Retail Condos

This might be an exciting opportunity for all you entrepreneurial types out there with the trend of Retail Condos.  Basically as a lot of the old shopping malls or large stores close down with there 1970's concept of mammoth square footage, owners of these relics of yesteryear are dividing them into Retail Condos (from 60-550 sq ft.) and for sale to prospective business owners, but just like residential condos location is key to allow your store to thrive. So look for anchor box stores/retailers with familiar names in your complex that drives customers to your area then you can "feed" from the foot traffic that's generated. Also again like your own home, a condominium corporation is set up with you the owner paying into a fund to cover maintenance for the reinvented space and common areas, so without saying if the age of the mall is growing "grey hair" have an expert check out the big ticket items as the roof, foundation, AC/ Heating systems etc. Now on the upside to own one of these units, retail condo owners are allowed to lease their space to another retailer or sell the unit (if in time) the location pays off. To finish up, like any investment......do your homework but in my humble opinion sounds like a win/win!

Pay Down your Mortgage Quicker with these KeyTips.

Congratulations you are getting a mortgage ( which for most will  be your biggest purchase of your life) so why not save some money/interest that is paid back to the lender and not be intimidated either by all the mortgage choices or interest rate information that will be sent your way and understand what your options are, read on.  Now first we are all wired differently when it comes to financial stress and to use the analogy of a car; how many of you would fret if your on a half of tank of gas with the next fill-up station miles away, or like myself because you know the mileage and your confident you have enough fuel your not worried. Much is the same in picking the right mortgage term ( length of the mortgage contract),  personally the longest term  i will do is a 4 year fixed which is always lower in interest than the most popular 5 year fixed (which most lenders push the hardest) and will save you big money over your typically 20 year contract. Now my favorite is the 1 year fixed which comes with rock bottom interest rates ( if your willing to roll the dice that the rates stay down) but if they are heading north, bonus!!!....you can lock in a secure rate a few months before your renewal date, also double bonus; with both of these options have the discipline and take what is saved in your monthly payment and apply it directly to the mortgage per month again saving you huge amounts. So to finish up on my picks; needless to say you have to pay attention to the business news and also have the plan in place to pay down your mortgage with the savings that you incur from the smaller amount owing to the lender due to the lower interests rates charge.  Now to the "other" side lol;  the terms i avoid are the 5 year variable, 3, 7 and 10 year fixed but maybe because of your debt levels are high  you might not qualify for my favorites so do not have those options for now, or again your tolerance
for the unknown rate hikes is such so you like the comfort of the long term security ( if that's the case, take the 10year fixed as it is usually just a few tenths of a % point from the 7 year and sleep at nights) but  all of this comes at a price with higher interests rates and of course more money out of your pocket.  In closing, you know yourself best and your comfort zone so pick what options are better for you and enjoy your new abode stress free.

Ways to Save More and Reduce Debt

We as Canadians are riding a wave of self destruction if we don't get our debt under control. As a society we have "grown" comfortable with the fact of owing back and forget that there is a cost of borrowing.....its call interest. Today we are at historical low rates but like any cycle it has to increase so now is the time to reel in those IOU'S. Here is a list how to save more and get out of debt faster  A) Set up an automatic transfer of money into a high interest savings account every time you get paid...out of sight, out of mind as they say.  B) Ask your lender if you can increase your mortgage payments by 10% and save huge amounts of interest owing to them. C) Increase your regular contributions to your RRSP ( Registered Retirement Savings Plan) or TFSA  (Tax-Free Savings Account) by the same amount your take home pay goes up each year.  D) Pay off any Credit Cards or Lines of Credit within 20 months and save on its high interest charges. E) How is it possible you might ask with the above list?  Track your monthly household expenses and cut down your biggest non-essential payouts......remember our previous blog on wants and needs people and lets start controlling our own destiny.

Tips for Home Buyers

So we are going down the real estate highway which by the way is the biggest purchase most of you will ever make in your lives, so here are a few tips to make it has painless as possible. A) Get a pre-approved mortgage before hiring a realtor, that way your not wasting yours and the agents time looking for a home above your means B) Get your finances in order, first examine your credit report ( scores range from 220-800 of course the higher the better and easier to qualify for a mortgage) and be prepared for the down payment on the mortgage to your lender of choice (5-10%) and also closing costs which is an additional 5% + of the amount paid for your abode ( legal fees, deed transfer tax, fuel adjustment, moving costs, power hookup, tax adjustment, fire/homeowners insurance, maybe water quality/septic field testing and so on....lets not forget about appliances and curtains etc   C)  Do your homework on what you want in a home;
features from how many bedrooms/bathrooms, size of yard, age of home, etc. D) Don't become "Mortgage Poor" and take on too much as you don't want to be living on the edge each month and have nothing left to enjoy life. E) Know your move in date, also when your lease ends or if you can sublet till your home is ready.  F) Get a professional house inspection and if possible a warranty from the builder/seller to cover any defects for the first few years. G) Be realistic as you may never find your perfect home. Good Luck!

Self Employed and to get a Mortgage

So you want to be a home owner, but working for yourself its tough to convince lenders your business is a good as you claim it is (lol). They will use the average income of the last 2yrs to determine the amount you can borrow and equally important the interest rate which the loan will be at.  What to do you ask?...first is to give up some of your deductions, perhaps forward them to a following year like your depreciation of equipment, travel expenses, medical etc. This will bring your income up and get that debt to service ratio in the right direction but on the down side your tax bill will be higher, but hey something got to give hahaha. Ask others in your type of business who they use for a mortgage broker, a person that would know your industry and its quirks. A savvy agent can get around roadblocks that some banks put up or maybe even use private lenders. Finally, having more than the minimum down payment will make any lender take notice plus your eliminate
the high mortgage insurance fees.               Happy House Hunting!!

To Start Your Own Business

So you want to venture down that road of self employment?  Well I've been on that highway my entire life and for me there is nothing better than controlling your own destiny!  Here are a few tips that maybe you can use to save some time and also get by those growing pains. A) Start with a good business plan, make sure its feasible as most entrepreneurs have the mindset and great ideas but maybe not have a good business sense.... remember passion doesn't pay the bills!  B) Incorporate your business, it might seem like an added expense but well worth it as it will protect your personal assets,  lower your tax rate, allow you to invest within your own Ltd., pay yourself etc. C)  Have a good accountant as this is paramount in the business world.  They are experts in the tax codes/issues and finances, certainly someone to have on "your" team to save you money.  D) Payroll;  Set it up with your local bank to do it for you with all its deductions to the various government agencies plus do direct deposit for your employees. The cost is minimal compared to the time saved.  E) Be prepared to put in at least 5yrs of long days to get the business up and running, also you'll find that your staff will be your biggest headache (everything from poor work habits, not showing up for their shift, theft etc)  My solution?.....make some of your employees owners, as then they has a vested interest in the business to make it grow. So what you do is through your accountant get a value of your company, so for example we shall say XYZ Ltd. is worth $100,000 and your selling to 3 of your staff 10% each so they individually need to come up with $10,000 to be part owner of XYZ Ltd.  The best way is to take it out of their pay over 5yrs, so believe me they will watch the shop for you lol  (plus you the owner don't give up control because you still have over 51% stake, and don't have to be there all the time so you can concentrate on other things)   The payoff for them is they become owners without any money down and in 5years the value has gone up for all partners.....so a win/win!!

To be a Landlord

So you want to be a landlord, there are advantages .... writing off the interest on the mortgage, insurance payments, repairs etc while your tenant pays down the cost of the house as (hopefully lol) the value goes up. This is what I've learned having a few home rentals on the go and you can decide if its for you or not.  A) Location (like your principle residence) is key, as you want the price of your rental to go up so make sure the area is desirable, also if you can afford it look for a duplex or triplex so if one renter leaves you still have income coming in.  B) Borrow as much as possible for the building,  follow the Golden Rule  (get wealthy by using someone else's money) so you get the tax benefit of writing off the mortgage interest (more borrowed, more interest) to offset the rent as that's considered an income plus this way your keeping

your own money to pay down your own mortgage/bills and putting the extra into other investments. Also most banks will ask for15-20% down payment because they deem it a business, so what i did was lived in

the house for awhile that way there was a

lower minimum amount required (as its considered principle residence), then moved out and started being a landlord. C) Try to be handy with repairs or have friends who are as paying a tradesmen for all your issues will make you not want to be in the business. Or I always looked for a tenant who was of that talent and i reduced the rent for them so a win/win as they took pride in their work as they got paid for it and you had no worries with all the little things that would arise.....and trust me, everything does gets beat up a lot quicker than your own home. On that thought, at first i had to keep telling myself not to be in "love" with the property, as it was an investment and don't be disappointed if your folks didn't keep it just so. For example i went with commercial carpet or laminate hardwood floors, stuff that is durable  but it wouldn't be what i would use in my own residence   D)  Look for smaller yards as its less to take care off and a deterrent for those big backyard bashes   E) Be

diligent in collecting the rent and trust me you ll hear every story you could ever imagine why they are not able to make the deadline   F) On that note, if you find good tenants do everything possible to keep them by maybe reducing the rent, upgrade the washer/dryer, buy them a vacuum cleaner etc, as all landlords have horror stories so well worth doing the little things to keep your sanity  G) Finally my experience with management companies that collect rent/screen applicants hasn't been good, they charge 50% first months rent  then usually 10% for each month after. Some issues i had is they would never go out to check the property as they had the tenant mailed in post dates and that's what you want as a landlord is those 'eyes' to protect your investment by going to your rental for a physical check Or when checking out references they would call the names on the applications, which turned out most times it was relatives who gave glowing reviews only to find out to my chagrin  not so good, plus the process cost you hundreds of dollars! (half first months rent)  So there is my list of the dos and dont's and have known some folks that have done very well in the landlord game.....i had my taste of it, personally i rather have a piece of paper (stock/mutual fund) that doesn't call me on a weekend night saying the toilet is plugged or Aunt Mabel needs a kidney transplant (true story!!) and needs the rent money to be bedside lol