All posts for the month February, 2012

How To Overcome Bad Experience Have you ever had that moment of disappointment? Perhaps that experienced of setting up an expectation but failed to achieved it? Didn’t get that dream job, you lost your job, you lost your house, didn’t do well in your last job interview your last exam or perhaps failed to be with that special someone? Sounds familiar doesn’t it?

Wether it is a personal objectives or relational experience failure are all  the same and has no difference. A failure is a failure no matter which way you look at it and the worse part is resentment often follows. Experts often says we all learn from our mistakes but it sounds too cheesy isn’t it?

The real question is how to overcome it? Here are some tips how to quickly overcome that resentment caused by failure that is hanging down in your shoulder.

First ask yourself a question – How will you know that you have done a good job? Experience says our mind is trained to make decision based out of “internal deciders” or “external deciders.” Your answer to this question is crucial in understanding your mistake.

Internal Deciders: is a process of thinking that cannot be explained but you just know it and feel it.
External Deciders: is a train of thought that can be express with the use of evidence.

Why is this important? In NLP (Neuro Lingustic Programming) or some call it training of the mind there is a term called “uptime” and “downtime” moment.

Uptime: You are fully aware of your surroundings, what you are doing and are aware of what is going on around you.
Downtime: Is when you start loosing your composure and everything starts to fall apart and gets in your head.

As cheesy as it sounds but a good way to overcome a resentment is to face the problem head on by recapturing that “downtime” moment feeling. That moment of failure but disengaging yourself from that actual event as if you are the audience of yourself just like watching your failure unfold and being rehearse in a movie. The faster you can do this the faster you can spend more time on the “uptime” moment and gain back your composure to correct yourself. Because by watching your failure from a perspective of an audience when you are in that uptime moment and are fully aware of your surroundings, your conscious mind will help you adjust and overcome that negativity and so uptime moment becomes second nature to you because it doesn’t feel as bad watching your mistakes from the perspective of an audience as suppose to you actually making the mistake.

From the audience point of view it is easy to ask yourself a question such as what could you have possibly done differently knowing what you know now in this specific situation? Because lets face it we tend to build rapport with someone who think and act just like us. We tend to listen and get advice from people who think, behave and act just like us. A notion of what “monkey see monkey do!” Our brain is structured and behave the same way when we are disappointed or feeling down we tend to caved in and escape from that awful bad experience but we can always train our unconscious mind to always be in that uptime moment.

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Rent To Own How Does It work?

How Does Lease To Own Work?

  • These agreements – relatively uncommon in Canada – are best administered by a licensed real estate agent or lawyer, property experts say.
  • A lease-to-own agreement gives a buyer the opportunity to rent a home, with an option to buy in three years or less. The sale price is determined beforehand.
  • The potential buyer pays a deposit, which is credited toward the purchase price.
  • The buyer pays a monthly rent, just as would be done in a typical lease agreement, plus an additional rent premium that is also credited to the purchase price.
  • If the potential buyer doesn’t buy the house at the end of the contract, both the deposit and the rent premium are lost.
  • Real estate agents and lawyers agree that before entering into such agreements, potential buyers should ensure they are dealing with the property owner.
  • They should seek assurances that their option deposits are going into a trust or other secure place.
  • Potential buyers should also know and understand the potential risk of losing their option deposit should they never qualify for a mortgage to eventually purchase the home.

Who really benefits?

Lease to own usually works very well if done correctly. Most of the time it works in favours to the landlord or homeowner. Why? Because they target buyers – people whose willing to own a home but cannot get a mortgage from the bank. (Example: Buyers that don’t have enough income and think their income stream will increase in the future or do not have a great credit score to qualify for a mortgage and thinking their credit score will increase in the future.) Some preyed on buyers who they think cannot afford to buy a home at all and they would inflate the future selling price of the property. Unless you have a crystal ball and could accurately predict the economic situation in the future then you can be certain that you are getting a good deal.

There are a lot of companies who advertise seminars about lease to own business and how it is a great source of rental income. But don’t get fooled with their no risk-guarantee advertisement and make sure to consult a professional before venturing and getting into a lease to own property investment yourself. Renting out a property to somebody who is in financial difficulty and cannot afford to buy now – with a tainted credit score is very risky! If you are counting on the rental payment to pay for a mortgage you could be well out-of-pocket for a few months while evicting a tenant out of your rental premises.

Before deciding whether lease to own is the right option for you consider and ask yourself the following questions:

1. Am I certain and absolutely sure that my financial situation will change for the better in the upcoming years?

(This question is important because you wouldn’t want to get locked in to a lease agreement where you would be shouldering all the expenses mentioned in the lease agreement such as – maintenance of the property and would later found out you are not qualified to get a mortgage anyway!)

2. Do I really know the future market value of the property Im purchasing?

(Do your homework! Do you think the future market value is set a proper price? Even an expert appraiser will be reluctant to give a future valuation because it is impossible to predict what will happen in the future. Make sure you ask a question about how they arrived at the future market value – what valuation method of analysis was used to arrive at a dollar value.)

3. For Lease To Own Investor: Do I have enough funds to pay months of mortgage without receiving a rent?

(You need to consider for the worse scenario. Under RTA – Residential Tenancy Act a landlord must follow a proper eviction process to evict a tenant. Sometimes eviction process could take months and months and if you are relying solely out of a rental income you may find yourself defaulting on your mortgage.)

Renting a bedroom vs Entire HousePassive income. The easiest way to create passive form of income is through renting out a property whether an entire house or a spare bedroom. What is passive income? Simply define by Robert Kiyosaki, the author of rich dad poor dad, an income stream that is generated with little or no effort. It is called passive because it is effortless also known as “dumb” income that does not involve a lot of strategy compare to other forms of income generating sources.

Home owner rent out a spare bedroom for different reason. Whether your budget is stretched thin or you’re looking for a way to get ahead, renting out that extra bedroom can provide a financial boost. Add breathing room to your monthly budget. With less of your monthly income going toward mortgage payments, you can focus on other priorities like adding to your emergency savings or retirement account or paying off credit card debt.

A savvy real estate investor on the other hand would acquire multiple properties to produce multiple income stream which requires more cash flow and involves higher risk compare to a simple homeowner renting out just a spare bedroom. Renting out an entire unit is different from just renting out a spare bedroom because they fall in to two different property law in Ontario.

This is when an investor needs to be careful and make sure he has a good understanding of tenancy law in the province of Ontario under Residential Tenancy Act.

So you have decided to rent out an extra bedroom space in your primary residence. The good news is under hotel accommodation where a landlord (owner of the house) resides in the same premisses, an entrance is shared including amenities such as kitchen and bathroom such tenancy is excluded from residential tenancy act under hotel accommodation. Therefore a landlord or the owner of the house that lives under the same roof can impose his own rules as long as it does not violate the quiet enjoyment of his border.

On the other hand when renting out an entire unit such as basement unit equipped with a separate entrance or renting out an entire house such tenancy falls in to the rules of Residential Tenancy Act. Under the act, a tenant must be given proper notice when terminating a tenancy agreement. For example a month to month tenancy requires a 60 days notice, a weekly tenancy requires a 28 days notice. Also, keep in mind the “no pet” clause in the province of Ontario which entails that a landlord cannot prohibit a tenant from bringing in pets in the house unless such pet can pose harm or causes allergic reaction to people living in the house.

Under lease agreement 60 days notice must be given to both party in advance prior to termination of tenancy. Question normally arise, what if a tenant failed to pay monthly rent obligation? Under RTA a tenant must be given a proper notice – whether the tenant is under a lease agreement or a month to month tenancy a notice must be given to both party. If a tenant still does not complies to a landlord demand for rent, a landlord must obtain an eviction notice from the sheriff office and this may take few days to receive. It could take up to 30 to 60 days before a tenant can be fully evicted out of the premisses.

Wether you are planning of renting out a whole unit or a spare bedroom it is also important to know the zoning bylaws within your area. Some areas in Toronto, ON. prohibits subletting a residential home so it is important to check with the municipality about your zoning bylaws.

There is also a difference between a legal apartment and illegal apartment so don’t get mixed up between the two. What constitute a legal apartment is a unit that is inspected and approved by the municipality and deem to be safe to live in. Such inspection includes checking of proper entrance and exit, windows, doors, electrical wiring, fixtures etc. It sometimes can be very expensive to upgrade a unit to a legal apartment and this is why almost 90% of home rental apartment in Toronto is an illegal apartment to begin with. Otherwise, there would a lot of people living in the street.

I am not suggesting that you start an illegal rental apartment but it is important for you to know the facts. Renting out a property can be very rewarding and can add to financial gain if done correctly.