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.