Put your money where the return is!

Now is a good time to revisit renovations...where to invest your money, and where to avoid spending. Chances are if you're not buying or selling, you're renovating.

The Globe and Mail published a great article you can check out below.

If you are considering any renovations, give us a call - we'd be happy to help with trade referrals and design advice.

Check out the end of the article for some of our favorite trades and suppliers...

What are some renovations that add value to my home?

A good investment in a renovation should increase the value of your home by at least the amount of money you spent, or close to it. A bad one doesn’t get you much of your money back. Here are some investments that have proven to return their value, or close to it:

· Low-cost improvements that make your home look better: Painting, new wallpaper, and items like new rugs and curtains help to brighten and improve the look of a home, and add value to your house if they are done close to the time of sale.

· New or improved kitchens and bathrooms: Improvements to your kitchen and bathroom seem most likely to increase the value of your home. Keep in mind that these improvements lose value over time.

· Improvements to the living room and the master bedroom: These are also good investments and will usually return most of the money you spent, if not more.

· Investments in more efficient use of energy: Oil, gas, and hydro costs continue to go up. That’s becoming more of a concern when people are looking to buy a home. You can make your home more energy efficient as an investment in its value. Some government programs help reduce the costs of these projects. Also, consider buying appliances that waste less energy.

· Keeping up with repairs. If you do a little at a time, you can avoid doing a lot of expensive repairs at the same time. A reasonable amount to spend yearly is 1% to 2% of the value of your home.

What are some renovations that don’t add much value to my home?

· Swimming pool: Make sure you want a pool before you invest in a pool. The cost of putting in one won’t show up in the price that you get when you sell a home.

· Costly appliances: Most people won’t want to pay an extra $4,000 for your home to pay for a $7,000 refrigerator instead of a $1,200 refrigerator. If you pay thousands of dollars for top-of-the-line appliances, enjoy them. You probably won’t get your money back if you sell them with your home.

· Costly landscaping: The way your home looks from the street can really help interest buyers. It's called 'curb appeal.' But if you spend $30,000 in landscaping, don’t expect to get it all back. Most buyers probably won’t see or appreciate the value.

· Renovating in an area where homes are being torn down: Tear-down activity involves homes being sold, torn down, and replaced by bigger, more expensive homes. If someone is going to buy your home and tear it down, a renovation won’t return any of your money. The buyer will have no interest in the building, just in the land.

Remember: Don’t assume you will get all your money back from a renovation

The key to renovating is to keep the house in good repair and do the renovations you want to enjoy. If you think you might be selling in the near future, focus on renovations that are more likely to get your money back.

Thinking of renovating? Call our favorite trades and suppliers first! Don't forget to tell them Mark Richards sent you:)

General Contracting - Cole Contracting - Greg Cole: 416.471.9019 colecontracting@rogers.com

Kitchens - Paula Murphy - pmurphy@irpinia.com

Plumbing - Sean - Athletic Plumbing: 416.845.2659

Landscaping - Paul & Eleanor - Stonehenge: 416.467.6059 www.stonehengedesignbuild.com

Hardwood Floors (install and refinishing) - Mervin 416.731.4079

H1N1 Info

As the H1N1 vaccine has hit the clinics, everyone has a myriad of questions...Where to get it? Is it safe? The best thing you can do is inform yourself.

I like to keep my clients healthy so to help out I've attached links for some of the best resources on H1N1:

Globe and Mail

City of Toronto Info Centre

CBC News

Remember - wash your hands frequently!

Jenny Shops

As our resident designer, Jenny knows the best places and the best deals for your home.

Check out here recent favorites...

For a bit more selection and variety in styles than a store such as West Elm, I've been a fan of G.H. Johnson Furniture Gallery lately. Like West Elm, they usually have a lot of items in stock and any delivery lead times seem to be shorter than a lot of furniture stores.

Another treat is that this can literally be a one-stop-shop for some rooms.

They have an art gallery attached to the store with an amazing selection, and always have great bedding and accessories, including a mirror gallery.

The timing is great to shop - they have a 50% renovation sale happening right now.

They are located centrally at 950 Dupont Street between Ossington and Dufferin.

Check out their site at www.ghjohnsontrading.com.

Looking for more? Pick up the current edition of Canadian House & Home - they have a great removable shopping guide for your home.

Cheers, Jenny

Boom or Catch Up?

You may have noticed reports all over the news that real estate is back.

Home buyers who didn't take advantage of the downturn are now facing bidding wars and over-asking purchase prices. As they say, by the time you realize the market has hit bottom, it's already over.

As of the end of September, the average price in the GTA is up to $406,877, an increase of 10% compared to the same time last year. Sales activity is up 28%.

Mortgage rates continue to be historically low and inventory is increasing, but is this just a catch up from pent up demand of buyers waiting it out and sellers not wanting to list until they felt things were picking up again? Or is this just a historical seasonal peak in the year?

TREB believes this market is a sign of growth and recovery. Growing consumer confidence and financial stability, low interest rates and positive economic news are driving long term investments. They also say indicators such as growth in all categories of the market show widespread movement upward, as opposed to a trend in one particular sector.

As long as inventory keeps up with demand and interest rates stay low, as they are said to be until mid 2010, I believe we will see a steady pace right through to next summer.

But it is a funny market right now. Although there is heated competition in some price points such as the $500,000-$800,000 range, buyers are not willing to be aggressive on anything that is overpriced.

Some sellers are happy to put their home up for sale over market value just on the chance that they get that perfect bite but are driving away the potential for competitive bids by not pricing their home attractively. Buyers are shopping but are very discriminating and taking a much harder look at values, still looking to get a deal where possible.

It's kind of like a car race after an accident...people are getting back out there and going full throttle but with a cautionary foot ready to hit the brake at any sign of danger.

For more information, check out these great links and recent articles:

Check out varying opinions on the real estate market...

GLOBE AND MAIL - BACK TO BOOM

Click on this interactive map to see what is happening to values in your neighbourhood...

TORONTO HOME VALUE SURVEY

Click here for the full Toronto Real Estate Board September Market Watch...

TREB Market Watch


Cheers,
Mark
416.728.2499
mark@markrichards.ca

Where to buy - and why...

Looking to buy but not sure where? Check out the Real Estate Guide 2010 from Toronto Life.

I highly recommend you pick the guide up...even though you can check out 94 neighbourhood profiles online, the printed magazine has a thorough renovation guide with great sources for everything you need.

TORONTO LIFE REAL ESTATE GUIDE 2010

Mortgages

From the desk of Peter Majthenyi and Andre Semeniuk of My Mortgage Planner...






A Harsh But Short Recession

It appears our recession has come to an end and Canada is leading other nations on a slow climb to prosperity. After shedding more than 400,000 jobs, there will still be significant challenges to get many Canadians back to work in the years to come.

As a result, our Government has committed to keeping interest rates low until at least 2011 in order to maintain our economic momentum. Real estate appears to be one of the first sectors to be rebounding by posting an 18% jump in July 2009 alone, fueled primarily by record low mortgage rates.

Considering the Bank of Canada is in no position to increase interest rates anytime soon, the majority of borrowers are opting to tie their mortgage to the benchmark over night rate of .25%. This means taking a 5 year variable mortgage, which is currently as low as 2.4%.

Even if we factor in gradual rate increases in the future, this interest rate will still out perform the alternatives. Also keep in mind that a variable mortgage allows you to “abort” at any point for free, so you are more nimble to react to a changing interest rate market.

In most cases, we will all pay 5-6% for our mortgages over time regardless if we choose a variable or fixed right now, yet our goal is not to pay it any sooner than we have to!

The mortgage product that will dominate the 2010 landscape will be the “Mortgage & Line of Credit Combo”. This type of mortgage allows borrowers to pay their mortgage off much quicker as well as to engage in tax efficient investing.

The line of credit availability grows with every dollar paid down on the mortgage principal, with the line of credit hopefully leveraged only to invest in appreciating assets. This growing line of credit allows all of one's income to be used to pay down mortgage principal while never leaving one short of cash.

In the past, we'd often have thousands of dollars sitting in our chequing account earning very little interest and not working for us, while with this growing line of credit at 3.25% we will always be prepared for unexpected situations.

In order to secure this type of financing package, the borrower must have good income and credit, as well as at least 20% equity … eventually every homeowner will end up in a mortgage of this nature because there is absolutely no down side, and it is a key tool to create personal net worth much quicker.

Financial literacy includes understanding your “Mortgage Plan”. We welcome you to call us soon for a complimentary assessment of maneuvers you can implement now to ultimately build your personal wealth sooner … the cost of procrastination can be significant.

Here's to a healthy fall market.


Anytime,
Peter & Andre

Home Renovation Tax Credit

You've likely heard of the Home Renovation Tax Credit (HRTC). Here are the details you need to know if you're going to take advantage of this great incentive...

For renovations done between January 28, 2009 and February 1, 2010, you can claim a 15% credit against renovation expenses after the first $1,000. The maximum tax credit is $1350 which represents $9000 worth of renovations.

Renovations must be to any dwelling that you own and use personally, or is used by a spouse or child. Eligible dwellings include a cottage, provided it is for personal use.

Rental properties are not eligible, but you may qualify for the credit if, for example, you renovated the personal use areas on a house that is your principal residence but which contains a rental unit.

For expenditures made for common areas or that benefit the housing unit as a whole (such as re-shingling a roof), you must divide the expense between personal use and income-earning use.
Here are the renovation expenses that qualify:

- renovating a kitchen, bathroom or basement,
- building an addition, deck, shed, or fence,
- new carpet or hardwood floors,
- installing a new furnace, fireplace or water heater,
- re-shingling a roof, a new driveway or resurfacing,
- painting (interior or exterior)
- permanent swimming pools, sodding or some landscaping.

The renovation must be of an enduring nature and integral to the dwelling, and can include the cost of labour and professional services, building materials, fixtures, rentals, and permits.

Furniture, appliances, electronics, or tools, are not eligible for the tax credit. Routine repairs, maintenance and cleaning normally performed on an annual or more frequent basis are also not eligible.

The tax credit is family-based; one tax credit is available per household. If two families share the same home (as co-owners, not renters), then both are eligible for separate tax credits. The tax credit can be applied to the tax return of either spouse.

Most home have received a green envelope on their door to keep all required documentation which includes agreements, invoices, receipts, and cancelled cheques.

You should also check out the ecoENERGY retrofit program if you plan to do any renovations that will save energy.

For more details on the government websites, click below...

HOME RENOVATION TAX CREDIT 2009

ecoENERGY PROGRAM