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10 Top Questions You Need to Ask Before You Buy Your Home

Here is some top question you may need to ask before you are jumping in with 2 feet, by asking these questions and analyzing the answers you are able to get a better decision for your future home.

1-How is the Windows Condition?

Windows are costly and it may cost you something between $!0,000 to $15,000, you may consider the space, light or basement. But don’t ignore the windows, they need to be in perfect condition to save the energy and be safe enough.

2- What is position and quality of the trees around the house?Can these trees fall on your house? Do any of these trees rotted? Do any of them need to be cut or are these trees blocking the suns ? be aware of here trees are in relation to the house want to buy and keep it in your mind that if you want to remove a tree, the cost is usually anywhere from $400 to $1500.

3-Do you see any sign of pests?

Look inside cabinets and places where pests like to hide. If you see ant pests sign you need to think about pest control plan.

4- Are there sidewalks in the neighborhood?

Mostly old homes don’t have sidewalks and in winter you don’t have clean the snow, it is safer for kids to have sidewalks. But you need to know you are responsible for your sidewalk in all seasons.

5- Is the house too-out dated?

There is no perfect house except the one you build and customize based on your own needs but if the house is too outdated and you decide to buy it there is a long-time process for you to upgrade.

6- Does the house have any weird smell?

When you walk in the house it should smell well like nothing, some smells like nature, but it shouldn’t be any odors that try to make the house smell good. It there is any odor it might be mold and it can be costly problem to fix.

7- Does the ground angle away from the property?

It is very important to know where does the water flow around the house? Grading is probably one of the few things people check when they looking to buy a house. If the grading is poor, it allows water and rain to sit at the home’s foundation and it may cause lots of damages.

8- What do the cars in the neighborhood look like?

It may look unethical, if you see broke-down cars, expect to find a broke-down neighborhood. Cars don’t need to be expensive, but it shows how neighbors care about their environment they live in.

10- How much does the utility cost for that specific area and property?

Your usage will be different, depending on family size and your needs, however it is always good to ask owner to show you the couple of utility bill. Yu don’t want to surprise by seeing the first utility bill.

By having answers to all these questions, you will secure your self and hopefully you can make your best decision for one of the biggest investments in your life.

Capital Gain Tax on Investment Property

You may hear about capital gain tax over and over or your accountant my advice you that you need to pay capital gain tax on your investment property. We will talk about this briefly in this article.

Canada’s capital gain tax was introduced in part to finance the growing costs of social security system and create a more equitable system of taxation, even senior’s need to pay capital gain tax and there is no exemption. Every single person who owned a property for more than three years, any gain arising from such sale will be considered as long term capital gain, current long term capital gain tax rate is 20% and it is calculated as the difference between net sales consideration and indexed cost of property. The chart below shows an example of long term calculation capital tax:

Sales price of house——————————————————————5,000,000

(Less)Transfer expenses (brokerage & commission) ————————25,000

Net sales——————————————————————————–4,975,000

(Less) acquisition cost of the house———————————————–4,141,304

(Less) house improvement cost —————————————————254,000

Gross long term capital gain——————————————————–579,696

Short term capital gain on property is considered as a gain from selling a property which was held by you for less than 2 years. Here is an example to show the calculation:

Sales price of house——————————————————————5,000,000

(Less)Transfer expenses (brokerage & commission) ————————25,000

Net sales——————————————————————————–4, 97 5,000

(less) purchase price of the house————————————————3,000,000

(less) house improvement———————————————————200,000

Gross short term capital gain—————————————————–1,775,000

Nest short term ———————————————————————-1,775,000

Short term capital gain————————————————————532,500

As of 2019, the capital gain rate is 50%, however there are some ways to reduce the capital gain tax, we shortly mention here and we describe each in following articles.

• Donate assets to registered charity or even well-known private foundation
• Chose the right time to sell your investment property.
• People who own small business, fishing property or farm can use the life time 

4 Factors to investigate before buying a business

When you decide to buy a business, there are many areas that you can do your research easily, however there are some not obvious areas that you need to consider before buying a business.

1- Know why the business is for sale
 The business owner needs to give a satisfactory reason why they were selling the business.
 You need to ask business owner questions and find out the main reason they want to sell their business. Because experience shows most of the entrepreneurs absolutely hate the idea of selling their business.

2- customer connection
 Customer is like blood for each business, and the customers are the source of revenue for the business. You need to know if the loyal customers will stay on the board after the sale. You may also think if those customers decide to move their business elsewhere, will the business you are buying still be able to grow well?
 3- Key employee retention

Talk with current owner and identify the key employees, there will be an adjustment period and you may want to keep some important employees to keep the customer relations. Accounting staff are also playing an important role and if you find out that there is a wonderful accounting staff talk to the owner and keep them for an easy transition.

4- Government regulatory restrictions

Most of the business need to obey with certain government regulations before you buy a business make sure you have a solid understanding of those government rules because they are part of that business.

Your new business is an exciting start, established customers and reputation are great assets to start with, you only need to investigate every inch of the business before deciding to buy.

What is the best size condo for investment?

You may already have an answer and mostly is one bedroom plus den or 2 bedrooms. You may think it gives you the best option to invest or rent. But you may think twice after you read this article.

The most common mistake happens when you think you will be live in your investment property. Many investors confuse their own preferences for what makes a good property with what criteria makes a good investment.
 For the condominium you may want to invest in, you want to pick the smallest studio, the smallest one bedroom, the smallest 2 bedroom and there are 2 reasons to do that.

1- the smallest units produce the best cash flow
 the rental units primarily determine by unit type not the square footage, but unit type determine by square footage not the unit type, and this is the enough reason to buy the smallest unit for each category to collect more cash flow.

2- the smallest units appreciate at the fastest rate
 there is always a ceiling on the maximum amount a buyer will pay for given type unit, so buying the smallest cheapest unit of a given type will leave the most room for appreciation.
 For example, over a five years period, a 700 square foot bought at 350 k, might appreciate at 400 k, which would represent the maximum price for 1 bedroom, and this would be a 14% increase in price. However, in the same building a 500 square foot 1 bedroom bought at 350K might appreciate to 350 K which would be below the maximum price for a 1 bedroom.

So, do not worry if your investment unit is small, you will never live in that unit. Stick to the fundamentals and you will not regret your decision in the long run.

6 Tips to buy new condos on assignment sale?

Purchasing a pre-construction unit is quite common, before we discuss how to handle such transaction, let us understand the meaning. As assignment sale refers to the sale of a contract stating the purchase of a pre-construction condominium unit. In short, you will sell contract, once the builder registers the building, you should sell the property and along with the title.

The assignment clause of contract comes in handy when you have purchased a new pre-construction condo but must sell it before the completion of construction due to any reason.
 1- It is not a resale condo
 When you buy an assignment, it means you will get the ownership of the unit only after the final closing date which is why it is not like a resale purchase.
 2- Consider the certain dates
 -Assignment closing date- when your assignment sale transaction with the original home buyer is completed.
 -occupancy closing date-the first closing date when the buyer gets the condo’s key from the builder.
 -final closing date- is when the title of the property will transfer to the buyer’s name.
 – an assignment closing date when purchasing a new unit is usually before or after occupancy closing date.
 3- Make sure you are financially stable and pay 20% down payment which is paid by the original purchaser to the builder and also you have enough money to pay the difference amount between the current asking price and its original value.
 4-You need the builder approval to complete the transaction
 5- For the builder to approve the transaction, you must provide proof of mortgage approval.
 6- Do not be in hurry, it is a new investment .it is essential that you consider all the aspects before sign the papers.
 In conclusion, if you really like location and you are financially stable to buy an assignment condo, check the original agreement and make sure there is an assignment clause, the next step is to follow the legal part .

Buying Cottage as a real estate investment

The first question you should ask yourself when it comes to real estate investment is” Can you sell it for more in few years?” and your answer depends on various factors. For example, location, rental rules, management costs and others.

Appreciation is one of main factors and it refers to the increase in an asset (your cottage property) over time. So, choose wisely and consider location as a key element. Being close to ski slopes, waterfront, city centers and many other activities is advantageous.
 You may also consider renting your cottage as a supplementary income. However, there are certain things you should know:
 • Beside of location, a fully equipped, modern cottage will generate more interest. Many people looking for high speed internet, cable television, fully equipped kitchens, cleaning service and so on.
 • Your cottage also needs certain level of management, you will need someone to maintain, clean, clear snow, take out the trash etc.
 • Your cottage also needs advertising, insurance and many other associated costs. Additionally, your rental income must be declared, and it is taxable. However, the costs associated with the rental property are tax deductible, these include mortgage interest, property taxes, insurance, maintenance and upgrades.
 • Before you invest to buy a cottage to rent, make sure municipal and provincial laws allow you to rent your property, so you can at least cover your mortgage payment and even make extra income.
 In conclusion do your research and make wise choices to increase the return on your investment if you buy cottage for personal enjoyment its weight in gold. However, your situation may change, and you may want to rent it out, so you need to have peace of mind. You can even buy a cottage and rent it out till you retire, in this case you can enjoy it with almost no mortgage.