Ottawa Real Estate Blog

Feb. 15, 2018

New Standardized Lease Agreement

Want a Copy of the New Standardized Lease Agreement for Ontario, taking effect April 30, 2018?

New Residential lease agreement for Ontario

Last week, the Ontario Government released a new standardized lease agreement for private residential leases which includes; single and semi-detached houses, apartment buildings, rented condos and secondary units.

The landlord is required to provide one within 21 days of the request. The Tenant can withhold 1 Months Rent if One is not provided!

When the Government announced that they were creating a standardized lease, OREA worked closely with the Ministry of Housing and participated in their consultations. It was important for OREA to ensure that landlords and tenants be given some flexibility in the terms of the lease. This is why we were pleased that the government included an "additional items" section in the standardized lease.

You can download the new form below:

Ontario's New Residential Tenancy Agreement

Feb. 7, 2018

Income & Investment Properties are selling for over List Price

Four Multi-Family Properties Sold Recently

This video post talks about the recent sales of Four Multo-Family Buidings that all sold in the past few months, they all sold quick and went for over their Listed Price.

You need to act really fast if you even want to have the chance to submit an offer on these types of Property, as their are usually multiple offers on the best Ones, and some even sell with no conditions!

The Four Properties we looked at were from different neighbourhoods and the details are below:

  1. The First property was a Triplex in Centretown that was listed for $659,000 and it sold in 10 days for $55,000 over the list price.

  2. Second property was a Doudle Side-By-Side located in Billings Bridge/Heron Neighbourhood, it was listed for $630,000 and it sold in just 7 days for $97,000 more than the listed price

  3. Third property was in Queensway Terrace area, it was another Double Side-By-Side, that was listed for $558,900 and it sold in 9 days for $95,000 over the asking price

  4. Lastly, there was a Triplex in Overbrook that was listed for $620,000 and it sold in 10 days for $107,000 over the asking price.

Some of these properties were in really really rough shape as we showed them to some of our clients and saw the condition they were in. We would guess that the buyers for some of these buildings would need to drop another $300,000 just to bring them up to spec...!

There were 17 offers on One of these buildings, and that is what pushed the final sales price so high.

If you're looking to buy an Income & Investment Property, make sure you get to see the newest listings as soon as they hit the Market, contact us Today!

Check out some current Multi-Family Properties for sale, or let us Appraise Your Property

Jan. 3, 2018

Top 10 neighbourhoods in Ottawa

Here are the Top 10 neighbourhoods for Price and Hotness!

top 10 neighbourhoodsWe found it interesting when we looked closely at some of the numbers of sales and prices in different neighbourhoods. So, we will start to provide you with some statistics about some stats that don't instantly jump out at you, hope you find them interesting.

For January 2018 we are giving you the Neighbourhoods that simply had the highest selling price and then we will provide you with the Neighbourhoods that had the Listings that sold the Fastest, these are the HOT Neighbourhoods right now!

Let's start with a look at the Highest Priced Sales throughout the city. Can you guess where the highest prices were for January 2018?

Top 10 Neighbourhoods by Highest Sales Price in January 2018

These are simply the neighbourhoods that had the highest priced sales for the month, based on the raw data. To put it in a bit of perspective, we also provide the time that these homes took to sell as well

 

  1. Rockcliffe Park, sold for $1,960,000 in 249 days
  2. Rockcliffe Park, sold for $1,495,000 in just 2 days
  3. Old Ottawa South, sold for $1,250,000 in 274 days
  4. Old Ottawa East, sold for $1,248,500 in 376 days
  5. Westboro, sold for $1,152,500 in 96 days
  6. Carlingwood, sold for $1,115,000 in 65 days
  7. Westboro, sold for $1,085,000 in 57 days
  8. Westboro, sold for $1,040,000 in 53 days
  9. Rural Kanata, sold for $985,000 in 182 days
  10. Quinterra, sold for $980,000 in just 2 days

Rockcliffe Park took the Top 2 Spots for the highest priced sales, which was expected, Westboro took 3 spots, and we had Kanata Lakes jump in at Number 9. Three of the homes that sold for the highest prices also spent more than 8 months on the Market before they sold !

In this category, I would rate Westboro as a very good Neighbourhood if you are thinking about selling your home and you price it right, you should get it sold in a few months and for a decent price.

Top 10 Neighbourhoods based on how fast listings took to sell

These could be considered the HOT Neighbourhoods, as these homes all sold the quickest in January 2018. We are giving you 12 neighbourhoods as they all sold within 1 day 

 

  1. Overbrook 2 Storey Detached, 3 bedroom. Sold in 1 day for $4900 below List Price
  2. Centretown, 1 bedroom condo, sold in 1 day for full asking price
  3. Centretown, 1 bedroom condo, sold in 1 day for full asking price
  4. Kanata Lakes, 3 bedroom Townhouse, sold in 1 day for $300 below asking price
  5. Centretown, 1 bedroom condo, sold in 1 day for full asking price
  6. Wellington Village, 6 bedroom 2 storey detached, sold in 2 days for $72,000 over asking price
  7. Kanata Lakes, 3 bed Townhome, sold in 2 days for $36,100 over asking price
  8. Findlay Creek, 3 bedroom Semi-Detached, sold in 2 days for full asking price
  9. Overbrook, 1 bedroom Detached Bungalow, sold in 2 days for $36,200 over asking price
  10. Bradley Estates, 3 bedroom Townhome, sold in 2 days for $17,100 over asking price
  11. Copeland Park, 5 bedroom Semi Split Level, sold in 2 days for $1100 over asking price
  12. Lowertown, 2 bedroom condo, sold in 2 days for full price

All of the neighbourhoods above are HOT, as these homes all sold within 2 days of being listed, but notable are the sales that happened in Wellington Village, Kanata Lakes Overbrook and Bradley Estates, as they sold for quite a bit over the asking price.

Also, if you are thinking about selling your Condo in Centretown, this area seems to be pretty hot as well, as it took 3 spots out of the Top 12!

If you want to explore some Neighbourhoods and the real estate stats, visit our Neighbourhood Market Report Page, and if you want the current stats, check out this months General Market Update

Dec. 6, 2017

Triplex that sold in October 2017 in Vanier

This month we are crunching the numbers on a Triplex Property that sold in the Vanier Neighbourhood

This is the 2nd month in a row where the property we chose to look at gave the buyer a loss every year, with a 35% down-payment. Granted, it was only a $258 loss. But, some Investors are OK with that, as long as their building appreciates and the tenants keep paying the mortgage down for them.

The Triplex this month had One 1 Bedroom Apartment and Two 3 Bedroom Apartments.

The Operating Expenses look to be a bit on the high side here, at 41% of the Net Income, that means that over 40% of the income goes towards expenses. The Sales Price Times the NET Income also seems to be a tad higher than we expect to see.

This property was on the market for 113 days before it sold.

Vanier Triplex Building, Sold Oct. 2017
Listed Price $535,000

Selling Price $521,500
Scheduled Rental Income (SRI) $35,400
Effective Rental Income (ERI) $33,984
Total Operating Expenses (TOE) $13,933
Net Operating Income (NOI) $20,051
Capitalization Rate (CAP) 3.8%
Operating Expense Ratio (OER) 41%
Sales Price X Net Income 26
35% Downpayment $182,525
Mortgage (@ 3.25%) $338,975
Annual Debt Service (mortgage payments) $20,309
Cash Flow -$258
Return on Investment (ROI) -0.14%
Nov. 15, 2017

4-Unit Building Sold in Lowertown

Here are all of the financials from the recent sale of a 4 Unit Building in Lowertown in Oct. 2017

Patrick Walchuk walks you through all of the financial information from this recent sale. You decide if this buyer got a good return on his money or not, we think so!

Lowertown 4 Unit Building, Sold Oct. 2017
Listed Price $995,000

Selling Price $995,000
Scheduled Rental Income (SRI) $81,120
Effective Rental Income (ERI) $77,875
Total Operating Expenses (TOE) $24,902
Net Operating Income (NOI) $52,973
Capitalization Rate (CAP) 5.3%
Operating Expense Ratio (OER) 45%
Sales Price X Net Income 32%
35% Downpayment $384,250
Mortgage (@ 3.25%) $610,750
Annual Debt Service (mortgage payments) $36,591
Cash Flow $16,382
Return on Investment (ROI) 4.3%

From the table above, you can see that this Building sold for full price, and it sold after being listed for just 7 days. The Cap Rate is decent, the Cash Flow is excellent, with the buyer getting over $16,000 every year to put in their pocket (with a 35% downpayment)

At the end of the day, the Buyers' Return On Investment here was 4.3% which most investors would take Today. With the numbers looking so good on this property, we suspect that there was likely some work needing done, or coming up, but as long as the buyer was aware of this, we think this was a good buy.

Oct. 27, 2017

Ontario Residential Tenancies Act, Recent Changes

There have been some recent changes to the Ontario Residential Tenancies Act under Bill 124

Included in these changes are:

  • Changes to the family reason for Terminating a Lease
  • Expanded rent controls
  • New rules and forms for Evictions and more

It was announced that Rental Controls are now extended to cover all Multi-Family Buildings, Smaller Income Properties and Homes or Condos that are rented out in all of Ontario, no matter what year they were constructed.

New rules mean that rents can only be raised by 1.5% in 2017 and by 1.8% for 2018. If a Tenant leaves of their own accord, the Landlord can then raise the rent by as much as they want for a new Tenant. Check out the Historical Rental Increases in Ontario here

It used to be the case that if a Landlord wanted to move a family member into One of their Apartments, they simply had to give the Tenant 60 days notice (as long as they reached the end of their lease). This has now changed.

If you tell a Tenant that you are moving a Family member in now, you must pay a further penalty, which is equivalent to 1 months rent, or you have another option of finding the Tenant another Apartment that is acceptable by them.

We sometimes see Buyers' of Income Properties wanting to live in One of the Units themselves, and in this situation, that buyer does not need to give the penalty of 1 months rent. But that buyer or family member must remain living in that unit for a full 12 months, or they could be liable for a penalty of $25,000 for essentially lying to the Tenant just to get them out.

There is also a new rule whereby a Tenant who claims that they are being abused, and want to leave their Apartment, they can do this with just 28 days notice to their Landlord, and break their lease without any penalty.

For more information about any of these changes, get in touch with Patrick Walchuk at 613-788-2590 or leave your comments below.

You can see a more detailed explanation of these changes directly from a Real Estate Lawyer from Toronto, Mark Weisleder, with RealEstateLawyers.ca, you can reach Mark at 1-855-466-3801 or Info@RealEstateLawyers.ca 

Take a second to express your thoughts on these new rules to the Ontario Residential Tenancies Act.

Posted in New Rules
Oct. 17, 2017

New Mortgage Rules In Effect January 1st 2018!

New Rules In Effect Jan. 1st Will Affect Your Buying Power & Your Ability To Refinance Your Home!

I heard that the new stress test will devalue what someone can afford by 21%. So if one planned to buy a house at $400,000, they may be looking at just $320,000. Apparently it will impact 1 in 6 buyers, which is 17% of the total buying market.

There will be a negative effect on a segment of the market for sure. You need to understand that this is NOT just for mortgages that are CMHC insured, like the last stress test set up in October 2016. This is for basically ALL mortgages of buyers who have a 20% plus down payment.

It is supposed to come into effect January 1st, 2018 but from the articles I'm seeing, it could start asap as it will be at the banks discretion. Therefore, I'm simply writing to tell you the obvious ....if you are a buyer, have You been pre-approved for a mortgage as it is now more important than ever.

Watch the video below with Patrick Walchuk and Leo Maiorino from Mortgage Brokers Ottawa explaining the main aspects of these new mortgage rules and who they will impace the most!

The government (Office of the Superintendent of Financial Institutions) is implementing new mortgage rules that will reduce purchasing power on conventional purchases and refinancing of all homes.

The new qualifying rules will come into effect January 1, 2018 requiring all conventional mortgages to qualify at the greater of; a rate 2% higher than the contract rate, or the qualifying rate (currently 4.89%).

The new rules will impact your mortgage affordability by approximately 20%.

An average family income of $100,000 translates into approximately a $500,000.00 mortgage approval at current rates.

With the new rules, the average family's ability to qualify for a mortgage will be reduced to approximately $400,000.00.

For the purpose of this example, our mortgage calculations are based on a 30-year amortized mortgage and no other outstanding debts (OAC, rates subject to change).

What does that mean for you?

If you are purchasing with 20% down payment, start looking more seriously and purchase prior to January 1st 2018.

If you wait, your dream home may be substantially different than you expect.The Purchase agreement must be in place prior to January 1, 2018 to qualify under the existing rule.

Looking to consolidate SOME debt into your mortgage?

If you have credit card debt or any other unsecured debts you should strongly consider refinancing now prior to the qualifying rules changing on January 1st 2018. Typically people consider consolidating debt after their holiday bills come in the New Year, we recommend that you consider thinking about this process now, as it may not be an option later.

Other mortgage financing that will be impacted, refinancing for the purpose of:

  • Home renovations
  • Purchasing a recreational property
  • Other major financial changes

You should discuss a plan now with your current or future lender or Mortgage broker.  Even if your mortgage is not yet up for renewal, it is worth discussing what your options are before the changes come into effect in January.

Our thanks go to Leo for shooting this video with us, if you're looking for a great Mortgage Agent get in touch with him:

Leo Maiorino, Mortgage Agent
Direct: 613-371-6975
LeoM@MortgageBrokersOttawa.com

Oct. 6, 2017

4 Unit Building in Centretown Financials & ROI

See the Cap Rate, Cash-Flow & ROI on this Recent sale of a Multi-Family Building near downtown

This recent sale of a 4 Unit Building will give you a good idea of what to expect if you're looking to buy a smaller income property in the downtown areas of Ottawa. This sale was in the centretown and Golden Triangle Neighbourhood near the Canal.

This Listing sold for over the asking price and we suspect that there were multiple offers, as we've seen in recent months. Good Income Properties are selling within the first few days of hitting the market and some for well over the listed price.

Carlington 4 Unit Building, Sold Sept. 2017
Listed Price $739,900

Selling Price $750,000
Scheduled Rental Income (SRI) $46,140
Effective Rental Income (ERI) $44,294
Total Operating Expenses (TOE) $19,924
Net Operating Income (NOI) $24,370
Capitalization Rate (CAP) 3.2%
Operating Expense Ratio (OER) 45%
Sales Price X Net Income 31
35% Downpayment $262,500
Mortgage (@ 3.25%) $487,500
Annual Debt Service (mortgage payments) $28,596
Cash Flow -$4,226
Return on Investment (ROI) -1.6%

Some numbers to take note of are the Operating Expense Ratio, which was 45% on this building, which we consider to be quite high, and at the end of the day, the purchaser here would have a negative cash flow of over $4000 per year after putting 35% down.

This building sold in 3 days, if you are looking to buy an Income or Investment Property anywhere in the Ottawa area, get in touch and we'll send the best properties to you as soon as they hit the market.

Sept. 6, 2017

8-Unit Property sold in Carlington

Financial breakdown from the recent sale of an 8 Unit Apartment Building in the Carlington Neighbourhood.

This property was a purpose built building in the West End of Ottawa, in the Carlington Neighbourhood and it gave the buyer a 2.7% return on their investment.

Carlington 8 Unit Building, Sold Aug 2017 

Selling Price $1,261,695
Scheduled Rental Income (SRI) $93,000
Effective Rental Income (ERI) $89,280
Total Operating Expenses (TOE) $29,328
Net Operating Income (NOI) $59,952
Capitalization Rate (CAP) 4.7%
Operating Expense Ratio (OER)  33%
Sales Price X Net Income 21
35% Downpayment $441,953
Mortgage (@ 3.25%) $819,742
Annual Debt Service (mortgage payments) $47,824
Cash Flow $12,128
Return on Investment (ROI) 2.7%

Want to sell your Income Property?

If you own an Income Producing Property and are thinking about selling it, get your free evaluation Today and find out what it's worth.Get Your Buildings Value here

Aug. 7, 2017

Sandy Hill 6-Unit Property, sold July 2017

Financial info and the Return on Investment for a 6-unit Building in Sandy Hill, Ottawa

Below is a video covering the financial information for the recent sale of a 6 Apartment building in Sandy Hill, we'll let you decide if the buyer got a good deal, we provide you with the Cap Rate as well as the ROI based on the investor dropping a 35% down-payment.

Sandy Hill 6 Unit Building, Sold July 2017 

Selling Price $1,500,000
Scheduled Rental Income (SRI) $137,520
Effective Rental Income (ERI) $132,019
Total Operating Expenses (TOE) $49,253
Net Operating Income (NOI) $82,766
Capitalization Rate (CAP) 5.5%
Operating Expense Ratio (OER)  37.3%
Sales Price X Net Income 18
35% Downpayment $525,000
Mortgage (@ 3.25%) $975,000
Annual Debt Service (mortgage payments) $56,881
Cash Flow $25,885
Return on Investment (ROI) 4.9%

From the table above I would say that this was a decent investment, which gave this investor over $2000 cash-flow every month and the building shows a Cap Rate of 5.5% which is considered quite high for a neighbourhood like Sandy Hill. This buyer got a Return on their Investment of 4.9%.

The Total Expenses above take into account the maintenance and management for the building as well.

This buyer put down $525,000 to buy this property, which equates to 18 times the NET Income of the property and this is considered low to fair, with the total expenses at almost $50,000 per year, but at the end of the day, all that really matters is the amount of cash you can put in your pocket every month or year and in this case it was a very decent purchase IMHO.

Want to sell your Income Property?

If you own an Income Producing Property and are thinking about selling it, get your free evaluation Today and find out what it's worth. Get Your Buildings Value here