While waiting at my chiropractor's office yesterday, I watched Jim Rohn, talk about his "Ant Philosophy". Jim Rohn is kind-of-like a preacher for business people and entrepeneurs. The Ant Philosophy is based on the habits of a common ant. In the summer, ants work hard, and persistantly to gather up as much as they can for the winter. In the winter they sit back and enjoy the fruits of their labour.
Many people who work in real estate, do the exact opposit of the common an. It's natural to work hard during the spring real estate market and then do little in the summer. That's where I see real estate professionals, be it realtors, other mortgage professionals, home inspectors run into financial difficulty.
The Ant Philosophy is similar to Warren Buffet's mantra of doing the exact opposit of what others do. If you've ever tried this in your own life, you'll see how challenging it can be. Peer pressure is intense.
How does this relate to real estate and mortgages? For example, if you have a variable-rate mortgage with an amazing rate of under 3%, instead of riding out the mortgage because everyone is complementing you on the rate, look at locking in before rates go up...try the ant philosophy.
If you'd like to discuss your mortgage (or the Ant Philosophy), please call me at The Mortgage Centre 519-763-3900 ext.1001 or e-mail at lastovic.s@mortgagecentre.com.
Showing posts with label real estate investing. Show all posts
Showing posts with label real estate investing. Show all posts
Friday, July 27, 2012
Friday, July 6, 2012
Guelph’s unemployment rate dips once more
When it comes to buying real estate, it's important to be objective especially if you're considering it for an investment.
There are many key drivers that influence the phases of the real estate cycle. Employment is one of the demographic drivers. Other key demographic drivers include:
-Net migration;
-Vacancy rates;
-Housing Constructions; and,
-First-time homebuyers.
Today Stats Canada released unemployment rates for Canada, and Guelph as usual, has one of the lowest rates on unemployment in the country.
What does this mean for the local real estate market? When people have jobs, they buy homes. That's one of the reason's why home sales are up year-over-year in Guelph. Furthermore, when unemployment is low, people migrate to these cities for employment. Guelph's vacancy rates are also at record lows.
GuelphMercury - Guelph’s unemployment rate dips once more
There are many key drivers that influence the phases of the real estate cycle. Employment is one of the demographic drivers. Other key demographic drivers include:
-Net migration;
-Vacancy rates;
-Housing Constructions; and,
-First-time homebuyers.
Today Stats Canada released unemployment rates for Canada, and Guelph as usual, has one of the lowest rates on unemployment in the country.
What does this mean for the local real estate market? When people have jobs, they buy homes. That's one of the reason's why home sales are up year-over-year in Guelph. Furthermore, when unemployment is low, people migrate to these cities for employment. Guelph's vacancy rates are also at record lows.
GuelphMercury - Guelph’s unemployment rate dips once more
Wednesday, July 4, 2012
Buying a rental property for the wrong reasons...
One of my specialities is helping people build their their real-estate-investment portfolio. Because I'm in the business of owning and managing rental properties myself, most of my clients appreciate the fact that I have first-hand experience of what to do (and what not to do). I've made several mistakes over the last ten years where I've lost money, but I have also had several success. I'm proud to say that I'm finally making a decent profit.
I love Don Campbell's quote from the Real Estate Investment Network (REIN), "Real estate is not a get-rich-quick-scheme, it's a get-rich-slow-and-steady strategy".
Here are some typical reasons people give for buying a rental property, that may be the wrong reason for purchasing (I'd love your feedback):
1. I want to supplement my income now. If you purchase a rental property and need to put a mortgage on the property to 80 per cent of it's value, you're likely not making more than $500/month on it. I'm referring to the marketplace which I know best KW, Cambridge, Guelph, Brantford, and Niagara.
2. You want passive income. Owning a rental property is not a passive business. There's allot of work that goes into managing a property and making money. Depending on the property, it should take you an hour each week BUT you need to do some work each week per property.
3. You're retiring in a year. If you're retiring shortly and you're looking for something fun to do, then a rental property may be the way to go. I've also helped retires buy properties to leave a legacy for their children. If you have money to invest and want to make a "dividend" or supplement your monthly income, investing in a private mortgage is a good alternative.
I love Don Campbell's quote from the Real Estate Investment Network (REIN), "Real estate is not a get-rich-quick-scheme, it's a get-rich-slow-and-steady strategy".
Here are some typical reasons people give for buying a rental property, that may be the wrong reason for purchasing (I'd love your feedback):
1. I want to supplement my income now. If you purchase a rental property and need to put a mortgage on the property to 80 per cent of it's value, you're likely not making more than $500/month on it. I'm referring to the marketplace which I know best KW, Cambridge, Guelph, Brantford, and Niagara.
2. You want passive income. Owning a rental property is not a passive business. There's allot of work that goes into managing a property and making money. Depending on the property, it should take you an hour each week BUT you need to do some work each week per property.
3. You're retiring in a year. If you're retiring shortly and you're looking for something fun to do, then a rental property may be the way to go. I've also helped retires buy properties to leave a legacy for their children. If you have money to invest and want to make a "dividend" or supplement your monthly income, investing in a private mortgage is a good alternative.
Thursday, April 19, 2012
Here's one way to pay-off your mortgage if you have rental properties
This week I met Sam who has been an astute real estate investor over the last 7 years. He's been strategic about his real estate purchases, focusing on good locations and positive cash flow.
Although he's retired, Sam still has a significant mortgage of $250,000 on his primary residence and carries a secured-line-of credit (SLOC) of $70,000. Don't be surprised at this debt level, because more and more baby boomers are not paying-off their mortgages before they retire. In this case, Sam went through a divorce almost 10 years ago where his assets where divided, which is the main reason he still carries a mortgage.
The great thing about Sam's situation is that he has a stable teacher's pension and he's done a good job at managing his real estate investments. He has enough equity in his real estate investments to pay-off his secured line-of-credit. This SLOC could be an issue in the future, given that rates on SLOC's show a 10-year historic average rate of about 6%.
Sam's meeting with his accountant this week to determine how to minimize the tax implications of this restructuring. But I'm a big believer of using the equity in your real estate to help your personal finances, while still maintaining a positive cash flow on the properties.
Here's a good link from a recent story in the Financial Post on how to manage SLOC debt.
Although he's retired, Sam still has a significant mortgage of $250,000 on his primary residence and carries a secured-line-of credit (SLOC) of $70,000. Don't be surprised at this debt level, because more and more baby boomers are not paying-off their mortgages before they retire. In this case, Sam went through a divorce almost 10 years ago where his assets where divided, which is the main reason he still carries a mortgage.
The great thing about Sam's situation is that he has a stable teacher's pension and he's done a good job at managing his real estate investments. He has enough equity in his real estate investments to pay-off his secured line-of-credit. This SLOC could be an issue in the future, given that rates on SLOC's show a 10-year historic average rate of about 6%.
Sam's meeting with his accountant this week to determine how to minimize the tax implications of this restructuring. But I'm a big believer of using the equity in your real estate to help your personal finances, while still maintaining a positive cash flow on the properties.
Here's a good link from a recent story in the Financial Post on how to manage SLOC debt.
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