25 Nov

Budgeting for the Holidays

General

Posted by: Ingrid Kutzner

Be mindful with money this season! Along with holiday joy come holiday bills, to avoid a sleigh-size tab, plan ahead to save money and maximize the payoff.

ORDER ONLINE Avoid getting stuck in the hustle and bustle of holiday shoppers by ordering gifts online from your laptop or phone. The time you save can be put towards spending more time with friends and family.

 BE THRIFTY Start early and keep an eye out for special sales. Many retailers have Black Friday and Cyber Monday deals to help you get a jumpstart on holiday shopping. Get inspired with coupons and get into the routine of flipping through flyers delivered to your home and online

TRUST YOUR BUDGET It keeps you on track during the rest of the year, so why not lean on it now? Starting the season with a plan and a maximum spending limit will help alleviate stress while shopping. There are plenty of free budget-tracking apps that connect right to your bank accounts and can be pulled out of your pocket for reference at any time – especially when you’re feeling overwhelmed at the mall.

GET CRAFTY Everyone appreciates the handmade touch in a gift, and DIY-ing this holiday can help you save money. There are wonderful options that can be found online, even for beginners. Examples include homemade wreaths, body scrubs, and fun photo scrapbooks that can be done alone or in a group, and you’ll end up with a gift that money can’t buy. If you’re not sure where to find these clever and cost-effective ideas, Pinterest is a great place to start.

GIVE THE GIFT OF TIME Instead of buying gifts, spend quality time with your friends and family while you give back to others. Sharing the experience and splitting the cost of hosting a dinner for a family in need will offset the cost of spending money on each person and double the amount of joy spread during the holidays. It feels good to pay in kind.

HOSTING A PARTY?

Think ahead: Start thinking about your ingredients early and keep an eye out for sales on nonperishable goods. By beating the holiday rush, you can afford more goodies for less.

BE RESOURCEFUL Hosting a large gathering? Ask each of your guests to bring a dish. This cost effective tip will act as conversation starter too.

EARN REWARDS A number of retailers offer cards where you can earn points toward future purchases, including entertainment.

CHOOSE WISELY Your time matters, so spend more of it with your guests and less of it in the kitchen. Pick a short and easy recipe that won’t cost a lot to make. Prepare as much as you can the morning or day before for a smoother hosting experience.

Published by DLC Marketing Team

2 Nov

The Art of Leveraging

General

Posted by: Ingrid Kutzner

For some people, just owning one property and having a single mortgage is enough to handle. But there may be no better way to grow your net worth than real estate. You might not realize homeownership can be a gateway to owning multiple investment properties. You might be thinking: there’s no way I can turn the value of my modest home into a real estate empire. Ok, maybe not an empire, but you can take the equity of your home and, with the right investment, get a return far greater than a stock portfolio.

Most people are trained to stay out of debt and don’t want to consider using the equity in their home to buy an investment property. But they haven’t realized the art of leveraging.

If you’re using equity from your primary residence to buy an investment property, keep in mind that the interest you’re using is tax deductible. Consider you’re also buying an appreciating asset, and if you put a real estate portfolio to a stock portfolio side-by-side, they don’t compare. Who is a good candidate? You might be surprised to learn you don’t need to make six figures to get into the game.

Essentially, you just have to be someone who wants to be a little smarter with their down payment. Before you go down that road, there are some quick things you need to know.

With investment properties, the minimum down payment will jump to 20 or 25 per cent from five percent. Rental income from the property can be used to debt service the mortgage application, while some lenders will have a minimum liquid net worth requirement outside of the property.

TO MAKE SURE YOU’RE GETTING THE BEST OUT OF YOUR INVESTMENT PROPERTY, YOU MAY WANT TO CONSIDER THE FOLLOWING:

ARE THERE EMPLOYMENT OPPORTUNITIES IN THE AREA?

Statistics Canada (www.statcan.gc.ca) offers reliable and timely data on the latest trends in the real estate market. Also, keeping up with the news will help you hear if a large corporation may be moving into the area, with families soon to follow. Consider if the property is in a college town or near a military facility where there will always be a need for rental properties.

WHERE IS THE PROPERTY LOCATED?

Walk Score is a big attraction to most renters. What is the proximity to schools, hospitals, local transportation, grocery stores, etc.? Look for properties that are in a central location so that the demand will be greater. What are the average rental rates in the area? Your monthly rent is your bread and butter. Find out what the average rental rates are in the area by visiting Statistics Canada or the Canadian Rental Housing Index.

IS THE AREA SAFE?

Once again, Statistics Canada is your go-to source for crime stats in the area. Or visit the local police department to get it right from the source. Remember, in this day and age, renters do their homework too. They will get the same info and make their decisions based on what they find out.

ARE THERE ANY AMENITIES NEARBY?

Find out what amenities are nearby like free public transportation, a community pool or center, a large shopping center, a dog park, etc. The demand for certain amenities will vary based on the area. Remember that families will want different amenities than young professionals.

ARE THERE ANY PLANS FOR FUTURE DEVELOPMENT IN THE AREA?

Sometimes a simple drive-by will show you a lot about the area. Are there quite a few empty homes, condos, or store fronts? Does it look like there is a large boom in new construction? Often a neighborhood in the beginning steps of gentrification could result in both a faster and higher appreciation for investment properties.

IS THERE A HIGH NUMBER OF PROPERTIES ON THE MARKET?

Keep an eye out for market trends in the last couple of years. Review vacancy rates for the area (your realtor will have access to this info). Make sure to determine if you could carry the mortgage for a period of time in case no one rents from you.

A Dominion Lending Centres Mortgage Professional with the right experience and understanding of financing rental properties can be an invaluable resource.

Published by Dominion Lending Centres