Wes Smith RE/MAX Ocean Pointe

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I have listed a new property at 2405 SEABLUSH DRIVE in NANOOSE BAY.
This private rural property with custom-made contemporary Westcoast home overlooking Nanoose Bay may be the perfect acreage that you've been looking for. This home includes a warm open kitchen/dining/living room area and adjoining deck overlooking the ocean and gardens; a large rec room and bonus family room; a newer wood stove that helps to heat the entire home in the winter; an amazing ensuite with deluxe walk-in shower off the Master Bedroom. A large detached double garage with workshop is perfect for working on your hobbies. 2 wells produce ample water on this property. Large and well maintained garden area with lots of veggies. Fruit trees planted throughout yard. Just minutes drive from Fairwinds and Beachcomber marinas and Fairwinds Golf Course. 10 minutes drive to either Nanaimo or Parksville. This immaculately maintained property is an amazing find. Make an appointment to view today!
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Please visit our Open House at 288 MACHLEARY STREET in NANAIMO.
Open House from Sunday, August 23, 2015 to Sunday, August 23, 2015 2:00 PM - 4:00 PM Large renovated home with massive deck, HUGE garage, suite potential. Modern. Come and view!
Fully renovated modern home in the heart of Nanaimo's Old City. This home features: a large living room with new fireplace insert and refinished hard wood floors; an open renovated kitchen with stainless steel appliances and breakfast bar; an oversized hottub-ready deck with (partial) ocean views; a covered wrap-around front porch; a massive 3-bay garage with alley access; a generously sized family room; and lock-off area which could be made into a suite. Newer roof in place with new skylights; new 60 gallon hot water tank. Boat and RV parking in yard. Walking distance to downtown stores and restaurants, numerous parks, the Aquatic Centre, and much more! If you are looking for a new-ish home in the Old City area on a quiet street - then this might be the home for you! Would also be a perfect property for a home based business utilizing alley access to the rear garages and lower level of house (lots of room for product storage and customer parking)Make an appointment to view today!
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I have listed a new property at 37 25 MAKI ROAD in MILL BAY.
Stunningly mobile home with additions in quiet adult-oriented park in South Nanaimo/ Chase River. 3 bedroom/ 2 bathroom unit with almost 1500 sq. ft. . This unit feels more like a house than a mobile. Features include an oversized living room, a large newer deck at the front, a private rear deck, plank-style hardwood flooring, open kitchen with island, soaker bathtub, vinyl siding, skylights, shingled roof, built-in custom shelves and display areas, and lots of storage. Walking distance to south end shopping and bus routes. Minutes drive from downtown Nanaimo. Pet friendly mobile home park. No rentals. Make an appointment to view today!
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 Not all your rental income is used to lower your debt service ratios...

From Ramona King, Senior Editor of MoneySense Magazine


In a previous post I talked about the basics of mortgage debt ratios—the calculations lenders use to determine if you qualify for a mortgage. This prompted this reader question:


Q: If I own a rental property, which debt ratio does that get included in? GDS or TDS or both? In other words, which debt ratio do you add the rental property mortgage payment, rental income, taxes and heat to?


A: Good question. While the short answer is TDS (the total debt service ratio), the mechanics of how a rental property is assessed when applying for a mortgage are important. As such, I thought it would be a good idea to provide a brief explanation of how lenders use rental property income and expenses when you apply for a mortgage.

In general, lenders will apply two calculations when examining a rental property:

Debt Service Coverage ratio

This is calculated by dividing the Net Operating Income (all rental income minus all reasonable operating expenses) by the Debt Service (cash required during a specified time period to cover the payment of interest and principal on a debt). For example, if your property’s rental income is $2,000 each month and it costs you $500 in expenses along with a $1,200 monthly mortgage payment, then your DSCR would equal 1.25 ($2,000 – $500 / $1,200).

Most lenders want to see a minimum 1.1% return on a rental property—so for every dollar you spend on the rental property, you earn at least $1.10 in income.

Rental offset rules

The lender will use 50% to 70% of the rental income to offset the principle, interest and tax mortgage payments (PIT) you make on the property. So if your property earns you $2,000 per month, the lender will only account for $1,000 to $1,400 in income to offset the PIT payment. To see how this works, let’s assume PIT payments equal $1,425. Since you earn $2,000 in income, and the lender uses a 70% rental offset rule, you deduct $1,400 from the $1,425 PIT payment. The remaining $25 shortfall will be added to your debt—thereby increasing the debt portion of your total debt service ratio.


Unfortunately, though, there is no standard. Some lenders use debt service coverage ratio while others use rental offset rules. The best approach is to talk to a mortgage professional to determine your best options.

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Sometimes, it’s helpful to learn from your mistakes. Usually, it’s much better to learn from someone else’s, especially when it comes to something as important as selling your home. Here are some common mistakes you really don't want to make:

1. Trying to sell your home yourself
In this DIY era, the urge to try to sell your home yourself to save money can beckon like the smell of oven-fresh cookies at an open house. Resist. Working with a licensed agent helps ensure you’re not leaving money on the table as a result of an off-target listing price or a mistake in the many steps that lead to a final sale. Sell your sofa yourself online. List your home with a professional.

2. Picking the wrong REALTOR®
Not all agents are equal. Just because your college buddy dabbles in the industry doesn’t mean he’s the best guy to sell your home. You want experience. You want to work with an agent who has a depth of knowledge. Invite your buddy to the housewarming party. Find an agent who can truly guide you.

3. Pricing your home too high
Sometimes it’s good to aim high. But when you’re setting a price for your home, it’s better to be smart than overly eager. Listing your home at a price beyond the true market value and then letting it drop several times can lead to a lower sale price than you’re hoping for. A savvy agent can help you set the best, most competitive price for your home based on other recent sales and local market trends.

4. Sweating the small stuff
Keep things in perspective. You’re in the process of one of the largest business transactions you’ll ever make. It's easy to get distracted by dollars adding up from pre-sale repairs or post-inspection demands, but don’t let the cost of replacing a closet door, servicing the furnace or fixing a stairway banister derail you. After you reach the finish line on your home sale, you'll focus more on the rewarding outcome and quickly forget about the smaller frustrations.

5. Getting emotional
Yes, your children may have learned to walk on that carpet, but a heartfelt story isn’t going to win the hearts of buyers. With so much personal history tied to your home, emotions can cloud judgment. An agent can help you make smart, strategic decisions.

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After weeks (or even months) of searching for a home, you’ve finally found the perfect home. Unfortunately, you have excellent taste and there are five, 10, maybe even more offers on the table. If you’re caught in a bidding war, there’s more you can do than cross your fingers.


Here are 3 strategies that may help turn the odds of winning the war in your favor.


1. Help the seller out

Do whatever you can, within reason, to make the decision easier for the seller. This can include being flexible on the closing date to accommodate the seller’s moving plans. And although it’s not unusual for buyers to ask a seller to pay for a portion of their closing costs, now may not be the time to press your luck. If you're able to cover your own closing costs and you don't ask for seller assistance in your offer, you definitely could stand out. Also, the greater your down payment, the more secure a seller may feel that your mortgage financing will close with no problems. That's not to say you can't compete against someone who is offering a larger down payment; sellers will weigh various factors as they review offers with their agent. Overall, limiting your requests of the sellers and submitting your highest and best offer are the best approaches to being competitive.


2. Be prepared to act fast

Both you and your agent should be constantly monitoring homes for sale so you can evaluate potential homes as quickly as they're posted. Research the properties as much as possible before your showings so you can be prepared to make an offer on the spot if the home is a good fit. Talk with your agent about adding an escalation clause into your offer that automatically increases your bid if other buyers come in. Finally, include a pre-approval letter from your lender stating that you qualify for a loan in the amount of your offer. 


3. Don’t be shy
There isn’t always a lot of cash separating the top bid from the next closest contenders. For a seller with a strong emotional attachment to their home, an extra thousand dollars might mean less than passing their house along to the right buyer. Draft a letter describing why you fell in love with their house. Is it the perfect size for your growing family? Do you want to bring the backyard garden back to life? It just might give you the edge over the competition.


If you’re looking for advice tailored to your specific situation, please get in touch with me: Wes Smith at 250-758-3700 or via email at wes@wessmith.ca

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Plenty of homeowners are relying on a basement suite or a laneway house to help get them into Metro Vancouver’s hot housing market.


Mortgage broker Sherlock Yam says changes to Canada Mortgage and Housing Corporation (CMHC) rules coming at the end of September could be another big help for those looking to legally rent out part of their newly purchased home.


“Previously, CMHC rules allowed only 50 per cent of the rental income to be added towards qualifying for your mortgage,” said Yam. “Now it’s increased to 100 per cent.”


If a secondary unit brings in about a $1,000 in rent monthly, being able to include all of it, rather than just half, would add another $6,000 in household income a year. That equates to about $25,000 of extra buying power added to a mortgage.

The rule change is also intended to add rental units to an already strapped supply, even pushing potential sellers to include rental opportunities to attract this new group of buyers.


Overall, the added boost may be even better than recent interest rate cuts.


“For those people, this has increased their borrowing power by more than they benefited from that recent Bank of Canada change,” said Tsur Somerville, director for the Centre for Urban Economics and Real Estate at UBC.


Still, Sommerville says don’t expect these new buyers to drive Metro Vancouver’s housing market much higher.


“The thing is that it’s got to meet all the other CMHC requirements,” he said. “So it’s people putting less than 20 per cent down; people buying a house that’s $1 million or less. When you start doing all those sorts of things, I’m not sure the number of people is really huge.”


For those who do apply, the added cash from renting out might just be enough to finally buy in

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