Choosing the Right Neighbourhood When Buying a Home

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Choosing a neighborhood is almost as critical as choosing a house or apartment. It needs to be safe with low crime rates, affordable, and provide you with everything that you need.

If you're planning on purchasing a home, keep in mind that you're not just buying a house, you're investing in a neighborhood. The two are synonymous so you need to be extra careful in choosing the area you'll be living in.

You can't judge a book by its cover, nor a neighbourhood by its looks. Ultimately, you want to buy a house that will still be in a desirable place to live 10 or 15 years from now. Depending on your own particular needs and tastes, some of the following factors may be more important considerations than others:

• Style of homes
• Quality of schools
• Property values
• Crime rate
• Future construction
• Proximity to: schools, employment, hospitals, shopping, public transportation, cultural activities,  highways, beaches, parks, shopping, recreation and spiritual or community organizations (churches, temples, mosques, etc.)

If you’re a first-time buyer with limited financial resources, it’s a wise purchasing strategy to buy a home that meets your primary needs in the best neighbourhood that fits within your price range.

You can maximize your home purchase location by incorporating some of the following strategies into your neighbourhood search:

• Look for communities that are likely to become "hot neighbourhoods" in the coming years. They can often be discovered on the periphery of the most continuously desirable areas.
• Look for a home in a good neighbourhood that is a bit farther out of the city. If commuting is a concern, purchase a home that is close to public transportation.
• Look at the neighbourhood demand by asking whether multiple offers are being made, whether the gap between the list price and sale price is decreasing, and whether there is an active community involvement. You can also drive around neighbourhoods and see how many "sold" signs there are in a particular area.
• Look into purchasing a condominium or co-op, rather than a house, in a desirable neighbourhood. This way you may still be able to purchase in a prime area that you otherwise could not afford.
• Consider the safety issues such as traffic and how your kids are going to get to school. Paying attention to the local school system is valuable even if you don’t have children or plan to because many potential buyers are concerned with that issue. A thriving school district can be an indication of an area that will continue to rise in property values.

Of course, being too close to the school or boxed in by traffic jams can hurt the resale value of your home. You should also check how local students score on standardized tests to help determine the quality of the education taught in the area.

There are a few more sources that can provide assistance in learning about a neighbourhood:

• Go have dinner at one of the restaurants in the area. You can strike up conversations with some of the local patrons in that restaurant.
• Talk to local business owners. Even if they don't live in the area, they will have some insight about the neighbourhood and people living there.
• Find out about owner-occupancy. Your agent is a good source for this kind of information. Ask about rental values - even if you plan to live in the home. Often tenants don't have the same pride of homeownership that owners do; thus properties are not always kept up.
• Check the landscaping at major commercial developments. Is it kept up?
  Visit local facilities such as malls, movie theatres, etc. Frequently these will be hang-outs for school-aged children and  good place to get an idea about the neighbourhood kids.
• Drive through the neighbourhood and see if there are a lot of home remodelling projects going on. If so, it likely means homeowners are planning to stick around and are willing to invest more in their homes because they like the neighbourhood.

Once you have identified your preferred neighbourhood, make several visits to it on different days and times, coming back in the evening, on weekends, and during school time hours to see how the area changes. Observing the neighbourhood and the people who live and work in the area will give you a better understanding of whether its a fit for you and your family. The more time you spend studying the location the less likely you are to discover something you really dislike after you have bought the home.

Contact me at kimlouie.net to chat about real estate!

January Home Sale Prices in Waterloo Region

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KITCHENER-WATERLOO, ON (Feb 4, 2019) –– There were 307 residential sales in January through the Multiple Listing System (MLS® System) of the Kitchener-Waterloo Association of REALTORS® (KWAR), an increase of 14.6 per cent compared to January 2018.

"January was surprisingly busy with an above average number of home sales," says Brian Santos, KWAR President. "The number of units sold last month were up nearly fifteen per cent compared to the previous ten-year average for January."


Total residential sales in January included 189 detached (up 26 per cent), and 80 condominium units (up 19.4 per cent) which includes any property regardless of style (i.e. semis, townhomes, apartment, detached etc.). Sales also included 20 semi-detached homes (down 28.6 per cent) and 17 freehold townhouses (down 19 per cent).

The average sale price of all residential properties sold in January increased 5.3 per cent to $484,076 compared to January 2018. Detached homes sold for an average price of $564,718 an increase of 1.9 per cent compared to January of last year. During this same period, the average sale price for an apartment style condominium was $303,379 for an increase of 22.1 per cent. Townhomes and semis sold for an average of $368,227 (up 0.7 per cent) and $407,852 (up 4.6 per cent) respectively.

The median price of all residential properties sold last month increased 5.3 per cent to $455,000, and the median price of a detached home during the same period increased 7.1 per cent to $530,000
"It was a positive sign to see an uptick in the number of residential listings hitting the MLS® system last month," says Santos. "However, the total number of homes available for sale continues to perform well below historical averages."

REALTORS® listed 585 residential properties in K-W and area last month, an increase of 25.5per cent compared to January of 2018. The number of active residential listings on the KWAR’s MLS® System to the end of January totalled 810, which is 11.4 per cent more than January of last year, but still well below the previous ten-year average of 1,189 listings for January.


The average days it took to sell a home in January was 26 days, which is 5 days less than the amount of time it took in January 2018.
Santos says, "We have a positive outlook for 2019. I think we’re going to see home prices remain steady or have small increases, sales will continue to be strong but we’re also beginning to see more homes being listed for sale to increase our inventory and provide buyers with additional options. So long as everything else remains equal Waterloo Region should remain a strong and stable market."

Using Your Home Office as a Tax Deduction

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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 kilometers you are traveling 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.

Contact me at www.kimlouie.net to chat about real estate!

Does Condo Living Work for a Family?

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When looking to buy a new home for their families, most people don’t automatically think purchasing a condominium is a viable option for them.  Part of the reason for this thinking is the widely held misconception that a condo lifestyle is primarily for young couples, seniors and singles. It is a North American myth that families need big houses to thrive and that children need a lot of space to develop well. None of this is supported by research evidence.

Paradoxically, detached houses have become bigger and bigger at a time when they have become emptier and emptier. Families have fewer children and, in a majority of Canadian families, both parents work and during the day most children are in school.

Families that live in large houses actually have less time together because each family member spends most time alone in his or her room. Nowadays, kids have a cell phone, television, computer, Internet, and a game system in their own bedrooms—and this is where they spend most of their time. In large houses, some parents now have to phone or text their children to get them to come down to eat.

Many families may look at high-rise complexes and multi-units and think that they are not suited for family lifestyles. The truth is that condominiums are a feasible option for anyone who wants to own property. In fact, many condos may provide more, not fewer, opportunities for children, including:

Sociability. Children living in a condo, especially in a high rise, meet people on a daily basis in corridors, elevators, lobby, and parking. They can learn to interact with others, how to be polite or considerate. They may become less shy and more sociable.

Diversity. Condos generally have a diverse population, especially in large cities, so that children are more likely to meet people from all ages and various backgrounds.

Peers. There are several other children around in the same building. This situation can help them make new friends.

Physical Activity. Many condos have a pool so that children can have fun while exercising. As well, many condos are located near a playground or green space.

Living in a condo may also offer many advantages for parents with small children, such as:

Easier Supervision. It may be easier to supervise children’s social activities in a condo because it is a fairly self-contained vertical neighbourhood or a townhouse area that is quite compact. It’s easier for parents to keep track of their children’s whereabouts.

Sociability. Mothers at home with small children nearly always meet other mothers in the same situation. In some condos, enterprising mothers exchange services and babysitting, arrange meetings or go to a nearby park together.

Car Pooling. Carpooling for schools can more easily be arranged once parents know each other.

Similarly, condos are ideal when a mature couple or person wants to help aging parents where adult children may buy a suite for their parents in their building, or in an adjacent building.

A condo home is like a home anywhere else: location counts. Parents or would-be parents should look into the surrounding neighbourhood just as people do when they buy a detached home. Some areas are better than others and the same can be said about schools. It is recommended that you visit the neighbourhood school to make sure that your children can attend it. It's not always the case in some areas that have seen a lot of recent development.

Condo living does not mean that parental supervision is not necessary. For instance, small children should never be left alone on a balcony or terrace on floors above ground level. They could climb and fall. Neither should children be left alone in elevators. Unless a building has cameras in the elevators, children below the age of 14 should probably always be accompanied by another person. Underground parking areas are not a safe place for a child alone.

In other words, parents have to exercise the same caution and vigilance over their children that they would in other living environments. They only need to adapt their vigilance to the type of condo they live in.

We are seeing a great deal more in the way of multi-family developments in both established and newer communities that offer close proximity to schools, libraries, pools and arenas, amenities that are obviously priorities for young families.

Home builders are also taking into consideration some of the more obvious requirements like more bathrooms, and bedrooms, and have grown more cognisant of the little things that families appreciate, like sound attenuation, extra phone jacks, and cable outlets. With many of those important details now being looked after by builders and developers, families don’t have to worry about it and can instead focus on what type of condominium development would best work for them.  Most tend to lean towards a townhouse style, with many units now offering sizes and plans similar to single-family homes.

Contact me at www.kimlouie.net to chat about real estate!

How To Qualify for A Mortgage!

 

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Many people wonder if buying a home is really within their reach. It often seems like a daunting purchase for the first time buyer. The good news is that with the large variety of options available today, it has never been easier to secure a mortgage.

Mortgage lenders assess a variety of criteria when considering mortgage applications. Most lenders look at the following factors when determining whether you qualify for a mortgage loan.

One of the first questions a lender will consider is how much of your total income you’ll be spending on housing. This helps the lender decide whether you can comfortably afford a house.  Mortgage payments for principal, interest and taxes generally should not exceed 30% of your gross monthly income.

A lender will then look at your debts, which generally include house payments as well as payments on all loans, charge cards, child support, etc., that you make each month.

A history of steady employment, usually within the same job for several years, helps you to qualify. However, a short history in your current job shouldn’t prevent you from getting a loan, as long as there have been no gaps in income over the last two years.

Good credit is also very important in qualifying for a loan, and the lender will want to know that the house is worth the price you plan to pay.

Down payments are not always required as there are mortgage programs that provide 100% financing for qualified purchasers.  If you have a down payment of 20% or more of the purchase price, this is known as a "conventional" mortgage, and the mortgage lender will not require default insurance.  However, with mortgage loan insurance to cover potential default of payment, you may be able to qualify for a mortgage with a down payment of as little as 5%.

When budgeting, also consider other monthly-related expenses such as condominium fees, heat, hydro, water, property tax, insurance and household maintenance.

Even if you can’t buy a home right now, home ownership is possible. If you make it a serious goal and plan for it, within two years you can probably overcome most or all of obstacles that usually face first time buyers.

Contact me at www.kimlouie.net to chat about real estate!

Tips for Creating the Ideal Basement Apartment

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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, 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 draw the eye up and therefore giving 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, 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
Open-Concept Layout  that combines the kitchen, dining room, and living room in one shared space. work extremely will with a small basement apartment. It increase the view and natural light and make 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.

Contact me at www.kimlouie.net to chat about Real Estate!

Real Estate Market Stabilizing in Waterloo Region

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There were 5,823 residential homes sold through the Multiple Listing System (MLS® System) of the Kitchener-Waterloo Association of REALTORS® in 2018, a decline of 11.1 per cent compared to 2017.

With 263 transactions taking place last month, December’s home sales were down 13.2 per cent from this time last year and slightly behind the previous 10-year average of 268 sales for the month of December. 

The combination of rising interest rates and the mortgage stress test definitely took some steam out of the market relative to what we saw in the previous two years. These types of impediments are most impactful on first-time as well as other buyers entering the housing market.

Total residential sales in 2018 included 3,355 detached (down 16.2 per cent), and 1,553 condominium units (up 6.4 per cent) which includes any property regardless of style (i.e. semis, townhomes, apartment, detached etc.). Sales also included 417 semi-detached homes (down 23.6 per cent) and 431 freehold townhouses (down 7.7 per cent).   

The average sale price of all residential properties sold in 2018 increased 3.4 per cent to $483,537 compared to 2017. Detached homes sold for an average price of $575,412, an increase of 4.8 per cent compared to 2017. During this same period, the average sale price for an apartment style condominium was $304,676 for an increase of 12 per cent. Townhomes and semis sold for an average of $373,307 (up 5.5 per cent) and $396,391 (up 4.7 per cent) respectively. 

The median price of all residential properties sold last year increased 3.6 per cent to $445,304, and the median price of a detached home during the same period increased 6.1 per cent to $525,000.

The average time it took for a home to sell in 2018 was reflective of demand continuing to outpace supply. The number of months of inventory remained at under 2 months of supply throughout the year (3-4 months is historically normal for Waterloo region) and the average days to sell in 2018 was 24 days, compared to 19 days in 2017 and a previous 10-year average of 40 days.  

While we may be seeing fewer buyers coming down the 401,  they are still a component of the Waterloo region real estate market, just not as speculative as what we saw in the previous two years. 2018 continued to be a seller’s market in the region with stable sales activity and homeowners realizing solid gains in their property values.

Even though prices increased more moderately overall compared to the last two years, they continue to respond to strong demand and the desirability of our area. For those would-be buyers who have been sitting on the fence these past two years, home prices are only getting further out of reach, as supply remains low and demand strong.

Dollar volume of all residential real estate sold last year decreased 8 per cent to $2.8 Billion compared with 2017. 

While the majority of residential MLS® System activity is properties for sale, REALTORS® are increasingly representing landlords and tenants. Last year 733 residential leases occurred through KWAR’s MLS® System, an increase of 22 per cent compared to 2017 and, a 40% increase compared to 2016.

Contact me anytime at www.kimlouie.net to chat about real estate!