tag:blogger.com,1999:blog-64023464877515060412024-03-17T23:01:51.132-04:00INFO Immo-WebVotre source d'informations immobilières!
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Ce Blogue est une veille de nouvelles, articles et blogues sur l'immobilier en général.epaquinhttp://www.blogger.com/profile/01589631138771940331noreply@blogger.comBlogger36247125tag:blogger.com,1999:blog-6402346487751506041.post-4013084957251851102024-03-16T09:19:00.001-04:002024-03-16T09:19:16.482-04:00Crédit immobilier : comment le renégocier ou le faire racheter ?<p>Le rachat de crédit immobilier est une démarche incontournable pour réduire le coût de son prêt. Que ce soit pour profiter de taux plus bas ou simplement améliorer sa situation financière, voici les étapes à suivre […]</p>
<p>L’article <a href="https://info-immo.com/credit-immobilier-renegocier-ou-racheter/">Crédit immobilier : comment le renégocier ou le faire racheter ?</a> est apparu en premier sur <a href="https://info-immo.com"></a>.</p>
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epaquinhttp://www.blogger.com/profile/01589631138771940331noreply@blogger.com0tag:blogger.com,1999:blog-6402346487751506041.post-70900255512119140732024-03-16T08:49:00.001-04:002024-03-16T08:49:46.422-04:00What Independent Business Owners Need to Know Before Leasing a Commercial Space<div class="fusion-fullwidth fullwidth-box fusion-builder-row-1 fusion-flex-container has-pattern-background has-mask-background nonhundred-percent-fullwidth non-hundred-percent-height-scrolling" style="--awb-border-radius-top-left:0px;--awb-border-radius-top-right:0px;--awb-border-radius-bottom-right:0px;--awb-border-radius-bottom-left:0px;--awb-flex-wrap:wrap;">
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<p>Small, independent businesses taking their first steps into the <a href="https://www.remax.ca/commercial" target="_blank" rel="noopener">commercial real estate</a> market can feel like they’re at a disadvantage compared to large-size businesses with deep enough pockets to hire all the resources needed to protect their interests and negotiate the best terms on a commercial space for lease.</p>
<p>But with a bit of study, planning and the right team by their side, small businesses can level up the playing field for the same chance at success.</p>
<h2>First Things First: Learn the Commercial Space for Lease Lingo</h2>
<p>While you don’t need to study like you’re prepping for a bar exam, becoming better-versed in <a href="https://blog.remax.ca/20-terms-you-need-to-understand-before-signing-your-commercial-real-estate-lease/" target="_blank" rel="noopener">common commercial real estate leasing terms</a> and current commercial market trends won’t take much time, but it’ll save you lots of it as you deal with everyone involved in the commercial real estate ecosystem.</p>
<h2>Take Note of Timelines</h2>
<p>A commercial real estate lease for a new business can take up to six months to negotiate. Make sure you factor in this period, plus time for exploring financing and renovating, so you’ll be ready to move in and open on schedule. Add a buffer period to all timelines as well, just to be safe.</p>
<h2>Set Up Your Team</h2>
<p>If your business is successful enough to warrant its own space, you likely have an accountant you already work with who’s created an over-arching budget for your big plan. They’ll need to revise it as you get more detailed information on leasing costs and decide on your lease term.</p>
<p>You’ll also want to add a commercial real estate lawyer who specializes in leasing to assist you in drafting, analyzing and negotiating your agreement so that you can benefit from their experience and an unbiased opinion. If they also have experience with zoning and permitting, you’re gold.</p>
<p>Assuming you’ve done a strategic analysis to find the best location for your business and maybe even scouted out a few areas, you’ll want to enlist the services of a commercial real estate agent. Leasing commercial space is a complex process that can impact your business not just today or tomorrow but well into the future. The right commercial real estate broker will not only work hard to find you the right commercial space for lease but, along with your lawyer, will guide you through the process from start to finish.</p>
<p>Lastly, since most commercial real estate spaces require some sort of renovation before tenants move in, and because you’ll want them alongside your on-site tours and building inspections, you should also draft a preferred contractor onto your roster. If you don’t have one, your commercial real estate agent may have contacts you can interview.</p>
<h3>Do Your Due Diligence</h3>
<p>Research is key to signing the right lease for your business. You can do some of the tasks yourself, but many of them will be resolved quicker if you let your lawyer do the leg work and make time to review their findings afterward.</p>
<p>Key due diligence tasks include:</p>
<ol>
<li>
<h3>Vetting Your Prospective Landlord</h3>
<p>Learning more about your prospective landlord is one of the most important parts of due diligence research that needs to be done but is often overlooked. You’re about to enter an important business partnership together, so it’s imperative to know who they are, what their financial situation is and whether you’ll be able to depend on them.</p>
<p>If your landlord is not the owner of the building you’ll be moving into, it’s doubly important, as your business could end up being evicted in the event of foreclosure – even if you’ve been on time with every payment.</p>
<p>Your lawyer will conduct a public records search to find out more about the landlord and can also request documents related to the landlord’s business entity to accomplish this task.</p>
<p>You can do your part as well by:</p>
<ul>
<li>Interviewing co-tenants regarding landlord relations and responsiveness</li>
<li>Checking to see how well the building and parking lot are maintained</li>
</ul>
</li>
</ol>
<ol start="2">
<li>
<h3>Confirming Zoning</h3>
<p>Before you sign your lease or even shortlist a location, it’s imperative to ensure the <a href="https://blog.remax.ca/how-zoning-issues-can-impact-your-commercial-space/" target="_blank" rel="noopener">zoning</a> is correct for how you want to use the space today and tomorrow. Your commercial real estate agent can help you with this task, as can your lawyer. It’s especially important to review any zoning variances the past tenant might have had, as these may not apply to your business.</p>
</li>
<li>
<h3>Understanding Leasing Basics<strong><br /></strong></h3>
<p>A lease is a legally binding contract that outlines the terms under which one party agrees to rent property from another. It guarantees the lessee (or tenant) the use of an asset and guarantees that the lessor(the property owner or landlord) is entitled to regular payments for a specified period in exchange.</p>
</li>
</ol>
<p>There is no standard commercial lease. However, all leases must contain a description of the leased premises, the duration of the lease and the amount of the rent, and also state:</p>
<ul>
<li>The type of lease</li>
<li>If and how it can be renewed</li>
<li>The rules governing rent increases</li>
<li>The services provided by the landlord</li>
<li>Tenant insurance requirements</li>
<li>Obligations for repair and maintenance</li>
<li>Leasehold improvements to be made and who will pay for them</li>
<li>The amount of the security deposit (if required by the landlord)</li>
</ul>
<p>You can get more information about the differences between a net vs. gross lease here, but in general:</p>
<ul>
<li>In a gross lease, the tenant pays a flat fee that covers their base rent and all incidentals.</li>
<li>In a net lease, the tenant pays a base rent plus certain expenses, depending on the type of lease:
<ul>
<li>In a Single Net (N) lease, the tenant pays base rent and some portion of the property taxes.</li>
<li>In a Double Net (NN) lease, the tenant pays base rent, some portion of the property taxes and some portion of the building insurance.</li>
<li>In a Triple Net (NNN) lease, the tenant pays base rent, some portion of the property taxes, some portion of the building insurance, utilities and may also be responsible for other maintenance fees or operating costs.</li>
</ul>
</li>
</ul>
<ol start="4">
<li>
<h3>Understanding Exactly What You’ll Be Paying For<strong><br /></strong></h3>
<p>Landlords and owners generally try to transfer as many financial obligations as possible to the tenant, no matter the lease type, but everything within a commercial lease is subject to negotiation.</p>
<p>If lease-type definitions cause your head to spin, try using plain language instead. Ask your accountant to create a spreadsheet of costs associated with your final two or three location choices, and ask your landlord for both past bills and upcoming estimates for as many items below as possible, including:</p>
</li>
</ol>
<ul>
<li>Base Rent (TIP: Make sure your landlord uses your premise’s <strong>usable square feet</strong> gross square feet in their calculations.)</li>
<li>Property taxes</li>
<li>Insurance</li>
<li>Maintenance (both interior and exterior)</li>
<li>Utilities (water, gas, electric)</li>
<li>Internet service</li>
<li>Security</li>
<li>Parking</li>
<li>Leasehold improvements (and who will pay for them)</li>
<li>Building repairs (NOTE: these are not usually a tenant’s responsibility)</li>
</ul>
<p>Pay special attention to:</p>
<ul>
<li><strong>Property Taxes</strong>: if you choose a Net lease of any type, you’ll be responsible for at least a portion of these, and if you’re in an up-and-coming area, you could be facing double or even triple-digit year-over-year increases.</li>
<li><strong>Leasehold Improvements</strong>: As your business moves, the leasehold improvements you make will typically stay with the building, adding to its value in the future. If your business bears all the costs for these, you’re essentially paying for the right to help your landlord make more profit when they lease or sell the building later.</li>
<li><strong>Lease Holdover Rate: if you</strong> overstay your lease term, your monthly rent could increase to double or more than your current monthly rent. Aim for no more than 125% of your monthly rent or lower if you can.</li>
</ul>
<ol start="5">
<li>
<h3>Cap Costs Where You Can<strong><br /></strong></h3>
<p>To minimize negative outcomes, try to negotiate a cap on the number of increases in rent, property taxes and common area fees within certain ranges based on historical costs.</p>
</li>
<li>
<h3>Negotiate Until You Get it Right<strong><br /></strong></h3>
<p>Make sure your commercial real estate agent and lawyer let your landlord know theirs isn’t the only property on your shortlist, so the landlord is incentivized to add tenant inducements such as a period of free or reduced rent, plus complete or partial payments for leasehold improvements.</p>
</li>
<li>
<h3>Find Out About Financing</h3>
<p>Financing is available to cover everything from leasehold improvements and equipment purchases to moving expenses and marketing. Consider increasing your line of credit as well, so you’ll have added cash on hand.</p>
<p>Lastly, ask your landlord if they offer vendor financing. Building owners and landlords may offer it to seal the deal with a prospective tenant whose reputation they know will cause others to commit or whose business is especially solid.</p>
</li>
<li>
<h3>Getting Set to Open Your Doors<strong><br /></strong></h3>
<p>In many municipalities, a license or occupancy certificate is required to open a business or industrial facility. Make sure you get any such documents before you sign your lease.</p>
</li>
</ol>
<p>And remember, before you sign any commercial real estate lease agreement, be sure you understand both its terms and the financial implications for your business – now and in the future. Have your lawyer, commercial real estate agent and accountant thoroughly review it, then sign away.</p>
</div>
</div>
</div>
</div>
</div>
<p>The post <a href="https://blog.remax.ca/what-independent-business-owners-need-to-know-before-leasing-a-commercial-space/">What Independent Business Owners Need to Know Before Leasing a Commercial Space</a> appeared first on <a href="https://blog.remax.ca">RE/MAX Canada</a>.</p>
<br />
<br />
<br />
from RE/MAX Canada https://ift.tt/C3pfcbL<br />
RE/MAX Canada
epaquinhttp://www.blogger.com/profile/01589631138771940331noreply@blogger.com0tag:blogger.com,1999:blog-6402346487751506041.post-23029905270961233932024-03-16T08:46:00.001-04:002024-03-16T08:46:18.315-04:00What Independent Business Owners Need to Know Before Leasing a Commercial Space<div class="fusion-fullwidth fullwidth-box fusion-builder-row-1 fusion-flex-container has-pattern-background has-mask-background nonhundred-percent-fullwidth non-hundred-percent-height-scrolling" style="--awb-border-radius-top-left:0px;--awb-border-radius-top-right:0px;--awb-border-radius-bottom-right:0px;--awb-border-radius-bottom-left:0px;--awb-flex-wrap:wrap;">
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<div class="fusion-layout-column fusion_builder_column fusion-builder-column-0 fusion_builder_column_1_1 1_1 fusion-flex-column" style="--awb-bg-size:cover;--awb-width-large:100%;--awb-margin-top-large:0px;--awb-spacing-right-large:1.92%;--awb-margin-bottom-large:20px;--awb-spacing-left-large:1.92%;--awb-width-medium:100%;--awb-order-medium:0;--awb-spacing-right-medium:1.92%;--awb-spacing-left-medium:1.92%;--awb-width-small:100%;--awb-order-small:0;--awb-spacing-right-small:1.92%;--awb-spacing-left-small:1.92%;">
<div class="fusion-column-wrapper fusion-column-has-shadow fusion-flex-justify-content-flex-start fusion-content-layout-column">
<div class="fusion-text fusion-text-1">
<p>Small, independent businesses taking their first steps into the <a href="https://www.remax.ca/commercial" target="_blank" rel="noopener">commercial real estate</a> market can feel like they’re at a disadvantage compared to large-size businesses with deep enough pockets to hire all the resources needed to protect their interests and negotiate the best terms on a commercial space for lease.</p>
<p>But with a bit of study, planning and the right team by their side, small businesses can level up the playing field for the same chance at success.</p>
<h2>First Things First: Learn the Commercial Space for Lease Lingo</h2>
<p>While you don’t need to study like you’re prepping for a bar exam, becoming better-versed in <a href="https://blog.remax.ca/20-terms-you-need-to-understand-before-signing-your-commercial-real-estate-lease/" target="_blank" rel="noopener">common commercial real estate leasing terms</a> and current commercial market trends won’t take much time, but it’ll save you lots of it as you deal with everyone involved in the commercial real estate ecosystem.</p>
<h2>Take Note of Timelines</h2>
<p>A commercial real estate lease for a new business can take up to six months to negotiate. Make sure you factor in this period, plus time for exploring financing and renovating, so you’ll be ready to move in and open on schedule. Add a buffer period to all timelines as well, just to be safe.</p>
<h2>Set Up Your Team</h2>
<p>If your business is successful enough to warrant its own space, you likely have an accountant you already work with who’s created an over-arching budget for your big plan. They’ll need to revise it as you get more detailed information on leasing costs and decide on your lease term.</p>
<p>You’ll also want to add a commercial real estate lawyer who specializes in leasing to assist you in drafting, analyzing and negotiating your agreement so that you can benefit from their experience and an unbiased opinion. If they also have experience with zoning and permitting, you’re gold.</p>
<p>Assuming you’ve done a strategic analysis to find the best location for your business and maybe even scouted out a few areas, you’ll want to enlist the services of a commercial real estate agent. Leasing commercial space is a complex process that can impact your business not just today or tomorrow but well into the future. The right commercial real estate broker will not only work hard to find you the right commercial space for lease but, along with your lawyer, will guide you through the process from start to finish.</p>
<p>Lastly, since most commercial real estate spaces require some sort of renovation before tenants move in, and because you’ll want them alongside your on-site tours and building inspections, you should also draft a preferred contractor onto your roster. If you don’t have one, your commercial real estate agent may have contacts you can interview.</p>
<h3>Do Your Due Diligence</h3>
<p>Research is key to signing the right lease for your business. You can do some of the tasks yourself, but many of them will be resolved quicker if you let your lawyer do the leg work and make time to review their findings afterward.</p>
<p>Key due diligence tasks include:</p>
<ol>
<li>
<h3>Vetting Your Prospective Landlord</h3>
<p>Learning more about your prospective landlord is one of the most important parts of due diligence research that needs to be done but is often overlooked. You’re about to enter an important business partnership together, so it’s imperative to know who they are, what their financial situation is and whether you’ll be able to depend on them.</p>
<p>If your landlord is not the owner of the building you’ll be moving into, it’s doubly important, as your business could end up being evicted in the event of foreclosure – even if you’ve been on time with every payment.</p>
<p>Your lawyer will conduct a public records search to find out more about the landlord and can also request documents related to the landlord’s business entity to accomplish this task.</p>
<p>You can do your part as well by:</p>
<ul>
<li>Interviewing co-tenants regarding landlord relations and responsiveness</li>
<li>Checking to see how well the building and parking lot are maintained</li>
</ul>
</li>
</ol>
<ol start="2">
<li>
<h3>Confirming Zoning</h3>
<p>Before you sign your lease or even shortlist a location, it’s imperative to ensure the <a href="https://blog.remax.ca/how-zoning-issues-can-impact-your-commercial-space/" target="_blank" rel="noopener">zoning</a> is correct for how you want to use the space today and tomorrow. Your commercial real estate agent can help you with this task, as can your lawyer. It’s especially important to review any zoning variances the past tenant might have had, as these may not apply to your business.</p>
</li>
<li>
<h3>Understanding Leasing Basics<strong><br /></strong></h3>
<p>A lease is a legally binding contract that outlines the terms under which one party agrees to rent property from another. It guarantees the lessee (or tenant) the use of an asset and guarantees that the lessor(the property owner or landlord) is entitled to regular payments for a specified period in exchange.</p>
</li>
</ol>
<p>There is no standard commercial lease. However, all leases must contain a description of the leased premises, the duration of the lease and the amount of the rent, and also state:</p>
<ul>
<li>The type of lease</li>
<li>If and how it can be renewed</li>
<li>The rules governing rent increases</li>
<li>The services provided by the landlord</li>
<li>Tenant insurance requirements</li>
<li>Obligations for repair and maintenance</li>
<li>Leasehold improvements to be made and who will pay for them</li>
<li>The amount of the security deposit (if required by the landlord)</li>
</ul>
<p>You can get more information about the differences between a net vs. gross lease here, but in general:</p>
<ul>
<li>In a gross lease, the tenant pays a flat fee that covers their base rent and all incidentals.</li>
<li>In a net lease, the tenant pays a base rent plus certain expenses, depending on the type of lease:
<ul>
<li>In a Single Net (N) lease, the tenant pays base rent and some portion of the property taxes.</li>
<li>In a Double Net (NN) lease, the tenant pays base rent, some portion of the property taxes and some portion of the building insurance.</li>
<li>In a Triple Net (NNN) lease, the tenant pays base rent, some portion of the property taxes, some portion of the building insurance, utilities and may also be responsible for other maintenance fees or operating costs.</li>
</ul>
</li>
</ul>
<ol start="4">
<li>
<h3>Understanding Exactly What You’ll Be Paying For<strong><br /></strong></h3>
<p>Landlords and owners generally try to transfer as many financial obligations as possible to the tenant, no matter the lease type, but everything within a commercial lease is subject to negotiation.</p>
<p>If lease-type definitions cause your head to spin, try using plain language instead. Ask your accountant to create a spreadsheet of costs associated with your final two or three location choices, and ask your landlord for both past bills and upcoming estimates for as many items below as possible, including:</p>
</li>
</ol>
<ul>
<li>Base Rent (TIP: Make sure your landlord uses your premise’s <strong>usable square feet</strong> gross square feet in their calculations.)</li>
<li>Property taxes</li>
<li>Insurance</li>
<li>Maintenance (both interior and exterior)</li>
<li>Utilities (water, gas, electric)</li>
<li>Internet service</li>
<li>Security</li>
<li>Parking</li>
<li>Leasehold improvements (and who will pay for them)</li>
<li>Building repairs (NOTE: these are not usually a tenant’s responsibility)</li>
</ul>
<p>Pay special attention to:</p>
<ul>
<li><strong>Property Taxes</strong>: if you choose a Net lease of any type, you’ll be responsible for at least a portion of these, and if you’re in an up-and-coming area, you could be facing double or even triple-digit year-over-year increases.</li>
<li><strong>Leasehold Improvements</strong>: As your business moves, the leasehold improvements you make will typically stay with the building, adding to its value in the future. If your business bears all the costs for these, you’re essentially paying for the right to help your landlord make more profit when they lease or sell the building later.</li>
<li><strong>Lease Holdover Rate: if you</strong> overstay your lease term, your monthly rent could increase to double or more than your current monthly rent. Aim for no more than 125% of your monthly rent or lower if you can.</li>
</ul>
<ol start="5">
<li>
<h3>Cap Costs Where You Can<strong><br /></strong></h3>
<p>To minimize negative outcomes, try to negotiate a cap on the number of increases in rent, property taxes and common area fees within certain ranges based on historical costs.</p>
</li>
<li>
<h3>Negotiate Until You Get it Right<strong><br /></strong></h3>
<p>Make sure your commercial real estate agent and lawyer let your landlord know theirs isn’t the only property on your shortlist, so the landlord is incentivized to add tenant inducements such as a period of free or reduced rent, plus complete or partial payments for leasehold improvements.</p>
</li>
<li>
<h3>Find Out About Financing</h3>
<p>Financing is available to cover everything from leasehold improvements and equipment purchases to moving expenses and marketing. Consider increasing your line of credit as well, so you’ll have added cash on hand.</p>
<p>Lastly, ask your landlord if they offer vendor financing. Building owners and landlords may offer it to seal the deal with a prospective tenant whose reputation they know will cause others to commit or whose business is especially solid.</p>
</li>
<li>
<h3>Getting Set to Open Your Doors<strong><br /></strong></h3>
<p>In many municipalities, a license or occupancy certificate is required to open a business or industrial facility. Make sure you get any such documents before you sign your lease.</p>
</li>
</ol>
<p>And remember, before you sign any commercial real estate lease agreement, be sure you understand both its terms and the financial implications for your business – now and in the future. Have your lawyer, commercial real estate agent and accountant thoroughly review it, then sign away.</p>
</div>
</div>
</div>
</div>
</div>
<p>The post <a href="https://blog.remax.ca/what-independent-business-owners-need-to-know-before-leasing-a-commercial-space/">What Independent Business Owners Need to Know Before Leasing a Commercial Space</a> appeared first on <a href="https://blog.remax.ca">RE/MAX Canada</a>.</p>
<br />
<br />
from RE/MAX Canada https://ift.tt/C3pfcbL<br />
RE/MAX Canada
epaquinhttp://www.blogger.com/profile/01589631138771940331noreply@blogger.com0tag:blogger.com,1999:blog-6402346487751506041.post-61516040546813948072024-03-15T10:36:00.001-04:002024-03-15T10:36:20.036-04:00What It Means to Be House Poor – and How to Avoid It<div class="fusion-fullwidth fullwidth-box fusion-builder-row-1 fusion-flex-container nonhundred-percent-fullwidth non-hundred-percent-height-scrolling" style="--awb-border-radius-top-left:0px;--awb-border-radius-top-right:0px;--awb-border-radius-bottom-right:0px;--awb-border-radius-bottom-left:0px;--awb-flex-wrap:wrap;">
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<div class="fusion-layout-column fusion_builder_column fusion-builder-column-0 fusion_builder_column_1_1 1_1 fusion-flex-column" style="--awb-bg-size:cover;--awb-width-large:100%;--awb-margin-top-large:0px;--awb-spacing-right-large:1.92%;--awb-margin-bottom-large:20px;--awb-spacing-left-large:1.92%;--awb-width-medium:100%;--awb-order-medium:0;--awb-spacing-right-medium:1.92%;--awb-spacing-left-medium:1.92%;--awb-width-small:100%;--awb-order-small:0;--awb-spacing-right-small:1.92%;--awb-spacing-left-small:1.92%;">
<div class="fusion-column-wrapper fusion-column-has-shadow fusion-flex-justify-content-flex-start fusion-content-layout-column">
<div class="fusion-text fusion-text-1">
<p>You’ve got your mortgage pre-approval, and you’re shopping the market for your perfect home. If you find one that’s priced too close to your limit, you run the risk of being house-poor. Let’s look at what it is, what you can do to avoid it, and what to do if you are already house-poor.</p>
<h2>The Costs of Owning a Home</h2>
<p>When you begin the process of looking for a home, you may think that the amount in your <a href="https://blog.remax.ca/how-to-increase-your-mortgage-pre-approval-amount/" target="_blank" rel="noopener">pre-approval</a> letter and the house sale price are the only things that matter, but that’s not the case. There are several other costs associated with buying and maintaining a home that people often overlook:</p>
<p><strong>Utilities – </strong>Your home needs water, electricity, and natural gas to run. You may also require utilities like internet and possibly city services like garbage pickup. Utilities are not factored into a mortgage payment, so you need to add them to your monthly budget or risk having your services turned off.</p>
<p><strong>Property taxes – </strong>Sometimes <a href="https://blog.remax.ca/should-you-pay-property-taxes-through-your-mortgage/" target="_blank" rel="noopener">property taxes are included in a mortgage payment</a>, but sometimes they are not. If it is not included, you can visit the website for the property tax authority where you live and enter your home’s address to find out how much your property taxes will be every year.</p>
<p><strong>Maintenance – </strong>It might not be tomorrow or the next day, but eventually, something will break in your home, and it will be up to you to repair or replace it. A new home likely won’t have this issue immediately, but if you live in an older home, it’s crucial that you maintain an emergency fund for the inevitable upkeep of the house.</p>
<p><strong>Mortgage interest –</strong> If you have been following the mortgage rates as of late, then you are likely aware of the volatility in interest rates. Whether you hold an adjustable-rate mortgage or it is time to renew your conventional fixed-rate mortgage, you will need to understand that there is a chance you could pay more throughout the life of the mortgage.</p>
<h2>The 32% Rule</h2>
<p>Being house-poor means that you spend a large portion of your income on your mortgage and other housing expenses, leaving little for other costs. Canada Mortgage and Housing Corporation recommends spending no more than 32 per cent of your pre-tax income on housing expenses. To determine this number in your own circumstances, multiply your annual salary by 0.32. If you spend that amount or less on your home, then you should be in good shape. If you spend much more on housing, then you might be house-poor.</p>
<h2>How to Determine Being House Poor</h2>
<p>Are you unsure if you are house-poor? If so, the best way to figure it out is by calculating your debt-to-income (DTI) ratio. In other words, you can measure your earnings compared to your obligations by taking your monthly debt payments and dividing it by your income.</p>
<p>Here are two types of DTI ratios:</p>
<ul>
<li><strong>Front-End</strong>: This is the per centage of your major housing costs made up of your monthly gross income. Add your home expenses, divide by how much you make every month before taxes, and multiply the tally by 100.</li>
<li><strong>Back-End</strong>: This considers all of your debts that go beyond housing and compares every minimum monthly payment to your monthly income.</li>
</ul>
<h2>Avoiding Being House Poor</h2>
<p>Being house-poor can happen for any number of reasons. It could be that you did not take the extra expenses into account. Or perhaps there was a significant drop in income, making for a tight budget. Here are a few tricks to avoid becoming house-poor:</p>
<p><strong>Budget ahead of time.</strong> Let’s be honest: acquiring a residential property is the most significant purchasing decision of your lifetime. You cannot be cavalier about it. Therefore, if this is your long-term objective, you will need to budget far in advance of the move-in date. Financial experts say to apply the 28 per cent rule: Set aside 28 per cent of your monthly income and put it in a high-interest savings account.</p>
<p><strong>Erase your debts.</strong> Is this easier said than done? Perhaps. However, a mortgage will be your largest debt for the next 15, 20, or 25 years. As a result, you will want to decrease or eliminate your debt holdings to ensure you can maintain a mortgage while avoiding becoming house-poor. This can usually be done in various ways, including cutting back on non-essential expenses, consolidating your debts, and exploring other ways to earn money.</p>
<p><strong>Make a larger </strong><a href="https://blog.remax.ca/how-much-is-a-down-payment-on-a-house/" target="_blank" rel="noopener"><strong>down payment</strong></a><strong> on the home. </strong>Not only will this give you more equity in your home, but it will make your mortgage payments smaller and save you thousands over the life of the mortgage.</p>
<p><strong>Purchase a home that is less than your mortgage pre-approval amount. </strong>It may not be your dream home, but a smaller home will be more affordable. You can always upsize to a larger home when you’re financially ready.</p>
<p><strong>Keep an emergency fund. </strong>You can never predict when something will break or if there might be a temporary or permanent income change. A dedicated emergency fund that is otherwise untouched could be the difference between living comfortably through a challenging time or being house-poor.</p>
<p><strong>Skip adjustable-rate mortgages.</strong> While it might seem like adjustable-rate mortgages provide you with lower interest rates at the onset, they can typically lead to volatile monthly payments, making it harder to budget month to month. A fixed-rate mortgage provides more stability and ensures you accurately budget for the coming months.</p>
<p><strong>Don’t fall for life inflation.</strong> When workers receive pay raises, they will adjust their living standards accordingly. This can be tempting, and many people fall into this trap, but you are better off dedicating the extra earnings to savings or your mortgage. This is one of the best ways to avoid being house-poor as you are preparing your household for income changes (good or bad).</p>
<h2>What to Do If You Are Currently House Poor</h2>
<p>If you have crunched the numbers and figured out that you are already house-poor, don’t panic. There are actions you can take to alleviate some of the stress and perhaps get you out of the poor house.</p>
<p><strong>Get a second job. </strong>This is not always a practical action, especially if there are children in the picture, but a second job could give you the funds you need to keep your home and your lifestyle at their current level. Even a few hours a week at a part-time job or engaging in the “gig economy” can make a difference.</p>
<p><strong>Find a roommate. </strong>Charging rent can increase your income, plus a renter will often pay for part of the utilities. If you don’t want someone living in your home permanently, you could consider renting out a room on Airbnb.</p>
<p><strong>Trim your discretionary spending.</strong> This recommendation involves cutting your spending on a wide range of non-essential activities, such as visiting restaurants, heading to the local movie theatre, and travelling to exotic destinations. Instead of eating out three times a week, reduce it to twice and cook a nice meal at home. Or, rather than see the latest blockbuster at the cineplex, wait until it pops up on a streaming platform.</p>
<p><strong>Dip into savings.</strong> This can be a hard financial decision, but using some of your rainy-day savings should be an option to help cover some of your monthly mortgage payments. It should be noted that this is not a long-term solution, but it can plug a gaping fiscal hole in the short term.</p>
<p><strong>Refinance or downsize. </strong>If all else fails, it might be time to consider moving into a smaller home that will work better within your budget.</p>
<p>Being house-poor is a life circumstance that is stressful and avoidable. Do your research to ensure that you can afford home ownership, and take the steps necessary to get out of the situation if you find yourself house-poor.</p>
</div>
</div>
</div>
</div>
</div>
<p>The post <a href="https://blog.remax.ca/what-it-means-to-be-house-poor-and-how-to-avoid-it/">What It Means to Be House Poor – and How to Avoid It</a> appeared first on <a href="https://blog.remax.ca">RE/MAX Canada</a>.</p>
<br />
<br />
from RE/MAX Canada https://ift.tt/pm4KlfD<br />
RE/MAX Canada
epaquinhttp://www.blogger.com/profile/01589631138771940331noreply@blogger.com0tag:blogger.com,1999:blog-6402346487751506041.post-48853540231656678782024-03-15T10:34:00.001-04:002024-03-15T10:34:52.145-04:00What It Means to Be House Poor – and How to Avoid It<div class="fusion-fullwidth fullwidth-box fusion-builder-row-1 fusion-flex-container nonhundred-percent-fullwidth non-hundred-percent-height-scrolling" style="--awb-border-radius-top-left:0px;--awb-border-radius-top-right:0px;--awb-border-radius-bottom-right:0px;--awb-border-radius-bottom-left:0px;--awb-flex-wrap:wrap;">
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<p>You’ve got your mortgage pre-approval, and you’re shopping the market for your perfect home. If you find one that’s priced too close to your limit, you run the risk of being house-poor. Let’s look at what it is, what you can do to avoid it, and what to do if you are already house-poor.</p>
<h2>The Costs of Owning a Home</h2>
<p>When you begin the process of looking for a home, you may think that the amount in your <a href="https://blog.remax.ca/how-to-increase-your-mortgage-pre-approval-amount/" target="_blank" rel="noopener">pre-approval</a> letter and the house sale price are the only things that matter, but that’s not the case. There are several other costs associated with buying and maintaining a home that people often overlook:</p>
<p><strong>Utilities – </strong>Your home needs water, electricity, and natural gas to run. You may also require utilities like internet and possibly city services like garbage pickup. Utilities are not factored into a mortgage payment, so you need to add them to your monthly budget or risk having your services turned off.</p>
<p><strong>Property taxes – </strong>Sometimes <a href="https://blog.remax.ca/should-you-pay-property-taxes-through-your-mortgage/" target="_blank" rel="noopener">property taxes are included in a mortgage payment</a>, but sometimes they are not. If it is not included, you can visit the website for the property tax authority where you live and enter your home’s address to find out how much your property taxes will be every year.</p>
<p><strong>Maintenance – </strong>It might not be tomorrow or the next day, but eventually, something will break in your home, and it will be up to you to repair or replace it. A new home likely won’t have this issue immediately, but if you live in an older home, it’s crucial that you maintain an emergency fund for the inevitable upkeep of the house.</p>
<p><strong>Mortgage interest –</strong> If you have been following the mortgage rates as of late, then you are likely aware of the volatility in interest rates. Whether you hold an adjustable-rate mortgage or it is time to renew your conventional fixed-rate mortgage, you will need to understand that there is a chance you could pay more throughout the life of the mortgage.</p>
<h2>The 32% Rule</h2>
<p>Being house-poor means that you spend a large portion of your income on your mortgage and other housing expenses, leaving little for other costs. Canada Mortgage and Housing Corporation recommends spending no more than 32 per cent of your pre-tax income on housing expenses. To determine this number in your own circumstances, multiply your annual salary by 0.32. If you spend that amount or less on your home, then you should be in good shape. If you spend much more on housing, then you might be house-poor.</p>
<h2>How to Determine Being House Poor</h2>
<p>Are you unsure if you are house-poor? If so, the best way to figure it out is by calculating your debt-to-income (DTI) ratio. In other words, you can measure your earnings compared to your obligations by taking your monthly debt payments and dividing it by your income.</p>
<p>Here are two types of DTI ratios:</p>
<ul>
<li><strong>Front-End</strong>: This is the per centage of your major housing costs made up of your monthly gross income. Add your home expenses, divide by how much you make every month before taxes, and multiply the tally by 100.</li>
<li><strong>Back-End</strong>: This considers all of your debts that go beyond housing and compares every minimum monthly payment to your monthly income.</li>
</ul>
<h2>Avoiding Being House Poor</h2>
<p>Being house-poor can happen for any number of reasons. It could be that you did not take the extra expenses into account. Or perhaps there was a significant drop in income, making for a tight budget. Here are a few tricks to avoid becoming house-poor:</p>
<p><strong>Budget ahead of time.</strong> Let’s be honest: acquiring a residential property is the most significant purchasing decision of your lifetime. You cannot be cavalier about it. Therefore, if this is your long-term objective, you will need to budget far in advance of the move-in date. Financial experts say to apply the 28 per cent rule: Set aside 28 per cent of your monthly income and put it in a high-interest savings account.</p>
<p><strong>Erase your debts.</strong> Is this easier said than done? Perhaps. However, a mortgage will be your largest debt for the next 15, 20, or 25 years. As a result, you will want to decrease or eliminate your debt holdings to ensure you can maintain a mortgage while avoiding becoming house-poor. This can usually be done in various ways, including cutting back on non-essential expenses, consolidating your debts, and exploring other ways to earn money.</p>
<p><strong>Make a larger </strong><a href="https://blog.remax.ca/how-much-is-a-down-payment-on-a-house/" target="_blank" rel="noopener"><strong>down payment</strong></a><strong> on the home. </strong>Not only will this give you more equity in your home, but it will make your mortgage payments smaller and save you thousands over the life of the mortgage.</p>
<p><strong>Purchase a home that is less than your mortgage pre-approval amount. </strong>It may not be your dream home, but a smaller home will be more affordable. You can always upsize to a larger home when you’re financially ready.</p>
<p><strong>Keep an emergency fund. </strong>You can never predict when something will break or if there might be a temporary or permanent income change. A dedicated emergency fund that is otherwise untouched could be the difference between living comfortably through a challenging time or being house-poor.</p>
<p><strong>Skip adjustable-rate mortgages.</strong> While it might seem like adjustable-rate mortgages provide you with lower interest rates at the onset, they can typically lead to volatile monthly payments, making it harder to budget month to month. A fixed-rate mortgage provides more stability and ensures you accurately budget for the coming months.</p>
<p><strong>Don’t fall for life inflation.</strong> When workers receive pay raises, they will adjust their living standards accordingly. This can be tempting, and many people fall into this trap, but you are better off dedicating the extra earnings to savings or your mortgage. This is one of the best ways to avoid being house-poor as you are preparing your household for income changes (good or bad).</p>
<h2>What to Do If You Are Currently House Poor</h2>
<p>If you have crunched the numbers and figured out that you are already house-poor, don’t panic. There are actions you can take to alleviate some of the stress and perhaps get you out of the poor house.</p>
<p><strong>Get a second job. </strong>This is not always a practical action, especially if there are children in the picture, but a second job could give you the funds you need to keep your home and your lifestyle at their current level. Even a few hours a week at a part-time job or engaging in the “gig economy” can make a difference.</p>
<p><strong>Find a roommate. </strong>Charging rent can increase your income, plus a renter will often pay for part of the utilities. If you don’t want someone living in your home permanently, you could consider renting out a room on Airbnb.</p>
<p><strong>Trim your discretionary spending.</strong> This recommendation involves cutting your spending on a wide range of non-essential activities, such as visiting restaurants, heading to the local movie theatre, and travelling to exotic destinations. Instead of eating out three times a week, reduce it to twice and cook a nice meal at home. Or, rather than see the latest blockbuster at the cineplex, wait until it pops up on a streaming platform.</p>
<p><strong>Dip into savings.</strong> This can be a hard financial decision, but using some of your rainy-day savings should be an option to help cover some of your monthly mortgage payments. It should be noted that this is not a long-term solution, but it can plug a gaping fiscal hole in the short term.</p>
<p><strong>Refinance or downsize. </strong>If all else fails, it might be time to consider moving into a smaller home that will work better within your budget.</p>
<p>Being house-poor is a life circumstance that is stressful and avoidable. Do your research to ensure that you can afford home ownership, and take the steps necessary to get out of the situation if you find yourself house-poor.</p>
</div>
</div>
</div>
</div>
</div>
<p>The post <a href="https://blog.remax.ca/what-it-means-to-be-house-poor-and-how-to-avoid-it/">What It Means to Be House Poor – and How to Avoid It</a> appeared first on <a href="https://blog.remax.ca">RE/MAX Canada</a>.</p>
<br />
<br />
<br />
from RE/MAX Canada https://ift.tt/pm4KlfD<br />
RE/MAX Canada
epaquinhttp://www.blogger.com/profile/01589631138771940331noreply@blogger.com0tag:blogger.com,1999:blog-6402346487751506041.post-46184479927817458852024-03-14T12:56:00.001-04:002024-03-14T12:56:48.198-04:00Renegotiating Your Retail Space Lease: When, Why And How to Approach Your Landlord<div class="fusion-fullwidth fullwidth-box fusion-builder-row-1 fusion-flex-container has-pattern-background has-mask-background nonhundred-percent-fullwidth non-hundred-percent-height-scrolling" style="--awb-border-radius-top-left:0px;--awb-border-radius-top-right:0px;--awb-border-radius-bottom-right:0px;--awb-border-radius-bottom-left:0px;--awb-flex-wrap:wrap;">
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<p>Whether you’re a small retailer selling hand-made products in a tiny shop or a larger one looking to take your business to the next level, the annual rent for your retail space will be one of your most significant business expenses. If, like many entrepreneurs, you signed your landlord’s cookie-cutter triple net ease without asking a <a href="https://www.remax.ca/commercial" target="_blank" rel="noopener">commercial real estate</a> agent or lawyer specializing in lease negotiations to help create a counteroffer, you may find yourself experiencing sticker shock each month when your rent comes due. Even if you’re mostly happy with your contract and just want to tinker with it a bit before a renewal, renegotiating your lease could save you plenty.</p>
<h2>Why Renegotiate the Lease for Your Retail Space?</h2>
<p>There are lots of reasons to consider renegotiating your lease. Maybe you need to contain costs by placing caps on property taxes or maintenance expenses that have suddenly ballooned out of hand. Perhaps the paint and carpeting in your retail space are starting to wear, or the look no longer matches your brand personality. Or even though you like your digs, a suite down the hall that you’ve had your eye on for years is finally available, and you’d like to trade spaces. Or maybe, without realizing it, you lucked in on the perfect <a href="https://blog.remax.ca/how-to-choose-the-ideal-location-for-your-franchise/" target="_blank" rel="noopener">franchise location</a> and want to lock it in with a longer lease term.</p>
<p>No matter the reason, if you’re a reliable tenant, chances are your landlord would rather keep you than lose you, and you might be able to get much of what you want by renegotiating your current lease.</p>
<h2>Timing Your Retail Space Negotiations And Capitalizing On Market Factors</h2>
<p>Renegotiating a commercial lease agreement takes time, so starting the process as early as possible is best and essential if you’re already having trouble making your monthly rent or if changing consumer habits have caused you to rethink or retool your business.</p>
<p>If you’re not in a hurry – although it’s riskier – staying on top of commercial real estate market conditions and announcing your desire to renegotiate during a market dip or after a recent vacancy in a multi-tenant building can give you extra leverage.</p>
<p>In the case of a renewal, lease renegotiations should begin at least 12 to 15 months before the lease for your retail space expires. The longer the lead time you have, the more alternate spaces you can evaluate and the more written Offers to Lease you can collect from other landlords. Not only will you create a competitive environment where all landlords need to put their best offer on the table to win your business, but if your current landlord never intended to renew your lease, you’ll find out quickly and be more prepared to move.</p>
<h2>Don’t Undervalue Your Bargaining Strength</h2>
<p>A variety of factors will determine your bargaining strength when renegotiating the lease for your retail space. These include:</p>
<p><strong>Overall tenant vacancy and turnover rates</strong><br />
The higher the tenant vacancy or turnover rate in the building you currently occupy, the more crucial it will be for your landlord to retain your tenancy. Investors in commercial real estate want predictable monthly returns on their investment, and when tenant suites sit empty, they get bills for <a href="https://blog.remax.ca/essential-tips-for-successful-commercial-property-management-in-canada/" target="_blank" rel="noopener">property management</a>, maintenance and utilities expenses instead. Not a best-case or desired scenario.</p>
<p><strong>The percentage of the building you occupy</strong><br />
The larger the percentage of the building you occupy, the greater your vacancy’s financial impact on the landlord. If the property has multiple tenants and your business occupies a large, ground-level retail space, even if other tenants remain on the rent roll, the conspicuous absence of your operations at street level and the loss of your cost contributions on the property’s balance sheets gives you significant clout.</p>
<p><strong>Your tenant history</strong><br />
Long-term tenants are valued and retaining them is vital to creating monthly cash flow and profit.</p>
<h2>Amplify Your Bargaining Strength With the Help Of a Broker</h2>
<p>Hiring someone to represent you in a lease renegotiation can generate more success and higher returns.<br />
Experienced commercial real estate professionals can examine your current lease, identify areas that need to be improved and help you create a new offer that brings costs down significantly. They can act as your advocate and communicate with landlords in ways that won’t cause your previously positive relationship to suffer, even as you score wins.</p>
<p>Brokers can help you locate alternate retail space to occupy, not only so you can create the competitive scenario we outlined above but also to give you options should negotiations lead nowhere.</p>
<p>Your desired area’s market conditions and retail space availability may have changed since you signed your last lease. Other landlords might now offer better contract terms, and new locations might offer lower taxes, lower rent and more valuable amenities. You can bring these factors to the table during your lease renegotiations or keep them in mind if you need to move.</p>
<p>Brokers typically charge a three- to six-per-cent commission for their services, based on the total value of the lease, so it’s essential to ensure that your renegotiated lease delivers more business value or saves you substantially more than money the value of the commission, or you’ll simply trade building costs for broker ones.</p>
<h2>Renegotiation Requests for Your Retail Space</h2>
<p>Lease renegotiations involve give-and-take, so it’s imperative to prioritize the items that create the greatest savings for your business or allow it to operate more efficiently. This enables you to be firm where you need to be and flexible where you don’t.</p>
<p>Items that will save you money include:</p>
<ul>
<li>A reduced or fully-returned initial lease deposit.</li>
<li>A 10- to 15-per-cent reduction in your base rent and a deferral of the difference to the end of your lease.</li>
<li>Free rent or rental allowances that you may have missed out on initially, so you can control costs until the renegotiations are finalized, and in the case where a landlord may be unwilling to reduce the base rent for fear it will reduce the amount future renters pay.</li>
<li>NOTE: A single month of free rent annually would result in a total rent savings of 8.3 per cent.</li>
<li>Free staff parking or Wi-Fi.</li>
<li>Rent adjustment or elimination for a specified period, based on you and your landlord sharing a percentage of your monthly sales.</li>
<li>If you’re in a <a href="https://blog.remax.ca/20-terms-you-need-to-understand-before-signing-your-commercial-real-estate-lease/" target="_blank" rel="noopener">net lease</a>, a cap on expenses such as property taxes, maintenance, utilities, common area costs, etc.</li>
<li>A reduction in the size of your retail space /or the ability to sublet all or part of it.</li>
<li>A reduced lease term.</li>
<li>Severance of the lease so that you can move into a more affordable retail space in another building owned by your landlord.</li>
<li>A lesser penalty for early severance of your lease.</li>
</ul>
<p>Items that might allow you to operate more efficiently include:</p>
<ul>
<li>Adding a clause that bars competitors from leasing in any building you rent.</li>
<li>Extended hours of service in response to consumer demands.</li>
<li>Leasehold improvements better-adapted to your current needs, including new carpet and a new paint job for your retail space.</li>
<li>Access to specialized common spaces /or janitorial services.</li>
<li>First refusal to lease a nearby unit for expansion.</li>
</ul>
<h2>Have Several Backup Offers Ready If Your First One Is Refused</h2>
<p>If your landlord dismisses your initial renegotiation offer, be sure you have second and third offers ready. Once your landlord sees you’ve prepared backups, it’ll help convey your intent to continue as a tenant, and they may be more prepared to bargain as a result.</p>
<p>If your landlord outright refuses your request to renegotiate – if you and your real estate agent have been scoping out and running the numbers on potential new locations for your retail space – you should know where you need to relocate to and when.</p>
</div>
</div>
</div>
</div>
</div>
<p>The post <a href="https://blog.remax.ca/renegotiating-your-retail-space-lease-when-why-and-how-to-approach-your-landlord/">Renegotiating Your Retail Space Lease: When, Why And How to Approach Your Landlord</a> appeared first on <a href="https://blog.remax.ca">RE/MAX Canada</a>.</p>
<br />
<br />
from RE/MAX Canada https://ift.tt/UenPAbd<br />
RE/MAX Canada
epaquinhttp://www.blogger.com/profile/01589631138771940331noreply@blogger.com0tag:blogger.com,1999:blog-6402346487751506041.post-68625806124981497732024-03-14T12:54:00.001-04:002024-03-14T12:54:45.551-04:00Renegotiating Your Retail Space Lease: When, Why And How to Approach Your Landlord<div class="fusion-fullwidth fullwidth-box fusion-builder-row-1 fusion-flex-container has-pattern-background has-mask-background nonhundred-percent-fullwidth non-hundred-percent-height-scrolling" style="--awb-border-radius-top-left:0px;--awb-border-radius-top-right:0px;--awb-border-radius-bottom-right:0px;--awb-border-radius-bottom-left:0px;--awb-flex-wrap:wrap;">
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<p>Whether you’re a small retailer selling hand-made products in a tiny shop or a larger one looking to take your business to the next level, the annual rent for your retail space will be one of your most significant business expenses. If, like many entrepreneurs, you signed your landlord’s cookie-cutter triple net ease without asking a <a href="https://www.remax.ca/commercial" target="_blank" rel="noopener">commercial real estate</a> agent or lawyer specializing in lease negotiations to help create a counteroffer, you may find yourself experiencing sticker shock each month when your rent comes due. Even if you’re mostly happy with your contract and just want to tinker with it a bit before a renewal, renegotiating your lease could save you plenty.</p>
<h2>Why Renegotiate the Lease for Your Retail Space?</h2>
<p>There are lots of reasons to consider renegotiating your lease. Maybe you need to contain costs by placing caps on property taxes or maintenance expenses that have suddenly ballooned out of hand. Perhaps the paint and carpeting in your retail space are starting to wear, or the look no longer matches your brand personality. Or even though you like your digs, a suite down the hall that you’ve had your eye on for years is finally available, and you’d like to trade spaces. Or maybe, without realizing it, you lucked in on the perfect <a href="https://blog.remax.ca/how-to-choose-the-ideal-location-for-your-franchise/" target="_blank" rel="noopener">franchise location</a> and want to lock it in with a longer lease term.</p>
<p>No matter the reason, if you’re a reliable tenant, chances are your landlord would rather keep you than lose you, and you might be able to get much of what you want by renegotiating your current lease.</p>
<h2>Timing Your Retail Space Negotiations And Capitalizing On Market Factors</h2>
<p>Renegotiating a commercial lease agreement takes time, so starting the process as early as possible is best and essential if you’re already having trouble making your monthly rent or if changing consumer habits have caused you to rethink or retool your business.</p>
<p>If you’re not in a hurry – although it’s riskier – staying on top of commercial real estate market conditions and announcing your desire to renegotiate during a market dip or after a recent vacancy in a multi-tenant building can give you extra leverage.</p>
<p>In the case of a renewal, lease renegotiations should begin at least 12 to 15 months before the lease for your retail space expires. The longer the lead time you have, the more alternate spaces you can evaluate and the more written Offers to Lease you can collect from other landlords. Not only will you create a competitive environment where all landlords need to put their best offer on the table to win your business, but if your current landlord never intended to renew your lease, you’ll find out quickly and be more prepared to move.</p>
<h2>Don’t Undervalue Your Bargaining Strength</h2>
<p>A variety of factors will determine your bargaining strength when renegotiating the lease for your retail space. These include:</p>
<p><strong>Overall tenant vacancy and turnover rates</strong><br />
The higher the tenant vacancy or turnover rate in the building you currently occupy, the more crucial it will be for your landlord to retain your tenancy. Investors in commercial real estate want predictable monthly returns on their investment, and when tenant suites sit empty, they get bills for <a href="https://blog.remax.ca/essential-tips-for-successful-commercial-property-management-in-canada/" target="_blank" rel="noopener">property management</a>, maintenance and utilities expenses instead. Not a best-case or desired scenario.</p>
<p><strong>The percentage of the building you occupy</strong><br />
The larger the percentage of the building you occupy, the greater your vacancy’s financial impact on the landlord. If the property has multiple tenants and your business occupies a large, ground-level retail space, even if other tenants remain on the rent roll, the conspicuous absence of your operations at street level and the loss of your cost contributions on the property’s balance sheets gives you significant clout.</p>
<p><strong>Your tenant history</strong><br />
Long-term tenants are valued and retaining them is vital to creating monthly cash flow and profit.</p>
<h2>Amplify Your Bargaining Strength With the Help Of a Broker</h2>
<p>Hiring someone to represent you in a lease renegotiation can generate more success and higher returns.<br />
Experienced commercial real estate professionals can examine your current lease, identify areas that need to be improved and help you create a new offer that brings costs down significantly. They can act as your advocate and communicate with landlords in ways that won’t cause your previously positive relationship to suffer, even as you score wins.</p>
<p>Brokers can help you locate alternate retail space to occupy, not only so you can create the competitive scenario we outlined above but also to give you options should negotiations lead nowhere.</p>
<p>Your desired area’s market conditions and retail space availability may have changed since you signed your last lease. Other landlords might now offer better contract terms, and new locations might offer lower taxes, lower rent and more valuable amenities. You can bring these factors to the table during your lease renegotiations or keep them in mind if you need to move.</p>
<p>Brokers typically charge a three- to six-per-cent commission for their services, based on the total value of the lease, so it’s essential to ensure that your renegotiated lease delivers more business value or saves you substantially more than money the value of the commission, or you’ll simply trade building costs for broker ones.</p>
<h2>Renegotiation Requests for Your Retail Space</h2>
<p>Lease renegotiations involve give-and-take, so it’s imperative to prioritize the items that create the greatest savings for your business or allow it to operate more efficiently. This enables you to be firm where you need to be and flexible where you don’t.</p>
<p>Items that will save you money include:</p>
<ul>
<li>A reduced or fully-returned initial lease deposit.</li>
<li>A 10- to 15-per-cent reduction in your base rent and a deferral of the difference to the end of your lease.</li>
<li>Free rent or rental allowances that you may have missed out on initially, so you can control costs until the renegotiations are finalized, and in the case where a landlord may be unwilling to reduce the base rent for fear it will reduce the amount future renters pay.</li>
<li>NOTE: A single month of free rent annually would result in a total rent savings of 8.3 per cent.</li>
<li>Free staff parking or Wi-Fi.</li>
<li>Rent adjustment or elimination for a specified period, based on you and your landlord sharing a percentage of your monthly sales.</li>
<li>If you’re in a <a href="https://blog.remax.ca/20-terms-you-need-to-understand-before-signing-your-commercial-real-estate-lease/" target="_blank" rel="noopener">net lease</a>, a cap on expenses such as property taxes, maintenance, utilities, common area costs, etc.</li>
<li>A reduction in the size of your retail space /or the ability to sublet all or part of it.</li>
<li>A reduced lease term.</li>
<li>Severance of the lease so that you can move into a more affordable retail space in another building owned by your landlord.</li>
<li>A lesser penalty for early severance of your lease.</li>
</ul>
<p>Items that might allow you to operate more efficiently include:</p>
<ul>
<li>Adding a clause that bars competitors from leasing in any building you rent.</li>
<li>Extended hours of service in response to consumer demands.</li>
<li>Leasehold improvements better-adapted to your current needs, including new carpet and a new paint job for your retail space.</li>
<li>Access to specialized common spaces /or janitorial services.</li>
<li>First refusal to lease a nearby unit for expansion.</li>
</ul>
<h2>Have Several Backup Offers Ready If Your First One Is Refused</h2>
<p>If your landlord dismisses your initial renegotiation offer, be sure you have second and third offers ready. Once your landlord sees you’ve prepared backups, it’ll help convey your intent to continue as a tenant, and they may be more prepared to bargain as a result.</p>
<p>If your landlord outright refuses your request to renegotiate – if you and your real estate agent have been scoping out and running the numbers on potential new locations for your retail space – you should know where you need to relocate to and when.</p>
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<p>The post <a href="https://blog.remax.ca/renegotiating-your-retail-space-lease-when-why-and-how-to-approach-your-landlord/">Renegotiating Your Retail Space Lease: When, Why And How to Approach Your Landlord</a> appeared first on <a href="https://blog.remax.ca">RE/MAX Canada</a>.</p>
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epaquinhttp://www.blogger.com/profile/01589631138771940331noreply@blogger.com0tag:blogger.com,1999:blog-6402346487751506041.post-21026462200735288352024-03-12T09:04:00.001-04:002024-03-12T09:04:43.812-04:00How Does the Canadian Housing Market Compare to the U.S. Right Now?<div class="fusion-fullwidth fullwidth-box fusion-builder-row-1 fusion-flex-container nonhundred-percent-fullwidth non-hundred-percent-height-scrolling" style="--awb-border-radius-top-left:0px;--awb-border-radius-top-right:0px;--awb-border-radius-bottom-right:0px;--awb-border-radius-bottom-left:0px;--awb-flex-wrap:wrap;">
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<p>In the aftermath of the coronavirus pandemic, many real estate sector observers wondered if the US and Canadian housing markets were in a bubble. When the Federal Reserve and the <a href="https://blog.remax.ca/will-the-bank-of-canada-cut-interest-rates-this-year/" target="_blank" rel="noopener">Bank of Canada (BoC) started raising interest rates</a>, the widespread expectation was that both countries’ real estate markets would cool down. Well, four years after the COVID-19 public health crisis and about two years since the tightening cycle started, industry experts have been closely monitoring the North American real estate market as conditions have been quite compelling.</p>
<p>Still, considering everything that has happened, from <a href="https://blog.remax.ca/the-blind-bidding-debate-in-canadian-real-estate/" target="_blank" rel="noopener">bidding wars to blind bidding</a>, the two countries are going through comparable experiences in their respective real estate industries. Most importantly, sales activity and price growth have been through the roof since the early days of the COVID-19 pandemic. Fuelled by historically low borrowing costs and changing consumer trends, the housing gains in the <em>Great White North</em> and the <em>Land of the Free</em> have been monumental. And, in certain segments of the market, the growth had been record-breaking.</p>
<p>But just how similar is the Canadian housing market to the US real estate market right now? We’re taking a deeper look at the numbers to find out:</p>
<h2>How Does the Canadian Housing Market Compare to the US Right Now?</h2>
<p>According to the National Association of Realtors (NAR), <a href="https://www.nar.realtor/research-and-statistics/housing-statistics/existing-home-sales" target="_blank" rel="noopener">existing-home sales </a>across the US rose 3.1 per cent to roughly four million units in December, following mostly a year of declines.</p>
<p>Prices also enjoyed substantial growth to kick off the year, buoyed by tighter inventories and reviving demand. NAR data highlighted that median existing house prices climbed by more than five per cent to a record $379,100.</p>
<p>When it comes to housing stocks, the months of inventory clocked in at 3.0 months, up from 2.9 months in January 2023. This is an important measurement for industry observers because it gauges the number of months it would take to exhaust supplies at the current rate of sales activity. Recent data suggest that housing stocks could continue to be tight in the coming months.</p>
<p>The Department of Commerce <a href="https://www.census.gov/construction/nrc/current/index.html" target="_blank" rel="noopener">reported</a> that privately-owned housing starts were 14.8 per cent below the revised December estimate, clocking in at 1.331 million units. This was also nearly one per cent below the January 2023 rate of 1.34 million units.</p>
<p>Building permit numbers were not impressive at the start of the year. In January, privately-owned housing units approved by building permits in January fell 1.5 per cent month-over-month, totalling an annualised rate of 1.47 million units. However, building permits were up 8.6 per cent year-over-year.</p>
<p>American economists are cautioning that housing affordability is an intensifying problem in markets across the United States.</p>
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<p><q class="fusion-clearfix">Don’t wait for or expect a home price crash. We don’t foresee one coming (thankfully), nor do we think one is necessary to restore affordability at the national level.</q></p>
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<div class="author"><span class="company-name"><strong>Joe Syedl, Senior Markets Economist at JPMorgan Chase</strong></span></div>
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<p><em>“The takeaway: If you are looking to buy a house in the United States, don’t wait for or expect a home price crash. We don’t foresee one coming (thankfully), nor do we think one is necessary to restore affordability at the national level. We think time and continued robust income growth can cure the problem on their own,”</em> said Joe Syedl, the senior markets economist at JPMorgan Chase, in a Nov. 2023 research note.</p>
<p>Now, how does this compare with the Canadian real estate market?</p>
<p>New data from the Canadian Real Estate Association (CREA) show that housing activity was robust while prices eased. In January, residential property sales advanced nearly four per cent, totalling approximately 40,000 units.</p>
<p>The MLS® Home Price Index (HPI) tumbled more than one per cent monthly and jumped 0.4 per cent on an annualized basis. The national average home price surged 7.6 per cent from January 2023 to nearly $660,000.</p>
<p>Housing inventory levels slipped to start the year. The number of months of inventory clocked in at 3.7, down from 3.8 months at the end of December and 4.1 months at the end of November. Typically, the long-term average for this time of the year is around five months of supply.</p>
<p>That said, the number of newly listed residential properties increased 1.5 per cent from December to January. Unfortunately, new listings are hovering at their lowest levels since June 2023.</p>
<p><em>“The market has been showing some early signs of life over the last couple of months, probably no surprise given how much pent-up demand is out there,”</em> said Larry Cerqua, Chair of CREA, in a statement. <em>“There’s a consensus that the market will probably look quite a bit different this year compared to 2022 and 2023.”</em></p>
<p>New housing construction activity levels were higher than they were a year ago. Still, housing starts fell by ten per cent month-over-month in January, falling short of economists’ expectations of 235,000 units, according to the Canada Mortgage and Housing Corporation (CMHC).</p>
<p><em>“Despite the trend performance, actual starts saw strong year-over-year growth, driven by high multi-unit starts, particularly in Toronto. In fact, from a historical perspective, we observed the second highest number of housing starts for January going back to 1990,”</em> said CMHC chief economist Bob Dugan in the report.</p>
<p>Ultimately, both the Canadian and US housing markets are experiencing tight supplies, terrific price growth, and expectations of lower mortgages by the year’s end. Even with higher prices, there is still demand, although prospective homebuyers may not witness much price relief. Remember, home prices are still higher than where they were before the coronavirus pandemic. With possible mortgage relief on the way, the Canadian and US real estate markets could enjoy revived activity.</p>
<h2>Concerning Trends in US and Canadian Housing Markets?</h2>
<p>The US and Canadian real estate markets each have individual and comparable trends that deserve a spotlight as we embark upon 2024.</p>
<h2>Subprime Mortgage Crisis … in Canada?</h2>
<p>The subprime mortgage crisis in 2008 was one of the chief contributors to the Great Recession. More than a decade later, Canada is facing some subprime mortgage fears that some are calling an “accident waiting to happen.” A 2021 analysis from Bloomberg Economics found an alarming trend of more Canadian borrowers taking on zero-down mortgages. Three years later, subprime borrowing has become one of the fastest-growing segments of the broader credit market. Although there are plenty of regulations that prevent subprime lending on a massive scale, the Bank of Canada (BoC) is warning that the quality of home loans had deteriorated throughout the pandemic amid a zero-rate environment, citing quarterly surveys of loan officers that revealed they loosened mortgage lending conditions. However, as the BoC started raising rates, mortgage lending tightened. Since many are anticipating negative homeowner equity for the most recent homebuyers, concerns are mounting among industry observers. Will this result in a crisis? Financial regulators do not appear to be worried.</p>
<h2>A Housing Affordability Issue</h2>
<p>The US and Canada are each suffering from an affordability crisis that is pricing out young families from achieving the dream of home ownership. In Canada, the average price of a home is approximately $660,000, with valuations in the key markets of <a href="https://blog.remax.ca/whats-going-on-with-toronto-house-prices/" target="_blank" rel="noopener">Toronto</a> and Vancouver venturing north of $1 million. Even accumulating a down payment is taking longer for many households: roughly eight years. Moreover, people cannot simply relocate to a small town or a rural community since prices in these areas have soared to levels unseen before the pandemic.</p>
<p>South of the border, under-building has led to an acute shortage of housing, industry reports say. Estimates suggest that the US real estate market is short between three and six million homes. This has undoubtedly metastasized into a generational issue, particularly since seniors are more likely to own a home than older millennials. In addition, the current economic landscape has prevented homeowners from listing their properties. When rates were slashed to zero, families could scoop up cheaper single-family houses, townhomes, and condos at historically low <a href="https://blog.remax.ca/how-government-bond-yields-relate-to-mortgage-rates/" target="_blank" rel="noopener">mortgage rates</a>. Today, there is little incentive to move to a more expensive home at a higher mortgage rate.</p>
<h2>Is the Economy Too Dependent on Real Estate?</h2>
<p>Is real estate accounting for too much of the economy’s growth? The real estate market accounts for nearly half of Canada’s gross domestic product, and mortgage debt is poised to eclipse the nation’s GDP.</p>
<p>In the United States, the economy is not as dependent on housing, although it still accounts for a large share of the GDP. Housing activity is estimated to contribute around 15 per cent to growth, comparable to the manufacturing sector. Still, the Federal Reserve warned in 2021 that the US economy, particularly following the devastating pandemic-induced meltdown, cannot afford a boom-and-bust cycle in real estate.</p>
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<p>The post <a href="https://blog.remax.ca/how-does-the-canadian-housing-market-compare-to-the-u-s-right-now/">How Does the Canadian Housing Market Compare to the U.S. Right Now?</a> appeared first on <a href="https://blog.remax.ca">RE/MAX Canada</a>.</p>
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epaquinhttp://www.blogger.com/profile/01589631138771940331noreply@blogger.com0tag:blogger.com,1999:blog-6402346487751506041.post-18177448946343749272024-03-12T09:02:00.001-04:002024-03-12T09:02:21.904-04:00How Does the Canadian Housing Market Compare to the U.S. Right Now?<div class="fusion-fullwidth fullwidth-box fusion-builder-row-1 fusion-flex-container nonhundred-percent-fullwidth non-hundred-percent-height-scrolling" style="--awb-border-radius-top-left:0px;--awb-border-radius-top-right:0px;--awb-border-radius-bottom-right:0px;--awb-border-radius-bottom-left:0px;--awb-flex-wrap:wrap;">
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<p>In the aftermath of the coronavirus pandemic, many real estate sector observers wondered if the US and Canadian housing markets were in a bubble. When the Federal Reserve and the <a href="https://blog.remax.ca/will-the-bank-of-canada-cut-interest-rates-this-year/" target="_blank" rel="noopener">Bank of Canada (BoC) started raising interest rates</a>, the widespread expectation was that both countries’ real estate markets would cool down. Well, four years after the COVID-19 public health crisis and about two years since the tightening cycle started, industry experts have been closely monitoring the North American real estate market as conditions have been quite compelling.</p>
<p>Still, considering everything that has happened, from <a href="https://blog.remax.ca/the-blind-bidding-debate-in-canadian-real-estate/" target="_blank" rel="noopener">bidding wars to blind bidding</a>, the two countries are going through comparable experiences in their respective real estate industries. Most importantly, sales activity and price growth have been through the roof since the early days of the COVID-19 pandemic. Fuelled by historically low borrowing costs and changing consumer trends, the housing gains in the <em>Great White North</em> and the <em>Land of the Free</em> have been monumental. And, in certain segments of the market, the growth had been record-breaking.</p>
<p>But just how similar is the Canadian housing market to the US real estate market right now? We’re taking a deeper look at the numbers to find out:</p>
<h2>How Does the Canadian Housing Market Compare to the US Right Now?</h2>
<p>According to the National Association of Realtors (NAR), <a href="https://www.nar.realtor/research-and-statistics/housing-statistics/existing-home-sales" target="_blank" rel="noopener">existing-home sales </a>across the US rose 3.1 per cent to roughly four million units in December, following mostly a year of declines.</p>
<p>Prices also enjoyed substantial growth to kick off the year, buoyed by tighter inventories and reviving demand. NAR data highlighted that median existing house prices climbed by more than five per cent to a record $379,100.</p>
<p>When it comes to housing stocks, the months of inventory clocked in at 3.0 months, up from 2.9 months in January 2023. This is an important measurement for industry observers because it gauges the number of months it would take to exhaust supplies at the current rate of sales activity. Recent data suggest that housing stocks could continue to be tight in the coming months.</p>
<p>The Department of Commerce <a href="https://www.census.gov/construction/nrc/current/index.html" target="_blank" rel="noopener">reported</a> that privately-owned housing starts were 14.8 per cent below the revised December estimate, clocking in at 1.331 million units. This was also nearly one per cent below the January 2023 rate of 1.34 million units.</p>
<p>Building permit numbers were not impressive at the start of the year. In January, privately-owned housing units approved by building permits in January fell 1.5 per cent month-over-month, totalling an annualised rate of 1.47 million units. However, building permits were up 8.6 per cent year-over-year.</p>
<p>American economists are cautioning that housing affordability is an intensifying problem in markets across the United States.</p>
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<p><q class="fusion-clearfix">Don’t wait for or expect a home price crash. We don’t foresee one coming (thankfully), nor do we think one is necessary to restore affordability at the national level.</q></p>
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<div class="author"><span class="company-name"><strong>Joe Syedl, Senior Markets Economist at JPMorgan Chase</strong></span></div>
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<p><em>“The takeaway: If you are looking to buy a house in the United States, don’t wait for or expect a home price crash. We don’t foresee one coming (thankfully), nor do we think one is necessary to restore affordability at the national level. We think time and continued robust income growth can cure the problem on their own,”</em> said Joe Syedl, the senior markets economist at JPMorgan Chase, in a Nov. 2023 research note.</p>
<p>Now, how does this compare with the Canadian real estate market?</p>
<p>New data from the Canadian Real Estate Association (CREA) show that housing activity was robust while prices eased. In January, residential property sales advanced nearly four per cent, totalling approximately 40,000 units.</p>
<p>The MLS® Home Price Index (HPI) tumbled more than one per cent monthly and jumped 0.4 per cent on an annualized basis. The national average home price surged 7.6 per cent from January 2023 to nearly $660,000.</p>
<p>Housing inventory levels slipped to start the year. The number of months of inventory clocked in at 3.7, down from 3.8 months at the end of December and 4.1 months at the end of November. Typically, the long-term average for this time of the year is around five months of supply.</p>
<p>That said, the number of newly listed residential properties increased 1.5 per cent from December to January. Unfortunately, new listings are hovering at their lowest levels since June 2023.</p>
<p><em>“The market has been showing some early signs of life over the last couple of months, probably no surprise given how much pent-up demand is out there,”</em> said Larry Cerqua, Chair of CREA, in a statement. <em>“There’s a consensus that the market will probably look quite a bit different this year compared to 2022 and 2023.”</em></p>
<p>New housing construction activity levels were higher than they were a year ago. Still, housing starts fell by ten per cent month-over-month in January, falling short of economists’ expectations of 235,000 units, according to the Canada Mortgage and Housing Corporation (CMHC).</p>
<p><em>“Despite the trend performance, actual starts saw strong year-over-year growth, driven by high multi-unit starts, particularly in Toronto. In fact, from a historical perspective, we observed the second highest number of housing starts for January going back to 1990,”</em> said CMHC chief economist Bob Dugan in the report.</p>
<p>Ultimately, both the Canadian and US housing markets are experiencing tight supplies, terrific price growth, and expectations of lower mortgages by the year’s end. Even with higher prices, there is still demand, although prospective homebuyers may not witness much price relief. Remember, home prices are still higher than where they were before the coronavirus pandemic. With possible mortgage relief on the way, the Canadian and US real estate markets could enjoy revived activity.</p>
<h2>Concerning Trends in US and Canadian Housing Markets?</h2>
<p>The US and Canadian real estate markets each have individual and comparable trends that deserve a spotlight as we embark upon 2024.</p>
<h2>Subprime Mortgage Crisis … in Canada?</h2>
<p>The subprime mortgage crisis in 2008 was one of the chief contributors to the Great Recession. More than a decade later, Canada is facing some subprime mortgage fears that some are calling an “accident waiting to happen.” A 2021 analysis from Bloomberg Economics found an alarming trend of more Canadian borrowers taking on zero-down mortgages. Three years later, subprime borrowing has become one of the fastest-growing segments of the broader credit market. Although there are plenty of regulations that prevent subprime lending on a massive scale, the Bank of Canada (BoC) is warning that the quality of home loans had deteriorated throughout the pandemic amid a zero-rate environment, citing quarterly surveys of loan officers that revealed they loosened mortgage lending conditions. However, as the BoC started raising rates, mortgage lending tightened. Since many are anticipating negative homeowner equity for the most recent homebuyers, concerns are mounting among industry observers. Will this result in a crisis? Financial regulators do not appear to be worried.</p>
<h2>A Housing Affordability Issue</h2>
<p>The US and Canada are each suffering from an affordability crisis that is pricing out young families from achieving the dream of home ownership. In Canada, the average price of a home is approximately $660,000, with valuations in the key markets of <a href="https://blog.remax.ca/whats-going-on-with-toronto-house-prices/" target="_blank" rel="noopener">Toronto</a> and Vancouver venturing north of $1 million. Even accumulating a down payment is taking longer for many households: roughly eight years. Moreover, people cannot simply relocate to a small town or a rural community since prices in these areas have soared to levels unseen before the pandemic.</p>
<p>South of the border, under-building has led to an acute shortage of housing, industry reports say. Estimates suggest that the US real estate market is short between three and six million homes. This has undoubtedly metastasized into a generational issue, particularly since seniors are more likely to own a home than older millennials. In addition, the current economic landscape has prevented homeowners from listing their properties. When rates were slashed to zero, families could scoop up cheaper single-family houses, townhomes, and condos at historically low <a href="https://blog.remax.ca/how-government-bond-yields-relate-to-mortgage-rates/" target="_blank" rel="noopener">mortgage rates</a>. Today, there is little incentive to move to a more expensive home at a higher mortgage rate.</p>
<h2>Is the Economy Too Dependent on Real Estate?</h2>
<p>Is real estate accounting for too much of the economy’s growth? The real estate market accounts for nearly half of Canada’s gross domestic product, and mortgage debt is poised to eclipse the nation’s GDP.</p>
<p>In the United States, the economy is not as dependent on housing, although it still accounts for a large share of the GDP. Housing activity is estimated to contribute around 15 per cent to growth, comparable to the manufacturing sector. Still, the Federal Reserve warned in 2021 that the US economy, particularly following the devastating pandemic-induced meltdown, cannot afford a boom-and-bust cycle in real estate.</p>
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<p>The post <a href="https://blog.remax.ca/how-does-the-canadian-housing-market-compare-to-the-u-s-right-now/">How Does the Canadian Housing Market Compare to the U.S. Right Now?</a> appeared first on <a href="https://blog.remax.ca">RE/MAX Canada</a>.</p>
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epaquinhttp://www.blogger.com/profile/01589631138771940331noreply@blogger.com0tag:blogger.com,1999:blog-6402346487751506041.post-12393011981337730982024-03-11T11:21:00.001-04:002024-03-11T11:21:31.756-04:00A Look at Saskatoon Real Estate<div class="fusion-fullwidth fullwidth-box fusion-builder-row-1 fusion-flex-container nonhundred-percent-fullwidth non-hundred-percent-height-scrolling" style="--awb-border-radius-top-left:0px;--awb-border-radius-top-right:0px;--awb-border-radius-bottom-right:0px;--awb-border-radius-bottom-left:0px;--awb-flex-wrap:wrap;">
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<p>The <a href="https://blog.remax.ca/canadian-housing-market-outlook/" target="_blank" rel="noopener">Canadian housing market</a> is experiencing a correction. Whether conditions escalate remains to be seen. Still, the Bank of Canada’s path to policy rate normalization is weighing on the real estate industry. But while multiple housing markets – from major urban centres to rural communities – are experiencing a mixed bag of conditions, from immense growth to holding steady to declines. A case in point is the Saskatoon real estate market. How is the Saskatoon real estate market?</p>
<p>Prices in the Saskatoon housing market have crept up at a gradual pace amid a climate of high interest rates and strengthening demand.</p>
<p>In fact, despite the pandemic-era boom, values did not venture to the moon either. This explains why Saskatoon has remained one of <a href="https://blog.remax.ca/housing-affordability-in-canada/" target="_blank" rel="noopener">Canada’s most affordable housing markets</a>. These modest gains have attracted families from other provinces and immigrants, as average prices have allowed many households to achieve the dream of ownership.</p>
<p>So, how is the Saskatoon housing sector performing to kick off 2024?</p>
<h2>Saskatoon Real Estate in 2024</h2>
<p>Could the next 12 months be huge for the Saskatoon real estate market? If the early numbers are anything to go by, it could be a terrific time to buy a residential property in this Prairie city.</p>
<p>New <a href="https://saskatchewanrealtorsassociation.ca/market-watch-january-2024/" target="_blank" rel="noopener">data</a> from the Saskatchewan Realtors Association (SRA) show that home sales surged at an annualized pace of 22 per cent, totalling 245 units. This was 16 per cent above the 10-year average.</p>
<p>As for prices, there was some easing in the Saskatoon housing sector. The benchmark price for a home slipped from $374,100 in December to $378,200 in January. That said, home prices did rise two per cent from the same time a year ago.</p>
<p>Supply has played a crucial role in the Saskatoon real estate market, with inventory levels far below the historical averages. New listings tumbled 26 per cent year-over-year and are close to 50 per cent below the decade average for this time of year. But new housing construction has started off the year rather well, with housing starts climbing 25 per cent year-over-year to 94 units, according to the Canada Mortgage and Housing Corporation.</p>
<p>Now, compared to the broader provincial real estate market, conditions are pretty similar. Home sales rose 24 per cent year-over-year and are 18 per cent above the decade average, while home prices were relatively unchanged at $319,600. Plus, housing stocks plunged by 18 per cent year-over-year and are 36 per cent below the long-term average.</p>
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<p><q class="fusion-clearfix">Higher lending rates have driven many purchasers to seek out more affordable products, resulting in further inventory declines in the more affordable segment of our market.</q></p>
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<div class="author"><span class="company-name"><strong>SRA CEO Chris Guérette</strong></span></div>
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<p><em>“Higher lending rates have driven many purchasers to seek out more affordable products, resulting in further inventory declines in the more affordable segment of our market,”</em> said SRA CEO Chris Guérette in a statement. <em>“January failed to bring new listing relief to this area of our market, and prospective buyers can continue to expect tight market conditions when searching for more affordable properties.”</em></p>
<h2>Will 2024 Change the Saskatoon Housing Market?</h2>
<p>Following the modest market correction amid the Bank of Canada’s (BoC) inflation-busting efforts, housing affordability remains a key issue in the Canadian real estate sector. As first-time homebuyers struggle to navigate the turbulent housing industry, they are searching for affordable options. And one of these is the <a href="https://blog.remax.ca/saskatoon-housing-market-outlook/" target="_blank" rel="noopener">Saskatoon real estate</a> market.</p>
<p>As the conventional five-year fixed mortgage rate continues to hover around five to six per cent and prices remain firmly above their pre-pandemic levels, households are trying to get the best bang for their buck. Saskatoon achieves this objective, and people are beginning to notice.</p>
<p>Last year, Saskatoon officials projected that the city had its largest year-over-year population gain since the Second World War, rising by more than 14,000 people from October 2022 to October 2023. The last time the urban centre experienced such growth was in 2012, when the population increased by 7,000.</p>
<p><em>“It wasn’t something that we particularly expected,”</em> Saskatoon city planning and development director Lesley Anderson <a href="https://globalnews.ca/news/10245939/saskatoon-population-increase-2023/#:~:text=link%20Copy%20link-,Saskatoon%20city%20officials%20are%20estimating%20the%20city%20had%20its%20largest,1%2C%202023." target="_blank" rel="noopener">told</a> Global News. <em>“It’s not something that catches us off guard in terms of being able to deal with it, although those numbers were surprising.”</em></p>
<p>Because of this, city officials are determining if they have the residential units to accommodate such a sizeable jump in population levels. Considering that inventory levels are much below the long-term average, there will be a lot of catching up to do. The city council has already given the approval for a housing accelerator fund action plan to bolster residential infrastructure efforts.</p>
<p>With the national average home price up nearly eight per cent from a year ago to $660,000, prospective homebuyers are trying to stretch their home-buying dollars. As the annual inflation continues to run at a three per cent clip and mortgage rates add thousands of dollars extra a year to payments, families want options.</p>
<h2>Sustaining the Momentum</h2>
<p>For decades, Saskatoon has struggled to mirror its neighbours, whether <a href="https://blog.remax.ca/how-to-find-the-best-houses-for-sale-in-winnipeg/" target="_blank" rel="noopener">Winnipeg</a> or Calgary. But the post-crisis environment has been rather kind to the city, which leads to the question: Will Saskatoon sustain the trends of the last couple of years? Looking ahead to the rest of the year, prices are <a href="https://blog.remax.ca/a-look-at-saskatoon-real-estate/" target="_blank" rel="noopener">expected</a> to rise two per cent to roughly $369,000. Because of low inventories, Saskatoon will be a seller’s market, and local real estate experts say that developers are having a tough time keeping up with demand, ongoing labour shortages and input price pressures.</p>
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<p>The post <a href="https://blog.remax.ca/a-look-at-saskatoon-real-estate/">A Look at Saskatoon Real Estate</a> appeared first on <a href="https://blog.remax.ca">RE/MAX Canada</a>.</p>
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epaquinhttp://www.blogger.com/profile/01589631138771940331noreply@blogger.com0tag:blogger.com,1999:blog-6402346487751506041.post-87154967080354216262024-03-11T11:20:00.001-04:002024-03-11T11:20:10.285-04:00A Look at Saskatoon Real Estate<div class="fusion-fullwidth fullwidth-box fusion-builder-row-1 fusion-flex-container nonhundred-percent-fullwidth non-hundred-percent-height-scrolling" style="--awb-border-radius-top-left:0px;--awb-border-radius-top-right:0px;--awb-border-radius-bottom-right:0px;--awb-border-radius-bottom-left:0px;--awb-flex-wrap:wrap;">
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<p>The <a href="https://blog.remax.ca/canadian-housing-market-outlook/" target="_blank" rel="noopener">Canadian housing market</a> is experiencing a correction. Whether conditions escalate remains to be seen. Still, the Bank of Canada’s path to policy rate normalization is weighing on the real estate industry. But while multiple housing markets – from major urban centres to rural communities – are experiencing a mixed bag of conditions, from immense growth to holding steady to declines. A case in point is the Saskatoon real estate market. How is the Saskatoon real estate market?</p>
<p>Prices in the Saskatoon housing market have crept up at a gradual pace amid a climate of high interest rates and strengthening demand.</p>
<p>In fact, despite the pandemic-era boom, values did not venture to the moon either. This explains why Saskatoon has remained one of <a href="https://blog.remax.ca/housing-affordability-in-canada/" target="_blank" rel="noopener">Canada’s most affordable housing markets</a>. These modest gains have attracted families from other provinces and immigrants, as average prices have allowed many households to achieve the dream of ownership.</p>
<p>So, how is the Saskatoon housing sector performing to kick off 2024?</p>
<h2>Saskatoon Real Estate in 2024</h2>
<p>Could the next 12 months be huge for the Saskatoon real estate market? If the early numbers are anything to go by, it could be a terrific time to buy a residential property in this Prairie city.</p>
<p>New <a href="https://saskatchewanrealtorsassociation.ca/market-watch-january-2024/" target="_blank" rel="noopener">data</a> from the Saskatchewan Realtors Association (SRA) show that home sales surged at an annualized pace of 22 per cent, totalling 245 units. This was 16 per cent above the 10-year average.</p>
<p>As for prices, there was some easing in the Saskatoon housing sector. The benchmark price for a home slipped from $374,100 in December to $378,200 in January. That said, home prices did rise two per cent from the same time a year ago.</p>
<p>Supply has played a crucial role in the Saskatoon real estate market, with inventory levels far below the historical averages. New listings tumbled 26 per cent year-over-year and are close to 50 per cent below the decade average for this time of year. But new housing construction has started off the year rather well, with housing starts climbing 25 per cent year-over-year to 94 units, according to the Canada Mortgage and Housing Corporation.</p>
<p>Now, compared to the broader provincial real estate market, conditions are pretty similar. Home sales rose 24 per cent year-over-year and are 18 per cent above the decade average, while home prices were relatively unchanged at $319,600. Plus, housing stocks plunged by 18 per cent year-over-year and are 36 per cent below the long-term average.</p>
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<p><q class="fusion-clearfix">Higher lending rates have driven many purchasers to seek out more affordable products, resulting in further inventory declines in the more affordable segment of our market.</q></p>
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<div class="author"><span class="company-name"><strong>SRA CEO Chris Guérette</strong></span></div>
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<p><em>“Higher lending rates have driven many purchasers to seek out more affordable products, resulting in further inventory declines in the more affordable segment of our market,”</em> said SRA CEO Chris Guérette in a statement. <em>“January failed to bring new listing relief to this area of our market, and prospective buyers can continue to expect tight market conditions when searching for more affordable properties.”</em></p>
<h2>Will 2024 Change the Saskatoon Housing Market?</h2>
<p>Following the modest market correction amid the Bank of Canada’s (BoC) inflation-busting efforts, housing affordability remains a key issue in the Canadian real estate sector. As first-time homebuyers struggle to navigate the turbulent housing industry, they are searching for affordable options. And one of these is the <a href="https://blog.remax.ca/saskatoon-housing-market-outlook/" target="_blank" rel="noopener">Saskatoon real estate</a> market.</p>
<p>As the conventional five-year fixed mortgage rate continues to hover around five to six per cent and prices remain firmly above their pre-pandemic levels, households are trying to get the best bang for their buck. Saskatoon achieves this objective, and people are beginning to notice.</p>
<p>Last year, Saskatoon officials projected that the city had its largest year-over-year population gain since the Second World War, rising by more than 14,000 people from October 2022 to October 2023. The last time the urban centre experienced such growth was in 2012, when the population increased by 7,000.</p>
<p><em>“It wasn’t something that we particularly expected,”</em> Saskatoon city planning and development director Lesley Anderson <a href="https://globalnews.ca/news/10245939/saskatoon-population-increase-2023/#:~:text=link%20Copy%20link-,Saskatoon%20city%20officials%20are%20estimating%20the%20city%20had%20its%20largest,1%2C%202023." target="_blank" rel="noopener">told</a> Global News. <em>“It’s not something that catches us off guard in terms of being able to deal with it, although those numbers were surprising.”</em></p>
<p>Because of this, city officials are determining if they have the residential units to accommodate such a sizeable jump in population levels. Considering that inventory levels are much below the long-term average, there will be a lot of catching up to do. The city council has already given the approval for a housing accelerator fund action plan to bolster residential infrastructure efforts.</p>
<p>With the national average home price up nearly eight per cent from a year ago to $660,000, prospective homebuyers are trying to stretch their home-buying dollars. As the annual inflation continues to run at a three per cent clip and mortgage rates add thousands of dollars extra a year to payments, families want options.</p>
<h2>Sustaining the Momentum</h2>
<p>For decades, Saskatoon has struggled to mirror its neighbours, whether <a href="https://blog.remax.ca/how-to-find-the-best-houses-for-sale-in-winnipeg/" target="_blank" rel="noopener">Winnipeg</a> or Calgary. But the post-crisis environment has been rather kind to the city, which leads to the question: Will Saskatoon sustain the trends of the last couple of years? Looking ahead to the rest of the year, prices are <a href="https://blog.remax.ca/a-look-at-saskatoon-real-estate/" target="_blank" rel="noopener">expected</a> to rise two per cent to roughly $369,000. Because of low inventories, Saskatoon will be a seller’s market, and local real estate experts say that developers are having a tough time keeping up with demand, ongoing labour shortages and input price pressures.</p>
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<p>The post <a href="https://blog.remax.ca/a-look-at-saskatoon-real-estate/">A Look at Saskatoon Real Estate</a> appeared first on <a href="https://blog.remax.ca">RE/MAX Canada</a>.</p>
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epaquinhttp://www.blogger.com/profile/01589631138771940331noreply@blogger.com0tag:blogger.com,1999:blog-6402346487751506041.post-47504810576401156882024-03-09T12:41:00.001-05:002024-03-09T12:41:25.532-05:00What is a Foreclosure?<div class="fusion-fullwidth fullwidth-box fusion-builder-row-1 fusion-flex-container remax-text-container nonhundred-percent-fullwidth non-hundred-percent-height-scrolling" style="--awb-border-radius-top-left:0px;--awb-border-radius-top-right:0px;--awb-border-radius-bottom-right:0px;--awb-border-radius-bottom-left:0px;--awb-flex-wrap:wrap;">
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<p>How many economists and market analysts anticipated the Canadian real estate market would experience a crisis when the Bank of Canada (BoC) announced it would begin raising interest rates? Roughly two years later, the nation’s housing market has remained intact, although there have been pockets of weakness across the country. But the current housing landscape has been short of foreclosures, delinquencies, and price crashes.</p>
<p>According to the <a href="https://www.cmhc-schl.gc.ca/professionals/housing-markets-data-and-research/housing-data/data-tables/mortgage-and-debt/mortgage-delinquency-rate-canada-provinces-cmas" target="_blank" rel="noopener">Canada Mortgage and Housing Corporation (CMHC)</a>, the mortgage delinquency rate has never topped 0.15 per cent since the central bank pulled the trigger on its first rate hike in the spring of 2022. This is a result of immense pandemic-era savings and a solid labour market.</p>
<p>In other words, homeowners have not been forced to foreclose on their residential properties or engage in a forced sale to cover the cost of their mortgage.</p>
<p>That said, it is still vital to be equipped with the knowledge of how the process works.</p>
<h2>Reasons for Foreclosing</h2>
<p>Unfortunately, there could be many reasons as to why Canadians might foreclose on their homes. It could be because of rocketing household debt that is drowning families. A loss of employment, the death of a loved one, and a cost-of-living crisis could mean individuals can no longer afford their houses, townhomes, or condos.</p>
<p>Deciding to purchase a home is one of the most significant financial decisions you will make. It is essential to do your research, talk to your real estate agent, and make plans to ensure you purchase a home that is within your price range. In the same way, it is important to understand what you need to know to make a financially responsible decision; it’s important to understand what can happen if something were to happen and you are no longer able to pay your mortgage, resulting in a foreclosure.</p>
<h2>The Mortgage Foreclosure Process in Canada</h2>
<p>Foreclosure is a term you may have heard before, but if you don’t fully understand what exactly it means, we can explain! A foreclosure is what happens when a homeowner fails to pay the mortgage on their home, forfeiting the rights to the property. Since a foreclosure is not in the best interest of both the borrower and the lender, the lender will often reach out to try and resolve the issue as soon as payments have been missed. If that happens and a resolution is not reached, the home will likely go into one of two common remedies in Canada: Power of Sale or Judicial Foreclosure.</p>
<h3>Power of Sale</h3>
<p>PREFERRED IN: Ontario, New Brunswick, Newfoundland & Labrador, and Prince Edward Island</p>
<p>With this option, the lender is required to provide the borrower with notice and 35 days to pay what is owed and get the schedule back on track. If this does not happen, the lender will now be able to sell the property without having to involve the courts. Once the homeowner has been evicted, the lender would arrange for the home to go to auction through a real estate agent.</p>
<p>The money from the sale of the home will cover all of the fees that are owed, and if there is a remaining balance, it will be returned to you. If all fees are not covered, the lender has the right to sue you for the remainder.</p>
<h3>Judicial Foreclosure</h3>
<p>PREFERRED IN: British Columbia, Alberta, Quebec, Manitoba, Saskatoon, and Nova Scotia</p>
<p>While the Power of Sale option limits the involvement of the courts, the Judicial Foreclosure ensures the courts are heavily involved. Because of this, it can sometimes be a much longer process.</p>
<p>At the beginning of this, a Certificate of Foreclosure is obtained by the lender, and the ownership of the property is transferred to them. Once this happens, the borrower has no right to any capital gains that may result from the sale of the property.</p>
<h2>Will You Lose Your Home?</h2>
<p>It is commonly believed that foreclosure will lead to the loss of your property. However, various factors need to be considered:</p>
<ul>
<li><strong>Financial Situation</strong>: What do your personal finances look like? Do you have employment? How much debt do you possess? How behind are you on your mortgage payments?</li>
<li><strong>Partnership</strong>: The homeowner wants to work with the lender to come to a conclusion and determine an appropriate resolution that benefits both sides.</li>
<li><strong>Objective</strong>: If you want to keep your home, you need to convey a willingness to defend your home. This could be hiring an attorney or doing your part to solve your financial problems.</li>
</ul>
<p>Remember, just because you might have missed a mortgage payment or two does not mean you will face a foreclosure situation immediately. However, you do need to speak with the bank to ensure it does not metastasize. Lenders will typically wait up to six months’ worth of missed mortgage payments before initiating the foreclosure process.</p>
<h3>Response to Plaintiff</h3>
<p>After you have received foreclosure documents, it is imperative that you respond to these forms within 20 days. The best way to reply is with a Statement of Defense form or a Demand for Notice. However, should you fail to answer in the allotted period, the inaction concedes that you will not fight the foreclosure process. The mortgage lender will then contact the court that you are in default.</p>
<h2>How to Avoid Foreclosure</h2>
<p>In the end, even if you are falling behind on your mortgage payments, there are still many avenues to explore to avoid foreclosure on your residential property. Here is a brief list of actions you can take to avert disaster:</p>
<ul>
<li><strong>Do Your Research</strong>: Before agreeing to the terms of a mortgage, know the provisions and determine if they are reasonable.</li>
<li><strong>Talk to Your Lender</strong>: If you have fallen on hard times, you should immediately speak with your mortgage lender.</li>
<li><strong>Seek Financial Help</strong>: Whether you are drowning in debt or you are tapping into your savings frequently, immediately seek financial help before it spirals out of control.</li>
<li><strong>Attorney</strong>: Whatever happens, be sure to consider getting in touch with a real estate lawyer.</li>
<li><strong>Home Loan Options</strong>: Speak with a mortgage lender and determine if there are any ways to modify the terms of the home loan to prevent missing payments.</li>
<li><strong>For Sale</strong>: In the end, if it is becoming too overwhelming to maintain a home, speak with a real estate agent and sell your property before missing your first payment.</li>
</ul>
<h3>Be Prepared</h3>
<p>Ultimately, buying a home is the biggest financial decision you will ever make in your lifetime. This is not something you should walk into lightly. Therefore, from the time you think about acquiring a residential property to the moment you sign the contract, you will need to do your due diligence and ensure that this is something you can afford to do. Moreover, is this a substantial investment that you can be responsible enough to manage?</p>
</div>
</div>
</div>
</div>
</div>
<p>The post <a href="https://blog.remax.ca/what-is-a-foreclosure/">What is a Foreclosure?</a> appeared first on <a href="https://blog.remax.ca">RE/MAX Canada</a>.</p>
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epaquinhttp://www.blogger.com/profile/01589631138771940331noreply@blogger.com0tag:blogger.com,1999:blog-6402346487751506041.post-81849411160918835872024-03-09T12:39:00.001-05:002024-03-09T12:39:45.759-05:00What is a Foreclosure?<div class="fusion-fullwidth fullwidth-box fusion-builder-row-1 fusion-flex-container remax-text-container nonhundred-percent-fullwidth non-hundred-percent-height-scrolling" style="--awb-border-radius-top-left:0px;--awb-border-radius-top-right:0px;--awb-border-radius-bottom-right:0px;--awb-border-radius-bottom-left:0px;--awb-flex-wrap:wrap;">
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<div class="fusion-column-wrapper fusion-flex-justify-content-flex-start fusion-content-layout-column">
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<p>How many economists and market analysts anticipated the Canadian real estate market would experience a crisis when the Bank of Canada (BoC) announced it would begin raising interest rates? Roughly two years later, the nation’s housing market has remained intact, although there have been pockets of weakness across the country. But the current housing landscape has been short of foreclosures, delinquencies, and price crashes.</p>
<p>According to the <a href="https://www.cmhc-schl.gc.ca/professionals/housing-markets-data-and-research/housing-data/data-tables/mortgage-and-debt/mortgage-delinquency-rate-canada-provinces-cmas" target="_blank" rel="noopener">Canada Mortgage and Housing Corporation (CMHC)</a>, the mortgage delinquency rate has never topped 0.15 per cent since the central bank pulled the trigger on its first rate hike in the spring of 2022. This is a result of immense pandemic-era savings and a solid labour market.</p>
<p>In other words, homeowners have not been forced to foreclose on their residential properties or engage in a forced sale to cover the cost of their mortgage.</p>
<p>That said, it is still vital to be equipped with the knowledge of how the process works.</p>
<h2>Reasons for Foreclosing</h2>
<p>Unfortunately, there could be many reasons as to why Canadians might foreclose on their homes. It could be because of rocketing household debt that is drowning families. A loss of employment, the death of a loved one, and a cost-of-living crisis could mean individuals can no longer afford their houses, townhomes, or condos.</p>
<p>Deciding to purchase a home is one of the most significant financial decisions you will make. It is essential to do your research, talk to your real estate agent, and make plans to ensure you purchase a home that is within your price range. In the same way, it is important to understand what you need to know to make a financially responsible decision; it’s important to understand what can happen if something were to happen and you are no longer able to pay your mortgage, resulting in a foreclosure.</p>
<h2>The Mortgage Foreclosure Process in Canada</h2>
<p>Foreclosure is a term you may have heard before, but if you don’t fully understand what exactly it means, we can explain! A foreclosure is what happens when a homeowner fails to pay the mortgage on their home, forfeiting the rights to the property. Since a foreclosure is not in the best interest of both the borrower and the lender, the lender will often reach out to try and resolve the issue as soon as payments have been missed. If that happens and a resolution is not reached, the home will likely go into one of two common remedies in Canada: Power of Sale or Judicial Foreclosure.</p>
<h3>Power of Sale</h3>
<p>PREFERRED IN: Ontario, New Brunswick, Newfoundland & Labrador, and Prince Edward Island</p>
<p>With this option, the lender is required to provide the borrower with notice and 35 days to pay what is owed and get the schedule back on track. If this does not happen, the lender will now be able to sell the property without having to involve the courts. Once the homeowner has been evicted, the lender would arrange for the home to go to auction through a real estate agent.</p>
<p>The money from the sale of the home will cover all of the fees that are owed, and if there is a remaining balance, it will be returned to you. If all fees are not covered, the lender has the right to sue you for the remainder.</p>
<h3>Judicial Foreclosure</h3>
<p>PREFERRED IN: British Columbia, Alberta, Quebec, Manitoba, Saskatoon, and Nova Scotia</p>
<p>While the Power of Sale option limits the involvement of the courts, the Judicial Foreclosure ensures the courts are heavily involved. Because of this, it can sometimes be a much longer process.</p>
<p>At the beginning of this, a Certificate of Foreclosure is obtained by the lender, and the ownership of the property is transferred to them. Once this happens, the borrower has no right to any capital gains that may result from the sale of the property.</p>
<h2>Will You Lose Your Home?</h2>
<p>It is commonly believed that foreclosure will lead to the loss of your property. However, various factors need to be considered:</p>
<ul>
<li><strong>Financial Situation</strong>: What do your personal finances look like? Do you have employment? How much debt do you possess? How behind are you on your mortgage payments?</li>
<li><strong>Partnership</strong>: The homeowner wants to work with the lender to come to a conclusion and determine an appropriate resolution that benefits both sides.</li>
<li><strong>Objective</strong>: If you want to keep your home, you need to convey a willingness to defend your home. This could be hiring an attorney or doing your part to solve your financial problems.</li>
</ul>
<p>Remember, just because you might have missed a mortgage payment or two does not mean you will face a foreclosure situation immediately. However, you do need to speak with the bank to ensure it does not metastasize. Lenders will typically wait up to six months’ worth of missed mortgage payments before initiating the foreclosure process.</p>
<h3>Response to Plaintiff</h3>
<p>After you have received foreclosure documents, it is imperative that you respond to these forms within 20 days. The best way to reply is with a Statement of Defense form or a Demand for Notice. However, should you fail to answer in the allotted period, the inaction concedes that you will not fight the foreclosure process. The mortgage lender will then contact the court that you are in default.</p>
<h2>How to Avoid Foreclosure</h2>
<p>In the end, even if you are falling behind on your mortgage payments, there are still many avenues to explore to avoid foreclosure on your residential property. Here is a brief list of actions you can take to avert disaster:</p>
<ul>
<li><strong>Do Your Research</strong>: Before agreeing to the terms of a mortgage, know the provisions and determine if they are reasonable.</li>
<li><strong>Talk to Your Lender</strong>: If you have fallen on hard times, you should immediately speak with your mortgage lender.</li>
<li><strong>Seek Financial Help</strong>: Whether you are drowning in debt or you are tapping into your savings frequently, immediately seek financial help before it spirals out of control.</li>
<li><strong>Attorney</strong>: Whatever happens, be sure to consider getting in touch with a real estate lawyer.</li>
<li><strong>Home Loan Options</strong>: Speak with a mortgage lender and determine if there are any ways to modify the terms of the home loan to prevent missing payments.</li>
<li><strong>For Sale</strong>: In the end, if it is becoming too overwhelming to maintain a home, speak with a real estate agent and sell your property before missing your first payment.</li>
</ul>
<h3>Be Prepared</h3>
<p>Ultimately, buying a home is the biggest financial decision you will ever make in your lifetime. This is not something you should walk into lightly. Therefore, from the time you think about acquiring a residential property to the moment you sign the contract, you will need to do your due diligence and ensure that this is something you can afford to do. Moreover, is this a substantial investment that you can be responsible enough to manage?</p>
</div>
</div>
</div>
</div>
</div>
<p>The post <a href="https://blog.remax.ca/what-is-a-foreclosure/">What is a Foreclosure?</a> appeared first on <a href="https://blog.remax.ca">RE/MAX Canada</a>.</p>
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epaquinhttp://www.blogger.com/profile/01589631138771940331noreply@blogger.com0tag:blogger.com,1999:blog-6402346487751506041.post-78477407318072317452024-03-08T02:45:00.000-05:002024-03-08T02:44:59.943-05:00Bénéficier de primes CEE avec la mise en place des matelas isolants<p>L’efficacité énergétique est devenue une préoccupation majeure dans notre société contemporaine. Face aux défis du changement climatique et à la nécessité de réduire notre empreinte écologique, l’isolation thermique des bâtiments apparaît comme une solution incontournable. À ce […]</p>
<p>L’article <a href="https://info-immo.com/prime-cee-et-matelas-isolant/">Bénéficier de primes CEE avec la mise en place des matelas isolants</a> est apparu en premier sur <a href="https://info-immo.com"></a>.</p>
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epaquinhttp://www.blogger.com/profile/01589631138771940331noreply@blogger.com0tag:blogger.com,1999:blog-6402346487751506041.post-32016720433075588792024-03-07T10:56:00.001-05:002024-03-07T10:56:27.868-05:00The Ultimate Guide to Buying Land for Sale in Canada<div class="fusion-fullwidth fullwidth-box fusion-builder-row-1 fusion-flex-container has-pattern-background has-mask-background nonhundred-percent-fullwidth non-hundred-percent-height-scrolling" style="--awb-border-radius-top-left:0px;--awb-border-radius-top-right:0px;--awb-border-radius-bottom-right:0px;--awb-border-radius-bottom-left:0px;--awb-flex-wrap:wrap;">
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<p>Buying land, like any significant purchase, can seem daunting if you’ve never done it before and don’t know the rules of the game. As a commercial real estate investment strategy, you can buy a plot during a dip and sell it when the market rebounds, hold it and hope for an even bigger pay-off further down the road, or develop it for your commercial purposes.</p>
<p>No matter how you want to use it, when it comes to buying land for sale in Canada, the importance of doing due diligence before you sign on the dotted line can’t be overstated.</p>
<h2>Types of Land</h2>
<p>Land for sale in Canada is broken down into two categories:</p>
<p>Raw land is property that hasn’t been developed before, that may not have ready access to utilities such as electricity, gas and water, and may even lack road access altogether.</p>
<p>Vacant land is property that may have been developed before, and that is serviced or partially serviced by utilities offering potentially viable power or water. It may also have existing vacant buildings or structures on it.</p>
<h2>How Land is Valued</h2>
<p>A variety of factors determine the value and cost of plots of land, including:</p>
<p>Raw or vacant land designation – Even though it may come with access to utilities and roads, vacant land doesn’t always outvalue raw land. A developer with a big budget looking to create an eco-luxury experience may favour the privacy and remote feel that raw land can offer, knowing they can use solar, wind and geothermal energy to power up their property, draw their water from an onsite well, fly clients into the area and bring them to the site on the roads they’ll build.</p>
<p>Lot size – Again, although larger lots will usually have higher valuations, small lots with access to utilities and roads or located in an up-and-coming location or community could end up being more costly than their cousins with more acreage.</p>
<p>Proximity to utilities – It’s hard to build, let alone work without access to utilities. Construction requires electricity to run tools and water to mix cement, and even when onsite generators are available, they can be costly to run or prohibited due to noise restrictions or environmental regulations.</p>
<p>As a result, access to utilities almost always increases the value of a property. The few exceptions might be where a utility line cuts across a lot, restricting the useable space for development, or where utility or water mains can only be accessed via a neighbouring property. In that case, the land might be less valuable than a plot with utility access at the road’s edge.</p>
<p>Access to roads – Road access isn’t just needed to bring customers to your plot should you decide to develop it as a retail, restaurant, hotel or multi-use facility; it’s also the way you’ll transport building materials and construction workers to the site in the initial development phase, how employees will commute to the location and how you’ll restock the facility with supplies once it’s up and running. As with utility access, road access almost always increases the value of a property.</p>
<h2>Verifying the Value of Land With The Help Of a Real Estate or Land Agent</h2>
<p><a href="https://www.remax.ca/commercial" target="_blank" rel="noopener">Commercial real estate</a> agents specializing in land for sale in Canada or licensed land agents can help you verify the value of the <a href="https://blog.remax.ca/commercial-land-trends/" target="_blank" rel="noopener">land</a> you’re interested in by comparing it with similar plots in the area and by conducting a strategic location analysis.</p>
<h2>Compiling Information and Doing Due Diligence</h2>
<p>Once you have a plot in mind, you’ll need to carry out the following due diligence to determine if the property is right for you:</p>
<h3>Conduct or Review a Recent Land Survey</h3>
<p>A land survey determines a property’s legal boundaries and easements but will also provide information on gas and power connections, water drainage and sewage systems, plus other features that could affect a build. Unless a survey was done within the last year or two, it’s essential that you conduct your own survey and ensure your name is appended to the effort so that it’s considered legally valid.</p>
<h3>Conduct a Topographical Study</h3>
<p>It’s more expensive and takes more planning to develop land on an incline. Snow melt, rainwater runoff and mudslides can damage building structures, basements and foundations and cause significant environmental and health issues. Your architect, site engineer, and contractor will each need to take the topography of the land into account when creating their designs and quotes for development.</p>
<h3>Conduct a Soil Test</h3>
<p>You won’t be able to build if your land fails a soil test. You’ll need to hire a geotechnical engineer to conduct the test, which, along with listing the soil’s characteristics, ensures your land can support the structures built upon it, can absorb water as required, and if a septic system is needed, keep fluid leaks or effluent from the drain field from contaminating your property or the water table. Like the water well test that we’ll describe later, you can’t do a soil test prior to purchasing the land, but you can make buying the <a href="https://blog.remax.ca/commercial-real-estate-ottawa/" target="_blank" rel="noopener">land</a> contingent on your approval of the test’s results within a contingency section of your Agreement of Purchase and Sale.</p>
<h3>Make Sure Zoning is Correct</h3>
<p>As with all other commercial real estate purchases, it’s imperative that the <a href="https://blog.remax.ca/how-zoning-issues-can-impact-your-commercial-space/" target="_blank" rel="noopener">zoning</a> of the land you want to purchase matches up with how you want to use or develop it. You can check your lot’s zoning by accessing the online resources available from your municipal planning department or by contacting the department directly. Your commercial real estate agent and a lawyer can also assist in the process.</p>
<h3>Request a List of Restrictions</h3>
<p>Make sure you’re aware of any restrictions on your land, as restrictions remain in place even when the land changes ownership. Restrictions can include building height, number of vehicles allowed on a lot, permissions for fencing, etc. While you may be able to negotiate changes to an outdated list of restrictions, it’s better to walk away from the deal if the rules threaten to undermine your development plans.</p>
<h3>Evaluate the Land in Terms of Future Growth and Expansion</h3>
<p>If you plan on developing the land and your business expands, will the site be able to handle the addition of new buildings or facilities? Or, if you want to rent space to one or more tenants, do zoning bylaws and restrictions allow it?</p>
<h3>Understand Environmental Protections</h3>
<p>Contact your local conservation authority to ensure your lot isn’t located in an environmentally protected area. If it is, development may not be allowed, or restrictions may severely limit the type and size of buildings you can construct. Additional setback requirements from rivers or lakes will also be required.</p>
<h3>Estimate the Total Cost of Tapping into Utilities</h3>
<p>If you want to construct a commercial building on your land, you’ll need to outfit the property with utilities such as water, gas, electricity and even Internet access. First, you’ll want to ensure the land you purchase is near power lines and a water main; otherwise, accessing the nearest utility hub could be costly.</p>
<p>Then, you’ll need to factor in the following:</p>
<ul>
<li>Septic System: If your land isn’t connected to municipal sewer lines, you’ll need to install a biodigester or septic system with a drain field. First, check that square footage can accommodate both, and review your soil test to determine if the land meets standard percolation requirements.</li>
<li>Water Well: If you’re buying vacant land with a water well, you’ll want to conduct flow rate and water quality tests. As with soil tests, well-testing cannot be conducted prior to purchase and must be part of the conditions of your offer.</li>
<li>Gas Lines: Your soil test will determine whether gas lines pass through the property. If they do, it could be a deal breaker, as not only will it restrict the area you can build on, but it could also be a serious safety concern.</li>
</ul>
<h3>Aim to Stay Out of the Way of Natural Disasters</h3>
<p>Some locations are more prone to natural disasters than others. Remote locations can be subject to fire, wind, hail and snow events, while areas closer to city centres may be prone to flash flooding.</p>
<p>Your land survey should identify the environmental factors that could impact on your property. If it doesn’t provide the level of detail you want, dig deeper by researching the frequency of natural disasters in the local area and also note whether you’re in the path of dams, noisy power plants or municipal sewer drains. A history of flooding, tornadoes, wildfires or earthquakes could dramatically increase the cost of your insurance, if you can get it at all, while being in the path of a dam that’s not been well-maintained could spell disaster in more ways than one.</p>
<h3>Explore Financing Options</h3>
<p>The last thing you’ll need to determine is whether you need financing to buy the land and, if so, what type of mortgage best suits your plans for the property.</p>
<p>Options include:</p>
<ul>
<li>Land Mortgages: These loans are similar to residential mortgages but require a more significant down payment and are usually repaid at higher interest rates.</li>
<li>Construction Mortgages: These loans provide short-term financing for buying land and building on it. During the construction phase, you typically make interest-only payments (or no payments at all, in some cases) based on your outstanding loan balance. Often, repayment doesn’t begin until six to 24 months after receiving the loan.</li>
<li>Agricultural Loans: The Canadian Agricultural Loans Act (CALA) Program is designed to increase the availability of loans to farmers and agricultural co-operatives. Farmers can use these loans to establish, improve and develop farms, while agricultural co-operatives may also access loans to process, distribute, or market the products of farming.</li>
</ul>
<h2>Don’t Shy Away from Purchasing Land for Sale in Canada</h2>
<p>Investing in raw or vacant land comes with inherent risks, but as with any commercial real estate endeavour, thorough due diligence surfaces them so you can make informed decisions. Don’t shy away from purchasing land for sale in Canada. With the right team by your side and a step-by-step process for evaluating properties, you could find yourself unfurling the deed to your land in no time flat.</p>
</div>
</div>
</div>
</div>
</div>
<p>The post <a href="https://blog.remax.ca/the-ultimate-guide-to-buying-land-for-sale-in-canada/">The Ultimate Guide to Buying Land for Sale in Canada</a> appeared first on <a href="https://blog.remax.ca">RE/MAX Canada</a>.</p>
<br />
<br />
from RE/MAX Canada https://ift.tt/JVosfQT<br />
RE/MAX Canada
epaquinhttp://www.blogger.com/profile/01589631138771940331noreply@blogger.com0tag:blogger.com,1999:blog-6402346487751506041.post-68453917172709899452024-03-07T10:54:00.001-05:002024-03-07T10:54:46.768-05:00The Ultimate Guide to Buying Land for Sale in Canada<div class="fusion-fullwidth fullwidth-box fusion-builder-row-1 fusion-flex-container has-pattern-background has-mask-background nonhundred-percent-fullwidth non-hundred-percent-height-scrolling" style="--awb-border-radius-top-left:0px;--awb-border-radius-top-right:0px;--awb-border-radius-bottom-right:0px;--awb-border-radius-bottom-left:0px;--awb-flex-wrap:wrap;">
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<p>Buying land, like any significant purchase, can seem daunting if you’ve never done it before and don’t know the rules of the game. As a commercial real estate investment strategy, you can buy a plot during a dip and sell it when the market rebounds, hold it and hope for an even bigger pay-off further down the road, or develop it for your commercial purposes.</p>
<p>No matter how you want to use it, when it comes to buying land for sale in Canada, the importance of doing due diligence before you sign on the dotted line can’t be overstated.</p>
<h2>Types of Land</h2>
<p>Land for sale in Canada is broken down into two categories:</p>
<p>Raw land is property that hasn’t been developed before, that may not have ready access to utilities such as electricity, gas and water, and may even lack road access altogether.</p>
<p>Vacant land is property that may have been developed before, and that is serviced or partially serviced by utilities offering potentially viable power or water. It may also have existing vacant buildings or structures on it.</p>
<h2>How Land is Valued</h2>
<p>A variety of factors determine the value and cost of plots of land, including:</p>
<p>Raw or vacant land designation – Even though it may come with access to utilities and roads, vacant land doesn’t always outvalue raw land. A developer with a big budget looking to create an eco-luxury experience may favour the privacy and remote feel that raw land can offer, knowing they can use solar, wind and geothermal energy to power up their property, draw their water from an onsite well, fly clients into the area and bring them to the site on the roads they’ll build.</p>
<p>Lot size – Again, although larger lots will usually have higher valuations, small lots with access to utilities and roads or located in an up-and-coming location or community could end up being more costly than their cousins with more acreage.</p>
<p>Proximity to utilities – It’s hard to build, let alone work without access to utilities. Construction requires electricity to run tools and water to mix cement, and even when onsite generators are available, they can be costly to run or prohibited due to noise restrictions or environmental regulations.</p>
<p>As a result, access to utilities almost always increases the value of a property. The few exceptions might be where a utility line cuts across a lot, restricting the useable space for development, or where utility or water mains can only be accessed via a neighbouring property. In that case, the land might be less valuable than a plot with utility access at the road’s edge.</p>
<p>Access to roads – Road access isn’t just needed to bring customers to your plot should you decide to develop it as a retail, restaurant, hotel or multi-use facility; it’s also the way you’ll transport building materials and construction workers to the site in the initial development phase, how employees will commute to the location and how you’ll restock the facility with supplies once it’s up and running. As with utility access, road access almost always increases the value of a property.</p>
<h2>Verifying the Value of Land With The Help Of a Real Estate or Land Agent</h2>
<p><a href="https://www.remax.ca/commercial" target="_blank" rel="noopener">Commercial real estate</a> agents specializing in land for sale in Canada or licensed land agents can help you verify the value of the <a href="https://blog.remax.ca/commercial-land-trends/" target="_blank" rel="noopener">land</a> you’re interested in by comparing it with similar plots in the area and by conducting a strategic location analysis.</p>
<h2>Compiling Information and Doing Due Diligence</h2>
<p>Once you have a plot in mind, you’ll need to carry out the following due diligence to determine if the property is right for you:</p>
<h3>Conduct or Review a Recent Land Survey</h3>
<p>A land survey determines a property’s legal boundaries and easements but will also provide information on gas and power connections, water drainage and sewage systems, plus other features that could affect a build. Unless a survey was done within the last year or two, it’s essential that you conduct your own survey and ensure your name is appended to the effort so that it’s considered legally valid.</p>
<h3>Conduct a Topographical Study</h3>
<p>It’s more expensive and takes more planning to develop land on an incline. Snow melt, rainwater runoff and mudslides can damage building structures, basements and foundations and cause significant environmental and health issues. Your architect, site engineer, and contractor will each need to take the topography of the land into account when creating their designs and quotes for development.</p>
<h3>Conduct a Soil Test</h3>
<p>You won’t be able to build if your land fails a soil test. You’ll need to hire a geotechnical engineer to conduct the test, which, along with listing the soil’s characteristics, ensures your land can support the structures built upon it, can absorb water as required, and if a septic system is needed, keep fluid leaks or effluent from the drain field from contaminating your property or the water table. Like the water well test that we’ll describe later, you can’t do a soil test prior to purchasing the land, but you can make buying the <a href="https://blog.remax.ca/commercial-real-estate-ottawa/" target="_blank" rel="noopener">land</a> contingent on your approval of the test’s results within a contingency section of your Agreement of Purchase and Sale.</p>
<h3>Make Sure Zoning is Correct</h3>
<p>As with all other commercial real estate purchases, it’s imperative that the <a href="https://blog.remax.ca/how-zoning-issues-can-impact-your-commercial-space/" target="_blank" rel="noopener">zoning</a> of the land you want to purchase matches up with how you want to use or develop it. You can check your lot’s zoning by accessing the online resources available from your municipal planning department or by contacting the department directly. Your commercial real estate agent and a lawyer can also assist in the process.</p>
<h3>Request a List of Restrictions</h3>
<p>Make sure you’re aware of any restrictions on your land, as restrictions remain in place even when the land changes ownership. Restrictions can include building height, number of vehicles allowed on a lot, permissions for fencing, etc. While you may be able to negotiate changes to an outdated list of restrictions, it’s better to walk away from the deal if the rules threaten to undermine your development plans.</p>
<h3>Evaluate the Land in Terms of Future Growth and Expansion</h3>
<p>If you plan on developing the land and your business expands, will the site be able to handle the addition of new buildings or facilities? Or, if you want to rent space to one or more tenants, do zoning bylaws and restrictions allow it?</p>
<h3>Understand Environmental Protections</h3>
<p>Contact your local conservation authority to ensure your lot isn’t located in an environmentally protected area. If it is, development may not be allowed, or restrictions may severely limit the type and size of buildings you can construct. Additional setback requirements from rivers or lakes will also be required.</p>
<h3>Estimate the Total Cost of Tapping into Utilities</h3>
<p>If you want to construct a commercial building on your land, you’ll need to outfit the property with utilities such as water, gas, electricity and even Internet access. First, you’ll want to ensure the land you purchase is near power lines and a water main; otherwise, accessing the nearest utility hub could be costly.</p>
<p>Then, you’ll need to factor in the following:</p>
<ul>
<li>Septic System: If your land isn’t connected to municipal sewer lines, you’ll need to install a biodigester or septic system with a drain field. First, check that square footage can accommodate both, and review your soil test to determine if the land meets standard percolation requirements.</li>
<li>Water Well: If you’re buying vacant land with a water well, you’ll want to conduct flow rate and water quality tests. As with soil tests, well-testing cannot be conducted prior to purchase and must be part of the conditions of your offer.</li>
<li>Gas Lines: Your soil test will determine whether gas lines pass through the property. If they do, it could be a deal breaker, as not only will it restrict the area you can build on, but it could also be a serious safety concern.</li>
</ul>
<h3>Aim to Stay Out of the Way of Natural Disasters</h3>
<p>Some locations are more prone to natural disasters than others. Remote locations can be subject to fire, wind, hail and snow events, while areas closer to city centres may be prone to flash flooding.</p>
<p>Your land survey should identify the environmental factors that could impact on your property. If it doesn’t provide the level of detail you want, dig deeper by researching the frequency of natural disasters in the local area and also note whether you’re in the path of dams, noisy power plants or municipal sewer drains. A history of flooding, tornadoes, wildfires or earthquakes could dramatically increase the cost of your insurance, if you can get it at all, while being in the path of a dam that’s not been well-maintained could spell disaster in more ways than one.</p>
<h3>Explore Financing Options</h3>
<p>The last thing you’ll need to determine is whether you need financing to buy the land and, if so, what type of mortgage best suits your plans for the property.</p>
<p>Options include:</p>
<ul>
<li>Land Mortgages: These loans are similar to residential mortgages but require a more significant down payment and are usually repaid at higher interest rates.</li>
<li>Construction Mortgages: These loans provide short-term financing for buying land and building on it. During the construction phase, you typically make interest-only payments (or no payments at all, in some cases) based on your outstanding loan balance. Often, repayment doesn’t begin until six to 24 months after receiving the loan.</li>
<li>Agricultural Loans: The Canadian Agricultural Loans Act (CALA) Program is designed to increase the availability of loans to farmers and agricultural co-operatives. Farmers can use these loans to establish, improve and develop farms, while agricultural co-operatives may also access loans to process, distribute, or market the products of farming.</li>
</ul>
<h2>Don’t Shy Away from Purchasing Land for Sale in Canada</h2>
<p>Investing in raw or vacant land comes with inherent risks, but as with any commercial real estate endeavour, thorough due diligence surfaces them so you can make informed decisions. Don’t shy away from purchasing land for sale in Canada. With the right team by your side and a step-by-step process for evaluating properties, you could find yourself unfurling the deed to your land in no time flat.</p>
</div>
</div>
</div>
</div>
</div>
<p>The post <a href="https://blog.remax.ca/the-ultimate-guide-to-buying-land-for-sale-in-canada/">The Ultimate Guide to Buying Land for Sale in Canada</a> appeared first on <a href="https://blog.remax.ca">RE/MAX Canada</a>.</p>
<br />
<br />
<br />
from RE/MAX Canada https://ift.tt/JVosfQT<br />
RE/MAX Canada
epaquinhttp://www.blogger.com/profile/01589631138771940331noreply@blogger.com0tag:blogger.com,1999:blog-6402346487751506041.post-54220669600213184272024-03-06T09:05:00.001-05:002024-03-06T09:05:06.091-05:00The Ultimate Guide to Landlord-Tenant Law in Ontario<div class="fusion-fullwidth fullwidth-box fusion-builder-row-6 fusion-flex-container has-pattern-background has-mask-background nonhundred-percent-fullwidth non-hundred-percent-height-scrolling" style="--awb-border-radius-top-left:0px;--awb-border-radius-top-right:0px;--awb-border-radius-bottom-right:0px;--awb-border-radius-bottom-left:0px;--awb-flex-wrap:wrap;">
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<p>The financial rewards of investing in <a href="https://blog.remax.ca/ontarios-growth-making-the-multi-family-investment-market-more-attractive/" target="_blank" rel="noopener">multifamily commercial real estate</a> properties or leasing out space you already own can be significant. Having a steady flow of monthly rental income can offer you greater financial freedom both now and in the future.</p>
<p>Still, landlord-tenant relationships can be complicated. If you’re considering becoming a landlord in Ontario, an in-depth understanding of landlord and tenant responsibilities under Ontario’s Residential Tenancies Act can help make your single or <a href="https://blog.remax.ca/a-look-at-four-trends-in-multifamily-real-estate/" target="_blank" rel="noopener">multifamily</a> rental an amicable and profitable business venture.</p>
<h2>What is Landlord-Tenant Law?</h2>
<p>Landlord-tenant law refers to the various provincial and territorial legislations that outline the rights and responsibilities of landlords and tenants involved in residential and commercial leases and may also govern rental application and screening processes.</p>
<p>In this article, we’ll focus on the residential side of the act.</p>
<h2>The Residential Tenancies Act (RTA) in Ontario</h2>
<p>The Ontario RTA (formerly known as the Ontario Landlord and Tenant Act) sets out landlord-tenant rights and responsibilities once the parties enter into a tenancy agreement. Ontario’s Landlord and Tenant Board (LTB) ensures the rights and obligations of both landlords and tenants are balanced and is a tribunal with the authority to resolve disagreements between landlords and tenants.</p>
<h2>Tenancy Agreements</h2>
<p>So what exactly is a tenancy agreement? Simply put, a tenancy agreement – also known as a rental agreement or lease – is a contract between a landlord and a tenant stating that the tenant will pay an agreed monthly rent in exchange for the right to occupy a residential rental space or property.</p>
<p>Residential tenancies refer to situations in which a tenant is renting private living space, such as in a:</p>
<ul>
<li>Room</li>
<li>Basement or basement suite</li>
<li>House</li>
<li>Duplex</li>
<li>Townhouse</li>
<li>Apartment</li>
</ul>
<p>Ontario’s Residential Tenancy Act includes information regarding:</p>
<ul>
<li>Tenancy agreements</li>
<li>Landlord-tenant responsibilities</li>
<li>Maintenance standards</li>
<li>Rules related to rent and rent increases</li>
<li>Subletting rental units</li>
<li>Apportionment of utility costs</li>
<li>Termination of tenancies</li>
<li>Privacy requirements</li>
<li>Landlord and Tenant Board responsibilities and powers</li>
</ul>
<h2>Tenant Screening: The Secret to Profit and Positive Landlord-Tenant Relationships</h2>
<p>As a landlord, your business depends on keeping vacancy rates as low as possible. But you don’t want just anyone renting one of your units. You want a tenant who pays their rent on time, keeps their rental unit in good condition and respects other tenants and the community around them.</p>
<p>The RTA sets out what can and can’t be asked during tenant screening processes so landlords can acquire the information they need in a non-discriminatory way.</p>
<p>When screening applicants, landlords can ask only for the following:</p>
<ul>
<li>Rental history (although if a person does not have a history of renting – as in the case of student housing or <a href="https://blog.remax.ca/the-role-of-population-growth-in-canadas-housing-shortage/" target="_blank" rel="noopener">newcomers to Canada</a> – this cannot legally be used against them)</li>
<li>Permission to run credit checks and credit references</li>
<li>Legal name, address and date of birth (to conduct a credit check)</li>
<li>Information about a prospective tenant’s passport, driver’s license, source of income and expenses, but only for:<br />
-obtaining a more detailed credit report<br />
-ensuring the credit check is being done on the correct person and not someone with the same name and date of birth<br />
-the number and names of any persons that will be living in the rental unit</li>
</ul>
<p>Landlords cannot explicitly ask about or refuse to rent to a tenant based on their:</p>
<ul>
<li>Age</li>
<li>Race</li>
<li>Creed</li>
<li>Colour</li>
<li>Religion</li>
<li>Nationality</li>
<li>Ethnic origin and place of origin</li>
<li>Gender, gender identity or gender expression</li>
<li>Sexual orientation</li>
<li>Marital or family status</li>
<li>Physical or mental disabilities</li>
<li>Political belief or association</li>
<li>Lawful source of income</li>
<li>Pardoned criminal conviction</li>
</ul>
<h2>Standardized Lease Requirements</h2>
<p>In Ontario, landlords must use a Standardized Lease developed by the provincial government for most residential tenancy agreements.</p>
<p>Available in multiple languages, from Arabic to Vietnamese, the form uses plain language to clarify landlords’ and tenants’ roles and responsibilities. When complete, it creates a binding contract between the landlord and tenant.</p>
<h2>Landlord Responsibilities</h2>
<p>In addition to obeying Ontario’s laws and complying with the terms of a tenant’s lease, landlords must:</p>
<h3>Respect Tenant Privacy</h3>
<p>As a landlord, you must respect and protect your tenants’ privacy, especially when it comes to the information you may have collected about them in your tenant-screening processes.</p>
<p>In most of Canada, landlords must comply with the government of Canada’s <a href="https://www.priv.gc.ca/en/privacy-topics/landlords-and-tenants/privacy-in-the-landlord-and-tenant-relationship/" target="_blank" rel="noopener">Personal Information Protection and Electronic Documents Act</a> (PIPEDA).</p>
<p>According to PIPEDA, landlords must:</p>
<ul>
<li>Identify the reasons for collecting personal information before or at the time of collection</li>
<li>Obtain a tenant’s consent when collecting, using or disclosing a tenant’s personal information</li>
<li>Use a tenant’s personal information only for the intended reasons</li>
<li>Provide tenants with access to the personal information that you hold about them and allow them to challenge its accuracy.</li>
<li>Protect a tenant’s personal information with appropriate physical or digital safeguards.</li>
</ul>
<h3>Provide Safe and Habitable Housing</h3>
<p>Landlords need to provide safe and habitable housing by ensuring:</p>
<ul>
<li>The property they rent meets applicable housing codes, zoning laws, and fire and environmental regulations.</li>
<li>The rental unit and property are structurally sound</li>
<li>The rental unit and property’s entrances have working locks</li>
<li>Electrical, plumbing and HVAC systems are maintained</li>
<li>Hazards are removed from the property</li>
<li>Steps are taken to prevent pest infestations</li>
<li>Repairs are performed in a timely manner</li>
</ul>
<p>Disagreement on what constitutes the proper level of building maintenance or timeliness, in the case of repairs, can lead to disputes that can quickly turn ugly. Neglecting to complete a repair could cause a tenant to file a Tenant Application with the LTB, which could decide to remedy the situation by requiring you to reimburse the tenant for any damages caused to their property, the cost of the repair (if the tenant hired someone else to perform the repair work) or even require you to offer future rent abatements as compensation for the tenant having to live in a building in a dilapidated state.</p>
<p>Landlords cannot retaliate against a tenant for making such a complaint. When you’re ready to fulfill your obligations and make repairs, you’ll need to give your tenant adequate notice (typically a minimum of 24 hours before entering the unit) and let them know how long you’ll need to be in their space.</p>
<h3>Follow Guidelines On Allowable Rent Increases</h3>
<ul>
<li>Ontario guidelines dictate the maximum percentage a landlord can increase most tenants’ rent by during a year without the approval of the Landlord and Tenant Board.This guideline applies to tenants living in:</li>
<li>Rented houses, apartments, basement apartments and condos</li>
<li>Care homes</li>
<li>Mobile homes</li>
<li>Land lease communities</li>
</ul>
<p>It does not apply to:</p>
<ul>
<li>New buildings, additions to existing buildings and most new basement apartments that are occupied for residential purposes for the first time after November 15, 2018 (as these are exempt from rent control)</li>
<li>Rental units upon turnover of a tenancy</li>
<li>Community housing units</li>
<li>Long-term care homes</li>
<li>Commercial properties</li>
</ul>
<h3>Follow Guidelines on Tenant Evictions</h3>
<p>Landlords cannot evict tenants on a whim. Landlords must follow a process even when they want to evict for a “no cause” reason. Notice periods also vary depending on the cause.</p>
<p>In Ontario, tenants have security of tenancy. This means that a tenant can continue to occupy a rental unit until:</p>
<ul>
<li>The tenant decides to leave and gives the landlord proper notice that they intend to move out</li>
<li>The landlord and tenant agree to end the tenancy, or</li>
<li>The landlord gives the tenant a notice to end the tenancy for a reason allowed by the Ontario Residential Tenancies Act, and</li>
<li>The tenant agrees to move, or</li>
<li>The tenant disagrees with the landlord’s notice, the landlord applies to the LTB, and the LTB issues an eviction order</li>
</ul>
<p>Examples of “for cause” reasons for ending a tenancy include:</p>
<ul>
<li>Not paying the rent in full</li>
<li>Causing damage to the rental property</li>
<li>Disturbing other tenants or the landlord</li>
<li>Illegal activity in the rental unit or residential complex</li>
<li>There are also reasons for ending a tenancy unrelated to what a tenant has or hasn’t done. These are called “no-fault” reasons.</li>
</ul>
<p>Examples of “no-fault” reasons for ending a tenancy include:</p>
<ul>
<li>The landlord plans to do major repairs or renovations that require a building permit, and they can’t do the work unless the rental unit is empty</li>
<li>The landlord requires the rental unit because the landlord, a member of the landlord’s immediate family or caregiver wishes to move into the unit.</li>
<li>The landlord has agreed to sell the property, and the purchaser requires all or part of the property because the purchaser, a member of the purchaser’s immediate family or caregiver, wishes to move into the unit. (This reason for eviction only applies in rental buildings with three or fewer units or condominium units)</li>
</ul>
<p>In most cases, the landlord must compensate the tenant if they evict them for a “no-fault” reason. The amount of compensation varies depending on the basis and the number of units in the building.</p>
<p>While the parties resolve an eviction notice, landlords cannot prevent tenants from entering or occupying their rental unit or remove their tenant’s personal possessions from the space.</p>
<p>Eviction tends to be a time-intensive and costly process for landlords, making effective tenant-screening processes and resolving maintenance, repair and relationship issues between landlords and their tenants crucial to long-term business success.</p>
<h2>Are You Ready To Become A Landlord In Ontario?</h2>
<p>Though the profit potential is substantial, being a landlord isn’t a “set-it-and-forget-it” sort of thing. Rental properties can require significant upfront costs for renovations and refurbishments, ongoing time and <a href="https://blog.remax.ca/financing-options-for-commercial-real-estate-in-canada/" target="_blank" rel="noopener">financing</a> related to <a href="https://blog.remax.ca/essential-tips-for-successful-commercial-property-management-in-canada/" target="_blank" rel="noopener">property management,</a> maintenance and repairs, plus entail cash outlays for insurance and property taxes.</p>
<p>If you decide to take the plunge and become a landlord in Ontario, make it your goal to learn, understand, comply with and stay up to date on all aspects of Ontario’s Residential Tenancies Act to have the best chance of building a business that delivers high earning and harmonious landlord-tenant relationships.</p>
</div>
</div>
</div>
</div>
</div>
<p>The post <a href="https://blog.remax.ca/the-ultimate-guide-to-landlord-tenant-law-in-ontario/">The Ultimate Guide to Landlord-Tenant Law in Ontario</a> appeared first on <a href="https://blog.remax.ca">RE/MAX Canada</a>.</p>
<br />
<br />
<br />
from RE/MAX Canada https://ift.tt/DcMYlqj<br />
RE/MAX Canada
epaquinhttp://www.blogger.com/profile/01589631138771940331noreply@blogger.com0tag:blogger.com,1999:blog-6402346487751506041.post-41409457373248439962024-03-06T09:01:00.001-05:002024-03-06T09:01:33.168-05:00The Ultimate Guide to Landlord-Tenant Law in Ontario<div class="fusion-fullwidth fullwidth-box fusion-builder-row-6 fusion-flex-container has-pattern-background has-mask-background nonhundred-percent-fullwidth non-hundred-percent-height-scrolling" style="--awb-border-radius-top-left:0px;--awb-border-radius-top-right:0px;--awb-border-radius-bottom-right:0px;--awb-border-radius-bottom-left:0px;--awb-flex-wrap:wrap;">
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<p>The financial rewards of investing in <a href="https://blog.remax.ca/ontarios-growth-making-the-multi-family-investment-market-more-attractive/" target="_blank" rel="noopener">multifamily commercial real estate</a> properties or leasing out space you already own can be significant. Having a steady flow of monthly rental income can offer you greater financial freedom both now and in the future.</p>
<p>Still, landlord-tenant relationships can be complicated. If you’re considering becoming a landlord in Ontario, an in-depth understanding of landlord and tenant responsibilities under Ontario’s Residential Tenancies Act can help make your single or <a href="https://blog.remax.ca/a-look-at-four-trends-in-multifamily-real-estate/" target="_blank" rel="noopener">multifamily</a> rental an amicable and profitable business venture.</p>
<h2>What is Landlord-Tenant Law?</h2>
<p>Landlord-tenant law refers to the various provincial and territorial legislations that outline the rights and responsibilities of landlords and tenants involved in residential and commercial leases and may also govern rental application and screening processes.</p>
<p>In this article, we’ll focus on the residential side of the act.</p>
<h2>The Residential Tenancies Act (RTA) in Ontario</h2>
<p>The Ontario RTA (formerly known as the Ontario Landlord and Tenant Act) sets out landlord-tenant rights and responsibilities once the parties enter into a tenancy agreement. Ontario’s Landlord and Tenant Board (LTB) ensures the rights and obligations of both landlords and tenants are balanced and is a tribunal with the authority to resolve disagreements between landlords and tenants.</p>
<h2>Tenancy Agreements</h2>
<p>So what exactly is a tenancy agreement? Simply put, a tenancy agreement – also known as a rental agreement or lease – is a contract between a landlord and a tenant stating that the tenant will pay an agreed monthly rent in exchange for the right to occupy a residential rental space or property.</p>
<p>Residential tenancies refer to situations in which a tenant is renting private living space, such as in a:</p>
<ul>
<li>Room</li>
<li>Basement or basement suite</li>
<li>House</li>
<li>Duplex</li>
<li>Townhouse</li>
<li>Apartment</li>
</ul>
<p>Ontario’s Residential Tenancy Act includes information regarding:</p>
<ul>
<li>Tenancy agreements</li>
<li>Landlord-tenant responsibilities</li>
<li>Maintenance standards</li>
<li>Rules related to rent and rent increases</li>
<li>Subletting rental units</li>
<li>Apportionment of utility costs</li>
<li>Termination of tenancies</li>
<li>Privacy requirements</li>
<li>Landlord and Tenant Board responsibilities and powers</li>
</ul>
<h2>Tenant Screening: The Secret to Profit and Positive Landlord-Tenant Relationships</h2>
<p>As a landlord, your business depends on keeping vacancy rates as low as possible. But you don’t want just anyone renting one of your units. You want a tenant who pays their rent on time, keeps their rental unit in good condition and respects other tenants and the community around them.</p>
<p>The RTA sets out what can and can’t be asked during tenant screening processes so landlords can acquire the information they need in a non-discriminatory way.</p>
<p>When screening applicants, landlords can ask only for the following:</p>
<ul>
<li>Rental history (although if a person does not have a history of renting – as in the case of student housing or <a href="https://blog.remax.ca/the-role-of-population-growth-in-canadas-housing-shortage/" target="_blank" rel="noopener">newcomers to Canada</a> – this cannot legally be used against them)</li>
<li>Permission to run credit checks and credit references</li>
<li>Legal name, address and date of birth (to conduct a credit check)</li>
<li>Information about a prospective tenant’s passport, driver’s license, source of income and expenses, but only for:<br />
-obtaining a more detailed credit report<br />
-ensuring the credit check is being done on the correct person and not someone with the same name and date of birth<br />
-the number and names of any persons that will be living in the rental unit</li>
</ul>
<p>Landlords cannot explicitly ask about or refuse to rent to a tenant based on their:</p>
<ul>
<li>Age</li>
<li>Race</li>
<li>Creed</li>
<li>Colour</li>
<li>Religion</li>
<li>Nationality</li>
<li>Ethnic origin and place of origin</li>
<li>Gender, gender identity or gender expression</li>
<li>Sexual orientation</li>
<li>Marital or family status</li>
<li>Physical or mental disabilities</li>
<li>Political belief or association</li>
<li>Lawful source of income</li>
<li>Pardoned criminal conviction</li>
</ul>
<h2>Standardized Lease Requirements</h2>
<p>In Ontario, landlords must use a Standardized Lease developed by the provincial government for most residential tenancy agreements.</p>
<p>Available in multiple languages, from Arabic to Vietnamese, the form uses plain language to clarify landlords’ and tenants’ roles and responsibilities. When complete, it creates a binding contract between the landlord and tenant.</p>
<h2>Landlord Responsibilities</h2>
<p>In addition to obeying Ontario’s laws and complying with the terms of a tenant’s lease, landlords must:</p>
<h3>Respect Tenant Privacy</h3>
<p>As a landlord, you must respect and protect your tenants’ privacy, especially when it comes to the information you may have collected about them in your tenant-screening processes.</p>
<p>In most of Canada, landlords must comply with the government of Canada’s <a href="https://www.priv.gc.ca/en/privacy-topics/landlords-and-tenants/privacy-in-the-landlord-and-tenant-relationship/" target="_blank" rel="noopener">Personal Information Protection and Electronic Documents Act</a> (PIPEDA).</p>
<p>According to PIPEDA, landlords must:</p>
<ul>
<li>Identify the reasons for collecting personal information before or at the time of collection</li>
<li>Obtain a tenant’s consent when collecting, using or disclosing a tenant’s personal information</li>
<li>Use a tenant’s personal information only for the intended reasons</li>
<li>Provide tenants with access to the personal information that you hold about them and allow them to challenge its accuracy.</li>
<li>Protect a tenant’s personal information with appropriate physical or digital safeguards.</li>
</ul>
<h3>Provide Safe and Habitable Housing</h3>
<p>Landlords need to provide safe and habitable housing by ensuring:</p>
<ul>
<li>The property they rent meets applicable housing codes, zoning laws, and fire and environmental regulations.</li>
<li>The rental unit and property are structurally sound</li>
<li>The rental unit and property’s entrances have working locks</li>
<li>Electrical, plumbing and HVAC systems are maintained</li>
<li>Hazards are removed from the property</li>
<li>Steps are taken to prevent pest infestations</li>
<li>Repairs are performed in a timely manner</li>
</ul>
<p>Disagreement on what constitutes the proper level of building maintenance or timeliness, in the case of repairs, can lead to disputes that can quickly turn ugly. Neglecting to complete a repair could cause a tenant to file a Tenant Application with the LTB, which could decide to remedy the situation by requiring you to reimburse the tenant for any damages caused to their property, the cost of the repair (if the tenant hired someone else to perform the repair work) or even require you to offer future rent abatements as compensation for the tenant having to live in a building in a dilapidated state.</p>
<p>Landlords cannot retaliate against a tenant for making such a complaint. When you’re ready to fulfill your obligations and make repairs, you’ll need to give your tenant adequate notice (typically a minimum of 24 hours before entering the unit) and let them know how long you’ll need to be in their space.</p>
<h3>Follow Guidelines On Allowable Rent Increases</h3>
<ul>
<li>Ontario guidelines dictate the maximum percentage a landlord can increase most tenants’ rent by during a year without the approval of the Landlord and Tenant Board.This guideline applies to tenants living in:</li>
<li>Rented houses, apartments, basement apartments and condos</li>
<li>Care homes</li>
<li>Mobile homes</li>
<li>Land lease communities</li>
</ul>
<p>It does not apply to:</p>
<ul>
<li>New buildings, additions to existing buildings and most new basement apartments that are occupied for residential purposes for the first time after November 15, 2018 (as these are exempt from rent control)</li>
<li>Rental units upon turnover of a tenancy</li>
<li>Community housing units</li>
<li>Long-term care homes</li>
<li>Commercial properties</li>
</ul>
<h3>Follow Guidelines on Tenant Evictions</h3>
<p>Landlords cannot evict tenants on a whim. Landlords must follow a process even when they want to evict for a “no cause” reason. Notice periods also vary depending on the cause.</p>
<p>In Ontario, tenants have security of tenancy. This means that a tenant can continue to occupy a rental unit until:</p>
<ul>
<li>The tenant decides to leave and gives the landlord proper notice that they intend to move out</li>
<li>The landlord and tenant agree to end the tenancy, or</li>
<li>The landlord gives the tenant a notice to end the tenancy for a reason allowed by the Ontario Residential Tenancies Act, and</li>
<li>The tenant agrees to move, or</li>
<li>The tenant disagrees with the landlord’s notice, the landlord applies to the LTB, and the LTB issues an eviction order</li>
</ul>
<p>Examples of “for cause” reasons for ending a tenancy include:</p>
<ul>
<li>Not paying the rent in full</li>
<li>Causing damage to the rental property</li>
<li>Disturbing other tenants or the landlord</li>
<li>Illegal activity in the rental unit or residential complex</li>
<li>There are also reasons for ending a tenancy unrelated to what a tenant has or hasn’t done. These are called “no-fault” reasons.</li>
</ul>
<p>Examples of “no-fault” reasons for ending a tenancy include:</p>
<ul>
<li>The landlord plans to do major repairs or renovations that require a building permit, and they can’t do the work unless the rental unit is empty</li>
<li>The landlord requires the rental unit because the landlord, a member of the landlord’s immediate family or caregiver wishes to move into the unit.</li>
<li>The landlord has agreed to sell the property, and the purchaser requires all or part of the property because the purchaser, a member of the purchaser’s immediate family or caregiver, wishes to move into the unit. (This reason for eviction only applies in rental buildings with three or fewer units or condominium units)</li>
</ul>
<p>In most cases, the landlord must compensate the tenant if they evict them for a “no-fault” reason. The amount of compensation varies depending on the basis and the number of units in the building.</p>
<p>While the parties resolve an eviction notice, landlords cannot prevent tenants from entering or occupying their rental unit or remove their tenant’s personal possessions from the space.</p>
<p>Eviction tends to be a time-intensive and costly process for landlords, making effective tenant-screening processes and resolving maintenance, repair and relationship issues between landlords and their tenants crucial to long-term business success.</p>
<h2>Are You Ready To Become A Landlord In Ontario?</h2>
<p>Though the profit potential is substantial, being a landlord isn’t a “set-it-and-forget-it” sort of thing. Rental properties can require significant upfront costs for renovations and refurbishments, ongoing time and <a href="https://blog.remax.ca/financing-options-for-commercial-real-estate-in-canada/" target="_blank" rel="noopener">financing</a> related to <a href="https://blog.remax.ca/essential-tips-for-successful-commercial-property-management-in-canada/" target="_blank" rel="noopener">property management,</a> maintenance and repairs, plus entail cash outlays for insurance and property taxes.</p>
<p>If you decide to take the plunge and become a landlord in Ontario, make it your goal to learn, understand, comply with and stay up to date on all aspects of Ontario’s Residential Tenancies Act to have the best chance of building a business that delivers high earning and harmonious landlord-tenant relationships.</p>
</div>
</div>
</div>
</div>
</div>
<p>The post <a href="https://blog.remax.ca/the-ultimate-guide-to-landlord-tenant-law-in-ontario/">The Ultimate Guide to Landlord-Tenant Law in Ontario</a> appeared first on <a href="https://blog.remax.ca">RE/MAX Canada</a>.</p>
<br />
<br />
from RE/MAX Canada https://ift.tt/DcMYlqj<br />
RE/MAX Canada
epaquinhttp://www.blogger.com/profile/01589631138771940331noreply@blogger.com0tag:blogger.com,1999:blog-6402346487751506041.post-52837674654446828852024-03-06T08:51:00.001-05:002024-03-06T08:51:53.534-05:00Maximizing Your Investment: The Benefits of Renting Warehouse Space for Your Business<div class="fusion-fullwidth fullwidth-box fusion-builder-row-4 fusion-flex-container has-pattern-background has-mask-background nonhundred-percent-fullwidth non-hundred-percent-height-scrolling" style="--awb-border-radius-top-left:0px;--awb-border-radius-top-right:0px;--awb-border-radius-bottom-right:0px;--awb-border-radius-bottom-left:0px;--awb-flex-wrap:wrap;">
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<p>The good news? Business is off the charts. The bad? You’re running out of space for equipment, goods and staff.</p>
<p>Whether you’re a tech start-up with ten desks setting a course for fifty in a few short years or an e-commerce entrepreneur wondering if it’s time to expand and replan your fulfillment strategy for more profit, renting <a href="https://www.remax.ca/commercial" target="_blank" rel="noopener">commercial real estate</a> warehouse space could help you scale your operations and manage growth and inventory more efficiently.</p>
<h2>The Benefits of Leasing Warehouse Space</h2>
<p><a href="https://blog.remax.ca/demand-for-warehouse-space-surges/" target="_blank" rel="noopener">Warehouses are an increasingly popular option</a> for businesses of all types – from fitness clubs that want to add amenities like climbing walls, boxing rings or onsite cafes and apparel stores to their space to retailers looking to lessen supply chain woes or guard against shipping delays by bulking up on inventory in anticipation of seasonal peaks.</p>
<p>Their benefits include:</p>
<h3>Size</h3>
<p>One of the obvious benefits of leasing warehouse space is the increased work and storage space it offers. A single, large space eliminates the need for multiple off-site storage facilities and, if desired, could eventually centralize and house all of a company’s activities, from front-end office administration and sales to back-end manufacturing, showcasing and distribution. Small businesses can opt for spaces as small as 1,000 square feet, while large e-commerce retailers or film companies might elect to lease 50,000 square feet or more.</p>
<h3>Ease of Access</h3>
<p>Because warehouse space is typically located near major waterways, seaports, rail lines and highways, it allows easy access for receipt, transfer, distribution and even return of goods. When used as a product showroom or when it incorporates product repair and servicing, it can also improve customer experiences and satisfaction.</p>
<h3>A Warehouse for Every Need</h3>
<p>There are a myriad of different types of warehouses available for lease.</p>
<p>Typical types and uses include:</p>
<p>Public: This warehouse space is often government-owned, located near airports, railways and seaports, but can be leased for any business with short-term distribution needs. Public warehouses can be bare-bones storage spaces or provide other services such as physical inventory counts, inventory management and shipping functionality.</p>
<p>Private: Also known as proprietary stores or warehousing, private warehouses are an option for wholesalers, distributors and producers.</p>
<p>They typically provide:</p>
<ul>
<li>Storage</li>
<li>Inventory management</li>
<li>Cross docking (unloading materials from inbound transportation and loading them onto outbound carriers with no storage time in between)</li>
<li>Kitting (gathering and combining a collection of goods or SKUs to create a new SKU, as in the case of monthly gift box or subscription box goodies)</li>
<li>Pick, pack, and ship (fulfillment)</li>
</ul>
<p>Smart Warehouses: Smart warehouses use robotics and advanced technology such as artificial intelligence to automate all processes, from inventory tracking to picking, packing and shipping, and operate with very little physical labour.</p>
<p>Distribution Centres: Distribution warehouses function as regional hubs within more widespread logistical networks. They allow companies to serve a specific district or area more efficiently, making their location paramount.</p>
<p>Climate-Controlled or Cold Storage: Climate-controlled warehouses allow users to control temperature, humidity or light for products such as food, electronic components or live plants. Cold storage warehouses supply cooling and refrigeration services.</p>
<p>Hazardous Material (HazMat): Hazardous materials – including flammable substances, corrosive materials, explosives, radioactive matter and infectious agents – require extra precautions. HazMat warehouses have the specialized personnel, insurance, fire suppression, safety systems and containment protocols needed to safely transport, store, relocate and secure various substances.</p>
<p>Research And Development (R&D) Centres: R&D centres are often the most specialized industrial warehouse space and depending on the products created and tested within them, they may need to comply with stringent environmental regulations.</p>
<p>Data Centres: Data centres typically house the large-scale IT systems and computer servers involved in cloud storage or complex computing operations such as mining cryptocurrency. Electrical efficiency, climate control and security protocols are the most important considerations when leasing these warehouse spaces.</p>
<p>Flex Space: Flex space warehouses are perfect for fast-growing, small to mid-size companies that produce tangible products and want to scale their businesses as efficiently as possible by bundling office, storage space, showrooms, etc., under one roof.</p>
<h3>Flexible Lease Terms</h3>
<p>Flexible lease terms, including month-to-month contracts, allow businesses to upsize and downsize their operations and manage inventory in anticipation of or response to seasonal fluctuations or sudden increases or decreases in product demand.</p>
<h3>Improved Logistics</h3>
<p>The faster you get your products to your customers, the happier they’ll be. Depending on the nature of your business, you may require a large warehouse with high ceilings, sturdy loading docks or specialized storage solutions. Because you can tailor warehouse space to your business needs, you can create a customized system that reduces the time and labour required to manage incoming and outgoing shipments.</p>
<h3>Cost savings</h3>
<p>When you lease warehouse space, you avoid the sizeable capital expenditures of buying a warehouse outright. Instead of paying mortgage and renovation costs, you can invest in product development, technology, marketing and human resources.</p>
<p>Unlike other types of commercial real estate, landlords are usually responsible for the building maintenance and repair costs of their warehouse space. Without worrying about maintaining HVAC systems, repairing loading docks, resurfacing parking lots and replacing lighting, you can focus on your customers and your core business.</p>
<h3>Improved Security</h3>
<p>Warehouses store valuable assets, making them a target for both external and internal theft. Because warehouse security is crucial to maintaining brand reputation and warehouse occupancy rates, most landlords invest in comprehensive systems, including security cameras, access control systems, alarm and intercom systems, perimeter and parking lot security and often guard services as well. The best will also utilize digital warehouse management systems to track inventory in real-time.</p>
<h2>Disadvantages of Leasing Warehouse Space</h2>
<h3>Lack of Asset Appreciation</h3>
<p>Unlike purchasing a warehouse space, leasing one does not allow your company to reap the rewards that come from asset appreciation.</p>
<h3>Lack of Control</h3>
<p>When supply chains stutter or market fluctuations happen, businesses must respond quickly. Depending on the terms of your lease agreement, your company could find itself unable to modify your warehouse space or make operational changes without incurring significant delays as lawyers debate whether they’re allowed under your lease agreement. As a result, you could miss out on opportunities or watch your bottom line take a big hit.</p>
<h3>Long-Term Costs</h3>
<p>If you lease warehouse space for an extended period of time, you could lose the benefits of the lower upfront costs and reduced overhead and end up paying more in rent and other expenses than it would’ve cost to own the warehouse space outright.</p>
<h2>Co-warehousing: A Middle Option Before Committing to Bigger Things</h2>
<p>Co-warehousing is a collaborative approach where multiple businesses share a warehouse space and attendant resources. This arrangement allows companies to access specialized services or equipment and not shoulder all the costs and risks of going it alone.</p>
<h2>Choosing the Right Warehouse Space for Your Business is Essential</h2>
<p>Leasing warehouse space offers a range of operational advantages for companies looking to scale their business or manage inventory in the face of supply chain risks and seasonal or market fluctuations. With flexible lease terms and layouts that can help realize cost savings and logistical efficiencies, renting warehouse space can elevate your business to next-level status in no time.</p>
</div>
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<p>The post <a href="https://blog.remax.ca/maximizing-your-investment-the-benefits-of-renting-warehouse-space-for-your-business/">Maximizing Your Investment: The Benefits of Renting Warehouse Space for Your Business</a> appeared first on <a href="https://blog.remax.ca">RE/MAX Canada</a>.</p>
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from RE/MAX Canada https://ift.tt/G2BDUmg<br />
RE/MAX Canada
epaquinhttp://www.blogger.com/profile/01589631138771940331noreply@blogger.com0tag:blogger.com,1999:blog-6402346487751506041.post-60749111336637593512024-03-06T08:49:00.001-05:002024-03-06T08:49:56.667-05:00Maximizing Your Investment: The Benefits of Renting Warehouse Space for Your Business<div class="fusion-fullwidth fullwidth-box fusion-builder-row-4 fusion-flex-container has-pattern-background has-mask-background nonhundred-percent-fullwidth non-hundred-percent-height-scrolling" style="--awb-border-radius-top-left:0px;--awb-border-radius-top-right:0px;--awb-border-radius-bottom-right:0px;--awb-border-radius-bottom-left:0px;--awb-flex-wrap:wrap;">
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<p>The good news? Business is off the charts. The bad? You’re running out of space for equipment, goods and staff.</p>
<p>Whether you’re a tech start-up with ten desks setting a course for fifty in a few short years or an e-commerce entrepreneur wondering if it’s time to expand and replan your fulfillment strategy for more profit, renting <a href="https://www.remax.ca/commercial" target="_blank" rel="noopener">commercial real estate</a> warehouse space could help you scale your operations and manage growth and inventory more efficiently.</p>
<h2>The Benefits of Leasing Warehouse Space</h2>
<p><a href="https://blog.remax.ca/demand-for-warehouse-space-surges/" target="_blank" rel="noopener">Warehouses are an increasingly popular option</a> for businesses of all types – from fitness clubs that want to add amenities like climbing walls, boxing rings or onsite cafes and apparel stores to their space to retailers looking to lessen supply chain woes or guard against shipping delays by bulking up on inventory in anticipation of seasonal peaks.</p>
<p>Their benefits include:</p>
<h3>Size</h3>
<p>One of the obvious benefits of leasing warehouse space is the increased work and storage space it offers. A single, large space eliminates the need for multiple off-site storage facilities and, if desired, could eventually centralize and house all of a company’s activities, from front-end office administration and sales to back-end manufacturing, showcasing and distribution. Small businesses can opt for spaces as small as 1,000 square feet, while large e-commerce retailers or film companies might elect to lease 50,000 square feet or more.</p>
<h3>Ease of Access</h3>
<p>Because warehouse space is typically located near major waterways, seaports, rail lines and highways, it allows easy access for receipt, transfer, distribution and even return of goods. When used as a product showroom or when it incorporates product repair and servicing, it can also improve customer experiences and satisfaction.</p>
<h3>A Warehouse for Every Need</h3>
<p>There are a myriad of different types of warehouses available for lease.</p>
<p>Typical types and uses include:</p>
<p>Public: This warehouse space is often government-owned, located near airports, railways and seaports, but can be leased for any business with short-term distribution needs. Public warehouses can be bare-bones storage spaces or provide other services such as physical inventory counts, inventory management and shipping functionality.</p>
<p>Private: Also known as proprietary stores or warehousing, private warehouses are an option for wholesalers, distributors and producers.</p>
<p>They typically provide:</p>
<ul>
<li>Storage</li>
<li>Inventory management</li>
<li>Cross docking (unloading materials from inbound transportation and loading them onto outbound carriers with no storage time in between)</li>
<li>Kitting (gathering and combining a collection of goods or SKUs to create a new SKU, as in the case of monthly gift box or subscription box goodies)</li>
<li>Pick, pack, and ship (fulfillment)</li>
</ul>
<p>Smart Warehouses: Smart warehouses use robotics and advanced technology such as artificial intelligence to automate all processes, from inventory tracking to picking, packing and shipping, and operate with very little physical labour.</p>
<p>Distribution Centres: Distribution warehouses function as regional hubs within more widespread logistical networks. They allow companies to serve a specific district or area more efficiently, making their location paramount.</p>
<p>Climate-Controlled or Cold Storage: Climate-controlled warehouses allow users to control temperature, humidity or light for products such as food, electronic components or live plants. Cold storage warehouses supply cooling and refrigeration services.</p>
<p>Hazardous Material (HazMat): Hazardous materials – including flammable substances, corrosive materials, explosives, radioactive matter and infectious agents – require extra precautions. HazMat warehouses have the specialized personnel, insurance, fire suppression, safety systems and containment protocols needed to safely transport, store, relocate and secure various substances.</p>
<p>Research And Development (R&D) Centres: R&D centres are often the most specialized industrial warehouse space and depending on the products created and tested within them, they may need to comply with stringent environmental regulations.</p>
<p>Data Centres: Data centres typically house the large-scale IT systems and computer servers involved in cloud storage or complex computing operations such as mining cryptocurrency. Electrical efficiency, climate control and security protocols are the most important considerations when leasing these warehouse spaces.</p>
<p>Flex Space: Flex space warehouses are perfect for fast-growing, small to mid-size companies that produce tangible products and want to scale their businesses as efficiently as possible by bundling office, storage space, showrooms, etc., under one roof.</p>
<h3>Flexible Lease Terms</h3>
<p>Flexible lease terms, including month-to-month contracts, allow businesses to upsize and downsize their operations and manage inventory in anticipation of or response to seasonal fluctuations or sudden increases or decreases in product demand.</p>
<h3>Improved Logistics</h3>
<p>The faster you get your products to your customers, the happier they’ll be. Depending on the nature of your business, you may require a large warehouse with high ceilings, sturdy loading docks or specialized storage solutions. Because you can tailor warehouse space to your business needs, you can create a customized system that reduces the time and labour required to manage incoming and outgoing shipments.</p>
<h3>Cost savings</h3>
<p>When you lease warehouse space, you avoid the sizeable capital expenditures of buying a warehouse outright. Instead of paying mortgage and renovation costs, you can invest in product development, technology, marketing and human resources.</p>
<p>Unlike other types of commercial real estate, landlords are usually responsible for the building maintenance and repair costs of their warehouse space. Without worrying about maintaining HVAC systems, repairing loading docks, resurfacing parking lots and replacing lighting, you can focus on your customers and your core business.</p>
<h3>Improved Security</h3>
<p>Warehouses store valuable assets, making them a target for both external and internal theft. Because warehouse security is crucial to maintaining brand reputation and warehouse occupancy rates, most landlords invest in comprehensive systems, including security cameras, access control systems, alarm and intercom systems, perimeter and parking lot security and often guard services as well. The best will also utilize digital warehouse management systems to track inventory in real-time.</p>
<h2>Disadvantages of Leasing Warehouse Space</h2>
<h3>Lack of Asset Appreciation</h3>
<p>Unlike purchasing a warehouse space, leasing one does not allow your company to reap the rewards that come from asset appreciation.</p>
<h3>Lack of Control</h3>
<p>When supply chains stutter or market fluctuations happen, businesses must respond quickly. Depending on the terms of your lease agreement, your company could find itself unable to modify your warehouse space or make operational changes without incurring significant delays as lawyers debate whether they’re allowed under your lease agreement. As a result, you could miss out on opportunities or watch your bottom line take a big hit.</p>
<h3>Long-Term Costs</h3>
<p>If you lease warehouse space for an extended period of time, you could lose the benefits of the lower upfront costs and reduced overhead and end up paying more in rent and other expenses than it would’ve cost to own the warehouse space outright.</p>
<h2>Co-warehousing: A Middle Option Before Committing to Bigger Things</h2>
<p>Co-warehousing is a collaborative approach where multiple businesses share a warehouse space and attendant resources. This arrangement allows companies to access specialized services or equipment and not shoulder all the costs and risks of going it alone.</p>
<h2>Choosing the Right Warehouse Space for Your Business is Essential</h2>
<p>Leasing warehouse space offers a range of operational advantages for companies looking to scale their business or manage inventory in the face of supply chain risks and seasonal or market fluctuations. With flexible lease terms and layouts that can help realize cost savings and logistical efficiencies, renting warehouse space can elevate your business to next-level status in no time.</p>
</div>
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</div>
</div>
</div>
<p>The post <a href="https://blog.remax.ca/maximizing-your-investment-the-benefits-of-renting-warehouse-space-for-your-business/">Maximizing Your Investment: The Benefits of Renting Warehouse Space for Your Business</a> appeared first on <a href="https://blog.remax.ca">RE/MAX Canada</a>.</p>
<br />
<br />
<br />
from RE/MAX Canada https://ift.tt/G2BDUmg<br />
RE/MAX Canada
epaquinhttp://www.blogger.com/profile/01589631138771940331noreply@blogger.com0tag:blogger.com,1999:blog-6402346487751506041.post-89780784678487395502024-03-06T08:26:00.001-05:002024-03-06T08:26:35.167-05:00Is Hotel Investment a Smart Move?<div class="fusion-fullwidth fullwidth-box fusion-builder-row-1 fusion-flex-container has-pattern-background has-mask-background nonhundred-percent-fullwidth non-hundred-percent-height-scrolling" style="--awb-border-radius-top-left:0px;--awb-border-radius-top-right:0px;--awb-border-radius-bottom-right:0px;--awb-border-radius-bottom-left:0px;--awb-flex-wrap:wrap;">
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<p>Looking to diversify your <a href="https://www.remax.ca/commercial" target="_blank" rel="noopener">commercial real estate</a> portfolio? Now could be the moment to explore opportunities in Canada’s hospitality industry, particularly the hotel sector.</p>
<p>After suffering huge losses due to travel restrictions and lockdowns during the COVID-19 pandemic, the hotel industry in Canada has notched a recovery that few thought was possible. When restrictions were finally removed in October 2022, pent-up demand for leisure travel resulted in the hotel industry recording its highest-ever occupancy rate, average daily room rate (ADR) and revenue per available room (RevPAR) in 2023, surpassing even heady pre-pandemic levels recorded in 2019.</p>
<p>With growth in all three KPIs slated to go nowhere but up and the federal government focused on increasing tourism’s contribution to Canada’s GDP from $38 billion in 2022 to $61 billion in 2030, now might be the time to enter or expand your footprint in the hotel investment market.</p>
<h2>Types Of Hotels</h2>
<p>The Canadian hospitality industry is segmented by business model (chain or independent) and hotel type (luxury, mid- and upper-mid-scale, serviced or extended stay, budget or economy and capsule hotels).</p>
<p>By understanding the target market, typical features and operation model of each type of hotel, investors can decide which best suits their investment goals and risk tolerance.</p>
<h3>Luxury, Upscale Hotels</h3>
<h4>Target market: Affluent leisure and business travellers willing to pay a premium for high-end amenities and services.</h4>
<p>Typical features: Elegant design, high-end furnishings, upscale services and amenities, including pool, gym, multiple on-site fine dining choices, spa services, concierge, valet parking, 24-hour room service, gift shop, business centre, conference facilities and meeting rooms.</p>
<p>Operation model: Large staff, high operating costs.</p>
<p>Average Room#: 200-300+</p>
<p>Examples: Luxury: Fairmont, Intercontinental, Four Seasons, JW Marriott, Ritz-Carlton, St. Regis, Sofitel, etc. Upscale: Delta, Sheraton, Westin, Hilton, Hyatt, etc. and various independently-owned/operated boutique hotels.</p>
<h3>Midscale, Upper-Midscale (aka Limited Service, Select-Service) Hotels</h3>
<h4>Target market: Budget-conscious leisure travellers and short-stay business travellers.</h4>
<p>Typical features: They do not contain as many amenities as luxury hotels but could have a pool, gym, business centre, and meeting rooms. No full-service restaurant on-site but may offer a complimentary continental breakfast.</p>
<p>Operation model: Can operate with fewer staff and a more conservative budget than a full-service hotel. As inflation drives up the price of airline tickets and resort packages, Canadians will be forced to stay closer to home, and even business travellers will face pressures to be more cost-conscious. Mid-scale hotels that can maximize their offerings while maintaining affordable room rates can win the day.</p>
<p>Average Room#: 100</p>
<p>Examples: Midscale: Quality Inn, Best Western, La Quinta, etc. Upper Midscale: Comfort Inn, Best Western Plus, Holiday Inn Express, Ramada, Hampton Inn, Fairfield Inn, etc.</p>
<h4>Serviced or Extended Stay Hotels</h4>
<h4>Target market: Business professionals tired of living out of a suitcase and eating hotel food. Available for both short-term (weekly) and long-term (monthly) stays. Can compete with Airbnb in the vacation rental segment.</h4>
<p>Typical features: Fully-furnished apartments with kitchen, living room, washer-dryer, weekly housekeeping, possibly pool or gym, but otherwise, a reduced range of services.</p>
<p>Operation model: Seven-days-a-week demand, but lower operating costs due to fewer check-ins and reduced room maintenance and services.</p>
<p>Average Room#: 10-200</p>
<p>Examples: Homewood and Home2Suitesby Hilton, Apartments, TownePlace and Residence Inn by Marriott, Embassy Suites, Hyatt Studios, etc.</p>
<h3>Budget or Economy Hotels</h3>
<h4>Target market: Travellers looking for cost-effective, no-frill accommodations.</h4>
<p>Typical features: Fewest amenities and services, lowest room rates.</p>
<p>Operation model: Low staff-to-room ratio designed to realize profits in the 10% range.</p>
<p>Average Room#: 70+</p>
<h4>Examples: Days Inn, Travelodge, Super 8, Howard Johnson, Econolodge, Motel 6, etc.</h4>
<h3>Capsule Hotels: A New Entry on the Landscape</h3>
<h4>Target market: Downtown locations target international students looking for an affordable place to stay before settling into student housing. Airport locations target digital nomads and backpackers.</h4>
<p>Typical features: Cubicle-like rooms (28-40 sq. ft), stacked one on top of the other, utilizing energy-efficient designs and sustainable materials. Shared bathrooms but may have on-site restaurant or outdoor/rooftop gathering areas.</p>
<p>Operation model: Originated in Japan, usage is growing in major cities due to rising hotel costs and the effects of inflation. Franchising opportunities.</p>
<p>Average Room#: 6-60+</p>
<p>Examples: Pangea Pod, Panda Pod, etc.</p>
<h2>Advantages of Hotel Investment</h2>
<p>The advantages of investing in hotel properties include:</p>
<h3>Diversification of Your Investment Portfolio</h3>
<p>Real estate investing can be an excellent way to build wealth and generate passive income. But like any investment, it comes with risks. Investing in different types of commercial real estate asset classes (<a href="https://blog.remax.ca/demand-for-warehouse-space-surges/" target="_blank" rel="noopener">warehouse</a>, <a href="https://blog.remax.ca/a-look-at-four-trends-in-multifamily-real-estate/" target="_blank" rel="noopener">multifamily</a> and hotel properties) can reduce dependence on any property type or investment.</p>
<h3>Potential for High Returns Due to Consistent Demand</h3>
<p>Unlike many other investments, hotels have the potential to generate daily revenue, and the income stream can be formidable.</p>
<p>Because there are only so many hotels in each geographic area and hotel development currently lags behind demand, hotels can charge premium rates during peak travel times that coincide with holidays, summer vacation periods and important local events or festivals. These periodic rate increases can add significant profit to a hotel’s balance sheet.</p>
<h3>Tax Benefits</h3>
<p>Investing in hotels can offer tax benefits that can help investors hold onto their profits and reduce tax liabilities.</p>
<p>Some of the tax benefits associated with investing in hotels include:</p>
<ul>
<li>Interest deductions</li>
<li>Depreciation and cost segregation deductions</li>
<li>Tax-deferred exchanges</li>
</ul>
<h3>Growth Potential</h3>
<p>Depending on the services and amenities they offer; hotels can create a variety of revenue streams beyond room rentals. These include food and beverage sales, wellness services, themed weekend-stay packages, conference and event space rentals, and even daily pool or spa passes.</p>
<h3>Investment Opportunities That Reflect Your Risk Tolerance and Financing</h3>
<p>There are a variety of ways you can add hotel investments to your commercial real estate portfolio, including:</p>
<ul>
<li>Investing in Real Estate Investment Trusts (REITs)</li>
<li>Purchasing shares in a publicly-traded hotel operating company</li>
<li>Taking part in a crowd-funded hotel investment</li>
<li>Purchasing a hotel property</li>
<li>Building a new hotel property</li>
</ul>
<h3>Appreciation Potential</h3>
<p>Well-located and well-managed hotels that optimize occupancy and room rates can generate consistent cash flows that increase the value of their hotel property. As owners or operators add profitable new services or make design improvements and upgrades, the hotel’s value escalates along with them. As demand increases for a particular type of hotel or location, hotel value can soar.</p>
<h2>Disadvantages of Hotel Investment</h2>
<p>The disadvantages of investing in hotel properties include:</p>
<h3>Seasonality</h3>
<p>Hotels that rely on leisure travellers for most bookings can experience extreme revenue swings based on seasonality. These swings can be mitigated by developing offerings that attract new customers, such as special promotions and packages, sponsoring local events – or even creating new ones – and marketing them efficiently.</p>
<h3>Vulnerability to Changes in Disposable Income</h3>
<p>The hotel industry is highly susceptible to economic downturns, leading to decreased travel and demand for hotel rooms or changes in the types of hotels travellers prefer. When a downturn happens, luxury hotels are often the first segment to experience reduced bookings, while those at midscale hotels increase.</p>
<h3>High Operating Costs</h3>
<p>Even in budget motels, operating costs for staff, utilities and maintenance can be substantial. Costs for property tax, insurance and travel commissions also cut into profits.</p>
<h3>The Effect of Remote and Hybrid Work</h3>
<p>The persistence of remote and hybrid work models has put a significant dent in hotel earnings from business travellers. Whether capitalizing on the new “bleisure” trend of adding vacation time before or after business trips can offset these losses remains to be seen.</p>
<h2>How to Evaluate the Performance of Potential Hotel Investments</h2>
<p>Once you’ve weighed the pros and cons and determined the type of hotel you’re interested in investing in, you’ll need a way of evaluating your investment’s performance.</p>
<p>The most commonly used hotel investment KPIs include:</p>
<h3>Occupancy Rate</h3>
<p>This metric tracks the percentage of available rooms occupied during a given time period. A high occupancy rate indicates strong hotel room demand and can be a good indicator of hotel profitability.</p>
<h3>Average Daily Rate (ADR)</h3>
<p>This metric shows the average price of each room sold during a given time period. A higher ADR generates more revenue per available room.</p>
<h3>Revenue Per Available Room (RevPAR)</h3>
<p>The gold standard for measuring top-line performance in a hotel investment, RevPAR is calculated by multiplying the ADR by the occupancy rate and provides a snapshot of how well hotels are filling and pricing rooms. When RevPAR goes up, either the occupancy or ADR rate is up, or both. By comparing RevPAR trends over time, you can see seasonal trends and compare the relative performance of one hotel versus another in a similar geographic area.</p>
<h3>Gross Operating Profit (GOP)</h3>
<p>The metric considers a hotel’s total revenue minus its operating expenses. GOP is a key factor for understanding the hotel investment profitability.</p>
<h3>Return on Investment (ROI)</h3>
<p>ROI is a key metric for evaluating the overall success of a hotel investment and can help stakeholders determine whether the investment is meeting financial goals.</p>
<h2>Canadian Hospitality Market Strengths</h2>
<p>Hotel investment in Canada offers the advantage of a truly diverse market – from traditional leisure and business travellers to students, digital nomads, outdoor adventurers and event attendees – reducing dependence on any single market segment, thereby lowering overall risk.</p>
<p>With plusses like high demand, the potential for steady growth and appreciation, tax incentives and solid governmental support, investing in the Canadian hotel sector has never been more attractive.</p>
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<p>The post <a href="https://blog.remax.ca/is-hotel-investment-a-smart-move/">Is Hotel Investment a Smart Move?</a> appeared first on <a href="https://blog.remax.ca">RE/MAX Canada</a>.</p>
<br />
<br />
from RE/MAX Canada https://ift.tt/cdu4m1v<br />
RE/MAX Canada
epaquinhttp://www.blogger.com/profile/01589631138771940331noreply@blogger.com0tag:blogger.com,1999:blog-6402346487751506041.post-37928472019446321792024-03-06T08:24:00.001-05:002024-03-06T08:24:50.824-05:00Is Hotel Investment a Smart Move?<div class="fusion-fullwidth fullwidth-box fusion-builder-row-1 fusion-flex-container has-pattern-background has-mask-background nonhundred-percent-fullwidth non-hundred-percent-height-scrolling" style="--awb-border-radius-top-left:0px;--awb-border-radius-top-right:0px;--awb-border-radius-bottom-right:0px;--awb-border-radius-bottom-left:0px;--awb-flex-wrap:wrap;">
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<div class="fusion-column-wrapper fusion-column-has-shadow fusion-flex-justify-content-flex-start fusion-content-layout-column">
<div class="fusion-text fusion-text-1">
<p>Looking to diversify your <a href="https://www.remax.ca/commercial" target="_blank" rel="noopener">commercial real estate</a> portfolio? Now could be the moment to explore opportunities in Canada’s hospitality industry, particularly the hotel sector.</p>
<p>After suffering huge losses due to travel restrictions and lockdowns during the COVID-19 pandemic, the hotel industry in Canada has notched a recovery that few thought was possible. When restrictions were finally removed in October 2022, pent-up demand for leisure travel resulted in the hotel industry recording its highest-ever occupancy rate, average daily room rate (ADR) and revenue per available room (RevPAR) in 2023, surpassing even heady pre-pandemic levels recorded in 2019.</p>
<p>With growth in all three KPIs slated to go nowhere but up and the federal government focused on increasing tourism’s contribution to Canada’s GDP from $38 billion in 2022 to $61 billion in 2030, now might be the time to enter or expand your footprint in the hotel investment market.</p>
<h2>Types Of Hotels</h2>
<p>The Canadian hospitality industry is segmented by business model (chain or independent) and hotel type (luxury, mid- and upper-mid-scale, serviced or extended stay, budget or economy and capsule hotels).</p>
<p>By understanding the target market, typical features and operation model of each type of hotel, investors can decide which best suits their investment goals and risk tolerance.</p>
<h3>Luxury, Upscale Hotels</h3>
<h4>Target market: Affluent leisure and business travellers willing to pay a premium for high-end amenities and services.</h4>
<p>Typical features: Elegant design, high-end furnishings, upscale services and amenities, including pool, gym, multiple on-site fine dining choices, spa services, concierge, valet parking, 24-hour room service, gift shop, business centre, conference facilities and meeting rooms.</p>
<p>Operation model: Large staff, high operating costs.</p>
<p>Average Room#: 200-300+</p>
<p>Examples: Luxury: Fairmont, Intercontinental, Four Seasons, JW Marriott, Ritz-Carlton, St. Regis, Sofitel, etc. Upscale: Delta, Sheraton, Westin, Hilton, Hyatt, etc. and various independently-owned/operated boutique hotels.</p>
<h3>Midscale, Upper-Midscale (aka Limited Service, Select-Service) Hotels</h3>
<h4>Target market: Budget-conscious leisure travellers and short-stay business travellers.</h4>
<p>Typical features: They do not contain as many amenities as luxury hotels but could have a pool, gym, business centre, and meeting rooms. No full-service restaurant on-site but may offer a complimentary continental breakfast.</p>
<p>Operation model: Can operate with fewer staff and a more conservative budget than a full-service hotel. As inflation drives up the price of airline tickets and resort packages, Canadians will be forced to stay closer to home, and even business travellers will face pressures to be more cost-conscious. Mid-scale hotels that can maximize their offerings while maintaining affordable room rates can win the day.</p>
<p>Average Room#: 100</p>
<p>Examples: Midscale: Quality Inn, Best Western, La Quinta, etc. Upper Midscale: Comfort Inn, Best Western Plus, Holiday Inn Express, Ramada, Hampton Inn, Fairfield Inn, etc.</p>
<h4>Serviced or Extended Stay Hotels</h4>
<h4>Target market: Business professionals tired of living out of a suitcase and eating hotel food. Available for both short-term (weekly) and long-term (monthly) stays. Can compete with Airbnb in the vacation rental segment.</h4>
<p>Typical features: Fully-furnished apartments with kitchen, living room, washer-dryer, weekly housekeeping, possibly pool or gym, but otherwise, a reduced range of services.</p>
<p>Operation model: Seven-days-a-week demand, but lower operating costs due to fewer check-ins and reduced room maintenance and services.</p>
<p>Average Room#: 10-200</p>
<p>Examples: Homewood and Home2Suitesby Hilton, Apartments, TownePlace and Residence Inn by Marriott, Embassy Suites, Hyatt Studios, etc.</p>
<h3>Budget or Economy Hotels</h3>
<h4>Target market: Travellers looking for cost-effective, no-frill accommodations.</h4>
<p>Typical features: Fewest amenities and services, lowest room rates.</p>
<p>Operation model: Low staff-to-room ratio designed to realize profits in the 10% range.</p>
<p>Average Room#: 70+</p>
<h4>Examples: Days Inn, Travelodge, Super 8, Howard Johnson, Econolodge, Motel 6, etc.</h4>
<h3>Capsule Hotels: A New Entry on the Landscape</h3>
<h4>Target market: Downtown locations target international students looking for an affordable place to stay before settling into student housing. Airport locations target digital nomads and backpackers.</h4>
<p>Typical features: Cubicle-like rooms (28-40 sq. ft), stacked one on top of the other, utilizing energy-efficient designs and sustainable materials. Shared bathrooms but may have on-site restaurant or outdoor/rooftop gathering areas.</p>
<p>Operation model: Originated in Japan, usage is growing in major cities due to rising hotel costs and the effects of inflation. Franchising opportunities.</p>
<p>Average Room#: 6-60+</p>
<p>Examples: Pangea Pod, Panda Pod, etc.</p>
<h2>Advantages of Hotel Investment</h2>
<p>The advantages of investing in hotel properties include:</p>
<h3>Diversification of Your Investment Portfolio</h3>
<p>Real estate investing can be an excellent way to build wealth and generate passive income. But like any investment, it comes with risks. Investing in different types of commercial real estate asset classes (<a href="https://blog.remax.ca/demand-for-warehouse-space-surges/" target="_blank" rel="noopener">warehouse</a>, <a href="https://blog.remax.ca/a-look-at-four-trends-in-multifamily-real-estate/" target="_blank" rel="noopener">multifamily</a> and hotel properties) can reduce dependence on any property type or investment.</p>
<h3>Potential for High Returns Due to Consistent Demand</h3>
<p>Unlike many other investments, hotels have the potential to generate daily revenue, and the income stream can be formidable.</p>
<p>Because there are only so many hotels in each geographic area and hotel development currently lags behind demand, hotels can charge premium rates during peak travel times that coincide with holidays, summer vacation periods and important local events or festivals. These periodic rate increases can add significant profit to a hotel’s balance sheet.</p>
<h3>Tax Benefits</h3>
<p>Investing in hotels can offer tax benefits that can help investors hold onto their profits and reduce tax liabilities.</p>
<p>Some of the tax benefits associated with investing in hotels include:</p>
<ul>
<li>Interest deductions</li>
<li>Depreciation and cost segregation deductions</li>
<li>Tax-deferred exchanges</li>
</ul>
<h3>Growth Potential</h3>
<p>Depending on the services and amenities they offer; hotels can create a variety of revenue streams beyond room rentals. These include food and beverage sales, wellness services, themed weekend-stay packages, conference and event space rentals, and even daily pool or spa passes.</p>
<h3>Investment Opportunities That Reflect Your Risk Tolerance and Financing</h3>
<p>There are a variety of ways you can add hotel investments to your commercial real estate portfolio, including:</p>
<ul>
<li>Investing in Real Estate Investment Trusts (REITs)</li>
<li>Purchasing shares in a publicly-traded hotel operating company</li>
<li>Taking part in a crowd-funded hotel investment</li>
<li>Purchasing a hotel property</li>
<li>Building a new hotel property</li>
</ul>
<h3>Appreciation Potential</h3>
<p>Well-located and well-managed hotels that optimize occupancy and room rates can generate consistent cash flows that increase the value of their hotel property. As owners or operators add profitable new services or make design improvements and upgrades, the hotel’s value escalates along with them. As demand increases for a particular type of hotel or location, hotel value can soar.</p>
<h2>Disadvantages of Hotel Investment</h2>
<p>The disadvantages of investing in hotel properties include:</p>
<h3>Seasonality</h3>
<p>Hotels that rely on leisure travellers for most bookings can experience extreme revenue swings based on seasonality. These swings can be mitigated by developing offerings that attract new customers, such as special promotions and packages, sponsoring local events – or even creating new ones – and marketing them efficiently.</p>
<h3>Vulnerability to Changes in Disposable Income</h3>
<p>The hotel industry is highly susceptible to economic downturns, leading to decreased travel and demand for hotel rooms or changes in the types of hotels travellers prefer. When a downturn happens, luxury hotels are often the first segment to experience reduced bookings, while those at midscale hotels increase.</p>
<h3>High Operating Costs</h3>
<p>Even in budget motels, operating costs for staff, utilities and maintenance can be substantial. Costs for property tax, insurance and travel commissions also cut into profits.</p>
<h3>The Effect of Remote and Hybrid Work</h3>
<p>The persistence of remote and hybrid work models has put a significant dent in hotel earnings from business travellers. Whether capitalizing on the new “bleisure” trend of adding vacation time before or after business trips can offset these losses remains to be seen.</p>
<h2>How to Evaluate the Performance of Potential Hotel Investments</h2>
<p>Once you’ve weighed the pros and cons and determined the type of hotel you’re interested in investing in, you’ll need a way of evaluating your investment’s performance.</p>
<p>The most commonly used hotel investment KPIs include:</p>
<h3>Occupancy Rate</h3>
<p>This metric tracks the percentage of available rooms occupied during a given time period. A high occupancy rate indicates strong hotel room demand and can be a good indicator of hotel profitability.</p>
<h3>Average Daily Rate (ADR)</h3>
<p>This metric shows the average price of each room sold during a given time period. A higher ADR generates more revenue per available room.</p>
<h3>Revenue Per Available Room (RevPAR)</h3>
<p>The gold standard for measuring top-line performance in a hotel investment, RevPAR is calculated by multiplying the ADR by the occupancy rate and provides a snapshot of how well hotels are filling and pricing rooms. When RevPAR goes up, either the occupancy or ADR rate is up, or both. By comparing RevPAR trends over time, you can see seasonal trends and compare the relative performance of one hotel versus another in a similar geographic area.</p>
<h3>Gross Operating Profit (GOP)</h3>
<p>The metric considers a hotel’s total revenue minus its operating expenses. GOP is a key factor for understanding the hotel investment profitability.</p>
<h3>Return on Investment (ROI)</h3>
<p>ROI is a key metric for evaluating the overall success of a hotel investment and can help stakeholders determine whether the investment is meeting financial goals.</p>
<h2>Canadian Hospitality Market Strengths</h2>
<p>Hotel investment in Canada offers the advantage of a truly diverse market – from traditional leisure and business travellers to students, digital nomads, outdoor adventurers and event attendees – reducing dependence on any single market segment, thereby lowering overall risk.</p>
<p>With plusses like high demand, the potential for steady growth and appreciation, tax incentives and solid governmental support, investing in the Canadian hotel sector has never been more attractive.</p>
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<p>The post <a href="https://blog.remax.ca/is-hotel-investment-a-smart-move/">Is Hotel Investment a Smart Move?</a> appeared first on <a href="https://blog.remax.ca">RE/MAX Canada</a>.</p>
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<br />
from RE/MAX Canada https://ift.tt/cdu4m1v<br />
RE/MAX Canada
epaquinhttp://www.blogger.com/profile/01589631138771940331noreply@blogger.com0tag:blogger.com,1999:blog-6402346487751506041.post-32459511750147842742024-03-04T12:55:00.001-05:002024-03-04T12:55:21.557-05:00What Are Condo Fees?<div class="fusion-fullwidth fullwidth-box fusion-builder-row-2 fusion-flex-container nonhundred-percent-fullwidth non-hundred-percent-height-scrolling" style="--awb-border-radius-top-left:0px;--awb-border-radius-top-right:0px;--awb-border-radius-bottom-right:0px;--awb-border-radius-bottom-left:0px;--awb-flex-wrap:wrap;">
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<p>What are condo fees, how are they calculated, and what do they cover? Condos have become the home of choice for many Canadian homebuyers, particularly first-timers, but increasingly move-up buyers as well. But many don’t understand this lifestyle option before deciding that it’s right for them.</p>
<p>Homeowners are drawn to condo living for a variety of reasons. It is a good option as residents age and can no longer care for a house or want to downsize. There is less maintenance and repair responsibility and more security features. But the big draw is often on-site amenities such as a swimming pool that you would not otherwise be able to afford.</p>
<p>Affordability is a big factor behind the relatively recent shift to condo living, but it’s certainly not the only appeal. Other benefits include a sense of community (yes, vertical communities are a thing!), easy access to urban conveniences, public transit, employment and entertainment, as well as a lock-and-leave lifestyle for when life takes you further abroad.</p>
<p>Condo fees are the way that all the amenities are paid for, and the cost is a separate payment from your mortgage. Luckily, they tend to be fairly predictable. Let’s take a closer look at condo fees.</p>
<h3>What are condo fees, how are they calculated, and what do they cover?</h3>
<h3>What are condo fees?</h3>
<p>Every condo owner pays a regular, non-negotiable condo fee. This fee is calculated based on your share of the condo building – the larger your unit, the greater your fee. This fee is adjusted annually based on the condo’s operating budget.</p>
<p>Condo fees are mandatory for divided co-ownership but not for undivided co-ownership. Divided co-ownership means that you paid a minimum five-per-cent down payment, and there is a group of co-owners managed by a board of directors that regularly holds meetings. Undivided co-ownership means you paid a minimum 20-per-cent down payment and have a more flexible administration. Undivided co-ownership properties may still require a monthly or annual fee to build a reserve fund and pay for building maintenance.</p>
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<div class="fusion-layout-column fusion_builder_column fusion-builder-column-2 fusion_builder_column_1_1 1_1 fusion-flex-column stat1" style="--awb-bg-size:cover;--awb-width-large:100%;--awb-margin-top-large:0px;--awb-spacing-right-large:1.92%;--awb-margin-bottom-large:20px;--awb-spacing-left-large:1.92%;--awb-width-medium:100%;--awb-order-medium:0;--awb-spacing-right-medium:1.92%;--awb-spacing-left-medium:1.92%;--awb-width-small:100%;--awb-order-small:0;--awb-spacing-right-small:1.92%;--awb-spacing-left-small:1.92%;">
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<p>Fees can range from <strong>$50-$1,000 per month</strong>, depending on a variety of factors.</p>
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<p>Each condo owner is responsible for paying their condo fee in addition to other payments like mortgage, property taxes, and homeowner’s insurance. Fees can range anywhere from $50 to $1000 per month and will depend on a variety of factors, including:</p>
<ul>
<li>The size and age of the property</li>
<li>Whether the building is a high-rise</li>
<li>How many buildings are in a particular complex</li>
<li>The amenities covered</li>
</ul>
<p>Do be wary of condo fees that are too low since this can be a sign of underestimated maintenance costs, unfinished maintenance, or an underfunded reserve fund.</p>
<h3>What do condo fees cover?</h3>
<p>Your condo fees are divided into three main categories: utilities, common areas and the reserve fund. Let’s take a closer look.</p>
<p>A chunk of your condo fee goes to utilities such as water, hydro and sometimes heat – but this isn’t always the case. Most brand-new condominiums are now being built with individual heat pumps that are controlled by and paid for by their respectful owners.</p>
<p>Condo fees also pay for snow and garbage removal, cleaning and minor repairs of common areas, exterior window washing and the like. Make sure you’re clear on your condo fees before you buy.</p>
<p>We’ve already mentioned that condo ownership means less maintenance on your to-do list. But somebody’s gotta do it, right? Your condo fees cover that expense as well. This goes not only for the small stuff like lawn care but for major maintenance work like roofing that will come out of the reserve fund.</p>
<p>And remember those awesome amenities that your family and friends come over to use? You have to contribute to their upkeep. The more amenities your condo has, the higher your condo fees will be. Think pool, gym, hobby rooms, sports courts, an in-house theatre, and indoor and outdoor areas. Ask yourself if you’re going to actually use all of the amenities offered by your condo, because you’ll be paying for them.</p>
<p>Lastly, condo fees cover administration costs for managing the condominium, such as holding meetings. Some buildings are managed by private companies that are paid for their services. Insurance is necessary to cover the building and everything in it, and your condo fees cover this.</p>
<p>In short, if there is something that every resident uses as a collective that you are not paying out of your pocket for, it is probably being paid with your condo fees.</p>
<h3>What is a reserve fund?</h3>
<p>A portion of your condo fee is set aside in a reserve fund, which every condo board must maintain as a savings account for big-ticket items that inevitably arise. A roof replacement can cost upwards of half a million dollars, so this fund is essential.</p>
<p>Then there’s the Special Assessment. In the case that the reserve fund doesn’t quite cover the bill, each condo owner will be required to pitch in their proportionate amount to cover the cost.</p>
<p>If you’re considering condo ownership, make sure you incorporate the condo fee into your budget. Make sure to leave a buffer in case your condo fees increase, which tends to happen as condos age. Any increases are at the discretion of the condo board.</p>
<p>Before you make an offer, get a copy of the condo’s status certificate, which contains important details about the condo’s financial status. Review it and make sure you understand it. The document will include things like the condo’s budget, any pending legal matters, information about the reserve fund, current maintenance fees, and whether any increases are planned in the near future.</p>
<p>The fee for the status certificate? It varies by province, so ask your local <a href="https://blog.remax.ca/find-an-agent/" target="_blank" rel="noopener">RE/MAX agent</a>. In Ontario, you can expect to pay about $100. The information contained in it? Potentially worth a great deal more to your investment.</p>
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<p>The post <a href="https://blog.remax.ca/condo-fees-heres-need-know/">What Are Condo Fees?</a> appeared first on <a href="https://blog.remax.ca">RE/MAX Canada</a>.</p>
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<br />
<br />
from RE/MAX Canada https://ift.tt/jNM3Heq<br />
Lydia McNutt
epaquinhttp://www.blogger.com/profile/01589631138771940331noreply@blogger.com0tag:blogger.com,1999:blog-6402346487751506041.post-62548446411609795502024-03-04T12:51:00.001-05:002024-03-04T12:51:26.303-05:00What Are Condo Fees?<div class="fusion-fullwidth fullwidth-box fusion-builder-row-2 fusion-flex-container nonhundred-percent-fullwidth non-hundred-percent-height-scrolling" style="--awb-border-radius-top-left:0px;--awb-border-radius-top-right:0px;--awb-border-radius-bottom-right:0px;--awb-border-radius-bottom-left:0px;--awb-flex-wrap:wrap;">
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<p>What are condo fees, how are they calculated, and what do they cover? Condos have become the home of choice for many Canadian homebuyers, particularly first-timers, but increasingly move-up buyers as well. But many don’t understand this lifestyle option before deciding that it’s right for them.</p>
<p>Homeowners are drawn to condo living for a variety of reasons. It is a good option as residents age and can no longer care for a house or want to downsize. There is less maintenance and repair responsibility and more security features. But the big draw is often on-site amenities such as a swimming pool that you would not otherwise be able to afford.</p>
<p>Affordability is a big factor behind the relatively recent shift to condo living, but it’s certainly not the only appeal. Other benefits include a sense of community (yes, vertical communities are a thing!), easy access to urban conveniences, public transit, employment and entertainment, as well as a lock-and-leave lifestyle for when life takes you further abroad.</p>
<p>Condo fees are the way that all the amenities are paid for, and the cost is a separate payment from your mortgage. Luckily, they tend to be fairly predictable. Let’s take a closer look at condo fees.</p>
<h3>What are condo fees, how are they calculated, and what do they cover?</h3>
<h3>What are condo fees?</h3>
<p>Every condo owner pays a regular, non-negotiable condo fee. This fee is calculated based on your share of the condo building – the larger your unit, the greater your fee. This fee is adjusted annually based on the condo’s operating budget.</p>
<p>Condo fees are mandatory for divided co-ownership but not for undivided co-ownership. Divided co-ownership means that you paid a minimum five-per-cent down payment, and there is a group of co-owners managed by a board of directors that regularly holds meetings. Undivided co-ownership means you paid a minimum 20-per-cent down payment and have a more flexible administration. Undivided co-ownership properties may still require a monthly or annual fee to build a reserve fund and pay for building maintenance.</p>
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<p>Fees can range from <strong>$50-$1,000 per month</strong>, depending on a variety of factors.</p>
</div>
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<p>Each condo owner is responsible for paying their condo fee in addition to other payments like mortgage, property taxes, and homeowner’s insurance. Fees can range anywhere from $50 to $1000 per month and will depend on a variety of factors, including:</p>
<ul>
<li>The size and age of the property</li>
<li>Whether the building is a high-rise</li>
<li>How many buildings are in a particular complex</li>
<li>The amenities covered</li>
</ul>
<p>Do be wary of condo fees that are too low since this can be a sign of underestimated maintenance costs, unfinished maintenance, or an underfunded reserve fund.</p>
<h3>What do condo fees cover?</h3>
<p>Your condo fees are divided into three main categories: utilities, common areas and the reserve fund. Let’s take a closer look.</p>
<p>A chunk of your condo fee goes to utilities such as water, hydro and sometimes heat – but this isn’t always the case. Most brand-new condominiums are now being built with individual heat pumps that are controlled by and paid for by their respectful owners.</p>
<p>Condo fees also pay for snow and garbage removal, cleaning and minor repairs of common areas, exterior window washing and the like. Make sure you’re clear on your condo fees before you buy.</p>
<p>We’ve already mentioned that condo ownership means less maintenance on your to-do list. But somebody’s gotta do it, right? Your condo fees cover that expense as well. This goes not only for the small stuff like lawn care but for major maintenance work like roofing that will come out of the reserve fund.</p>
<p>And remember those awesome amenities that your family and friends come over to use? You have to contribute to their upkeep. The more amenities your condo has, the higher your condo fees will be. Think pool, gym, hobby rooms, sports courts, an in-house theatre, and indoor and outdoor areas. Ask yourself if you’re going to actually use all of the amenities offered by your condo, because you’ll be paying for them.</p>
<p>Lastly, condo fees cover administration costs for managing the condominium, such as holding meetings. Some buildings are managed by private companies that are paid for their services. Insurance is necessary to cover the building and everything in it, and your condo fees cover this.</p>
<p>In short, if there is something that every resident uses as a collective that you are not paying out of your pocket for, it is probably being paid with your condo fees.</p>
<h3>What is a reserve fund?</h3>
<p>A portion of your condo fee is set aside in a reserve fund, which every condo board must maintain as a savings account for big-ticket items that inevitably arise. A roof replacement can cost upwards of half a million dollars, so this fund is essential.</p>
<p>Then there’s the Special Assessment. In the case that the reserve fund doesn’t quite cover the bill, each condo owner will be required to pitch in their proportionate amount to cover the cost.</p>
<p>If you’re considering condo ownership, make sure you incorporate the condo fee into your budget. Make sure to leave a buffer in case your condo fees increase, which tends to happen as condos age. Any increases are at the discretion of the condo board.</p>
<p>Before you make an offer, get a copy of the condo’s status certificate, which contains important details about the condo’s financial status. Review it and make sure you understand it. The document will include things like the condo’s budget, any pending legal matters, information about the reserve fund, current maintenance fees, and whether any increases are planned in the near future.</p>
<p>The fee for the status certificate? It varies by province, so ask your local <a href="https://blog.remax.ca/find-an-agent/" target="_blank" rel="noopener">RE/MAX agent</a>. In Ontario, you can expect to pay about $100. The information contained in it? Potentially worth a great deal more to your investment.</p>
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<p>The post <a href="https://blog.remax.ca/condo-fees-heres-need-know/">What Are Condo Fees?</a> appeared first on <a href="https://blog.remax.ca">RE/MAX Canada</a>.</p>
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epaquinhttp://www.blogger.com/profile/01589631138771940331noreply@blogger.com0tag:blogger.com,1999:blog-6402346487751506041.post-44172090974032607102024-03-04T12:46:00.001-05:002024-03-04T12:46:22.364-05:00The 411 on Pre-Construction Homes<div class="fusion-fullwidth fullwidth-box fusion-builder-row-2 fusion-flex-container remax-intro-container nonhundred-percent-fullwidth non-hundred-percent-height-scrolling" style="--awb-border-radius-top-left:0px;--awb-border-radius-top-right:0px;--awb-border-radius-bottom-right:0px;--awb-border-radius-bottom-left:0px;--awb-margin-top:2%;--awb-margin-bottom:5%;--awb-flex-wrap:wrap;">
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<p>Do you choose the resale market or opt for a pre-construction home? When you are in the market to buy a home, it is an important consideration. There is no doubt that pre-construction homes have a certain appeal to homebuyers.</p>
<p>Buying brand new provides the opportunity to own a home that no one else has ever lived in. And because the house is in the pre-construction phase, you have the opportunity to customize it to your preferences.</p>
<p>If pre-construction is something you’re considering, here’s the info to help you decide if it really is for you.</p>
<h2>What is a Pre-Construction Home?</h2>
<ul>
<li>A pre-construction home is exactly what it sounds like: a house you buy before it has been constructed. Most styles of homes are available for pre-construction buying, including:</li>
<li>High-rise condos</li>
<li>Low-rise condos</li>
<li>Detached houses</li>
<li>Semi-detached houses</li>
<li>Townhouses</li>
</ul>
<p>For a condo development, you’ll buy a home from blueprints or a 3D computer rendering that provides a simulated walk-through. For houses, you can usually visit a model home that sits on the lot of the future development. Although model homes tend to be highly aspirational in their decor, it’s your chance to get a more realistic look at what you’ll be buying.</p>
<h2>The Benefits of Pre-Construction Homes</h2>
<p>So, what’s the big attraction of a pre-construction home? There are quite a few benefits, including:</p>
<h3>Warranty</h3>
<p>Like buying a new car, a brand-new home comes with a warranty. The warranty programs in Canada offer protection for newly built homes, including delays in occupancy and closing coverage, protection for your deposit, and the cost of repairs should there be issues once you move in.</p>
<h3>Lower Price Tag</h3>
<p>Pre-construction homes can offer better value than the resale market because you’re essentially buying a promise. You put down your deposits (as per your purchase agreement), and the builder promises to deliver a home by a specified date.</p>
<h3>No Bidding Wars</h3>
<p>Depending on where you’re shopping for your home, bidding wars can really raise the price. When inventory is low, buyers are desperate, and the more attractive the home and neighbourhood, the more chance you could end up paying an inflated price for a resale home. When it comes to pre-construction, you’re looking at a set price. You’ll know exactly how much you’ll pay, usually at fair market value.</p>
<h3>Designer Home</h3>
<p>You have the option of designing your home with plenty of upgrades available. There are not only upgrades for finishings like kitchen counters and flooring, but you can often make structural upgrades, including adjusting some floor plan options.</p>
<p>Because you’re making all your decisions during the building process, they are far more affordable than a reno or upgrade once you move in. The pre-construction process allows you to make smart decisions that will increase the resale value of your home.</p>
<h3>Lower Condo Fees</h3>
<p>When buying a brand new condo, the condo fees are lower in new builds than in resale condos. That is because everything is new, and the management has yet to see how much it costs to operate the building or property, so, as you will read below, this can also become a drawback.</p>
<h3>Flexible Deposits and Down Payments</h3>
<p>Although you tend to need more for a deposit or down payment for pre-construction, the payments are staggered. You have time to keep saving as there is a small amount paid upfront, and the rest is paid on a schedule that leads up to the final closing.</p>
<h3>Better Choices</h3>
<p>You’ll have more choices when buying pre-construction compared to resale condos, such as the floor and the location of your unit (i.e., a corner unit or a better view).</p>
<h3>10-Day Cooling Off Period</h3>
<p>You’ll have ten days to “cool off” and reconsider your purchase. You can arrange for financing and have a lawyer review the agreement during this time. Should you change your mind or find something in the deal you don’t like, you can get your full deposit back and walk away.</p>
<h3>The Downside of Pre-Construction Homes</h3>
<p>As with everything, you have to take the bad with the good. Some downsides to pre-construction include:</p>
<h3>Delays</h3>
<p>You should always go into pre-construction with a hint of pessimism. The reality is that you could face delays. And we’re talking years, not weeks or months. Researching developers will help you find a trusted company with a good reputation for customer satisfaction, hopefully lessening the likelihood of delays.</p>
<h3>Condo Fees Rising</h3>
<p>Although you’ll see lower condo costs going in, you must prepare to see an increase of as much as 10 to 20 percent within two years. It takes about two years for the management to realize the cost of running the condo, and increases are always required. This has to be added to your monthly budget when determining if you can afford your new condo, or you might have trouble making ends meet.</p>
<h3>Higher Deposits</h3>
<p>While you do get the opportunity to stagger your deposit payments, you will be paying as much as 10 to 20 percent overall, compared to a deposit of five percent when signing a resale agreement. In most cases, you’re looking at a five-per-cent sales deposit up front and then payments at four, nine and 18 months, depending on the developer or building schedule.</p>
<h3>Mortgage Challenges</h3>
<p>When buying a resale home, you’ll usually be making your purchase before your locked-in rate expires. However, this can be a challenge for pre-construction homes if the home completion date is extended and passes your locked-in expiry date.</p>
<h3>Occupancy Fees</h3>
<p>In the case of a <a href="https://blog.remax.ca/buying-a-pre-construction-condo-on-an-plan/" target="_blank" rel="noopener">pre-construction condo</a>, there is a registration process required before you can legally own your unit. If you have to move in before registration is complete, that is called interim occupancy. You pay a monthly occupancy fee if you move in during this period, which does not go towards your mortgage. This monthly fee will include your condo fees, the interest portion of the balance owing on the purchase price, and a portion of your property taxes.</p>
<h3>Project Cancellation</h3>
<p>When you buy pre-construction, you risk the project not making it to the finish line. Whether it’s a lack of sales or rising construction costs, <a href="https://blog.remax.ca/what-happens-if-a-pre-construction-condo-is-cancelled/" target="_blank" rel="noopener">pre-construction cancellation</a> is a reality for many homebuyers. Sure, you get your money back. However, the money you invested in the project has not earned you anything. You could have used it toward another pre-construction development or an alternative investment. On top of that, you originally purchased at an earlier year’s price. That money now has to go toward today’s real estate market, which may have risen sharply, leaving you with less buying power.</p>
<h3>Other Pre-Construction Costs</h3>
<p>Your <a href="https://blog.remax.ca/buying-a-pre-construction-condo/" target="_blank" rel="noopener">pre-construction home</a> also has additional fees, including GST/HST. There are rebates available if the house is your primary residence, depending on your province.</p>
<p>You’ll face some taxes (that you won’t be too thrilled about) if you intend to rent your unit. A good way to avoid these taxes is to live in your unit for a while before renting it out.</p>
<p>There are also closing costs you don’t have when buying a resale home, such as charges for utility meter installations, fees to track your deposit payments, electronic land registration system usage, and more.</p>
<p>These additional fees can add up to as much as three percent on top of your purchase price. Working with a real estate agent and lawyer will help you get a more realistic view of what further costs you’ll have to pay on your pre-construction home. A real estate agent can also help you look at a variety of resale and pre-construction options so that you are sure to find your dream home.</p>
<h3>How Do You Buy a Pre-Construction Home?</h3>
<p>You can take steps to maximize the benefits and minimize the risks of buying a <a href="https://blog.remax.ca/pre-construction-condos-what-you-need-to-know/" target="_blank" rel="noopener">pre-construction home</a>. First, research your builder. Visit online directories to determine if you are purchasing from a reputable builder. You’ll want to know that they have a record of completing projects so that you can be confident that you are investing your money wisely.</p>
<p>Next comes the purchase agreement. You must understand the agreement before you sign it. It is a legal and binding contract, so you must have your lawyer review it before you sign on the dotted line. This review is your chance to understand the warranty coverage on the home better. You are buying a new home, so some parts of your home are covered after you purchase it, making it essential that you understand what is covered and for how long.</p>
<p>Speaking of lawyers, some legal professionals specialize in pre-construction homes and are a real asset in the buying and negotiation phase. They know what to be on the lookout for and can guide you. On top of being a significant financial investment, it also requires a more extended buying period, so it’s best to have someone experienced by your side.</p>
<p>Finally, you will need to prepare for your pre-delivery inspection. Before you take possession, you can walk through your new home and ensure that the house is delivered to you as was agreed. You can reference pre-delivery checklists to ensure you are looking for the right things.</p>
<h2>Completions Are Slowing</h2>
<p>Over the last year, a new trend has formed in the Canadian real estate market: Residential construction activity is taking too long to build. Whether because of a tight labour market or rocketing interest rates, single-family homes and condominiums are being completed at a snail’s pace. Today, it takes approximately five to ten years before a residential development is ready to move into – it is usually around 18 months before a single-family home is completed – and the current trends are becoming riskier for developers.</p>
<p>While housing starts are higher than they were before the coronavirus pandemic, it is taking so long to deliver new projects to the market due to the plethora of simultaneous projects underway. As a result, the lengthy delays could exacerbate Canada’s affordability challenges because the country will be unable to construct the roughly 5.8 million homes it needs in seven years.</p>
<p>The delay in construction has also affected homebuyers in myriad ways.</p>
<p>Industry experts argue that homebuyers are not closing their transactions and walking away from enormous deposits. The reason? Interest rates have soared to their highest levels since before the Global Financial Crisis, meaning buyers cannot qualify for a mortgage when the closing date nears. This is especially troublesome if prices continue their growth from the coronavirus pandemic.</p>
<p>Reports suggest that some deposits are as high as $320,000.</p>
<p>In Toronto, for example, the average selling price is north of $1.1 million and is much higher than before the coronavirus pandemic, according to data from the <a href="https://creastats.crea.ca/board/treb" target="_blank" rel="noopener">Toronto Region Real Estate Board (TRREB)</a>. Buyers are not walking away as much from condo builds if they purchased a unit in 2020 or 2021, but there has been a gradual uptick. The situation has been primarily concentrated in the detached and semi-detached spaces.</p>
<p>Before buyers think they can abandon their purchase without any repercussions, legal experts say that builders can seize the deposit and sue for any damages. Additionally, if the developers resell these properties for less than what the original buyers acquired them for, builders can return to the party and request a difference in the cost.</p>
<p>At the same time, because of lower condo sales, developers delayed the completion of dozens of condo projects across the Greater Toronto Area (GTA) last year. To put this into perspective, this means approximately 14,000 units will not come to the market until perhaps there is an improvement in the pre-sale market.</p>
<p><em>“While some new launches with competitive price points have seen success, many projects have been unable to make an economic case for proceeding in the current market, causing more supply to be put on hold,”</em> said Shaun Hildebrand, president of Urbanation, in a <a href="https://www.cp24.com/news/high-interest-rates-market-uncertainty-continue-to-grip-the-new-condominium-sector-in-the-gta-report-finds-1.6626330?cache=ofieaywbljoc" target="_blank" rel="noopener">report</a>. <em>“As presale activity typically impacts construction starts with a 12-18 month lag, the slowdown in new condo sales that began in the second half of 2022 is expected to continue weighing on construction starts in the coming quarters.”</em></p>
<p>Ultimately, the Canadian real estate market, notably in the major urban centres, is beginning to witness two trends: a pile of empty homes and developers abandoning projects.</p>
<h2>New to Pre-Construction Homes? Get The Help You Need.</h2>
<p>Knowledge is key to moving through the pre-construction process, especially if it is your first time. An experienced real estate agent can help you right from the start. From analyzing market data to understanding the purchase price, a real estate professional understands your local market and can guide you throughout the process.</p>
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<p>The post <a href="https://blog.remax.ca/the-411-on-pre-construction-homes/">The 411 on Pre-Construction Homes</a> appeared first on <a href="https://blog.remax.ca">RE/MAX Canada</a>.</p>
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RE/MAX Canada
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