Wednesday, March 30, 2011

Student Housing

The City of Orillia & Office of the Fire Marshal has just released three brochures for the Spring of 2011 concerning student housing.  Get in the know with these links on...

1.  Student Housing, City of Orillia

2.  Fire Marshal Safe Student Accommodation 101 - 10 Tips

3.  Fire Marshal Parent's Guide to Safe Student Accommodation

Saturday, March 26, 2011

Wet Basement!

It's that time of year when the sump pump works overtime. 

There are some things you can do to prevent basement water problems or in the case of an older basement even minimize the water problems.

It's amazing how many homes I visit where I see the eavestroughing has come undone during the winter and the spring run off is flowing right down the side of the house instead of away from the basement wall. 

A quick walk around your home can prevent some issues, but Jon Eakes as a professional has some tips that might help you at this time of year.

Read Jon's article here.

Sunday, March 20, 2011

Bad Advice

It's amazing how many people tell me that a mom or dad (or both) are in a nice retirement home or will be going into a retirement home, but the family is concerned that their parent(s) won't be able to stay in the desired location because the money is going to run out.

When it comes time to sell the family home to provide the cash for retirement home living, just what should a person do?  I'm no financial expert, but I came across an interesting article from Garth Turner that provides some advice on this topic. 

Garth Turner's article.... 

At 78 she was forgetting her kids’ names, using a walker, and almost microwaved the cat. So the family decided it was time to sell mom’s house and stick her in a nice retirement home. The trouble with that: mom had no income save the public pension plan pittance, and the new digs cost three grand a month.
But once the house deal closed, there was $400,000 to play with. And that’s when armed conflict broke out.

Mother wanted to stick it in GICs because that’s what TNL@TB had told her. And she’d always listened to her in the past. But four hundred large invested in a five-year GIC paying 2.3% would give just $760 a month. Actually, it would return nothing at all until maturity, meaning the kids would have to upfront things. Nix that.

One of the sons pushed for mutual funds (he sells them), but everybody else figured out pretty fast his trailer fee might be bigger each year than mom’s cash flow. Screw that.

Then a daughter hooked up with an insurance guy who proposed a sweet deal. Give me the $400,000, he said, and I will guarantee you (did you hear that word, ‘guarantee’?) monthly payments of $3,500 every four weeks for the next ten years. Best of all, he continued, there will be no tax payable on this income stream, which means the old lady gets taken care of, with enough cash left to have Jack Daniels visit regularly.

And that’s what they did. They took the annuity. Nobody could imagine, after all, that she’d live more than the ten years.

This is a small but fine example of how people get skanked. The insurance company, of course, just took the money and then agreed to hand it back in 120 installments. Those $3,500 monthly payments add up to $420,000 over a decade – which is a 1% return on $400,000 (the exact amount is $418,140). Meanwhile, you can be sure they gave out the four hundred as a loan or mortgage at four times the rate.

Why would anyone possibly agree to hand their money over so it can be handed back? Because it seems safe. It’s predictable. It’s guaranteed. And most people are fools.

This, of course, is also why we buy guaranteed investment certificates and put our TFSA money into ‘high-yield’ savings accounts paying less than inflation. Let’s face it. Most Canadians haven’t a clue about investing, which is why they’re road kill for mutual fund salesguys and ravenous bank employees.

A few days ago I gave you a small primer on bonds. I showed you how they not only pay regular interest and guarantee your principal, but are capable of coughing up a nice capital gain – like during this past week.
More on that soon. You should also know about preferred shares. I’ve written about these things here often in the past, but it’s time for a review. That is, if you’re interested in making 300% more than with a GIC, at low levels of risk, while paying 80% less tax.

Preferred shares are more like bonds than stocks. Companies issue them to raise capital (same as bonds) and then pay the owners a regular stream of income so long as they own the preferreds. With bonds, the stream is called interest. All the interest you earn – 100% of it – is taxable (as with a GIC). But preferred shares pay you in the form of dividends, which are taxed far less. Point one.

Companies also issue common stocks, which we call ‘equities’, trading on places like Bay Street and Wall Street. Corporations like to keep shareholders happy by giving them a share of the profits. But these dividends can fluctuate significantly depending on the business cycle and the profitability of the company. Not so with preferred shares. Their dividends must be paid before any money goes to common shareholders. Better still, the dividend does not fluctuate. It’s fixed. Point two.

The preferred shares I like the most are the ones issued by the bedrocks of the financial system – Canadian banks and insurers (regulated companies like utilities are also cool). So it’s ironic that you can go and give a major bank your life savings and the GIC they place it in will yield 2%, and be illiquid until the day it matures. Or you can buy preferred shares in the same bank, and collect a dividend of 5.35%, which is paid to you regularly, while the shares themselves are 100% liquid – they can be sold in minutes. Point three.

By the way, if you’re in the middle federal tax bracket and earn $5,000, your tax bill is $1,100 if the income comes as interest, but just $217.50 if as dividends from preferreds. This means a dividend paying you 5.35% would be roughly equivalent to a GIC yielding 6.5%. And have you seen any of those lately? That are cashable?

What are the downsides? If interest rates rise then the price of preferreds (as with bonds) declines. But, of course, the income stream continues – so most people don’t get too fussed about that, especially when rate increases are likely to be gentle. And if we have another financial meltdown, then preferred values will also decline along with everything else – but the income will carry on. We had a chance to witness this in 2008-9, and bank preferreds bounced back in price quickly. By the way, not a single bank missed a single dividend payment. Investors who counted on income, not capital gains, never noticed a thing.

So, if mom’s $400,000 had been put into the preferreds of a few banks, she’d pay for her digs ($36,000 a year) and still have $200,000 left a decade later.

This is why children are so overrated.

( The above article is from  Garth Turner at )

Garth Turner

Read what others had to say about this in the comment section of Garth Turner's greaterfool website

Thursday, March 10, 2011

Spring Tips From Home Inspector

Ed Novosky passed along the following information to me directed to first time home owners.

It may not feel like it some days but spring is right around the corner.  Many of your recent clients may be first time homeowners and wondering, "What should I be looking for in my spring maintenance routine?" 

Here are a few tips that any homeowner can follow to help keep their propoerty in tip top shape.  Please feel free to share these tips with your clients.

Check for loose or leaky gutters. Improper drainage can lead to water in the basement or crawl space. Make sure downspouts drain away from the foundation and are clear and free of debris.

Low areas in the yard or next to the foundation should be filled with compacted soil. Spring rains can cause yard flooding, which can lead to foundation flooding and damage. Also, when water pools in these low areas in summer, it creates a breeding ground for insects.

Use a screwdriver to probe the wood trim around windows, doors, railings and decks. Make repairs now before the spring rains do more damage to the exposed wood.

From the ground, examine roof shingles to see if any were lost or damaged during winter. If your home has an older roof covering, you may want to start a budget for replacement. The summer sun can really damage roof shingles.

Shingles that are cracked, buckled or loose or are missing granules need to be replaced. Flashing around plumbing vents, skylights and chimneys need to be checked and repaired by a qualified roofer.

Examine the exterior of the chimney for signs of damage. Have the flue cleaned and inspected by a certified chimney sweep.

Inspect concrete slabs for signs of cracks or movement. All exterior slabs except pool decks should drain away from the home's foundation. Fill cracks with a concrete crack filler or silicone caulk. When weather permits, power-wash and then seal the concrete.

Check wood decks and porches for loose or deteriorated wood.  Replace worn out boards as needed.

Check outside hose faucets for freeze damage. Turn the water on and place your thumb or finger over the opening. If you can stop the flow of water, it is likely the pipe inside the home is damaged and will need to be replaced.

While you're at it, check the garden hose for dry rot.

Have a qualified heating and cooling contractor clean and service the outside unit of the air conditioning system. Clean coils operate more efficiently, and an annual service call will keep the system working at peak performance levels. Change interior filters on a regular basis.

Check your gas- and battery-powered lawn equipment to make sure it is ready for summer use. Clean equipment and sharpened cutting blades will make yardwork easier.

Courtesy of,
Ed Novosky
Certified Home Inspector
AE Home Inspection Services

Wednesday, March 9, 2011

8 Common Mistakes first-time homebuyers make and how to avoid them.

Julie Emery with RBC Orillia passed along a great article to me that I though I would share for first-time homebuyers.  Thanks Julie.

8 common mistakes most first-time homebuyers make and how to avoid them

Becoming a homebuyer and applying for a mortgage can seem overwhelming, especially if it’s your first time. With the help of one of our expert and dedicated mobile mortgage specialists, it can be easy. They’ll meet with you any time to guide you through the process and help you find the best mortgage for your specific needs.
To help you feel more confident and prepared for becoming a first-time homeowner, we’ve put together a list of eight of the most common pitfalls, which our mobile mortgage specialists can help you avoid.
1. Thinking you won’t qualify for a mortgage Dreaming of owning your own home but not sure if you qualify for a mortgage? Even if your credit history is less than perfect, we can help you find a solution.

2. Not knowing all the down payment choices You’ll be glad to know that there are different options available depending on how much of a down payment you can afford:
Conventional mortgage or RBC Homeline Plan® (20% down payment)

Low down payment mortgage (minimum 5% down)

Low down payment mortgages require mortgage default insurance. The premium can either be paid up front or added to the amount you borrow.

Under the federal government’s Home Buyer’s Plan, first-time homebuyers are eligible to use up to $25,000 in RRSP savings per person ($50,000 for couples) for a down payment on a home. The withdrawal is not taxable as long as you repay it within a 15-year period. To qualify, the RRSP funds you plan to use must have been in your RRSP for at least 90 days.

3. Focusing too much on the interest rate, rather than the overall solutionAll too often, first-time homebuyers give more thought to interest rates than the mortgage solution itself. While rates are a valid consideration, the different types of mortgages, their payment structures, terms and flexibility will have a much greater bearing on the overall cost of homeownership.

Fixed rate mortgage
Fixed rate mortgages offer the security of locking in your interest rate for the term of your mortgage, and your payment amount stays the same, providing ease of budgeting.
The main advantage is that the interest rate stays the same during the term of the mortgage and that you know exactly how much of your payment is applied to principal and interest.

Variable rate mortgage
With a variable rate mortgage, your payments remain the same, regardless of fluctuating interest rates. When rates go down, more of your payment goes to pay the principal and less to interest, enabling you to pay off your mortgage sooner. When rates go up, the reverse happens: less of your payment goes toward the principal and more to interest, extending the amortization period.
Many experts believe variable rate mortgages offer the greatest potentialfor long-term savings on interest costs.

Combined fixed and variable rate mortgage
With the RBC Homeline Plan, you can enjoy the advantages of both variable and fixed rates by diversifying your mortgage. That means the variable portion allows you to take advantage of potential long-term savings, while the fixed rate portion protects you if rates rise.
Your mobile mortgage specialist can help you decide which mortgage solution works for you, based not only on your budget but also on your future plans.

4. Being unrealistic about how much you can afford to pay for your home You may be under- or over-estimating how much you can afford to pay for your home. Our online mortgage calculators make it easy for you — all you need to do is log in to and click on the "How much home can I afford?" link. Enter your income and expense information, and the calculator will tell you the maximum mortgage payment amount you can afford each month.

Or you can click on "Mortgage Calculators" to quickly figure out monthly payments for different mortgage amounts and rates. You may find out you can comfortably afford more than you originally thought.
For a more personal touch, contact one of our mobile mortgage specialists. They can quickly help you
determine how much you can afford and answer any questions you might have.

5. Not considering a mortgage pre-approvalKnowing the amount you will be approved for gives you the confidence to begin looking at homes within your price range. Real estate agents will serve you better because they know you’re a serious buyer. You can easily make an offer to purchase as soon as you find the right home.
At RBC®, your pre-approved mortgage rate will be guaranteed for 90 days1. If rates go up during the period, you’re protected. If they go down, you will automatically get the lowest rate for the term selected.

6. Not choosing your own mortgage payments scheduleCustomize your amortization period depending on how much you can afford. Paying off your mortgage sooner saves you interest costs, while a longer amortization period (up to 35 years) reduces your regular payment amount and gives you more room to manage your cash flow.

Because extended amortization means increased interest costs and paying down a mortgage more slowly, this option isn’t for everyone. A 25-year amortization period should be the starting point for your consideration as stretching the amortization to 35 years can increase your total interest costs by 50% over the life of the mortgage.

If you decide a longer amortization is appropriate, consider a strategy to reduce amortization over the life of the mortgage. RBC’s money-saving options, such as Double-Up®, accelerated payment, 10% anniversary payment and annual 10% increase in payment amount, can get you back on track to a 25-year — or even shorter — amortization period.

Regardless of the mortgage option you choose, buying and owning a home is likely to be one of the biggest financial investments of your life. Creditor insurance can help protect that investment from life’s uncertainties and help give you the confidence that comes with knowing your investment is well protected.

HomeProtector® life and disability insurance can pay your outstanding mortgage balance up to $500,000 in the event of your death, or can make your regular mortgage payment — up to $3,000 per month for up to 24 months — if you become disabled.

See for details of coverage.

7. Forgetting about closing costsBy this time, you’ve selected a house, picked your mortgage options and are getting ready to finalize everything and make an offer. This means getting down to certain details and their associated costs. It helps to know what these are up front so you can minimize any last minute complications. When calculating closing costs, it’s fairly safe to assume you’ll need an additional 1.5% of the purchase price to cover such things as:

Lawyer or notary fees:
Make sure you work with an experienced real estate lawyer/notary so that all legal aspects of your house purchase are properly completed.
Land transfer tax: Most provinces levy a one-time tax, which is based on a percentage of the purchase price.

Property tax/utility bill adjustments:
The purchase price of a resale home is always payable subject to the usual adjustments at closing. This means that any amount that the seller has already prepaid will be adjusted so you pay the excess amount back to the seller, and vice versa. The most common adjustments occur on property taxes and utility bills that have been paid ahead of time.

Property insurance:
Your home is probably the biggest investment you will ever make in your life. Property insurance is all about protecting the things you value: your home, your personal belongings and even your financial future. When choosing an insurance company, make sure they offer a range of choices allowing you to personalize your insurance to suit your needs.

Moving costs:
Budget for a professional mover, decorating costs and fees for setting up your cable, telephone and other utilities.

Ongoing costs:
Don’t forget to budget for the cost of maintaining a home, such as heating, electricity, water, repairs and taxes. A good suggestion is to budget at least 1% of the home’s value for yearly maintenance expenses.     

Professional home inspection:
Always make an offer conditional upon a home inspection. As long as your offer is conditional upon the home inspection, you can have the purchase price reduced to offset the cost of needed repairs or cancel the agreement. You should also inspect the home before moving in to make sure its condition has not changed. A newly built home is usually covered by a builder warranty program.
Owning your own home is a milestone as well as an exciting experience! How often do you get to live in and enjoy your investments? Your mortgage specialist is always available to guide you through the process.

8. Not knowing your credit rating A credit rating is a record of your credit history and current financial situation, which typically translates into a credit rating score. Lenders can use your credit rating to verify your repayment history.
A good credit rating can improve your ability to get loans and mortgages.
If your credit rating needs improvement to help you qualify for a mortgage, you can improve your credit rating by always making at least the minimum payments on your credit cards, loans or utility bills on time.
Checking your history is easy! Simply ask for a copy of your credit rating at either or