Homes in other areas are probably fine.  For example, I live in the prairies, and with all the natural resource extraction going on, combined with some of the most profitable circumstances for farmers in decades, I assume home prices will continue to rise at a healthy rate.  If you live in the Martimes, chances are that you have never seen a real estate boom in your life (or you’re old enough to remember Confederation), and with the offshore drilling going on for next couple decades, you should be fine as well.  Us country mice might feel a few aftershocks if the house of cards (which could be an accurate metaphor for the lack of construction value seen in many new houses today) comes tumbling down, but our urban brethren will undoubtedly be harder hit.

If I Had a Million Dollars I’d Buy… an Old Bungalow?

So what event pushed me to cross over to the side of real estate bears?  Globe and Mail recently had a story about a not-so-special bungalow in Toronto.  This run-of-the-mill house was built in the 1960s, and includes 3 bedrooms.  From the details of the story, and the picture provided, there doesn’t seem to be any extenuating circumstances.  Actually, it looks a lot like the house I currently own, but with less of a yard, and a smaller garage.  So when I saw an asking price of $759,000 I thought it was pretty high, but then I realized what the headline of the article pertained to.  You see, this house managed to sell for over $1.18 million dollars!  This “everyman’s house” that had the good fortune to be built in a decent neighbourhood sold for $421,800 over the asking price!

This simply tells me that something is off.  When a house sells for over a million dollars, it should belong to a rich person.  Yet this is not a rich person’s house.  The story went on to say that the buyer was a foreign student.  Maybe this elite immigrant phenomenon is what is driving up prices in Toronto and Vancouver, and maybe it isn’t quite on the level that USA speculation was before their crash, but there is definitely still a major real estate bubble that is read to burst in these cities.

We’ve Learned From The American Model… Right?

Now the Canadian government will tell you that this is impossible to have a Canadian housing bubble since it is harder to obtain a mortgage here.  We have stricter lending rules, and there are no such animals as balloon mortgages or “teaser rate” mortgages around here (if you’re not sure what these terms mean, count yourself among the lucky).  While this maybe technically true, one could make the argument that the entire housing market is selling at a teaser rate right now.  The big bank oligopoly of Canada made news again this week by slashing mortgage rates back to all-time lows of 2.99% over four years.  This encourages people who are trying to buy “all the house they can afford” to make irresponsible decisions, and creates an upward spiral of speculation fueled by cheap money.

Stress Testing The “Average” Mortgage

For a basic idea of just how quickly many couples’ financial situations will change in a few years, let’s take a look at an “average” mortgage these days.  For a household looking to buy a “fixer-upper” for a measly $500K (excuse me while I go vomit) and making the usual bi-weekly mortgage payment, we are looking at manageable payment of $1,090 (assuming our 2.99% rate).  If this rate goes up to something resembling the Canadian historical average of say 5.99%, the payment goes up to $1,475.  If all of this printing money fuels inflation, and the Bank of Canada decides to jack rates up in order to battle it, you can see how these payments can climb quickly.  This would all be ok as long as people planned for all of the costs associated with owning a home.  I mean, everyone knows about the maintenance costs, the taxes, the utilities etc., right?  Not according to everything I’ve read.

That’s ok though, we all have money saved for a rainy day… oh, actually we collectively owe over 150% of our yearly salary, oooook.  People have to factor in however that we all have superb job stability… *gulp* right?  Canadians are stretched incredibly thin, and yet we refuse to respond to policy makers’ warnings because while they warn out of one side of their mouth, they keep lending out cheap money on the other side.  Economists will tell you we will always respond better to the financial incentive than a moral warning.

No Worries… blah blah… Soft Landing

The verbiage we keep hearing out of real estate professionals (why do news stories always feature these guys as the “unbiased” experts anyway) is that there will be a “soft landing” is the housing market.  Maybe there will be.  Maybe the demand is so high in certain areas, and the demographic trends are so unprecedented that there will be a gradual levelling out in the housing market.  The only evidence to the contrary is all of history after all.  Ever notice how the “experts” in every bubble will deny that there is a bubble until they are blue in face, and then switch midstream to this whole “soft landing” thing, and then finally they say that it was impossible to foresee the fact that a bubble was forming due to the surrounding circumstances?

As Canadians salivate over record low interest rates, and test our general lack of financial literacy, does anyone really want to bet that we are making sound and sustainable decisions right now?  While we might not see quite the geographical breadth, nor the financial depth of the crash our big brothers to the South of us experienced, I think there is little doubt that major debt correction has to occur in Canada sooner as opposed to later.

Once housing prices begin to fall, the trend may very well be combined with higher interest rates.  This combination of disincentives will likely destabilize the whole market.  Anyone else feel like we are in the 35^th round of a Jenga game and we’re trying to get that last block loose?

Related Posts:

• Should You Use A Real Estate Agent To Sell Your House?
• Save Money By Selling Your House Without A Real Estate Agent
• Real Estate Investment Trust (REIT) Portfolio

Can Anyone Really Deny The Real Estate Bubble Any Longer? originally appeared on Canadian Finance Blog on March 27, 2012.

Each have their own benefits. Renting allows you to have a very fixed budget every month. Even if emergencies happen and things break, that’s the responsibility of the landlord, not the tenant. Therefore, you can just keep on paying your same monthly amount. However, you are subject the whims of the owner, including getting evicted, having annual rent raises, and are limited as to what you can do on someone else’s property. Owning your own place, on the other hand, allows you not only to change or modify whatever you would like, but you are also starting to pay yourself back. When you pay your monthly mortgage, you are investing money into something that will actually have a return when you eventually leave that house, an obvious benefit over renting.

What costs more, renting or buying?

Sometimes the decision simply comes down to price. Can you afford to purchase property in your area? What would the price difference be between a rented house and a purchased house. Where I used to live, in North Vancouver, there was no comparison. While prices have recently dropped, good luck finding anything for less than half a million dollars – and that includes most townhouses and apartments. In comparison, you could find small places to rent for less than $1000 a month, far less than the mortgage on the property would be worth. We’ve since moved to Vancouver Island, and while the Victoria housing market is also quite expensive, further up island the prices are far more reasonable. You can rent a house for less than a thousand dollars, again, but you can also purchase a house in the 200,000 range. So if you figure out the monthly payments on that particular mortgage, it may be very similar in price to renting. At that point, there is hardly any financial reason to rent, when you can own for the same price.

Don’t forget, however, that even if your mortgage is the same price, you’ll also have to pay fore house expenses like property taxes, utilities, and be responsible for any maintenance or repairs that are required on the home. Property ownership brings its benefits, but also brings its risks.

Can you afford a house?

So the second big thing you need to look into before purchasing a home is your own financial situation. You don’t ever want to have to stretch your financial budget just to purchase a house. It’s not worth the financial strain. It’s better off to keep renting while you save up some more money. Even if the budget is close, or tight, but doable, then you may want to make sure that you have a hefty emergency fund saved up. When you start to own houses and property, you’ll want to increase the size of your emergency fund, as all of a sudden your emergencies can become so much larger. Wind storm knocked half your roof off? Better hope your emergency fund is able to cover that, else the home that you wanted to retire in may be going back to the bank. When you agree to take on a mortgage of that size, be sure that you can afford both the loan and the risks associated with it.

Related Posts:

• Renting is the Craze Now! Here’s How to Prepare for It
• Should You Use A Real Estate Agent To Sell Your House?
• Save Money By Selling Your House Without A Real Estate Agent

Which is Better for You: Renting or Buying a House? originally appeared on Canadian Finance Blog on February 29, 2012.

Hmm… no Momma’s boy jokes yet? I’m sure there will be some by the end of the post. Or, at least in the comment section.

Anyway, you can probably imagine the reasons why I live so close to my parents. My family is important to me, so I wanted to be close to them. I think the neighbourhood I live in is wonderful – there are all sorts of mature trees, it’s quiet, it’s flanked by all sorts of nature and the yards are ample, which isn’t a priority for developers these days. We live in a small town, which means housing costs are reasonable. And although now place will ever be entirely crime free, it sure does seem like my small town is.

Meanwhile, I can see the appeal of a larger centre. Opportunities are definitely more plentiful, especially if you’re in a more specialized field. There’s always something to do in the evenings, and seemingly countless single members of the opposite sex – assuming you’re looking. Everything from medical facilities to libraries are generally better in larger centres than smaller ones. There are all sorts of advantages to living in a big city.

But, is it all worth it? Does it matter where you live? In many instances, I’d argue you’re better off living in a small town. Here’s why:

Cost of Living

The 2 large centres closest to me are Calgary and Edmonton. The house I live in, would be worth approximately $150-200k more than the house I live in here.

Assuming I take out a 25 year mortgage at 4%, I’m looking at $800-$1000 more each month just in the costs of my mortgage alone. Add to that higher property taxes (since the property is worth more) and we’re looking at some serious extra cash going out the door each month from the increased cost of living.

Yes, there are admittedly jobs that you can only find in big cities. If your job is the starting goaltender for the Calgary Flames, I’m pretty sure you’re stuck in Calgary. (You’re probably not too worried about the cost of living though) But what about if you’re a nurse, or a teacher, or any other job that pays pretty much the same across your province? Is the increased housing costs really worth the extra benefits of living in the city?

Transportation

Here’s something you probably don’t know about small towns: they attract all sorts of people on fixed budgets. Why exactly?

Well, it’s simple. One, you have lower housing costs, and lots of smaller, older houses that rent cheaply. Two, small towns tend to not be so spread out, meaning you can easily find a place to live that’s central enough you don’t need a car. When you’re on a limited budget, those two things are very appealing. Sure, there’s little in public transportation, but the occasional cab trip solves that.

Even if you’re one of those people who likes bicycling everywhere, small towns have less traffic to deal with, making your commute both faster and safer.

Most of us in small towns do own cars. Imagine how nice it is to be able to get anywhere in town in less than 5 minutes. We barely know what rush hour is. Whenever I’m late for something, I always joke it’s because of traffic. You see? If you live in a small town, traffic jams are just a punchline.

Less Competition

In many of the professional fields in my town, there’s very little competition. There’s a shortage of doctors, mostly because doctors aren’t usually too interested in going to small towns. It’s the same thing with lawyers, accountants, dentists, and probably another half dozen professions I can’t think of.

Even if you’re just some guy who works in the oil field, less competition means more opportunity for you. If many of your co-workers are just itching to leave for a more exciting place, that increases your chances of succeeding in the place you already are.

One Horse Towns

One caveat about living in a small town. You have to make sure they town is big and diversified enough to not be dependent on one industry or one company.

My Dad grew up in a small town in Saskatchewan. In the mid 1980s, the lumber mill which employed a quarter of the town closed down. Not surprisingly, real estate values sunk close to 50% over the next few years. Unemployment was everywhere, and you had a workforce that was good at working at a lumber mill. Over the past few years, the town has finally begun to boom again, thanks to the natural resource boom. In the meantime, it was a bad time to live in that town.

Be careful when picking a small town to settle down in. If you find a good one though, there’s all sorts of advantages over a big city. Hey, you can even move into my neighbourhood. Just be quiet after dark.

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Does Where You Live Matter? originally appeared on Canadian Finance Blog on February 23, 2012.

Over the past decade, real estate has been one of the best performing sectors in Canada, if not the best. There are countless stories of people who have made hundreds of thousands of dollars simply by owning a house in the right location, during the last decade. And since gains on a principle residence are tax free, there are all sorts of people who have significant wealth stored in their house.

Let’s check out a pretty chart, provided by My Friend Fernando, a Realtor out of Calgary.

As you can see, prices have gone up drastically over the past decade or so. Prices have more than doubled during that time. Interest rates have declined during that time as well, meaning the cost to service a mortgage hasn’t really gone up with prices. If you combine that with longer amortization periods, the average Canadian homeowner is still making a reasonable mortgage payment. In fact, it’s allowed them to take on all sorts of other debt, perhaps to their detriment.

Can Canadian real estate prices continue to rise? This observer doesn’t think so. Here’s why.

Cheaper To Rent

Especially in major centers like Toronto and Vancouver, it’s cheaper for someone to rent than to buy. In certain neighborhoods, the difference between renting and buying is significant – to the tune of 25-50% savings for the renter, especially in the condo market.

Why is this happening? It’s simple. All sorts of people are buying up condos, with the hope of cashing in on the inevitable capital gain. All these landlords care about is getting some of their costs back in the meantime, so they rent out the units, for whatever they can get for them.

With more and more young Canadians buying their own condos, (partially influenced by how well real estate has done) this drives rents down, since less people are doing it. Supply is high, while demand is low. And as prices have gone up, so has the cost of servicing that mortgage. So the cost of owning has surpassed renting.

A metric which can be useful is to look at the home price to income ratio. Normally, at a national level, this hovers at around 4. In certain areas of the country, the ratio has risen to 6 or 7. From that perspective, these are overvalued.

Everybody Loves Real Estate

While there’s a small minority of people who are certain Canada is headed toward some sort of real estate meltdown, it’s still an incredibly popular asset class to own. Young people are hitting up their parents for loans for down payments. You often hear people talk about buying before the market goes up again and they get priced out. The level of home ownership in Canada has reached record highs, even surpassing the levels seen by the United States during the peak of their real estate mania just a few years ago.

And really, who can blame people for having confidence in real estate? Often, someone’s house is the only investment of any significance. Memories of a stock market collapse are fresh in our minds. Investment returns have been disappointing. For many people, their house has been far and away their best performing investment.

Emboldened by recent success, people are quick to jump on the real estate bandwagon. But are they committing a classic investing sin by loving something only after it’s had a terrific gain?

What Can Go Wrong?

What would have to happen to soften the real estate market? Unfortunately for bulls, any one of several factors could put the kibosh on this party.

Interest rates are at record lows, which allows people to buy more property than they’d be able to afford if rates were at more traditional levels. As mentioned above, this keeps mortgage payments reasonable, even as values continue to climb. Many homeowners are in ultra cheap variable rate mortgages,  meaning they’ll be hit immediately by rate increases, which will happen sooner or later. Homeowners in fixed rate mortgages will have a bit of a buffer until they renew their term, but they will eventually feel the pain of higher rates as well.

Meanwhile, Canadians have record debt levels. It’s going to be difficult for many homeowners to afford an extra few hundred bucks a month, since they already carry all sorts of other debt. This is not good for the market.

Most mortgages in Canada are recourse loans – meaning you can’t just abandon your obligation like so many Americans did. The bank has every right to sue you into the stone age if you decide to mail your keys back to the lender. This could cause a situation where many homeowners would like to move, but can’t get out of their current place.

As cracks appear in the market, public sentiment will shift. People won’t automatically associate real estate as the ticket to wealth. They’ll move onto the next popular investment. This will reduce the sea of buyers. Combine that with an increase in sellers, and you get a potentially toxic situation.

There are all sorts of factors that could cause the market to fall. What do you readers think? Is Canada poised for a major real estate correction?

Related Posts:

• 5 Factors That Might Burst The Housing Bubble
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Is Canadian Housing In A Bubble? originally appeared on Canadian Finance Blog on December 29, 2011.

If you have a property that won’t sell, consider renting it. As demand rises, the rental rates rise higher with it. What was once a major headache for no real return may now be worth the time and hassle. If you’re planning to rent your home, here are a few things to consider.

Escrow

Before you rent your home, save some money. Something is going to go wrong with the home and at some point one of those repairs will be a major expense. Just for repair expenses, keep at least $3,000 to $5,000 in liquid funds.

In addition to those funds, be prepared for the problem renters who don’t pay. Eviction proceedings can cost a lot of money, take more than a year to resolve and in that time you may not receive any rental proceeds. Have enough money saved for that scenario.

Insurance

Regular homeowners insurance isn’t going to cover your rental property. Additional liability protection is needed to protect you from lawsuits that could arise from your renters becoming injured on your property.

Problem Renters

If only the world were the kind of place where everybody paid the debts they owed and took care of property that was loaned to them as if it was their own. That’s not the world we live in and if you rent long enough you’re going to get the wrong people renting. They’ll tear up your rental property, won’t pay on time or at all, and you’ll have the stress and headache of trying to get them out. Run a credit check, check references, and examine their application closely.

Property Manager

For about 10% of your monthly rental you can hire a property management firm to handle your rental property. You pay them so you can be a silent partner. They market the rental property, screen renters, collect the renal payment, and handle the repairs. Especially if you no longer live close to your property, a property manager is worth the 10% you’ll lose.

The housing market, much like the world’s banks, is loved about as much the flu but in every market, some lose and some win. Your home doesn’t have to be a loser. There’s a good chance that somebody would be happy to rent it if you have the resources to be a landlord. It’s not for everybody and you may not rent it for enough to cover your mortgage payment but that’s a worse case scenario. The chances are higher than you think that renting your property may produce a little bit of income.

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• Which is Better for You: Renting or Buying a House?
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Renting is the Craze Now! Here’s How to Prepare for It originally appeared on Canadian Finance Blog on December 12, 2011.

Here in Canada where the real estate market hasn’t been quite as bad, you may not be close to foreclosure but you may be one of the homeowners who still have an underwater mortgage.

If you have a home that won’t sell or is underwater, you may be looking for options and sometimes, the options aren’t in your favour. I’ve put together a list of the best of the worst options when your home won’t sell.

Stay Put

Why do you need to sell your home? Is it out of necessity or because of a want? It’s tough question to ask but could you stay in your home for another five years or at least long enough to add value to your home if it is only slightly underwater? Other options may present themselves to you in the near future.

Rent it

Renting isn’t for everybody but for those who have to move, renting your property may not be a big money maker but it will at least lift the burden of a second mortgage payment and you have the added benefit of making your mortgage a little less underwater with every rental payment.

Beware of the problem renters. Eviction proceedings can take more than a year, cost thousands of dollars, and result in no rent money coming in for that period of time. Can you afford that if it happens?

Lease it

Leasing is similar to renting except, much like a car, at the end of the leasing term the person leasing your home has the option to purchase your home at a set price that you two agreed on at the beginning of the leasing term. In exchange, you add a non-refundable premium in to the rental payment. If they get to the end of the term and don’t want to purchase the home, you keep the premium.

If somebody really likes your home at the price you were willing to accept but the financing didn’t work out for them, they may lease your home to lock in the price while repairing their credit or saving more money for the downpayment. Similar to renting, do a thorough background check before committing to the deal.

Short Sale

A short sale is when the bank or lender agrees to take less money for your home than what is owed on it. The mortgage company doesn’t want the expense of a foreclosure so they may be willing to take a settlement if you’re in pre-foreclosure. Short sales can cause severe damage to your credit so they should be avoided whenever possible.

An underwater mortgages is a reality for many homeowners but there are options to help. Your home has the potential to be an income generator for you so think outside of the box before allowing your credit to be destroyed by a foreclosure.

Related Posts:

• Should You Use A Real Estate Agent To Sell Your House?
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Four Ways to Deal with a Home That Won’t Sell originally appeared on Canadian Finance Blog on November 28, 2011.

Here we’ll look at 3 common personal finance beliefs and dispel the myth behind them.

Myth: A credit counselor is required to repair credit.

This is not true. You can repair your own credit using patience and fortitude. Credit companies can help, but they can virtually do nothing that you cannot do yourself. The first thing is to order a free credit report. Northern Credit will give you one free report per year while TransUnion Canada and Northern Credit Bureau will provide them as requested. Report any errors in writing to each of the agencies. You can contact credit companies and work out a plan that can fit your income. You must be willing to show income statements, a budget and a plan. You may be able to re-negotiate the debt.

It is a myth that by closing accounts you can get more credit score points. Dropping a card may actually reduce your credit. It’s important to show that you are paying off credit with credit on time. If you already have or wish to apply to get airmiles card, it is one of the best reasons for having a credit card as it allows appreciation in travel miles. Do not get a new credit card if you are already in debt.

Myth: Interest rates will rise. This is the time to buy a house.

The Canadian housing market has been robust, resilient and growing. It has managed to remain outside the speculative quagmire that has snarled housing sales for our southern neighbour. The Canadian Real Estate Association changed a previous negative sales forecast to now show a 1 percent increase in sales, predicting 450,800 homes for 2011. CREA has reported only a 1.6 percent drop in sales from a year ago same period. The current average sale price, $363,500, represents an annual 7.2 percent increase, with the Vancouver market driving the lead.

Would one be desperate to rush into the market while interest rates are at their lowest? The Toronto-Dominion Bank reports home inspection rates and mortgage pre-approvals are several points down from last year. The Manpower job outlook for Canada, backing up home sales, appears positive.
This may very well be the time to get into the housing market. Due diligence must be pursued. Investigate and compare rates across the various provinces. One must understand that the Canadian economy is also part of a world macro-economic frame that is still under correction.

Myth: A college education bears multiple values.

Total student debt has been estimated at $20 billion, and student loans owed to the government increase by $1.2 million daily. With tuition rates uncharacteristically rising, up to 27 percent of students graduate with over $25,000 in debt. Defaults on the 8 percent government loans can easily compound a $30,000 loan into a $60,000 debt.

Graduating students are being forced to delay careers by taking up low-paying jobs outside their specialties. With no opportunity to build individual wealth, these students are unable to obtain credit to buy automobiles or homes.

Is college the way to go? A family’s personal finance figures importantly on planning foreseeable costs for college education. While some pundits point to a job market demanding college degrees or diplomas, others are saying the resulting student debt burden outweighs the benefit.

There’s a variety of non-repayable resources available when planning for education, just as there is a line of thought that a worthwhile profession can be obtained outside college. The family or individual must take a detailed, personal look at career prospects before committing financials or signing loans. Get a copy of “Canada Job Trends Update 2011” and go to the Working in Canada government site, among others, to obtain practical views of job outlooks

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Dispelling 3 Personal Finance Myths originally appeared on Canadian Finance Blog on September 1, 2011.

Whether you make it a side project or do it as pastime, house flips are an exciting activity that can be highly profitable if you know what you’re doing. You can engage your family as well, if you like.

The principle may be familiar to you from various reality shows or TV programs. To flip a house means to purchase a run-down property (a condominium unit or a house), invest in its renovation, then sell the renovated property to an end-buyer for profit.

As you may expect, location and timing are everything. Of course, merely making the necessary repairs and upgrades usually pays off generously, but the real potential is in the planning of the transaction. If you expect that a neighbourhood will become more popular in the future, you’ll do better flipping a house there than doing the same in a declining neighbourhood. If you think that the market will pick up soon, get your house now so that it’s ready for the hype.

The real cherry-pickers will meticulously seek old or abandoned houses in prominent neighbourhoods and snatch any shabbier house that has posh neighbours. Not only does this approach often maximize the return on investment, but the neighbours will be happy to see that the dark spot of their home area will receive a facelift.

A professional real estate agent experienced in house-flipping will be a great boon when you’re looking for good candidate houses. (Learn more about investing in Calgary real estate here.) Not every Realtor® is skilled in this technique and few are true specialists. Those who are, however, do it because they love the adventurous nature of flips from the bottom of their hearts — just like you do.

Once you’ve found a promising house and secured the necessary funds, it’s show-time. First, you must master the technicalities of the repairs, such as maintaining the stability of the house, engineering requirements, and liveability standards and appliances. While you’re figuring this out, your family can help you mow the lawn in front and behind the house, remove broken windows and doors, or locate all the loose bricks or floor pieces. Of course, you can pay somebody to do it, but it’s a great opportunity for a bonding experience and, in the end, you will have achieved something together. Once you’ve “prepared the workplace,” you can call in the professionals to take care of the house or condo and get it back in shape.

After the hard work has been carried out, you can engage your family in picking the colour scheme for the interior and exterior and deciding how to decorate the yard or the driveway so that it appeals to potential buyers.

Sometimes, your Realtor may be interested in chipping into the repairs in exchange for a share of the final margin. This might ease the financial burden for you and allow you to perform more extensive repairs than you could fund by yourself. Ask your agent whether he or she is interested in such arrangements.

Author Bio: Written by David Tsegai of Calgary Real Estate, a real estate firm specializing in property investment in the Calgary area.

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This Is Flipping Fun! originally appeared on Canadian Finance Blog on August 8, 2011.

So we knew we were going to end up moving by the end of the month. What we did not know is that we were going to be moving to Vancouver Island, a full week ahead of the end of the month. Suddenly we went from having all the time in the world for a relatively simple move, to having absolutely no time and a huge cross-ocean (technically) move. To further complicate things, we are not moving into our new place, we will be moving into a storage locker and will be living out of our car and off the generosity of friends and family for a few weeks before we find a place to settle down in. Yikes!

So as soon as I knew we were moving, I immediately set about doing what I always do with these large things. Researching. A quick google search of “how to move” lead me to a number of relatively generic lists, but it was good to start somewhere, and I knew it might help jog my memory of things that actually needed to be done. The scariest part, however, was finding out that half of these lists started with “two months prior to the move…”. Yeah, our timeline was suddenly about two weeks from making a decision to having to be gone, so it would be significantly shorter. Throughout the last week or so, I’ve learned a number of ways one can save a lot of money by planning out ahead of time a few things, and timing them accordingly.

Eat Through Your Freezer

I’ve written a whole other post on this subject, and if you plan on doing this, right before your move is the best possible time. Go through your freezer and write down everything that is in it. While you’re in there, toss anything that’s been in there for longer than a year, and anything else that might be suspicious. You don’t want to risk food poisoning just before you pack up your truck to move. Now start planning all of your next few weeks or month’s meals around the things that you have in the freezer. The point is that, if you time it right, you can have an empty freezer and a slightly fuller wallet by the time your move rolls around. We, unfortunately, were not able to accomplish this task. We’re doing the best that we can, but I can only eat a certain number of bulk bagels a day!

Time Your Rentals

Right at the end of the month and the beginning of the next is always the busiest time for rental trucks, moving companies, and storage lockers. If you can move at a different time of the month, you stand a much better chance of getting a vehicle reservation that the company will actually honour, and you might even find a deal or two. The storage place that we are moving into is currently having a buy one month get the next free promotion. So because we are moving into it at the end of the month, we get a pro-rated cost for the remainder of the month, and the next free. We essentially get a month and a bit (all that we will need) for the cost of less than a third of a month.

Coordinate With Your Employer

The summer season is the time of the year where my job is in most demand. Everyone is looking to take their vacation in the summer, so if you haven’t booked holidays it is all hands on deck. Therefore, planning a move right around the busiest time of the season is less than ideal. If you can, try to time your move around your already booked vacation time, or do it during a slower season so that you can take a few days without bothering anyone.

Tell Your Life To Calm Down

Moving is stressful. Even easy moves just down the street still require you to pack everything in your home, coordinate friends and family to help as they can, moving truck rentals, unexpected costs, and plenty more. If possible, plan to move when the rest of your life is as low-stress as possible. Have a major life change coming up? Perhaps wait to move, or get it out of the way ahead of time. I don’t recommend trying to move while also looking to change you and your spouses’ jobs, for example, or just after you had your first kid. Let the dust settle, and then consider moving. Moving requires a clear mind and heavy problem solving. Too often when you are stressed you do quick impulse purchases to fix problems, rather than taking a slightly longer road to get to the same end cheaper. Try to avoid these costly decisions by moving when you have less on your plate to deal with.

How have your moves been timed?

Related Posts:

• How to Find the Best Rental Apartment
• Unexpected Moving Expenses
• Moving Day!

Timing Your Move originally appeared on Canadian Finance Blog on July 20, 2011.

People do make big money in this area of investment, and it’s not by accident. Successful investors are those who know how to deal with all aspects of investing in property, including neurotic housing and rental markets and dubious-looking investment propositions.

Property investment basics

There are two common streams of residential property investment:

• Housing sales- The commonest form of investment, and theoretically straightforward, this is a high-capital investment, dependent on market moves.

• Housing rental- A revenue-creation approach to investment. Also the primary revenue stream for portfolios of properties.

It’s no exaggeration to say that you must be thoroughly conversant with all the issues related to either form of investment, right from the start.

Purchasing an investment property

Successful investors buy properties based on their potential for returns, either as direct sales profits, revenue potential, or both.

To assess the value of a property for purchase, you need:

• An accurate valuation of the market price and the upside potentials of the local market. This also means valuation of the downside of a property, the lower market prices in that area for that type of residence. The real value of a residential property is typically somewhat lower than the market top, and an averaging of similar properties provides a more reliable indicator of a price.

• Costing of your intentions regarding property development, upgrades, renovations, and other works. This valuation should be conducted on a real-cost basis, including legal and other fees. Important: Always consider these costs in terms of their relative value to your purchase, because you aren’t going to realize the capital value of improvements until sale or rental.

• A clear view of local market conditions- This is very much a risk management process. Assessing the market movements involves looking at price moves in recent years. A 5% return on a property isn’t a particularly good investment performance, and you could get far better returns in other markets.

A good investment property, defined

A really good investment property has some clear characteristics:

• A good local market- Meaning clearly consistent performance over time with regular demand, (check auction turnover figures) and no doubts about price downside. The ROI in these areas is usually excellent, and you don’t get stuck with an unsalable property.

• High quality premises- Forget entirely about the “handyman’s dream” properties or any rundown looking places, unless you’re an expert. Those properties can cost very big money to fix, and the choice is either deep pockets or demolition.

• Clear upside on sale price- The evaluation process shows the median price range and you can assess your capital return potentials quite accurately. A return of 8-10% is viable, under that is debatable.

• Good rental market- The right property has locked-in value as an income stream.

These are all quality controls on your investment. Get the strategy right, and you’ll get your investment moves right.

Author Bio: Tom Mallet is an Australian freelance writer and journalist. He writes extensively in Australia, Canada, Europe, and the US. He’s published more than 500 articles about various topics, including property investment and investment property.

Related Posts:

• Purchasing a Vacation Property in the US
• Property Tax Deferral For Young Families A Good Idea?
• What Are The Risks Of Leveraged Investing?

Residential Property Investing For Beginners originally appeared on Canadian Finance Blog on June 13, 2011.