Open House November 14 2016

Open House is hosted by Steve Gregory, and features Paul Rushforth and Barb Kramer of MortgageBrokersOttawa.com

Air Date: Nov 14 2016

Intro: Welcome to Open House the Real Estate and Mortgage show on 580CFRA. With Paul Rushforth of Paul Rushforth Real Estate and friend Frank Napolitano, a Mortgage Brokers, Ottawa.com. What are you going to do with the time and money you save? If you're buying, selling or just have a question about financing, give us a call at 521-TALK. That’s 521-8255. Now with Frank Napoltano and Paul Rushforth, here's Steve Gregory. –
Steve Hard to believe but he's here – Who’s that Frank or Me? Well both of you actually. Frank’s been away.
Frank: Yep, it’s an all male show.
Paul: Well, even Phil Boxer before the show, said, wow all the hitters are here.
Frank: Wow, wow.
Steve: Football?
Frank: Yeah, football went well last week, unfortunately they didn’t win, but great showing.
Paul: And a huge congratulations to you son Stephen, who was an All Star, which is unbelievable news.
Frank: Yep, pretty proud,
Steve: Adopted...
Frank: Yeah adopted, sure clearly,
Paul: We got a feeling who the mom if anyways. So have you been working at all? You never stop working Steven.
Frank: Come on Steven for real.
Paul: Now you’re calling him Steven.
Steve: Now they're angry at me.
Frank: How work, it’s still busy, it’s still very the weather doesn’t hurt obviously, the longer it takes for the snow to fall. I think the more activities in the real estate market, which good for us. I think there's a little more confidence. I'm sensing that there is more confidence with the election outcome and the fact that there's a lot more of civil servants that don’t feel like they're jobs are in jeopardy anymore. Therefore I think, at least I feel, from everybody that I've talked to, that they are much more confident about moving forward and potentially upgrading their home or doing renovations to their home. And doing the things that we were accustomed to seeing, where I think over the last six or eight months, we didn’t see much of it.
Steve: I know if you want to upgrade where there's a great house.
Paul: Where’s that buddy?
Steve: Out East.
Paul: Oh, yes, yes, yes,
Frank: It’s going on the market I hear.
Paul: It is.
Frank: If you're going to sell it I'll buy it.
Paul: No Ronda and I bought a new house, so our house is definitely hitting the market and it’s going to hit early January.
Steve: But you can take offers now.
Paul: I will take offers now, yeah I'm actually putting a sign up front, saying coming soon and if someone wants to see it, I can definitely show them the house for sure.
Frank For sale by owner?
Paul: Yeah, for sale by me, the owner.
Steve: Nice, nice.
Frank: Might take a little bit on the house, will you?
Paul: Yeah, but it’s going to be a lifestyle for somebody. You know it’s a gorgeous house, its two acres in Navan I'll definitely take a hit, I mean, I have a lot of money into it, so someone’s going to get a great deal on the house, for sure.
Steve: And it’s what? 200 sq. ft.
Paul: Yeah. No, it’s a big home, its 6000 sq. ft., but it’s got six bedrooms, four bathrooms, wine cellar, steam room, sauna, indoor hockey rink.
Frank: Yeah, the rink is incredible.
Paul: Yeah, the rink is amazing. So its walk out basement, salt water pool, in ground spa, lots landscaping. So anyone who’s looking for that type of house in Navin, call me.
Frank: Priced range have you, figured out a price yet, have you done your marking analysis.
Paul: You know what I'm going to do, I'm going to be a little bit smart this time, and I'm going to bring two of my senior agents in, to help me price the property, because...
Steve: What a good idea Paul.
Paul: Yes, I'm going to do that because you always tend to overvalue your own home. And so, I just want to make sure I'm nor overvaluing it; I want to make sure it’s - I mean, listen, I bought a house not conditional on my house selling, so I want my house to sell. I'm thinking probably around 1.5, that’s where I'm thinking it’s going to be. And the funny thing is, I have 1.8 and half into it. So I'm definitely taking a haircut on this one.
Steve: You’ve got a spring price or any fall price I mean.
Paul: Fall price, 1.5. There you go. When I say that’s based on two of my senior agents coming in to take a looking and agreeing with that. I mean, if they think it’s lower or higher, I might adjust, I don’t think I'll go higher. But if they think it’s a little bit lower, I might adjust it a little bit lower, we’ll see. But someone can have it right now.
Frank: Tough market though, in the winter.
Paul: Yeah, well, the funny thing is, I did what I tell people not to do right. I haven’t taken any pictures of my yard, so now you know what I'm doing, I put all of my – my yard is huge, there's landscaping and there's different outdoor kitchens and all sorts of things. So I've put all my furniture away, took me about two days to do it. So now, I'm putting it all back out for a photographer to come and take pictures next week, to put it all back into storage. The gardens don’t look as good as they should, you know. So I broke every rule that I tell people not to do and I did, so there you go.
Frank: Do you want to rewind Steve, it took you two days to put everything away.
Paul: Yeah, it took me two days, I put everything away myself.
Frank: Wow.
Paul: Yes, I did.
Frank: That’s not like you.
Paul: It is like me, I do it every day, it do it on all my properties. I do it on my cottage, yes, I did it myself. So now I've got to get pictures, but the pictures are not going to look quite as good as like what the summer pictures are going to look. But at least people can see what the yard is, because...
Frank: Because you didn’t take pictures in the summer.
Paul: That’s right, I didn’t Frank.
Steve: We've never talked about this...
Paul: We've never talked about doing this, but the thing is, it’s specific to my house. My house, my huge – besides the house is gorgeous, but my selling feature is my backyard. I mean, it’s like a Nordic spa back there.
Steve: And the neighborhood.
Paul: Absolutely, I mean, you’re in Navan, it’s a very affluent – good neighborhood anyways.
Steve: So, they're kicking you out, is what's going on.
Paul: They’ve asked me to leave. Apparently everyone, now - that knows my house is for sale in Navin, I hear them rejoicing right now.
Steve: When does the other one close.
Paul: May 31st, so I've got a long closing to give me some time.
Steve: Oh, beautiful...
Paul: Yeah, long closing to give me a little bit of time. But, you know, it may not sell overnight, I mean, it’s not everyone is looking in that price range in Navin, but if they are, they're getting a steel on the house.
Steve: I have a funny feeling, we going to hear more about this over the coming months.
Frank: Oh, I'm thinking the same thing.
Paul: Absolutely.
Frank: And the reason Steve and I are going to talk about this, is because there's – we're going to get compensated for selling it on our radio show.
Paul: You guys bring me a buyer, you will be getting compensation, trust me you will. So, Steve you keep talking about it, you will be compensated.
Steve: Well wait until I put mine up...
Frank: Then we’ll talk about two houses...
Steve: It will be half hour, two houses.
Paul: That’s right, that’s right. But you know, saying that, we were – my real estate team were down a little bit in October and I thought it was very stagnant October...
Frank: Election.
Paul: Of course, because of the election and I'm starting to hear what's going on. But when I look at the numbers from the Real Estate Board, it was up 4 percent the number of sales, which kind of shocked me a little. Because I think everybody that I talked to in the real estate industry, felt that stagnant, you know, approach right now the market. And I was very surprised actually, to see that, we're up 4 percent in number of sales. And the average sale price was up 2.8 percent too, which was good news. And that’s with the condo market being down 13 percent in average sale price.
Steve: Down 13.
Paul: It went from 290 to 251.
Steve: Ouch.
Paul: Yeah, so that’s
Frank: Could that just be a block of condos. Smaller condos that sold and drove the whole price down.
Paul: Yeah, it could be, I mean there was 202 condos sold, so it’s not a huge number of condos sold, but the average sale price for a condominium right now, is 258 almost 259, which is in line with where we were last year. So, we're going to see the condo market down, the residential market up and which is going to bring us to a 1 or 2 percent increase at the end of the year.
Steve: What's the average residential now.
Paul: The average residential is 380, so that’s – that was last month, sorry. It was 380,000 which was pretty good. Remember when we started doing the show, it was 250.
Frank: 250-260, that was eight years ago, eight and a half years ago.
Steve: Wow.
Paul: Yeah. So it’s still a good market, we've talked about this at length, it’s a very steady market. We're not seeing any big blips, and we're definitely not seeing as many multiple offers as we have been, during the spring market and the summer markets; we were seeing lots of multiple offers, we're not seeing it right now. But we're seeing homes, I mean, the supply is down though. We talked about the inventory numbers, like how long it would take every home to sell, in today’s market, if nothing else hit, and we are up and around 8 months on market; we're at 6.3 right now.
Frank: Wow.
Paul: Yeah, so it means, people are starting to take their house off the market. The condo is still 8.5 months of supply where residential is 5.8, so that brings us to 6.3 total.
Steve: That’s not bad.
Paul: That’s not bad, so if no other house hit the market, it would take 6.3 months to get everything sold.
Frank: Or 5.8.
Paul: Or 5.8 for residential.
Steve: 521 talk 5218255 – with Franko prettied up these he's got to go to Toronto today.
Frank: Yeah. More comforters guys, always learning.
Frank: Got to work got to work.
Steve: I always thought you said you lived in Stittsville. Were you ever there.
Frank: I'm there, love Stittsville, come on.
Steve: 521 talk, 521-8255, we’ll be right back.
[00:08:58 music and program ID]
Steve So rates went up a little bit last week.
Frank: Yeah the banks are...
Paul: Not all banks
Frank: Not all banks. Not all banks. So we got word yesterday, 4:30 we get this email form a number of lenders, saying, “Just a heads up, we think we're going to lower our prime rate – our variable rate again.” So, we went from three ago, - four weeks ago, prime minus 70, prime minus 75.
Steve: Yep.
Frank: We are – some lenders are as low as prime minus .3 right now. So that’s how much it’s dropped in the last or increased, I guess depending on which way you look at it. But not good for the consumer, good for the financial institution. No reason behind it; we asked and they don’t know. They're just – everybody is just following, banks have started it, always the banks start it. So the banks have started the – they started from, they went to prime minus .5. Some of the mono-line lenders held off, held off, held off, right up until last week, we had prime minus 65 with one of the lenders. And then on Monday morning we got the, now we've got to go down to prime minus 50 now, there’s a lot of pressure on us, so... So they go down to prime minus 50, we think that’s the end of it and then we get a couple of lenders during the week, saying, “We do prime minus 55,”not bad. We get the email yesterday, prime minus 30.
Steve: Wow.
Paul: Wow that’s a big change.
Steve That’s a huge change.
Paul: That’s a huge change what's that 2.4 now.
Frank: Yeah, so 2.4 at that point, you might as well take a five year fix. It’s almost like, to me, the banks are influencing customers to take another fix mortgage.
Paul: That’s being said, some of the banks.
Steve: Which is at what now.
Frank: Some of the banks have raised their fixed as well now; we where we had 249, 254, 259 a few weeks ago. Now we're at, we still have one or two 59 if we it closes by the end of the year. But most of them are 269, 274 now.
Steve: Still great rates, but there's no reason for them to go up.
Frank: Listen there's still awesome rates. The bottom markets spiked last week and have come back down this week. But of course, we're not going to see a lot of activity there.
Paul: Just to take about my personal situation for a second. Remember last week we were kind of, I forgot about the financing and I'm locked into a five year fixed on my house. And I'm like, how am I going to support.
Frank: Are you.
Paul: Yeah. My mortgage comes up for maturity in March.
Frank: May or March, oh no kidding. Sometimes you get lucky. You know I was with...
Steve: Funny thing is though, he had no idea when his mortgage was up. How many times have we talked about that.
Frank: You the majority, the truth is, you're in the majority. I don’t know how many times I've talked to people and I'll say something like, okay, “So, when is your mortgage up for renewal?” “I don’t know.” “What's your rate on your mortgage?” “I don’t know.” Three something, but no idea, it’s incredible how many people really, once at the time of the mortgage, their focused in on it. But once it’s done, they just forget about it.
Paul: Yeah.
Frank: Ask customers for mortgage statements, they have no idea where it is. Everybody gets one every year, your lender is obliged to send you a mortgage statement on an annual basis. Yet incredible how many people have no idea where their mortgage statements are.
Steve: Most people don’t do it online.
Frank: You could do it online, but the ones that don’t, you get an online – you get a statement regardless. There's a statement mailed to you in January of every year from your financial institution.
Paul: But you get it online too, but I didn’t even bother looking when I bought the house. I was just like oh, maybe I should look.
Frank: Your priority was buying the house.
Paul: That’s right, so now I mature in March, so now I'll just slip into a variable open and I'll have no penalty when I'm done right?
Frank: Well, depending on what happens right, you'll have a good idea in March, whether you’ve sold your house or not, how close you are to selling it. So don’t let the fact - and I say to people all the time, don’t choose a term to try and coincide with your, now depending on your mortgage amount and what you're going to have left on your new mortgage. But if you sense that rates are going up, then take that five year mortgage now and then just port the mortgage over. So that you continue to get that five year rate, as opposed to – now if you take a variable, again, that’s...
Paul: I can't port it over though, because what I owe on my house is more than what I...
Frank: No, but you can pay the penalty then for – the difference then. Or that you can do in your circumstances, is split the mortgage up, where you have a home equity line of credit for a portion of it. And the mortgage for what you think you're going to need for your new house. So that the line of credit portion is open and then once you sell your house, you can pay that part off and then just port the mortgage over the way it is.
Paul: Well the good news is I've just sold my house. Someone was listening, sent me a text, I think he's on the line actually, right now.
Steve: Oh, good well let's see who this is. Are you buying Paul’s house?
Stew: I've got a wicked deal at 375 it’s a beautiful house in Navin, I'm only paying 375, what a deal.
Paul: Everybody this is stuntman Stew calling in and Stew, I did check with all the residents of Navin and you're not welcome in Navin, I apologize.
Stew: Fine, I'll stay in Barrhaven, Gods country is Barrhaven.
Paul: Navin is a little upper class for you Stew.
Stew: Listen, you haven’t been Barrhaven lately have you? We're getting a Costco.
Frank: Oh, wow they’ve got a Movati now it’s incredible what's happening in Barrhaven, wow.
Stew: So this is my favourite real estate and mortgage show on Saturday, between 10 and 11.
Frank: What do you need Stew.
Stew: I'm asking for a friend. I have a friend who have a condo that he's trying to rent and he's looking to – he doesn’t know what to do. My friend what's to know should be put it on [00:14:37 inaudible], should he ask an agent, what should he do? He doesn’t want to sell it.
Paul: Well, your “friend” Stew, who I've already met with, I've told him not to sell the condo in Landsdowne, because it’s a prime location, the values will definitely go up. I think that your friend should rent that for sure.
Stew: Okay.
Paul: But Stew’s friend actually, well, Stew is on the line. Stew’s friend has a condo in the Landsdowne building, facing the football field on the seventh floor. Its two bedroom, one bathroom...
Frank: For just 750 a month.
Paul: The day I went and look at this with Stew’s friend, the Redblacks were actually practising and it was really cool and he's got a corner unit, so he's going to get the sunset, he's going to be able to watch the game, it’s going to be coming up for rent in January, I believe, Yeah, stew.
Stew: Yeah, my friend had the Redblacks, it was just at the exact time that it was being show to you.
Paul: Perfect timing – perfect timing.
Frank: Thanks Stew.
Stew: Thank guys, I’m listening, I'm on my way to the Canadian Tire Centre of the Sanders and Rangers I'll keep listening on the highway.
Frank: All right Stew, I'll see you there.
Steve See you bud.
Frank: What's Stew’s friend renting it for. What do you think it should be going for?
Paul: Well Stew’s friend would like 2500 a month, but I think he's probably going to be closer to 22, 23.
Frank Right.
Paul: Yeah, it’s not a huge unit, but the location and like he showed me the amenities of the building and the building, it’s gorgeous, like it’s the place to be. The bedrooms aren’t huge, but it’s – if it’s a young professional or a young couple, want that location, want that lifestyle, I mean, the value is there. You can go and rent in Westborough for 2021 or you can be in the Glebe for 2223 something in that range. When I went and look at it with Stew – Stew’s “friend” sorry - when I went and looked at it, he was contemplating selling it. It was “shall I sell it and make some money.” And I said “no, no you don’t sell it.” I said, “What’s going to happen is you got about two, three, four, maybe five years that this price is going to escalate.” I think what's going to happen after that, the new area is going to start to become Lebreton, I think it’s going to go from Westborough to...
Frank: Depending on what they choose.
Paul: It’s depending on what they choose, but I think you're going to see a Westborough to the Glebe now, I think Lebreton is going to be a very attractive option too, but that’s years away. So, I think you ride this one out and you ride it out for quite a few years...
Frank: I don’t know if that value is ever going to go down though.
Paul: It will never go down.
Frank: I think that building in Landsdowne is fantastic.
Paul: Yep.
Frank: I think the location is amazing...whether you're a football fan or not it doesn’t matter. I mean, you’ve got – you walk distance to everything, the restaurants there, they’re amazing. You’re just in the core of the city, you're right by the canal, you can't ask for anything better, if you're a professional looking for – you right, I mean, a couple or an individual that just wants that small place, Parking on the ground, I mean it’s got everything you’re looking.
Paul: The lifestyle is great, I mean, if I wasn’t married and I didn’t have kids, I'd be therefore sure. Or even if was married with no kids, I would be there, right?
Steve: Condo fees are what, do you know.
Paul: I don’t know if there are established yet, I don’t know if the condo fees are going to be established yet. But you're probably looking about 50 to 60 cents a square foot. And I think Stew’s about 760 square foot.
Frank: His friend....
Paul: Sorry, Stew’s friend. It was about 760 square foot. So, leave it to Stew and I know he's listening. Leave it to Stew to come on the show and plug his apartment, you know. His friend’s apartment, sorry.
Steve: He's so smart, come on, give him credit.
Frank: So unlike you plugging your own house.
Paul: I know, hold on, nothing in common - Hold on, you know what, I know Stew’s going to, because I seeing him texting me right now, so I know he's going to be yelling at me for this. It was me who told him to come on the show and plug his apartment.
Frank: Oh, interesting.
Paul: Yeah, so you can't blame it on Stew, you know.
Frank: And what are you get out to it. No what do we get out to it for plugging this. Stew’s going to get us an autograph puck or something right.
Steve: Can't wait.
Frank: Yeah.
Steve: 521 talk, 52182525, we’ll be right back.
[00:18:58 Music and program ID].
Steve: Well come back to the show, lots go to the phones and say hello to Shannon in Ottawa. Hello Shannon.
Shannon: Hi, yes I live in Kanata, Lakes area and I have a townhouse right now. But I'm think to upgrade to a bigger home. So I'm just wondering is it better to rent it out or sell it.
Frank: That’s the show that Paul and I talked about we're going to start.
Paul: Sell or tent. Sell it or tent it. Do you have enough money or can you refinance that to put a down payment on the new house?
Shannon: Yes, I can, so that’s why I'm just debating whether I should just rent it or sell it.
Paul: No, absolutely rent it – rent it. If you have an appetite for being a landlord, I'm a big, big supporter of having doors having investment properties. And if you can have the money to put down on a new house and not worry about it, I would be renting that house out and building wealth.
Shannon: Yeah, okay, so you think Kanata Lakes area is okay for that type of – because I think in Downtown is more able to rent it out quickly, but I'm not sure.
Paul: No.
Frank: But there's a lot of growth, there's RCMP, that’s moved into, so I think you’ve got the potential to a qualified, a good professional tenant, family.
Steve: D&D as well.
Frank: And D & D. So family to move in there that will hopefully cover what you're mortgage payment is, that you have right now.
Paul: How big is the house?
Shannon: Around 1700 square feet.
Paul: Yeah, you'll rent that out for 1500 a month.
Shannon: Yeah, roughly.
Paul: Easily. That’s a very easy rental and we're putting in townhouses, that’s my favourite rental sweet spot is the townhouses in Suburbia 1500, you'll have that thing rented no problem.
Shannon: Okay.
Frank: How long have you owned it?
Shannon: Three, four years.
Frank: So, what the suggestion that I would make, is get the property appraised. Because while you’ve lived in it as an owner occupied, it’s been tax free, so the value that’s it’s gone up is tax free. So if you get it appraised at this point, then, you're only going to pay the capital gains on the increase from the amount starting from when you rent it out.
Paul: That’s a good point.
Frank: So get the property appraised when you move out, so that you can have that in your pocket, incase Revenue Canada ever challenges you on what your property was worth.
Paul: Yeah, so instead of paying the capital gains on the whole, you'll pay capital gains on, let's say it’s worth 300 today and you go to sell it four years from now at 320, you're only paying the capital gains – correct – on the 20 grand.
Frank: On the 20, had you paid 250, it would have been on the 70, if you don’t get an appraisal done.
Paul: Good point, that’s a great point.
Shannon: Yeah, that’s a great point, thank you so much.
Frank: You welcome.
Paul: Thanks.
Steve: Thanks Shannon. Let's go to Sandy in Canada
Sandy: Hi there, good morning.
Paul: Morning.
Sandy: I have some questions actually. I own one of the townhouse in Morgan’s Grant, Kanata.
Frank: Okay.
Sandy: And actually – what happened I bought it in 2008 and then I rented it for the last five years. And when I moved out of the house, the prices was like around 300,000. Now it’s five years, since I left the house, but he price is still the same. So, my question is like, how do you think, the property market is in Kanata?
Paul: It’s good, there's always an appetite for investment properties in suburbia. I mean Kanata is a very booming area, so yeah, I think it’s a great investment area.
Sandy: And like Minto is building a new arcade actually near the Kanata Art Center, do you think it’s a good place to buy a townhouse for investment.
Paul: Absolutely, absolutely. The only thing I would caution you when you buy brand new for investment. Is you have to get a tenant in there and there's going to be mud, there's going to be no grass, there's going to be no drive way right of the bat. Then you're going to have to get eavestroughs and air conditioning and all that stuff. So some times, buying brand new, it’s harder to get a tenant in there, because of the conditions, right off the bat. So, I'm a big, big fan of buying something a couple years old or resale, than I am buying something brand new for rental.
Frank: The other thing I was going to say, you talked about the value of your property was 300, five years ago. Its 300,000 dollars today, So on the surface it doesn’t feel like you’ve made any money, but you have. Because if you’ve got a mortgage on it, your tenant has been paying that mortgage down for you and that is tax free. Because you only pay the capital gains on the value of the home, not the equity that you take out of it. So, if the home was worth 300 when you rented it out and you sold it today and it’s still 300, there is no capital gains. But you are further ahead, because your mortgage that may have been 240,000 five years ago, is likely down to 200 or 210 and you’re up 30 or 40,000 dollars and that is tax free.
Paul: Yeah.
Sandy: Yeah, you're right, that’s right. So that’s directly actually looking my bank – the charges. So, the second question I have actually, I bought a house...a Mattamy home here in Kanata.
Paul: Yeah.
Sandy: And I'm right by market looking for you know, like mortgage rates, so do you have anything that you can be giving me?
Paul: When is the closing date for the one that you bought in Mattamy?
Sandy: Its 15 December 2015.
Paul: So have you had a mortgage approved already, because if you’ve got a mortgage approved, two three, four months ago, the rates are likely better than what they are today, because the rates have gone up over the last few weeks.
Sandy: Oh, okay.
Paul: So, did you get a mortgage approval already.
Sandy: No, actually I didn’t.
Paul: Then hindsight, I mean, we talk about it all the time right. At any time, if you're within four months of your closing date, try to get a mortgage in place, because what it does, it locks in a certain and then in that four month period, should the rates go up, you’re protected, should the rates go down, you're going to get the lower rate anyway.
Frank: Buts still lock in now – lock in now.
Paul: So, no lose. Nothing wrong with locking in now, because we just down know. Based on the events of yesterday, unfortunately in Paris, the markets will react somehow on Monday. It will be interesting to see how they react one way of the other. So, you know, I would say that, if you plan - that’s an investment property as well, the one you're buying in...
Sandy: No, that’s my primary residence actually.
Paul: Okay, so give us a call on Monday, love to help you and give you some quotes on what type of mortgage you can get.
Sandy: Perfect, sounds good.
Steve: Thanks Sandy. Our next caller you’ve just touched on, but Cindy’s probably got some, yep Cindy – hello Cindy.
Cindy: Hi. I wanted to speak to Frank and have him look at his magic foreseeing ball and just tell me if he thinks that the events will cause interest rates to go down again.
Frank: It’s hard to say because typically if it happens in North America, it has a bigger impact on the North American markets. Because it happened in Europe, it will be interesting to see how it would affect the North American markets. Because will that attach really affect the economy in the US? Likely not, it probably won’t have a lot of impact on it, so I think it will affect the European markets much more than the North American Markets long-term. I think short-term, we might see some fluctuations on Monday and Tuesday, but then, you know, it will be back to normal. So, I don’t know that we're going to see a lot on this side of the world. I think there's going to be more movement on the other side. Honestly, like the bond markets come down this week, the news in the US is that the economy is moving forward aggressively, a lot more aggressively than they thought it was. This Christmas will be a huge indicator as to whether this economy has actually recovered as far as the US is concerned. I think the economy is going to be good in Canada too, because the dollars being where it is. I think there's going to be less Canadian shopping in the US. Black Friday, now Canada has adopted the Black Friday, so you're seeing retailers here. So, I think the numbers are going to be fairly strong in Canada. So Canada is going to feel like we're in a recovery mode too, because we've now – because the dollars has done what's it’s done, there's less cross border shopping. So, you know, I think the economy news is going to be very good and as a result, I think we're going to see a pretty flat interest market right now. And I think the reason that rates have gone up, is not the markets, but I think the banks, start looking to make a little bit more, that’s all.
Cindy: Okay.
Frank: Because there been no reason for the rates to go up the way they have over the last couple of week, with the exception of, they just want to line their pockets a little bit more, in my opinion.
Cindy: Okay.
Frank: In my opinion.
Steve: Thank Cindy. Let's go to John in Ottawa. Hello John.
John: Hey, how is it going? I just have a quick question, you mentioned Westborough is growing and Lebrenton is going to be next, but ....is out there too. What do you guys think about Beechwood? Because I drive down Beechwood, every time I go down there, I see a sign of new development condos going up and new buildings would go there and start building...you know...
Paul: John that’s a great Question and I was talking to somebody the other day about this, about Vanier, Beechwood sort of Vanier area...
John: Yeah the North Vanier, yeah.
Paul: Blows my mind that areas has taken off quicker than it has and I'll tell you why. When you think of location, I mean, you’ve got the river, you’ve got downtown, you have Newhead, you have Rockcliffe, I mean, you have great schools there, you’ve got Ashbury. It blows my mind that there has been more redevelopment, higher end, in the Vanier Beechwood area. I think in time it will. But it’s going to take a lot of redevelopment in Vanier. Because what happens in Vanier a lot, is the hand down of properties, someone owns it, they hand it down to the kids, the kids hand it down to their kids. So there no real movement as far as redevelopment in that area. But I would love to see and we've already seen some builders go I there with some high rises and things like that. But I think Vanier will be on the radar within the next 10 years, it will be very, it should be a very good area. Because the location is unbelievable, when you think about where Newhead is – I mean where Vanier, Beechwood area is, it’s a great location. I mean, its bordering right across the street, one of the nicest areas in Ottawa. So I have no idea why Vanier hasn’t taken off yet, but it will.
John: Yeah, I noticed a lot of new custom builders are going there building semi – close to the Beechwood on the North Vanier site. Lots will go cheap so...
Frank: Yeah, the price is right, right now, to get in now. and I think the same thing in Mechanicsville, We've seen Mechanicsville, which is right beside Westborough, start to flourish and when you get in the core of the city, those are areas that you can expect to continue to go up.
Paul: Yeah, I always like to look for area that I know are up and coming. You know, I find that, like I mentioned Hintonburg as an area. But it’s really slow as well, like it’s very into Westborough, just boom! That was Westborough, then all of the sudden they do the TD Place and boom, you know. I find Vanier, Hintonburg, Mechanicsville has been really slow to develop into a sought after area, really slow. But it will come, it definitely will come.
Frank: Circulation wise, those are your areas I'd look though.
Paul: Oh yeah absolutely, if you want to find some, anything along the LRT is...
Frank: Oh, yeah.
Paul: Anywhere along the LRT is where you want to be, that’s where the areas are going to really boom.
Steve: Can't wait until we start seeing that, minutes from the tracks.
Paul: The minutes from the tracks, yeah. Thanks of the question, good question though John.
John: Thank you.
Steve: 521 Talk 4316255, back with our final segment.
[00:30:23 music and program disclaimer sequence… The advice and recommendations in this program are those of the participants and not necessarily those of Bell Media or this station. Listeners are advised to obtain personal consultation, should they wish further information.
We return to open house, the real estate and mortgage show on Newstalk Radio 580CFRA. If you have any questions about mortgages or real estate, give us a call at 521-TALK, that’s 521 8255.]
Steve: Back to the phones we go and say hello to Sue. Hello Sue.
Sue: Hi, I have a question for Paul. What does he think of the student housing that is being built by March 2018. What does he think of the location on Champlain and Beechwood.
Paul: Are you talking about the Capital Hall.
Sue: Yes.
Paul: Yeah, they approached me about being their sales person to help them sell that product. Are you talking about buying it as in investment?
Sue: Yes.
Paul: Okay, without saying something against that investment, I look for great investments for my clients and I didn’t find the numbers worked there, for my clients. Saying that, - saying that, I don’t think you'll ever have a vacancy in there. There's only so many housing for students and there's not, basically, there’s not enough housing for students, so that building will always have a renter. I worry though that the condo fees, once built, are going to be a lot higher than they are right now. And you're not going to be able to cover your investment, that’s my only fear I that building.
Frank: And then I'm going to add to that; that if your looking to get financing on it and the banks get wind of the fact that’s its student housing, that’s going to be another issue in itself, to get financing on properties like that.
Paul: But it’s a condo building...it’s a condo to be rented out to students.
Frank: But again I mean, I told you the example I have right now, where I’ve actually gone up against a lender, because the LMS listing said that, it’s great for an investor for student housing, because it’s right by Algonquin College and all of the sudden, my customer, who’s actually buying it to live in it, we get a turndown, because the lender thinks, because of the way the LMS listing was written. Is that they're going to use it for student housing. So, again, my caution is, be very careful and do your homework ahead of time. Make sure that the bank or the lender you're going go with, will actually, lend on that building. Because once they do their homework, the banks, they get their teeth into it. And I'll give you an example, we have one major bank that will not lend on one of the major condo corporation, in the city, condo buildings in the city, because they feel that they’re overvalued. The condos are overvalued already.
Paul: So, to sort of reiterate a little bit Sue, if I was from Toronto and my daughter or my son was coming to school I Ottawa, I would buy one of these units for my kid to live in. Because the building is going to be amazing. But, if I'm someone like, you know, you and I from Ottawa, you're looking for an investment, I don’t know if...
Steve: Wouldn’t be your top 10.
Paul: It would be one of my top places to invest, put it that way.
Sue: Okay.
Paul: Thank you Sue.
Sue: But they do guarantee for three years of rental.
Paul: Of rental – yeah, which is great and I know that they do guarantee for three years. The problem being, its still – you’re still under water for your investment. I don’t think, even if they didn’t guarantee three years of rental; you'll never have a vacancy in there. That thing will be rented out all the time, because student need housing, its new, its attractive, it’s a great building, it’s a great location. So it will always be rented out. The problem is when you do your mortgage, your taxes, your condo fees, you're going to be...
Sue: What if I'm thinking of flipping it within the five years; because two years to build and three years with rental guarantee, within the five year period, if I was to sell it. Would I – I should make some profit on it.
Paul: You will make a bit of a profit, keep in mind though, the units are very, very, very small...
Sue: Yes.
Paul: So you're paying a high price per square foot in that building...
Sue: Mm-hmm.
Paul: Very high, I found it.
Sue: Yes.
Frank: How big are the units?
Paul: Some are 300 square feet,
Sue: 500...
Paul: ...400 square feet, 500 square feet.
Frank: 500 square feet, yeah. Getting financing on those two sometimes are a challenge. Some banks have minimum square footage, too for financing.
Steve: Getting financing on anything is a challenge.
Frank: Right now, yeah. Like one of the real estate agent said, “It’s not a buyers’ market, it’s not a sellers’ market, it’s a bankers market right now.”
Paul: Yeah.
Sue: Can I have the mortgage brokers name and his number, maybe I can call him, sometime this week and talk I'm more detail.
Frank: Yep. Well you can get it actually, if you’re going to call Monday or Tuesday, I'm heading out to Toronto today for a conference. But you call my Associate Barb, who’s also on the show with me many times. She can be reached at 613 656 0758, if it’s on Monday or Tuesday. If it’s Wednesday, on I'm back in the office, 0757 for me, Frank.
Sue: Thank you so much.
Frank: Okay, you’re welcome.
Sue: Have a good weekend.
Paul: Thanks you too.
Steve: That was a nice call. Orleans, we haven’t been to Orleans in a while. Hello Mark.
Mark: Hello, how are you?
Steve: Wonderful.
Mark: Good, question. I'm purchasing a cottage in the spring and I'm a bit concerned in terms of the water testing. So most of the – well all the cottages or house that are there, currently don’t – they're all on wells, right? They're not deep wells, they're surface wells. And they don’t pass the water test. So, am I going to be asked when it comes time to mortgage financing for a water test.
Paul: Yes, most lender area asking for water potability test, the reason for that is marketability. A lender always looks at a property when they're mortgaging it saying, okay, if we had to take the property back and sell it, one of the things that the purchaser is going to look for is to make sure that they have potable water. So, yes that is one of the things that they look at.
Mark: Does it make a different when it comes to financing, whether it’s your primary house or you...
Paul: No different whatsoever.
Steve: Keep asking.
Paul: If you quality and the property meets the guidelines, it’s no different.
Mark: Okay, well what happens if the water doesn’t pass.
Paul: Well, then that doesn’t make it a property that they're willing to lend on. That’s the issue...
Steve: You need potable water.
Paul: You need potable water, like I said, they need to be able to resell the property if something were to go wrong.
Steve: Well, there we go.
Paul: Wow.
Steve: Another hour. Shows over.
Frank: Dianne celebrated her birthday yesterday, as Paula White, Derek’s significant other celebrating her birthday today. Happy birthday to Paula, Happy birthday to Charles Chaknon, my good friend, who’s got his birthday today as well.
Paul: Awesome, I have an exciting day ahead of me, I'm taking my dad to the son’s game in our new Bell Suite.
Steve: Oh, nice.
Frank: Awesome.
Paul: So looking forward to the time, I'm going to pick him up right now.
Frank: Wish I was there.
Steve: Get one of those --- Stew...
Paul: Yes, I will, for us.
Steve: The Radio show is next, that would be great.
Frank: Have a great weekend everyone.

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