The recent boom in BC real estate is getting people excited about real estate investing. Investing in real estate can give you a strong source of income and move you toward financial freedom and the life you have always imagined. Here are 4 key Secrets to buying your first investment property.
- Budget—and Stick to It
One of the most important aspects of investing is ensuring you understand your borrowing limitations. Blindly looking at properties before assessing your finances can be a recipe for disaster. Take the time to meet with a qualified mortgage broker to determine how much you can afford to borrow responsibly before you start shopping.
- Find the Right Property
Once you have a set budget, you can begin looking for a property. It may be tempting to scour the listings on your own, but working with an experienced local realtor will be a great addition to your team. Working with someone who has first-hand experience in investing will help you find the right property, on budget, in the right area, and provide you a higher return.
- Have a Home Inspection Done
Any property you want to purchase should be inspected. Find a licensed home inspector who will point out any potential problems with the property. This can help you avoid costly repairs down the road. Also, if there are minor updates needed to the home, find a contractor who you can trust can put value back into the property when the time comes to sell or rent it out.
- Keep Records of Everything
Keep proper records of income and expenses for your property. Set up a separate, business account so you can easily trace your expenses associated with your real estate investing. This will make tax season and filing a breeze each year. Along the same lines, if you are buying with a partner ensure you have an agreement in place to protect both of you should things not work out as planned. Have your lawyer draft or review the agreement.
As a bonus tip, it is important to take time to build your “investment team”. Finding people that you can trust and work can make a large impact on your success. To build your network come to our Investors Network Seminar on Tuesday August 15. We are a dedicated group of entrepreneurs who can advise and guide you. You also get monthly training about the real estate market, mortgage changes, and much more!
As always, if you have questions or would like to find the right property, give us a call. Young Real Estate Group is here for you!
On July 12, we saw the first rate hike from the Bank of Canada. The rate was raised 0.25% from 0.5% to 0.75%. This was the first increase since September 2010 and more will come this year. What do these increases mean for your fixed or variable rate mortgage?
Your home may be the biggest purchase of your life, and anything that could affect the amount you are paying each month is important.
For a Fixed Rate Mortgage:
- Payments for current homeowners stay the same
- The interest rate on this type of mortgage is fixed so no matter what the Bank of Canada does, your rate will not change until your mortgage is up for renewal.
- Increase at mortgage renewal
- If you are at the end of your mortgages’ term, you will have to renew and your rate will change accordingly. This is not all bad news as the rate that you initially had at the start of your term (typically 5 years) may have been higher than the current rate is—even with the rate increase. To check what your future mortgage payments might be, I suggest using GLM Mortgage Groups’ Mortgage Calculator.
- Higher Rate for Prospective Homebuyers
- First-time home-buyers may have a higher rate if they are applying for a mortgage. Remember that the Bank of Canada will raise their rates in small increments (0.25%) at a time. Also, each increase translates into around $13 per $100k—an increase that most people can afford (though it may mean sacrificing a coffee run or two per week).
Variable Rate Mortgages
- Your Payments Will Increase
- A variable rate mortgage moves up or down with the general level of interest rates in the economy. This recent Bank of Canada hike means your mortgage payments will go up, but the amount you will be paying will be affordable, working out to around $13 per 100k
- Should you switch to a Fixed Rate?
- Deciding to lock into a fixed rate mortgage, depends on your ability to handle an increase in interest rates over time. Historically, borrowers who stay in a Variable Rate Mortgage (VRM) tend to save more money over the course of the term. It is important to make an informed decision and to understand how Variable Rate Mortgages work. Locking into a fixed rate may cost you more money than what an increase in your VRM would be.
The Mortgage Payment Calculator can show an estimated mortgage payment based on a new rate.
So there is no need to panic about these interest rate increases. It is important to stay informed and to budget for them. The effect these increases will have on the real estate market remains to be seen. This increase was the first one since 2010 but as we continue to get information we will keep you updated! If you have any questions, please contact Young Real Estate Group and we can put you in touch with the best professionals out there to help you navigate these mortgage rate changes.
Another month, another market update! The real estate market in the Fraser Valley has remained a seller’s market over the past month. We have seen average home prices rise, sales inventory slightly increase, and multiple bidding wars associated with many listings. To see last month’s stats for comparison please click here.
Here is what we saw this month for inventory, sales, and sales ratio:
Surrey had an inventory of 748 homes with 366 sales. This gives a sales ratio of 49% White Rock/South Surrey had 565 homes listed, with 166 sold. Total sales ratio of 29% North Delta had less inventory at 153 homes listed, but 91 sold giving it a sales ratio of 59%. Following that, Cloverdale had the highest sales ratio at 86% with 103 listings and 89 sales. Langley saw 232 homes listed with 183 Selling and a sales ratio 0f 79% (second highest). In Abbotsford, 288 homes were listed, 209 sold giving a high sales ratio of 73%. Last but not least, Mission had a sales ratio of 61% with 138 homes listed and 84 selling.
The upward trend of prices and low inventory continues to drive the market. Homes are selling quickly and for top dollar making this an excellent time to sell. If you or someone you know is selling, please get in touch with us at Young Real Estate by calling: 604-533-3491, or email email@example.com
Vancouver’s Red Hot Real Estate Market has become a news sensation. It’s in the headlines. It’s on TV. It’s in every other social media post you scroll through in your feed. But the question remains—what is actually happening in the market?
I teamed up with Geoff Lee of GLM Mortgage Group to cover this topic. We are bringing you the stats, the facts, and what you need to do to purchase a home in this crazy market. Click below to read my guest post!
This new program for first time homebuyers called the HOME Partnership Program may be able to help them! In a nutshell the program breaks down as follows:
- Offers qualifying home buyers loans of up to $37,500, interest and payment free, for five years.
- The province has started accepting applications, started on January 16, 2017.
- To qualify, buyers must:
- be buying their first home
- obtain a high-ratio, insured first mortgage for at least 80 per cent of the purchase price
- have a combined gross household income not exceeding $150,000
- have saved a down payment amount at least equal to the loan amount
- be a Canadian citizen or permanent resident for at least five years
- have lived in BC for at least the full year preceding their application.
- The loans will be due in full if the buyer defaults on a payment, ceases to use the home as a principle residence or resells the home.
- The Facts:
- The loans will match a home buyer’s contribution to a down payment up to five per cent of the home’s purchase price
- The maximum purchase price to qualify for a loan is $750,000 (excluding taxes and fees)
- After five years, buyers can either repay their loan or enter into monthly payments at current interest rates
- Loans through the program are due after 25 years.
- The Application:
- Applicate/purchaser applies for loan
- Expected fees are $560.00
- Expected turnaround time is 5 days
- Housing Loan Approval is good for six months *** Pre Approval Certificate is required from a Bank before applying for the BC Housing Loan for Down Payment ***
- Applicants selects a home and writes offer.
- Lender approval and final contract to be sent to BC Housing minimum 14 days prior to closing date
- BC Housing will send instructions to lawyer/notary 4 days before closing date
- Please allow extra time if your client is applying for the program for subject removals.
For easy reference, please view the PDF Flow chart, power point, and scenario’s.
If you or someone you know has questions about this program, please contact me. I would be delighted to help!
The new year will be here before you know it! But there is still time to find your dream home in 2016—and there are 4 reasons why you SHOULD buy before we hit 2017!
- Harder for First Time Home Buyers Increased Government Intervention: With each passing month there seems to be more regulations and interest rate volatility. From the changes on October 17th, to the new one’s coming into effect as of November 30th buyers are seeing a significant impact on their spending ability.
- A Market Rebound will make Buying More Expensive The Real Estate market slowed in Vancouver for the month of October-which is good news for First Time Home Buyers. However, there is the potential of a market rebound occurring, and prices going back up in the new year.
- Segments of our Market are Increasing: Two segments have been growing in the real estate market and will continue to do so in 2017. These two segments are First Time Home Buyers and Baby Boomers looking to downsize. This increase in demand, coupled with a lack of supply, tends to bring higher prices.
- Healthy Inventory of Homes Taper Off in the Winter: The supply of homes for sale is usually fairly low in January and February, making November and December a good time to pick up a new home. Buyers like a higher selection of homes and a lower chance of a bidding war.
The new year and holidays will be here before you know it! Take advantage of the less government intervention, lower pricing, and good supply available right now. This fall and winter could be your time to find the perfect home.
Fall brings about images of brightly coloured trees, warm apple cider, pumpkin everything—and a Home for Sale sign That last one may be a new one for you, but at Young Real Estate we have 5 reasons why Fall is one of the BEST times to sell your home:
- Fall Brings About More Buyers
Fall is the best time to sell because it is right before the holiday season hits full force. Typically we see a drop in the market from December-February, so listing your home just before this hits is optimal to capitalize on a strong potential to sell your home faster and for the optimal price.
- Interest rates are still low but maybe increasing anytime
Interest Rates are always a hot topic, as recent studies show that even a 1% increase in the interest rate could lead to nearly a million Canadians not being able to pay it! The rate has held steady as of late, but rumour continue to surface of changes to come.
- The Competition is Less
There are considerably less homes For Sale at this time of the year the in spring or summer. Fall is a the perfect time to showcase your home and to play into the high demand that the market has been experiencing.
- Rumours of New Mortgage Lending Laws
You may have heard that the BC Government and the Federal Government are introducing new mortgage laws, These new laws have started to come into effect, with the first coming into play on October 17, and are working to SLOW the market—making this fall more than any other time highly desirable to sell before the buyers options become limited!
- Risk of Home Pricing Decreasing in 2017
With new mortgage and lending laws coming into effect with their goal to be to LOWER the price of homes, there is a high likelihood that we will see a drop in prices of homes. This is great for the buyer, but not so great for you the seller! Capitalize on this well the market is HOT and list your home this fall.
If you are considering placing the “For Sale” sign on your home, contact us at Young Real Estate! We would love to help you navigate the changing real estate market and we will work with you to get the best possible price for your home.