6 Costly Mistakes That Rookie Investors Make

Posted on September 25, 2012 by Simon

Everyone is prone to making rookie mistakes – even investors. With all the hype, and excitement surrounding a purchase, some of use, even those that are highly analytical can rush into things and buy the wrong property, or not structure the deal correctly.

Let’s review some of the top mistakes we’ve seen rookies make . . .

1. Chasing cash flow. Many first-timers are keen on the idea of quick cash flow, but that isn’t tantamount to long-term financial success. Instead of aiming for a quick buck, focus on winning low tenant turnover; the mortgage is still paid, the property is still earning appreciation and there are certain tax advantages.

2. Fearing the unknown. Many first-time buyers wait too long to start and tend to over-analyze the property. The market in good areas is pretty hot, and properties will sell relatively quickly in most GTA neighbourhoods. We’ve seen many investors doing due diligence on a property before they even have it under contract – a mistake that could cost them the sale.

3. Going it alone. While many first-time investors may find “The Lone Ranger” style of investing appealing, be careful about cutting corners to save money, as successful investing requires many helping hands. Your advisory team should include a mortgage broker, an investment savvy Realtor, a good insurance broker, an accountant with experience in real estate, a contractor, a property manager and a real estate lawyer.

4. Flying without a flight plan. Everyone’s real estate investing needs are different. Create a plan that revolves around what you want, not what your contemporaries are doing. Don’t chase the “number of doors”, and don’t feel pressure to purchase more than you need.

5. Winging it. Sinking between $250,000 and $500,000 into a property without an education in investment isn’t necessarily a wise move. Invest in yourself before your first property: do your research, read a book, take a course or attend an investor forum to learn about the business

6. Nailing shut your exit. Diving into a property with no exit strategy spells trouble. Whether you are planning to fix it or flip it, have an exit strategy AND a plan B. Ask yourself before you buy, if I had to hold this property for 20 years, would I want to? Your answer should be a deciding factor in the purchase.

NOTE TO READERS: our seminars are always free, and will update you about market conditions, and the various investment opportunities in your market place. Call 416.366.9090 or email: info@reccanada.com for dates and locations.

How to win a landlord-tenant dispute

Posted on September 20, 2012 by Simon

Whether you are a landlord or a tenant, if you expect to win before the landlord and tenant board, you better be acting in good faith. Here are some recent decisions that make that clear.

10 per cent recent rent hike denied: In a case heard in Waterloo, the tenant had a pet and lived in a building that was not subject to rent review. The landlord tried to raise the rent by 10 per cent claiming that since pets were damaging his property, he needed to raise the rent of those tenants who had pets to pay for it.

The tenant complained to the board that the landlord was imposing a pet tax arbitrarily. The Board agreed and the increase was disallowed.

Who pays for hydro? In a case heard in Windsor, the tenant agreed to put the heat and hydro bill in his name. The tenant had poor credit and so he asked the landlord to put the hydro bill in the landlord’s name temporarily. The understanding was that the tenant would pay all utility bills as well as the security deposit. The landlord agreed to help out, but the tenant did not pay the bills.

The landlord asked the utility to suspend service. The utility gave one week for arrears to be paid and then cut off the power. The tenant went to the board, claiming that the landlord cut off a vital service, which is forbidden by law. The judge ruled that since it was the tenant’s obligation to pay for the utilities and he hadn’t, the landlord had not breached the Act.

When can you evict? In a case heard in Whitby, the landlord terminated a tenant’s lease because he was selling the property and the buyer wanted the unit for his own use. In fact, the buyer had signed a rent-to-own agreement, where he would become the landlord’s tenant with an option to buy the property at the end of the rental period.

This was not considered to be a good faith buyer. As a result, the landlord had to pay the tenant $3,000. It broke down as $1,200 for the higher rent the tenant would have to pay for their new apartment and moving costs of $225. As well there were damages of $1,600 for the inconvenience of having to move, the extra costs incurred getting the tenant’s kids to school and the fact that the tenant’s daughter had to give up a part-time job.

When to do repairs? In a case heard in Toronto, the tenant complained about the inconvenience caused by the landlord’s repair of the balcony in a small co-op unit. The 384-square foot bachelor apartment had a balcony that made up more than 25 per cent of the total area of the apartment. The tenant had no use of her balcony for 20 weeks and asked for a rent rebate.

The landlord claimed he had no choice since this was a decision of the co-op board. He did not however, give the tenant, among other things, the required 60 days’ notice before the repairs started. The tenant was able to obtain a rent rebate of 25 per cent of the total rent, for the entire 20 week period, totalling about $1,000.

The moral of these stories is that when you come to enforce your rights before the landlord and tenant board, make sure good faith is on your side.

Thanks to Mark Weisleder, a Toronto real estate lawyer for this article.

7 Great Sites For Personal Finance Info

Posted on September 20, 2012 by Simon

There are millions of sites offering free info, but most are self serving, and are extensions of financial institutions’ websites, often promoting their own products. Here are some of my favourite sites:

GetSmarterAboutMoney.ca: This site, run by the Ontario Securities Commission’s Investor Education Fund offers “straight answers to your money questions.” It was recently relaunched after a complete overhaul. It clearly explains the basics on everything from bank accounts and budgeting to investment and estate planning – without talking down to readers. It also offers terrific insight from a roster of first-class bloggers (including Alison Griffiths, formerly of Moneyville.) Check out the Cranial Cash Clash, a great game that will test your financial acumen.

Financial Consumer Agency of Canada: This site offers solid information about banking, budgeting, credit cards, mortgages, insurance, and credit. Highlights include a tool that helps you select a credit card, a calculator to help you figure out if your budget is realistic, and consumer alerts.

RateSupermarket: This site offers interest rate comparisons on mortgages, credit cards, and savings, as well as life insurance, plus basics and backgrounders. It recently added sections on bank accounts and investing. Its mortgage outlook panel offers insight on where rates are heading.

RateHub specializes in mortgages. You can search rates by city, type, by bank, and also look for a mortgage broker. Check out the First-Time Home Buyer Education Center, which has articles on all the basics from how to choose between variable and fixed, closing costs, and land transfer tax.

Canada Mortgage and Housing Corp: This site can’t be beat when it comes to housing information. Trying to figure out if home ownership is right for you? How to figure out how much you can afford? How to manage the monthly maintenance costs? This site has all that, and more.

What are your favourite websites for financial planning information?

And lastly, we offer a free, unbiased consultation on home budgeting and savings, especially as it relates to homebuying, or refinancing. Call us anytime to schedule an appointment. We’ll even give you a free cup of coffee ( or tea). Just ask for Simon! 416.366.9090

At $484M, London's Largest Mansion is Now World's Priciest.

Posted on September 19, 2012 by Simon

The 60,000-square-foot behemoth was assembled from what were previously four distinct single-family homes and now boasts a ridiculous 45 bedrooms, an indoor swimming pool, underground parking, and 68 bulletproof windows facing Hyde Park.

Your Home Is Like A Bank Account

Posted on September 19, 2012 by Simon

It’s become the new retirement savings plan — owning a home. What else is one to make of a country where about half of Canadians said they didn’t make a contribution to a registered retirement savings plan this year but close to 70% of households now own their home.

Your money grows tax free . . . because even in your RRSP, there are forced withdrawals and it’s fully taxable when taken out. The main advantage of home ownership is the forced savings it generates and for many people, especially those that don’t have the self discipline, and expertise, to save and invest, it really is a simple and effective investment for most Canadians.

The age old argument that renting is throwing away money is not valid or consistent if you are away for a year or two for work on temporary assignment, going to school or because you are just retired and want to try living somewhere else. On the flip side, buying makes no sense if you are on the move, which is probably why the nomadic among us choose to rent. With real estate commissions about 5% of the sale price, transaction costs can easily be close to 10% in a jurisdiction like Toronto with two land transfer taxes.

You also can’t ignore the tax benefits that come from home ownership because of the exemption you get from any gains on your principal residence. Put in sweat equity by fixing your house to raise the value and that’s about the only legal way not to pay tax in this country.

Another advantage is that you can’t easily take money out of your home and spend it, as you would with a savings account, or mutual fund. You’d have to either sell it or go through a complicated refinancing or equity line to free the cash up.

Then there’s the leverage. Nobody will let you leverage any other investment with 95% debt to 5% equity. If you are borrowing money at 3% and your investment is going up 5% every year, you can’t lose. If you are buying an income property with 20% down and the market is going up 5% a year, you are in effect making 25% return on your initial investment, year after year. This kind of return is not easily found in other investment types.

A Sweet Lesson On Patience

Posted on September 17, 2012 by Simon

A NYC Taxi driver wrote:

I arrived at the address and honked the horn. After waiting a few minutes I honked again. Since this was going to be my last ride of my shift I thought about just driving away, but instead I put the car in park and walked up to the door and knocked.. ‘Just a minute’, answered a frail, elderly voice. I could hear something being dragged across the floor.

After a long pause, the door opened. A small woman in her 90′s stood before me. She was wearing a print dress and a pillbox hat with a veil pinned on it, like somebody out of a 1940′s movie.

By her side was a small nylon suitcase. The apartment looked as if no one had lived in it for years. All the furniture was covered with sheets.

There were no clocks on the walls, no knickknacks or utensils on the counters. In the corner was a cardboard
box filled with photos and glassware.

‘Would you carry my bag out to the car?’ she said. I took the suitcase to the cab, then returned to assist the woman.

She took my arm and we walked slowly toward the curb.

She kept thanking me for my kindness. ‘It’s nothing’, I told her.. ‘I just try to treat my passengers the way I would want my mother to be treated.’

‘Oh, you’re such a good boy, she said. When we got in the cab, she gave me an address and then asked, ‘Could you drive
through downtown?’

‘It’s not the shortest way,’ I answered quickly..

‘Oh, I don’t mind,’ she said. ‘I’m in no hurry. I’m on my way to a hospice.

I looked in the rear-view mirror. Her eyes were glistening. ‘I don’t have any family left,’ she continued in a soft voice..’The doctor says I don’t have very long.’ I quietly reached over and shut off the meter.

‘What route would you like me to take?’ I asked.

For the next two hours, we drove through the city. She showed me the building where she had once worked as an elevator operator.

We drove through the neighborhood where she and her husband had lived when they were newlyweds She had me pull up in front of a furniture warehouse that had once been a ballroom where she had gone dancing as a girl.

Sometimes she’d ask me to slow in front of a particular building or corner and would sit staring into the darkness, saying nothing.

As the first hint of sun was creasing the horizon, she suddenly said, ‘I’m tired.Let’s go now’.
We drove in silence to the address she had given me. It was a low building, like a small convalescent home, with a driveway that passed under a portico.

Two orderlies came out to the cab as soon as we pulled up. They were solicitous and intent, watching her every move.
They must have been expecting her.

I opened the trunk and took the small suitcase to the door. The woman was already seated in a wheelchair.

‘How much do I owe you?’ She asked, reaching into her purse.

‘Nothing,’ I said

‘You have to make a living,’ she answered.

‘There are other passengers,’ I responded.

Almost without thinking, I bent and gave her a hug.She held onto me tightly.

‘You gave an old woman a little moment of joy,’ she said. ‘Thank you.’

I squeezed her hand, and then walked into the dim morning light.. Behind me, a door shut.It was the sound of the closing of a life..

I didn’t pick up any more passengers that shift. I drove aimlessly lost in thought. For the rest of that day,I could hardly talk.What if that woman had gotten an angry driver,or one who was impatient to end his shift? What if I had refused to take the run, or had honked once, then driven away?

On a quick review, I don’t think that I have done anything more important in my life.

We’re conditioned to think that our lives revolve around great moments.

But great moments often catch us unaware-beautifully wrapped in what others may consider a small one.

Location, Location, TIMING!

Posted on September 7, 2012 by Simon

As always, our aim, here at The Real Estate Centre, is to keep you at the forefront of Real Estate Investing by introducing the BEST opportunities at the BEST time. We’ve all heard that it’s all about Location, Location, Location.

Actually, it’s TIMING FIRST, THEN, Location, Location, Location . . .

Imagine if you could buy BEFORE other people realize the value, or if you could, say, get in the back door at the Film Festival opening night. This is one of those moments .. .

Will all of the possibilities out there right now, there are two specific projects that we can really recommend.

“181 Davenport”

Located in the very heart of Yorkville and developed by Mizrahi Developments, this is Phase 2 of the ultra successful 133 Hazelton, which quickly sold out this past year.

We have Exclusive FIRST ACCESS to this project, which means that you can choose exactly the unit or units you want, on the floor of your preference and at INTRODUCTORY pricing that will not be seen again.

Yorkville is hands down one of Toronto’s best areas to invest in. Rental units are in HUGE demand and inventory is always scarce. Whether you considering an investment for long term as a rental, or for personal use, we can help you select the best suite, and although this site is not yet open to the public, we can arrange for one of our staff to escort you on a private tour of the sales office.

“River City“

The King East corridor is the next up and coming urban destination of Toronto. The award winning development, was created by Saucier + Perrotte Architects, and will consist of three glass towers connected through transparent walkways that will encompass light throughout the buildings. The River City community will soon be home to over 1,000 loft style condominiums and townhomes.

Suites will offer nine foot ceilings, engineered hardwood floors, floor to ceiling windows with open concept kitchens. Bedrooms are bigger with expanded living rooms leading out to balconies and terraces. Amenities will be complete with a fitness, Yoga and Meditation Centre. Floating heated pool surrounded by green grass and trees. Guest suites, private screening centre and a business room offered exclusively to owners.

River City will be surrounded by Toronto’s largest 18 acre park, steps from restaurants, grocery stores, retail, and children’s schools and a daycare centre .The building will connect the waterfront to King street with only a 5 minute streetcar ride to the University of Toronto and the central core.

The incentives for River City are as follows:

Incentive #1 – VIP Discount – $10,000 – Credited at Purchase Price

Incentive #2 – Right to Assignment – $3000 $1000 with the ability to do so at 75% of Builders’ Sales.

Incentive #3 – Lease Back Program – $1500 or $1550 per month GUARANTEED for TWO YEARS

Incentive #4 – Capped Development Levies – $3500 $2500

Incentive #5 – Buy with Only 10% Down

All relevant material, such as prices, floor plans and brochures can be accessed at www.gtainvesting.ca

If you want to speak to someone right away about these or any investment opportunities, call Simeon Papailias at 416.791.0075.

Condo Act is . . .unfair! Says MPP Marchese

Posted on May 11, 2012 by Simon

Do condominium owners need more protection when it comes to disputes with builders and property managers? Rosario Marchese (NDP), member of provincial parliament for Trinity-Spadina believes so:

“The fact of the matter is that the Condominium Act doesn’t have any consumer protection whatsoever,” he tells the CBC. “And so when people have a problem, they have to go to court to solve it. We think that’s incredibly unfair.”

Through a private member’s bill, Mr. Rosario is hoping to create a review board which would help condo owners settle their case outside of the courts. This process promises to be more efficient, much faster, and significantly cheaper than the options currently open to disgruntled buyers.

Mr. Rosario also wants all property managers to be licensed in order to take out the ‘guess work’ and ensure ‘quality’.

On Thursday, Mr. Rosario will present the new bill and is asking all Toronto condo owners to join the debate at Queen’s Park.

Do you think Mr. Rosario’s concerns are legitimate? Have you ever had lengthy dispute with builders? Please pipe in with your comments or questions.

source: CBC

Market Watch for April – 8.5% Increase in Avg. Prices

Posted on May 4, 2012 by Simon

Here is a market update released by the Toronto Real Estate Board. Sales activity through Toronto MLS® reached 10,350 for the month of April, that’s up from the 8,778 transactions recorded last April. Average selling price in March was $517,556 which is an increase of 8.5 percent from the previous year. Strongest growth was in the single detached market.

Check out the video for more:

http://youtu.be/SsXmFs-gRak

14 Action Inducing Lessons from Benjamin Franklin

Posted on April 30, 2012 by Simon

Benjamin Franklin was a man of action. Over his lifetime, his curiosity and passion fueled a diverse range of interests. He was a writer (often using a pseudonym), publisher, diplomat, inventor and one of the Founding Fathers of the United States.

His inventions included the lightning rod, bifocals and the Franklin stove. Franklin was responsible for establishing the first public library, organizing fire fighters in Philadelphia, was one of the early supporters of mutual insurance and crossed the Atlantic eight times. Self-development was a constant endeavor throughout his incredible life.

Benjamin Franklin was clearly a man who knew how to get things done.

14 Action Inducing Lessons

Less Talk, More Action

“Well done is better than well said.”

Talk is cheap. Talking about a project won’t get it completed. We all know people who constantly talk about the things they are going to do but rarely ever take that first step. Eventually people begin to question their credibility. Taking action and seeing the task through to completion is the only way to get the job done.

Don’t Procrastinate

“Never leave that till tomorrow which you can do today.”

This is probably one of the first quotes I remember hearing as a teenager. With an impressive list of achievements to his credit, Benjamin Franklin was not a man hung up on procrastination. He was a man with clear measurable goals who worked hard to turn his vision into reality. What are you putting off till tomorrow that could make a difference in your life today?

Be Prepared

“By failing to prepare, you are preparing to fail.”

Whilst many of us don’t like change, others thrive on it. Either way change is inevitable. The stronger we fight against it, the more time and energy it consumes. Give up the fight. Focus on proactively making positive changes, instead of having change merely thrust upon you. Wherever possible, try to view change as a positive instead of a negative.

Get Moving

“All mankind is divided into three classes: those that are immovable, those that are movable, and those that move.”

There’s a reason we use the expression, movers and shakers. Movers are the ones who take action, the people who get things done, while the immovable are sitting around scratching their heads wondering how others could possibly be so successful. Which group do you want to belong to?

Avoid Busywork

“Never confuse motion with action.”

We are always running around doing things. We rush from one meeting or event to the next, sometimes without achieving a great deal. At the end of the day, how much of our busywork are we proud of? How much of that running around improves anyone’s life (including ours) for the better? Make your motion mean something.

Give Yourself Permission to Make Mistakes

“Do not fear mistakes. You will know failure. Continue to reach out.”

If we fear making mistakes, we become scared to try new things. Fear leaves us nestled in our comfort zone. Staying in your comfort zone rarely leads to greatness. Taking risks and giving yourself permission to make mistakes, will ultimately lead you to whatever your version of success may be.

Act Quickly on Opportunities

“To succeed, jump as quickly at opportunities as you do at conclusions.”

Opportunities are everywhere. The trick is being quick enough and smart enough to seize them when they arise. Instead of jumping to the conclusion that something won’t work or can’t be done, allow yourself the freedom to ask what if?

Continue to Grow

“Be at war with your vices, at peace with your neighbors, and let every new year find you a better man.”

We all have vices of some description. The key is to keep them under control or preferably eradicate them entirely. Be kind to those around you, whether they are neighbors, family, co-workers or friends. Never accept that you have finished growing as a person.

Keep Going

“Diligence is the mother of good luck.”

Have you ever looked at a successful entrepreneur or business person and thought how lucky they are? Most of the time, luck has nothing to do with it. Hard work and sacrifice on the other hand have everything to do with it. Successful people deal with failure. They tackle their demons head on. They pick themselves up and keep going.