As a follow up to my previous blogs, Rob Carrick of the Report on Business in today’s Globe and Mail has an excellent article on Mortgages, fixed or Variable. The article goes into of the pros and cons of fixed rate v/s variable, specifically a 10 year fixed rate to hedge against future inflation and as a result higher interest rates.

 As I have already discussed the difference between the variable and fixed I won’t discuss this at any length, other than to say it all depends on your individual situation and your tolerance for risk. However, let us look at it from a small investor situation and are you looking to buy, or refinance a rental house or multifamily duplex or triplex, a unit that will qualify for a residential mortgage. If you are working on a long term plan for the property, a 10 year mortgage may be something you should consider. As an investment property you will be able to write off part of or the entire interest cost, but the main reason should be that you can lock in at a historically low rate ( 5% to 6% ) and know your mortgage costs for that term.
You should then be able to determine your cash flow fairly accurately for the next 10 years.

Other costs will be more difficult to determine, however, electrical ( especially ) water and sewer, natural gas and city taxes are all going up, we just do not know by what percentage. Increases allowed by the Tenant Act will probably not cover the increases. Therefore, knowing your mortgage costs may indeed help you make the decission to buy that certain property that you are interested in or to pass.

Check out the current Centum rates on my Web Page courtesy of our Mortgage Manager Mike Jones.

Guest Post by Doug Lytle

Are you a small independent landlord trying to rent your properties? Consider renovating them. A recent survey indicates that over half of small, independent landlords are renovating vacant properties in an effort to differentiate themselves from the competition and attract tenants. Renovations don’t just help you attract new tenants; they help you retain current tenants as well.

“With so many homes and apartments sitting empty, landlords want their properties to stand out from the competition,” says Tracey Benson, president of The National Association of Independent Landlords. “Even if landlords have no rent coming in, they need to bite the bullet and make improvements to put their properties on renters’ short lists.”

The Association recently conducted a survey of landlords across the country and found that over half (52%) of smaller, independent landlords who expect the difficult rental market to continue are renovating their vacant properties. Over three-quarters of these landlords (76%) are doing so in an effort to attract tenants, while 42% of respondents said they are renovating to keep current tenants from moving.

But you don’t need to install high-end accoutrements like granite counters, stainless steel appliances or laminate floors to attract or retain tenants. Even low-budget investments like new carpeting or a fresh coat of paint can make a difference.

“Just about any improvement will make a property look better than one that hasn’t received much TLC,” Benson says.

For more information on how to attract or retain tenants in your apartment properties, or to learn about available properties, give our Century 21® office a call today.


Source: Century 21® USA

Here is a followup to my last blog were I disputed the fact of a real estate bubble in Canada and in particular to Real Estate in Peterborough.In todays Report on Business, Steve Ladurantaye’s column has some very interesting facts about new mortgages that were taken out in 2009.
According to a study that was done by the Canadaian Association of Accredited Mortgage professionals while examining 40,000 loans that were issued in 2009 they found that 86% were of a fixed term. These loans are considered less risky, as they are at a fixed rate over a fixed period of time, usually five years.
Therefore the majority of Canadian Mortgage borrowers are not taking undue risks and are factoring in rising interest rates in the future. Also the majority of borrowers took out mortgages below the maximum that they would be allowed under the gross debt service ratio. In fact only a small percentage ( about 4000 households v/s 13.25 million total households) are pushing their credit to the limit.
That is not to discount a variable rate mortgage. If you have a lot of equity say over 50% and little other debt you can take advantage of the lower rate ( about 2.25% ) especially over the next year. If you are about to renew or are looking to purchase this year, make an appointment with Mike Jones are mortgage manager at Centum Mortgages to discuss your plans.
Let us compare our situation to the on going mess in the U.S. According to Realty Track forclosures were up in December 14% over December 2008. This inspite of the foreclosure suspensions over the holidays by such giant lenders as Citigroup, Bank of America and Fanny Mae. To put this perspective, one in every 94 households in Nevada received notice of foreclosure, this is the worst state to the best, good old conservative Vermont with one in every 18,320 households receiving notice.
It is currently estimated that over 20% of all households are underwater ( Owe more than the house is worth ) Some how this situation has to be solved, or the U.S. economy will never be able to return to the 2006 or 2005 levels of employment.
As I wrote in my last blog, it is still a great time to buy residential or multifamily property in the the Peterborough area.