How much do you think you'll get back on your Reno

Remember these are just guidelines!


Ah, the sweet sounds of summer: hammering, sawing, digging, demolition. Well, they’re not sweet exactly, but certainly familiar to anyone who lives in one of Canada’s larger cities. With real estate prices in a state of flux, it seems everyone is eager to spruce up what they’ve got and hopefully be rewarded with an increase in property value. However, as we know, not all renovations are created equal. Just because you’re sinking the money into your home doesn’t mean you’ll see a return on your investment. And just about everyone has an opinion on what you should and shouldn’t be tearing out.

I came across a handy-dandy online tool offered by the Appraisal Institute of Canada, which can help you determine how much of a return you can expect to get out of your home renovation. (The AIC is a self-regulating professional association and the largest property valuation organization in Canada, with 4,800 members in Canada and around the world.) 


Choose a reno, plug in your expected cost, and it will tell you how much of your investment you can expect to get back. For example, if you spend $25,000 on a kitchen reno you are likely to get 75 to 100 per cent of that investment back when you sell, or $18,800 to $25,000.

Clearly, these are general guidelines, not hard and fast rules, and how much you spend will affect how much you get back. If you blow $70,000 on a fabulous bathroom job in a house that’s only worth double that, you’re unlikely to ever see a dime of that money again. In addition, choosing a renovation should be about more than just return on investment – it is your home, after all, and any work you do should also be for your enjoyment. But if you’re mulling over one job versus another and you’re looking to sell soon, it might be prudent to go for the basement reno over the swimming pool (see below).

Some of the big winners are obvious (bathroom and kitchen renovations appear to give the biggest bang for your buck), but there were others that were more surprising to me (only 25 to 50 per cent return on landscaping? Say it ain’t so).

Here’s a look at the return on investment you can expect from 25 of the most popular home renovations, according to the Appraisal Institute of Canada:

Bathroom and kitchen renovations are the real winners, providing a return on investment of about 75 to100 per cent, followed closely by exterior or interior painting at 50 to 100 per cent.

Other safe bets include basement renovation, garage construction, window/door replacement, rec room additions and fireplace installation, which return about 50 to 75 per cent, as do exterior siding and upgrades to flooring or furnace/heating systems.

You can expect a slightly lower return on investment (25 to 75 per cent) with concrete paving and roof shingle replacement, as well as installing central air conditioning or building a deck.

The lowest return on investment comes from landscaping, asphalt paving, building a fence or interlocking brick walkways, or even installing a home theatre room, which all return about 25 to 50 per cent. The home renovations that are least likely to increase property value are skylights, whirlpool tubs and swimming pools, which return between 0 and 25 per cent.

REPLACING LIGHT SWITCHES

Replace light switches with caution

Q: When I flip the light switches in my house, sometimes I hear a crackling, popping noise. Is this dangerous? Is new wiring required or is it something else?

A: The switches could be defective or worn out or the wires at the switch connections could be loose, causing arcing that is making the noises. There is probably nothing wrong with your basic wiring. Switches that make arcing noises can overheat, a definite fire hazard.

The safest course is to replace any switch that is making unusual noises such as hissing, crackling and popping. Switches are not expensive (avoid very cheap ones, since good ones cost only a few dollars each). Many switch replacements are made by do-it-yourselfers, although the wiring of some, such as three-way switches that operate a light from a couple of locations, can be a bit complicated.

The first step is to turn off the current at the entrance panel. Test the electrical wires with a circuit tester just in case the wires are carrying current. Remove the cover plate and the screws that hold the switch to the junction box in the wall.

Grasp the sides of the switch and gently pull it out of the box. Study the existing wiring before doing anything else — the location of these wires is a good guide to wiring a new switch. Simple, single-pole switches might have only three wires — two insulated wires that carry current and a ground wire, which is sometimes not insulated. Note the positions of the wires and mark them with masking- tape labels if necessary.

Loosen the screws that hold the wires in place. If the ends of the wires are damaged or nicked, cut off the damaged piece and expose about three-quarters of an inch of new wire. Some new switches have brass screws to attach the wiring — large screws for hot wires and a small screw for the ground wire. Wires are attached under screws by bending the ends into hook shapes and tightening the screws clockwise. Many new switches have small holes into which straight wire tips can be inserted to make the connections — a time-saving feature.

The Hamilton Spec

7 key questions for your new Realtor

Written by  Tahani Aburaneh

There are at least seven key questions every investor needs to ask their

prospective real estate agent before making the decision to hire.

Today’s markets are filled with potential landmines and dead-end deals," she tells CREW. "For you, the investor, this means hiring the right agent is more important than ever.  Unfortunately, not all real estate professionals are created equal."

Following this list of seven questions will help small and large property investors seperate the real estate wheat from the chaff.

1. How do you determine if a property is a good investment?  

This is your million dollar question… so when you ask it, sit back and listen carefully to the agent’s answer.  Your agent should have a proven process to evaluate potential investments.

Do they discuss cash flow, cap rate and return on investment?  Do they know how to properly calculate these figures? Your agent should also have a rubric to filter out bad investments.

My clients all get access to an investment calculator that crunches numbers for them.  If the investment makes money, we dig deeper.  If not, we move on.  Make sure your agent understands the investment language and the process.

2. Are you an investor yourself?
As an investor, you need an agent that speaks your language.  You need an agent that not only talks the talk, but walks the walk.  You need an agent that “gets it.” 

What better way to ensure your agent “gets it” than if they invest themselves?  As a fellow investor, your agent knows first-hand which strategies will work for your particular type of investment, and which won’t.

They view deals through a different lens as they’ve been in your shoes themselves.  You wouldn’t want advice on the stock market from a broker who had no money invested themselves … real estate is no different.

3. How much of your business is based on working with real estate investors?  
As the old saying goes, Jack of all trades, master of none; and never does this axiom prove truer than in real estate.  Most agents in this business focus almost exclusively on residential real estate, working on investment requirements only when one happens to fall into their lap.  You should avoid this kind of representation like the plague. 

You need an agent that specializes specifically in investment properties.  When you’re looking at investments, it’s not about the size of the kitchen or the paint in the bedroom; it’s about the bottom line, plain and simple.  There’s no room for emotion in investing.  You want an agent who understands this.  After all, you wouldn’t ask a divorce attorney to handle a patent case, you’d want a specialist.  It’s the same in real estate.

4. What kind of  real estate investment  do you specialize in? 
Many agents now-a-days will sell absolutely anything and everything to make a buck.  This is a huge disservice to you, the investor.  Selling ABC retail centres is a different world altogether than selling multi-family investments, or residential housing.  In fact, it’s a different universe.  Not only do the hot-button negotiation topics vary considerably between property types, but so do the players and the trends. 

A great agent will understand the power of specializing.  For example, while vacancy rates for residential investments may be low in one market, the same market may exhibit high vacancy rates for retail centres.  In order to stay up-to-date on these trends, an agent has to specialize.  Make sure your broker is a specialist in your particular property type.

5. How well do you know my market?
Real estate is a highly localized industry.  National or even regional market fundamentals may not reflect the realities of your particular market.  You want a broker who knows your local market inside and out. 

6. Are you familiar with strategies such as seller financing or LTO?  
Your real estate agent should be more than an intermediary between you and a multiple listing service.  A good real estate agent will find you opportunities you never even thought to look for.  They’ll help you look at opportunities in a different light, they are creative and bring power to you and your business.  They’ll be an expert and adviser.  If your agent can’t discuss strategies like vendor take-backs (VTB), lease-to-own options (LTO) or seller financing, you’re missing out on valuable opportunities that might have otherwise made you a lot of cash.  If your agent can’t discuss these strategies, you should find an agent that can.

7. Do you have a power team of professionals that you can refer to me?
A real estate deal requires more than just an investor and their agent; it requires the experience and expertise of a diverse group of professionals including lawyers, accountants, mortgage brokers and appraisers.  I call this my “power team.” 

Your agent should be able to refer you to their power team, who, just like the Realtor, specialize in these investment transactions – this way you know you’re covered from the start of your deal to the finish.

REPAIRING SQUEAKY FLOORS

Special tools needed to fix carpeted floor

Q: How can I repair squeaking carpeted floors that have no access from below — the ceilings underneath are covered with drywall. The noise is coming from the plywood subfloor under the carpet, which needs to be fastened more securely. It is also difficult to find the joists under the carpet. Any ideas on fixing without removing the carpet?

A: A special screw can be used in this situation. These screws are driven through the carpet, using a power drill and a small tool that stops the screw after it has reached the proper depth.

Another small tool is then used to break off the head of the screw so that it is hidden. The screws must be driven into floor joists, so locating the joists is essential.

There are a couple of ways to find the hidden joists. If you plan to do a lot of floors, you might want to invest in an electronic stud-joist finder. A low-tech method that often works is to thump on the floor with a hammer until you get a solid sound. This indicates the presence of a joist.

Note the spot and drill down with a small drill bit — a one-sixteenth-inch bit works and will not damage the carpet.

If the drill goes into solid wood after passing through the carpet and subfloor, you have verified the presence of a joist. After that, you need only measure 16 inches from the first joist location to find another joist, and so on. If you don’t know the direction of the joists, you will need to drill a few more tiny holes to verify that. It can take a lot of screws to fix a very squeaky floor.

Some contractors stretch strings across the floor at each joist location to make the screw installation faster. Spacing the screws depends on how badly the floor squeaks; a screw every nine to 12 inches along the joist might be needed.

McClatchy-Tribune News Service

Private for Sale

According to a U.S. National Association of Realtors survey, in hindsight 70 per cent of people who sell their home themselves say they would never do it again and most sellers net far less than they would have had a Realtor been selling their home.

The complexities of not using a Realtor can be a huge selling point. Todorovic says, “Ask them if they have the time. This is a large factor and should not be underestimated. Can they take time off from work and obligations to show the property? Can they market their property effectively and efficiently when it relates to cost and maximum exposure? Do they understand the complex terms in contracts? Can they handle legal pitfalls that can arise when a messy contract is written, which could result in a legal nightmare and involve huge expenses to rectify? Do they know how to pick the market price? Are they aware of the process that is required in a real estate transaction? Are they comfortable with negotiating contracts on a face-to-face basis with potential buyers? If the answer to all of these questions is yes, then best of luck to them. Otherwise, call the best Realtor in town and get them to do what they do best.”

Gary Bazuik Gary Bazuik, a sales rep with Royal LePage Coast Capital Realty in Victoria, says he avoids discussing being burned by a past experience and focuses on the fact that not all Realtors are the same. “I explain that nine out of 10 FSBOs eventually list their homes for frustration or safety reasons. A For Sale sign is an invitation for anyone passing to enter your home. If you list your home, only qualified buyers will view your property. Our MLS system had 1.9 billion page views last year alone, with each visit lasting an average of over 10 minutes. Your strong web presence will create the exposure you need to maximize value for your home.”

Costs associated with buying a house

UPPER END Market Trends Burlington 2012

Hamilton – Burlington
Luxury home sales in Hamilton-Burlington experienced the strongest first quarter on record, with 67 homes priced over $750,000 changing hands compared with 54 the year previous—a 24 per cent increase. Consumer confidence has bolstered enthusiasm, in tandem with continued diversification —the latter of which has resulted in a greater num- ber of well-paying jobs. The technology and health care sectors have attracted an expanding pool of affluent buyers who are fuelling demand in several hot pockets. Ancaster, in particular, has benefitted, as close proximity to the hospital and university are a top priority. Location is also of primary importance to affluent young families who are seeking homes within a short distance to CAIS-designated private school Hillfield Strathallan College—and they are willing to pay a premium. The market remains bal- anced, with a good selection of properties (284) priced over $750,000. Choice becomes more limited between $1 million and $1.2 million, with just over 30 homes available at this price point, which is generating the greatest number of multiple offers. Today’s luxury consumers are highly value-driven, stretching their dollar as far as possible, with resale properties having a slight edge at the lower end of the upscale market. Walkability has become a serious selling point in the upper-end, fuelling sales in ame- nity-rich Dundas. Turn-key product is preferred, but many buyers are willing to renovate to make it their own. Well-landscaped homes with outdoor living areas that act as an extension of the home for entertaining are sought-after, along with open floor plans. The ultimate perk is a main-floor wine cellar, a property wired with technology’s best bells and whistles and green construction. The latter is play- ing a greater role in recent years, especially at the $3 million to $4 million range and above. To some, the trend is more important than the promise of cost recovery down the road. Equity gains have been a significant factor bolstering upper-end sales, with Burlington a prominent example. In fact, some estatesubdivision homes in Burlington have now reached the prestigious $1 million mark. Some buyers— and more so at the higher price points—have been gravitating to custom construction. Teardown activity continues unabated in Old Ancaster and South Burlington and has even reached West Bur- lington, as a result of spillover from nearby Oakville. Purchasers are snapping-up small, older homes on good-sized lots. These properties are drawing fre- quent multiple offers, if priced correctly, especially those on 100 ft. lots. The $500,000 to $800,000 price point is the current sweet spot. Custom-built homes replacing older structures often sport values of $1.5 million and up. The cost of new construction is on the rise, however, with trades exceptionally busy. Out-of-town purchasers now account for approxi- mately one-third of properties sold in Burlington. International buyers are rare, but some are pur- chasing high-end homes for their children to live in while attending McMaster. The high-end condo- minium market is underserviced in Hamilton- Burlington, with builders yet to adequately address the demand. The supply of luxury units is very tight, and quality product that does come on-stream is sold quickly. The highest priced condo to change hands in the first quarter of the year was a pent- house unit located in Hamilton’s west end, sold for $690,000. In the single-detached category, the pric- iest home sold moved for $3.8 million in Aldershot on the Bay. It boasted over 7,000 sq. ft. of living

space and was situated on a 1.5 acre lot. Increasingly, value-conscious purchasers are looking to areas bordering Burlington and Oakville such as Water- down, where the same money will buy more home or better finishings. Hamilton, Ancaster, Dundas, Grimsby and Stoney Creek will be the area’s up- and-coming communities moving forward, as their appeal increases in step with the addition of new amenities. Waterfront properties, in particular, hold much potential. Demand is expected to be strong in Hamilton-Burlington through year-end, while price growth will move in line with the rest of the market.