Buy and Sell Saskatoon Real Estate

Investing in real estate can seem scary at first. After all, a house is likely the biggest purchase you’ll ever make. So if you’re nervous don’t worry, because you’re not alone.

In my opinion, the best way to handle these first-time jitters is by starting small. If you’re scared of investing in real estate because you don’t want to lose everything I have a really simple solution: don’t risk everything.

I hear stories all the time of people who have put everything on the line by quitting their jobs and investing in major house flips. This is a terrible idea! Being successful in real estate, and any business, really, isn’t about making giant leaps. It’s not about getting rich quickly. Truly successful people are deliberate, decisive and strategic. They’re cautious and they look for warning signs. They take small but significant steps. And they take them continuously.

Dipping your toe in the real estate pool by renting out your basement to a friend, or investing in a rental property with a few partners, is a great way to test the waters and start to learn the business of real estate investing without taking on a ton of risk. And not just that.  Taking on partners on projects can minimize your risk, but it can also provide you with a support team to share in the successes and failures while you’re learning. As far as I’m concerned, it’s a win-win.

If that’s still too much, an even smaller step is to rent out your home while you’re away. Sites like Airbnb have made it easier than ever to make money from your home, and their review system helps to minimize some of the risks by giving you confidence about who you’re renting to. This is a particularly great option for people who live in popular tourist areas. When you live in a high-demand area – a city centre for example – you can always find people to rent your home when you’re away on vacation or business. And ultimately you can decide not to rent to someone if their profile doesn’t give you 100% confidence. 

Remember, you don’t have to make a huge commitment to get started as a real estate investor. There are more options now than ever before, so start small and then take bigger steps once you have more experience.

Source: Scott Mcgillivray

https://scottmcgillivray.com/afraid-to-invest-in-real-estate-start-small/

And this good advice doesn’t cost you a nickel, says Saanich mortgage broker

Is it time for your mortgage checkup?

After signing a mortgage document, many homeowners forget about it until five years later, when they receive a call or letter saying it is coming due for renewal. But your mortgage needs regular attention, says Brenda Joynson, a Mortgage Consultant with Mortgage Depot in Saanich.

“If you experienced changes in your physical health, you would go see your doctor. With changes in the mortgage world, including the Stress Test, your mortgage broker or banker can find new ways to improve your financial health,” she says.

Here’s five good questions to ask your mortgage professional:

1. Do the Stress Test rules apply to me? This test was designed to ensure borrowers would be able to pay the loan if interest rates rose. But did you know the rules do not apply to mortgage renewals, as long as they are with the borrower’s existing lender? You may even be able to move your existing mortgage to a new lender to take advantage of better rates, without having to apply the stress test.
2. Does refinancing make financial sense to access my equity for other things? Even with mortgage payout penalties, your savings could be significant. That could help you increase cash flow by eliminating credit card balances or lines of credit. This would allow you to increase your mortgage payment and pay it off faster to save interest. Perhaps your properties need maintenance, or you’re considering a renovation to enhance its value and/or rentability? Leveraging your equity can also play an important role in successful investing.
3. Is there room for improvement in my mortgage structure? If you own more than one property or want to pursue tax-deductible investments, changing your mortgage structure can save you money at tax time. For example, many multi-level mortgage products allow you to separate non-deductible mortgage payments from your deductible mortgage interest.
4. When should I lock in my variable-rate mortgage? Current fixed rates are often lower, so if you plan to keep the property, it’s worth having your professional do a comparison between fixed rates and your current variable rate. A key consideration are the penalties charged for breaking the mortgage contract early.
5. How can I pay my mortgage off faster? Mortgage payments determine amortization length: the higher the payment, the lower the amortization; the lower the payment, the longer it takes to pay the mortgage off. One strategy worth looking at is extending amortization on revenue properties and reducing it on your residential mortgage.

If you have other mortgage questions, an annual mortgage check up might be just what the doctor ordered, Joynson says. Best of all, it doesn’t cost you anything!

Source: Saanich News https://www.saanichnews.com/marketplace/5-questions-that-could-save-you-thousands-on-your-next-mortgage/

Buying a house can be an exciting, but complex process. So when you embark on your journey, one of your first stops should be familiarizing yourself with the lingo.

We've curated helpful information from our Homebuyers' Road Map and Tips for Buyers, to share with you some of the most important terminology a new buyer needs to know—from pre-purchase to post-purchase.

Before you buy

First things first, you need to find yourself a REALTOR®. A REALTOR® can bring you peace of mind thanks to their experience and professionalism. From helping you find a home that meets your needs and price range, to negotiating your purchase price, directing you through complex contracts, a REALTOR® is an important part of your home buying journey. 

While it's exciting to start visiting open houses, you must first determine how much a mortgage lender is willing to let you borrow to purchase your first home. Your mortgage is a loan that can help you cover the cost of buying a home. How much you're able to borrow will depend on factors including your total current debt, monthly household income, how long you’ve been at your current job and how long it will take you to pay it back: Introducing the amortization period. A longer amortization period means lower monthly payments but higher interest rates. 

Mortgage lenders use Principle, Interest, Taxes and Heating (PITH) as a tool to ensure mortgage affordability by determining the monthly payments that can be made by the home buyer. The REALTOR.ca mortgage affordability calculators can help you perform your own PITH test to estimate affordable mortgage payments.

When taking out a mortgage, home buyers grant the bank a lien on the property. This gives the bank the right to seize your property in the event you don't repay your mortgage.

Types of mortgages: 

• Fixed-rate mortgage: Your interest rate is locked in for a specified period called a term. Your payments stay the same for the mortgage's term so you will not pay more even if interest rates increase over time.
• Variable rate mortgage: The rate of interest you pay may change if rates go up or down.
• Conventional mortgage: Requires a down payment of 20% or more of the property's value. You're not required to get mortgage default insurance with a conventional mortgage.
• Closed mortgage: The mortgage cannot be paid off early without paying a prepayment charge.
• Open mortgage: A mortgage that can be paid off at any time during the term, without having to pay a charge. The interest rate for an open mortgage may be higher than for a closed mortgage with the same term.

Now that you know how much you can afford, your REALTOR® can help determine what type of neighbourhood you want to live in and what type of house you want to buy.

Buying a home

You've found your dream home…now what? It's not time to pack your bags just yet. There are many expenses you must consider beyond the purchase price (the price you're willing to pay for the house). 

You need to consider how much of a down payment you can afford. This refers to the initial up-front portion you pay against your home purchase. The larger the down payment, the smaller your mortgage. Are you a first-time home buyer with a Registered Retirement Savings Plan (RRSP) account? You can now withdraw up to $35,000 without paying income tax through the Home Buyers' Plan.

Other factors you may want to consider at this stage are:

• Property taxes: This annual fee, imposed by the local government, pays for services like public education, local police and libraries. 
• Home insurance: This is a form of property insurance protecting you financially in the event of damages or losses to your home and its contents. In most cases, you can include these payments in your monthly mortgage payment. 
• Home inspection: Even if the home appears to be flawless, many home buyers arrange a home inspection as a condition of their purchase. Hiring a professional to inspect the overall condition of the home can cost a few hundred dollars, but can reveal any serious defects.

Now that you have figured out all of the costs associated with your purchase, you're ready to make an offer. An offer to purchase is a formal, legal agreement made between the buyer and seller which often contains certain conditions. This is commonly known as a conditional offer and includes factors that must be met in order for the sale to be successful such as financing terms, appliances and fixtures, inspections and the physical condition of the house. 

Generally, the seller has between 24 and 48 hours to accept, reject or counter-offer. This is known as irrevocability of the offer, the length of time the seller has to consider your offer. 

Once your offer is accepted, you will need to determine your closing costs. This includes your mortgage broker's fee, real estate commissions, moving costs, title insurance—an insurance policy protecting you against challenges related to the title of your home—and more. 

While there's a lot more lingo in the real estate dictionary, hopefully you now have a better understanding before taking plunge into one of the biggest single purchases you’ll ever make. These resources available on REALTOR.ca may also help you along your journey to homeownership:

• Tips for Buyers
• Find a Home
• Meet a REALTOR®
• Mortgage Calculators
• Homebuyers’ Road Map

Source: Realtor.ca/blog

https://www.realtor.ca/blog/postpage/11596/1362/real-estate-terms-cheat-sheet

The Canadian Real Estate Association says sales were slightly lower than November, but way up year-over-year

The Canadian Real Estate Association says home sales in December were up 22.7 per cent compared with a year ago when sales were relatively quiet.

The association says sales in the final month of 2019 were up compared with a year ago earlier across most of Canada, including all of the largest urban markets.

On a month-over-month basis, home sales in December were down 0.9 per cent.

The decline ended a streak of monthly gains that began last March.

The actual national average price for a home sold in December 2019 was about $517,000, up 9.6 per cent compared with a year earlier.

Excluding the Greater Vancouver and Greater Toronto Area, two of the country's most expensive and active housing markets, the average price of a home sold was about $400,000, up 6.7 per cent compared with December 2018.

The obvious follow-through from this increasingly tight market is that prices are starting to respond," said Douglas Porter, chief economist for BMO Economics.

"The MLS Home Price Index, which adjusts for shifts in the types of homes purchased, rose 3.3 per cent year over year. While that seems mild, it's a big pick-up from the outright declines reported in the first half of the year and is now running at its fastest pace in almost two years."

Source: CBC news https://www.cbc.ca/news/business/december-home-sales-crea-1.5427587

Have you ever considered building a skating rink in your backyard, but didn't quite know where to start? With so much to think about we spoke with two outdoor rink hobbyists, Devon Kunkel and John Houghton, to see what's needed to accomplish this wintry project.

Since all backyards are different, there's more than one way to create an ice rink. For example, Devon lives in a residential area and used purchased materials to build his, while John's rink receives extra help from Mother Nature thanks to his rural location (his yard partially floods each November). 

Timing and location

While you're waiting impatiently for winter to arrive, determine the rink's size—16 feet wide by 24 feet long, for example. Before the ground freezes solidly (it's OK if just the top half inch of soil begins to harden) is the best time to put your rink's perimeter in place. This also ensures your grass is dormant and avoids smothering it. If you wait until after it snows, you'll have to shovel or hope for a thaw before installing the perimeter.

When choosing your rink's location, consider how water drains from your yard. Avoid an area that will drain towards your home or your neighbours' and remember, flatter is always better. While you want to select a flat area away from your house, you want it to be close so a hose will reach, and where exterior lights can provide adequate coverage for night skating. If there's a slight slope, the 6” high boards should be enough to handle the increased ice depth at the lower end.

Pro tip: Before starting anything, always check with your municipality to determine if any bylaws or restrictions might affect your dream rink. Some municipalities require a permit to build one.

Materials

To start, you'll need rink-building materials, plus a few essentials to maintain your ice. Devon says a good quality hose, rated for winter use and long enough to reach the farthest ice with a spray attachment, is extremely important. A snow scoop and push shovel are ideal to clear snow accumulations. 

Complete rink kits, ranging from $80 to $700 or more, are available through national retailers, but if you'd like to build it yourself, these materials will do the trick for around $200 to $250 (excluding tools):

• 2” x 6' pressure treated boards (which usually come in 8 foot lengths)
• 2” x 2' pressure treated boards, cut to 8” lengths and tapered at one end
• tarps or heavy plastic sheeting — use a single sheet that overlaps the entire area
• 3” brass wood screws
• cordless drill
• mitre or hand saw
• rubber mallet

Source: Gord Brown @ Realtor.ca/blog

https://www.realtor.ca/blog/postpage/11576/1367/build-your-own-backyard-skating-rink

Jamie Golombek: For one, there's an increase to the basic personal amount Canadians can earn before facing federal income tax

This week, the government announced increases to the basic personal amount for 2020 and subsequent years beyond the normal inflationary adjustment. Let’s review the changes to the BPA and also take a look at some of the new tax numbers coming for 2020.

ANNUAL INFLATION ADJUSTMENT

Each year, most (but not all) income tax and benefit amounts are indexed to inflation. In early December, the Canada Revenue Agency announced that the inflation rate that will be used to index the 2020 tax brackets and amounts will be 1.9 per cent. This rate was calculated by taking the percentage change in the average monthly Consumer Price Index data as reported by Statistics Canada for the 12-month period ended Sept. 30, 2019 relative to the average CPI for the 12-month period ended on Sept. 30, 2018.

Increases to the tax bracket thresholds and various amounts relating to non-refundable credits take effect on Jan. 1, 2020. Increases in amounts for certain benefits, such as the GST/HST credit and Canada Child Benefit, however, only take effect on July 1, 2020. This coincides with the beginning of the program year for these benefit payments, which are income-tested and based on your prior year’s net income, as reported on your 2019 tax return.

TAX BRACKETS FOR 2020

For 2020, we will continue to have five federal income tax brackets, but they will all be indexed to inflation using the 1.9 per cent rate. The 2020 federal brackets will be: zero to $48,535 of income (15 per cent); above $48,535 to $97,069 (20.5 per cent); above $97,069 to $150,473 (26 per cent); above $150,473 to $214,368 (29 per cent); and anything above that being taxed at 33 per cent. Each province also has its own set of provincial tax brackets, most of which have also been indexed to inflation, but using their respective provincial indexation factors.

BASIC PERSONAL AMOUNT (BPA)

The biggest change for 2020 will be to the BPA. The stated purpose behind the BPA is “to help all Canadians cover their most basic needs” by imposing no federal income tax on a certain amount of income that an individual earns. The 1966 report of the Royal Commission on Taxation (known more commonly as the “Carter Commission”) concluded that “the first dollars of income should not be subject to tax.”

The Commission argued that “clearly the fraction of income available for discretionary use is extraordinarily small for a (low-income) family” and noted that “such a family (also) bears sales and property taxes that are disproportionately large relative to its ability to pay.”

The BPA is the mechanism used to ensure that no tax is paid on a certain amount of basic income and is $12,069 for 2019. This means that an individual Canadian taxpayer can earn up to this amount in 2019, before paying any federal income tax.

For taxpayers earning above this amount, the value of the federal credit is calculated by applying the lowest federal personal income tax rate (15 per cent) to the BPA, making it worth $1,810 in 2019. (Because the credit is non-refundable, it’s only worth the maximum amount if you otherwise would have paid that much tax in the year.) In 2017, the most recent tax year for which we have publicly-available data, nearly 27 million taxpayers claimed the BPA.

Each year, the BPA is indexed to inflation, meaning that for 2020, the inflation-adjusted BPA would have been $12,298 (i.e. $12,069 X 101.9 per cent), absent this week’s announcement. On Monday, the government announced that it is moving forward with its proposal contained in the Liberal election platform to increase the BPA, gradually, to $15,000 by 2023. For 2020, the new BPA will be $13,229. It will rise to $13,808 in 2021 and $14,398 in 2022.

But the increase in the BPA won’t apply to everyone as it will be phased out “for wealthy individuals … to ensure that this tax relief goes to the people who need help most.” Specifically, the increase in the BPA would be gradually reduced, on a straight-line basis, for taxpayers with net incomes above $150,473 (the bottom of the fourth tax bracket for 2020) until it has been fully phased out once a taxpayer’s income is over $214,368 (the threshold for the top tax bracket in 2020), to ensure “the wealthiest Canadians would not benefit from this proposed change.” These high-income taxpayers would simply receive the existing BPA, which will continue to be adjusted annually for inflation.

According to the government, the increased BPA translates to lower taxes for close to 20 million Canadians and once fully implemented in 2023, would save individuals nearly $300 in additional taxes beyond the inflation-adjustments annually. It would also relieve an additional 1.1 million Canadians from paying any federal tax. The cost of the increase to the BPA is projected to be $25.2 billion over the next five years.

CANADA PENSION PLAN CONTRIBUTIONS

CPP contribution rates for employees and employers will each increase to 5.25 per cent in 2020, up from 5.1 per cent in 2019. If you’re self-employed, you pay both the employer and employee portions, for a total of 10.5 per cent. The maximum pensionable earnings for 2020 is set at $58,700. The ceiling is calculated according to a legislated formula that takes into account the growth in average weekly wages and salaries in Canada. Quebec employees and employers contribute to the QPP at a slightly higher rate — 5.70 per cent in 2020 (up slightly from 5.55 per cent in 2019).

As a result, the new maximum employer or employee contribution to the plan for 2020 is up slightly to $2,898 ($3,146 in Quebec) and the maximum self-employed contribution is double that, or $5,796 ($6,293 in Quebec).

EI PREMIUM RATE AND MAXIMUM

Employees must also pay employment insurance premiums, with employers paying 1.4 times the amount of the employee’s premiums. For 2020, the EI rate is dropping to 1.58 per cent (from 1.62 per cent) of insurable earnings, up to a 2020 earnings maximum of $54,200. This translates to a maximum employee premium for 2020 of $856.36. For Quebec employees, the maximum employee premium for 2020 is $650.40. EI premium rates are different for residents of Quebec because Quebec administers its own parental insurance plan, which is financed by Quebec workers and their employers.

Source:  Financial Post

https://business.financialpost.com/personal-finance/taxes/these-are-the-tax-changes-you-need-to-know-about-for-2020

Wilkins uses different words to restate that the Bank of Canada isn't touching rates anytime soon

Kevin Carmichael: The central bank remains extremely reluctant to do anything that would cause Canadians to add to an already menacing pile of debt

Carolyn Wilkins, the No. 2 at the Bank of Canada, got a taste of the kind of power that comes with being the No. 1.

Wilkins, who is on everyone’s shortlist of potential replacements for the current governor, Stephen Poloz, spoke in Montreal on Nov. 19. She used different words to restate the position that the Bank of Canada laid out a couple of weeks ago in a new policy statement, an updated economic outlook, an overview of the deliberations that led to the decision to leave the benchmark rate unchanged, and a press conference.

The Canadian dollar fell.

“While the speech by Senior Deputy Governor Carolyn Wilkins was enough to unsettle the loonie, which lost about 0.3 per cent after it (was) released, it in no way signalled that Canada’s central bank is actively considering lower interest rates in the near future,” Don Curren, a market strategist at Cambridge Global Payments, advised the firm’s clients in an email.

Wilkins did unveil a dandy new metaphor to help us get our heads around how the central bank is setting up for the short term, which some forecasters think will bring the first global downturn in a decade.

“The Bank of Canada and other authorities must assess the risks and have the right safeguards in place,” Wilkins said. “Ideally, you want to put the winter tires on before the snow falls. It not only protects you, but also everyone else who’s on the road.”

Wilkins acknowledged the possibility of a slowdown, telling her audience that even if the trade wars stop getting worse, they still could result in US$1 trillion of lost global economic output by 2021. But for now, the central bank remains extremely reluctant to do anything that would cause companies and households to add to an already menacing pile of private debt.

Lower interest rates might offset some of the anxiety over trade heading into next year, but only at the expense of sowing the seeds of a new financial crisis down the road. Poloz’s Bank of Canada approaches policy as an exercise in risk management, and at the moment, policy makers think an interest-rate cut would ultimately do more harm than good.

“With vulnerabilities high and inflation close to target for more than a year, we said at our most recent interest-rate decision that taking out insurance wasn’t worth the cost at that time,” Wilkins said. “We also said that in considering the appropriate path for policy, we’d watch how the trade situation and household vulnerabilities evolve as well as fiscal policy developments.”

Currency traders who keep losing money by basing their bets on verbiage would do better by following developments related to those key points: household debt, inflation, trade and government spending.

Earlier this week, Statistics Canada reported that factory sales dropped 0.2 per cent in September, which caused the Bank of Nova Scotia to cut its real-time forecast for third-quarter economic growth to 1.2 per cent. (The Bank of Canada estimates the economy can grow a little less than two per cent a year without dangerously stoking inflation.)

Meanwhile, prices remain anchored. StatCan said Nov. 20 that the Consumer Price Index rose 1.9 per cent in October from a year earlier, while three separate measures that remove volatile prices from the mix posted readings of 2.1 per cent, 2.2 per cent, and 1.9 per cent.

The latest numbers, “should keep the (Bank of Canada) hesitant to add further monetary policy accommodation unless easing is warranted by a more substantial worsening in the growth and inflation outlook,” Veronica Clark, an economist at Citibank, said in a note.

An unexpected surge in immigration, coupled with record-low levels of unemployment, has offset weakness in trade and investment to date. But can it last? As Wilkins noted in Montreal, households’ debt-service costs are at historic highs. A greater amount of disposable income is being used to pay off debt rather than generate demand. The economy’s main engine is maxed out.

“The economy is challenging,” Kevin Macnab, chief executive of St. Jacobs, Ont.-based Home Hardware Stores Ltd., told the Financial Post’s Jake Edmiston in an interview on Nov. 20. “This year we’ve been pleased with our growth that we’re seeing. But it definitely is a challenging environment.”

The news that Lowe’s Companies Inc. plans to close three dozen “underperforming” stores in Canada raised questions about what’s happening on the ground in Canada, below the surface of those impressive headline hiring numbers.

When Lowe’s bought Quebec-based Rona Inc. in 2016, Canada was still feeling the effects of the post-crisis housing boom.

On a year-over-year basis, sales of building materials, garden equipment, and related supplies averaged monthly growth of 5.6 per cent between January 2016 and December 2018, according to data compiled by Statistics Canada. Growth has stagnated this year, albeit at a high level. Sales in that segment of StatCan’s monthly report on retail trade were $2.9 billion in August, close to the peak in data that date to 2012.

“The economic indicators we are monitoring and the results we achieved in 2019 suggest that the construction and renovation market is doing well,” said Stéphanie Couturier, spokeswoman for Boucherville, Quebec-based hardware chain BMR Group, which added three stores in Ontario this year. “The economic outlook and the recent acquisitions BMR Group made put us in a growth mode and not in a rationalization mode.”

Fiscal policy probably will be the deciding factor for the Bank of Canada. Prime Minister Justin Trudeau re-upped Bill Morneau as finance minister on Nov. 20, and Bloomberg News reported that the new government intends to table legislation on the middle-class tax cut the Liberals promised in the election campaign.

If they do, expect the Bank of Canada to remain on hold for the foreseeable future.

Source: Financial Post

https://business.financialpost.com/news/economy/wilkins-uses-different-words-to-restate-that-the-bank-of-canada-isnt-touching-rates-anytime-soon?video_autoplay=true