Ways To Increase Value of Property

Forced Appreciation in Canadian Real Estate

Even though houses increase in value over time, there are Ways To Increase Value Of Property to force and speed up the process. This can be done by a method called forced appreciation. Forced appreciation is the process by which you buy a house and do small but productive work to the house and/or property to increase either selling price or the monthly renting fees.

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Flipping Houses

Why Canadian Professional Real Estate Investors make a killing where others loose the shirt? The simple answer is proper education and coaching which works like GPS. The name of the game is to find deep discounted Real Estate which may or may not require any renovations or upgrading. Yes! There is huge niche market for this in Canada which you can learn more at World Wealth Builders.

Flipping Houses

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Moving Expenses -Let Canadian Taxman pay for it

Let Canadian Taxman or your Employer pay your Moving Costs

moving expenses

Being a Canadian Professional Real Estate Investor, you need to educate themselves about Canadian taxes. We pay taxes from the day we are born till our death. Majority of Canadian Professional Real Estate Investors do not pay attention to the taxes. Canadian taxes can be two way street. We also need to learn how to claim all our eligible expenses when we move?moving expensesContinue reading

Genworth Financial Foreclosures Canada

Genworth’s losses on claims were $62-million in the fourth quarter, $11-million higher than the same period a year earlier. Genworth’s stress tests suggest it could withstand either a 40-per-cent drop in home prices or a sharp spike in unemployment before its insurance business became unprofitable. But if a 25-per-cent drop in house prices were coupled with a prolonged increase in unemployment into double-digit levels, it would affect profitability. Canada’s largest private sector mortgage insurer, has set up its own internal group of real estate agents to deal with foreclosure sales.genworth financial foreclosures

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Canadian Foreclosure Process

Canadian Foreclosure Process

Canadian Foreclosure Process, a professional Canadian Real Estate investor should have a well understanding regarding to Foreclosure process in Canada.

Not only property owner, but also Lender consider the word “foreclosure” as their nightmares. Regardless which cycle the market is going through, it happens all the time, although the numbers do tend to go up during the real estate bust cycle.

Foreclosure is a legal action that a money-lender can take if the person who borrowed money using a mortgage stops paying back that mortgage. Foreclosure allows the lender to take or sell that person’s house by first getting a Court’s permission to do so.

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Tax Saving Tips for Real Estate Investors in Canada

Tax Saving Tips for Real Estate are as important as Real Estate investments.There are two things certain in life, death and taxes. Majority of Canadians do not understand the complexity of taxation.” A major portion of your earning goes toward your taxes which can be as big as 46-80% of your total earnings. Knowing a little about taxes can save you huge amount of money” says Navtaj Chandhoke, founder of Professional Real Estate Investors Group (PREIG) Canada.

Here is brief description of top ten tax saving tips. These are simple guidelines and are not rendered as professional advice. Your Chartered accountant can assist you professionally.

In its T4036 Guide to Rental Income, the Canada Revenue Agency provides a number of questions you can ask yourself to help determine whether an expense is current or capital in nature. For example, you replace wooden steps with concrete steps, it’s a capital expense. But if you simply repair the wooden steps, the expense is currently deductible.

Dont exaggerate your home office expenses. This is a red flag for the CRA. There are always exceptions, but a good rule of thumb is a maximum of 25 per cent as the business share of heat, hydro, property taxes and so on.

Keep a careful log of car expenses. This is another red flag for CRA.

If you run into trouble or make a mistake, call the CRA. Most times they will be very helpful, especially if you call before the crunch.

Whatever you do, dont ignore communications from the CRA, respond promptly and make notes of your conversation right on the letter for future reference.

Unless you are incorporated you are required to complete a Statement of Business and Professional Activities (T2125) at the same time as you file your personal taxes.

Dont wait until the last minute. Its impossible to get yourself properly organized under eleventh-hour time pressure and its difficult to make good decisions to minimize your taxes.

Make an estimate of your expected tax bill. If your revenue is going to be high, you might consider making that machinery or computer purchase before years end. Youll defray some of the expense through capital cost depreciation.

You should set aside 30 to 40 per cent of your gross income to cover income tax and CPP. Even if you are the only employee of your business, you are responsible for paying the employee and the employer CPP contributions.

Keep proper records differentiating business from personal If you cant prove it, the CRA will likely assume the expense is personal. Use the categories provided by CRA on the T2125.

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How to Understand Mortgage Interest Rates in Canada

understand mortgage interest ratesInterest rates are going to rise again. Whether you are a sophisticated Professional Real Estate Investor or a Mortgage Virgin, it is good to have basic knowledge about mortgage financing. The options pertaining to lenders, terms, rates, terminology and new products can be overwhelming and will baffle you. Most Canadians like to do lot of research before signing the dotted line, therefore it is vital that you, the Professional, be well informed.

understand mortgage interest rates

Real Estate prices across the country have skyrocketed in recent years, boosted by rock-bottom interest rates that have made it cheaper than ever for Canadians to finance home purchases. Changes to mortgage application rules and the introduction of harmonized sales tax in Ontario and British Columbia are likely to push people into the housing market before the expected slowdown.
From here forth, you the Mortgage Virgin, will be introduced to new tactics.

Higher Credit Score Requirements

Want a mortgage? You’d better have top-notch credit to get the best deal, or in some cases, to get approved at all. Although mortgages can be arranged in most cases for credit scores down to 620, they often come with a higher rate and/or fees. The sum of your Down Payment can also determine how you qualify for a mortgage. If you are putting down more than 20% the qualifying criteria is different. However, if the sum of your down payment is between 5% to 19.9%, the qualifying criterion is completely different. Be aware of these two options.

Time to obtain Mortgage commitment from the lender

Realtors occasionally push buyers to get preapproved and write “clean” offers without conditions. Unfortunately, preapprovals don’t guarantee a “final” approval. Preapprovals are often just glorified rate holds. Proper financing conditions give you time to arrange an iron-clad approval before you commit to buy.

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How long and at what rate?

The term you elect often effects the total interest you pay more than the rate itself. Consult a professional to pick the right term from the start. Have him/her run a rate simulation to show which term would save you the most money over five years. Feel free to shop Credit unions and any other lenders. Please do not allow anyone to pull your credit report. If you’re credit report is pulled more than 3 times a year, your credit rating goes down.

Payments, Privileges & Penalties

Always be prepared for rainy days as well other circumstance life may throw at you. It’s imperative to be prepared for the good, the bad and the ugly. If you are getting paid weekly, make weekly mortgage payments, if biweekly do the same. Would the lender offer you the privilege to increase the payments in case you attained increased cash flow or a raise. Be aware of the penalty cost in case you need to sell your home prior to mortgage maturity and portability clause.

Negotiate

If you have excellent credit, use your local financial institution as a starting point for locating rates. Ask your mortgage planner to find a lender who will beat the best rate in your province. Use a mortgage professional who compares all lenders; not just a handful. Do your own homework as well. Mortgage brokers only deal with the Lenders who pay them if you are qualified Buyer.

Understand Amortization period

Don’t consider a long-term amortization (i.e. 30-35 years) unless you are confident you’ll have spare funds to make prepayments. A 35-year amortization will lower your monthly payments to 16 per cent on a 4% interest rate of $250,000 mortgage. However, the total interest you’ll pay increases 32 per cent versus a 25-year amortization.

Use RRSPs for a down payment as well as a Tax Refund

If you qualify as a first-time home buyer, you and your spouse can each use up to $25,000 from your RRSP as a down payment. CRA will not deem that money taxable income as long as you annually repay 1/15th of the amount withdrawn. Do not forget the big check coming to you as Tax refund from Canada revenue Agency. Use the refund to pay down your debts or mortgage.

Only pay for What you need

Paying extra for an open mortgage, a “capped” variable rate, cash back, large prepayment options, or a 10-year term is often unnecessary. Have your mortgage professional compare the estimated interest cost of alternatives. Check with local credit unions for better terms.
Consider a hybrid Mortgage

Hybrid mortgages are part fixed and part variable. You determine how much of your mortgage goes in each part. Since no one knows how high rates will climb, hybrids nicely diversify your interest-rate exposure. Do your homework and decide based on your comfort level, not the mortgage broker or the Bank.

Mortgage Insurance:

The number one question is who is the beneficiary? Shop, compare and save when purchasing your new home, take the time to shop around for life insurance. Compare the cost of a term life insurance policy to a mortgage insurance policy. Chances are you’ll find a term life insurance policy will have lower yearly premiums and offer more coverage and flexibility than a mortgage insurance policy

Rule of thumb:

The price of a home should not exceed 15 times the annual rental income for this or a similar house. If you are paying more, there is a good chance you are overpaying.

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understand mortgage interest rates

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 P.S. Take Action now to attend the eye-opening seminar and walk away with confidence, knowledge, and specific “action ideas” that can help you achieve your dreams and leave the rat race behind.

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RCMP commends Navtaj’s article on Grow up Houses

Navtaj Chandhoke is a Canadian-based real estate investor, speaker, author and educator. He is the founder of the Professional Real Estate Investors Group (PREIG) Canada and World Wealth Builders leading real estate investor’s education, support, network and mentoring program. He has been proving real estate education since 1993.

On April 27th, Navtaj Chandhoke received an email from RCMP’s Communication Strategist of Serious and Organized Crime, Marc-Andre Massie. This email stated that they commend his recent article in reference to the RCMP’s strategy to combat illegal marijuana grow operations and the related organized crime groups. The Professional Real Estate Investors Group (PREIG) Canada is supporting the RCMP initiative and is engaged with promoting the Marijuana Grow op houses Initiative (MGI).

In this article, Navtaj Chandhoke stressed that every Canadian Real Estate Investor should always do their due diligence and if required, check the RCMP website to verify if the property has ever been a Grow op houses. Grow op houses can be health hazards causing problems such as mold. Due to the nature of this crime, it has the potential of devaluating the property prices as well as the value of all the properties in the neighbourhood which in return will affect any investment strategies.

Every province has different laws, in many cases it is not part of the law to give full or even partial disclosure to the new home buyer or the real estate investor.

The majority of Canadian Real Estate investors prefer to invest in safer communities where they can create good rental pools for people who prefer to rent or lease.

The RCMP is launching the website to let Canadian’s know which properties were grow ops, which can raise a red flag. The RMCP is also seeking approval from Navtaj Chandhoke to reference his articles into their monthly MGI, which gets sent to their entire force. They have also requested to continuously receive more insights from Navtaj about upcoming events, information and support that would benefit the RCMP.

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Acquiring Tax Sale properties in Canada

Secrets of Super Wealthy Professional Real Estate Investors part 1 of 10

Many provinces in Canada levy property tax on Real Estate based upon the current use and value of the land and this is the major source of revenue for most municipal governments in Canada. While property tax levels vary between municipalities in a province there is usually common property assessment or valuation criteria laid out in provincial legislation. The municipality has the right to collect property taxes owing even if they have to sell the property to recuperate the property taxes owing. These properties are never listed on MLS or Real Estate Brokers. This is another secret of super wealthy Professional Canadian Real Estate Investors and or Apprentices to acquiring Tax Sale properties in Canada.

Acquiring Tax Sale properties in Canada

The secret of super wealthy Canadian Professional Real Estate Investors and or Apprentices have used this secret to build huge wealth. The city or municipalities are not required to sell these properties at market value, instead they sell them for the amount of taxes owing. This way the Professional Real Estate Investors can buy a property for 10 cents a dollar. The key is to learn the act, law and the process to find and finance them and than make a great fortune.

Acquiring Tax Sale properties in Canada

What is a Canadian Property Tax Sale

Simply put, tax sales are public auctions where properties are sold to the highest bidder.  Throughout the year, cities, towns, villages, townships and municipalities, in each province, compile a list of properties against which taxes have been outstanding for at least two consecutive years.  After this two year period, the municipal treasurer prepares a tax arrears certificate and registers it against the property in question.

This certificate gives an accurate description of the property and indicates that the land will be sold by public sale if all taxes are not paid to the municipality within one year of the registration of the certificate.

In spite of the municipality’s efforts to collect these taxes, they often go unpaid and the properties are put up for auction, allowing the public and the super wealthy Canadian Professional Real Estate Investors and or Apprentices the opportunity to purchase these properties and this is how you get real bargains.  Property can be bought for as low as 10 cents on a dollar.

Professional Canadian Real Estate Investors and or Apprentices can buy property “free and clear” at a tax defaulted deed auction. These taxing agencies sell property to the highest bidder in an effort to recover the original taxes and costs due.

 Why the Canadian Property Owners don’t pay their Property taxes?

There are many reasons why properties are sold for non-payment of taxes. Some of the most common ones are financial difficulties, law suits, ignorance, death of an owner (with no apparent will or heir), owner living abroad and not realizing his/her obligations, owner moved and cannot be traced, disputes of ownership with no party resorting to the courts for settlement, etc….

How to become a Professional Canadian Real Estate Investor and/or Apprentice

Proper education and training makes all the difference!  By becoming an Apprentice of World Wealth Builders and a member of the Professional Canadian Real Estate Investors and or Apprentices website, you will have access to: 

    1. Current Listings of Tax Sale Properties being sold for delinquent taxes
    1. Sheriff sales (property seized by local authorities)
  1. Canadian Grants

The Property Tax Sale advertisements are gathered directly from many different sources including the websites of the city and the provincial courts. 

What kind of properties get SOLD In Canadian Tax sales

They can include vacant lands (such as bush lots and timberland), improved lands (such as farms, cottages and houses), commercial or industrial properties, and occasionally islands. They vary from small lots to large parcels, with hundreds of acres. 

How do the Professional Canadian Real Estate Investors and/or Apprentices BUY these properties at basement bargain prices

First you have to learn the proper law, act and its implementation including the exemptions. Proper education, training and knowledge in order to obtain where, when and how to do it is mandatory unless otherwise you want to buy a lemon….

There are two ways in which tax authorities sell properties: either by public auction or public tender, with sealed/closed bids.

Public Auction for Canadian Tax Sale Properties

This format is similar to other auction formats.  An auctioneer accepts bids from several bidders and then recognizes the highest bidder as the winner.  The place, date, and time of the auction will be clearly defined by the municipality and can be found in the auction advertisement on our website.

If you are the highest bidder, you will be required to pay the amount that was bid and any applicable land transfer tax to the auctioneer by money order, bank draft or certified check.

Public Tender for Canadian Tax Sale Properties

If you wish to submit a tender, you can ordinarily obtain a tender form the municipal office, which will be identified in the sale advertisement on our website. Your submitted tender should be accompanied by a deposit, usually 20 percent (but specified by the sale advertisement) of the tender amount, in the form of a money order, bank draft or certified check.

Your tender form, along with the deposit, should be enclosed in a sealed envelope, which is labeled as “tax sale for” and a short description or municipal address of the property to indicate which property the tender is for. Then, enclose that envelope in a second envelope, addressed to the treasurer of the municipality, as indicated in the sale advertisement and on our website.

The above article provides general commentary of an educational nature. It does not constitute advice for any specific person or any specific set of circumstances. Because circumstances vary, readers should consult professional advisers in order to obtain advice that is applicable to their specific circumstances.

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