How to stage a bathroom to impress potential buyers

 

by Corben Grant 

In terms of square footage, bathrooms probably make up a relatively small part of a home, but despite that, they can be one of the most important rooms to stage properly. As a very private space, the bathroom is crucial to feeling comfortable and welcoming in a home, especially to potential buyers touring your properties. If you can nail this room in staging, you are well on your way to making a huge impression on your viewers.

In this article, we will offer some tips for you and your clients on how to make sure a bathroom looks its very best, including some common things that people often miss.

 

Why it’s important to properly stage the bathroom

Bathrooms are a pretty unique place in the house. Though we don’t spend our whole days in them as we would in a living room or office, they are a very personal space for people. For most, they are one of the first rooms they enter to begin their day and one of the last places they go at the end of the night. It’s a private space where people’s most intimate habits come out.

When staging a home, you ideally want to make it feel welcoming so the guest can imagine themselves in it. The thing is, it’s not easy to make someone comfortable in a stranger’s bathroom. That’s where staging comes in – to help to turn even the dingiest bathroom into something more appealing.

The first step: clean. Really clean.

This one may seem obvious, but it’s really the single most important step. When preparing a bathroom for staging, you should take extra care beyond the usual cleaning activities to get your bathroom squeaky clean. The obvious stuff like cleaning the sink, toilet, and mirror should be done with extra care. If need be, clean everything twice. Get out the toothbrush or the bleach. Descale your shower head and taps. Make everything sparkle!

Beyond that, consider things like cleaning out drawers or spaces beneath the sink. Your buyers are going to want to know what sort of storage options are available for them to use, so pushing all your clutter into a drawer is not a great solution.

Also, be sure to clean all the small spots you may have a habit of missing, like the cracks between surfaces that can accumulate some serious grime. Take a close look at caulking and grouting in the bathroom floor, shower, or backsplash. These can honestly be a pain to clean, but they will make a huge difference in the overall impression of cleanliness.

Another consideration is the actual cleaning products you use for your bathroom. Odd smells in a bathroom can be pretty off-putting for most people and a lot of heavy-duty cleaners can have harsh chemicals. Consider using them only to start, but finish with nicely scented products to avoid any distracting odours. You may also choose to open the window (weather permitting) to allow fresh air into the bathroom. Or, get an air freshener or scented candle but ensure it’s not too strong.

Remove all personal items

Your potential buyers are visiting to learn about a house. They don’t care what sort of shampoo your client uses. Leaving personal items in a staged bathroom can range from mildly distracting to downright off-putting. Before showing a home, do your best to store away any unnecessary bathroom items, preferably somewhere out of sight like in a closet.

For everyday essentials, keep them together in a basket or bag you can easily put out of sight when a showing begins. The same idea applies to the shower. Keep any shower items to a minimum.

Put away toilet seat covers for showings and consider putting away the bathmat as well. For extra points, remove trash cans and laundry hampers from the bathroom before having your showing as these often look unappealing, especially if they’re full.

Change out your tired old bathroom items

This is a step beyond cleaning and decluttering that you can do to make your bathroom look even better. This relatively inexpensive trick can make your bathroom look magnitudes more appealing. Simply put, if your bath mat has seen better days, replace it. The same goes for your shower curtain, your hand towels, and really anything else that can be removed and replaced.

Now, how far you take this will depend on how bad your current bathroom items are and how expensive the upgrade is. For example, a new shower head is pretty easy to install. Replacing your whole toilet on the other hand may not be worth the effort.

Even disposable items like toilet paper or bars of hand soap should be switched out with brand new ones for the showing. Imagine the times you’ve seen hotel bathrooms and how nice it felt to see everything stocked and set for you upon arrival. This is the feeling you want to tap into for your guests.

Replace an old toilet seat

The toilet is potentially the single most uncomfortable area in the home. You want to do everything you can to make it as clean as possible. If necessary, get a brand new toilet seat to replace an old worn-out one. A toilet seat can be bought at any home improvement store and often doesn’t take more than a screwdriver to install.

Consider lighting choices

One big way to improve the way potential buyers see your bathroom is to take a look at the lighting. Generally, people like bathrooms that are bright and lit with a neutral tone. And, if your bathroom is too dark, it will make it hard to see that wonderful cleaning job you did.

If you have a window in your bathroom, you may have blinds for privacy’s sake. However, during a daytime show, open the blinds to fill the room with welcoming natural daylight. Even if you don’t have a window, something as simple as changing out your light bulbs can make a big difference in the impression of the room and it shouldn’t cost you much.

New towels

Get a new set of towels just for the purpose of hanging up for showings. After all, what’s more inviting than a fresh set of crisp white towels on the towel rack? This will also give you the option to coordinate your towels with the design of your bathroom to really make a cohesive look. We will talk more about bathroom design later.

Get a new shower curtain

Changing your shower curtain can be another easy and inexpensive way to drastically change the appearance of your bathroom. If yours is old and worn or clashes with other elements of the room, consider changing it. There are hundreds of shower curtain designs and textures available, so you can easily find the perfect one for your space.

Consider a total design overhaul

You may have not put much thought into the design of your bathroom, but it can be really important for a showing. This will be one of the instances where it’s best to consult a design guide or ideally a professional stager or interior designer to help guide your choices. Just like clothing, homes have design trends and styles and picking just the right style can take some expertise. Even if you pick the right style, it can take a special eye to fully realize the vision.

Remember when we mentioned replacing your bathroom items before? You should keep your design in mind as you select new items to keep everything looking consistent. A design overhaul doesn’t mean you need to do a full remodel of your bathroom (though that is an option explored later) and it can be as simple or as in-depth as you want it to be.

A fresh coat of paint goes a long way

A new coat of paint can make a big difference in your bathroom, especially if it’s been a long time since the last paint job. The thing about trendy colours is they may look appealing at the time, but eventually come to feel worn-out and old. If you have a bathroom that features the pinks, greens, and browns of the 1960s or 70s, for example, buyers will turn and run. Your designer can help you choose the best colours that appeal to modern buyers.

Paint doesn’t only have to be for the wall either. In many cases, bathroom vanities or cabinets can be painted as well. Adding a new colour to cabinets can cover up any scratches or dents that were present as well as change the feel of the room greatly. You would be surprised how much new life an old cabinet can get from a simple coat of paint. Always consider this option before going out of the way for new cabinets.

Modern colour choices

Just what are the popular colours in home design these days? For bathrooms, the general advice is to avoid vibrant colours and stick to more neutral tones. White is a common bathroom colour, though a bit bland. Other popular colours are grey, tan, and light blue. These colours help make the bathroom feel bright and clean and can even help a small bathroom feel larger than it really is. And while neutral colours are recommended, a vibrant accent wall may be a perfect finishing touch for your particular space. Again, consult a designer for the perfect colour options for the space in question.

Replacing fixtures

Short of a full remodel, replacing mismatched fixtures in your bathroom with all new pieces can make a huge difference. This could cost more than other options, but will give you a chance to really nail that style you want to present.

Additional details

There are many smaller decor items you can add to a bathroom to make it feel more welcoming. Though they might not be strictly functional, they can put people more at ease in the room. A popular choice is a plant, and there are many house plants that actually thrive in the bright and occasionally humid settings of a bathroom. If you aren’t great at caring for plants, a fake one will do the trick.

Add visual appeal with wall art

Another option to spice up your bathroom space is wall art. You shouldn’t let your bathroom look like a crowded art gallery, but a frame here and there can add a lot of visual interest. Choose something tasteful and appealing to anybody, and aim for simple imagery over highly detailed attention-grabbing pieces. Remember, it is supposed to add to the look, not draw all the looks to it.

A good option is to hang your art above the toilet or the towel bar. A master bath may have plenty of room for art, whereas for a small bathroom, stick to only one or two small pieces or nothing at all.

Some more decorative ideas include decorative soap dishes or trays for bathroom necessities, bowls of scented potpourri or candles, a basket of neatly folded hand towels, jars with cotton balls or bath salts, and more. There are so many options to choose from, but whatever you do, try to keep it subtle.

When is it time for a remodel?

The final choice when trying to sell a home may be to remodel your bathroom entirely. A bathroom remodel can turn your bathroom into a completely different space and can make it much more appealing to potential buyers. However, the return on investment of a bathroom remodel may not always be favourable for you. Here are some times you may want to consider a full remodel.

If your bathroom is in very poor shape or is severely outdated it may be time to consider a remodel. This is especially true for the master bath which could be a major showpiece for the home. Another time to consider is if you are doing remodels or renovations to other parts of the home and want the bathroom to match. You may also consider remodelling a basement bathroom as part of a larger basement finishing project.

Conclusion

If you keep all these tips in mind, you will be surprised by how dramatic the difference can be in your bathroom. It may just look so good after all is said and done, that you nearly don’t want to sell it! Now that you’ve mastered your bathroom staging skills, it’s time to move on to the other rooms in the home that each have their own unique needs. Stay tuned to REP for more tips for your home staging in the future.

 

Tips for staging homes during holidays

 

by Helana Mulder 

Selling your home is quite an undertaking, even with a real estate professional on your side. There’s paperwork, meetings, financial decisions, physical labour, open houses, and so much more that goes into selling your home and moving out.

One important step that you need to take on when you put your house on the market is staging. If you’re looking at selling your home this holiday season, now is the time to learn how to stage your home with some holiday touches.

 

What does it mean to stage your home?

When you put your house on the market, you will have to take photos of the rooms and the layout, as well as have your house available for showings and open houses. Instead of a regular house clean-up to make the place look tidy, many people opt to stage their home as well.

Staging involves preparing your home to sell by making it appeal to prospective buyers at an open house or a showing. This can be done by organizing and designing your home in specific ways. Staging your home is considered a form of visual merchandising and is meant to make the property look its best by showing off its best features. This can include putting in new appliances, repairing any outstanding damages, decorating the home, and doing a deep clean.

open house during holiday season with for sale sign on front yard

Should you stage your home during the holidays?

Sometimes sellers ask if they should stage their house during the holidays. When appealing to potential buyers, you have to think about what they want to see. Some buyers may want to see the house decorated for the holiday season, while others may want to see what the space looks like regularly.

Whether you decide to opt-out of staging your home or not, you will want to think about the type of buyers you are attracting and go from there. You can also take photos with the home staged and others without so that the buyers can get a strong idea of what the home does and can look like.

How to stage your home during the holidays

If you’ve decided that you will be staging your home for the holiday season, there are a few things to keep in mind when it comes to holiday decorations that will add to your holiday home staging success.

Keep your holiday décor simple

When it comes to decorating your home for staging purposes during the winter months, it’s best to stick with simple and generic decorations.

Think of lights and other holiday displays. Not everyone celebrates Christmas, so you will want to keep the door and room décor fairly generic when you sell so that you can appeal to more potential buyers.

Think about your holiday lights

Christmas lights are some of the most well-known holiday decorations and can make any space match the season. However, when you are staging your house, you want to plan your lighting strategically, especially when taking photos of the space.

When a potential buyer looks at a home, they don’t want to be bombarded with an extravagant festive light display on your front yard or in your living room. You will want to make the space as appealing as possible.

This is why we recommend that you use simple white lights when it comes to home staging. White lights keep the room looking festive without being too over the top.

simple lights and Christmas tree in staged home

Consider a Christmas tree

Having your home up for sale usually involves people entering your home quite often. Tucking personal items away is an easy way to maintain privacy and make the space look more generic. This tip also translates to staging your property.

For example, if you want to have a Christmas tree in your staged design, you should also lean towards simple and classy decorations. While homemade ornaments and garlands are great and festive, they can be somewhat off-putting to buyers. This is why you should stay away from them and decorate with basic pieces that fit well together.

The tree is a centrepiece and catches the eye. Creating an aesthetically pleasing tree design can appeal to potential buyers when selling your home during the holidays.

Don’t leave the space overcrowded

While it’s fun to decorate your space with all kinds of different holiday decorations, when it comes to staging, less is more. Add some life to your rooms without filling them up so much that it’s overpowering. Finding this balance can be quite a challenge, but you’ll find that your property looks more appealing with just a few key pieces of décor.

Make sure your outdoor décor is welcoming too

When clients enter a home for a showing or open house, they want to feel welcomed and at-home. So, when you are in the process of staging your place during the holiday season, you will want to keep that in mind.

Using simple wreaths, garlands, and other holiday décor on your front door can help buyers feel welcomed yet not overwhelmed.

holiday wreath on front door for open house

Remember to consult with your real estate agent

When you sell your home with a real estate agent, you have someone on your side. These real estate professionals are here to help you in prepping your home to sell – this includes staging your home. If you’re wondering how you should decorate your home for the holidays while it’s up for sale, consult your agent. They can provide important insight and tips that can help you throughout the process.

 

Top six ways to start saving for a down payment so you can buy a house

How to save for a down payment on a house, fast!

by Kandace Gallant

If you’ve been struggling to save money to put towards a down payment on a house, you’re not alone. With mortgage rates and the prices of homes skyrocketing all across the country, it’s not uncommon for first-time home buyers to borrow or be gifted a down payment from other sources, particularly their parents. Although there are other means of borrowing a down payment, such as a line of credit, a personal loan, or tapping into your savings, there’s no doubt that saving thousands of dollars yourself is both rewarding and tough.

The trouble is …

Where do you even start?

Here are some tips that can help you save for a down payment so you can buy a home and finally dip your toes in the waters of real estate.

It’s time to start saving and here’s what you can do to make your down payment and closing costs saving process even easier:

1. Open a savings account

Having a savings account can be one of the best ways to put money aside and not end up touching it so it continues to increase, and even build a little bit of interest. It’s also really convenient and requires no extra work on your end. All you need to do is tell your financial institution that you want to open a traditional savings account and set up auto-deposit so that every time you get paid, for example, a set amount will automatically be transferred into the savings account.

You can also start a Registered Retirement Savings Account (RRSP) and use up to $35,000 of your savings ($70,000 as a couple) to buy your first home along with the federal government’s Home Buyers’ Plan. However, you must repay that amount back to your retirement savings within the next 15 years.

2. When do you want to buy a house?

Coming up with a timeframe on when you actually want to start the home buying process can help you stay on track and help you make sure you’re setting aside the proper amount of money every month, especially if you have a general idea of where you’re hoping to buy a house. Knowing the when and where aspects will definitely aid in the process of figuring out how much you’ll (approximately) need to save.

3. Prioritize your goals

If owning a home is your ultimate goal, you may need to put other things on the back burner for now such as buying a new car, going on vacation (sorry!), limiting how often you go out to eat, or resisting purchasing that nice watch on display. It may not seem like a big deal at the time, but every little bit you put towards a down payment can really come in handy in the end, even if it is only $50.

4. Pay off your debts

This obviously sounds a lot easier said than done, but trying to pay off other debts (like your credit card) first can actually help improve your chances of getting improved for the mortgage amount you want. The debt-to-income ratio is one of the most important factors when it comes to determining how much mortgage you’ll be able to borrow, particularly when it comes to your credit score. How long you’ve been building credit, how often you make payments on your credit card, any outstanding line of credits, and if your payments are made on time will all be taken into consideration. A credit score of 660 and up is considered good. A bad credit score is 579 and below. The lower your credit score is, the more you’ll be deemed a “risky” lender.

5. Put yourself on a strict budget

Buying a home comes with sacrifices. Remember, you want your saving account to increase, not decrease! This means you may have to get used to living on a stricter budget. Ways to do this can include:

  • Think before you buy. Get into the mindset of: is it a want, or a need?
  • Skip vacations for a bit, try to find the best deals available, or vacation locally
  • Try not to eat out a lot and if you do, use coupons Go to the library instead of buying books
  • Buy used clothes or stick to your current wardrobe
  • When grocery shopping, make a list and stick to it (and use as many coupons as you can)
  • Research prices before you go somewhere and see if they offer price matches

6. Work on the side, if you can

Working full-time is already tough enough, but some people may find it beneficial to get a temporary part-time job on the side as well to make saving a little easier. Or, if you have a hobby like painting, pottery, or making jewellery, consider selling your products online. Remember, any contribution can make a huge difference, even if it seems small at first. Plus, you can take advantage of an extra job to help pay off your debts quicker.

 

How else to come up with a down payment so you can get into your first home

If saving every month has proven to be difficult (which it is for many of us, especially while renting or paying for a car), there are other means by which you can borrow a down payment, or utilize government programs.

Home Buyers’ Plan

As mentioned above, you can tap into your RRSP account to withdraw up to $35,000 tax-free (or $70,000 as a couple). This does, however, require repayments for the next 15 years.

First-Time Home Buyer Incentive

The First-Time Home Buyer incentive is shared equity with the Government of Canada. If you qualify, the incentive aims to help reduce monthly mortgage payments by five to 10 per cent on a newly constructed home, five per cent on a resale home, and five per cent on new or resale mobile or manufactured homes. This allows first-timers to potentially save less for a down payment since their monthly mortgage payments will be less as well. The buyers must repay the incentive in 25 years or when the home is sold, but they can also choose to pay the incentive back in full when they require the funds without penalty.

First-Time Home Buyers’ Tax Credit

While this isn’t necessarily a way to save for a down payment, it is a way to get money back from the government for future mortgage payments or just help you financially in general. Those who are just purchasing a home for the first time (or who haven’t owned a home in the last four years) will qualify and can receive a total tax rebate of $750. This may not sound like a lot, but when you’re purchasing a new home, any amount of money helps.

GST/HST New Housing Rebate

This is another rebate program that you can obtain the GST/HST portion of what you paid on an owner-built home, purchased a new residential rental property, or have undergone a substantial renovation/home addition. You can receive a maximum amount of $30,000 if you qualify.
 

How much you may need to save before buying a house, including closing costs

Even if it takes you a few years to save the amount needed to buy a house, starting to save early can make all the difference in the world. In Canada, the typical amount you need to save for a down payment is five per cent on the first $500,000, and 10 per cent on the remaining amount, so, for example, if a house is listed at $600,000, you’ll need $35,000 as a down payment. This amount doesn’t include closing costs though, which can run anywhere from another two to four per cent of the purchase price. In that case, if a home is $600,000, closing costs could range from $12,000-$24,000.

A common mistake first-time buyers make before buying a home is just saving enough for a down payment, therefore, you’ll also want to consider saving for the following* before looking for a new home:

* These are rough cost estimates and are subject to change.

Property Appraisal ($300+)

A real estate appraisal, or land valuation, is when an expert determines the value of a home before it’s listed on the market. A value is determined based on what other properties are selling for in the area, current market trends, and the aspects of the home (square footage, upgrades, etc.). This can help sellers determine if they’re happy with the value or if they need to improve on finishing touches before listing to get the most ROI.

Home Inspection ($300+)

A home inspector provides a close search of the home, not the whole property like an appraiser. They’ll ensure that things are up to code and safe such as the framework, electrical work, plumbing work, the roof, the exterior, and more.

Title Insurance ($400+)

Title insurance is necessary as it protects you if there are any issues with signing over ownership to the house, and losses due to title fraud/defects. Title insurance isn’t actually mandatory, however, it’s definitely recommended to protect you against any potential risks, for example, if the seller puts the house for sale without their ex-partner knowing and that partner tries to dispute the sale, leaving you without a home.

Mortgage Insurance

Mortgage insurance doesn’t necessarily benefit homeowners in big ways unless they’re seen as a risky lender. These rates will vary and will be calculated at a certain percent of the purchase cost. It’s mainly to assist the financial lender in case you default on a mortgage payment. The cost will be added to your monthly mortgage payments.

Land Transfer Taxes

Whether you buy a condo or a house, every property is subject to land transfer taxes in Ontario. The cost will vary per transaction depending on the province and will be paid when the deed to the house is transferred in your name. The cost will be calculated after taking into consideration the province, the purchase price, the cost of upgrades, and more.

Legal Costs ($500+)

You’ll need to pay your lawyer for conducting a title search, prepare and review the deed and any other paperwork, transferring documents, etc. It’s not legally required, but it does make the process much easier, especially for those who have never gone through the buying or selling process before.

Moving Expenses ($750+)

Don’t forget you’ll likely have to pay for a moving truck! They typically charge per hour and also take into consideration the distance between your current living situation and your newly purchased home. If you know a few people with trucks that are willing to help, great! Otherwise, you’ll want to invest in a professional moving company.

Property Taxes ($1,000+)

Just like when you rent and provide the landlord with last month’s rent, you’ll have to reimburse the seller’s property taxes, utility charges and other expenses. Your lawyer will be able to determine how much you’ll owe, which will be paid on the closing day. Remember, this is only if the seller has pre-paid for the entire year, otherwise, they will have to make a payment to the municipality.
 

Struggling to save for a down payment?

If you’re struggling to pay for a down payment, you’re not alone. It’s not uncommon for people just getting into the real estate world to borrow a down payment from a family member or a different financial lender than their mortgage is from. Saving for a down payment can definitely take longer than you’d hope, but there are still ways you can reach your goal of doing it yourself!

The best way to save for a down payment is to free yourself of debt and other expenses, particularly a car or a credit card. You should also consider making a plan/a goal; when do you actually see yourself moving into a home? One year from now? Two years from now? Once you have a goal in mind, this can help you determine a proper savings plan. You’ll also find it beneficial to set up a savings account with automated payments, so every time you get paid, money will automatically be transferred into your savings. You could save even more money if you stuck to a strict budget; no more going out for dinner or splurging on newly released books or movies!

Lastly, remember that when it comes to your savings for a house, a down payment isn’t the only expense. Expenses associated with closing on a house can be quite extensive, especially when it comes to appraisals, land transfer taxes, property taxes, moving costs, and lawyer fees. While you shouldn’t let this damper your plan to get into real estate, you should definitely take the time to map out realistic goals according to your specific financial situation. Take it step-by-step. This isn’t something that everyone can rush into, and that’s okay.

The best place to buy a rental property in Canada: 2021

 Although the median home price is on the rise, many Canadians are seeking out ways to grow their assets and seek financial freedom. This has given birth to the idea of the “side hustle,” a way to make money besides one’s usual employment. Some real estate professionals are choosing to expand their role in the real estate business by purchasing investment properties and acting as landlords. Real estate investing provides a much-needed boost in income without the need for job growth.

According to Statistics Canada, approximately 15% of residential property owners in British Columbia and Ontario owned two or more properties in 2018. 22% of homeowners in Nova Scotia owned two or more properties as well. It seems that more people are purchasing investment properties, whether they are used as rental units or vacation homes.

This article will discuss what housing markets are the best to invest in, what investors should consider, rental income, and more to help you determine where you should invest your money.

property in canada

The real estate market: what is going on and what you need to know

Since the COVID-19 pandemic first started in 2020, the Canadian real estate market has exploded. Many people are staying at home rather than going out or taking a vacation, causing many to reconsider their living space. Some people are finding that they have more disposable income due to shopping malls being closed and being unable to take vacations. The combination of these factors – alongside low-interest rates – has caused many people to flood the housing market for a new home.

As housing prices skyrocket in response to the increased demand and low supply of homes, it can be more difficult to buy rental property. According to CBC, the median home price is $716,000 in Canada. Despite the high median home value, incomes have not increased. In 2019, the national median household income was $62,900 in 2019. These national averages exemplify. There is a stark difference between what people earn and the average price of a home in the real estate market.

The rising national average of home prices and plateaued income has delayed when people buy their first home. The median age of first-time homebuyers is now 36 years old in Canada. This means that more people are either living with their parents or renting longer.

A hot housing market for your investment: short-term rentals

While you may want to invest in a city with a growing population, regional vacation markets are growing

Canadian real estate markets can be difficult to enter because of the high average home prices. If an investor is having difficulty investing in long-term rentals like single-family homes, they should consider investing in-short term rentals.

Rather than choosing the most populated city to invest in, Avery Carl, the CEO and founder of a real estate company, Short Term Shop in Tennessee, suggests investing in regional vacation markets. Regional vacation markets are vacation places that are close to home, allowing visitors to drive there rather than fly. Some examples of regional vacation markets in Canada are Muskoka, Niagara-on-the-Lake, Cape Breton, and Banff. While some of these places may not be experiencing population growth or job growth like most cities, they attract many short-term tenants for out-of-town vacations.

A hot housing market for your investment

Regional vacation markets are also more recession-proof than other markets. As we have seen this past year, many people still want to take a vacation – even if there has been a decline in jobs and job growth. Local vacations are more affordable rather than faraway destinations, spurring more people to travel locally. As a result, local vacation areas typically experience seasonal population growth and competitive median rent prices.

In Merged Media‘s podcast, Carl mentioned that short-term rentals are “little income turbochargers” that will allow you to build your wealth more quickly. Typically, the average home price in these areas is lower than the national average but has similar property values. This means that these properties can be just as profitable as commercial real estate due to their high median rent.

You don’t need to find an investment property in the largest city to invest in real estate. You can easily purchase a short-term rental for lower than the median home price.

What all real estate investors need to know

Anyone who is considering investing in a rental property – whether short-term or long-term – may think that their investment will be straightforward and automatically lead to increased cash flow. Sadly, this is just a myth. Real estate investing can be a difficult task for even the most prepared individual. Take the time to consider these various factors, regulations, and financial investments you may have not considered yet – it could open your eyes to the reality of real estate investment.

Determine the median rent and value of your property

One of the most important things in real estate investing is to ensure that you make sufficient rental income from your property. This will ensure the success of your investment and grow your assets over time.

median rent and value of your property

In April 2021, the average rent price in Canada was $1,675 per month. While this is the median price for a rental unit, the cost can greatly differ depending on your location, amenities, and local economy. To determine what rent you should charge, evaluate the median rent in your area. If your unit has a great location, many amenities, and is in an area experiencing population growth, you could charge above the median rent price for your property.

Most investors may not be fortunate enough to start renting their properties at high prices. Just remember that if you bought a place at a lower property price, home values will typically increase over time. This could spur you to raise your rent prices and, over time, increase your rental yield.

You may have to renovate your rental properties

Investors may need to consider a cheaper property because of the required 20% down payment when buying a second property. This could mean that you may need to buy a fixer upper for your investment. Don’t discount buying a property that is in less than ideal shape, the affordable prices of a fixer-upper may help you afford to invest in the most populous city in your region.

Consider the local economy

It is important to choose a rental property in an area with a thriving economy. A city’s unemployment rate will provide some much-needed information to understanding how the economy is faring in the city. This will allow you to plan not only for the present but predict how the local market will change.

If there is a significant opportunity for job growth in the area then there could be an increase in rental demand. For example, Sarnia, Ontario is in the process of completing a $2.5 billion expansion on one of their chemical plants. This expansion has created 900 new jobs, causing an influx in job growth and local home prices. Choosing an area with expected or ongoing job growth is a good way to determine whether you will be able to fill your rental estate with tenants – and for the long-term.

renovate your rental properties

Alongside job growth, population growth is a similar influencing factor. Many major cities like Toronto, Vancouver, and Calgary are experiencing population growth as more people flock to the city for jobs, school, and a more urban lifestyle. The constant growth in these urban areas has led to increased house prices and a strong rental market. Consider the population growth for your city and the surrounding area to determine whether your rental housing will be in high demand.

Another thing investors should consider is their local vacancy rate. A healthy vacancy rate in a local rental market is 3%. If you notice that there is a higher vacancy rate in the area you are thinking of owning rental property, search other housing markets for a more secure investment.

Invest in real estate close to a college or university

If you choose to purchase a long-term rental, consider owning rental property in a city that has a college or university. While rental real estate could be a gamble in some cities with changing economies, real estate investments in college or university towns are more likely to thrive because of the consistent enrollment in higher education.

In an article by the Globe and Mail, a real estate investor noted that he had bought six rental units in Waterloo, Ontario in 2013. His units, which are several blocks away from both Wilfrid Laurier University and the University of Waterloo, were quickly filled by students. In 2019, he had seven rental units that were bringing in a revenue of approximately $17,000 in monthly rent.

Invest in real estate close to a college or university

The consistent growth in student populations has made university towns some of the best real estate markets for investors. Students will always need housing and rental real estate is the best option for many students who live in the city on a short-term basis. The steady growth of university towns like Kingston, Waterloo and Guelph (fondly known as the Royal City) has been beneficial for many real estate investors.

“Still, location is key – whether it’s a five-minute walk from campus or close to good transit – when investing in student housing,” said the real estate investor in the 2019 Globe and Mail article. While you may have chosen to buy rental property in a university town, you should consider how appealing your property will be to students searching for a place to rent.

Property taxes

If you are looking to buy a rental property in a growing city with a high average cost of living, it is likely that most homes or condominiums you view will have a significant property tax. While you are looking for an investment property, consider whether the property tax is worthwhile for your investment. There may be significant demand for locations in up-and-coming neighbourhoods, attracting long-term tenants and a greater rental income.

To learn more about property taxes that you can expect from your investment property, speak to the neighbours or visit the municipal assessment office. They will have information on the unit’s property tax on file and may mention if they expect a rise in your property tax any time soon.

Property taxes

Consider the help of a property management company

A property management company may be a great idea for people who live far away from their investment property or those who may not have the time to deal with the responsibilities of being a landlord.

Property management services will help with landlord-tenant laws, collecting rent, unit maintenance, acquiring tenants, financial services, and more. The comprehensive services take the stress out of being a landlord and allow you to run your.

The best place for rental investment is up to you

Overall, there is no best place to invest – where you buy a rental property is up to you. Take the time to ask yourselves these questions to figure out where you should invest in a rental property:

  • What is your budget?
  • What locations do you feel comfortable renting? What are their local economies like?
  • Do you want a short-term or long-term rental?
  • Do you feel comfortable renting to students?
  • And more!
 

Millennials most optimistic about buying a home

 Aleesha Baronian and Matthew Laturski are looking forward to moving into their first house with their chihuahua. SUPPLIED

After renting an apartment for nearly a year, Matthew Laturski and girlfriend Aleesha Baronian purchased a semi-detached home in Oshawa and are excited to begin investing in their financial future when they get the keys next month.“I think the best side hustle you can do is own a house. It just doesn’t make sense to pay rent when you can put that money towards something that will be an asset for you,” says Laturski, an accidents benefits adjustor.They began their journey to homeownership began when Baronian’s dad offered to help with a down payment. “We thought about saving up a bit more money but my dad reminded us that we could wait another six months and save another $5,000 but the same house we’d buy today would be more expensive down the road,” says Baronian, a customer service representative.Like many young couples, saving for a home when launching their careers and paying off student loans felt like an “uphill battle” but near record low mortgage rates sealed their decision to buy.
Realtor Monique Johnson says her Keller Williams Portfolio Realty Brokerage has seen a record number of transactions by millennials this year. They have a “hunger for financial independence” and see real estate as a “safe investment” that’s a “strong vehicle” to create the life they want.“Perhaps seeing their parents and peers be successful in real estate is giving them that push…Other incentives are making this the perfect storm for young people to jump into the market,” Johnson says.Those incentives include the federal government’s National Housing Strategy and RRSP Home Buyers’ Plan and the provincial government’s Land Transfer Tax Rebate.She’s impressed with today’s savvy young buyers and the steps they’re willing to take to get into the market. “There was a time when I would get calls from young people wanting to buy the heart of the city. That’s no longer the case,” Johnson says.“They’re willing to go to the suburbs. They’re buying a property and renting part of it out. They understand how real estate can be used as a tool to create wealth for themselves and is more than just about a place to live.”If they don’t have enough money for a down payment, some are even reaching out to someone in the same situation and together coming up with a full down payment and either living in the property together or renting it out. “Young people are rarely buying move-in ready homes. They’re buying homes they can afford,” she says.

A recent Scotiabank survey revealed just 38 per cent of Canadians believe now is a good time to buy a new home. However, younger Canadians appear to be more optimistic about purchasing a property during the COVID-19 pandemic.Nearly one in five of Canadians aged 18 to 34 years say the pandemic has accelerated their plans to purchase a home or investment property; though one-third are waiting for prices to drop before buying a home.
Before you begin house hunting, understand what you can afford within your budget.“There are a lot of different options for qualifying for a mortgage and a lot of different down payment options,” says Scotiabank home financing advisor Mary Adamidis. An online mortgage calculator, such as Scotiabank’s What Can I Afford? Tool, will give you a good sense of the mortgage you could qualify for.“Once you’ve set your savings plan and determined how much home you can afford, getting a pre-approved mortgage is the next step,” Adamidis says. “With a pre-approved mortgage, sellers know that you’re creditworthy and you have the ability to make an offer quickly.”Tips for millennialsThe following tips from Scotiabank home financing advisor Mary Adamidis can help make dreams of homeownership happen:
Manage debt.

Lenders typically calculate your ability to afford a mortgage based on traditional debt-to-income principles, which consider your monthly housing costs, gross monthly income and existing debt, and also includes loans, credit cards, lease payments and any other outstanding debt.

When preparing to begin your homebuying journey, evaluate your existing debt and see what you can pay off to help ensure your credit rating is in good standing. If you can’t eliminate your debt entirely, make sure you’re on a regular payment plan and are keeping your credit in good standing.Save, save, save. The greater the down payment, the less you’ll have to borrow and if you have at least 20 per cent, you won’t have to pay mortgage default insurance premiums. Set a savings goal based on your estimated budget for your home. If you’re looking to purchase a $600,000 home, for example, try to save at least $35,000. (Insured mortgages require five per cent minimum on the first $500,000 of the purchase price and 10 per cent on any amount over $500,000 up to $999,999.)A pre-authorized debit plan into a savings account, such as a Tax-Free Savings Account, can help you reach your goal, while a regular savings routine can help you prepare for unexpected expenses, such as legal fees and moving expenses.

How to save for a down payment on a house, fast!

If you’ve been struggling to save money to put towards a down payment on a house, you’re not alone. With mortgage rates and the prices of homes skyrocketing all across the country, it’s not uncommon for first-time home buyers to borrow or be gifted a down payment from other sources, particularly their parents. Although there are other means of borrowing a down payment, such as a line of credit, a personal loan, or tapping into your savings, there’s no doubt that saving thousands of dollars yourself is both rewarding and tough.

The trouble is …

Where do you even start?

Here are some tips that can help you save for a down payment so you can buy a home and finally dip your toes in the waters of real estate.

Top six ways to start saving for a down payment so you can buy a house

It’s time to start saving and here’s what you can do to make your down payment and closing costs saving process even easier:

1. Open a savings account

Having a savings account can be one of the best ways to put money aside and not end up touching it so it continues to increase, and even build a little bit of interest. It’s also really convenient and requires no extra work on your end. All you need to do is tell your financial institution that you want to open a traditional savings account and set up auto-deposit so that every time you get paid, for example, a set amount will automatically be transferred into the savings account.

You can also start a Registered Retirement Savings Account (RRSP) and use up to $35,000 of your savings ($70,000 as a couple) to buy your first home along with the federal government’s Home Buyers’ Plan. However, you must repay that amount back to your retirement savings within the next 15 years.

2. When do you want to buy a house?

Coming up with a timeframe on when you actually want to start the home buying process can help you stay on track and help you make sure you’re setting aside the proper amount of money every month, especially if you have a general idea of where you’re hoping to buy a house. Knowing the when and where aspects will definitely aid in the process of figuring out how much you’ll (approximately) need to save.

3. Prioritize your goals

If owning a home is your ultimate goal, you may need to put other things on the back burner for now such as buying a new car, going on vacation (sorry!), limiting how often you go out to eat, or resisting purchasing that nice watch on display. It may not seem like a big deal at the time, but every little bit you put towards a down payment can really come in handy in the end, even if it is only $50.

4. Pay off your debts

This obviously sounds a lot easier said than done, but trying to pay off other debts (like your credit card) first can actually help improve your chances of getting improved for the mortgage amount you want. The debt-to-income ratio is one of the most important factors when it comes to determining how much mortgage you’ll be able to borrow, particularly when it comes to your credit score. How long you’ve been building credit, how often you make payments on your credit card, any outstanding line of credits, and if your payments are made on time will all be taken into consideration. A credit score of 660 and up is considered good. A bad credit score is 579 and below. The lower your credit score is, the more you’ll be deemed a “risky” lender.

5. Put yourself on a strict budget

Buying a home comes with sacrifices. Remember, you want your saving account to increase, not decrease! This means you may have to get used to living on a stricter budget. Ways to do this can include:

  • Think before you buy. Get into the mindset of: is it a want, or a need?
  • Skip vacations for a bit, try to find the best deals available, or vacation locally
  • Try not to eat out a lot and if you do, use coupons Go to the library instead of buying books
  • Buy used clothes or stick to your current wardrobe
  • When grocery shopping, make a list and stick to it (and use as many coupons as you can)
  • Research prices before you go somewhere and see if they offer price matches

6. Work on the side, if you can

Working full-time is already tough enough, but some people may find it beneficial to get a temporary part-time job on the side as well to make saving a little easier. Or, if you have a hobby like painting, pottery, or making jewellery, consider selling your products online. Remember, any contribution can make a huge difference, even if it seems small at first. Plus, you can take advantage of an extra job to help pay off your debts quicker.

How else to come up with a down payment so you can get into your first home

If saving every month has proven to be difficult (which it is for many of us, especially while renting or paying for a car), there are other means by which you can borrow a down payment, or utilize government programs.

Home Buyers’ Plan

As mentioned above, you can tap into your RRSP account to withdraw up to $35,000 tax-free (or $70,000 as a couple). This does, however, require repayments for the next 15 years.

First-Time Home Buyer Incentive

The First-Time Home Buyer incentive is shared equity with the Government of Canada. If you qualify, the incentive aims to help reduce monthly mortgage payments by five to 10 per cent on a newly constructed home, five per cent on a resale home, and five per cent on new or resale mobile or manufactured homes. This allows first-timers to potentially save less for a down payment since their monthly mortgage payments will be less as well. The buyers must repay the incentive in 25 years or when the home is sold, but they can also choose to pay the incentive back in full when they require the funds without penalty.

First-Time Home Buyers’ Tax Credit

While this isn’t necessarily a way to save for a down payment, it is a way to get money back from the government for future mortgage payments or just help you financially in general. Those who are just purchasing a home for the first time (or who haven’t owned a home in the last four years) will qualify and can receive a total tax rebate of $750. This may not sound like a lot, but when you’re purchasing a new home, any amount of money helps.

GST/HST New Housing Rebate

This is another rebate program that you can obtain the GST/HST portion of what you paid on an owner-built home, purchased a new residential rental property, or have undergone a substantial renovation/home addition. You can receive a maximum amount of $30,000 if you qualify.

How much you may need to save before buying a house, including closing costs

Even if it takes you a few years to save the amount needed to buy a house, starting to save early can make all the difference in the world. In Canada, the typical amount you need to save for a down payment is five per cent on the first $500,000, and 10 per cent on the remaining amount, so, for example, if a house is listed at $600,000, you’ll need $35,000 as a down payment. This amount doesn’t include closing costs though, which can run anywhere from another two to four per cent of the purchase price. In that case, if a home is $600,000, closing costs could range from $12,000-$24,000.

A common mistake first-time buyers make before buying a home is just saving enough for a down payment, therefore, you’ll also want to consider saving for the following* before looking for a new home:

* These are rough cost estimates and are subject to change.

Property Appraisal ($300+)

A real estate appraisal, or land valuation, is when an expert determines the value of a home before it’s listed on the market. A value is determined based on what other properties are selling for in the area, current market trends, and the aspects of the home (square footage, upgrades, etc.). This can help sellers determine if they’re happy with the value or if they need to improve on finishing touches before listing to get the most ROI.

Home Inspection ($300+)

A home inspector provides a close search of the home, not the whole property like an appraiser. They’ll ensure that things are up to code and safe such as the framework, electrical work, plumbing work, the roof, the exterior, and more.

Title Insurance ($400+)

Title insurance is necessary as it protects you if there are any issues with signing over ownership to the house, and losses due to title fraud/defects. Title insurance isn’t actually mandatory, however, it’s definitely recommended to protect you against any potential risks, for example, if the seller puts the house for sale without their ex-partner knowing and that partner tries to dispute the sale, leaving you without a home.

Mortgage Insurance

Mortgage insurance doesn’t necessarily benefit homeowners in big ways unless they’re seen as a risky lender. These rates will vary and will be calculated at a certain percent of the purchase cost. It’s mainly to assist the financial lender in case you default on a mortgage payment. The cost will be added to your monthly mortgage payments.

Land Transfer Taxes

Whether you buy a condo or a house, every property is subject to land transfer taxes in Ontario. The cost will vary per transaction depending on the province and will be paid when the deed to the house is transferred in your name. The cost will be calculated after taking into consideration the province, the purchase price, the cost of upgrades, and more.

Legal Costs ($500+)

You’ll need to pay your lawyer for conducting a title search, prepare and review the deed and any other paperwork, transferring documents, etc. It’s not legally required, but it does make the process much easier, especially for those who have never gone through the buying or selling process before.

Moving Expenses ($750+)

Don’t forget you’ll likely have to pay for a moving truck! They typically charge per hour and also take into consideration the distance between your current living situation and your newly purchased home. If you know a few people with trucks that are willing to help, great! Otherwise, you’ll want to invest in a professional moving company.

Property Taxes ($1,000+)

Just like when you rent and provide the landlord with last month’s rent, you’ll have to reimburse the seller’s property taxes, utility charges and other expenses. Your lawyer will be able to determine how much you’ll owe, which will be paid on the closing day. Remember, this is only if the seller has pre-paid for the entire year, otherwise, they will have to make a payment to the municipality.

Struggling to save for a down payment?

If you’re struggling to pay for a down payment, you’re not alone. It’s not uncommon for people just getting into the real estate world to borrow a down payment from a family member or a different financial lender than their mortgage is from. Saving for a down payment can definitely take longer than you’d hope, but there are still ways you can reach your goal of doing it yourself!

The best way to save for a down payment is to free yourself of debt and other expenses, particularly a car or a credit card. You should also consider making a plan/a goal; when do you actually see yourself moving into a home? One year from now? Two years from now? Once you have a goal in mind, this can help you determine a proper savings plan. You’ll also find it beneficial to set up a savings account with automated payments, so every time you get paid, money will automatically be transferred into your savings. You could save even more money if you stuck to a strict budget; no more going out for dinner or splurging on newly released books or movies!

Lastly, remember that when it comes to your savings for a house, a down payment isn’t the only expense. Expenses associated with closing on a house can be quite extensive, especially when it comes to appraisals, land transfer taxes, property taxes, moving costs, and lawyer fees. While you shouldn’t let this damper your plan to get into real estate, you should definitely take the time to map out realistic goals according to your specific financial situation. Take it step-by-step. This isn’t something that everyone can rush into, and that’s okay.

Millions of Canadians already missing payments due to COVID-19

We are still relatively early in the coronavirus crisis but already many people are missin payments.

A new report from insolvency practitioners Bromwich+Smith with Leger Research has found that 49% of households in Ontario and Alberta, and more than half in British Columbians, have suffered an immediate income reduction since the crisis began.

The share of households who reported already falling behind with payments on credit cards, utilities, or telecoms is 24% in Alberta, and 19% in Ontario and BC.

“The results are quite staggering really. Of course, we get a sense of what is happening when we read the news, but the survey results make it far more real having interviewed 750 people across BC, Alberta and Ontario,” says David de Lange, Senior Vice President of Leger Research.

Getting help
Most of those struggling will reach out for help from the federal and provincial governments but almost a quarter of respondents said they didn’t know how they would adjust to a reduction in income.

Bromwich+Smith advises that getting government help is a good first step for those that cannot pay their debts followed by asking their mortgage lender to see if a deferral could work for them or call a licensed insolvency trustee to understand if restructuring debts makes sense for their current state.

COVID-19: Government announces new mortgage buying program

 

 

 

 

 

 

 

 

The Canadian government has announced a further measure to mitigate the impact of the COVID-19 crisis and to help maintain stability in the financial system.

It will launch a revised Insured Mortgage Purchase Program (IMPP) which will see up to $50 billion of insured mortgage pools purchased through the Canada Mortgage and Housing Corporation (CMHC).

It means that banks and mortgage lenders will have stable funding to continue to lend to consumers and businesses.

The government highlights that this does not pose additional risk to taxpayers as the insured mortgages being purchased are already backed by the government.

“These events remind us all how crucial it is to have a safe and affordable place to live. CMHC exists in part to buffer the effects of events such as the COVID-19 virus pandemic, which affect the health and stability of Canada’s financial system. This is what we do. We are part of a federal team that is working hard together to ease the impacts on Canadians,” said Evan Siddall, president and CEO of CMHC.

Earlier this week, the Office of the Superintendent of Financial Institutions (OSFI) announced measures to shore up finances of the institutions it regulates and the suspension of the planned changes to the mortgage stress test.’

CMHC

@CMHC_ca

We’re taking measures to help the during . Through an Insured Mortgage Purchase Program, the will buy up to $50B of insured mortgage pools to help lenders. Details: https://ow.ly/MsWa50yNcqD 

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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

Market update:

Big Six banks to allow 6-month mortgage payment deferral

 

 

 

 

 

 

 

 

Canada’s largest banks are coordinating their approach to the COVID-19 coronavirus outbreak to protect their employees and customers.

Measures to support both health and finances will have some common elements across the ‘Big Six’ banks – RBC, CIBC, TD, Scotiabank, BMO, and National Bank of Canada, the Canadian Bankers Association said.

Financial support will include up to a six-month payment deferral for mortgages, and the opportunity for relief on other credit products.

Individual Canadians or business owners facing hardship are encouraged to contact their bank directly to discuss options that could be available to them.

In keeping with advice from Canada’s public health authorities, the response is also designed to support social distancing to control the virus’ spread.

That means that branches will be closed or operate with reduced hours, while special care will be taken with those branches in rural communities.

Critical services will be maintained and many banking services will continue to be available through ABMs, mobile apps, bank websites and telephone banking.

Banks will be communicating with customers to explain the measures they are taking.

Canada’s banks are being supported by a reduction in the stability buffer required for a ‘rainy day’ and by other measures taken by the federal government and Bank of Canada in expectation of a potentially-prolonged downturn.

With interest rates currently at 0.75%, there is room for the BoC to make further reductions in line with some other major economies. The Fed cut its overnight rate to a range of 0% to 0.25% on March 15.

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

Market update:

Home sales poised to moderate

 

 

 

 

 

 

 

 

The COVID-19 outbreak will likely moderate house sales in the near term, according to an economist.

Brian DePratto, senior economist at TD Bank, said the current market conditions due to the impact of the coronavirus paint a bleak picture for home sales in the next months.

“That said, sales are well-positioned to make a strong recovery once the impact of the virus dissipates, helped by an ultra-low interest rate environment,” he said in a report in The Canadian Press.

DePratto said the recovery in sales once the concerns surrounding the COVID-19 ease will likely translate to price gains.

Home sales increased by 26.9% annually in February. On a monthly basis, sales were up by 5.9%, driven by the strong turnout in the Greater Toronto Area (GTA). This came with a 7.3% growth in new listings.

The healthy sales activity and the gains in listings came with a 15.2% annual growth in the national average price for homes, which now stands at $540,000. Excluding the major markets of Greater Vancouver and GTA, the national average price during the month grew by 10.5% to $410,000.