Family Formation & Housing

For young couples starting families, buying their first home and/or other real estate. Covers mortgages, credit cards, interest rates, children’s education savings plans, joint accounts for couples and the like.

5 ways Real Estate boosts Financial Independence

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By Sia Hasan

Special to the Financial Independence Hub

Gaining financial independence is one of the most difficult propositions. Life is expensive, particularly if you live in a metro area, which is where most of the higher paying jobs are located. As a result, most people save only small amounts of their paychecks or none at all. Clearly, this is not the path to financial independence (aka “Findependence.”).

Thankfully, you don’t have to make a massive salary to become financially independent. There are several methods for building wealth, including starting a business, investing in securities, and investing in real estate. Even if you do the first two already, you need to consider these five ways of increasing your financial independence through real estate.

Real estate investment offers the highest returns for the lowest risk when compared to starting a business or investing in stocks. The reason is that real estate offers five surefire ways to grow your money, known by the acronym IDEAL. By setting a long-term plan to benefit from these five methods of making money in real estate, you are on your way to financial independence.

The IDEAL investment

IDEAL stands for income, depreciation, equity growth, appreciation, and leverage. To succeed in making real estate work as an investment, you need to look beyond your principal residence. Though owning your own home provides appreciation and tax benefits, most people can’t produce income from their principal residence, owners of duplexes and people who rent out spare rooms aside.

1.) Income

When you purchase a rental property, you generate income, provided that you collect enough rent to exceed expenses. With a cash purchase, this is easy. If you finance the purchase, you need to analyze the numbers carefully. Provided you finance the right rental property, you earn a much higher rate of return on the financed property than if you purchased it with cash.

2.) Depreciation

To increase your rental income profits, you need to bone up on the IRS depreciation rules. Because the property is a business investment, you get to deduct all depreciation off of your profits. This saves thousands of dollars in income taxes every year. Continue Reading…

The downsizing dilemma: 39% of homeowners skeptical it will save money

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By Joyce Wayne

Special to the Financial Independence Hub

For older Canadians considering selling a home to retire to a smaller living space or a more affordable community, downsizing might sound like a financial bargain, but in a recent Ipsos survey commissioned by HomeEquity Bank, 39 per cent of current homeowners are skeptical that downsizing will actually save them money.

More than a decade ago, I faced the downsizing dilemma and I now wish I’d been as skeptical as these savvy consumers. I put a considerable down payment on a condo in downtown Toronto, purchasing it from builder’s plans. At the time, I wished to retire from my long-time position as a college professor to launch a new career as a writer.  Selling my home, cashing in on the equity I’d accumulated, while moving to smaller digs, made sense to me.

Yet as 27 per cent of downsizers shared with the Ipsos survey, the costs were more than expected. Expenses from downsizing can add up quickly.

Originally I was attracted by the lure of improving my cash flow to support a new career, but downsizing didn’t net out that way after factoring in all the closing costs and moving expenses along with the disruption to my lifestyle.

Moving away felt like starting all over again: this time in my sixties. The weight of condo living took its toll.

After living in my condo for two years, facing unexpected changes to the original building plan, loud nocturnal noise from other condo dwellers, endless fire drills and my terrace furniture burning up with cigarette butts dropped on my balcony from above, I put the unit on the market.  Once again I was faced with real estate and closing costs. When I purchased a home in my former neighbourhood, I was forced to negotiate a mortgage.

According to an earlier Ipsos survey commissioned by HomeEquity Bank in July 2018, half (51 per cent) of those aged 75+ say it’s important to stay in their current home because they want to keep close to family, friends or their community, while four in ten (40 per cent) say emotional attachment and memories are what’s behind the importance of staying put in their current home during retirement.

What I’d do differently if considering downsizing: Continue Reading…

How to add value to your home before selling

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By Emily Roberts

(Sponsored Content)

Over time, the value of your home can be expected to gradually increase in value, unlike most consumer purchases (like cars), which depreciate from the moment they are acquired.

As long as you’re living in the home, this price appreciation is seldom a gain you can pocket, and in fact, your property taxes may rise as a result. But eventually it should be able to be sold at a solid profit.

When you do decide to finally sell, you will want to get as much money for your home as possible. You will want to get a return on your investment and be able to afford your new home. In this article, we are going to give you some ideas on how you can improve the value of your home before selling. Keep reading if you’d like to find out more.

Build an extension

If you have a lot of space on your property, then you might find that adding an extension to the kitchen or the side of your home might actually make a huge difference to the overall value. Think about how much this could cost you and how much more you might be able to make on your house when you are selling it. People love to have extra space but don’t sacrifice a garden completely for a slightly bigger kitchen.

Add Insulation

If your home is not totally insulated, then you are not saving as much money on monthly bills as you could be. Many people forget to insulate their attics and their sheds, which can consume a lot of energy. Not only will you save yourself money on the bills, but you will also save the new buyer in the long run. Make sure to insulate your home and mention it to potential buyers when they are viewing your home.

Add an outdoor building

If you have some extra space in your garden you should think about investing in an outdoor building, which you can learn more about at Armstrong Steel: one of the most renowned providers. The buildings they provide come pre-made and so all you have to do is assemble them. When you have put it together, you can choose to do whatever you want with it. Continue Reading…

Court decision on sold data access means more transparency for home buyers and sellers

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By Penelope Graham, Zoocasa

Special to the Financial Independence Hub

A seven-year legal battle between the Toronto Real Estate Board (TREB) and Canada’s Competition Tribunal has come to an end, ushering in a new era for Toronto real estate data access.

On August 23rd the Supreme Court of Canada stated it would not hear an appeal from TREB to keep past sold real estate data private, following rulings from both the Tribunal and the Federal Court of Appeal that required it be made available online.

This means TREB’s online brokerage members, such as Zoocasa, are now allowed to display the historical data for individual real estate listings to site users with password-protected accounts. This information includes a home’s original listing price and sale price, its 10-year sales history, and whether it has ever had a terminated listing. Previously, clients could only receive this information once they were under contract with a real estate agent, who could provide it to them over the phone, by fax, or in person.

The move is being widely hailed as a victory, both for those who work in the real estate industry and for prospective buyers and sellers’; but how will it change today’s real estate market?

A boon for Buyers

Perhaps the biggest benefit for buyers will be the improved transparency around home prices. While having access to the data is unlikely to prevent bidding wars, it will mean shoppers will have a better idea of what condos and houses for sale are truly worth before they put in an offer.

It will also decrease price lowballing, a strategy in which sellers list their homes for a much lower amount than they expect to receive. This piques the interest of buyers looking for a great deal, often leading to multiple-offer situations and hyper-inflated prices. It’s an especially common tactic in hot markets, such as on the Toronto or Vancouver MLS, and a constant source of frustration for buyers trying to find homes that are actually within their budgets.

Now, buyers will be able to see what comparable homes are selling for in the same neighbourhood, and whether their desired listing has been priced accurately.

Greater strategy for Sellers

This doesn’t mean sellers will receive the short end of the stick: they’ll now have more information than ever to inform their decision to list. Continue Reading…

Want an affordable neighbourhood with top Schools? Head for the ‘Burbs

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By Penelope Graham, Zoocasa

Special to the Financial Independence Hub

The mantra for real estate shoppers is typically “location, location, location” – but for those with kids in tow, it might as well be “schools, schools, schools.”

For parents, whether or not a home is close to a highly-ranked educational institution is a top consideration, alongside affordability, number of bedrooms, and parking.

In fact, living within a certain school catchment can significantly impact one’s home value: even homes located across the street from one another that are in different school zones may see that difference reflected on their home listing prices.

EQAO school ranking and home price are especially correlated in high-demand urban centres, such as the City of Toronto, where home buyers pay a premium of hundreds of thousands of dollars to live within their coveted catchment.

For example, in Etobicoke, where the top EQAO-ranked school of Lambton Kingsway Junior Middle School boasts a score of 3.2 (out of 4), home buyers would pay a premium of $821,580 to dwell nearby. In York, that premium is $689,178 to live near Humbercrest Public School (3.1), and $444,183 to be close to CD Farquharson Junior Public School in Scarborough (3.3).

Exploring affordability in the Greater Golden Horseshoe

However, those who wish to live close to a top-ranked school at a more affordable price are wise to head to the suburbs: according to recent data compiled by Zoocasa, the correlation between school ranking and average home price isn’t as strong in surrounding Greater Golden Horseshoe markets.

Consider the city of Hamilton, located just west of Toronto along the shores of Lake Ontario. Also known as “Steeltown” or the “Hammer” for its roots as a steel manufacturing centre, it’s now highly sought for its growing “eds and meds” industry; and the fact that detached Hamilton houses with large lots are relatively inexpensive.

Those looking to live close to the best schools have many options in Hamilton; for example, one of the top-ranked schools, Sacred Heart Separate School (2.9) is located in East Hamilton, where the average home price clocks in at $396,964. In upscale Ancaster, where the average home sells for $838,337, is the similarly-ranked Immaculate Conception Elementary School, illustrating similar education standards are available for buyers regardless of home budget.

Mississauga schools among the best

The City of Mississauga is also a great example of a municipality where good schools and real estate affordability go hand in hand. Continue Reading…