Okay let's just get down to business..

1. The first step is to start looking at houses right away. - BUSTED!  First and foremost, it’s so important to learn about the home buying process. There’s a lot of legal documents you’ll be signing and things you don’t see on HGTV that you need to become familiar with. Find a trustworthy (and funny ??) Realtor who has lots of experience working with buyers, ask for their recommendations for a dependable and honest mortgage broker, and begin the process there. Educate and prepare yourself for success!

2. New homes are always better. - BUSTED!  In all actuality, old homes usually have good/better bones. Sometimes, new homes are built quickly and cheaply, and the systems and structures don’t necessarily stand the test of time.

3. Your only upfront cost is your 5% / 10% / 15% / 20% down payment.  - BUSTED!  Don’t forget, you will also incur closing costs like legal fees, land transfer taxes, title insurance and other disbursements, as well as deposits to set up new utility accounts. You’ll also need to keep in mind your moving costs, a small budget for new furniture to fill your new larger space, and things that are essential to homeownership like tools, lawn care and snow removal items, etc. 

4. Go with the lender who offers you the lowest rate.  - Classic bad advice from your uncle who bought and sold a house back in 1972.. but also BUSTED!  Lower rates don’t always translate to the best savings at the end of the day. If you need to break your mortgage term early for any reason, you could face big penalties.. or perhaps you’ve come into some money (big lottery win???)  Having prepayment privileges are also very important. Another important question: Will this be considered a collateral loan? Or a traditional mortgage? The answer to this question could greatly affect all of the above-noted expenses/costs. 

There’s a lot of myths out there but I’m happy to bust them and help put YOU on the right road to homeownership! 

Thinking about buying in the next few months? Have questions about the process? Want to read over a free copy of my Home Buyers guide? Or just want to chat about what's happening in the real estate market these days? I'm always available to chat!

A few weeks ago, I posted an article on my blog titled “The Hype Around the BRRR Method for Real Estate Investing”. Since then, several people have reached out asking questions about buying a second home and wondering how to finance it. Having worked in the real estate industry for 15 years and being a landlord myself, I think I can provide some valuable insight for someone who wants to get started.

Here are 10 things that you should know!

1.  Make sure you have 6 months worth of mortgage payments in the bank as a back up plan. You may have renovations you want to do when you buy an investment property, you may also have a challenging time renting it out, or you could have an uncooperative tenant that isn’t paying their rent. The landlord tenant board is backed up by at least six months right now, so it's important for you to have a safety net in place to minimize your risk.

2.  Don’t use your own money! Especially right now with rates so low! Borrow money for down payment via refinancing your current home or secure a HELOC against your home from your lender. HOWEVER: Be very careful about overextending yourself! The last thing you want is a struggle to make future purchases because of having too many open credit lines.

3.  Make a budget. Building materials have increased by at least 40% since the pandemic started. If you need to renovate, be sure to factor that into your budget. You’ll want to put aside an extra 20% of current material prices so you’ll have a cushion if prices do continue to increase before you have all of your supplies secured. (Look at the price of lumber right now.. insane ??!)

4.  Don't forget, in the City of London, all rental properties need to be licensed. The city requires an ESA and fire inspection certificate before a rental license can be approved. There are fines for landlords who own rental properties without licenses. 

5.  Ensure you have a few hours a month to be available to your tenants if you plan to self-manage your property. There will always be small things that need doing, collecting rent, making repairs, calling around for tradespeople, etc  

6.  Property managers generally cost approximately one month's rent for tenant screening and placement, and another 5-10% of monthly rent for full management services. Budget for this by building these costs into the rent you’re charging your tenants. 

7.  Make sure to learn the Residential Tenancies Act front to back so you know your rights as a Landlord. The act favours tenants' rights, so it’s important to know what your rights are if you ever have to deal with any tenant-related issues.

8.  Landlord and tenant relationships are also subject to the Human Rights Act, so it’s a good idea to understand what the act entails.

9.  If a dwelling has more than 4 units, it’s considered a commercial property, so be prepared to pay HST on top of the purchase price. You will also be required to have a substantially larger down payment than the regular 20% you’d usually expect when buying a residential property.

10.  Be sure to keep your rental properties as leveraged as possible if you want to keep investing. You may be asking why?? I know it sounds crazy but when you look at the after-tax numbers, it makes sense. (Only the interest portion of your monthly mortgage payment can be written off.)

As always, if you have any questions about real estate investing, or about anything else real estate related, I’m just a phone call away!

Whenever I am doing research on real estate investing, one common strategy I see referred to is the BRRRR method. You may be asking what is the BRRRR method and why should I care?? 

The BRRRR method is like the ULTIMATE recycling program for real estate investors. You buy a property that needs some love, give it a makeover, rent it out to a deserving tenant, refinance it to get your money back, and then start the process all over again with a new property. It's a sustainable way to build your real estate investment portfolio while also making your city a better place, one property at a time. 

Let's break it down, step by step:

Step 1 - BUY: you buy a property that needs work. The property usually needs some cosmetic updates. Definitely more than a coat of paint. Your objective is to raise the value of the property. You want to have that cash available to do the necessary upgrades or leverage an existing property to pull that equity out. The most common way to access your equity in Canada is using a home equity line of credit (HELOC). I will get into more about HELOC's in another blog post.  

Step 2-  REHAB:  Completing the renovation itself. Make sure you don't get in over your head/you are using a contractor for the updates. This part needs to go well! You need to account for costs like mortgage, taxes etc. while the renovations are happening. Every month you are renovating is money you can't recoup since you are on the hook for mortgage and other costs during this process. You also want to be prepared with extra funds just in case there is something you weren't anticipating. 

Step 3 - RENT: Advertise your place and screen for good tenants. Right now there are definitely limited vacancies, so you have the opportunity to pick who you want to rent to. I can’t stress it enough - screen, screen, screen! 

Step 4 - REFINANCE: After you have renovated and secured a tenant. You can start thinking about refinancing options. Each lender is different, so it’s important your realtor and mortgage broker know your investment goals. For example, some banks do not allow you to refinance within your first year of purchase.  Once you get approved for refinance, you are ready to move onto the last step. 

Step 5 - REPEAT! The money you have secured from refinancing is for your next BRRRR investment. You continue to repeat this process to build your portfolio, build equity in your investments, and grow your overall wealth. 

With the BRRRR method, you can create a portfolio of high-performing real estate investments. 

What are your investing goals for 2023? Are you feeling a little B-R-R-R-R this winter? Perhaps we need to chat!

Hey there, first-time homebuyer! Are you ready to join the ranks of responsible adulthood and start making mortgage payments? Good for you! But before you start signing on the dotted line, there are a few things you should consider to make sure you end up with a home that's the perfect fit (and not a money pit).

1. Affordability: Let's be real, no one wants to be stuck in a tiny studio apartment for the rest of their lives (unless you're a fan of the "IKEA bedroom closet" look). But before you start dreaming of sprawling mansions, make sure you know how much you can realistically afford. Get pre-approved for a mortgage and consider all the costs of homeownership, including closing costs, property taxes, and regular maintenance

2. Location: Unless you're planning on living in your car (hey, it's a rising trend), you're going to need to choose a location for your home. Consider factors like proximity to work, schools, public transportation, and amenities. And if you're a city slicker, don't forget to factor in the noise level and crime rate. No one wants to be woken up at 3 am by a car alarm (or a neighbor's karaoke session).

3. Size and layout: It's important to think about your current and future needs when it comes to the size and layout of your home. If you're planning on starting a family or frequently hosting guests, a larger home with more bedrooms and bathrooms may be a good investment. But if you're a solo dweller or plan to downsize in the future, a smaller home may be a better fit. And don't forget to consider the layout - is it open and spacious, or cramped and cluttered? No one wants to feel like they're living in a game of Tetris.

Buying a home is a big decision, but it doesn't have to be a daunting one. Just make sure to do your research and ask for help when you need it. And remember, there's no such thing as the perfect home - just the perfect home for you. 

For a copy of my first-time home buyers guide, click HERE to send me your contact info and I'll email you a copy!

Don't forget, I'm always here to help!