Buying a Condo as an Investment

Not too many years ago, buying a condo was considered a compromise move. Condos are more affordable, particularly for first-time buyers who have a tough time breaking into the housing market. Until recently the cheap entry fee entitled you to apartment-style living, no yard to call your own and lusterless appreciation—not an attractive package to most home buyers.



This may be changing. Latest statistics from Canadian Mortgage and Housing Corporation (CMHC) show condos make sense for investment or ownership. Rentals are increasing every year according to recent market statistics. 

New construction favouring condos.Recent statistics show that construction of condos is actually increasing. New construction of singles and semis has fallen steadily since 2002. Young people seeking a downtown lifestyle, empty nesters downsizing, and people tired of commuting, all make condos extremely popular and support a robust market.

Hi-rise sales stable
Condo sales have had some ups and downs, but sales volume by year has been quite steady. The rental market for condos is improving as potential first-time buyers postpone home purchases in favour of renting. Renters are less inclined to leave their apartments and pursue home ownership.

Is a condo a good investment?
As with any real estate, a condo could be a good or bad investment. It all depends on the building and the market. There are some great condo investments in many areas around the country and there are also some bad investments.

The condo situation looks promising. The percentage of total sales is expected to continue rising this year. Condos are selling well and renting well, making them a good investment whether you're planning on moving in or leasing out.

Condo buying tips
Look for a condo that's in a development that has a high ratio of owner-occupants to renters. Some lenders won't lend on condos that have a high rate of absentee ownership. Also, owner occupants tend to be more concerned about keeping things going well in the development.

Find out what the condo fees are and what is covered by this fee and include it in your costing. Some condos prohibit pets, and some have parking, storage and renting restrictions. Read and understand the Covenants, Conditions and Restrictions (CC&Rs) and any other pertinent governing documents before you complete a purchase.

It's usually best to avoid buying into a condo complex where the homeowner's association is involved in litigation. To find out if there are any other association issues that you might want to avoid, read copies of the minutes from recent homeowner's association meetings. One of the best ways to get the straight scoop on a condo project is to talk with some of the current residents. Find out what they like and what they don't like about living there before you decide to buy.

What are the tax, legal, and financing considerations?
If you decide to invest in a condominium rental property, many of your personal expenses may be deducted from income in addition to the normal tax deductions such as mortgage, interest, depreciation, and other condominium-related expenses. For example, you would normally be entitled to set up a small office in your current residence for managing your investments, which would include keeping your records. You could deduct a percentage of all your home-related expenses. The normal formula is to take the square footage of the office area that you are using relative to the total square footage in your home. In general terms, 10% to 15% or more is usually deducted for that portion.

In addition, you would be entitled to deduct a part of the car-related expenses involved in managing your investment portfolio, whether it is one rental property or more than one. The percentage of all your car-related expenses can vary, obviously depending on the usage of the car relating to your investment.

If you are seriously contemplating investing in a condominium, it is important to consult your real estate agent and seek the advice of a competent tax and accounting professional, and legal advice from a lawyer specializing in condominium law.

Contact me today for a Free Home Value Report or for answers to all your real estate questions at www.kimlouie.net!

Energy Saving Tips for Your Home

With energy costs eating up a larger portion of our income more than ever before, it is very important to take all possible measure to conserve energy.  Here are some tips to help you save energy, save money, and do your part for the environment.

Heating and Cooling
About 60% of energy costs in a typical home are tied up in heating and cooling and 20% in hot water. So, these are the first places to look when it comes to saving energy.

Consider installing a programmable thermostat. In summer set the thermostat at 24°C while you are at home, and 28°C when you are away. Every degree you raise can reduce your cooling bill by about 2.5%.

In winter, set the thermostat to 21ºC during the day and to 18ºC when you are sleeping and 15ºC when you are out.
Wrap your electric water heater in an insulation wrap. This reduces 8-10% of hot water heater energy usage.

Apply caulking and weather stripping around drafty doors and windows to keep the cold air out in the winter (or hot air out in the summer). Proper weather-stripping, caulking, and insulation can save 5 to 15% of that heat loss.

Shade your outdoor central air conditioning unit with trees or shrubs making sure you do not block air flow around the unit. This can reduce 10% of your electricity use.

Clean the furnace filter monthly and replace it every three months. Check air vents regularly to ensure nothing is preventing the air from circulating freely.

It's a simple scientific fact: heat moves toward cold. In winter, heat moves toward the windows and doors and if your home windows are not insulated properly, up to 50% of all heat inside a home could be lost. Having thermally-isolated windows and a thick window covering will help reduce heat loss considerably.

Lighting
Keep fixtures and bulbs clean. Dirt can absorb as much as 50% of the light. Always turn off the lights when leaving a room, even if it’s only for a few minutes. It’s just a myth that it takes more energy to turn a light on than to leave it on.

Try to position floor or table lamps in a corner. This allows light to reflect from the walls, making the room brighter without turning on more lights.

Replace traditional light bulbs with compact fluorescent bulbs (CFL). CFLs use up to 75% less energy than comparable standard light bulbs and can last up to 10 times longer.

Kitchen and Bathrooms
Switch non-essential chores from the peak times to earlier in the day or even overnight when electricity demand and rate is less.

Install water efficient low-flow showerheads and faucet aerators and install an ultra low-flow toilet or an early closure valve. Take showers instead of baths – they use less water.

Keep refrigerators and freezers out of direct sunlight, and allow at least 5 centimeters all around (or as recommended by the manufacturer) to allow heat to escape from the compressor and condensing coil. Allow hot foods to cool before putting them in the refrigerator.

The stove is another big energy guzzler. If you put aluminum foil on the bottom of the oven to catch drippings, make sure the foil does not block any of the oven’s circulation holes and don’t put foil on the oven racks.

Use an electric kettle to boil water – not the stove, which is less efficient. Thaw frozen foods in the refrigerator before cooking, unless the label says otherwise.

Turn off the oven just before finishing – the oven will remain hot long enough to complete the job.
Don’t use a bigger pot than you need, and match it to the right size element.

Home Office and Living Room
Even when appliances are turned off, they continue to draw electricity. Unplug them when not in use. Turn off unnecessary lights in the house (they produce a lot of heat which works against the air conditioning.)

Using screen savers doesn't save any energy. Activate energy saving settings on your computer or turn off your monitor when you are away from the computer.
Use area rugs on cold floors. If your feet are cold, your body will feel cold so rather than turning up the thermostat, put on a sweater.

Open draperies during the day on south-facing windows and let the sun heat your rooms naturally. Close your drapes and blinds during the night to reduce heat loss.

Installing ceiling fans can help to lower energy use in both the summer and winter. In summer, set your fan counter-clockwise to produce a cooling breeze. In the winter, set it clockwise to push warm air accumulated near the ceiling down back into the room.

Dishwashers and Washing Machines
If your dishwasher has the option, choose air drying rather than heat drying. If not, stop the machine before the drying cycle starts and open the door to let dishes air dry. By doing so, you can reduce the dishwasher’s energy use by 10%.

Avoid running small loads in your washing machine. You can save 1% on your energy costs by loading your washing machine to capacity before running the cycle.

Wash laundry in cold water whenever possible. Rinsing your clothes in hot or warm water won’t make your laundry any cleaner. Select your washing machine’s cold water rinse and save 4% in energy costs.

Energy saving is a hot topic! Talk about it with your friends and family. Discuss and share ideas and learn about how each of you can do better. Most likely you will come up with some creative ideas that are fun and can save you up to hundreds of dollars each year. Learn about how this topic fits into broader scale environmental initiatives and the role we as energy consumers could play to save mother earth.

Contact me at www.kimlouie.net for a free Home Value Report or to discuss the current real estate market!

Buying a Home in a Tight Market

The real estate market is tight and becoming more competitive in many areas across the country. Inventory is below average and home prices are rising as inventory shrinks, mostly in large cities.

There are several areas where buyer demand has increased while the inventory has decreased. In the last few months, it has not been unusual for a house to be shown to prospective buyers by more than six agents on the first day on the market. In many occasions, a decisive buyer has jumped in and bought the home, while others are calling and asking if the seller would pay closing costs, leave the drapes, and leave the hot tub.

If you want to increase your chances of obtaining your "dream" home and lowering your chances of losing out to another buyer here are some great tips:

1. Get pre-qualified for a mortgage.  You'll be able to make a firm commitment to buy and your offer will be more desirable to the seller.

2. Stay in close contact with your agent and clearly express your needs. Request your agent to be notifying you as soon as a home that fits your criteria goes on the market. Be ready to see the house on a short notice - if it is a great home, it will go fast.

3. Keep in mind that there's no such thing as the "perfect" home especially if you're in a market where prices have been consistently rising. Instead, set priorities. Determine what you're willing to sacrifice.

 4. Be ready to make a decision.  Spend a lot of time in advance deciding what you must have in a home so you won't be unsure when you have the chance to make an offer.

5. Bid competitively.  You may not want to start out offering the absolute highest price you can afford, but don't go too low to get a deal. In a tight market, you'll lose out.

6. Keep contingencies to a minimum.  Restrictions such as needing your father to see the home, or wanting to delay the closing 60-90 days can make your offer unappealing.  In a tight market, you want to stand out as the most appealing buyer for the home.

7. Get a professional inspection before you buy the home and sign the final mortgage loan papers. Otherwise, you'll be left in the dark about any hidden defects in the property.
Most importantly, if you're determined that now is the time to buy, don't be timid. You'll need to be ready to act on a moment's notice and present an attractive offer as soon as you see that close-to-perfect home that hits the market.

Contact me at www.kimlouie.net for a free Home Value Report or to discuss the current real estate market!

K-W Home Sales continue to stabilize in September - How does your home compare to these prices?

A total of 470 residential properties changed hands in Kitchener-Waterloo and area through the Multiple Listing System (MLS® System) of the Kitchener-Waterloo Association of REALTORS® (KWAR) in September. This was a decrease of 12.8 percent compared to the record number of sales in September of 2016, but still ahead of the previous 5-year September average of 437 sales.



On a year-to-date basis 5,357 residential units have sold compared to 5,239 during the same period in 2016, an increase of 2.3 per cent.

“We are seeing strong demand continue into the autumn” said KWAR President James Craig. Residential listing inventory on the KWAR’s MLS® System to the end of Septembers totalled 843, which is ahead of September of last year, but represents just half the number of listings that were on the market in the previous five years (2011-2015) for September.

September’s sales included 285 detached homes (down 14.2 per cent), and 105 condominium units (down 19.2 per cent) which includes any property regardless of style (i.e. semis, townhomes, apartment, detached etc.). Sales also included 38 semi-detached homes (up 22.6 per cent) and 37 freehold townhouses (up 12.1 per cent).

The average price of all residential properties sold last month increased 12 per cent to $455,079 compared to September 2016. The average sale price for an apartment style condominium was $261,337 for an increase of 6 per cent. Townhomes and semis sold for an average of $359,448 (up 20.9 per cent) and $372,226 (up 19 per cent) respectively.

Detached homes sold for an average price of $513,873 in September for an increase of 10 per cent compared to a year ago. “Our local residential real estate market continues to show solid price growth and unit sales,” says Craig who points out that year-over-year price appreciation peaked in April of this year when the average price of a detached home increased 40 percent to $594,108. Today, on a year-to-date basis, the price of a detached home has averaged $553,029, an increase of 24.7 percent compared to 2016.

“What might seem to be a stabilizing of prices in September may have more to do with the price ranges that people were purchasing in,” says the president of the KWAR. Craig notes that last month 32% of all residential transactions were in the $300-399,999 range; compared to just 15.6% in April. “We also saw more transactions in the higher price ranges during the heat of the spring market. There were 20 sales that occurred over the one million dollar mark in April, compared to only 5 in September.

The average days on market in September was 36, compared to 57 days a year ago. On a month to month basis, it took ten additional days on average from list to sale date in September compared to August.

“The feverish spring conditions have given way to a saner playing field, however an increase in listings would be a welcome shift for homebuyers who would benefit from increased selection across the more affordable price ranges.”

Contact me at www.kimlouie.net for a free home value report or to chat about the local real estate market!

3 Tips to Help Sell Your Home This Autumn

Traditionally, Fall is the second busiest season in terms of home sale activity.

 Selling your home is a competition - here  are 3 tips to help make yours shine a little more than your competitors.

 Clean up:
A little bit of elbow grease can do wonders so start cleaning up to make your house look its best. A clean and organized house will look good in photos and impress potential buyers during viewings.



Use curb appeal to make a great impression:
First impressions count so make sure potential buyers like what they see when they drive by or arrive for a viewing. Consider painting the exterior of the house with a warmer hue to make it more inviting, and keep your yard clutter-free. Accentuate your landscape with a few seasonal decorations such as pumpkins and gourds to make it more appealing to potential buyers. Keep in mind that a great curb appeal can help you command a higher price and increase your chances of selling your house in less time.

Create a cozy atmosphere:
Since it can already get pretty chilly at times, try to create a warm atmosphere inside your home. Apply a fresh coat of paint on your walls, make sure your house has plenty of light, and set the thermostat at a comfortable temperature. Display a fall centrepiece to highlight a certain area and add pops of bright colors to breathe life into the room. To further increase your chances of selling your house fast this autumn, consider working with a credible realtor in your area. This can help spell the difference between selling your house fast and letting it sit on the market for an indefinite period of time.

Contact me today at www.kimlouie.net to find out what your home is worth or to chat about current market conditions!