Tuesday, April 26, 2011

Pros and Cons of Buying a Resale Home by Ravinder Tulsiani


•A resale house as the name suggest is the house, which is available for second sale. Since it is not a brand new house, its price is far lower than a brand new house.
•A resale house a lived-in feeling, and the general landscape is mature
•Since the landscape is mature enough, a resale house has well developed mature society and close neigbourhood area.
•Resale house offers the purchaser a completely developed community services.
•A resale house is usually an old house whose architectural style is out of place and looks unique with all the grandeur. This is simply sensed by most of the purchasers of resale house property and love it by al its nature.
•If there are any cracks, settling in the building, these are checked by an experienced building inspector and can be corrected on the very first instance.
•A resale house has often got extra features that were made or installed by the previous owners. These customized features sometimes add to the beauty of the house all the more.
•The purchaser does not have to pay GST. However, there are certain provinces that take Harmonized Sales Tax (HST), which is the combination of GST, and provincial sales tax.


•The equipment already installed in the resale house has crossed the warranty date and there are chances that it might need repair.
•There have been instances where the house has been renovated many times through any local handyman, who lacks any building permit or inspection permit.
•Many of the old homes don’t have a good set up, with small rooms, poor layout, no lavish structures, low basement ceilings; bathrooms and kitchens might be too small. The costing of renovating such homes is not only time consuming but out of budget as well for many purchasers.
•There can be many hidden defects in the house, which cannot become evident immediately. It takes time and energy.
•Most of such houses do not often meet the electrical and insulation codes, using aluminum wires than copper wires. Many use lead pipes instead of copper pipes.

Sunday, March 20, 2011

Resolving the Residential Condo Property Disputes by Ravinder Tulsiani

There are basically four ways in which you can come over from the property disputes. These are:


Litigation – This is the last resort of fight the property related dispute, where a case is filed in the court against the erring condominium corporation or council. The court then takes appropriate action on hearing the complaint. There are challenges in the entire litigation process. The litigation process is time consuming, expensive and many-a-times very uncertain, as to what will be the possible results. In case you are stuck between choosing litigation or arbitration as the solution for the dispute, then I would say that you should consult a condominium law specialist. Don’t be in haste, as you have to face dire consequences in the later stage.

Arbitration – Most provinces condominium legislations have certain procedures set aside for the arbitration process. The disputes that come under the arbitration largely includes, fines put in case of breach of bylaws or rules and regulations; disputes related to contributions related to expenses shared by those living in the condominiums; damage caused to common elements, amenities etc.

Under the arbitration process, it is necessary that parties agree to a single arbitrator. However, there are provisions available where each party selects an individual arbitrator, and the two arbitrators are presided over by a third arbitrator, who is a chairperson. Further, the arbitrators should have been the owner and occupier of a condominium unit in some another condominium development for at least a year. The arbitrator should not be a member of Condominium Corporation, who is involved in the arbitration. The arbitrators make just and a balanced decision, which is also considered the final decision by the court of law. Remember, the procedures in different provincial condominium legislations are different.

Mediation – Here the complaint is lodged to the condominium council of respective province in order to show that the other owner has bylaws, rules and regulations.

Negotiation – In this method, a direct, one-to-one conversation is carried out between two persons in order to get over the dispute. Just breaking your personal hindrances and doing the things in a better way, is just needed.

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You may reprint/redistribute this article provided that you post the article unchanged in its entirety and give credit to Ravinder Tulsiani as the author and include the source link.

Buying a Brand New House by Ravinder Tulsiani

Everybody dreams of buying a new house that can serve as the means of becoming your principal accommodation or becomes your primary source of investment. The prime advantages of going for a brand new home are:

• Comparing the market prices in the adjoining areas become easy, as there are other houses in the same locality that have been built in same land space and with almost similar model.
• New homes stand at lower rates, especially if they are built in the sub urban zones, where the land value is quite low.
• Being new, the house looks, fresh, neat and tidy, and also has a fresh ambience altogether.
• Since the homes are usually built by the builders who are registered under the New Home Warranty Program in the respective province, you have the foolproof safety from any of the builder defaults, as New Home Warranty Program takes all the necessary care.
• Since the houses are brand new, they adhere to the construction standards that include, plumbing, heating, cooling, insulation, and many more.
• Every builder offers to the buyer several house models. The buyers can go for the customized selection procedures, where they look for kitchen appliance colors; kitchen and bathroom floor coverings; etc.
• New houses are designed with sense and the room layout is also very structured. Care is taken to provide en suites, high ceiling level in the basement, well spaced family room, patios and much more.

Like advantages, a brand new house has also got some of the demerits to its credit. These include;

• A condition occurs where the builder who has made the property has not registered itself with the New Home Warranty Program. In such a case, it would become a difficult task for the purchaser of the property to approach any genuine person if any problem occurs with the house at any point of time.
• The purchase documents made by the builder are often confusing and too lengthy to be understood in a less time.
• In case the builder doesn’t acts, as thought, there is the possibility that the purchase might lose deposit funds. Though in Canada, there are some provinces also offer strong consumer protection legislation to safeguard the funds.
• Many a times what happens is that houses are purchased even before they actually come on the land. The architect sketches the model plan of the house and that’s it. A purchaser purchases the property based on it.
• There are very common occurrences where the constructions are delayed, wither there are some finishing touches that need to be done; landscaping or anything extra needs to be done. And all this requires time and more expenses, which often eat away the patience of the purchaser.

A piece of advice here! When you go for any of the purchasing the property, you need to know that following things about the builder and/or the contractor. These comprise:

• Check from the Local or Provincial Home Builder’s Association, whether the builder or contractor is the member of the association or not.
• Check whether or not any complaints have been lodged either in past or at present with the local Better Business Bureau.
• Check the buildings or houses made by the contractor or the builder in other localities. It is the right of the purchaser to ask the contractor about his ongoing projects as well as previous development projects.
• Check whether the builder who is making the property is registered with New Home Warranty Program. If they are not registered, then don’t sign any document without consulting or seeking your lawyer’s advice.
• You can also check about the credibility of the builder or contractor from municipal business licensing office.

Reprint Rights:
You may reprint/redistribute this article provided that you post the article unchanged in its entirety and give credit to Ravinder Tulsiani as the author and include the source link.

Thursday, March 3, 2011

Choosing the Option to Buy or Rent by Ravinder Tulsiani

Buying, selling and renting is an integrated process included under any real estate. Every real estate can and is rented, purchased or sold at any point of time. There are provincial and municipal rules and bylaws that guarantee one or either of the processes for the renter or the purchaser of the property.

Whether it is your first property purchase, or you are the first property renter, you have to remain attentive, with eyes wide open to see and know what new adventures are playing in the real estate market. An option to choose to buy a real estate property needs the investor to take into account various socioeconomic factors and also see what is the best thing available in the property market.

It is for the property investor to see that does the property holds value, does it has all the amenities to raise the value in the market, is the property situated in a commercial zone, etc. Above all the investor also has to take into account any provincial bylaws that can affect the purchase. Considering the fact that what all mortgage options can work rightly for the investor at any point of time is yet another smart move to go for.

Investors or property purchasers going for short term and long term mortgage plans have to prove their credit history anyways. From the lender’s perspective, a property is the way of doing the business in profitable manner. He wants to remain risk free all the time. Though, doing business is a risk, but lending the mortgage plans which work best is what keeps going behind the mind of a mortgagee.

Renting a real estate property for commercial or residential purposes takes into account various municipal and provincial laws that are applicable at any point of time. All types of properties including homes, residential properties, houses, townhouses / town homes, apartments, condos, lofts, villas, single family homes, detached houses, barns, cabins, cottages, triplex/duplexes, apartment buildings, commercial real estate, retail spaces, office spaces, warehouses, industrial properties, farms ranches, horse properties, foreclosure homes, hotels, motels, hostels, golf course real estate, double-wide homes, mobile homes can be rented in Canada/US.

Some provinces/states and cities have rent control, which limits the amount a landlord can charge for the apartment. Each province also has rules on how much a landlord can increase the rent each year for an existing or new tenant. Disputes between tenants and landlords can be taken to a rental tribunal.

It is important to note that rent paid may or may not include such utilities as heat, electricity, gas and water. Before you agree to a rent, find out what it includes. Cable for television and the cost of a telephone line are usually not included and you will be billed directly by the respective utility companies for those amenities.

The landlord pays the property taxes and takes care of insurance for the building, but the tenant is responsible for insuring individual personal items.

Saturday, February 26, 2011


Pros of Owning a Condo

•You have the choice of finding variable locations, space, sizes and condos with different architectural features.
•Financing facility available by showing the property as single family home
•Have the access to luxurious amenities such as spa, swimming pool, saunas, hot tubs, community centres and many more.
•Only an elected councilor has the power to managing the overall property.
•Individual Ownership and Substantial growth in equity.
•It is a less expensive option than single family home because of efficient land use.
•It can be your profitable investment venture.
•Low cost property option as repair and maintenance cost are shared.
•You can decorate the interiors of your condo unit, just the way you want it.
•It is an ideal property lying between the rental apartments and the single-family houses.
•The condo units give a smart living option to singles or couples; “empty nesters”.
•High security due to presence of neighbours in close proximity and also controlled entrances.
•Owners actively participate in the condominium development community programs and events such as, making of rules and regulations; byelaws; budgeting etc.
•High level of social activities and sense of neighbourhood community development is also there. This is because of the element of permanence.
•Problems peculiar to home ownership are overcome. These problems include repairing, maintenance costs etc. All this is now taken into the hands of a professional management company.
•Those belonging to middle income groups can easily buy such property.
•The owner has the natural way to take the ride in the real estate market.

Cons of Owning a Condo

•The quality of construction cannot be judged rightly.
•There is a possibility that the elected councils act in a biased manner.
•It might occur where the owner has to pay for those amenities, which is of least interest to him/her.
•The individuals who lack professional capabilities to handle them manage condominiums.
•The value of the property might not go as high as it goes in the case of single-family housing.
•Many of the owners of the condominium might not show interest in the council elections, and as the result same people are elected as councilors.
•Since the families in the condominiums are in close proximity, there are continuous source of disturbances available, which largely include, regular high volume parties; parking space; etc.
•Personal liberty may be constrained at times due to restrictions imposed in the bylaws and other local regulations.

Monday, February 21, 2011

Extrinsic Factors Affecting Real Estate Prices by Ravinder Tulsiani

Extrinsic Factors Affecting Real Estate Prices by Ravinder Tulsiani

There are many factors that control the real estate prices in the market. It doesn’t matter whether you are a buyer or a lender, but these market factors always play an instrumental role. Let me discuss them with you.

Interest Rates – An inverse relation exists between the interest rates and the property prices. If the interest rates are high, then the prices of the real estate property are lower and vice versa. What’s more, at low interest rates, more people can buy their first homes or second homes or investment property and as the result housing demand is created in the real estate market.

Rent Controls – State restrictions on the rent controls will automatically result in fewer buyers. The rental legislations are subject to change and modification depending on the State. You can search for the latest State rental legislations by typing the keyword, “landlord tenant law” in search engines.

Taxes – The places where high municipal property taxes are prevalent, purchasers are delimited to purchase the real estate property in that region. If the taxes are increased, it is eminent that there would be a drop in real estate prices. There are still many State taxes like the property purchase tax or the speculative tax can also make the confidence of the buyers lose. For the federal tax legislations like the down turn in capital gain tax can also limit the investors from investing in the real estate property market of the area. Therefore, these points play a crucial role in assessing the real estate activity and the prices in general.

Economy – A positive growing economy with high buoyancy makes the investors’ and the buyers’ confidence high. There would be a high market activity marked by increased selling and purchasing of homes, and this would result in increased market prices. And if the market behaviour shows sluggish movement, converse will happen. In such a scenario, both the buyer as well as investor will lose confidence and low market activity marked by poor selling and purchasing of homes, and this would automatically result in depreciation of the market prices of the homes.

Location – A real estate property placed in good and commercially valued location will have high property value as compared to the property, which has low commercial value. Naturally, high commercially significant properties attract more investors’ and buyers’ than any other property.

Land Availability – Factors such as land shortage; zoning restrictions in the municipalities; State land-use laws; and other type of ongoing laws that restrict the land use, would make the housing prices increase.

Public Image – There is certain type of public notion build to an area or the geographical region or the residential property. This can affect the demand as well as the prices of the property to a large extent. There are certain properties located in the States that are much in public demand. Such properties always have an appreciated value.

Immigration/Emigration – A scenic topography with plenty of retiring opportunities, high scale business options; good employment opportunities; tourism etc. aids in attracting people from other countries as well as people from country within. Therefore, immigration to an area increases the property value and conversely emigration results in depreciated property value.

Vacancy Conditions – If the region shows high vacancy levels, the real estate sales can dip and this also affects the confidence of an investor. Conversely, low vacancy levels can increase the activity of first homebuyers and those of investors as well.

Seasonal Factors – There are certain months in a year where the real estate sales move down. This also results in lowest real estate prices. This is also true for the recreational properties and other types of properties.

Political Factors – The State and the municipal government rulings can affect the property prices. This in turn can also affect the demand and the supply of the real estate property.

Friday, February 11, 2011

"Super Tactics of Time Management Experts" Download it for FREE!

Do you want to get rid of your dreadful “time-wasting” habits and start doing things in an organized, efficient manner?

“Give Me a Few Minutes and I’ll Show You How to Quickly and Effectively Get More Done in a Week Than What Most People Can Accomplish in a Month!”

Did you know that rich people value their time much more than they value their money?

That’s right!

Success comes to those people who can manage their time according to their priorities. It is due to the fact that they can finish doing important tasks at a certain period of time without rushing things and without becoming reckless.

Thus, coming up with remarkable results is no surprise to them. So, are you willing to change your life?

Are you willing to establish a more organized living, to use your time wisely, and to start doing things now rather than the day before the deadline?

If you are, then great! Because I, too, am willing to share with you the secret ingredient of success – something that successful people themselves use, something that I call…

Super Tactics of Time Management Experts

I’m telling you, with the secrets enclosed in this comprehensive, step-by-step report, you can instantly change your life from unorganized to clean and tidy, from “there’s still tomorrow” to “now is the right time.”

This report will show you how to manage your time efficiently using powerful techniques in the art of prioritizing, delegation, goal-setting, planning, organizing, and overcoming the so called “time robbers.”

With these super tactics, you’ll be having the time of your life!

From Ravinder Tulsiani, Author

Dear Time-Deprived Friend,

Have you ever postponed a certain task as simple as mailing a birthday card for your mom who is out of the country, or perhaps something as important as preparing your report for tomorrow’s presentation at the office?

Yeah, I know what you’re thinking. You’re having a very hectic schedule and you feel like going crazy over so many tasks and things to do.

Say your mom believed any of your excuses why you had sent her a “belated happy birthday” greeting card, or you had managed to get over the presentation even with fillers like “uhm…you see… uhm… well…” Did you feel glad about it being done and consider it good enough?

I don’t think so.

In fact, you could have done it better … or rather, you ought to do it better!

Do you have to wait for the moment when your mom sulks because she thought you’ve forgotten her birthday? What if the increase and promotion you’ve been waiting for your whole life will be given to your colleague because you don’t deserve the recognition?

Why wait for something terrible to happen before you start organizing your time, your career, your relationship with other people, your space, and most especially, your life?

“With Time Management, You Can Be Efficient…You Can Be Productive…You Can Be the Best of What You Can Be Right Now!”

So are you ready?

Check out just SOME of the information you will find inside Super Tactics of Time Management Experts:

 Necessary pre-requisites to help you manage your time effectively.

 Main factors in determining your personal time.

 How to become proficient in the art of prioritizing.

 A very powerful tactic that can help you get more things done in one week than what most people can accomplish in a month.

 The most notorious (and oftentimes irresistible) activities that steal away most of your time, and how you can effectively overcome them.

 How to make your time productive when you really can’t avoid the time thieves.

 How to do just once what people are doing many times.

 How to make emails work for you in your pursuit to save time.

 How to finish your job in much lesser time and attain a balanced life.

 Extraordinary methods to gain more direction in accomplishing whatever needs to be done.

 Significant factors to boost your job performance and efficiency.

 How to triple or quadruple your time to enjoy life to the fullest.

 How to relieve yourself of tasks that you hate to do.

 Super tactic to give you the right motivation.

 Practical tips to overcome procrastination.

 Three important aspects in planning your moves.

 Motivational tools to give you the zest in starting out a task or duty with vibrant enthusiasm.

 Important things to remember in setting goals.

 Useful ways to create a sound plan.

 How to utilize your effort or energy to become an achiever.

 Suggested organizational method you can do to entail great results in managing your time.

 Terrific techniques to organize your tasks and activities.

 Unique and fun tactics for organized filing.

 How to remember important dates or occasions without fail.

 How to minimize errors and mistakes that waste so much time.

 Great ways to help you create a better working space and lifestyle.
 How to minimize your time looking for objects.
 How to get control over your workplace, your life, and the time that surrounds you.

 What to do to reduce stress and anxiety.

 Why many people achieve very little despite spending most of their time on certain activities.

 How activity logs function.

 The standard technique used by top-level athletes, successful businessmen and achievers in realizing their dreams and reaching their goals.

 Keys to being really productive and efficient.

 How tasks should be prioritized.

 The difference between an Action Plan and a What To Do List.

 The importance of effective scheduling.

And a lot, lot more!

“Remember: Time is Precious, Exquisite, and Priceless!”

You only have one life to live. Would you like to spend most of it just working and being overwhelmed with too many responsibilities to handle? I don’t think so.

Would you like to have more than enough time in the world to do the things you love and to enjoy your life, amidst all your tasks? Sure you would. That’s how important time management is.

Download Super Tactics of Time Management Experts Now!

Ravinder Tulsiani

P.S. What are you waiting for? Time is running fast. The earlier you read and apply the super tactics in this book, the more time you’ll ever have in your life.

P.P.S. You can never turn back the hands of time. Time wasted can never be reclaimed. So act now!


Thursday, February 10, 2011

How To Be A Public Speaking Superstar by Ravinder Tulsiani

Have Supreme Confidence and Master Public Speaking. I Can Teach YOU Step-By-Step The Same Exact Proven Methods I Use To Speak And Present With Power, Influence And Charisma To Get What You Want. How To Be A Public Speaking Superstar.

After reading this book, you will be able to:

* Overcome your fear of public speaking
* Manage speech anxiety effectively
* Prepare a powerful speech using 9 basic steps
* Analyze your audience to make your topic fit their interests
* Organize your speech carefully to improve understanding and recall
* Enhance the quality of your speech
* Organize an introduction that will relax you and your audience
* Identify the 3 qualities an effective speaker should possess
* Know how public speaking can improve your personal development
* Know how public speaking can influence your society
* Know how public speaking can advance your profession

Download my new book "How To Be A Public Speaking Superstar"

Wednesday, February 9, 2011

Develop Your Financial IQ by Ravinder Tulsiani

Learn how to develop your financial IQ to help grow your wealth. Packed with valuable information that anyone can use to increase their financial IQ fast!

Download my new book "Develop Your Financial IQ"

Saturday, January 29, 2011

Real Estate Investment and Its Potential Disadvantages by Ravinder Tulsiani

Real Estate Investment and Its Potential Disadvantages by Ravinder Tulsiani

There are also many disadvantages to the real estate investment. These disadvantages can be easily taken off, if you have an insight about the limitations of real estate investment and what can be its short term as well as long-term repercussions. The basic disadvantages attached to any type of real estate investments are:

Taking Wrong Decisions

People going for the real estate investment property take decisions in haste.Make a firm decision when you go for purchasing your first real estate property, is just not easy man. If you are swayed by emotions, you will be ruined. Yes, I say RUINED! People do get broke, where they make decisions not from mind, but from their hearts. Objective feelings can get you the good real estate deal, and you ought to know this right from the beginning. Subjective actions will not land you anywhere. REClub.com will give you first hand practical information on how to go while purchasing your first home. The way I did it!

No readily AVAILBLE Liquidity

With your real estate investment, you need to know one thing straight, and that is you simply cannot aspire hard cash immediately. You have to wait and watch the market movements and other socio-economic and politico economic factors before selling your real estate property, like a mall or your home. Instead, you can always borrow a sum of money against your property! But! Hey! Do you really want to go for borrowing?

Wait for Long

Real estate investment is something that gives you delayed returns. You have to be patient enough to wait in order your real estate property gets appreciated enough, and that can give you amazing yields. It is one investment that can even take a decade or more to give you high returns. In fact if you want to go for some fast returns, try thinking of investing in something else, such as information technology business, BPO etc.

Eats away your TIME and ENERGY

Real estate investment can get you real fatigue. It is a lethargic time consuming process that makes you feel almost laid back. You need to plan and have those instincts to get going with your property. You will learn more on about making you real estate investments more time efficient in later part of the chapters.

A Risky ADVENTURE to Ride

Investing in a real estate property can be a risky and costly event… Hmm, if you are not prepared before, you will make losses. Not just losses but, but you will become a pauper. Remember, as I said in my earlier statements, Real estate market is speculative. You never know, where your investments make you land. Just play the right way. The real estate strategies given in the book can show you the right path and you will be riding up and safe.

No Stringent Comparison Methodologies

Real estate market is variable. The price of two real estate properties can vary a great deal, provided you keep other factors such as time and location, constant. No two real estate properties can have exact. There always exists kind of variation and this need to be taken into account. Though, you do have the existing rule of thumbs and set strategies, but all these are workable, if tried in combination. Individually, they become worthless math.

Guided and Drawn on Government Policies

Government policies and regulations play an indispensable role in deciding on the real estate investment. These policies and regulations include control the zone based bylaws, construction activities; property prices; rent control procedures; license dispensations and property transfers; taxes etc. Therefore, in order to easily get through all these scruples, you need to have a legal advice from a seasoned real estate lawyer, and more so, you should have the best advice in your hand, when you want to make income through your real estate investment.

Wednesday, January 12, 2011

Advantages of real estate investing

Advantages of real estate investing

Investing in real estate is as advantageous and as attractive as investing in the stock market. I would say it has three times more prospects of making money than any other business. But, But, But… since, it is equally guided by the market forces; you cannot undermine the constant risks involved in the real estate. Let me begin discussing with you the advantages of real estate investments. I found the advantages as most suited and really practical.


Real Estate Investments are Less Risky

As compared to other investments, less of misadventure is involved in a real estate property. I will not get away from the fact that just like any investment you make; you have the risk of losing it. Real estate investments are traditionally considered a stable and rich gainer, provided if one takes it seriously and with full sagacity. The reasons for the real estate investments becoming less risky adventure primarily relate to various socio-economic factors, location, market behavior, the population density of an area; mortgage interest rate stability; good history of land appreciation, less of inflation and many more. As a rule of thumb, if you have a geographical area where there are plenty of resources available and low stable mortgage rates, you have good reason for investing in the real estate market of such a region. On the contrary, if you have the condo in a place, which is burgeoning under the high inflation, it is far-fetched to even think of investing in its real estate market.

No Need for Huge Starting Capital

A real estate property in Canada can be procured for an initial amount as low as $8,000 to $ 15,000, and the remaining amount can be taken on holding the property as security. This is what you call High Ratio Financing. If you don’t have the idea as to how it works, then let me explain you with the help of an example. Remember that saying… Examples are better than percepts!

Supposing, you buy a condo worth $200,000, then you have to just pay the initial capital amount say 10% of $200,000. The remaining amount (which is 90%) can be financed, against your condo. It means that in a High Ratio financing, the ratio between the debt (here in the example it is 90% Mortgage) and the equity (here in the example it is 10% down payment) is very high. It is also important to calculate high ratio mortgage insurance with the help of Canada Mortgage and Housing Corporation (CMHC). If needed, you can also purchase the condo on 100% mortgage price.

Honing Investment Skills

A real estate investment, especially when you buy a condo for yourself, will be a pleasurable learning experience. It gives you the opportunity to learn and when I went ahead with my first real estate property, I was totally a dump man. Ask me now, and I can tell you everything, from A to Z. Necessity is the mother of all inventions. I had the necessity to buy the property and so I tried with it, and I was successful. I acquired all the knowledge and skills through experience of selling and purchasing the residential property. Thanks to my job. It gave me the experience to become an investor.

Not a time taking Adventure

Real estate investment will not take out all your energies, until you are prepared and foresighted to take the adventure in full swing. You can save hell lot of time, if you are vigilant enough to know the techniques of making a judicious investment in the right time and when there are good market conditions prevailing at that point of time.

You should be prepared to time yourself. Take some time out, and do market research. Initiate small adventures that involve negotiating real estate deals, buying a property, managing it and then selling it off. Calculate the time invested in your real estate negotiation. If the time was less than the optimum time, you have done it right. And if you end up investing more time, then you need to work it out again, and make some real correction for consummating next deals. You have various ways and methodologies, called the Real Estate Strategies that can make it happen for you in the right manner.

Leverage is the Right Way

The concept of leverage in real estate is not a new one. It implies investing a part of your money and borrowing the rest from other sources, like banks, investment companies, finance companies, or other people’s money (OPM). There have been many instances where people have become rich by practically applying OPM Leverage Principal. As I had discussed under the sub head - No Need for Huge Starting Capital, the high ratio financing scheme gives an opportunity of no risk to the lenders, as the property becomes the security. Moreover, in case the lender is interested in selling the property, the net proceeds resulting from the sale of the property should comfortably cover the mortgage amount.

Now consider a situation, where the lender leverages the property at too high ratio debt say 98% or even more, and all of the sudden the market shows a down turn, then both the investor as well as the lender. Hence, greater is the mortgage debt, more is the lender’s risk, and it is therefore necessary that lender pays higher interest rates. The only way out to ease the risk from lender’s head is to get the mortgage insured. Two companies authorized to insure your high-ratio mortgage debts are CMHC (www.cmhc-schl.gc.ca), and GE mortgage Insurance Canada (www.gemortgage.ca).

Let me explain you with the help of an example… supposing, you are buying a real estate property worth $ 200,000 at three mortgages, with the first one of $100,000, the second of $75,000 and the third one of $25,000. Possible percentage of interest rates charged can be 3%, 5% and 7%. The last mortgage amount of $25,000 will be accounted, as riskiest; as it would relatively be the last mortgage that you will pay when you finally make a selling deal.

On the contrary, if the first mortgage representing almost 90% of your property price is insured against getting default or as high ratio mortgage, then in the above example, the basic interest rate would be 3%.

Let me explain you the leveraging concept by taking another example.

Supposing, you are buying a real estate property worth $200,000, and made down payment of 10%, equitable to $20,000, while financed the rest amount of $1,80,000. Over the year’s time, the value of your property appreciates by 10%. In this case, what would be the total return that you’d incur on your down payment of $20,000? It would be 200%. Yes 200%. Putting in simpler words, the down payment of $20,000 made by you has an appreciation of 10% over it, i.e. (10% increase of original home price of $ 200,000), 200% return on your down payment investment of $20,000.

On the contrary if you invest all the money in buying the property of $200,000, and in wake of appreciation of 10% over the year ($20,0000 would then be accrued to as 20%.

Synonymous with leveraging is pyramiding, where you borrow on the appreciated value of your existing property. Pyramiding applies the principal of leverage that enables you to purchase even more properties. This appreciated value over the real estate property in some selected areas results in accumulation of rich financial virtues.

Real Estate Appreciation

An appreciation is an average increase in the property value over original capital investment, taking place over a period. There are some neglected real estate properties that have an appreciation below the average mark, whereas, some of the properties located in maintained geographical areas, showing high demand, have an above average appreciation. In such centrally located and high demand areas, the average appreciation can reach up to 25% in a year. I will discuss appreciation in the chapter on real estate cycles. For now, for general understanding, appreciation is what goes up.

You Make Your Equity

As you gradually pay your mortgage debts, you are creating your equity. In other words, you would be reaching to original house price on which you have no debt. Your equity is absolutely free of percentage increase in appreciation. From the investor’s perspective, in real estate market, equity is the amount that is free of debt and it is the amount that an investor holds. When you sale your property, then the net money you get, after paying all the commissions and closing costs, becomes your equity. Lenders don’t want to take risk by allowing a loan on over 90% of equity. Therefore, in this manner, the lenders take the safety measures in wake of their loan being defaulted.

The Federal Bankruptcy act says that all the first mortgages of over 75% of the appraised or purchase value must be covered under high-ratio insurance schemes. However, there are certain conditions, wherein, CMHC offers the purchasers of real estate property qualifying the insurance, a mortgage of up to 100% of purchase price over your principal house value. In the wake of an event where borrowers want more money from the lenders, they would ideally settle for second and the third mortgages.

Low Inflation

Inflation is the rise in the prices of the products, commodities and services, or putting it another way, it is the decrease in your capacity to buy or hire the services. Supposing, a commodity was worth $10 a decade back, will now cost $ 100 as the result of inflation. For people who have fixed salaries feel the real brunt of the dollar, as the inflation rises. In Canada, the inflation rate varies and it varies every year. There was a time when Canada had a double-digit, but it was controlled to single digit, after the regulation of policy.

If we analyze closely, the land appreciation value for the residential real estate is 4% to 5% higher than inflation rate. Therefore, when you invest in real estate, then you are paying mortgage debts in high dollar value. Now as you are getting more, salary to pay less amount than the amount that you had paid in the original mortgage.

Tax Exemptions

You get various tax exemptions on your principal and investment income property. The tax exemptions available in real estate property investment are more than available in any other investment. In other investments, you lose terribly on the investments in your bank in the form of inflation and high taxes therein, but in real estate; you don’t actually have such hindrances.

Various tax exemptions available are:

•The interest receivable from your bank account, term deposit or guaranteed Investment Certificate (GIC) is completely taxable as income. A little math here will do the magic work for you. Supposing, if you get an interest of 8% on the deposit, and the on going inflation rate is 5%, the Real Return Rate will come out to be settled at 2%.
•You get completely tax-free capital gain on principal amount of your residential real estate property.
•You have the opportunity to ward off principal amount of your residential real estate property against the home expenses incurred by you.
•You can easily ward off the property depreciation against your income.
•You can cut the expenses incurred in real estate property investment through your income
•Tax rate reduced to approx. 50% of the capital gain.
•And many more

Net Positive and High Income is Generated

If taken in right direction and played seriously, a real estate investment can be your virtue making endeavor now and in times to come. You will not only be having additional assets building in your favor, but also with positive cash flow, your real estate property value will increase automatically.

High Return on Investments (ROIs)

Real estate investment gives you potentially high ROIs before and after the taxes levied on your income. In fact, investing in real estate gives you high ROIs after the taxes.

Demand for the Real Estate Increases

As a natural instance, when the population of a region increases, the total usable land decreases, and this provides the impetus for high real estate prices. There are many communities that can or cannot have growth and development regulations, thereby, resulting in limited land available for use. Therefore, the real estate prices of the area shoot up. Remember housing is the necessity of an individual and therefore it is much in demand than any other single commodity taken. Furthermore, there are people who purchase additional houses for their recreation, recluse or as a past time. This in turn increases the demand for land.

Tuesday, January 11, 2011

Canada and the Housing Explosion by Ravinder Tulsiani

Canada and the Housing Explosion by Ravinder Tulsiani

Canadian real estate market is growing at an alarming rate. This phenomenal growth is more prevalent in the western provinces, and this has been primarily aided by increased number of jobs; low unemployment rate, low interest rates and as the result low mortgage rates on the real estate property. These low interest mortgage loans were primarily accorded because the condos were available for selling, before they were physically present on the land. A new set of protocols is therefore created. Under this, the real estate property agents and developers begin to sell a part of property, before the construction activity, and sells the remaining realty after the construction is over. In this manner, the realty developers can adjust the prices of condos and other housing properties according to the prevailing real estate property market.

Moreover, beyond these low interest mortgage rates, market is also susceptible to the likings and demands of the consumers. Take for example, in Alberta, due to greater availability of oil resources have resulted in an extensive migration of people to the region and as the result there is housing shortage and this has driven the realty prices high. Now for those Albertans, who have passed their prime can earn huge profits by selling their property at high prices and moving to British Columbia for amusements and to enjoy their life to the hilt, by keeping themselves busy doing golfing, fishing, and sailing.

Moreover, the regions located along the coast show a tremendous immigration belonging to retiring age groups. As per the population statistics of Canada, such a large-scale immigration of working people has not been seen anytime during the century. The important point to think is that many of these retirees have good amount of time, at least 15 years or more, to enjoy their life, and do what they want to do.

The infrastructure planners and developers conceptualize the new and innovative construction ideas in order to realize the dreams of the new immigrants. With new building and construction concepts developing, there is much demand for housing in Canada. An average Canadian has his or her morale boosted. The one time sluggish economy of Ottawa has transformed into a strong business activity center and plenty of job opportunities, and this has created demand of residential real estate, all of a sudden.

Saskatchewan is another such example, which has seen the growth in its economy has taken place because of surplus of natural resources rich in uranium and potash. It also has one of the Canada’s big grain markets and as the result; there has been phenomenal boost in the real estate sector in this region. Such a real estate boom has not seen elsewhere in Canada. Saskatchewan is the only province, which has seen the highest percentage of annual unit sales and the proposed new schemes for housing.

Another high commercial activity center of Canada - Toronto, and the greater Toronto area (GTA), already had appreciable real estate market, and it is developing even more, due to large-scale immigration, good employment opportunities. The real estate costs in GTA is continuously increasing, and above all, you will see that this area has undeterred scope for the housing. In addition, the prices of houses in Toronto are much higher as compared to other provinces such as Calgary and Edmonton. On the contrary, if one compares the rate of growth of housing prices, then Calgary and Edmonton, completely outsmarts Toronto.

About the Author:
Ravinder Tulsiani is a published author and writes numerous articles and books on finance, self-help and relationships.

Reprint Rights:
You may reprint this article provide that you give credit to Ravinder Tulsiani as the author and include the article's source link at the bottom of the article.

Thursday, January 6, 2011

control or gamble

control or gamble

In my previous article, i mentioned that an investor should not buy based on factors they cannot control since that is considered (in my view) speculation, not investing.

what should be looking for?

look for things you can control. what are these?

1. you can control the price you pay today relative to the market price. that is, how much of a discount you can negotiate off the fair market value of the property.

2. you can create forced appreciation of a particular property. (this is not macro, it's micro) I am not suggesting you can increase the value of the housing market, rather of only one property... yours.

how do you forcefully apprciate the value of a particular property?

buy properties in need of repairs (especially cosmetic), it's amazing how much improving curb appeal, replacing that burnt carpet and a fresh coat of paint can increase the value of a property.

Summary: control what you can when you invest, leave the rest to speculators (aka gamblers).

About the Author: Ravinder Tulsiani is a published author who has written about personal finance, real estate, self-help and online marketing.

can you still make a fortune in real estate?

can you still make a fortune in real estate

Of course you can.

careful though, if you think its as easy as just putting your money down on a new condo and waiting for it build to realize the gain due to appreciation, you may be in for a rough ride ahead.

I subscribe to the philosophy that only invest based on things you can control. if you cannot control something, you should not factor that in your equation.

so let me ask you, can you control appreciation? can you have a direct impact on the value of housing prices? or are you simply speculating on the fact that the prices have come down lately and are bound to go up considering historical performance of the market?

the answer in most cases is no. as an individual investor, we cannot control housing prices, the market etc... or any other macro economic elements.

so, if you're investing in real estate based on factors you cannot control, i call that speculation, not investment.

About the Author: Ravinder Tulsiani is a published author who has
written about personal finance, real estate, self-help and online