Nothing drives me crazier than when somebody says “I can’t afford the down-payment ” or “I can’t afford to save”, but they are driving around a car that leases for $750/month!
This post was inspired by a new investor client that was thinking of getting into his first property. He had done the meetup’s, the courses, and tons of research on the areas he wanted to invest and was really prepared so I assumed he would have no problems financing his first purchase.
He had decided that since he was young and had time before getting married and having a family, he would purchase a duplex. He would live in one unit and rent out the other. He had found the perfect property that needed some work but he was able to get it for a steal – in Hamilton no less!
We have all been keeping an eye on what has been happening with our neighbours to the south and wondering how the so called Trump effect will affect us in Canada.
Many of my Canadian clients who have been investing in many US markets continue to pursue investing in the US as they don’t feel that the Trump effect is something to worried about.
Furthermore, with low property prices, low vacancy rates, high cash flow and most importantly no bidding wars, there are many opportunities to get into the market without breaking the bank – even with the exchange rates as they are!
Many of my clients, myself included still plan to invest in the US but are wondering what options exist for financing, so I thought this would be a great primer on how to finance your properties as a Canadian investing in the US.
Every year thousands of new immigrants arrive in Canada and more than half of those end up immigrating to Toronto. With property prices where they are, many people cannot afford to buy resale and therefore end up looking at the pre-construction opportunities, of which there are many in this growing city.
My current clients are Canadians but were living in Kuwait for the last 17 years. There two oldest have since come back for University and their youngest will be going to high school next year. They arrived in Toronto 6 months ago and the wife recently found work but the husband is still looking for work in a highly competitive marketplace.
I think the TFSA is one of the best gifts that the Canadian Government ever gave to us. What is surprising is how many people don’t understand the benefits of this – especially if you are self-employed, such as I am!
I started automatically contributing to my TFSA on a weekly basis about 2 years ago and have built up a considerable savings, within the contribution rules of course. See here for more information on how much you can contribute each year!
The problem I was having was how to maximize my returns or interest earned. It’s no secret that the interest offered by institutions is ridiculously low. We bank our hard-earned money with these institutions, which they then borrow from and lend back out at a higher interest rate! I will save this rant for a future post.
Recently, I was contacted by a new client that was separating from her husband. Prior to filing for separation they decided to amicably split and split the proceeds from the sale of their existing home. They agreed that since they had no children and he had supported her through her schooling, he would not pay her alimony. The amicable split helped them protect their credit score as the credit score will usually take a hit, when you divorce or separate.
Divorce or separation can have a major impact on both your personal and financial lives. Where you might have previously had joint accounts for major expenses like your mortgage or loan payments, now you will have your sole accounts. Furthermore where you had two incomes you now have one income.
January is a time of year that new resolutions get made and also broken! For instance usually try to start some kind of diet or exercise program, only to give up by February.
For those that are looking at their debts – especially after Christmas with higher spending than usual, they may endeavour to start a budget or stick to a budget or even get some help with credit counselling.
For investors, this may be a great time to reflect on the past year’s successes or misses. For instance at the start of the previous year, you may have set a goal to buy 1-4 properties during the year or you may have wished to start lending your money instead of becoming a landlord or you may have started off great only to be brought to a full stop due to the inability to qualify for a mortgage or lack of a down payment.
So what do you do when your credit has suffered, you have credit issues or debt issues and you cannot qualify?
The Government keeps changing up rules and on January 1, 2017 those of you in Ontario, will see 3 new rule changes – some good and some bad!
There is a clear distinction between shopping for a property as an investor and as a homeowner.
As an investment property, you may be looking at properties that need lots of work or may have smells that you would avoid as a potential homebuyer. Recently, an investor I met, said “the smell of poo is the smell of money”. While that is gross, it is also true! As an investor, the worst shape the property is in, the better the deal you will get. Remember the money is in the buy!
On the other hand as a homebuyer, in most cases you are looking for a turn-key property and one that you can call home for years to come.
It’s no news that the new mortgage rules have thrown everyone into a tizzy! Not only, are there new rules, but now there is new terminology and a new way of thinking we need to adopt, so I thought it would be a great primer to spell it out in this blog post.
Before November 30, 2016 we would assess a Purchase in terms of Conventional or High Ratio. Now we need to look at a Purchase in terms of Insurable or Un-Insurable. Note all refinances are considered Un-Insurable.
So how does this affect you?
When I started investing in real estate, I remember my coach saying to me “always start and end with your WHY. I didn’t know what my Why was when I started or why it even mattered, but as I gained more experience and started making passive income, I stopped to reflect on what my Why was and why it actually mattered.
Everyone has a different reason for getting into Real estate investing; for some they hate their job and want to pursue real estate investing to be able to quit their job; for others they love their job but just need a bit more month before the money runs out; and others just love real estate as a passion. However, no matter what the reason, they all start and end with their WHY!