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Tips for Turning Your Home Into an Income Property

For years, people across Canada have been turning run down, old properties into money, by transforming homes into income properties. Although most people who watch home renovation or real estate television shows can picture themselves quickly fixing or transforming a property for a financial return, it isn’t always that easy.  If done correctly however, renovating your first home to become an income property can help you pay your mortgage, and in the long run, make you money. Here are some things to consider before you turn your home into an income property:

      Do your research first

Why would you attempt to renovate a home if you aren’t increasing or at least breaking even in the value of the home? If you plan to rent out the home, (the most common form of an income property), make sure you can meet the industry standard, which is to pay back the cost of your renovations within two years rent. If you can meet these two points, you might be ready to renovate.

     Two heads are better than one

If you can, never go it alone. Entering this type of venture with a partner gives you more financial security, allows you to delegate work and tasks, and ultimately, it’s good just to have someone next to you through the highs and lows of the renovation process.

     Budget, re-budget, and prepare to budget again

Once you’ve got a design and a quote from a professional contractor, make sure you plan to have a slush fund available for the unexpected. As a simple rule, the more you do in a home, the more damage or issues you might uncover. Things like faulty electrical, mould, structural issues, or any combination of troubles are not uncommon once you start opening walls. To be safe, make your budget, and then add 25% on top of the quote to help ease the surprise and stress connected to these types of issues.

    Know your choices and make it liveable

Are you going to create a simple basement apartment, split your home into a duplex, or invite multiple tenants by dividing further? Larger spaces will allow you to demand a higher rent, potentially getting you nearer to mortgage free living. At the same time however, you need to make each space liveable. No one wants a bedroom that will only fit a single bed and no furniture, a kitchen with zero counter space, or a bathroom where you’re stepping over the toilet to get to the sink. Your space needs to be easy to rent, and one that will meet the needs to a variety of tenants.

     Make it sound and fireproof

As soon as you welcome tenants into your income property, you’re inviting the risk of annoying sound pollution, and even added fire hazards. This is why when you’re renovating your income property, it’s important to put in quality drywall and other barriers to protect the rest of your home against sound invasion, and to serve as a fire barrier.

    From the outside in

Before you worry about what tile to put down, or what colour to paint the walls, consider the entrance to your income property. Not only is this important in terms of curb appeal, but tenants typically prefer their own, secured, private entrance to a home. Shared entrances are sometimes acceptable as long as no one’s living space overlaps, but a separate, private entrance is ideal. As well, consider the surface of the entrance and safety to avoid complaints, lawsuits, or costly repairs. No one ever wants a tenant to fall down a slippery and dark stairwell on the way to their basement apartment.

There is a lot to consider before you renovate an income property. If done correctly, however, you could be on your way to mortgage free living and a future source of additional income. For more information on mortgage budgeting and real estate investing, contact the mortgage brokers at FamilyLending.ca

Chanteille Kennedy Writer for FamilyLending.ca

Making An Offer To Purchase A Home

As a first-time homebuyer, this is actually the moment you’ve been anticipating. You have discovered a home you love, and today it is time to make a proposal to buy. With all the investment going into this home, it’s a wise idea to leave the construction of your Offer to buy, also referred to as a legal contract of Purchase and Sale, up to your attorney and real estate agent.

Preparing an Offer to Purchase, or Agreement associated with Purchase and Sale, has to be done with proper care, as it is a legal document and also sets the cornerstone for the acquisition of your newhome.

The following are just some of the things you will probably need to consider when composing the Offer to Purchase:

• Your name, the name of the seller, and the accurate address of the purchase property or home. Don’t forget, this needs to be your legitimate name, as an Offer to Purchase is really a legalized document.

• Price offered and also the quantity of deposit you will place down.

• Closing particular date – In the offer to buy, the actual finishing time usually happens 30 to 60 days after the contract has been decided upon, and indicates the day you’ll take ownership of the property. Taking possession and also the “closing date” within an Offer to Purchase also symbolizes the day an individual, as the brand new owner, will be responsible for all maintenance, utilities, property taxes and insurance coverage on the house.

• A request for a current land survey of the home

• Null and Void Time – Each and every Offer to buy must expire. A null and void time is the time allocated for any vendor to take into consideration and reply to your current offer.

• Conditions on the property – Most Offers to Buy include conditions which include mortgage financing, inspection reports, as well as inclusions.

Making a proposal to Purchase often suggests the end to the long process is near. But try not to count your chickens before they hatch! It’s not uncommon to undergo a stage of settlement following your initial Offer to buy. Following this give and take goes away; you’ll be left with the excitement of a new home and the responsibility of a mortgage payment. With regard to help preparing for this financial commitment, get in touch with the mortgage brokers at FamilyLending.ca.

 

Create Value In Your Home

With regards to return on your investment in a home renovation, people always want to know exactly what improvements will raise the value of their property by far the most. The easy answer is, revenue suite, however there are more tactics along with makeovers that have good dollar for dollar return also.

Thinking long-term as well as beating the market industry via well planned house makeovers can produce an increased return. You cannot assume all refurbishments however, will certainly produce precisely the same price. Listed below are the most notable five home refurbishments for return on your investment:

1. Developing accommodations suite
Thinking long-term as a home owner who will choose to improve the overall value of their residence, while probably living mortgage loan free, an income suite, or rental suite has the maximum return on your investment ( ROI ) of all refurbishments for home owners to think about. Actually, the Return on investment of creating accommodations suite can often be 150% to 250%.
2. Painting
Appears simple right? Affordable and easy to complete, painting typically offers a return on your investment of 100%. Choosing natural tones and being attentive to details tend to be key in this chance to further improve your home, and get your money back.
3. Kitchen and Bathroom Renovations
Despite the fact that these are bigger undertakings, bathrooms and kitchens have the possibility to deliver a return on investment between 75% and 100%. The more bathrooms you’ve got in the home the better, and a vibrant, spacious kitchen with a well planned design as well as newer home appliances can get you value for your money.
4. Updated Flooring
Similar to painting, new flooring surfaces will surely have an immediate visible impact and produce fresh life into a house. On average, brand new flooring surfaces can generate in between 70% to 90% return on your investment (ROI). Don’t think you’ll want to spend a fortune on this either. Laminate flooring is tough, simple to put in, and looks fantastic.
5. Doors as well as Lighting
New door hardware and light fixtures may immediately refresh and produce additional value to your home. Generally, custom light fixtures and door hardware bring a return on investment of 60% to 75%. In most cases, these types of improvements should be concentrated in kitchens and eating areas where you have a chance to invigorate an area that will create immediate atmosphere.

Investing in the suitable home makeovers will help lower your monthly payment and enhance the valuation of your property. Get in touch with the investment specialists at FamilyLending.ca today to learn how to take advantage of the value of your property.

 

Things to Consider Before Buying a House

Buying a home is a big investment – both financially and emotionally. Make sure you’re properly prepared by considering the following things prior to submitting a purchase offer.

Your Credit Rating
If you aren’t aware of your credit rating, now is the perfect time to do a little investigating. Making sure your finances are in order is probably the most important step you’ll need to take prior to purchasing a home. Your credit report will play an important role in the mortgage approval process, plus it will also help determine many of your mortgage terms, including the all important interest rate.

Mortgage Types
There are numerous laws and options associated with mortgages. While you don’t need to know all the ins and outs of the mortgage process (there are lawyers for that!) it is important that you understand the different options available to you. From fixed rates to variable arrangements, there are lots of things to consider when deciding on a lender. A professional mortgage broker can help you narrow down your options, but ultimately it’s up to you to determine which lender is best for your needs.

Mortgage Pre-Approval

Being pre-approved for a mortgage can be a huge advantage to any home buyer. Not only does a mortgage pre-approval allow you to better understand and set your budget, it also gives you an advantage when putting in an offer on a property. Sellers have a tendency to favour offers accompanied by proof that a buyer has a mortgage pre-approval from their bank or lender. This shows there is one less obstacle in the transaction process, and could give you the edge to successfully purchasing the home or property you want.

Needs, Wants, and Real Estate Agents

Before you even start looking for homes, sit down and create a well-defined list of needs and wants. Clearly knowing what you need in a home, what you want, and what you get within your budget, will help you and your realtor find an ideal property. Speaking of realtors; before hiring a real estate agent, take the time to understand the particular duties, loyalties, and roles a real estate agent should, and will play in the home buying process

How to Find Your Home

Today, the most obvious tool available in the home search adventure is the internet. There are dozens of quality home search websites in North America that will put photos, amenities, and prices at your fingertips. Just because the Internet is convenient, doesn’t mean you should neglect “old fashioned” methods like driving to visit neighbourhoods, flipping through newspaper ads and classifieds, or grabbing a local real estate magazine.

Time to Make an Offer

One of the most stressful moments for any home buyer is putting in an offer. You’ve got a mortgage pre-approval, you’ve found a home you love; now it’s time to put your money on the table, and sign the papers. As a standard feature to any offer, it’s important to include a home inspection. This protects you against any hidden issues with the structure and construction of a home. Similarly, when it comes to navigating what can often be a long and confusing contract, be sure to have the paperwork checked over by your real estate agent and a lawyer.

Buying a home can be a long and stress-filled event, but if you follow these tips, and do your research before buying a home, you’ll be well prepared, and find a property that meets your unique needs and wants.

Call the Knowledgeable Staff at FamilyLending.ca today to learn more 866-941-6678

Chantielle Kennedy writer for FamilyLending.ca

First Time Home Buyer Mistakes to Avoid

Not Knowing What You Can Afford
What the banks say you can afford, isn’t necessarily what you should spend on your first home. If you don’t already have a budget for your home hunt, now’s the time to start planning. The mortgage brokers at FamilyLending.ca recommend making a list of all of your monthly expenses (excluding rent, of course). Subtract this total from your monthly pay and you’ll have a better understanding of what you can spend on your home every month. You can also use the free mortgage calculators from FamilyLending.ca to help crunch some numbers and chart out your new home expenses.

Skipping Mortgage Pre-Approval
When it comes to setting the budget for your first home, make sure to talk to your mortgage broker about pre-approval. A mortgage pre-approval will help you better understand the expenses associated with your home purchase and could improve your ability to bargain for a property.

 

Forgetting to Consider Expenses

Many first-time home buyers are unaware of the expenses that come along with owning a home. Homeowners are responsible for property taxes, insurance, and unexpected maintenance costs. These expenses can add up quickly and overwhelm underprepared individuals.

 

Being Overly Picky

Having a first-time home buyer wish list is great, but don’t be disappointed when you’re unable to find a property that meets all of your requirements. Compromise is often necessary when you’re looking for a starter home, so remember to be flexible when you’re comparing properties.

Settling Too Soon
While compromise is necessary, it’s worth noting that you should never compromise on important aspects of your property search. Settling for a so-so property may be acceptable for the short-term, but what about your long-term goals and needs?

Shunning DIY Projects
First-time home buyers are often quick to rule out purchasing an older home due to cosmetic issues or dated decor. If you find an older home that meets all of the big ticket items on your list (location, size, layout), don’t let the physical appearance set you off. It’s easy to change out fixtures and tear down wallpaper.

Falling for Finishes
First-time home buyers are better off looking for a home they can add value to, rather than paying more for a home whose full potential has already been realized. This will ensure a bump in equity later on down the real estate ladder.

Bypassing the Inspection
First-time home buyers should never, ever forgo a home inspection. You need to know what kind of shape your property is in and whether or not there are any major issues hidden just below the surface.

Going it Alone
If you’re serious about buying a home, the mortgage brokers at FamilyLending.ca highly recommend hiring a professional real estate agent to aid in your search. Realtors are held to the ethical rule that they must act in your best interest, helping you find the perfect property for your unique needs.

Forgetting About the Future
Purchasing a home is a big financial commitment. Make sure you’re able to handle the expense and budget for the future properly. For more first-time home buyer advice, contact the mortgage brokers and financial experts at FamilyLending.ca today.