Jul
30
How To Invest And Profit In A Falling Real Estate Market
Filed Under Real Estate General | Leave a Comment
I came across a great article today that talked about investing in a falling market. Now, there is a clarification here… Alberta is decreasing in prices currently, but is not a falling market. The big thing with real estate investing is looking long term and focusing on cash flow. The number one rule in real estate investing is Cash Is King.. but more on that another day!
There is no doubt that it is more difficult to profit from a falling real estate market in the short term. However, some of the most successful real estate investors in the world made their money by buying when everyone else said to sell. While the overall market is declining, there are still countless opportunities for great returns if you look in the right places and time your purchase well. This article will give you enough simple tips to determine whether it’s time to start buying or keep looking. Regardless of market or region, you’ll learn how to love the opportunity that a slow market creates.
Jul
24
RRSPs Now Protected Against Bankruptcy
Filed Under Finances | Leave a Comment
Effective July 7, RRSPs, RRIFs and Deferred Profit Sharing Plans can no longer be seized by creditors in case of bankruptcy.
This follows recent legislative amendments to the federal Bankruptcy and Insolvency Act (BIA) and the Companies’ Creditors Arrangement Act (CCAA). These changes are facilitating the coming into force of the Wage Earner Protection Program Act (WEPPA). As a result, “all types of registered investments are now subject to protection against the claims of creditors due to bankruptcy proceedings,” says Terri Williams, director of educational services for Dundee Wealth, “Only a few provinces already have laws in place to provide protection in their jurisdictions.”
Williams says financial advisors used to employ a strategy of putting RRSPs of small business clients into the life insurance industry’s segregated funds because seg funds are creditor proof. Advisors have been calling Dundee to verify that if creditor proofing was the only reason for using seg funds, they are now free to switch to mutual funds or lower cost alternatives.
Previously, an older person who inadvertently got into financial trouble may have concluded their best option was to declare bankruptcy. But now a Small Business person besieged by creditors won’t be in danger of forfeiting their RRSPs, Williams says. “Now she or he can rest assured their RRSP won’t be claimed by creditors.”
In 2003, the Canadian Federation of Independent Business conducted a survey that found 91% of small business owners used RRSPs as a retirement savings vehicle versus only 28% that used registered pension plans (which are already safe from creditors).
More information about the amendments to the Act is available on the Office of the Superintendent of Bankruptcy Canada website here.
Jul
22
Their home prices may be plunging but U.S. consumers are still managing to raise cash through home equity lines of credit.
Ian Shepherdson, chief U.S. economist at High Frequency Economics ,notes that home equity extraction via revolving lines of credit rose 11.6% in the four weeks to July over the same period the year before. This is well short of the 44% rate at its peak in late 2004 but its fastest rate since December 2005.
Mr. Shepherdson suspects this is distress borrowing among households under extraordinary financial stress. While diminished, home equity remains enormous at about US$8.7-trillion at the end of the second quarter and a viable source of cash. Many homeowners sign on to a line when they take out a mortgage.
“For some people in secure employment who bought homes a few years ago with fixed rate mortgages but are now feeling the squeeze from soaring food and energy prices, the temptation to draw on a pre-existing line to ease the pressure must be enormous,” he said in a note.
For most, home equity lines of credit are tax-deductible at marginal rates and carry much lower interest rates than credit cards and other forms of consumer lending.
Home equity extraction released a US$3.6-trillion wall of cash between 2002 and 2006, reaching a peak of 7% of GDP in the first quarter 2006. The bulk of this is transaction driven. People raise cash when the downsize — or raise the size of their mortgage when the trade up. This form of equity extraction has tumbled with house prices to just 1.4% of GDP.
But the numbers give a clue (along with rebate checks) why U.S. consumers can manage to keep spending, albeit more modestly, in the face of adversity.
Jul
22
Banff is throwing an outdoor concert to celebrate the end of a year and a half of construction on the Alberta resort town’s main street.
Canadian acts Theory of a Deadman, k-os, Joel Plaskett Emergency and Ron Sexsmith will headline an all-day concert on Aug. 21 on Banff Avenue, the town announced Tuesday.
Two blocks of Banff Avenue, the town’s main drag, had been blocked with barricades and road equipment since 2007, while the town undertook a $22-million project to replace underground infrastructure, widen sidewalks, improve lighting and add crosswalks and loading zones.
“We want to celebrate the refreshing of Canada’s town in a big way, so we’re bringing in four of Canada’s top bands from coast to coast, and hosting a free party for anyone who wants to come out and celebrate with us,” said Banff Mayor John Stutz.
He’s expecting 30,000 people to take in the concert and street party, dubbed Banff Live, which will run from 1 to 9 p.m. on Aug. 21.
Jul
21
As you may or may not have heard, that the government backed Mortgages will have to be minimum 5% down and a maximum of 35 years amortization. Many purchasers are trying to scramble to get into the market with zero down or 40 year amortization before the Oct. 15, 2008 cut off date and because Albertans have taken up longer-term and zero-down mortgages with greater zeal than the rest of the country — especially in Calgary, where prices have skyrocketed in recent years — the greatest impact of the new policy, taking effect Oct. 15, will likely be felt here.
However, the changes are being made “to ensure Canada’s housing market remains strong and to reduce the risk of a U.S.-style housing bubble developing in Canada,” the government says. Personally, I don’t think we were headed towards a housing bubble. Yes, prices have increased, but the market is currently correcting itself, and there is still much growth to come, and hopefully it is at a sustainable level.
As quoted in the Calgary Herald, Todd Fralic, regional sales director for Mortgage Intelligence, estimates 35- to 40-year mortgages make up about 20 per cent of his Calgary business. Fralic said getting rid of 40-year mortgages is going to be as big of an issue as getting rid of zero-down mortgages.
“I think it hurts the new homebuyer who’s trying to get in our market quicker,” Fralic said. “Other people disagree and say, ‘You know what, there’s nothing wrong with putting five per cent down on a house. If you can’t save your five per cent, then you shouldn’t be in the market.’ ”
We will have to see what happens to prices and the inventory levels over the next couple months, but I do think that the market will get a bit tighter before Oct. 15, 2008 and then settle down afterwards into Christmas months…
Jul
19
i-Finance: Using Your RRSPs To Invest
Filed Under Education, Finances | Leave a Comment
Have you been looking to use your RRSP’s or LIRA’s to invest with but don’t want to pull them out? This is an amazing product that we have come across that could work for you!
i-Finance is a great product that allows you to pull out the amount of your RRSP’s or LIRA’s into a Line Of Credit that you in turn can use to invest, or spend how you would like to.
If this is something that you are interested in, please drop me a line at RealEstateBlogger@me.com, and I can forward the company that deals inRealEstateBlogger@me.com, and I can forward the company that deals in i-finance in Calgary and area.
Jul
18
Does Canada Have the Dirtiest Oil?
Filed Under Oil Sands | Leave a Comment
Would love to hear your comments on if Canada’s Oil is the dirtiest? What do you think?
Jul
17
The city of Calgary is hoping more recycling bins and a phone number for reporting full Trash bins will keep its downtown cleaner.
Calgary launched a pilot project Thursday to place stickers on about 100 garbage bins along 7th Avenue, from Third St. East to 10th street West, encouraging people to phone its 3-1-1 number when the container is full.
The city is also adding 40 pilot recycling bins in the area and changing street cleaner schedules so that more are working during the day.
Source: Calgary Herald
Jul
17
Calgary Home Prices Drop, but Market Still Strong
Filed Under Calgary News Articles, Home Prices | 2 Comments
A survey by a national real estate firm shows average house prices in Calgary in the second quarter of this year declined in three categories - detached bungalow, standard two-storey and standard condominium - compared with a year ago, while national averages all increased.
According to the House Price Survey and Market Survey Forecast report released today by Royal LePage Real Estate Services, the average price drops in the Calgary market were 4.7 per cent for a detached bungalow (to $438,122), 6.0 per cent for a standard two-storey home (to $437,744) and 5.0 per cent for a standard condominium (to $285,033).
The Edmonton market saw bigger price plunges by 14.5 per cent for a detached bungalow ($320,000), 12.4 per cent for a standard two-storey home ($348,571) and 14.2 per cent for a standard Condominium ($226,000).
Jul
17
Finance Minister Ain’t Gonna Worry
Filed Under Canadian Economy, Mortgages | 2 Comments
Federal Finance Minister Jim Flaherty shrugged off housing worries in Canada Wednesday, saying there is no bubble and that the subprime-mortgage woes crippling financial institutions in the United States are not threatening banks north of the border.
“There is no bubble in the Canadian housing sector,” he told reporters after speaking to roughly 400 people at a Calgary Chamber of Commerce event.
“That’s not been our concern. Our concern has been a tendency for longer amortization periods, like 40 years, and for purchasers putting very little money down. We’ve seen nothing in Canada like the U.S. subprime situation.”
He goes on to say that with the new tightening of the rules with down payments on mortgages and amortization periods, he is not fretting about the banks and the woes that are happening in the US. He ends the article by saying… that he acknowledged that the economy is going through “turbulent times,” it still remains healthy.
“Our economy is strong,” he told the audience.
The Chamberlain Group
