Robert Q Lee

Buying a home is an important life step. What do you need to know to make the right decision? How do you get a property to gain as much value as possible?

We turned to the Appraisal Institute of Canada for expert tips!

Home appraisal: what is it?

A home appraisal is an independent and unbiased opinion of the value of your property, completed by a qualified appraiser, to determine the price at which the property in question would likely be sold if it were put on the market.

How do you appraise different types of buildings?

There are three types of methodologies for assessing the value of buildings. The first is the comparison-based method, in which the appraiser gives an opinion on the value of the property by carrying out an analysis of sales made or in progress, or real estate listings of properties that have characteristics comparable to the property in question. This is the most widely used method in the residential market.

The second is the cost-based method, which involves estimating the value of the building and the land separately and then adding them together to determine the real value of the property. The total cost estimate is adjusted by deducting depreciation of the home and taking into account improvements to the land.

Finally, the income-based method is an analysis of the property’s annual income and expenses to determine the net present value income.

When buying a home, what do you need to consider to determine its value?

When buying a home, it is important to think about your own life goals. Do you plan on living in your home for a few years or for the rest of your life? Are you thinking of renting it out or living in it yourself? No matter what your plans are, you will need to consider the general condition of the property and determine what improvements you will need to make in the short, medium and long term.

What are the top five improvements a homeowner can make to their home to increase its value, according to the experts?

The top five improvements that can generate the highest return on your investment:

• Renovating the kitchen

• Renovating the bathroom

• Repainting the interior and exterior

• Updating the décor

• Decluttering

When it comes to renovations, keep in mind that improvements that are consistent with the value of your property and the market, and are done by professionals, are usually a better investment

Make sure you assess your needs well and don’t overdo it. Investing in an expensive project might have the opposite effect of improvement within a given market, and the investment might only be partially recognized by future buyers.

Five types of renovations that increase the value of a property:

• A finished basement

• Garages

• Sun rooms / additions

• Decks / fences

• Landscaping

Five types of renovations that generate longer-term value:

• Replacing the roof

• Updating the heating and cooling systems

• Replacing windows and doors

• Updating the electrical (panel, wiring, sockets, fixtures)

• Repairing structural defects

Focus on energy-efficient, long-lasting upgrades. Also remember that constant maintenance will greatly reduce the potential costs of future renovations. Don’t underestimate the simple upgrades, either. New handles or a coat of paint can make a world of difference.

What are the factors that can decrease the value of a property?

Changing market conditions may impact the supply and demand for comparable properties as well as the attractiveness of a specific property. Likewise, constantly postponed maintenance, or finishes that are out-dated or of poor quality, can have a negative effect on a property’s attractiveness and value.

What general advice can you offer?

Make sure you get a building or renovating permit. Take the time you need to obtain the appropriate permits from your municipality or the appropriate authorities. This is a good step to ensuring that the renovation work complies with the building codes.

Use the services of a designer, architect or contractor. They can help you draw up a plan, advise you on renovations or assist you with the construction phase. This will ensure quality renovation work while avoiding cost overruns.

Examine each feature very carefully. Overly original concepts or infrequent improvements in a given market can have a negative impact on a home’s resale potential. This is where the expertise of a real estate appraiser comes in. They can guide you thanks to informed and objective recommendations as to the market value of the property.

There has been much speculation about what rising interest rates could do to Canada’s hot housing market.

Now a new study by the British Columbia Real Estate Association attempts to put some numbers on the future.

Home sales are expected to fall and home price growth will moderate, according to the report by chief economist Brendon Ogmundson.

“In the past, Bank of Canada tightening has usually led to falling home sales and flattening home prices, so it wouldn’t be a surprise to see the same happening in the upcoming round of tightening,” he said.

His study looks at four scenarios ranging from the Bank’s overnight rate returning to a pre-pandemic level of 1.75% to it reaching above 3%.

Under the first scenario, sales could be expected to fall by 25% at the end of two years.

* “If the Bank does raise its policy rate more aggressively in response to an overheating economy, then our models show that home sales would decline more significantly,” the study said.

One thing that makes such predictions more difficult this time around is the B.C. housing market currently has a record low number of active listings.

“With markets so out of balance, we expect home price growth to slow but to what extent depends on the final rate destination for the Bank of Canada and for Canadian mortgage rates,” said Ogmundson.

*The Bank of Canada could start that tightening as early as next week, a growing number of economists say.

TD Securities and Laurentian Bank made the Jan. 26 call Monday, while Scotiabank says the central bank “cannot afford” to wait any longer, reports Bloomberg.

The Bank of Montreal has brought forward its call to March from April.

*Markets are pricing in a 75% chance of a Jan. 26 hike, with traders betting on as many as six rate increases over the next year.

Buying a home is all about timing. Whether you’re purchasing a home to live in or you’re wanting to invest in your future, the time has to be right to take on such a responsibility.

Are you ready for such a big commitment? Are you prepared to devote the amount of time necessary? Are you sure you’re prepared to handle the upkeep? The answers to these questions and more are important, but many homeowners fail to answer them honestly before making the decision to buy a home.

Below are four things you should know before buying a home. Understanding what you’re getting into may help you avoid a costly mistake.

1. When To Buy A Fixer Upper

Buying a house is one thing. Buying a fixer-upper is another thing entirely. Not only are you responsible for the mortgage payment each month, you must have the funds to make the repairs necessary, especially if said repairs are required to make the home livable.

For many aspiring investors, fix and flip properties are their bread and butter. While it’s a great way to turn a profit (usually), this method is best used once you’ve established a comfortable life outside the investing world.

For example, right out of college would probably not be the best time to commit to such a huge undertaking. When you’re young, the sky’s the limit and owning a house that needs a lot of work is a sure-fire way to bring you back down to Earth quickly.

2. Making Emotional Purchases

It’s very easy to get caught up in the excitement of life and make decisions based on your emotions. For instance, when things are going well – perhaps you have a great job, have just gotten married, and find out there’s a baby on the way – you might decide buying a house is the right thing to do at that very moment. While it sounds like a solid idea at the time, circumstances change in a heartbeat that could cost you plenty.

If you don’t plan to stay in a specific area for long, it might not be such a wise decision to buy a house. You never know what the market will do, and you could end up owing more than the house is worth. It’s important to weigh your options carefully – sans emotions – to ensure you’re making the right choices at the right time.

3. Investing Based On A Hunch

We all know investing is a gamble at best. Whether it’s the stock market or real estate, you never know what’s going to happen until it does. With that in mind, however, it’s never a good idea to invest in real estate just because you think a certain area is going to explode.

If you have a hunch an area is going to develop into a thriving community where real estate investments will be profitable, check verified sources like the city’s planning commissions to find out any development status. Don’t bank on your hunch.

4. Patience Is A Virtue

No matter the time in your life, the decision to buy a home shouldn’t be a spur-of-the-moment thing. Do the math, figure out where you stand, and look at many houses before deciding on one. If you rush into this decision, you’ll come to regret it sooner or later.

Buying a home is one of the biggest decisions you’ll ever make. It deserves careful consideration and even more careful planning for it to be one you are proud of. The four things you should know before buying a home above will help make your home-buying experience a positive one.

Buying your first home is as scary as it is exciting. A lot of responsibility goes along with that purchase, so it’s a good idea to learn as much as possible as you go through the process. As ready as you think you are for such a big responsibility, take a moment to browse through the following list of mistakes you should try to avoid.

Financial Preparedness

As a young person, you may feel you’re financially ready to take on the responsibility of homeownership, even if your bank account says otherwise. This is likely to be the biggest purchase you’ll make in your lifetime, so you mustn’t make an impulse decision.

To make sure you’re financially ready, ensure you’re not just buying a house because all your friends are doing it and that you have an emergency fund set up to cover the cost of unexpected situations. If you can pay yourown closing costs, have money set aside for taxes and insurance, and you have enough money to pay for any move-in repairs that need to be made, you’re probably financially ready to buy a house.

Hire A Real Estate Agent

While the Internet makes it easy for anyone to shop and purchase a home, it doesn’t mean you should go it alone. Hiring a real estate agent will help you find the perfect home as well as to navigate the complicated waters of the home buying process. Furthermore, you’ll likely get a better deal with an agent by your side.

Don’t Make Decisions Solely On Price

It’s likely you’re shopping for a home within a budget, but price shouldn’t be the only factor when deciding on a home. If you choose a home based solely on price, you may miss out on other vital factors such as a safe neighborhood or the proximity of nearby conveniences. Be sure to look at several factors when searching for your first home.

Get Pre-approved

You can certainly look for a home without getting pre-approved for a mortgage, but not knowing how much home you can afford beforehand can cause you to waste time looking at homes you can’t afford. Furthermore, without a pre-approved mortgage, you could set your heart on a particular home that the bank won’t fund because it’s out of your price range.

Don’t Skip The Home Inspection

Many real estate agents are good at staging a home to make you think it is perfect. You may be tempted to forgo the home inspection based on the appearance of the home, but it’s important to keep in mind that many of the issues in a home aren’t readily visible. Only a trained home inspector will be able to uncover and identify issues such as mold, water damage, etc.

The home inspection should be a non-negotiable part of the home buying process.

Buying a home is an exciting time, especially when you’re young. If you’re buying your first home, be sure to keep the tips listed above in mind as you shop so you avoid some of the more common mistakes young homebuyers make.

As the oldest millennials begin their careers, and the youngest ones are just graduating high school, they will be making important decisions about their finances. They will question their spending and saving habits, and some will delve into investing.

For those young people interested in real estate investing, we’ve compiled a short list of lessons every millennial real estate investor should know. We feel these lessons are critical to your success and hope they help you navigate the challenging waters of real estate investing.

Lesson 1: Be Genuine And Have Integrity

In case you aren’t sure what it means to have integrity, we’ll tell you.

Having integrity means you act the same in public as you do in private.

You may think your private life is completely separate from your work/public life, but the reality is, at least a little bit of who you are in private leaks through to your public life. For example, if you constantly drop the F-bomb at home, it’s likely there are minute pauses in your speech at work (where the F-bombs would have been) that ultimately cause your colleagues and clients to mistrust you just a little bit.

Be a man or woman of integrity so others see you as a genuine person.

Lesson 2: Build A Network With Your Personal Touch

Anyone can build a network using digital media these days, but if you hope to be successful, you must build a network of people you like serving and truly care about. You do this by making a list right now of the people who will answer and return your calls. Then, you add one name a week of someone you’ve met and connected with. In order for this to work, you must take the time to speak with people in person. After all, humans were designed to be social. We need each other, so put your phone away and make real connections with others to build your network.

Lesson 3: Learn To Communicate Effectively

Once you’ve amassed your network, you need to learn how to communicate with them. To do this, find a great book with prose you would like to sound like. Read it aloud three times a week for 30 minutes. That’s it. By the end of a 10-week period, you’ll be speaking differently. Your speech will be clear and concise, and you’ll be confident in what you’re saying.

Lesson 4: Be Willing To Admit When You’re Wrong

We’re all human, and we all make mistakes. It’s these mistakes, however, that make us likable and relatable. It’s a fact that people who brag a lot tend to be seen as untrustworthy by others. When you make mistakes and are willing to admit to them, others see you as genuine and honest. Don’t be afraid to admit your defeats because we all have them.

As an investor, you’re always looking for the next big opportunity. For many savvy real estate investors, this means buying properties near college campuses. While this may sound like a bigger risk than reward, there are actually some really good reasons to buy and then rent properties in college areas. Check them out!

You Don’t Have to Work So Hard to Market Your Property

The sheer nature of a college town sells itself. With high walkability ratings, these towns are full of restaurants, entertainment, and shopping. Finding renters in a college town is really easy because there’s always an abundance of people hoping to find housing close to the school and all the activity.

There’s No Shortage of Potential Renters

Many students relocate when they enter college. A good majority of them come from far away, which means they need somewhere to live while they attend school. Renting is the obvious option since most of these students will either return home or move away after graduation. Even if a renter moves out of your unit, there’s always another waiting to move in immediately.

Aside from the student body, there’s also the school’s staff and faculty, as well as graduate students. While many of these people are longer-term residents, they may still prefer to rent rather than buy.

You Can Maintain Competitive Rental Rates

Because there’s such a high demand to live in the area, you can set and maintain competitive rental rates that keep up with the going market value.

Vacancy Rates are Low

Renting in a college area is a balancing act because vacancy rates tend to climb during the summer months when students return home for the break. You can avoid this pitfall of renting to college students by making them sign a year-long lease. This obligates your renters to year-round occupancy, so you don’t have to worry about vacancies during the offseason.

The Risks of Buying Property in a College Town

As with any investment, there are risks to be aware of when buying property in a college town.

College Students are Notorious forCausing Property Damage

While renting in a college town has many benefits, no landlord is immune to the property damage college students almost always cause while living in a rental unit. You can offset this damage by factoring it into the security deposit you require when they sign a lease.

You May Have to Dedicate More Time to Finding Renters

College students move around a lot, so you may have to spend more time looking for new renters than you would in another area. The good news is, there’s usually no shortage of prospective tenants waiting to rent your property.

It Can Be Difficult Finding Renters for the Summer Months

As stated before, summertime tends to result in more vacancies as students return home for the break. Having tenants sign a year-long lease solves the problem of seasonal vacancies in a college area.

College Students Can Be Demanding

Because they’ve never lived away from home before, college students tend to have a lot of questions and be quite demanding when it comes to needing something. It’s easiest if you live nearby so you can address their needs quickly, or if you can’t live nearby, hire a reputable management company to handle all the landlord responsibilities in your place.

If you’re an investor looking to increase your earning potential, consider buying rental property in college areas. While there are some risks involved, there are ways around them to make investing in college town real estate a smart move.