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Bad news for Montreal investors

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Montreal might have one of Canada’s hottest real estate markets, but that doesn’t mean its high-rise condo investors are reaping the benefits.

According to a Canada Mortgage and Housing Corporation report, upwards of 75% of investors in the new high-rises that have recently sprouted around downtown Montreal are in the red—the reasons being their mortgage payments, condo fees and annual taxes.

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“We had a sample of 375 condo units being rented out of the new high-rises in Montreal, and we see cash flow is mostly negative in those condos,” Francis Cortellino, a CMHC economist, told CREW.

The number could be lower, though. Cortellino advises that the study presumed those buyers only put 20% down to purchase their units, but the reality is a number either put more money down or even purchased in cash.

The report brings to mind a joint report from CIBC and Urbanation earlier this year that revealed 44% of Toronto’s condo investors were in negative cash flow—of which 45% were short by less than $500, and 20% between $500 and $1,000. In that case, investors were very likely banking on long-term asset appreciation, and may have even been using their losses to offset taxes.

“This report is more of an open question about Montreal. We’d have to dig deeper,” said Cortellino. “Investors in Montreal may be hoping for the same result that cash flow may be negative in the short-term, but when they sell their units, value would increase a lot. This report is the first step to seeing what’s going on in those new very large high-rises in Montreal.”

The CMHC report showed that operating expenses exceeded rents by an average of $385 a month.

Brad Henderson, president and CEO of Sotheby’s International, says there could be other factors at play. If Toronto is any indication, the most likely reason is that investors are hedging on expected appreciation.

“If it’s a fully financed condo, it’s as true in Montreal as it is in Toronto,” he said. “Most people are banking on appreciation of the underlying asset, in this case a condo, being part of their overall return. They’re expecting appreciation will be more than enough to compensate them for their negative cash flow, and only time will tell if that’s what will happen. In Toronto, people have been rewarded for new construction condos, where they’ve had to fund them for the first couple of years before selling them either to another investor or to an end-user.”

 

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Minor renovations that make a major difference

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(NC) Renovations can be a daunting task. If your goal is to increase your property value, smaller upgrades can provide a higher return on your investment.

Here are some budget-friendly projects for key areas of your home that can boost your property value:

Kitchen. You don’t need a complete remodel to increase the value of this space – it can be as simple as focusing on one thing, such as cabinets or countertops. Refacing old cabinets by adding a fresh coat of paint, a new finish or updated knobs can bring new life to your kitchen. Adding new granite countertops is an easy way to modernize an older kitchen. Make sure to choose a countertop that fits with the price point and aesthetic of your home.

Bathroom. The bathroom is where most of us begin and end our day; modernizing it is a great way to increase your property value. New floors or shower tiles will give the illusion of a complete makeover. Updating the vanity, sink or mirror are also inexpensive options. Smaller bathroom projects like these can have high appeal to future buyers.

Windows. These are often overlooked in renovations. However, upgrading windows is a great idea for both aesthetic and energy-saving purposes. In cooler climates you can purchase windows with insulating properties, and in warmer climates you can purchase those that reflect sunlight.

Deciding on the right budget to suit your needs can be hard, but worrying about the financing shouldn’t hold you back. For an easy way to finance these renos, check out The Home Depot Project Loan, available across Canada.

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The hottest bathroom looks this year

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(NC) Thinking about renovating your bathroom this year? Whether it’s a simple update like a fresh coat of paint or new hardware, to a complete overhaul of your layout, there is a lot to consider when renovating. Read on for some of the latest trends.

Bold colour choices. Similar to what’s happening in the kitchen, bold colours are making their way into bathrooms, from deep blues to forest greens and even black. If you don’t love painting, consider bold wallpaper. It works particularly well in powder rooms, as the smaller space is a great area to experiment in without overwhelming the rest of the house.

Compact design. New designs are embracing less square footage by combining features, with fewer double sinks and more shower/bath combos. Installing glass doors instead of using shower curtains creates a more open look. Wet bathrooms are also growing in popularity and create a show-stopping look while maximizing small spaces.

Terrazzo time. Terrazzo is making a comeback with a modern twist. Today’s terrazzo comes in a wide variety of colours and uses an assortment of other materials to get its signature bits-and-pieces look. It’s a great alternative to stone and marble as it isn’t as expensive. Plus, it’s as durable as it is eye-catching, while requiring minimal maintenance.

Statement mirrors and art. Many people see the bathroom as a functional room and not a place for statement pieces, but this space is an extension of your home. An easy way to change the appearance is to update the mirror. Round mirrors in particular are very popular this year. Don’t be afraid to move pieces from other rooms in your home here to achieve a more interesting look.

Industrial chic. Exposed plumbing and hardware are being incorporated into new designs this year, a look that allows a number of unique metal finishes to be shown off. From matte black to copper and gold, try mixing and matching in your bathroom.

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Most popular handyman jobs for spring

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(NC) As the weather warms, it’s an ideal time to tackle home renovation projects. Here are the top jobs worth hiring a handyman for this spring:

Deck and patio repairs. If you have one of these outdoor spaces, it’s a safe bet that you’re planning on spending a lot of time out there over the summer. Since decks see so much action, they require proper maintenance and upkeep. Fixes can include warped or rotten wood, popped up nails or loose handrails.

Power washing. A small task that is often overlooked is maintaining the overall cleanliness of the outside of your home. Have the exterior, back deck and driveway power washed to easily freshen it up.

Window washing. From snow and rainstorms to heat waves, there’s a lot of muck that can build up on your windows. A professional will get those hard-to-reach places clean and make your windows and your sills sparkle.

Caulking and weather-stripping. Weather-stripping and caulking can have a significant impact on keeping cool air in and hot air out—and vice versa come winter. If there’s a significant leak it will also help save money on your energy bills.

Updating doorbells and locks. Keeping your home secure is always a priority. With so many new smart locks and doorbells available, consider an update that allows you to keep an eye on your home from afar. From video doorbells to smart security cameras[KM1] , it’s one less thing to think about when away from home.

Updating the backsplash. This small job makes a big impact. It’s a great way to inject some personality and make it look like you’ve done a lot more to the space than you have. If you want to go all out, have your handyman also paint your kitchen cabinets for a quick and easy kitchen makeover.

Find the perfect handyman for your spring jobs at homestars.com.

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