Tuesday, March 29, 2016

How to make smart home renovation investments

For a good ROI on your home renovation consider advice from the Canadian Appraisal Institute
It’s been said before: We are the generation of renovation. Ask any friend and I bet you my lunch that almost all of them have either done or will be doing a renovation. (If you’re really quite sure no one you know has or plans on living through a renovation, then I hope you like peanut butter!)
There are two main reasons for renovating. The first is to improve your current home based on your own personal needs (not wants, needs). This is the primary reason to justify expensive projects, such as adding a second-story addition, finishing the basement, or extending the kitchen. It’s a renovation that will require a lot of work, money, and inconvenience, but will allow you and your family to enjoy the home more fully in the up-coming years.
The second reason people use to to justify a renovation is that they are adding value to their home. This is a problem. Evidence shows that it’s a lot easier to justify spending money if you think you’re getting a rebate—and convincing yourself that your $15,000 bathroom remodel will add $20,000 in value to your home is the psychological version of a rebate. The big problem with this is that people will then use these mental gymnastics to justify financing a renovation—and take on debt today, in order to increase your home’s value tomorrow is not financially savvy (particularly with rates poised to rise, which will prompt a cooling housing market and declining housing prices).
For those savvy enough to understand that a home renovation isn’t an investment, here’s a few tips on how to plan a smart renovation.
According to the Appraisal Institute of Canada (AIC) homeowners should follow these 4 general tips when renovating:

#1. Choose improvements with long life expectancy

These are the less-than-sexy remodel jobs, such as new roofing (every 15 to 25 years for asphalt tile), a new furnace (every 10 to 15 years), or a new A/C unit (every 10 to 15 years). These improvements can offer savings in the year of renovation and in the years to come. For  instance, replacing all the windows in your home could cost $10,000 or more, but the AIC estimates that this renovation will provide a return on investment (ROI) between 50% and 75%. Since outdated or improperly working windows and doors are major contributors to a home’s energy loss—up to 20% by some estimates—repairing or replacing these features will provide immediate savings and will add value to your home. Now, that’s a smart reno.

#2. Invest in modern updates, particularly in high traffic areas

The kitchen and bathrooms are key areas that hold their value if the finishes are contemporary and neutral. However, an entire renovation isn’t always required. For instance, wooden kitchen cabinets can be easily updated by resurfacing the doors and changing the hardware. You can also modernize and update the look of your kitchen by changing the countertop and replacing lighting and plumbing fixtures.
However, if your kitchen or bathroom layout just doesn’t work or your cabinets are beyond the point of resurfacing, it may be time to consider a full renovation. According to the AIC, you can expect a 75% to 100% ROI on a major kitchen remodel or extension.
But I need to point out that even the most well-thought out and contemporary remodel today will look dated in 15 years, so don’t bank on a dollar-for-dollar return on your remodel budget if you don’t plan on selling for a few decades. Still, if you’re renovating with your own family in mind, you can develop a smart plan by asking for features that are easy to update when it comes time to sell. A good designer and contractor can easily help in this situation (and can very often get you industry discounts!).

#3. Don’t overlook (or underestimate) the more inexpensive remodel jobs

The return on investment for a fresh coat of paint is up to 165%—the best ROI of any home improvement. Other smaller remodel updates that don’t break the bank include replacing the front door, updating the home’s lighting fixtures, and adding (or rejuvenating) landscaping.
Inexpensive remodel jobs aren’t isolated to a few fixtures, either. Removing carpet and installing hardwood goes a long way to increasing your home’s appeal to potential buyers and according to the AIC, the ROI on floor upgrades ranges from 50% to 75%. That means if you spend $5,000 redoing your floors, you can expect to recoup anywhere from $2,500 to $3,800 of your costs.

#4. Consider energy efficiency

According to a variety of appraisel sources, energy efficient renovations are considered to have one of the highest paybacks, relative to cost.
A great snapshot of the cost and ROI of some home renovation projects can be found on the U.S.-basedRemodeling magazine website. Remember, this is a U.S. magazine, so prices will be dramatically different in Canada, but it’s a great snapshot of how home renovations range in cost and the ROI you can expect.
*** For the complete article, please click here

Get the Best ROI with Your Next Home Improvement Project


2016 Canadian budget tackles foreign home ownership, housing affordability

The 2016 Canadian federal budget has been unveiled, and it includes a proposal to get more information on foreign ownership in the country’s housing market to help inform future government policy.
“We know that Many Canadians, particularly British Columbians, are concerned about the effect of foreign ownership in the housing market,” said Finance Minister Bill Morneau in the House of Commons yesterday.
“Unfortunately, the problem isn’t fully understood. More information is needed. To fill this data gap, and so many others like it, we will support Statistics Canada so that it can improve our understanding of important problems and help us all make better decisions,” he continued.

to read the complete article, please click here 

Wednesday, March 23, 2016

Duplexes, triplexes, fourplexes ... oh my!!!

Blake
Located in Vanier
8 units – all two bedrooms
with renovations, rents could increase
zoned R4 with 108 by 128 lot
cap rate of 5.3%
asking$1,175,000

Percy
Centertown location
8 units (2 bachelor, 4 one, 2 three beds)
two buildings
well maintained
cap rate 5.6%
asking $1,250,000

Daly
Sandy Hill
7 units (2 two, 1 three, 4 four beds)
two bedrooms are same layout as 4 beds
R4 with 66 by 99 lot for possible expansion
cap rate of 5.6%
asking $2,150,000

Dagmar
located in Vanier
6 unit building (6 one bed)
totally upgraded
steps to New Edinburg
cap rate of 6%
asking $839,000

Richelieu
Located in Vanier
Triplex (2x two bed and 1x one bed)
cap rate of 7.5%
asking $389,900

St. Jacques
located in Vanier
triplex (2x three and 1x two)
separate meters
one unit needs renovations
being sold by CIBC
no financials available

Cantin
located in Vanier
triplex (1x two, 2x one)
coin laundry
updated
cap rate is 5.9%
asking $419,000

Ethel
located in Vanier
Fourplex – bachelor, 1 bed and two 2 beds
tenants pay utilities
some updating needed
cap rate is 6.7%
asking is $350,000

Levis
located in Vanier
triplex (2 two bed and 1 three bed)
larger units
cap rate is 7.1%

Apolydor
Close to Billings Bridge
purpose built triplex (1xtwo and 2xfour bedrooms)
currently partially owner occupied and tenant
current cap rate is 5.4%
asking is $749,000

Windsor
Steps to Windsor Park
Old Ottawa South location – Hopewell School district
- 6 unit building – legal non-conforming – 4 two bedrooms, 1 one bedroom and 1 bachelor
- parking not being charged
rents under market (2 bedrooms under $1200 monthly)
current cap rate is 4.85% (lots of upside)
asking $1,200,000
Guigues
side by side double (legally separated)
blocks from the Byward Market
separately metered for gas and electric
both 4 bedrooms
tenants pay utilities
5.3% cap rate
asking $699,000
Catherine
Near Kent Street
newly renovated
1 two bedroom, 1 one bedroom, 1 bachelor
6% cap rate
asking $484,900
Hinton
essentially brand new – gutted and totally rebuilt
less than 10 blocks to Civic Hospital
close to Parkdale Market
separate hydro meters
contemporary style
less than one block to Wellington West and numerous restaurants
3 two bedroom/two bathroom units (four unit can be converted by seller)
5.6% cap rate
asking $1,125,000
Raven
Near Carling and Queensway
two huge 3 bedrooms and basement 1 bed
under market rents on three bedrooms
cap rate is 5.5%
asking is $574,900

Bruyere
across the street from Bruyere Hospital
2 two bedrooms, 1 one bedroom
well maintained and upgraded
separate hydro
cap rate of 5.3%
asking $775,000
Waverley
amazing Golden Triangle location
large 40 by 99 lot
duplex with 3rd unit
fire retrofitted
3 one bedroom
two furnished suites and one unfurnished
laundry in all units
Cap rate of 5%
asking $854,900
Bell South
located in Glebe Annex
3 one bedrooms and 1 two bedroom
upside of about $100 per unit per month in rents
Graduate student building
future potential to sell as semis (to confirm with city)
5.1% Cap Rate
asking $569,900
885 Maitland
4 plex (2 bachelor and 2 three bedrooms)
over $100,000 in recent renovations
cap rate of 5.0%
asking price is $749,000

Please drop me a line with any questions - http://www.bennettpros.com/gregblokblog

Tuesday, March 22, 2016

Ottawa Market Update - February 2016

New home sales continue to trend upward in early 2016, as

February saw an increase of 17.9% in comparison to February

2015. New home YTD sales are 13% above the 5-year average of

570. This trend of growth has been observed since October 2015,

suggesting an increase of consumer confidence since the 2015 fall

elections. Minto led the way in February with 94 sales, followed by

Mattamy with 54. A contrast of January, as Mattamy and Minto had

101 and 51 sales respectively. Special inventory pricing and

incentives played a strong role for each builder.

Freehold towns continue to lead the market, with an increase

of 4% product share from last month, while singles decreased by

2%. Freehold Towns remain a popular choice for purchasers, due to

their comparative size and lower price per square footage than

singles. Townhomes represented the majority of February sales for

builders such as Minto (65%), Richcraft (66%) and Tamarack

(61%).

The Ottawa Resale market saw an increase of 7.2% from February

2015, receiving a boost of 46 sales during the extra day of the leap

year. With spring fast approaching, listings increased by 26.6 % and

inventory on hand by 10.7% since January. The average price for

residential properties stood at $384,632, a modest growth of 1.2%

from February 2015. Of the 1,509 YTD sales, 31.6% were in the

$300,000 to $400,000 price range.


Ariana Luna @ PMA Brethour Realty Group

Monday, March 21, 2016

Exports drive Ontario’s automotive sector to big gains

Canadian manufacturing — specifically Ontario's automotive sector — is showing signs of finally roaring back to life.
Strong U.S. demand and a lower dollar helped pushed manufacturing sales in January a higher than expected 2.3 per cent to a record $53.1 billion, Statistics Canada reported Wednesday. Volumes reached levels last seen before the Great Recession of 2008-09.
Much of it was driven by Ontario, where manufacturing sales jumped 3.9 per cent to a record $26.4 billion, partly on moves by some automakers to retool their plants to produce higher-value vehicles, Statistics Canada said.
"This is a pretty dynamite report," said Toronto-Dominion Bank economist Brian DePratto. "It's hard to find anything not to really like about it. This is more confirmation of our view that (economic) growth in the first quarter is likely to be north of 2 per cent."
...
Total motor vehicle manufacturing sales, most of it in Ontario, rose 9.6 per cent to $6.6 billion, their highest level since November 2000.
Nationally, motor vehicle manufacturing accounted for 12.5 per cent of all manufacturing sales in January, a high last reached in 2003, while petroleum and coal products represented just 7.5 per cent of the total, their lowest level since 2004.

For the complete article, please click here

Saturday, March 12, 2016

March Break Multifamilies in Ottawa

Windsor
Steps to Windsor Park
Old Ottawa South location – Hopewell School district
- 6 unit building – legal non-conforming – 4 two bedrooms, 1 one bedroom and 1 bachelor
- parking not being charged
rents under market (2 bedrooms under $1200 monthly)
current cap rate is 4.85% (lots of upside)
asking $1,200,000

Guigues
side by side double (legally separated)
blocks from the Byward Market
separately metered for gas and electric
both 4 bedrooms
tenants pay utilities
5.3% cap rate
asking $699,000

Catherine
Near Kent Street
newly renovated
1 two bedroom, 1 one bedroom, 1 bachelor
6% cap rate 
asking $484,900

Hinton
essentially brand new – gutted and totally rebuilt
less than 10 blocks to Civic Hospital
close to Parkdale Market
separate hydro meters
contemporary style
less than one block to Wellington West and numerous restaurants
3 two bedroom/two bathroom units (four unit can be converted by seller)
5.6% cap rate
asking $1,125,000

Bruyere 
across the street from Bruyere Hospital
2 two bedrooms, 1 one bedroom
well maintained and upgraded
separate hydro
cap rate of 5.3%
asking $775,000

Waverley
amazing Golden Triangle location
large 40 by 99 lot
duplex with 3rd unit
fire retrofitted
3 one bedroom
two furnished suites and one unfurnished
laundry in all units
Cap rate of 5%
asking $854,900

Bell South
located in Glebe Annex
3 one bedrooms and 1 two bedroom
upside of about $100 per unit per month in rents
Graduate student building
future potential to sell as semis (to confirm with city)
5.1% Cap Rate
asking $569,900

Hopewell
Old Ottawa South location
near Carleton
two 3 bedrooms and a 1 bedroom
individual hydro
should be some upside in three bedroom rents ($1751 monthly)
5.5% Cap Rate
asking is $699,000

Contact Greg at the Bennett Property Shop for these great Ottawa real estate investments

Tuesday, March 8, 2016

City's $35M building code reserve fund draws questions

Tuesday's planning committee discussion on the 2016 draft budget was the longest one chair Jan Harder has seen thanks to councillors grilling staff on a reserve fund that now tops $35 million.
The fund is intended to help cover the city's costs of doing building inspections and other Ontario Building Code enforcement in years when revenues from building and demolition permits are down.
The City of Ottawa has been taking in more fees than it needs to cover expenses for enough years that a fund that was worth $21 million five years ago now has $35 million.
"Imagine if you had two years of your household budget sitting in the bank. You'd probably be very okay with that," said Coun. Steven Blais.

Could be stimulus

The money cannot be moved to other branches of the city to cover shortfalls because of provincial legislation, said Blais. Instead, he would like to see the City consider offering short-term rebates on the fees charged for permits.
Although the planning committee frequently discusses large towers downtown, Blais said the vast proportion of development takes place in the suburbs and that work has dropped significantly for small contractors.
Coun. Allan Hubley agreed.
"We've way overcharged. I think we need to take this opportunity and act quickly to provide some sort of stimulus to the industry," he said.
"Maybe we could get some work going by the next season, which would be next spring."
Acting Deputy City Manager John Moser promised a report on the reserve fund and the fee structure by the end of March 2016.
by Kate Porter at CBC

Monday, March 7, 2016

Globe and Mail - first-time buyers turn to condos - TAMSIN MCMAHON

The average first-time buyer in Vancouver now needs more than a decade to save for the minimum down payment on a house under tough new federal mortgage rules, a sign that affordability in Canada’s most expensive cities has reached crisis levels.
But as two new analyses of the housing market make clear, soaring prices of detached houses in Vancouver and Toronto are masking the reality that, for many Canadians, housing has actually become more affordable over the years, spurred by falling interest rates, steady income growth and a surge in condo construction.
In the Vancouver region, where resale house prices jumped nearly 14 per cent last year to more than $950,000, it now takes 109 per cent of median pretax income to afford the costs of a mortgage, property taxes and utilities on a typical detached house, according to a fourth-quarter analysis by Royal Bank of Canada economists Craig Wright and Robert Hogue.
Thanks to surging home prices and stricter down-payment rules for insured mortgages that took effect in the middle of February, the typical first-time buyer in Vancouver would need to save 10 per cent of their pretax income for 132 months – or roughly 11 years – to be able to afford the minimum down payment on a typical house. That’s up from 89.5 months, or about 7.5 years, in the fourth quarter of last year, economists Matthieu Arseneau and Kyle Dahms said in a new housing affordability report by National Bank of Canada.
In Toronto, the average first-time buyer would need to save for 76 months, or more than six years to afford the down payment on a low-rise property. The costs of a detached house now consumes more than 70 per cent of median household income in the city.
Detached houses have now become a luxury in Canada’s two hottest housing markets, the economists say, accessible to only a select group of wealthy buyers, with little hope for prospective buyers that such conditions will change any time soon.
“The single-family home market has become unaffordable and that’s the reality for markets such as Vancouver and Toronto,” National Bank chief economist Stéfane Marion said.
That has pushed many first-time buyers into the condo market, which has actually become more affordable for such buyers because of an abundance of supply. In fact, Toronto and Hamilton are the only two major cities in which condo ownership has become more expensive over the years. In cities such as Edmonton, Winnipeg and Ottawa it is now cheaper to make a mortgage payment on a condo than to pay rent, a trend driven by a boom in new condo construction coupled with weak job markets that have encouraged more prospective first-time buyers to continue renting.
Surprisingly, even buyers in Vancouver are spending slightly less of their income on mortgage payments for condos than they did in the past. Monthly mortgage payments on a typical condo in the Vancouver area cost 33.9 per cent of median pretax income, compared with a long-term average of 35.1 per cent.
“Mostly it’s a situation where supply has been provided to meet demand,” Mr. Marion said. “So we’ve had a situation where even in markets like Vancouver, condo prices have remained relatively stable over the past five years because of incoming supply.”



New federal mortgage rules that doubled the down payment on the portion of a house priced between $500,000 and $1-million mainly affect the market for houses in three cities: Victoria, Vancouver and Toronto. In Vancouver, for instance, a first-time buyer would have to save for roughly 11 years to come up with a down payment, well above the historic average of 61.5 months, or about five years. In Toronto, soaring prices and steeper down payments have added nearly three years to the amount of time needed to save for a house. Meanwhile, in cities such as Calgary, Edmonton and Ottawa, housing affordability is little changed from long-run averages.


No region embodies Canada’s affordable-housing crisis like Vancouver, where it now costs 109 per cent of the city’s median pretax household income to afford a detached house, nearly 60 per cent above the long-term average. Costs have soared nearly 30 per cent over the long-run averages in Toronto, to 71 per cent of income. But while home ownership has become less affordable on a national scale, it has become more affordable in several cities, including Calgary, where the cost of a detached house consumed 38 per cent of household income in the fourth quarter of last year, 10 per cent below the city’s long-term average. 


Even as buyers in Toronto and Vancouver have struggled to get a foothold into the market for detached houses, condos have proved to be an increasingly affordable option for many. A surge of new condo construction has kept resale prices in check in many cities. Coupled with falling interest rates, buyers are now able to spend less of their income to afford a condo than in the past. Nationally, the share of pretax income required to afford a monthly mortgage payment on a condo declined 7 per cent last year from its long-run average. It has fallen even more dramatically in markets such as Calgary, Edmonton and Montreal. 


Conventional wisdom says that Canada’s housing boom has made it more expensive to buy housing in most major cities than to continue renting. But the opposite is true in several Canadian cities. In Edmonton, renting now costs an average of $104 a month more than the typical monthly mortgage payment on a condo. It is a similar story in Winnipeg. In Ottawa, the average monthly rent now costs nearly $200 more than a mortgage payment on a condo. Meanwhile, in cities such as Toronto, Montreal and Vancouver, condo ownership may be more affordable than buying a house, but it still commands a healthy premium to renting. 

Thursday, March 3, 2016

Extra day in leap year causes jump in sales for February

Happy Leap Day!!!

Members of the Ottawa Real Estate Board sold 911 residential properties in February through the Board's Multiple Listing Service® system, compared with 850 in February 2015, an increase of 7.2 per cent. The five-year average for February sales is 908.

"Although the weather was very unpredictable this month, with many highs and lows and several winter storms, the Ottawa resale market only saw activity pick up," says President of the Ottawa Real Estate Board, Shane Silva. "Residential and condo sales combined increased by 52.3 per cent since last month. However, we need to factor in the leap year, which added an extra day to the month of February, and 46 sales on that day."

February's sales included 199 in the condominium property class, and 712 in the residential property class. The condominium property class includes any property, regardless of style (i.e. detached, semi-detached, apartment, townhouse, etc.), which is registered as a condominium, as well as properties which are co-operatives, life leases and timeshares. The residential property class includes all other residential properties.

"In February, 2,312 homes were listed, up 26.6 per cent since January, and inventory on hand at the end of February rose by 10.7 per cent since January," says Silva. "We're starting to see more homes coming onto the market in preparation for the busy spring selling season. If you're thinking of putting your home on the market, this is a great time to do so."

The average sale price of a residential-class property sold in February in the Ottawa area was $384,632, an increase of 1.2 per cent over February 2015. The average sale price for a condominium-class property was $249,727, a decrease of 6.8 per cent over February 2015. The Board cautions that average sale price information can be useful in establishing trends over time but should not be used as an indicator that specific properties have increased or decreased in value. The average sale price is calculated based on the total dollar volume of all properties sold.

"The highest concentration of properties sold continues to be in the $300,000 to $400,000 price range, followed by the $200,000 to $300,000 range," says Silva. "These price ranges continue to have the highest concentration of properties sold - residential and condo - while two-storey, bungalow, and one-level condos have the highest concentration of buyers. In addition to residential and condominium sales, OREB Members assisted clients with renting 414 properties since the beginning of the year."