Sens game in a box tonight!

I am going to the game tonight against the Leafs. I am super-excited. The Leafs will show how much they suck. I predict a 6-2 final for the Sens. I thought I would post this to remind people of the incentive to use me as a real estate agent in the future. Even if you live out of town, I will be able to give you some great references to help you. Go Sens Go!

PS. I think I will talk about "the incident" in the next day or two...

Room for rent

I have a room for rent. $500 gets you everything you need. Cable and high-speed internet are included. The only catch is that the room is a little bit drafty, but I will buy you a space heater to ensure your comfort. The room is on the ground floor behind the kitchen. There are 3 guys currently living in the house.

Now, if I don't get to rent the room, I might consider some other options in the future. I'd like to make it an office at some point. I think the rooms is better served as an office than a bedroom. That being said, I like money and having two mortgages becomes a lot more affordable when someone is living in the room.

The only other option that I forsee is to create a bedroom in the basement. That way, the room will not be so drafty and that I will be able to collect some more rent money. In fact, I may consider doing some insulating work in the spring if I can muster up enough money.

Results of poll...

Awhile ago, I asked people to vote on their favoured method of compensation when it comes to a referral program. Options included: tickets to a hockey game, cash, steak dinner, gift certificates, or even something else. The vote was nearly unanimous. People want hockey tickets. Now, I know I haven't started to do any buying or selling of real estate, but this gives me a good start to know what I need to do to get the word out.

This is what I am thinking. If you come to me and buy or sell a property, you'll obviously get some tickets. If you refer me to a friend that leads to a real estate transaction, I will get some more tickets for you. Therefore, you don't even need to buy a house to get some tickets. Now, I'll make sure they are good tickets. My clients will not be sitting in the nose bleeds. I am going to make the extra effort to ensure that my clients are completely satisfied. Hopefully, they will be completely satisfied in working with me achieving their real estate goals, and the hockey tickets will serve as the cherry on top.

Again, this is likely very dependent on where I end up working, but this is what I want to do for my clients. I'm not sure what to do for some of the non-hockey fans out there...

PS. I'm not ready to comment on the previous post just yet. I need a new roommate though, so if you know anyone please drop me a line.

As the world turns...

An interesting development today occurred with one of my rental properties. I'll discuss this more when I feel that all of the issues have been properly addressed or resolved. Stay tuned.

Another assessment...

Before people start thinking of me as a cheap prick, I have asked for my home to be re-assessed on only one of my homes. My Stittsville property has increased in value, but ultimately, I do not have any objections to the assessed value. My Ottawa property on Arlington, however, was a different story.

Now, I want to say that I think that the municipal property assessment corporation (MPAC) is somewhat poorly organized. First, they had re-assessed the value of my home at $191,000 in the spring. I was perfectly happy with this number as it saves me a lot of money when it comes to property taxes. Despite the re-assessment only being 6 months old, they re-performed the valuation of my property and my property's value increased to $253,000!!! A $62,000 increase in only 6 months! Although this would be a nice return on my investment, it means that my property taxes have just shot through the roof. To make matters worse, the City of Ottawa is proposing a minimum 4.9% tax increase next year as well.

Now, I think a 32% increase in my property value over 6 months is a bit ridiculous. This is especially true given the fact that all I've done to renovate the place is get rid of the garbage, and paint a couple of the walls. Therefore, I got on my horse and called MPAC. They agreed to re-assess the home yet again.

This time, however, they decided that they needed to inspect the inside of the house. I had no problems with this as I could easily justify the value of the house being lower. I have the advantage of having my neighbour having his home listed for sale. He is asking $214,900 at the moment. His home is in worse shape though than mine, but nonetheless it is likely the best comparable. Given the fact that my house isn't in perfect condition, I was able to get an idea of what my home should be valued at.

Before I say what the home was re-assessed at, I want to give people a warning if they are thinking about getting a re-assessment performed. MPAC has access to records of house listings. I had listed my house in the summer to see if I could sell it. I listed at $259,000 at the time. Hence, they had made a valuation of my home based in part on my listing price for my home. Arguably, this is a decent estimate of the value of the home. Thankfully, I had received no formal offers on the house and only received calls of interest. I had a verbal offer for my house, but nothing written on paper. This saved me hundreds of dollars on my property taxes as a result. Therefore, if you plan on living in a home, please be careful in listing your house unless you truly want to sell. You may be re-assessed on your property taxes as an undesired consequence.

After all of this, my home was re-assessed at $218,000. I am okay with this amount. It still represents a 14% increase from my original assessment, but it probably accurately reflects the value of my home. I could argue the amount further by appealing the decision to a tribunal, but ultimately, I am not going to be able to save that much more money. I did manage to lower the tax base by $35,000, so I am quite happy with that.

Ottawa Real Estate Market

I'm sorry to those government workers that read my blog on a nearly daily basis. I know that you are constently busy looking at stuff on the internet, and you stop by my blog to kill a little time by reading what I have to write. I said that I would post my opinions about the Ottawa Real Estate Market, and since I've said that I was going to post, my opinions have changed somewhat. I wanted to digest some of the recent economic news before I decided to make an opinion. I'm sorry for waiting a few days between posts.

Now, Ottawa is a unique town. We are a government town. We are somewhat protected from economic boom and bust cycles. We are not immune, but protected. What does this mean for real estate? Well, first, it means that you are not going to double your money on your real estate investment in one or two years. We never have such a hiring spree that we have excess amounts of workers in our city looking for houses. We also do not have the mass exodus of workers when times have taken a turn for the worse. Ottawa doesn't suffer the ups and downs of gold-rush-like town, so our growth is usually modest and steadily increasing.

That being said, the Ottawa job scene has deteriorated somewhat in recent months. Nortel, a former darling of the pageant, continues to cut jobs. In addition, the City of Ottawa is facing a budget crisis and are thinking about cutting jobs. These seem like troubling times for our city, but the news isn't as bad as it looks. Although, housing prices will cool a little bit as a result of these job cuts, this presents a good opportunity for those that continue to work.

Housing prices do not fall instantly. They take time because home-owners want to maximize what they pay for a house. They can always start high and come down later. Therefore, I think you will see the prices coming down in the next few months. It will be a chilly winter for real estate sales, but things should warm up in the spring again. With mortgage rates at near all-time lows, it seems ludicrous to me as to why you wouldn't want to lock in a mortgage at these rates. I think, from an investment point of view, you have to like the current conditions to buy. As the old saying goes, "buy low, sell high".

If you've already bought a house, don't feel bad. You've likely locked in a great mortgage, so over the long-term, you have made a great investment decision. I'm just outlining when the housing prices will reach its bottom. It's pure speculation, but I think it's an interesting concept to discuss.

A lesson in economics... with today's news.

If you believe recent headlines, we are heading for the next depression. Now, I don't disagree that the markets are in a bit of a slump, but there are no real reasons for panicking in Canada except for the paranoia that has been created by various news media. There is no question that the housing market in the United States has plummeted. In Canada, recent job reports have been somewhat encouraging, so I don't see why the media is drawing parallels between the economies.

Granted, the US is our largest trading partner, so their economic troubles do have an impact on the success of the Canadian economy. That being said, our country is running, albeit small, a surplus, compared to the massive deficits created by President Bush. In addition, the US economy required a bailout package for its financing institutions due to their problems with the sub-prime mortgage crisis. In Canada, we have essentially provided our banks with an asset swap to help them out. We've given them now a total of $75 billion in the swap. I've been reading comments on news site and a lot of people are misstaking this for a bailout.

This is not a bailout. The Canadian government is providing cash to the banks to ease their liquidity problems. What does this mean?? Well, the banks have mortgages to individuals that they are expecting to collect over the next number of years. The banks are stretched to the point where they no longer have the cash to continue lending at current rates. The mortgages are still good, but they eat up the banks reserves. Banks can only lend so much money despite their abilities to make billion dollar profits.

I may make things more clear if I used an example. If I lent you (consumer)$1000 at a rate of 5% for one year, you would pay me $1050 in one year. As the lender (bank), I would make $50, but I lose my ability to loan another $1000 to someone else unless I can borrow another $1000. This is where the government can step in. The government can pay me (bank) $1025 for the ownership of the mortgage. The government will earn $25 when the loan matures, and I (bank) will earn $25 plus maybe another $50 from another loan that I could create.

The reason the government wants to do this is because these types of loans are critical for the success of our economy. First, the person that needs the first loan may be able to receive the needed cash to purchase a home. Next, if someone else needed money to start a business, they would not be able to acquire any cash. On a macro-level, a person would only be able to get the financing if they were willing to pay a higher interest rate. A lot of people may not want to get into business if they have to pay too high of an interest rate. The risk would be too great. By providing a mortgage swap, the Canadian government is assuring Canadians that they can borrow at low rates and be able to continue to stimulate the economy.

In my next post, I will discuss my outlook for the Canadian real estate market. I'll make a prediction for Ottawa, and when will the best time will be to get into the market. Obviously, I'm talking strictly from a investment point of view, dollars and cents. When purchasing a home for your own use, dollars and cents matters, but it is only a part of the overall satisfaction with living in your own particular home.

Phase 1 - OREA exam

For anyone looking for a real estate agent in the near future, I am one step closer to being able to officially help you out. I passed the exam I wrote on Saturday. I thought it was pretty easy except that I really don't think that I had taken enough time to study for it. I did the whole course in 3 weeks. It was a crunch to study for as I was painting in the house, going curling 3 nights a week, working overtime at work, going to Tweed for a curling bonspiel, and doing various other things.

Next, Phase 2. I've already signed up, but I don't expect to write that exam until January 17th. This should give me a little more time to study a little better. This will allow me to study a lot during the Christmas holidays and ensure that I will know all of the requireds inside and out.

So, the next set of results that I will be waiting for are my results from writing the UFE. They arrive on the 5th of December at noon. Of all of the exams that I am planning to write in the next little while (or have already written), this is the exam I want to pass the most. It is, by far, the hardest exam I've ever written. I'm not sure that I could go through the process again. It's very stressful for even an even-keeled individual like myself. I'm not sure I am willing to go though it again.

Calling all tradespeople....

I was asked today by a friend about referring a mason. Unfortunately, I do not know any masons. I figure that it's probably a good idea to start to get to know some tradespeople. In fact, if you know someone or you are one and I don't realize it, I'd be happy to post things on my blog with respect to some of the work that you've done or had done to a home.

I know a newly licenced plumber, my cousin Jason. Jason has been working now for a few years in the plumbing business and, this past weekend, we had a party to celebrate his passing of his plumbing exam. Jason is now sub-contracting to his former employer, and will likely accept other jobs that come available if you need a licenced plumber.

Jason was able to help me with an issue at the time of the purchase of my Arlington home. During closing, the seller had tried to slip some information in the agreement about the water and sewer. As my home was built in 1905, this was standard practice back then, but now the standards have changed. Jason was able to advise to me that the water and sewer really do not pose much of an issue, but simply that the standards are simply different for semi-detached homes.

MPAC - My new enemy...

If you've been reading this blog for awhile now, you might remember the time when I bought my Arlington house that I decided to get my house re-assessed for property tax purposes. I was successful in my endeavors as I had my assessment base change from $233,000 to 191,000. This reduction of $42,000 meant that I saved this year on my property tax bill. I probably saved close to $500 this year. I was very happy with my work.

Unfortunately, the Municipal Property Assessment Corporation (MPAC) has decided that all homes are being re-assessed for 2008, as most properties were assessed last in 2005. Since they were doing all properties, I had both my Fringewood and Arlington properies re-assessed. Now, the standard increase has been 3.36% in the City of Ottawa. This translates into that my Fringewood home is now assessed at $214,000, an increase of 3.16% year over year, from 190,000. I have no real issue here. In fact, I can likely find evidence that the Fringewood property is worth more, but I will keep my mouth shut for now.

On the other hand, my Arlington property was a bit of a shocker. Despite having a re-assessment performed only 6 months ago, my property tax base increased from $191,000 to $253,000. $62,000!!! This translates to an 8.12% increase year over year since 2005. This is more than double the rate of the rest of the City of Ottawa. I am planning to appeal this decision. This means probably $3-4K over the next few years in extra property taxes. The increase is supposed to be phased in, but I'm going to do everything in my power to reverse this decision.

I have evidence to support my position. Although it's nice to see the assessed value of my home increase (as it means my home's value has increased), I do not want to be spending a fortune on property taxes. I have started the appeal process, and along with my evidence, I will present everthing in future post (maybe tomorrow even).