner, then it’s time to make a few New Year’s resolutions. Your dream can be achieved with a simple plan and the desire to see it through all the way to your new home!

1- Save for a down payment
Saving money to buy a home doesn’t mean you have to make giant cuts from your monthly budget. The smallest cuts from your day-to-day routine are often the ones that can save you money because they all add up over time. Small changes in your lifestyle like making your coffee at home instead of buying from coffee chains, and preparing your lunch instead of eating out or buying fast food can save you a few hundred dollars each month.

2- Pay off debt within reason
If you’re sitting on debt, commit to paying off enough amount each month to improve your debt-to-income ratio. Eliminating debt altogether is ideal, but it may be unrealistic if you also need to save for a down payment and closing costs. Instead, focus on bringing your debt-to-income ratio below 36% which will still qualify you for favourable mortgage programs and rates.

3- Keep track of your credit score
Your credit score impacts whether or not you’ll get approved for the home of your dreams. If you haven’t monitored your credit score in the past, resolve to keep track of where you stand this year.

Get your free credit report and use it to check for errors in your history that can affect your score like delinquencies, late payments, liens, or fraud. 

4- Decide what is your housing need
This next resolution is figuring out what you need in a home. Here’s a basic list that can help you decide. The number of bedrooms, bathrooms, neighbourhood, proximity to schools, Local traffic/Public transportation, or shopping centre. 

5- Get prequalified 
Prequalifying for a mortgage is the first thing you should do to start your home search. A prequalification letter gives you an estimate of the mortgage amount you can get approved for. You can use the estimate while searching for a home to narrow down your options. 

6- Budget like a homeowner
Once prequalified for a home, start simulating a budget that includes paying your mortgage and other costs. This is crucial for first-time home buyers since owning a home comes with more financial responsibility than renting.

Add expenses like insurance and taxes into your budget to simulate payments. You’ll know you can comfortably afford the mortgage if you can manage payments and have money left over for living expenses. If not, adjust the price of the homes you’re shopping for to make sure you can afford them.

Annual Home Sales in the Waterloo Region for 2024 saw a Slight Increase – December Home Sales a More Significant Boost

WATERLOO REGION, ON (January 6, 2025) — There were 6,777 homes sold through the Multiple Listing Service® (MLS®) System of the Cornerstone Association of REALTORS® (Cornerstone) in 2024, an increase of 2.8 per cent compared to 2023, and a decline of 18.9 per cent compared to the previous 5-year average for annual sales. 

On a monthly basis, 334 homes were sold in December, an increase of 14.4 per cent compared to December 2023 and 9.9 per cent below the previous 5-year average for the month.

“Although the number of homes sold in 2024 was still well below long-term averages, the final three months of the year showed a significant increase in sales,” says Christal Moura, a spokesperson for Cornerstone in the Waterloo Region market. “This increase coincided with lower interest rates, which heightened buyer interest and activity in the market.”

For 2024, total residential sales included 4,100 detached (up 5.5 per cent), and 1,368 townhouses (up 2.6 per cent). Sales also included 821 condominium units (down 8.8 per cent) and 477 semi-detached homes (up 5.5 per cent).

In December, the average sale price for all residential properties in Waterloo Region was $763,840. This represents a 3.3 per cent increase compared to December 2023 and a 1.4 per cent increase compared to November 2024.

• The average price of a detached home was $898,204. This represents a 6.0 per cent increase from December 2023 and an increase of 4.0 per cent compared to November 2024.
• The average sale price for a townhouse was $630,676. This represents a 1.7 per cent increase from December 2023 and an increase of 2.7 per cent compared to November 2024.
• The average sale price for an apartment-style condominium was $475,006. This represents a 3.7 per cent decrease from December 2023 and an increase of 5.5 per cent compared to November 2024.
• The average sale price for a semi was $644,786. This represents an increase of 5.1 per cent compared to December 2023 and an increase of 0.2 per cent compared to November 2024.

Year-to-date, the average sale price for all residential properties in Waterloo Region decreased 0.3 per cent to $784,343 compared to 2023.

• The year-to-date average price of a detached home was $910,901. This represents a 0.8 per cent decrease compared to 2023.
• The year-to-date average sale price for a townhouse was $638,385. This represents a 2.3 per cent decrease compared to 2023.
• The year-to-date average sale price for an apartment-style condominium was $472,801. This represents a 2.0 per cent decrease compared to 2023.
• The year-to-date average sale price for a semi was $662,859. This represents a decrease of 2.1 per cent compared to 2023.

Home office tax deductible expenses

One of the great virtues of starting a home business is the tax breaks you can claim. However, claiming aggressive write-offs is a sure way to attract CRA auditors. In this article, we'll look at some of the more popular home business write-offs as well as some tips on how you can legitimately claim them.

1. Keep business records

If you wish to claim tax deductibles on your home office expenses, you must get into the record-keeping mindset. You need to establish a means of keeping track of the money that is coming in and the money that is going out. Being audited is not the end of the world. However, being audited and not having the records to back up your deductions can be a nightmare.

The more detailed your accounts are, the easier it will be to face an audit. Compiling your daily reports into a monthly tracking sheet will drastically shorten the time it takes you to get your taxes together, and it will have the added benefit of providing a snapshot of your business month-to-month.

2. Write off your workspace
Writing off a home office can be particularly attractive if you have a line of work that can be neatly confined to a dedicated room. You can still write off part of a shared room, but in either case, the space is calculated as a percentage of the total house or apartment area. That percentage is applied to all the related costs, including utilities, insurance, rent or mortgage payments, and so on.

3. Update your business equipment
Office furniture, software, computers, and other equipment are all 100% deductible within the year that the cost is incurred - you don't need to depreciate. There is an upper limit and the purchases must be majority-usage (primarily used) and necessary or helpful for business.

4. Business phone and internet
If chatting with clients is a necessary part of your business, it may be worth getting a second phone line or a dedicated business cell phone, as both of these are 100% deductible. If you only converse with clients occasionally, you can still write off the costs by noting the dates, times, and reasons for the calls and then circling the items on your regular phone bill to deduct at tax time.

You can also deduct part of the cost of your internet if you use it for business. There is no absolute percentage to use, but it will be difficult to write off more than 50% if other members of your family are using it for non-business purposes. Be reasonable and pick a defensible percentage that you won't regret in the case of an audit.

5. Entertainment expenses
You can wine and dine clients (preferably paying or likely to pay clients) and get a tax break. The tendency for business owners at all levels to abuse this write-off has scared many home business owners away from claiming it. However, it is acceptable for you to take out a client for a meal and some entertainment. It will be easier to defend a $200 deduction for a client who has brought you a lot of business than the same meal for a buddy who paid you $20 for an hour's work over the entire fiscal year.

6. Take a trip, not a vacation
Have to hit the road to expand your market? Save your receipts. On business trips, your travel expenses are 100% deductible and your food expenses can be deducted at 50% of the total. Keep all of your receipts because even things like dry cleaning and tips are considered a necessary expense when you're out-pounding the pavement in new markets.

7. Automobile expenses
When it comes to automobile expenses, you can claim registration, repairs, oil changes, and gas. But it’s important you keep a log of the kilometres you are travelling for business on a daily basis, because you may need to prove how frequently you use your car for business.
 
8. Employ (not just pay) your family
You can use family members as employees and deduct their salaries as long as you account for their work and pay the going rate. If you have a business that lends itself to having a spouse and kids help out, then use that labour pool. You'll likely pay less than market rates for the help, and you can deduct insurance premiums for them as well.

9. Make justifiable deductions
Just because you have a home business doesn't mean you can go crazy with deductions. If you don't think you can face down an auditor with detailed proofs justifying the deduction, then perhaps it isn't a deduction you should be taking.

The CRA's T2125 form — Statement of Business or Professional Activities — needs to be filled out to claim these expenses. Page 3 of this form deals with the calculation of what is called business-use-of-home expenses.

Most tax software programs will let taxpayers claim home office expenses, although you may want to upgrade to a more expensive version that caters to the self-employed or small-business owners.

Working from home can result in big tax savings. But the rules are strict and the paperwork can be formidable. It might be wise for first-time claimants to seek the help of a professional.

How to increase affordability when applying for a mortgage

The key to a successful mortgage experience is carefully considering all your options and buying within your means to sustain your payments. Borrowers unsure which approach is best can rely on certain time-tested strategies to avoid overextending themselves.

Here are a few tips to boost affordability when arranging your mortgage:

1. Know what you can afford. 
A mortgage pre-approval helps you establish a price range and the maximum mortgage you can reasonably afford.  Most lenders will lock in a rate for up to 120 days when pre-approving potential borrowers for a mortgage.

2. Revisit your current debts. 
When applying for a mortgage, a lender will look at your total debt service ratio (TDS), or how much of your total income is going towards various types of debts, including car loans, credit cards, and other consumer loans.  A mortgage broker can advise on restructuring your current debt (by increasing the amortization and lowering payments on your car loan, for example), to ensure that your TDS ratio is acceptable to prospective lenders.

3. Look into a longer amortization. 
Some lenders offer mortgages with amortizations longer than the traditional 25-year amortization which results in a lower monthly payment.  Those opting for a longer amortization should plan to make lump sum payments down the road or increase their monthly payments (say, after receiving a salary increase), to lessen the amount of interest they pay throughout the life of their mortgage.

4. Increase the size of your down payment. 
Increasing the size of your down payment means a lower monthly payment.  A common way for first-time buyers to come up with more cash for a down payment is to make use of the federal Home Buyers' Plan to withdraw up to $20,000 each from a registered retirement savings plan (RRSP) without tax penalty to buy or build a qualifying home.  Also, many lenders allow the down payment to come from a properly documented gift, and a borrowed down payment may be possible for some borrowers.

5. Consider locking in your rate for a longer period.
If you’re uneasy about fluctuating interest rates and your ability to meet any increases, then a fixed-rate mortgage could be a good fit.  Many lenders are open to longer fixed terms, up to 10 years in some cases.