Sunday, March 29, 2009

Good News for Ottawa

􀂾 Universities and Colleges are under expansion:
• Carleton U. ($110M): School of Journalism, new residence,
new lab.
• U of Ottawa ($90M): New Tower
• Cité Collégiale ($18M): New Building

􀂾 Ottawa Transit project to start ($7B)

􀂾 Parliament Hill renovation ($1B)

􀂾 CSEC Cryptology facility ($62M)

􀂾 Congress Centre (160M)

􀂾 Bayshore’s facelift (130M)

􀂾 Ottawa Community Housing Corp (OCH) to invest $346.8M to
repair social housing stock

􀂾 Manpower’s 2009Q2 report on Net Employment Outlook ranks
Ottawa’s positive job creation prospects as 4th in Ontario and
12th in Canada

􀂾 Athletic Club fitness chain to build 5 new facilities, starting
with a $10M facility in Orleans, citing Ottawa’s favourable
economy compared to other Ontario cities

Good Reasons to Remain Optimistic

􀀹 Canada’s financial system rated the STRONGEST IN THE WORLD

􀀹 IMF study states that Canada’s housing market is NOT OVERVALUED

􀀹 Low risk of mortgage meltdown due to MORE PRUDENT PRACTICES in
mortgage lending and insurance, STRONGER BANKING REGULATIONS

􀀹 Share of Canadian SUB-PRIME MORTGAGES LESS THAN 5% vs. 35-40% in
the US at the peak

􀀹 MORTGAGE ARREARS as of Dec 2008: CANADA􀃆 0.33%,
ONTARIO􀃆 0.36%

􀀹 Canadian Homeowners have built more EQUITY.

Tuesday, March 24, 2009

Buying investment real estate

Buying a property for investment is very different then buying a home to live in. When buying a home to live in, there are many emotional factors that influence your decision making. You decide on the property while look at how the space feels, the location and lot size, colours, etc.

When buying an investment property you have a different outlook, your focus is on numbers, exit strategy, then the property itself. The actual house is a widget that gets you to an ultimate goal of increased networth.

THE NUMBERS:
The fascinating part of real estate investment is that the many potential investors seem to overlook the numbers. The base evaluation of point of a real estate investment (and the starting point) are the numbers. As a starting investor, it is not a stupid question to ask 'what numbers?'

You have to look at monthly carries including mortgages, condo fees, city taxes, insurance and potentially management. On top of these expenses, you do have to factor in vacancy and maintenance. It is important to put forth a complete picture of the expenses on the property.

Once you have a grasp on the monthly expenses, you need to figure out the monthly income. This can be accomplished by looking at the current leases and comparibles rents in the neighbourhood. I would also suggest looking at http://ottawa.en.craigslist.ca/, http://ottawa.kijiji.ca/, or http://www.ottawaliving.ca/ - these sites are excellent resources to see what properties are renting for.

Remember that tenants have rights and you cannot randomly raise rents, even if an existing tenant is renting at a reduced rate compared to the neighbourhood comparibles. This year, the rental increase is 1.9%, and you have to give 90 days notice to your tenant.

The formula from here is pretty simple - income minus expenses = positive number. If it is not a positive number, your deal is losing money. Now in real estate investment remember the timeframe of income minus expenses could be monthly or over a period of years (based upon an equity growth property).

If the numbers do not make sense, the investment is a no go and you should walk away at this point. It is not worth going any further if there is no upside in the numbers to make them positive. That great triplex in the Glebe that costs $650,000 and produces $21k in NOI is not on the list!

THE EXIT STRATEGY:
Why is the exit strategy important? If you cannot answer this, you should not invest in real estate. Exit strategy is how you liquidate the property when you are no longer interested in owning the property. You should always plan your exit before you buy the property.

Part of the equity growth strategy is being in the right neighbourhood, which will add value to your property. When buying a property for cash flow you sometimes are going to different, possibly less desirable neighbourhoods. It is necessary to buy smart.

Without planning a proper exit strategy, you could possibly end up holding onto the property for a longer period of time than you wish. When looking at your portfolio, it is sometimes necessary to have your money moving. When an opportunity presents itself, you might have to move quickly and take advantage of an opportunity.

THE PROPERTY:
The property is a widgit in the end. It is a means to an end. Once you know that the numbers make sense and the exit strategy is in place, you can then look at the property. Remember, you are buying as an investment, not to live in the property.

In your home you have granite and hardwood, a spa-like luxury bathroom, nine foot ceilings, double car garage, etc. Forget your home, think back to your first place you likely rented after getting out of school. Think of how happy and excited you were for your first home. Now think back to the payment and how with your new found knowledge you realize you were paying all the expenses for your landlord and giving him some cash flow on top of that.

Make sure the property is structurally sound and safe. Make sure that you have the home checked by a certified home inspector to make sure there are no issues. Once you have these types of assurances from the home inspector, do not let your personal biases stand in the way of making a good investment decision.

Remember to follow the simple plan of numbers, exit strategy then property!

Now it is time to find the right property - http://www.bennettpros.com/Our_Listings_by_Map/page_2170543.html

Tuesday, March 17, 2009

Investment Properties

As a young professional I am constantly looking at various investment options and strategies to build long term wealth. I found the seminar hosted by the Bennett Real Estate Pros to be very inspirational as it illustrates how attaining wealth through real estate is a realistic goal for any motivated individual determined to take financial control of their lives. Since the seminar I have been working with Greg Blok, looking at various investment properties that are aligned with my current financial and personal position.

Having recently purchased an investment condominium with the Bennett Real Estate Pros I can definitely attest to the high quality of their service. Their patience, friendliness and in-depth knowledge of the Ottawa real estate market are all factors that contributed to the positive and successful experience I had with their company. I plan to continue my business relationship with the Bennett Real Estate Pros and would highly recommend their services to any home buyer or real estate investor.

Mike in Ottawa

Let's get started!

Looking for the best real estate deal is often a very difficult task. The best way to seek for the best deal is to begin searching early while being careful. Keep in mind that getting the best means that you must start searching as soon as you make a decision to search. Here are some tips in getting the best real estate deal:
Start by making a decision. Real estate investment is one of the most profitable ventures that you can plough your money into. It is a good venture in which you can reap lots of profits in the long run as well as in the short run. Make sure you are making this investment out of desire, not out of desperation.
Choose an area where you want to invest. One thing about investing in real estate is that you must be certain on where you want to base you investments. Remember that the value of your assets will not be the same everywhere. Even in the long run, the value of property may increase in one area and fall in another area. You must therefore carry out a good market research. One thing most people fail to understand is that a good market research is everything about making a real estate decision. This is the only way to tell you what to do and what not to do.
Work with a real estate expert. This should be a link to the above tip. There is no way in which you can study the market very well without making a genuine evaluation of the market and this can only be done through working with a professional. Remember that you will not only need a competent person to give you the best and most recent information, but you will also need compellable information to help you make a decision. Make sure this is a professional who works in the investment industry full time.
Get to the field and discover what is obtainable. Remember that doing all the paperwork may lead you to success. But there is no guarantee that this will always lead you to what is actually obtainable. For example, if you intend working through someone, there may be certain hidden fees or certain disclosures that you would have known if you did the research in person.
Make a decision now. You may want to wait till prices are down ahead of making a significant purchase. But you should also know that the demand for land today is scarce while supply is very limited. Even when prices are high, it is still good to invest in real estate. Remember that you can build up equity in the property in order to reap more than that cost you acquired in getting the property.
With historically low interest rates, now is the time to get into real estate investment. Set goals and timelines for these goals, as a goal without a timeline is still a dream. Take control, get started.
www.bennettrealestatepros.com

Friday, March 13, 2009

Essential Real Estate

It's important to note that real estate is a non-renewable resource. It is in increasing demand with limited supply. Historically real estate has proven itself to be an asset that appreciates over time. When used for rental purposes, it has the ability to provide a passive income.

"Essential Real Estate" can be defined as basic (albeit nicely renovated) living accommodations in growing markets it appeals to all tenants, making it the rental real estate of choice in the marketplace. Because this type of rental property serves an essential need, it provides stable and predictable investment performance over time.

Let's compare "Essential Real Estate" to speculative real estate investments:

Essential
- Predictable
- growing markets
- Impervious to market conditions
- Needed by everyone
- Located in revitalized communities

Speculative
- Volatile
- declining markets
- At the mercy of the market
- Wanted by some
- Located in over-priced primary cities

Being a Landlord

To become a good landlord, you need to set aside all your egos and treat your tenant as a human being. The best policy is to use the GOLDEN RULE, treat others as you want to be treated. When you select a tenant, remember to make the best choice, not the first rental application that comes along.

You should be aware of your duties and responsibilities as a landlord. You should regularly maintain your property and be updated with the latest housing regulations. You cannot keep increasing the rent every month, you can only increase once a year or when you have a tenant turnover. A proper tenancy agreement protects both you the landlord and the tenant, it clearly outlines each parties responsibilities and benefits.

If anyone-either the landlord or the tenant-breaks any rule of the contract, legal action can be taken against them. As a landlord, you need to hand over a copy of the agreement to the tenant. You should let your tenant know beforehand if there is any problem with your property.

You need to have a mindset of making yourself readily available. If your tenant is facing a problem with your property, encourage him to let you know about it at the first go. If any repair is needed to be done, you should do that right away. The electrical system, water heaters, gas, sanitation, etc should be working properly. Remember an avalanche is easier to stop by picking up a snowball at the top of the mountain, rather than holding back the falling snow.

Making arrangement for an annual gas safety certificate is a legal requirement that you must do. Also, the fire detectors and the alarm must be properly working for the safety and security of your tenant. The interior and the exterior of the house should be taken care of on a regular basis by you. One of the advantages of a condominium as an investment, is that this exterior work is done, so you do not have to worry about snow shovelling, grass cutting, roofs or windows.

You need to put yourself in the tenant’s shoes to understand as to what kind of behaviour you would have expected from your landlord. If you wish to make monthly inspections on your property, send a tenant notice informing him about it before calling upon the home. You need to understand that you are the owner of the house but during the rental period, it is the tenant who has possession of the home. In return for this possession, the tenant pays a monthly rent. If you can create a transparent relationship between you and your tenant, then everything will be easier to deal with.

For making a real investment out of your real estate transaction, it is essential that you treat being a landlord as a business not a pastime. You need to gather enough information to make a proper selection of tenant. That will help you whenever you think of renting your property to a candidate.

Wednesday, March 11, 2009

Investment help?

Greg has been extremely helpful in educating a complete property novice.
He is always quick at answering every question and willing to help at
any time. I lay my entire trust in Greg and he came through with flying
colours. I am definitely going to continue using Greg in my future
property investments, and highly recommend him to anyone looking to get
into property.

Regards,
Paul

Monday, March 9, 2009

Need Help?

As a real-estate investor I'm glad to have been introduce to Greg Blok and the Bennett Real Estate Professionals over two years ago. During this time he and his team have always been available and courteous to me. Greg help me establish a vision and plan after my first purchase and offered me the opportunity to invest in ground breaking developments before they became the talk of the town. I believe that Greg's no nonsense approach as served me well in my purchases as he concentrated solely on the numbers presented to us. Since the first purchase, I now find myself signing a third purchase agreement and looking forward to the future which will no doubt include a fourth one and numerous advise and phone calls from Greg.

JF in Ottawa, Ontario

Sunday, March 8, 2009

196 Barrow - Open House - March 8 2009 - 2 to 4

Please feel free to drop by 196 Barrow, in Kanata and visit me at my open house. This is a great family home close to three schools.

See you this afternoon!!!

Draw for Sens Tickets - new web site

We have launched our improved Bennett Real Estate Professionals web site. We are hosting a contest to win box seats to the Sens game on March 12.

All you have to do is visit our site at www.bennettrealestatepros.com - go to the section titled Real Estate Seminars, find the secret code (hint - below Marnie's picture) and email it to info@bennettrealestatepros.com along with your phone number and email address.

While you are there, check out our new site

Thursday, March 5, 2009

Rental Properties

There are many ways to make money in investment real estate. One of the best is purchasing a property and then renting it out. In order to make this investment successful, you need to ascertain affordability. At its base, cash flow investment is managing what you take in and making sure it is more than your paying out.

After you have decided upon your down payment, you need to provide sometime for finance companies, mortgage brokers, and also the banks to check out whether they are interested about giving you loans or not. For this, you might require to submit some documents like credit reports to them to qualify for the money.

The finance part is a crucial aspect of any kind of real estate investment. So it is necessary that you shop around for the best finance deal. Rather than spending your valuable time shopping, ask me for a referral to the appropriate persons. Check into the available interest rate that the financer is going to provide you and check out whether it is variable or fixed. The other important factor to consider like length of term which has a huge impact on your cash flow.

Try to know about all the good locations for renting properties. Remember areas that are great for living in are not necessarily the best for renting. You have to search for great deals. The best way to find a great deal is to enlist my help to find that property. After identifying the bargain properties, you should begin with the job of making appointments to view them.

From there, we will have to decide on management of the property. You have two choices – self management or a professional company. Remember that property management fees are tax deductable. Self management takes significant time in non-condo properties, whereas a manager answers the middle of the night calls on your behalf.
Make sure to give a look to the neighborhood before purchasing a property. You can even speak to the neighbors to gather knowledge on the surrounding area. Finding other people who rent in the area will give you a good idea of what to expect.

With the recent drop of rates, mortgage money costs $4.01/$1000 borrowed. This makes a huge difference in cash flow. On the same property just six months ago it would have cost $5.46/$1000 - this is a savings of $1.45/$1000 meaning $435 per month on an average home in Ottawa, a huge difference in affordability!

Radio show - 1pm Saturday March 7

Just wanted to let everyone know that Marnie and I will be on the radio, 580 CFRA, Saturday afternoon at 1pm. Hope you can join us there.....

G

Tuesday, March 3, 2009

Fear mongering

This is certainly an unprecedented time in the history of the world. Economists and arm chair prognosticators are having a field day with comparisons between now the and the Great Depression. Realistically, from the excerpt below, a much better comparison is the 1980s. We are definately in a time of uncertainty, but with swift intervention (interest rate lowering, stimulus packages, etc) we are starting to see the light at the end of the tunnel, with predictions of solid recovery as soon as third quarter 2009.

Please bear in mind, Ottawa has been a bastion of hope through all this with unemployment going down, average household income and home values going up!

"…This fearmongering may be good politics, but it’s bad history and bad economics. It is bad history because our current economic woes don’t come close to those of the 1930s. At worst, a comparison to the 1981-82 recession might be appropriate…In the last year, the U.S. shed 3.4 million jobs. That’s a grim statistic for sure, but represents just 2.2% of the labor force. From November 1981 to October 1982, 2.4 million jobs were lost—fewer in number than today, but the labor force was smaller. So 1981-82 job losses totaled 2.2% of the labor force, the same as now.

Job losses in the Great Depression were of an entirely different magnitude. In 1930, the economy shed 4.8% of the labor force. In 1931, 6.5%. And then in 1932, another 7.1%. Jobs were being lost at double and triple the rate of 2008-09 or 1981-82.

This was reflected in unemployment rates. The last survey pegs the U.S. unemployment rate at 7.6%. That’s more than three points below the 1982 peak (10.8%) and not even a third of the peak in 1932 (25.2%). You simply can’t equate 7.6% unemployment with the Great Depression.
Other economic statistics dispel any analogy between today’s economic woes and the Great Depression. Real gross domestic product (GDP) rose in 2008, despite a bad fourth quarter. The Congressional Budget Office projects a GDP decline of 2% in 2009. That’s comparable to 1982, when GDP contracted by 1.9%. It is nothing like 1930, when GDP fell by 9%, or 1931, when GDP contracted by another 8%, or 1932, when it fell yet another 13%.

Auto production last year declined by roughly 25%. That looks good compared to 1932, when production shriveled by 90%. The failure of a couple of dozen banks in 2008 just doesn’t compare to over 10,000 bank failures in 1933, or even the 3,000-plus bank (Savings & Loan) failures in 1987-88. Stockholders can take some solace from the fact that the recent stock market debacle doesn’t come close to the 90% devaluation of the early 1930s…"

Quoted from :
Bradley R. Schiller, University of Nevada economics professor, in a February 13 Wall Street Journal op-ed essay, "Obama’s Rhetoric Is the Real ‘Catastrophe’