A story about money

An American investment banker was at the pier of a small coastal Greek village when a small boat with just one fisherman docked. Inside the small boat were several large yellow fin tuna.
The American complimented the Greek on the quality of his fish and asked, “How long does it take to catch them?” The Greek replied: “Only a little while.”
The American then asked why didn’t he stay out longer and catch more fish? The Greek said he had enough to support his family’s immediate needs. The American then asked, “But what do you do with the rest of your time?”
The Greek fisherman said, “I sleep late, fish a little, play with my children, take siesta with my wife, Maria, stroll into the village each evening where I sip wine and play cards with my friends, I have a full and busy life.”
The American scoffed, “I am a Harvard MBA and could help you. You should spend more time fishing and with the proceeds, buy a bigger boat with the proceeds from the bigger boat you could buy several boats, eventually you would have a fleet of fishing boats.
Instead of selling your catch to a middleman you would sell directly to the processor, eventually opening your own cannery. You would control the product, processing and distribution.
You would need to leave this small coastal fishing village and move to Athens, then London and eventually New York where you will run your expanding enterprise.”
The Greek fisherman asked, “But, how long will this all take?” To which the American replied, “15-25 years.”
“But what then?” The American laughed and said that’s the best part. “When the time is right you would announce an IPO and sell your company stock to the public and become very rich, you would make millions.”
“Millions … Then what?” The American said, “Then you would retire. Move to a small coastal fishing village where you would sleep late, fish a little, play with your kids, take siesta with your wife, stroll to the village in the evenings where you could sip wine and play cards with your friends.”

One more exam

I haven't got my results yet for Property Law, but my mortgage financing course is this Saturday. I still need to study a bunch, but hopefully I can review a bunch of stuff tomorrow night. From the readings I have done so far, the material doesn't seem to be too bad. I just hope that the last chapters are a little more advanced than I would have expected.

Feather-rented! Again!

My old house at 75 Arlington recently became vacant. The girls that have been living there have subletted since the end of school. So, they gave me the required 2 months notice at the end of July. They also mentioned that the subletters were going to try to take over the lease, but some of them were currently out of town.

After about two weeks, the subletters let me know that they would not be taking the place anymore. Since I didn't have anything signed with them, I had no recourse. Instead, I had to post on Carleton's housing website.

This time, the calls did not come in as feverishly as when I posted 73 Arlington a few months before. The calls did come in eventually, and I met some nice 4th year and grad school girls that were seriously interested in the house. Not wasting any time, I got them to sign a lease and pay up first and last month rent.

Overall, my three properties have had new tenants this year. As stressful as it is, it has meant that I can charge more for rent than I did last year. I now collect an extra $350 a month in rent. It goes a long way into making these properties more affordable. I am even seriously considered doing a major bathroom renovation.

Exam update

I am in the middle of writing three exams which are required for me to continue being a real estate agent. This morning, I saw that I passed my commercial real estate course. I was quite pleased with my results. The week leading up to the exam resulted in a couple of nights at bluesfest, so it goes without saying that my study time was limited. I did really well. I got an 86. A 75 is required to pass.

When I wrote the exam, I wrote beside a girl that has failed multiple times. I don't get it. The exams are pretty easy and it is expensive to have to repeat write. She seemed really outgoing, so she has that going for her as an agent, but it concerns me the number of attempts she is taking with these exams. It certainly is not an accounting level of certification.

Feathersold!

Congrats to Kyle and Suzanne on their recent home purchase! I know many people already knew through facebook, but I usually do not announce "feathersold" until the deal becomes final. There can always be surprises in the home inspection, so I do not like to jinx it. I also have been trying to complete courses I need to maintain my licence.

Anyways, Kyle and Suzanne bought a beautiful single family home just on the outskirts of Richmond. They are now pretty central to their friends, family and work. They will be able to save gas money as they won't need to travel too far to see their friends and family. They will be able to enjoy the country lifestyle, but still have great access to shopping and major routes. Although they bought a very cute home, the real value is in the land they bought. Like they say, location! Location! Location!

Again, I want to thank Kyle and Suzanne for using my services and wish them the best of luck in their new home.

Feather-rented!

The Stittsville house is now rented. I had it listed on the real estate market for sale for about a week and a bit to see what the market was like in Fringewood.

On the Sunday of the open house, I only had one person come by the property to take a look. It was a neighbour. Given the Sunday was the 19th, I was going to try to play it safe by deciding to list the house for rent as well. I figured if I didn't like the house for rent then, I would not be renting the house until August. I didn't want an empty house, so I was luckily able to rent the house almost immediately.

As a result, the house is no longer for sale. It was a quick decision that I had made as I really do not have a good reason to leave the place I am currently living in. I recently signed up to go curling at the Ottawa Curling Club and it will be nice to be within walking distance this winter. I know I shouldn't be writing about the "W" word yet, but I still plan on taking advantage of the summer weather a lot.

Housing crisis???

In the United States, house prices ran up so high and fast that people flocked to the market to make a quick buck. They would mortgage their houses for two to three times its value in order to find other properties with skyrocketing values. This meant that people held onto mortgages that were multiple times their income. When the bubble burst, the owners were stuck with homes previously valued at $800K were now worth less than half. Owners would sell for less just to save their shirts. They didn't have the income to support the mortgages.

One of the dangers in Canada is the record low interest rates. When rates begin to go up, the affordability goes down for Canadians. In some cases, people can barely afford the mortgages they currently own. One of the issues is that the bank lends on the fact that it is the primary debt holder. They know they will get paid before any other debts in the case of bankruptcy. The banks know that they get paid before you pay for your groceries.

This has an impact because costs like groceries are not accounted for when determining whether or not you should qualify for a mortgage. You, as a consumer, should try to know this. If the bank qualifies you for a certain amount, it may be difficult to manage your mortgage if you take out the full value. It is best to consult your financial advisor about what is affordable for you.

With interest rates at a point where the only direction in the future is up, there is a great concern that, if rates rise too quickly, Canadians will not be able to afford the houses they currently own. This will cause an increase in the supply of houses in the market and thus prices will start coming down. This is not necessarily a certainty, but it is certainly a risk the Bank of Canada has to think about when they set their lending rates.

I saw an article today with references to household debt as a percentage of income. The article can be found at the link below.

http://www.ottawasun.com/2011/06/20/canadian-households-more-indebted-than-ever

This type of information indicates that there needs to be some action on the part of the government or the Bank of Canada to help protect the Canadian Real Estate market. The government introduced new lending rules in April that will assist, and the Bank of Canada has been holding rates steady over the last year. It remains to be seen if further action needs to be taken.

Two big things!!!

First, the more boring of the two things. My website is now compatible with mobile devices. If you visit it using your phone, you can hopefully read it with ease!

Second, my house is now listed. The MLS number is 797214. As of right now, the house is not available publicly. The house can only be seen by another real estate agent or a person who receives emails from their agents. The house should be available publicly in the next day or so.

House almost ready

The painting is done.  Landscaping is done.  The carpets go in tomorrow.  I expect to list the Stittsville property either tomorrow night or sometime on Wednesday.  It should be interesting.  I know of two other properties in the area and they've been on the market for a few weeks.  It might be a tough sell.  We'll see!!!

Courses

I've signed up for three real estate courses this summer. Commercial real estate, real estate law and mortgage financing are the courses. I need them to maintain my license.

Two courses are online and the third requires a couple of days off vacation from work. I would have preferred to use my vacation differently, but I'll live with it.

Sent from my iPhone

Update

I'm working on my Stittsville house. We have done the landscaping, started the painting, and pulled up the carpet.

I am painting the whole house from top to bottom. I'm also putting new carpets throughout the rooms that had carpets previously.

We are also finishing a room in the basement to produce a extra bedroom or office.

The deck got painted today because of the nice weather, but hopefully the inside will have some rooms done in the next day or two. That way, I can send a carpet guy in.

More updates to come.

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Guess what?

In my last post, I talked about how I was going to rent again. Well, plans have changed again. The individual who was supposed to show up with cash today messaged me last night to bail. To be honest, I am not surprised. When it comes to business, I try not to count my chickens before the eggs hatch.

I don't want to sound too much like Kevin O'Leary, a dragon on CBCs Dragon's Den, but it seems that, in business, only money speaks to me. I only trust that someone will move into a home if they put up the money. I've come across too many people that like to make big promises, yet they often fail to deliver. I've begun to ignore the promises and have only listened to currency.

Thankfully, I have not been burned by anyone yet. Today, I was still able to move ahead with plans to spruce up the house for sale. The tenants still possess the house until the end of the month, but we've found a painter and went shopping for some new light fixtures. I'm hoping to have the clean up done by mid-June. Wish me luck!

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Nothing going to plan

Just when I thought I was going to stop trying to rent my Stittsville house, one of the people I was going to rent the house to has come back.

If you've been following me, you might be wondering why I keep changing my mind. I change it because I really do not know where I would like to move to next. I can't decide between downtown or close to work.

Each of my choices have pros and cons. My usual five year outlook doesn't give me any additional clarity. I figure I might have a better idea after the summer.

The renter will sign a one year lease so I can try renting for a year and try selling a year from now. With the market appreciation and low interest rates, I would be wise to remain fully invested.

I meet the guy on Sunday to sign. So, there's still lots of time to change plans again.

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New washer

The washer broke down in one of my downtown units. It was in the unit I lived in. I believe it used to make a lot of noise when I lived there.

I suppose I had two options. First, I could have hired a repair guy. Now, I can only assume that he would have costed me $100 or more for just showing up. I would have to pay extra for any parts. I didn't think this was a great option. The washer was also likely older than I was. It looked like I should get a new one.

My other option may have been to buy a new used washer. I decided to go brand new. First, I get a warranty with a new washer. Next, the tenants are more appreciative of newer objects. Finally, I was able to get a pretty cheap model. The cost was about $350, so not that much more expensive than what a repair might have costed. With the warranty, it was a no brainer.

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Selling vs renting

I've been busy lately with my properties. I've had showings at my place in Stittsville as I am trying to rent it out. At least, I was trying to rent it.

It will have been available June 1.

Instead, I've decided to test the market. I think I can use the proceeds from the sale in a better way in the future, so I think its important to maximize my returns.

I've got to do some touchups before listing, since it had been rented for the last four and a half years by the same tenant. I need some paint, some carpets, and a couple of other things.

The sale of the house will allow me to reduce my total debts. This will make me more appealing to banks and will allow me to have more flexibility in my own living arrangements.

Stay tuned.

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Some pictures of some recent work

Thanks to mom and dad for the photos. Also thanks to my brother and dad for the help.

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Easier to post

So, when I hurt my back I decided to go and get that new phone I wanted. I ended up getting a new iPhone 4 from apple and I love it!

I am hoping with the extra convenience I will have more posts on my website. I figure whenever I have some downtime out of the house, I can simply write by using my phone.

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Condo Release Party

Brad Lamb is a well known Toronto real estate developer who has started to make a name for himself in Ottawa. He is probably best known for the Mondrian building in Ottawa.

http://lambdevcorp.com/mondrian.php

On Thursday, May 5, he is having a release party for a project dubbed Gotham. This is an excellent opportunity for investors to get involved early in the project. As more units get sold, the price usually goes up. At a recent claridge release party, claridge had increased their prices by $30,000 after one day. I'm interested to see what the opening prices will be for this property at Gloucester and Lyon.

http://lambdevcorp.com/gotham.php

This property is being constructed with a green standard. A unique feature for all patios will be a gas hookup. This means BBQs!!! This is a rare feature. The only way to get to this event is by invite, so let me know if you want to go!!!

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Some paint

This might not be the best two photos for comparison, but I think the new paint looks nice.

It certainly looks a little nicer when both sets of doors match.

The windows needed to be touched up too. You have to remember there is about 3 years difference between the two photos.

The next project is a new shed in the back yard.

Dragon's Den

Not too long ago, a co-worker of mine got a new job. I decided to get the group organized to get a farewell gift. I decided to go to Chapters to pick up a gift certificate. In addition, I ended up buying a couple of things for myself. I had noticed that I haven't picked up a book in awhile.

I picked up a book by Robert Herjavec called "Driven". If you don't know who he is, he is probably most famously known as a dragon on CBC's "Dragon's Den". He is also featured on another entrepreneurial-based show on ABC called "Shark Tank".

As I have done in the past, I thought I would review another book. This was another business book, and I thought it would be an interesting read. Mr. Herjavec has had a very interesting career to date and I was interested in his story. Unfortunately, this book was fit for the bathroom.

I say that because the chapters are short and disjointed. You can sit down for five minutes, do a little reading, and be on your way again. You do not have to read through the entire book in one sitting because you are certainly not led by any form of suspense. This is typical of a business book, but I had hoped for more.

I think there are thousands of books on that topic, so I thought that there were no flashes of brilliance or insights within this book. I respect what was said in the books, but since there was nothing noteworthy to read, I label this book as a money-grab. I would have preferred to hear more stories about his rags to riches, but such entertainment was minimal.

I'm hoping the next book will provide some more insights.