7 ways your home can make money for you.

Who knew you could be living in a money-maker?

The roof over your head is likely the biggest asset you'll ever own. Trouble is you don't see any money from your house until you sell it – unless you follow the lead of some ingenious homeowners who have figured out a way to cash in on their homes while still living in it. You could be sitting on a pile of dough without even realizing them. Here's how you can make your home make money.

1. Become a landlord
The plan: Rent an apartment in your home. It could be a basement bachelor, a renovated attic, an entire floor or a detached, renovated garage. Renting an apartment can allow you to buy a house you might otherwise not be able to afford. "It also allows many seniors to hang on to their homes," says Susan Wankiewicz, executive director of the Landlord's Self-Help Centre, a nonprofit service that helps small-scale landlords in Ontario.

KA-ching!: Rents range from a few hundred dollars to more than $1,000 a month. When Rosalind Stefanac and her husband bought their first home in Toronto in 2002 for $300,000, they specifically looked for a property with an apartment that would help ease the mortgage payments. They rented out their basement apartment for $700 a month, which covered half the mortgage.

Reality check: It takes more than paint and wallpaper to make an apartment suitable to rent. Each municipality in Canada has individual standards regarding renting, and you'll need to ensure the space meets zoning codes. Stefanac spent about $10,000 on drywall, insulation, carpets, wiring and a new fridge – and it took 14 months of rent money to recoup the cost.

Being a landlord can also be stressful, especially when your tenant gets behind on the rent. After Stefanac's first tenant lost his job, he couldn't always make the rent and sometimes paid her partially with five- and 10-dollar bills. Carefully screen potential tenants by getting references, especially from previous landlords.

2. Put up a parking lot
The plan: Rent out your driveway or garage to people who need parking space (usually in major urban centres) or storage facilities for items that need to be kept indoors over winter, such as boats and motorcycles. Free classified ad websites such as www.craigslist.org and www.kijiji.ca have categories specifically devoted to parking and storage spaces for rent.

KA-ching!: Norm Gill, a retired school district employee whose Vancouver home is close to B.C. Children's Hospital (where parking spots go for $10 a day), rents out two spaces in his four-car garage for a total of $300 a month. "We built a new home and didn't realize how much it would cost, so this brings in a little extra money," he says. Rebecca Gruihn, a film student at York University in Toronto, rents out the parking space that comes with her apartment for $75 a month. "It's not a lot of money, but when you're a student, every bit helps," she says.


Make your property a star
The plan: Rent out your home as a set for a commercial, TV movie or feature film. Every province in Canada has a government-run film development corporation (British Columbia Film, for example) that lists properties available to location scouts and producers. All you need to do to get listed is send in photos of your home.

KA-ching!: Rental rates can vary from $500 to $5,000 a day, depending on the type of project (a feature film typically pays more than a TV production). When the Honourable Myra Freeman, lieutenant-governor of Nova Scotia, listed her Halifax home for sale in 2000, a location scout who went to the open house decided the 1970s details – yellow appliances, shag carpet and wallpapered rooms – were just right for the feature film Scotland, Pa., directed by Billy Morrissette and starring Christopher Walken. Freeman was pleased by the respect the film company showed for the property during the three-week-long shoot and says seeing a movie made in her home was an "exciting adventure." Over the past two years, Susan Harding-Cruz of Hamilton has earned $5,000 for renting out her home for three TV productions that each took three days to shoot.

Reality check: A movie shoot can upend your life, since you'll have to move out of your home during filming. You may have a crew of 50 people tramping through your house, so things can get broken. "This isn't for someone who is uptight about her home," says Harding-Cruz. "If you've got lots of precious things around, it might make you nervous." Check that the production company has adequate insurance to cover replacement costs. When one of Freeman's antique tables was badly scratched, the film company paid for a replacement.

4. Host a student
The plan: Host an international student in your home by providing a separate bedroom and three meals a day. Homestays, as they are called, can last anywhere from a few days to a year, and students can range in age from 10 to 60. The host family is expected to spend quality time with the student, helping him adjust to a new culture and often a new language.

KA-ching!: You can earn about $500 to $800 a month per student and can host more than one student, says Robin Wilson, managing director of Canada Homestay International, which has a network of 4,000 homeowners across the country. Laura Williams, a Vancouver-area energy manager and single mom to three teens, hosted a 16-year-old Brazilian boy and received $800 a month. "It was a positive experience for my kids," says Williams. "They loved getting to know Felipe and treated him just like a brother. And they are hatching plans to go visit him in Brazil now that he is back home."

Reality check: You, the homeowner, lose some privacy, and students may test their newfound freedom since they are away from their families, often for the first time. Felipe had trouble sticking to a curfew because he hadn't had one back home.

5. Run a bed-and-breakfast
The plan: Offer one or more rooms in your home to travellers who are visiting your area.

KA-ching!: Rates vary widely, from about $50 to $200 a night, depending on how luxurious the accomodations are and where you are located. Debbie Gaspich purchased her 150-year-old home, the Martin House Bed and Breakfast, in Jordan Village, Ont., (close to Niagara-on-the-Lake and the popular Shaw Festival) with the intention of continuing to rent out the rooms to pay for the renovation and upkeep of her large property. She began by renting just a couple of rooms and earned $7,000 in her first year. Today she rents five bedrooms, as well as a small cottage on the property, from May to October and earns $25,000 annually. She manages the B&B on top of a full-time job.

Reality check: Changing sheets. Preparing brunch. Keeping your home tidy. Engaging in small talk early in the morning even if you don't feel up to it. Running a B and B can require a lot of work and energy.

6. Go back to the land
The plan: If you own a large parcel of land in a rural area, you can rent it to farmers to raise crops or livestock.

KA-ching!: Depending on where you live and what the land is used for, rates can vary from $20 to $200 an acre, says Kevin Hursh, an agriculture consultant in Saskatoon. "There are different values for different crops – you can earn more if you rent your land to harvest soybeans instead of wheat or barley, for example." Six years ago, Tami and Daniel Blais sold their house in town and moved to a $130,000 country home that came with 160 acres outside Battleford, Sask. Instead of farming the land themselves, they rent 80 acres to a local farmer. The farmer keeps two-thirds of the profits and pays the other third (about $3,000 a year) to the Blaises as rent. "We use the money to pay our property taxes and insurance," says Tami.

Reality check: The odour of manure in the fields and the noise of combines swathing the crops may be a bit of a nuisance, but for most people in rural areas this is just part of country living. More concerning is the potential for pesticide drift when crops are sprayed. Also cattle or horses may get out and require rounding up.

7. Tap into your equity
The plan: Apply for a home equity loan. One-quarter of Canadian homeowners have borrowed against the equity in their home, according to a recent Ipsos-Reid survey. These loans are easy to qualify for and have lower interest rates than other types of loans (usually around prime). Plus, banks typically require that you pay only the interest expense of the loan.

KA-ching!: This is an easy way to get access to a lot of money without having to wait too long. "Many banks will lend you up to 80 per cent of the value of your home, 85% with some private lenders, minus any outstanding mortgage".

Reality check: Because they are so easy to acquire, you can land in more debt than you can handle. If the market turns downward and your $300,000 house is suddenly worth only $250,000, you've lost a lot of the equity in your home and still have the loan to repay.
by Anne Bokma

Posted by Steven Porter. Steven is a licensed Mortgage Agent with Mortgage Architects and a retired licensed, real estate broker with 30 years experience in residential real estate. He can be reached at 1-905-875-2582; steven.porter@mtgarc.ca or online at 1800Mortgages.ca

Purchase Plus Improvements Program

I'd like to share a program that has become very popular with many first time home buyers who want the features that come with a new home at the price and benefits of a resale home. The program is called Purchase Plus Improvements.  Here's just a couple of great examples for use of this program:

1) By including $30,000 for upgrades in your mortgage on a $400,000 home purchase gain a kitchen and bathroom that could have only been purchased if you spent $500,000 on a home.

2) By including $40,000 in your mortgage by adding a rental suite, turn a home into an additional source of income.

Overall, if you are looking for a product that offers a greater financing choice for you and your family by building a new home or undertaking a small or large scale improvement to an existing home and increasing the value of the property, this is the product for you!

Some of the features of the Purchase Plus Improvements Program include:

• Availability for new home construction, purchases or refinance with improvements.
• Loan-to-Value (LTV) ratios for purchase transactions: up to 95% for 1–2 unit and 90% for 3-4 unit owner-occupied properties based on as-improved value.
• LTV ratio for refinance transactions: up to 80% for 1-4 unit owner- occupied properties.
• Mortgage loan insurance premium refunds for homeowners who make energy–savings renovations to an existing home.
• For more detailed information get in touch with Steven Porter, Mortgage Agent with Mortgage Architects to explain the technical aspects of this program and fit it to your needs.

Take the first step to creating your own dream home and talk with your mortgage broker. 

Visit http://www.stevenporter.ca/solutions/ShoppingAids and download my easy Mortgage Checklist to begin your home search. Or email me, I'm always available to answer your questions. 

Steven Porter, CRMS ABR SRES CNE is a licensed Mortgage Agent with the Mortgage Architects. Steven is also a licensed, non-selling real estate broker, Accredited Buyer Representative and Seniors Real Estate Specialist with 30 years residential, commercial and investment  real estate experience. Steven works with together with Realtors across the west GTA in a noncompeting capacity, assisting customers and clients achieve financial independence through home ownership. Steven can be reached at 1-905-875-2582 or EMail at steven.porter@mtgarc.ca

'Tenanting' a vital skill for landlords

'Tenanting' a vital skill for landlords

by finance columnist Ellen Roseman

Real estate can yield good returns for investors. But success requires more than just a talent for buying low and selling high. You also need an ability to size up potential tenants, to decide if they will treat your property kindly and pay consistently. Experienced landlords say this is the hardest job of all — and requires skills that take a while to develop.

"I have three properties in Moore Park in Toronto," says Eamon Hoey, "and I've learned a lot in the five years since I've been in the rental market. After-tax returns on my properties, including any capital gains, are about 5.2 per cent a year. Most income funds will give you a better return," he says.

"Expect disasters", says Hoey. "The furnace in one property stopped working and caused $105,000 worth of damage. Unfortunately, the insurance didn't cover the damage" — since the home wasn't occupied by tenants at the time.

He makes it a rule not to rent to people with pets. His sister once had a tenant with a pet snake, which escaped and was spotted by another tenant.

"My sister got a major bill from the fire department and the exterminator, who had to search for and destroy the boa constrictor. This isn't an event my sister likes to talk about publicly."

Kathy Paliwoda is a consultant for residential landlords in Southwestern Ontario. She also teaches realtors about a landlord's rights and obligations. She says, one of the biggest causes of disputes between landlords and tenants is overpayment of utility bills. What happens if a tenant agrees to pay the bills for water, gas and electricity and later falls behind? Is the landlord liable? Can the utility put a lien on the property?

In a recent Ontario court case, Duong vs. Waterloo North, Justice Donald Gordon ruled landlords weren't responsible for a tenants' unpaid hydro bills.

Paliwoda says landlords may still be on the hook. Utilities often ask them to sign a contract, saying they're responsible when tenants don't pay utility bills on time. Her advice: If a utility threatens to shut off the power, pay the bills and sue in small claims court. Otherwise, you could have thousands of dollars in property damage that insurance won't cover.

Libby Telford is a first-time landlord. She says, "I think students are the best choice. They're not around much, they respect the rules of the house and they have provided me with post-dated cheques for the term of their lease."

However, she's not looking forward to finding tenants again. "I'm very picky and it's stressful for me, knowing I would consider only one out of every six prospective tenants."

Andrew Vitch is an experienced landlord. He owns seven rental properties with 31 units in St. Catharines, Ont. The worst tenants, he says, are those who bring in friends to sublet their places when they leave. "Invariably, these tenants are not as good as the ones we chose," he says. "When they eventually move, we're faced with significant cleaning and repair costs that probably wouldn't have occurred with the original tenant."

Vitch and his wife Sue do regular maintenance in their buildings. They deliver cards and candies to tenants at Christmas. "I believe the bottom line in selecting tenants is: Are they on the way up or the way down?" he says. "We've rented to several tenants who had recently been bankrupt. After thorough investigation, it became obvious they had bottomed out and were getting things back together."

He talks about "tenanting" as a learned skill. As you get better at screening, checking references, calling banks and employers and running credit checks, you tend to be more satisfied with your tenants — and your real estate investment.








Posted by Steven Porter, Real Estate Broker / Mortgage Advisor

Lenders forcing investors to move into commercial

 More landlords are selling up their single-family homes to get over the increasing obstacles imposed by lenders, according to investors.

Frustrated by the increasing demands for additional paperwork and lengthy waiting periods, more investors are selling their assets to make the move into commercial.

“Investors realised more the advantages of commercial investing over residential after the market tumbled and with more lending restrictions in place, we are seeing a lot more make that move,” says Chris Davies, a real estate investor and Realtor in Edmonton.
Requiring a larger down payment, Davies says more investors are willing to sell up their assets quickly and make the move, both into multi-family buildings as well as retail and office space.

Speaking to CREW for a special feature on commercial investing in the new September issue, Simmone Park, an Ottawa-based investor, says landlords can be more financially “creative” to make the move.

“You can get creative and use a small business loan in your corporation’s name rather than use a conventional mortgage,” she says.

The positive performance of commercial real estate across the country is also whetting investor appetite to make the move from residential. According to the latest REALpac/IPD Canada Quarterly Property Index, Calgary recorded the best return of 11.1 per cent for the year ending June 30 compared to the Canadian average of 9.5 per cent.

Edmonton enjoyed returns of 10.8 per cent during the same period, while Toronto hit the spot at 10.1 per cent.

Written by  Grainne Burns

Blogged by Steven Porter, Mortgage Advisor,