Monthly Archives: August 2008

Looking to the 2010 Olympics: Buying a Condo in Whistler

Winter in Whistler

Winter in Whistler

We spent last weekend in Whistler, the future site of the 2010 Winter Olympics. And, despite ugly weather, and a tough slog of a running race around the peak of Whistler Mountain, we found ourselves once again longing for a place to call our own nestled amongst the mountains, the lake and the village.

Before the Start of the 5 Peaks Race in Whistler

Before the Start of the 5 Peaks Race in Whistler

Whistler has a magical feeling for us. We got married there because of it’s magic. It’s a place where you feel yourself relaxing just being there, and yet you feel energized too! It’s a place that is as gorgeous in the winter as it is in the summer, with plenty to do and see no matter what the time of year.

So – what does it take to own a place in this future Olympic host city? And does it make sense from a real estate investing perspective to put your money into a condo in Whistler?

We strolled into the sales office of a new high-end development in Whistler Village and met an agent named Susie Franks who was kind enough to spend an hour with us. Susie gave us the lowdown on buying property in Whistler.

Here are some highlights of what we learned about buying a condo in Whistler:

  • You are not going to get rich from owning a condo in Whistler. Buying in Whistler is more of a lifestyle investment than a money maker. If you buy right, it’s a subsidized way of being able to spend time at a place you call your own in an amazing resort destination. And, over time, I am sure you will see some nice capital appreciation. (Dave is going to do some analysis on this and put it in an upcoming Rev N You with Real Estate article)
  • Around Whistler Village and Blackcomb, properties are zoned Phase 1 or Phase 2. Phase 1 essentially means that the owner has unlimited use of the property, but when it’s not in use by the owner, it must be rented out for nightly rentals. Phase 2 means that the owner can only use the property for 4 weeks in the winter and 4 weeks in the summer. The rest of the time it must be part of the nightly rental pool. Phase 2 buildings are mostly the hotels (Delta, Westin, Four Seasons, etc. and
    Kokanee Crankworx in Whistler Village (2007)

    Kokanee Crankworx in Whistler Village (2007)

    are right in Whistler Village). We focused most of our attention on Phase 1’s because we want a townhome more than a condo unit in a large building, and the maintenance fees on the Phase 2 properties are very high because the units are maintained by the hotel company.

  • Expect to pay 40% for a Property Manager. There are plenty of companies to choose from to do your property management. The property management fee covers the advertising, renting, cleaning and reporting on the revenue/expenses of the property in most cases. You, as an owner, will pay cleaning charges when you use the property yourself but otherwise it’s all included.
  • Prices are coming down – will they go up again before the Olympics? I think the fear that they will drop a lot after the Olympics weighs heavily on any investors mind so it’s quite possible we won’t see another lift. But, who knows? My crystal ball is broken.

If you want to learn more about buying in Whistler, you can sign up for our free monthly newsletter to see what Dave comes up with when he does analysis for our future purchase. Or, you can contact Susie. She was incredibly knowledgeable, friendly, helpful and pressure-free!! She will be our first call when we’re ready to get serious about buying a condo in Whistler.

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The Housing Market in Canada: The Sky Is Falling!

The sky is obviously falling – every paper is filled with doom and gloom headlines! Job cuts, house prices falling, and the increase in foreclosures. And the blogging world is full of doom and gloom for the real estate market.

But, is the sky falling? And more importantly – does it REALLY matter? I’m not going to argue that there hasn’t been a weakening. And, while I am still young, I am not foolish enough to say that we aren’t in for some tougher times. I agree that the market has turned into a Buyer’s market and that you should be more cautious about buying any real estate right now.

BUT – I also feel this is the time to start window shopping. As investors, now is the time to begin to more closely watch the market, and in particular, focus on a location or two to really spend your time getting to know. What’s going to emerge in the next up swing of the cycle as THE place to live?

What can you do now, to be ready to pounce on good deals in a year or two? Start doing your research:

  • Follow the listings: How many listings are for sale in a price range you feel comfortable buying (or you can afford)? For example, if I like what the plans are for development or changes in James Bay area of Victoria, B.C. and I feel it would be a good area to invest in at some point I will start tracking the listings (and sales figures if you can get them) for that area. In August of 2008, maybe there are 250 properties listed for sale in the $300,000 to $350,000 range that I can potentially afford. In another few months, I will check the listings again, using the same search criteria. When you start to notice there are fewer new listings hitting the market and more sales are happening, then it’s time to make your move! I will also note down the addresses of certain properties that I am really interested in. You’d be surprised how often you’ll see the same house come up on MLS in a slow market. Sellers often take it off and put it back on repeatedly trying to keep the listing fresh looking (as the listing notes when it was posted on the site for sale).
  • Track Rent Rates: While I am tracking this information, I would also track rent in those areas and on similar properties. Often in a declining property value market, rents stabilize and often increase as there are more people renting vs. buying. Thus, the supply and demand economics kick in. More renters equals more demand equals less supply (of rental units). This can often push rents up, thus making the properties potentially cashflow better (especially in a declining property value market).
  • Evaluate your money and financing options: Finally, over the time I am researching the market and watching for deals, I am also looking at my down payment and financing options. How much money do I have for my down payment? What are the financing options I have? I do all this now to get ready for, potentially, a quick purchase when I see a great deal.

So, even if the sky is falling on the housing market in Canada, I’m not detered from real estate. In fact, I am getting ready for the shopping season. I am getting ready so I can spot properties in my target areas that have been on the market for 6-12 months and have had several price reductions. When the prices line up with rental rate changes I will be getting very serious about buying!

Real estate investing is simple but it’s not easy. It’s about patience and perserverance. And, it’s also about not about listening to the newspapers and, instead, doing your own research to make decisions based on the fundmentals of an area and of a property.

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Buying a Home in 2015

Buying a Home in the Future - It's Coming Up Quick!

Buying a Home in the Future

Home buying is going to get a lot more interesting in the future. Just imagine typing in the address of the home you are considering purchasing and in one single website learning:

  • There are three houses on that block that have been flagged as rotten neighbours because of trash in their yard, loud parties or regular police visits,
  • There’s a proposal for a new Wal-Mart in the area, or that there’s a local restaurant that just won an award – basically in one quick search you will have access to all the latest news and blogs about that area,
  • Who else is looking to buy in your area, and what other people are saying to them about house hunting in your prospective block. Are there good schools in that area? Do you have easy access to public transportation? No real estate agents involved… just people helping people with their searches.
  • A good estimate of what your prospective property is worth, and what other houses in the area are worth,
  • And of course, listings of other properties in the area to peruse.

There are so many fantastic websites popping up everyday – in a few years someone (Google perhaps?) is going to sit down and do a mashup of the best sites and make the ultimate home buyers shopping site!

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Real Estate Write Offs: Taxes and Weekends

Think that real estate investing is the quick and easy way to become super rich? Have visions of shopping at Holt Renfrew and sipping the finest wines the minute you begin investing? Well, I’m sure there are a few people in the world who claim this is their experience, but it’s not the norm. Expect to spend time, money and sweat building your real estate portfolio. And, while you are writing off your expenses for the tax man, know that you’ll often be writing off your weekends too.

Take this past weekend we spent in Toronto. I had some work to do in Toronto during the week, but for the weekend Dave flew in to meet me. We had a wedding to go to and a lot of friends to visit. It was a mini-vacation… or it could have been if we weren’t real estate investors with a handful of units in Toronto.

Two of our close friends live in and manage a tri-plex we own near Little Italy in Toronto. While visiting them, they mentioned a leak under the sink. When Dave took a quick look he found rotting wood and a definite leak that needed quick attention. Knowing it has to get fixed and that a plumber call on a Saturday would cost us a fortune, Dave set about making the repairs. Thankfully our friends were up for joining us as we went to Home Depot, Rona and then back to Home Depot. And they entertained themselves while we put in a new faucet and prepared dinner in the bathroom sink instead of in the kitchen sink.

Thawing shrimp in the bathroom sink while we fix the kitchen sink

Thawing shrimp in the bathroom sink while we fix the kitchen sink

Dave drying some of the wood that was wet from the sink leak

Dave drying some of the wood that was wet from the sink leak

Sunday had more fun for us as we met with another friend who lives in one of our units at the Toy Factory Lofts in King West in Toronto. She was kind enough to let us wander around her house spotting the deficiencies that still need repair while catching up on life. Afterwards, we stopped for a quick bite to eat and were back to the tri-plex to do yard work… in the rain! It had to get done before we flew back so we were both out there pulling weeds, spreading pine bark and picking trash while the skies showered their liquid sunshine on us. We consoled ourselves with the fact that brunch was a tax write off, and we were able to get a lot of good visiting time in with friends while crossing things off our to-do list at the same time.

It feels really good to have handled a bunch of the issues with our investments that are tough to deal with from Vancouver. And, it’s a nice bonus that our trip expenses are tax write offs because we did spend half our time dealing with our investments*, but I can’t say I want every weekend to be like this. There were definitely moments where I felt like it was the weekend that I was writing off, not our expenses for tax purposes!! But, that’s life as a real estate investor!

*always speak with an accountant about what you can and can’t write off for taxes as there are a lot of rules about what qualifies and what doesn’t.

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Real Estate Investing in Windsor, Ontario

It’s never happened to us before! But, it was bound to happen eventually… Dave and I have three e-mail addresses for our Real Estate Investing website Rev N You with Real Estate. One is a general account that we both check, and the other two are our own where the other one doesn’t access it. We get most of our reader mail to the general account, and unless we feel the other person is better suited to respond, we reply to the reader right then and there.

So what happened? We both responded to the same e-mail at the same time! This poor reader was probably wondering what was going on as “Rev N You” appeared in her inbox twice in five minutes with two totally different emails!! I thought it was worth sharing our reader’s email and what we wrote to her… and maybe you have other ideas to help her?? Or maybe you can just laugh at how different Dave and I think sometimes!

So first, here is our reader’s email about Real Estate Investing in Windsor, Ontario:

Hello,

I really enjoy your informative articles!

You’ve written about affordable and expenses places in a previous article, and I was wondering if you have any information about the Windsor area.

View of Detroit Skyline from Windsor, Ontario, Canada

View of Detroit Skyline from Windsor, Ontario, Canada

I live in Vancouver (expensive) and I’ve noticed that prices for multifamily residential buildings in Windsor are quite attractive (inexpensive). I’ve been investigating the east Windsor area near the university, near the river (east of the Abassador bridge the river side area has been cleaned up and fixed nicely) to buy a multifamily building, but finding a competent realtor to work with me is proving difficult as the ones I have contacted seem unwilling to work through the process of due diligence as are property managers. I think apathy has gripped this city.

Have you written about this area, or siimilar ones, in the past (I couldn’t find it in the archives) or do you know anything about the area improving or will you be addressing these types of cities in a future article?

Any information you can provide is much appreciated.

Thank you,

****

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Dave’s Response to our reader about Real Estate Investing in Windsor:

Thanks so much ****! We are always happy to hear from our readers.

We too live in Vancouver and are very aware of the expensive nature of this city. I am always on the lookout for inexpensive places to buy, but usually inexpensive is that way for a reason. It could be high vacancy rates, high unemployment, small town, no reliable property management, etc. So, of late, we have avoided most of those areas.

Regarding Windsor, we have some good friends that did just what you are thinking. They bought a multi-family near the university and, at the time, thought they had a competent manager. Unfortunately, the manager was really just a realtor who said she also did property management. Well, to make a long story longer, they started to have higher vacancy and the manager wasn’t keeping close tabs on the property. They eventually sold at a loss just to get rid of the headache. Now, this doesn’t mean it will happen to you, but it is a common challenge in places such as Windsor. If you aren’t going to be there to make sure things are going well, it’s IMPERATIVE that you have a professional property manager lined up BEFORE you buy the property.

Regardless of management, Windsor is in a huge downspin. With the auto and manufacturing industries getting hit so hard (and they make-up a huge portion of the labour force there), the city has taken a huge turn for the worse. This, plus the close proximity to Detroit (which shares similar industries), would put it near the bottom of “places to invest in” in my opinion. It will likely take many years before it re-cooperates. But, it comes down to your objectives. It could turn out to be a good place to buy now and hang onto. But, there is huge risk involved with it. In my opinion, you’re better off focusing in a city that is still moving along nicely or could get even better such as Saskatoon, St. John’s, NFLD, or Regina. Again, as long as you get professional property management in place before you buy and continue to do your research on the area (but that’s a whole different topic), you would likely be better off.

We will try to address “picking a city” in an upcoming newsletter.

I hope the above has answered some questions.

Regards and keep on reading Rev N You with Real Estate!

Thanks,

Dave

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Ok, my turn, here’s what I wrote at the same time as Dave was writing our reader, unbeknown to me!

Hi ****,
Thank you for your email. We appreciate the feedback!
We haven’t done any investing in Windsor. I will be honest in saying that it’s because it’s heavy

When I think of Windsor, Ontario I think of the Auto Industry

When I think of Windsor, Ontario I think of the Auto Industry

reliance on the auto sector and exports made me nervous. I always kept Dave from looking too hard there. Your timing could be pretty good though – it’s been a hurting city for awhile with the high dollar and high gas prices. There probably are some good deals to be found there, and if you stick to areas like the University that don’t rely on people in the auto industry to fill your rooms it does sound like a good plan (of course, assuming it cashflows positively from day 1).

As for finding a good realtor – we’ve always found it tough from across the country. I am not sure if people are too lazy or think you aren’t as serious because you’re far away. It’s not impossible, but it’s tough. Referrals work best so I will see if I can get you one! I will check with our property manager in Toronto who is from Windsor. He may have some suggestions or contacts to offer. I also have a couple of other ideas that I want to look into but I need to know how many units are in this building (is it more than 4 – because that will change who I suggest you contact)? Finally, what’s your investing experience level?
I know this isn’t too helpful yet, but let me chat with Dave and our property manager in Toronto and get back to you. I’m off to Toronto next week so you will probably hear from Dave sometime next week with whatever we can dig up for you.
Have a great long weekend.
Julie
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All right – so there you go! It’s never happened before, but there’s the two totally different mindsets Dave and I work with!! 🙂 Neither of us are convinced real estate investing in Windsor is a great idea right now, but if you have other advice for our reader please share it! As we both noted, we haven’t ventured into Windsor with our investments so we don’t really have the contacts or the experience to really help. If you do, we’d love to hear from you.
And, as you may have seen in my e-mail to our reader, I’m off to Toronto for the week, and Dave will be joining me at the end of the week so this is probably all you’ll hear from us this week! I hope you have a good one.

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