Canadian households spent a total of $22.8 billion on renovations in 2010, according to a recent survey conducted by the Canada Mortgage and Housing Corporation. While 51% of those home renos finished right on budget, about 34% of homeowners spent more than they anticipated, the findings suggest. While renovation costs can go up for all kinds of reasons - change of plans, structural problems, price of materials - here are a few steps you can take to anticipate and rein in expenses for projects large and small.

Big projects, big overrun potential:

By nature, the bigger the project, the greater the potential for cost overruns. While you can benefit from the know-how of skilled tradespeople or contractors, it's still up to you to watch the numbers:

Read More...

The ongoing financial woes in the US and in countries in Europe are one of the contributing factors to Canada's stable housing market and historically low interest rates, and these rates will continue right into mid-to late 2012.  The variable rate, which is based on the Bank of Canada's Prime rate is sitting at 3% and is likely to stay there right up until mid-to-late 2012. The main reason for this is the very slow economy in the US. The Federal Reserve there has already announced that their prime interest rate will not increase until 2013, hoping that it will create a more fertile ground for economic growth. By keeping the rates low, they hope to stimulate borrowing from businesses and consumers. Because the US is a major trading partner, it forces us to keep our rates low to keep our economy growing while we wait for the US and for Europe to catch up. 

Fixed rates will start moving up earlier than the variable rate but without major jumps. Benjamin Tal, deputy chief economist for CIBC said in an exclusive interview with TMG The Mortgage Group that fixed rates, which depend on bond markets, will remain relatively stable, with small increases, over the next six to eight months. 

"It is interesting that, here in Canada, when we believe there will be a slowdown, something happens in the world that helps us and makes our economy stronger," he said. "And because there is uncertainty in world markets, the Bank of Canada won't raise rates until those markets stabilize, which will take some time."  Currently, the Canadian housing market and the economy is stable and balanced. Consumers have been listening - they have slowed the pace of their borrowing and have been working on paying off their debts. It is, indeed, an ideal time, when rates are low, to do that. Tal cautions, however, that low interest rates may fuel an increase in borrowing, which has not happened yet, and this could be worrisome in the long-term.  

"Credit is not a bad thing - it is the electricity of the economy," he said. "We want banks and consumers to be responsible with their borrowing." Low interest rates are attractive but borrowing like there's no tomorrow is dangerous. Eventually those rates will go up and if you're stuck with large lines of credit it may be more difficult to pay them off and could burden the household budget. 

Networking is an important skill in any business if the goal is a profitable business. The same holds true for real estate investing, at least on behalf of those who are serious about pursuing real estate investing as a business rather than a part time hobby. Either way, in all honesty, the ability to network for potential business partners, investors, and join ventures along the way can be critical to providing the type of diversity your real estate portfolio needs in order to be solid in a market that is nothing short of volatile.

 With the current situation of  lending market, networking has become more essential than ever before for real estate investors. Networking can not only lead you to potential properties that might prove profitable but also to people who need your specific specialty or may be looking for a property you have access to. Even if you share your profits, as long as you are also sharing the workload, you can find a very favorable working environment when you join someone else in a venture such as wholesaling properties, offering lease options, or even working together on a quick flip situation (though caution and clearly defined parameters are best in any of these situations it is critical when flipping a property).

Whenever you have the opportunity to network with other real estate investors it is in your best interest to do so. Don't limit yourself to only networking with those who engage in the same sort of investing you are most comfortable with as diversity is important to all real estate portfolios and you never know when an ideal flip will come across your desk that you can pass along, while making a bit of a profit from the transaction of course (to a flipper) or a perfect buy and hold unit will catch the eye of someone who generally purchases properties with the intent of flipping. Contacts work both ways and you can all stand to profit from the eyes and ears of others, whether as a joint venture, equity sharing project, or simply acting as business partners on specific projects for quicker results and an extra set of hands and eyes on the job.

If you aren't a part of a real estate investors networking group in your area, take the time to find them and join. The contacts you will make are invaluable if you intend to make real estate investing your primary business now or hope to make it your primary source of income in the future. Join as many groups as possible today (locally and within a reasonable driving distance) and see what a difference they make in the volume and scope of your real estate investing business.

Read More...

If you have decided that a mortgage broker will best suit your buying needs, you will want to ensure that you know how to make your broker work for you. Getting the most from your mortgage broker is relatively easy, but you must make sure to ask all the right questions.

To begin, let's talk about your money. You have probably heard about those dishonest brokers that manage to wrangle extra fees and rates from unsuspecting customers - don't wind up one of these victims. Instead, make sure that you are getting the most from your mortgage broker by asking them to list all fees up front. This way, if your broker is adding on a few fees here and there, you will have evidence that the new fees are unjust.

Also, make sure that your broker provides you with a detailed listing of all the lenders that they work with. At this point, go over the list of lenders and make sure that you are not missing out on a loan that you broker does not have access to. Of course, during this time you should also be aware of any lenders that your broker is constantly trying to thrust in your face, which should automatically be a sign that you need to switch brokers.

Once you are sure that all fees and lenders are disclosed from the beginning, treat your broker in much the same way that you would expect a psychologist to treat you - in short, make your broker match your loan personality to that of a great bargain. Some brokers are simply lazy, and they have no interest in spending the time to make sure that you needs are fully met. If you choose to allow a broker to simply select a lender for you without asking you any detailed questions, you are not getting the most from your mortgage broker.

Read More...

The popular Eco-Energy Retrofit Grant is still available until March 31, 2012. You can access up to $5000 for improvements for energy-saving renovations to your home, but you'll need to act fast. Before you begin work, you must arrange for an NRCan-licensed energy advisor to perform a residential energy assessment of your home. 

After the work is complete, a post-retrofit evaluation must be done by March 31, 2012. Full details are available at www.oee.nrcan.gc.ca. To register, go to http://www.oee.nrcan.gc.ca/register

Real estate investing is potentially a very profitable business, but like any opportunity that offers the potential for big profit, investment in properties also comes with some risks. In fact, just as many businesses fail within the first year of operation, so, too, do many entrepreneurs in the real estate business face burnout and failure. In many cases, these failures are preventable and caused by one of more of these 3 common mistakes:

1) Refusing To Invest a Dime in Your Business. Many entrepreneurs get caught up in those exaggerated claims made by some so-called investment experts and really believe that they can build an empire without investing a penny. In reality, you do need to spend money to make money. To run a successful business, you need to hire a good attorney, pay for inspections, and pay for marketing as well.

2) Making as Much As You Can. You should know exactly how much you will be making from real estate investing, because you are the only one who determines your profits. Don't leave your profits up to chance - decide how much you will earn from your business.

3) Sitting Back. Lots of entrepreneurs get started with the right idea. They go out there, make plans and start researching real estate. Months later, they are still making big plans and researching. There is a point at which you have to just jump in. Give yourself 30 days to get started, get set up, and get educated. After that, you should have a plan and you should start working your plan on the 31st day. Nothing will happen unless you make it happen, so get ready and then take some action. If going full tilt after a month of preparation seems scary, take baby steps. On day 31, contact a few leads or line up that loan. Even small steps will get you there and once you have taken a few small steps you can start going after investing full-tilt. Real estate investing is about making smart choices consistently. It's not about never being wrong. That said, you will be able to profit much more and enjoy the process by avoiding some of the common mistakes entrepreneurs make. Leverage other investors' knowledge and avoid learning by trial and error. Your bottom line will be much better as a result.

It is a real advantage for real estate analysts to determine the value of an investment property quickly. When we might not have access to our computers and real estate investment software, or (forgive me) might just want to remind ourselves that we can still do the math on a napkin over lunch.

Nonetheless, investment real estate property such as multi-family units, office buildings, and similar residential and commercial properties that generate rental income sometimes require a rough real estate valuation on the spot.

Read More...