Home inpection

I have done another home inspection. This time, it is the neighboring property. Details to follow.

Another property???

Well, there are those that are close to me that might know which home I am moving into to try to buy. At this point, we are still in the negotiation stage, but I'd like to reach an agreement in the next couple of weeks. It's going to be a private deal to save the seller some commissions. I'm hoping that this will translate into some savings for me.

I'll keep people posted. I'm sorry for the vague nature of the post, but I really wanted to share this information. I suppose that a little post is better than nothing right?

Budgeting

When you are going to go and buy your home, there are a few extra costs that you might not consider. For example, I've mentioned lawyer fees and home inspections in previous posts. All of these costs can add up quickly. They can eat into your downpayment, and although you may be approved for a larger amount, you likely want to keep your mortgage to a minimum.

I would say that you should plan to spend between 4-5 thousand in cash, outside of your downpayment. Why is this important? Well, if you are planning to take advantage of the Home Buyer's plan, you will need cash to pay for your deposit (usually about $2000), plus things like home inspections and lawyer fees. These items add up quickly and you may not be able to get the cash out of your RRSP's quickly enough to close a deal. The last thing you would want is a house of your dreams slipping through your fingers because you have your money "tied-up".

This is also important when it comes to mortgage insurance. Canada's mortgage system requires that you purchase insurance on a mortgage where you do not have a minimum of 25% deposit. 25% deposit is a very large sum and if you are near that amount, you'll want to ensure that you will have enough cash to pay for any extra costs that might incur. You don't want to buy the insurance because it gets expensive in the long-run.

Now, I'm being conservative by estimating $4-5K. You will likely not need this much cash for everything, but it will be good that you have an extra buffer of cash. Not only can things come up during the buying process, there is a good likelihood that things will occur after you purchase a house. I'm not saying that these items will be house related, but you need to ensure that you can pay for that car repair, plane ticket, or anything else that comes at you unexpectedly.

Buying a home will likely be your largest commitment in your life. With marriage's getting shorter, a 25-year mortgage is a hefty burden and it becomes a larger burden than most marriages, financially and in terms of length.

Tenant issues

Yesterday, I had my first issue with the house at 75 Arlington. The tenants had called me last night while I was at work to tell me that the furnace was not working. When I bought the house, the home inspector had indicated that the furnace was quite old and that there would be a good chance that it would need to be replaced in the near future. I didn't think it would be so soon.

I called Direct Energy to come and check out the furnace. Unfortunately, they wanted me to pay the service man the day of the service, so I had to attend. They told me over the phone that it was going to be anywhere between 8-12 in the morning. Being an accountant, I was not thrilled with this appointment. This meant that I would have to leave work at some point or be late for work. It means that I will have to work a couple of nights pretty late to make up the time.

Thankfully, the service man called me pretty early in the morning, so that I was only minimally late for work. I called to say that I was going to be late, and I bet they understood, but I would have certainly preferred not to be late.

When everything is running smoothly, being a landlord is a great way to make money. There are very few headaches when things are running smoothly. On the other hand, it just seems like the bad things always occur at the worst times. When I had water issues with my Fringewood property, my parents were out of town, so I could not rely on them to help me out. It was my property anyways, and I would have done the work myself, like I had, but it would have been nice if someone like my dad was able to check on things during the daytime while I was at work. It just helps to relieve the stress a bit.