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7 ways to prepare for the spring homebuying season

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Most of us may still be bundled up against the elements, but spring will spring eventually, and with it will come the annual acceleration housing market and mortgage transactions. Even if your local housing market is as tight as Toronto’s – or even Vancouver’s these days – spring is the busiest time of year for real estate transactions.  If you are planning on getting a mortgage this spring, what are you waiting for? Take some time to prepare yourself for the potentially long bumpy road ahead, and hopefully you’ll be rewarded with a smooth homebuying experience.

 

  1. Find a mortgage broker

Getting a recommendation from someone who has worked with a mortgage broker is the best way to go about finding one, but if you don’t know anyone who has used a mortgage broker, take the time to find one on your own. Mortgage brokers don’t work for a particular institution and are free to go to multiple lenders to find the best deal for you – included those lenders who you would be unable to access on your own. They also work with banks, so there really is no downside. You’ll probably need to speak with more than one broker to determine whether or not he/she is a good match for you. You want to find one who’s comfortable working with your current financial situation and who doesn’t raise any red flags in the back of your mind, such as suggesting shady practices or loopholes that will get you a home, but end up putting your financial future at risk.

 

  1. Check your credit report

You don’t want to find out that you have an error in your credit report when you’re submitting your paperwork for financing. Do what you can to improve your credit and check your credit report for any errors so that you won’t be blindsided at the 11th hour when there’s a house on the line.

 

  1. Get a mortgage pre-approval

A mortgage pre-approval is when a lender looks at you as a borrower and determines how much money they’re willing to give you as a mortgage. While your final mortgage amount may vary based on the appraisal of the property that you want to purchase, a mortgage pre-approval is probably the best tool in your house hunt for several reasons. First, it will give you an idea of how much money you can spend. If you were just basing your budget on how much you can afford on a monthly basis, you may be ignoring some facts that are important to the lender and that will impact your worthiness as a borrower, such as your credit history. Secondly, the interest rate that you’re given in your pre-approval is guaranteed for a set period of time. That time period varies, but most lenders honour it for a period of about four months. Another reason is that with a pre-approval, a buyer knows that you’re serious and likely to have no issues with financing, and if once you put an offer in on a home and your offer is approved, you already have a head start on the mortgage process.

 

  1. Do your research

If you haven’t started your research online already, do it now. This applies to mortgage interest rates, it applies to different mortgage products, it applies to home prices and styles in your area. Your broker will get you the best rate possible, for example, but in order to know what kind of mortgage you want, you should know the basics about different features that you can get with a mortgage that can closer align it with your short term and long term financial goals, and be able to discuss them with your broker. Another reason you want to do your research first is to learn your housing market. What’s happening halfway across the country really has no bearing on how difficult or easy it will be for you to find a home. If you’re used to living somewhere where homes usually go for under the asking price and you are relocating to an area where bidding wars are common, failing to get aggressive could cause you to lose out on multiple properties.

 

  1. Find a realtor    

Just as a mortgage broker is your right-hand person when it comes to securing your mortgage, your realtor is your right-hand person when it comes to finding your property. You may have to interview several different realtors before you can find one that suits your needs, and that’s perfectly okay. Depending on your specific criteria for finding a home and the intensity of your particular housing market, you could be working with your realtor for a long time, so not only do you want to like him/her, but you also want to make sure they’re not the kind of person who will push you into a deal that you’re not comfortable with, or to a price point higher than what you gave them. You also want to be able to be brutally honest when it comes to what you think about the properties that they’re showing you. If you’re afraid to tell your realtor the truth, keep searching. And while you want them to be nice, you don’t want them to be a doormat; you want them to be able to fight for you if it comes to negotiations. Some questions you might want to ask are: “What kind of buyers do you typically work with?” “What’s your area of expertise (condos, repeat buyers, investment properties, etc.)?” “What’s your offer strategy?” “What’s the best way for to contact you?” “How many homes have you bought and sold in our target area?”

 

  1. Manage your expectations

Buying a home is often a marathon, not a sprint. While you want to hit the ground running, know that transactions can often hit snags for even the most well-prepared buyer. Be realistic with your budget so that you know what kind of home you can afford and don’t waste time and energy looking at other options. Know that every mortgage transaction with every lender is different, so while your brother may have gotten a 2.3 per cent interest rate on his mortgage, that doesn’t mean you will. Your best friend may have scored the deal of the century on a semi-detached home steps away from public transit, but that doesn’t mean you will. Go into the process with an open mind and realistic expectations.

 

  1. Don’t give up

If your mortgage application gets rejected or your offer gets denied, try not to get discouraged. Even if you have to explore other financing options, there still may be ways that you can buy a home before the heat of summer arrives.

 

Are you looking to invest in property? If you like, we can get one of our mortgage experts to tell you exactly how much you can afford to borrow, which is the best mortgage for you or how much they could save you right now if you have an existing mortgage. Click here to get help choosing the best mortgage rate


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The First Step to Property Investment – I Want To Invest, Now What

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Have you been considering real estate investing but aren’t sure where to start? There is no doubt that you have heard how much of Canada’s wealth stems from real estate. It’s a hugely successful area of investment, and it’s relatively easy in comparison to playing the stock market which can be far more complicated and volatile.  If it’s something you have thought about and don’t know where to begin, this is the place. The Home Guyz always want to see successful investors and they know the old saying, If you fail to plan, you plan to fail. These are the very initial steps you should take if you’re considering. It isn’t a how-to more of a where to begin.  The most important thing to understand if you’re considering real estate investing and becoming a landlord is that it takes time, you must understand that property investment isn’t a way to get rich fast, but rather a high-performing investment that grows consistently over time.

Here are 5 steps to get you started with the real estate investment process, because remember; fail to plan is planning to fail.

Step 1: Set Clear Goals. Make your goals clear, not just “I want to make money” have a target number that you want to reach by a certain time. Is this a five year goal, a 10 year goal or maybe something you want to use in retirement. Have a clear outline of why you want this, and your goal timeline.

Step 2: Make Time. Depending on how you plan on investing will depend on the amount of time you need to put towards it. But one thing is clear, despite how you inves whether short term rentals, apartment landlords etc. all of it will take some of your time. So make sure you have time to give to the process. You may think that hiring a property manager will mean that you don’t have to put in the time, but that’s just not true. The process, especially at the start is time consuming. Consider the initial time consuming things to include:
-research
-bank meetings 

-lawyer meetings 

-finding and viewing property

-managing properties or the property manager

Step 3: Do Your Research. Do you fully understand all the financial elements? Gross yield vs net yield? how will this affect your taxes and what you’ll pay in capital gains? Do you understand the power of leverage- or do you know where and who to ask for help? You need to have a full understanding of all of this before you proceed with investing. These can be very very expensive lessons to learn along the way. Knowledge is power when it comes to real estate investing. 

Step 4: Create Your Budget. Like buying any house, you need a solid budget and you need to understand what you’re budgeting for. To start with your budget, it’s smart to speak with a professional, but in general you’ll need to have the money up front to pay for your deposit, lawyer fees, agent fees, taxes, and of course you’ll need contingency money for emergencies that may arise. The difference with a budget for real estate investing is that the budget you have must be over and above your own household and life expenses, so you’ll need to ensure that you have a solid grip of all of your regular expenses to ensure that the money you are using is able to be spent over and above your regular budget. So you must have a solid understanding of your existing financial situation. Which leads us nicely into our next point…

Step 5: Speak With A Mortgage Broker: You’ll want to understand what lending options are available to you, and what the various options are. A professional is the best way to go. Do not look for these options on the internet, this information will not be accurate to you and your situation, you don’t want to base your budget around a lending option that may not be available to you! Check out a Mortgage Broker we recommend.

Step 6: Finalize Your Personal Preferences (Now is a good time to look back at your goals!) You’ll need to be clear on what you want your property investment to be. Knowing what you want your goals to be will lead you into the type of property that will make that happen. Ask yourself all the questions…do you want a higher income or a higher yield? Do you want short term rental? Do you like the idea of a condo or does the lack of control not something you want to deal with? How hands-on do you want to be? What location are you looking for? And of course budget, which will immediately narrow many options and areas. All of these questions and factors are areas that you must be clear on, you must be able to answer these questions. This is a very good time to contact The Home Guyz as they always know the best areas and options, they know the right questions you need to ask, which leads us into the next step.

Step 7: Contact Your Real Estate Salesperson. You’ll need assistance with finding rental prices. This isn’t guess-work or even information you should pull from the internet. You will want to speak with actual rental agents who can let you know the prices you can get for certain renal properties. Plus an agent will have a good understanding of the demand and you’ll want to know listing prices vs. actual sold prices. They can talk to you about rental yields, days on market, vacancy rates and other factors you just can’t find without a professional. These are all factors you must take into consideration in order to be a successful landlord and real estate investor. Your agent can assist you with your preferences outlined in the previous step and they can help narrow your search, or even better, perhaps open up some great opportunities you perhaps weren’t aware of! They can help you identify risks you perhaps hadn’t thought of and work with you to find smart ways to overcome them.  Looking for a Realtor®


Investing in Real Estate is rarely a bad idea. It’s a good way to confidently grow your investment portfolio, and build long term wealth. But it is not risk free. Be prepared, The Home Guyz would love to discuss with you investment opportunities in the Ottawa area and beyond. 

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Investing in Urban Real Estate for Beginners

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No matter what type of urban property you’re considering, it’s important to first understand the ins and outs of urban real estate investment.

Why are more people investing in urban real estate

Many investors have shifted their focus from suburban properties to urban properties and there are many reasons for this. One big reason is that there are much more properties available in a city compared to a suburb, which can depend on the area in which you’re searching. For the most part, popular cities keep adding more and more infrastructure, which means there’s usually no shortage of properties to invest in.

Since urban areas are more popular for rentals, it’s usually easy for real estate investors to find tenants for their properties. That is sometimes a problem in suburban neighbourhoods. Not having tenants means an investor might have to go for an extended period of time without income from their investments. Utility and maintenance fees, along with property taxes, must still be paid during this time.

When investing in an urban property, however, there is usually plenty of foot traffic. People are going to notice a property available for rent and there is always someone in need of a place to live.

Why you should invest in urban real estate

If you’re a first-time investor, then buying an urban real estate property could seem like a huge undertaking. Investing in urban real estate is similar to investing in any other type of property, though. You still have to do an extensive search to find the perfect property and provide maintenance when needed. There are, however, many benefits to investing in an urban property.

One of the great things about urban real estate is that there’s a huge diversity of different properties. If you aren’t ready to take on an entire home or commercial building, you could instead invest in a local condo. This will still yield some passive income and won’t require much work. That said, if you’re looking to make a living off your investment, then it’s important to find a property, or properties, that will yield a large profit.

In urban areas, there’s also a huge diversity of people, food and shopping options. The promise of diversity is a big reason many people choose to live in an urban setting. People also like the convenience of having public transport, plenty of parks and other amenities. Interest in urban living, especially with younger people, will probably keep growing. This means you could see huge profits on your investment in the future.

With so many people moving into urban areas, you might choose to buy a piece of property in the hopes of selling it at a future date. It’s important to do plenty of research on the area where you plan on investing. This will help ensure that you see a good return on your investment.

Another reason you should consider investing in urban area properties is that they are sometimes much cheaper than suburban properties, depending on where you look. This is great for those not looking to blow all their money on a first-time investment. Make sure any property you’re considering isn’t suspiciously cheap, though. This could mean there are major problems with the property, including the need for many repairs.

Finding the perfect property

As with investing in any type of property, it’s important to do plenty of research on urban real estate investments. This means checking out the property yourself to make sure there aren’t expensive repairs needed. You should also check for things like insect infestations, mould and any other problems. Any issues with a piece of property could mean you’re wasting money by having to pay for repairs or cleaning.

If you plan on buying a property to sell at a later date, be sure to heavily research the area. Check for housing trends and see if the area has increased in value over the years. You don’t want to accidentally purchase a piece of property that will end up dropping in value over time.

There are many benefits to visiting the neighbourhood in which you’re wanting to invest before settling on a piece of property. This will help you better understand the area and the amenities it has to offer. Don’t purchase a piece of property if you’ve noticed plenty of “For Sale” signs or businesses that have closed down, for example.

It’s always a good idea to consult with a real estate professional in the area. They will offer you the best advice and provide all the information needed on a specific neighbourhood and piece of property. When going to look at a property, have a maintenance professional check for any needed repairs. This could help save you a ton of money on your budget for renovations or avoid a property that needs too much work.

Make sure to get the best financing

Financing urban homes can be subject to different rules and regulations. Often times it pays to have a broker shop around for you to get you the product that supports and urban home, but also helps to maximize your lending amount.

We recommend all readers to call LendCity Mortgages for your urban property. They can be reached from their website in the link above or by calling them at 519-960-0370.

Be aware of these things

There are certain issues with urban properties of which you should be aware. The breaking of lease agreements, for example, is a bigger problem with urban properties than suburban properties. This is an easy problem to deal with, however. Just make sure that you’re properly vetting your tenants before allowing them to rent. This means doing proper background checks and looking at their rental history. Put reasonable consequences for breaking the lease early into the agreement—something that will help you recoup your costs.

Fixing and flipping a home could also be much more difficult in an urban area because there is less room and more red tape to get through. Working with a reputable local contractor will usually ensure that you won’t have too much trouble renovating a property.

With the right research and awareness, urban properties are a great investment.

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7 Tips for Investing in Distressed Properties

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Distressed properties are so cheap that the cost of repairs and renovations could be minimal compared to the potential profit. If you want to invest in a distressed property, it’s important to do plenty of research and be aware of the risks involved. Having a good strategy in place can ensure that purchasing a distressed property will result in larger profits.

Do your research for every distressed property you find

If you’ve found a distressed property for a good price, it’s important to do plenty of research before buying. Consider having a specialist inspect the property and check for any and all needed repairs. This will help you avoid the need for unexpected repairs down the line. You don’t want to end up investing in a piece of property that’s beyond repair.

Researching the neighbourhood is just as important. Even if the price is right, you’ll want to make sure the property is in an area where homes sell. Speaking with a reputable real estate agent in your area is the best way of finding out information on a particular neighbourhood.

Take an on-hand approach

It’s important to stay aware of whatever’s being done to your property. While construction and renovations are being done, you should frequently visit the property. Make sure your contractors keep you updated on the progress of any renovations. Knowing that everything is going smoothly will give you peace of mind. If there are any issues, you’ll want to find out about them right away.

Investing in a distressed property takes a lot of time and energy. Make sure it’ll be worth it by staying on top of repairs and renovations.

Do proper planning

Before you start looking at properties, it’s important to develop a good strategy. This will include deciding where to look and how much you’re willing to spend on renovations. Developing a strategy with a local real estate professional and the contractor could help assure that you’re making all the right decisions. Develop a timeline for how long repairs and renovations should take. Try to decide on a specific date when the property will be ready to sell.

Since distressed properties are usually a bit more unpredictable than other investments, be sure to prepare for any situation. You’ll need to push your expected sale date forward if repairs and renovations take longer than expected, for example. This means not promising a specific move-in date to potential buyers unless you’re absolutely sure that the property will be ready.

Know that there are risks

Being optimistic about any property that you’re invested in is a good thing—however, don’t ignore the risks. Distressed properties are usually in bad shape. Don’t invest if you can’t put in the right amount of time and money.

If you were hoping to receive financing for a distressed property investment, then you might be disappointed. There aren’t many lenders out there who will offer financing for a distressed property. That’s why it’s a good idea to have a backup plan.

If you are looking for financing call LendCity Mortgages at 519-960-0370. They have access to construction lenders that will move forward on a distressed property.

Selling a distressed property can also take time, even if it looks great. The market can fluctuate. That is why it’s a good idea to have a real estate agent on your side. A good real estate agent can help you decide on the best time to sell.

Have an exit strategy

Since there are many risks involved with distressed properties, it’s good to have a pre-determined exit strategy. This is true for any real estate investment, but especially with distressed properties. Don’t spend all your money on buying the property and repairs. Have some money set aside in case you need to exit the deal. Exiting will definitely result in a monetary loss, but is sometimes better than sitting on a property and waiting for it to sell.

Hire the right renovation company

Renovations are a big part of investing in a distressed property, so you’ll want to make sure you hire the best local contractors. A good contracting company can take care of all your repair and renovation needs in a timely manner. When it comes to finding the right contracting company, consider asking other investors. They might have good recommendations for inexpensive contracting companies in the area.

Online research could also result in finding the perfect contracting company. Check each company’s reviews and contact them for estimates. These estimates will also help you better develop your budget.

Have a proper budget in place

Most investors buy distressed properties through an auction. This is why it’s important to decide how much you’re willing to bid without going over. Besides just the cost of the property itself, there are also plenty of monetary considerations that need to be made with distressed properties. You’ll need to make sure you have enough money left over for repairs and renovations. The cost of marketing and landscaping, taxes and insurance should also be considered.

Is investing in a distressed property worth it?

Distressed properties are enticing to investors, mostly because they’re much cheaper than other properties. If you have the right strategy, then investing in a distressed property could be quite profitable. Depending on the distressed property, there could be less competition, which means you’ll end up spending even less.

Be willing to take the risk of owning a distressed property if you’re going to purchase one. If you’re not willing to take the risk, then consider putting off your investment and saving up for a safer option. Distressed properties take a lot of time and work, making them difficult investments for new investors. If you’re a new investor interested in a distressed property, consider consulting with experienced investors. Pick their brain for tips on making money from a distressed property investment.

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