mergers and acquisitions and smart recruiting can help real estate firms gain market share

In a market with a high level of competition, it can be difficult to grow a real estate firm. Some firms are able to increase their market share by strengthening community connections or by improving efficiency through new technologies, but most firms have to rely on other methods to grow. Mergers and acquisitions, in addition to smart recruitment, can make a significant difference for a firm that aspires to grow its market share.

As this article in The Real Deal highlights, mergers and acquisition activity in the real estate sector hit $524.7 billion in 2017, 25 percent more than the previous record of $424.5 billion, which was set in 2007. That activity accounts for mergers and acquisitions by private firms, residential and commercial brokerages, and real estate investment trusts (REITs).

Right at Home Realty Inc. recently acquired the assets of Your Choice Realty (YCR), a real estate firm with more than 400 realtors. The acquisition aligns with Right at Home Realty’s goal of expanding its presence throughout Ontario. Right at Home Realty has a team of more than 4,500 realtors, and YCR’s sales personnel and members of the management team will join Right at Home Realty.

Right at Home Realty Inc. wanted to make sure the acquisition of YCR was a smooth process for the YCR realtors and that the new team members would be able to take advantage of the employee resources that Right at Home offers, including ongoing training, excellent support staff, and a welcoming and open office environment.

A fascinating case study on the Keller Williams Realty blog discusses how important it is to provide a transition plan for incoming employees after a merger or acquisition and why retaining talented agents can make a substantial difference to the overall success of the transaction.

Besides using mergers and acquisitions to grow market share, a savvy firm will also recruit and cultivate talented agents. In addition to the ongoing training and high-level technological resources that Right at Home Realty Inc. offers, the company also makes proactive recruiting efforts to attract the right agents.

Recruitment and retention is integral to a firm’s success, because the cost of employee turnover, while difficult to quantify exactly, has been estimated by the Society for Human Resource Management to be about $4,129 (as the average cost-per-hire), with the average time to fill a position estimated as 42 days.

That cost and time delay can be detrimental to a firm’s bottom line. Instituting smart and efficient recruitment and retention processes can give a firm a competitive edge when seeking greater market share.

John Lusink: Will Home Renovations Always Provide Me a Return on Investment?

As many of us know, as residential property values in many parts of Canada have continued to rise in the past several years, the popularity for homeowners to add value to their homes by doing renovations has also risen. Taking advantage of a strong real estate market can be a good thing, but the question when it comes to renovating or remodeling one’s home is this: even in the best of real estate markets, is it a given that home renovations will provide a return on investment (“ROI”)? Put another way, can it be comfortably assumed that the increase in home value will be greater than the amount of money the homeowner puts into his or her home renovation? Those are important questions to ask.

Unfortunately, a rule of thumb that I always have when it comes to most aspects of the real estate industry is that almost nothing can be “comfortably assumed”. There are risks to nearly every move one makes in the industry, regardless of how strong the market is, and, yes, that goes for home renovations too. Now my purpose in introducing this word of caution is not to discourage those who may be considering a home renovation. Rather, it’s to emphasize the importance of carefully deliberating points such as the potential cost of renovation, what areas of the home are being renovated, and the timing of the project in relation to a potential sale of the house. All these play fundamentally into whether or not you as a homeowner will enjoy a financial return on investment after all the hard work you or your contractor put in to completing a renovation.

However, before even beginning to consider whether certain home renovation projects will be more intelligent to take on than others, I always recommend that homeowners consider whether their homes require any specific repairs to be done. If so, repairs should be undertaken prior to beginning any sort of renovation projects, as repairs will most likely yield immediate value for a homeowner. Things like cracked kitchen tiles, faulty electrical areas or a loose drainage pipe – these are all repairs that should be addressed first and foremost.

So, if you’ve fixed all needed repairs in your home, you can now consider what areas of your house to concentrate on as far as potential renovations. As many homeowners know, almost universally the most important rooms of any house – and the most frequently used rooms of any house – are the kitchen and the bathrooms. For those who are selling their homes and are looking to increase their home’s market appeal through renovation work, there is no doubt that tackling a kitchen and/ or bathroom renovation is well worth the effort and monetary cost. These are rooms that potential buyers pay a considerable amount of attention to, which means that kitchen and bathroom renovations oftentimes yield a 100% ROI for homeowners. However, as a caveat, these are rooms that are often the most expensive to renovate, especially if we are speaking about renovations that are more than just cosmetic.

The importance of going green is something that I often see overlooked by those who are renovating their home, which is why I regularly try to stress the point to my clients. When completing a renovation, remember how significant green technology can be, both for the environment, as well as for your pocket book. Things like replacing old kitchen appliances with green Energy Star appliances, or replacing windows with more energy efficient ones – these are all improvements that will not only help reduce your monthly energy bill, they can also yield some tax breaks too.

Sometimes in addition to renovating a room or area of a home, homeowners will also consider adding on to a home, which is a topic that I would like to end the article on. There is no doubt that adding on to a home can make the property more appealing – it adds to the total square footage, it can make the property not only larger, but also feel larger, and it can correct design issues with a home, such as a small master bedroom or a master bedroom without an on-suite. However, when considering the question of whether or not to add on to one’s existing property, I always urge homeowners to consider return on investment. Completing an add-on is usually an extremely cost-intensive project, and when considering an add-on from a return on investment perspective, the positive potential of a large project like an add-on may start to fade. Put a little more bluntly, the increase in a home’s value from an add-on rarely is greater than or even equals the cost of completing the add-on. It’s for this reason why I often recommend that homeowners stick with renovations and repairs.

In the end, even in a strong real estate cycle such as the one we’re in right now, I urge homeowners to carefully consider the numbers when beginning to consider a renovation to their home. If the numbers are not adding up or if it proves to be too expensive to do the kind of renovation you would like, perhaps it’s not a project that should be taken on at this point in time.

John Lusink – Why I’m Against the Proposed Municipal Land Transfer Tax (MLTT)

For the most part I use this forum to give me an opportunity to impart the knowledge I’ve gained from my years of experience as a realtor.  I offer home buying and other industry tips and facts, which I’d like to think are helpful and which are almost always apolitical.  I’m not one to frequently write on political or legislative issues.  However, that doesn’t mean I don’t have my opinions, especially when we’re talking about legislation that directly affects the industry I work in.

I mention this in relation to the Municipal Land Transfer Tax or MLTT, which has been on the industry’s radar for a number of years now and which the Ontario Real Estate Association (OREA), The Toronto Real Estate Board and myself strongly oppose. By way of “full disclosure”, I am a Director on for The Toronto Real Estate Board as well as Chair of The Government Relations Committee.  For those who are unfamiliar with what the MLTT is, let me give you a brief explanation and history of the tax.  The Municipal Land Transfer Tax is a second land transfer tax that can be implemented on a municipal level throughout Ontario.  That means that if an Ontario municipality decides to impose this new land tax, it would impact the sale of all homes in that municipality and essentially make the home buying experience in that municipality more expensive for all home buyers.  Make no mistake about it – the MLTT is something that would have a negative impact on the housing market in the municipalities that chose to implement it, and the reason why we know this is because of the effect the MLTT has had in the Toronto real estate market.

Toronto is the only municipality thus far to have imposed the MLTT.  The city did so in October of 2007 and the negative effect of its implementation on homebuyers and on the city’s real estate market as a whole is absolutely clear as day.  In fact, a recent study commissioned by the OREA and conducted by Altus Group Economic Consulting made the counterproductive impact of the MLTT even more evident.  Far from stimulating the real estate market in Toronto, the MLTT, which added as much as $6,206 to the average price of a Toronto home in 2013, has cost the city $2.3 billion in economic activity and almost 15,000 full-time jobs since the tax’s implementation.  What’s more, further research revealed that 85% of Toronto residents agree that the MLTT has made home ownership in the city more difficult; and 71% of Toronto residents expressed that the MLTT has caused them to delay their decision to purchase a home.  These are clearly not positive figures, and these, as well as others, demonstrate that in making the home buying experience more expensive (in a market that is already extremely expensive) the MLTT has done nothing but stunt the Toronto housing market.   Simply put, the economic return from this new land tax is outweighed by the disastrous toll it’s had on Toronto’s overall economy.

With all this negative evidence, one would expect that the MLTT would’ve already been swiftly repealed in Toronto.  Sadly, that hasn’t been the case.  Even more unfortunately, there is the distinct possibility that other municipalities in Ontario may impose the MLTT in their local real estate markets, something that the OREA and I are strongly against and are actively working to prevent.  

We breathe a small sigh of relief in knowing that many Ontarians understand the deleterious impact of the tax.  Imposing the MLTT in other Ontario municipalities could add as much as $3,680 to the cost of a new home.  It’s no wonder then that 69% of Ontarians believe that the MLTT would make them incur more debt in order to pay off the tax; and that 73% of Ontarians believe that this second land tax, if imposed, would make them unable to spend as much on furniture and renovations on their new home.  This last statistic specifically lends support to the idea that the MLTT not only negatively impacts the real estate market, it also casts a withering touch to the multitude of other industries that depend on the real estate industry to survive.

For me as a realtor, there is nothing that gives me more joy than seeing a buyer purchase that brand-new home, that home of his or her dreams.  The feeling of finally being a homeowner is a wonderful thing, and according to most of Canada – and 90% of Ontario residents – owning a home is a dream that Canadians aspire to. 

The reality is that the MLTT is an unnecessary tax that in the long run will do more economic harm than good.  More importantly, from my perspective, it makes that grand goal of being able to purchase a home all the more difficult for Canadians.  Ontarians already have one land tax to deal with when purchasing a house – that should be sufficient.  That’s why I will continue to say NO to another home owner tax.

For more information on the subject and for ways in which you can voice your opposition to the MLTT in your municipality, please feel free to visit www.DontTaxMyDream.ca.            

John Lusink Advises on What to Know When Moving Into a Condo

We read about it almost every day – the continuing rise in Canadian real estate prices. And it seems as real estates values continue to rise, so do the questions revolving around the future of the market. Are we in a real estate bubble? When will the market soften? And when it does, what will happen to the rest of the economy? Will we see another pull down into a recession because of the real estate sector?

Lots of questions indeed. But, despite these questions, there’s one thing that’s for sure – as real estate prices continue to rise, they are causing an undeniable change in what Canadians can and can’t afford. As has been mentioned repeatedly in the media, an increasing number of Canadians cannot afford to buy homes because, simply put, they’re out of their price range now. As an alternative to buying a new home, some Canadians are turning to remodeling their current residences. Others, particularly young, first-time buyers, are turning to a second, more affordable option – namely, buying a condominium. This is the topic that I would like to talk about in this month’s article.

Clearly, in most instances, purchasing a condominium is a more affordable option than buying a home. But, besides affordability, condominiums boast several other fairly significant positive points that on average home buying doesn’t offer. If we are talking about high-rise condominiums located in downtown core areas, then condo living can provide a close proximity to entertainment attractions and a wide range of other amenities offered by an urban, downtown centre. Not to mention that the increasingly frustrating suburban-home-to-downtown-office commute is entirely eliminated when living in a downtown condo.

Other amenities particular to condominium living should also be kept in mind. Most condo buildings have a Home Owner Association or HOA, which will be responsible for tending to all landscape demands and the repair and maintenance of anything that is outside of the four walls of your condominium. Certainly for a buyer who is looking for less responsibility or who is unsure as to whether they will be able to keep up with the maintenance of a home, a condominium may be a more suitable option. There’s also the fact that many condominium buildings offer access to pools, gyms and patio areas, all of which may be difficult to find when looking for a home on a limited budget.

And at the risk of overselling the positive aspects of condo living, purchasing a condo may also serve as a strong investment opportunity, particularly here in Canada. Over the past five or ten years, in a number of major Canadian cities, Toronto being perhaps the most often reported, there’s been a noticeable shift in people returning from the suburbs to the downtown core. It’s a trend that’s been particularly noticeable in the younger generation, and there’s no doubt that the increase in popularity of downtown real estate has had a buoyant affect on real estate prices in the area. So, for those who are considering purchasing a condominium, particularly a condominium in a downtown centre, the rising popularity of the area – which has a strong chance of continuing – makes purchasing a condo an attractive option.

But, like most things, there are upsides to condominium living and there are other parts and aspects that may completely turn off some buyers – and it’s important for every buyer who is considering purchasing a condominium to have an unfiltered point of view of what exactly it means to live in a condominium building.

Consider the reality that if you purchase a condominium, you will be living in a community. That means you will be sharing walls and potentially hearing neighbors and also interacting, perhaps on a daily basis, with your neighbors. Many buyers who have lived in apartments for many years would consider the idea of purchasing a property with shared walls a complete disappointment. So, the reality of the communal environment of condominium living is really an important factor that needs to be included in the decision equation.

There are two other points that I always like to communicate or stress for those buyers who are thinking of purchasing a condo – one point relating to the Home Owner Association. HOAs can provide a lot of support and a lot of advantages to residents. However, it’s typical for HOAs to also impose certain building rules, which all residents are expected to follow. These rules may include noise restrictions, restrictions on pet ownership, as well renovation limitations. Once again, similar to the previous point, many buyers look forward to gaining an increase in freedom and independence when buying a property. Unfortunately, these same buyers may find HOA restrictions to be far too imposing for their liking.

And as a final point that I would like to mention is a B-side to the earlier argument I made in regards to the current investment opportunity presented by condos in downtown areas. Yes, there is popularity in living downtown right now and, yes, that is certainly helping condominium values. However, traditionally condominiums have proven to be the bellwether of the real estate market, meaning that when the market begins to feel a decline in values, condominiums are the first properties that feel the pull back. This can make selling a condo property that much more difficult.

In the end, despite all the differences between condominium buying and home buying, one principle remains true across the board – buyers always need to take an in-depth and well-rounded look at whatever property they are considering, one that honestly and openly considers the good with the bad.

John Lusink: Investment Property – Domestic or Abroad?

Note on Professional Role Change: Before beginning my monthly blog post, I wanted to briefly let all my readers know about the new management position that I accepted at RE/MAX. In March, I accepted a new role as General Manager at RE/MAX Premier, Inc. at the company’s Vaughn, Ontario office.

In my role as General Manager, I will be overseeing all management operations at the office and working to further enhance the RE/MAX Premier client experience. For the past ten years, RE/MAX has become known in the industry for its ability to help buyers and sellers navigate the complexities of the real estate world, while delivering quality, hassle-free client service. As General Manager, I look forward to giving clients of RE/MAX Premier even more choice and an even higher competitive edge.

           In a previous article dated November 5, 2013, I discussed the economics of the modern income property and highlighted a few variables to consider if you were contemplating becoming involved in such an investment.

            Why don’t we consider this topic from a new angle and assume that you are a seasoned investor who wants to expand to a second, or even third, income property. You are aware of the risks and the expenses – in both time and money – involved in owning this type of investment and are ready to leverage the success you’ve experienced thus far for future gains.

            The next logical question then becomes: show I invest domestically or abroad? There are great opportunities and benefits to both, but only one will be the right choice for you. Let’s examine each in a bit more depth.

Domestic

            Since the Canadian real estate market continues to maintain a stable footing, now may be the time to consider another go at domestic investment. The economy is expected to continue its upward course and job growth is projected to be good – though slightly slower – in the remaining months of the year. These factors will have a profound effect on the real estate sector, which, experts speculate, makes it an opportune time to get involved in the market. What’s more, surveys have shown that capital is available for this type of investment.

            If this is to be strictly an investment property – not one you want to hold and use as a vacation home – wise investors will consider investigating the urban market. Previous years have seen urbanization become a dominant trend, and 2014 is expected to remain strong in this upward shift. So, what does this mean for the real estate investor? The urbanization of many major markets presents investors with the opportunity to participate in redeveloping these increasingly in-demand locations. The development of new housing, condominiums, and rental properties and apartments in urban areas is a burgeoning niche that deserves exploring.

Markets to watch in 2014 include Calgary, Edmonton, Saskatoon, and Vancouver.

Abroad 

            Real estate markets abroad can be an enticing draw to the investor in the market for a vacation home or a rental property. Who would scoff at four acres of prime real estate in Costa Rica for a mere $43,000? But while the price may be right, there are many other factors to consider when buying abroad.

            As a citizen of Canada, you may not have given much thought to the rules governing foreign ownership, but they do exist and they differ from country to country. Have a country in mind? Do your homework and become intimately familiar with the property laws of that locale. What are the taxes? Can this property be used for rentals? Are there laws regarding taxable presence – meaning the length of time you are, or aren’t, spending time in the country?

           Another factor to consider is title and past ownership. Some areas of the world – Eastern Europe for example – have undergone extensive boundary shifting and have made property ownership a murky subject. Again, it’s advisable to do your homework. You don’t want the great-great-great-great-grandson of the original property owner popping up to lay claim to your new investment.

            When considering the purchase of a foreign property – especially in underdeveloped countries – plan on paying cash. This will help put in perspective what you can afford without the aid of the often shoddy or even non-existent financing system found outside the major global markets.

            As is always wise with any real estate purchase, contact a local broker to help you with the details. It’s money well-spent when you consider some of the obscure laws and provisions for property ownership found in many of the hottest markets. For example, in some Southeast Asian markets, you’re welcome to buy property as a foreigner, but if you turn around and sell that property, you have to keep the money you make in a Malaysian bank. It’s little things like this that can make or break a foreign real estate transaction.

Markets to watch in 2014 include Central America, Southeast Asia, and the Mediterranean.

            The bottom line when deciding between purchasing real estate domestically or abroad is: know your market. Do your homework and make use of local brokers who know the area well. Though you may be considering a property in the most beautiful corner of Canada or one on some exotic beach on the other side of the globe, don’t let your heart rule your head. As with every other investment, information makes for a wise decision. Take the time to gather as much information as you can and, whether you purchase domestically or abroad, your real estate investment will pay off in exactly the way you want it to.

John Lusink: How to Accurately Price Your House.

As one would expect, there’s a lot involved and a number of questions that need to be asked when it comes to selling your home. How do you go about finding a trustworthy agent who will do a quality job representing you and your home? How do you stage your home? How long will it take for your home to sell? And, indeed, the questions go on from there.

But, perhaps the foremost question that comes to many sellers’ minds, particularly those who are selling a home for the first time, is how to come up with an accurate listing price, one that maximizes the monetary investment put into the house, but does not put the house out of the financial reach of its target base of buyers.

Now naturally, we all want to receive the most amount money out of what was perhaps one of the largest investments we made. But, that does not mean that one should put one’s house on the market at some exorbitant or unfounded price. After all, a critically important rule to remember is that a home’s “freshness” appeal begins to wane dramatically after 21 days on the market. Put another way, once you list your home, it will receive the most amount of attention from prospective buyers during those first 21 days on the market. Therefore, putting your property on the market at an unreasonably and unjustified high price may very well drive away many potential buyers. Which means, in turn, that the benefits of that critical 21-day honeymoon stage will have gone to waste.

This is all to say that it’s incredibly important that you do your research on what a fair and accurate listing price is for your home prior to putting it on the market.

But, of course, that leads to another question – namely, how does one come up with a fair and accurate value for one’s home, and what kinds of factors play into this valuation process? A real estate appraiser, usually sent by the bank, is most often called upon to judge a home’s real value. Beyond that, those who are selling their homes may also be inclined to get a second judgment from their real estate agent. In respect to listing price, the agent may be able to provide a more refined and up-to-date home valuation based on the current trends of the local market and what other similar houses in the area have sold at recently.

Now, regardless of whether your home valuation process involves an agent or appraiser, or both, it’s been my experience as a real estate broker that many sellers feel far more secure in the selling process as a whole when they better understand what factors went into their home’s listing price. For this reason, I thought it would be worthwhile to give a brief summary of some of the major factors that play into the process of accurately assigning an initial listing price for a for-sale home. 

Let’s discuss a few of these factors.

Oranges to Oranges and Apples to Apples.

Determining a listing price for a home is clearly a numbers game. But, it’s also a who’s who game. That’s to say that one of the most commonly used methods for determining a listing price for a home, besides appraising it based on its offered features and condition, is comparing what other similar homes recently sold for in the area.

This is a common practice and completing this kind of neighborhood comparison is imperative before putting any house on the market. However, in doing this comparison research, there are certain essential guidelines that should be followed:

• Make sure to compare apples to apples. That means that it’s important to compare your house with similar homes that sold in your neighborhood in the past six months; similar as far as age, square footage and offered features (number of bedrooms, bathrooms, etc.)

• Also, you should try to gain a firm understanding of where the price differences lie in your surrounding neighborhood. It’s common for neighborhoods to vary in real estate prices. And usually a physical barrier, such as a major road or freeway or railroad, marks these price differences. So make sure you understand where these neighborhood price divisions are located and relegate your comparison research to only those areas that are similar to your home’s area in price.

• Take a tour of active listings in your neighborhood that are similar to your home and see first-hand what kind of competition you’re up against.

The Current State of the Real Estate Market.

As we all know, the real estate market, just like any other market, has its fluctuations and trends. And fortunately or unfortunately as the case may be, these trends oftentimes play a major part in determining a listing price for a home. You may have already come across the terms seller’s market and buyer’s market as they apply to the real estate world. Both these terms highlight very real scenarios that can have a real affect on setting a home’s listing price.

A seller’s market favors, namely, the seller and is marked by a shortage in supply of for-sale homes as compared to demand. On the flip side, a buyer’s market favors namely the buyer, primarily because the supply of available, for-sale homes on the market exceeds the amount of demand.

Though this is by no means a hard and fast rule, and it’s really mentioned as a way to provide more perspective, in a seller’s market, the seller will have a higher possibility for selling their home at a higher price and, thus, may want to put their home on a market at a higher initial offering. As a quick caveat, a seller should always refer to a real estate agent or broker before putting their home on the market at an ambitiously high listing price.

By contrast, in a buyer’s market, a seller will face increased competition from other similar homes on the market and, because of that, it’s likely that a seller will face strong pressure to list their home at a lower or more competitive price.

Now whichever market you, the seller, end up listing your house in, the key takeaway should be that information and knowledge is of the utmost importance. The more knowledge you have about the current real estate market and what other similar homes are selling for, the more likely you will be able to find a listing price for your home that yields both a buyer and a return on your property investment.

John Lusink: Tips for Successfully Hiring and Working with Contractors

For many homeowners, having the option to remodel their homes, even if it’s just a room or two, ranks as one of the most enjoyable opportunities of the entire home buying and home owning experience. Unlike renting, when you buy a house, it’s entirely yours. You are free to personalize and customize it however much you wish and really make the property your own.

But, sometimes there’s a catch. After all, unless you’re a master carpenter or in the home renovation business, for those homeowners who want to tackle more extensive renovation projects, such as remodeling a kitchen or making an add-on to the house, many homeowners will quickly realize that they won’t be able to do it alone. Any attempt to undertake an extensive project alone will be far too risky and far too time-consuming. In short, homeowners who are looking to tackle major home renovations will come to accept that they will need a trained and experienced hand to complete the project, like one of a contractor.

But, this is where it gets a little tricky. Because whether or not your renovation project will be successfully completed and, more importantly, whether or not it will be completed on time and on budget, depends quite a bit on who you hire as your contractor and how dependable and skilled he or she ends up being. Which of course leads to another question, and probably the most important one of them all, which is namely, what’s the best way to find and hire a skilled and reliable contractor?

In my career as a realtor, I’ve seen plenty of homeowners enjoy wonderful relationships with talented and knowledgeable contractors; and, unfortunately, I’ve also seen the opposite story too. Therefore, I’m never surprised when homeowners anxiously ask me how they can find a reliable contractor who will get the job done well. 

Well, over the years, I’ve developed a few tips that I think really come in handy for those homeowners who are looking to find and hire the right contractor for their remodeling projects.

Let me describe.

First off, Get Recommendations from Friends and Family.

It’s pretty obvious that the first step in selecting the right contractor is finding the right contractor. But, how do you go about doing that? What’s the best resource to depend on?

Most people will first go to Google or a similar online resource to learn who the top-rated contractors are in their area. I have nothing against those resources – those are both legitimate and worthwhile. However, they shouldn’t serve as the only resources that shape your search.

Besides third-party resources like Google, when looking for a reliable and experienced contactor, I also suggest that homeowners ask their friends and family. Friends and family provide a reliable and unfiltered recommendation source, and if they haveused any contractors in the past, they will be sure to tell you the truth behind their experience and whether it was good or bad.

Visit At Least One of the Contractor’s Current and Past Projects.

If you’re still in the search phase and have narrowed your selection of a contractor down to a couple candidates, then this is the opportune time to inspect the work portfolios of each of your prospective candidates with a fine-tooth comb.

With that said, don’t limit your inspection of their work to the portfolio they present; and don’t limit your inspection of their work to any sort of verbal description either.

Instead of reviewing photos and text on a page, try and visit the prospective contractors’ past projects. Seeing a completed project up close and first-hand will give you a much clearer and more accurate read on the expertise of the contractor(s) you’re considering.

Furthermore, don’t limit yourself to viewing the contractor’s completed projects either – take time to visit the contractor’s projects that are currently in-progress as well. See your contractor in action. See first-hand how this contractor treats his or her staff and  subcontractors, and whether or not he or she works efficiently and maintains a safe work environment. These are all incredibly important criteria that must be part of your search.

When You Select a Contractor, Set a Payment Schedule.

When you do eventually decide on a contractor, naturally you’ll want to establish a healthy and positive relationship with this contractor from the get-go. Communication and clarity play a key role in forming this kind of working relationship. With this in mind, the contractor will want to get paid for the work they do for you and they’ll want to know when this will happen. Therefore, prior to the beginning of any work, you and the contractor should be very clear and agree in writing on the terms of payment.

Although terms of payment vary across the industry, many contractors expect to be paid a certain portion of the total project cost up front; 1/4 or 1/3 of the total project cost as down payment number is a figure that often comes up.

 Draft a Written Contract.

As just mentioned, in order to enjoy a healthy and effective relationship with the contractor you choose, you and your contractor should always be on the same page as far as work schedule, payment schedule, project end-goals and project timelines, among other topics. More importantly, it’s important that all these agreements between you and your contractor are recorded and documented.

Thus, prior to any work being done, make sure to draft up a clear and comprehensive contract that both you and the contractor can agree on and sign. If there are any disagreements or bumps in the road as the project gets underway, a written contract can serve as the perfect tool that both you and the contractor can point to and rely on to settle any differences in opinion.

Hopefully, some of these tips will prove helpful. Clearly, a large home renovation can be a nail-bitingly nervous time, especially when you’re putting this project in the hands of someone else. However, always try to look at the positive side – by renovating a room, like a kitchen or bathroom, you’re adding real monetary value to your property. And if that doesn’t help calm your nerves, just think of how much joy your newly remodeled kitchen or newly remodeled bathroom will bring to you and your family when it’s completed!

John Lusink: Buying a Vacation Home for the New Year? Here’s Some Advice.

So, you and your family have just returned from a holiday vacation and you’re all very excited. The holiday was wonderful and everything your family wanted it to be. But, what really made the vacation was where you stayed. The location was incredible; it was relaxing and gorgeous; and you and your family don’t want to just go back there – you want to live there! Or at least live there for a portion of the year.

Well, if you’re already a homeowner and these sorts of thoughts are running through you and your family’s minds, then you may be starting to consider buying your first vacation home. And if you are, then congratulations! Buying a vacation home is incredibly exciting and it’s something that many people don’t have the opportunity to do.

However, just like buying a standard home, buying a vacation home is a significant investment and carries with it potential risks; which means it’s an undertaking that shouldn’t be done lightly nor without a good amount of research.

With that said, I thought it would be worthwhile to offer some beginning tips on what should be considered when beginning to look at buying vacation property.

First off, read up on your vacation community and really know it before buying anything.

Here’s the thing – a lot of people who buy vacation properties do not know the communities they are buying into very well. Maybe they stayed in the community a couple of summers, maybe longer. But, do they know the area during the other times of the year? And do they truly have a realistic idea of the community that’s separate from their holiday travels?

These are big questions and they need to be asked when starting to think about purchasing a vacation home.

So, a word of advice: know as intimately as possible the vacation community you’re thinking of buying into. If you only visited the community once, then try to return there, perhaps during the next holiday season, and spend more time exploring the area and getting a feel for the people who live there. And if you already have a particular property in mind, then consider renting it for a period of time before buying. Not only will this give you a clearer picture of the actual home you’ll be purchasing, it will also, once more, give you an opportunity to explore the surrounding community.

Like in most home purchases, make sure your outlook has a long-term focus.

The real estate markets found in vacation communities are oftentimes driven by factors and trends that are separate from mainstream markets. For example, many vacation communities are not near industries or areas of commercial business. Many of them have limited housing. And many of them have limited living resources, such as competitively priced grocery markets and schools, hospitals and medical practitioners.

All this means that, if you do want to eventually sell your vacation property, it could be a more difficult and lengthy process. So, for your own financial well-being, it’s best to have a long-term focus as you set out on your search for a vacation home; real estate market experts suggest that buyers should be willing to own a vacation home for at least five years, if not more.

Make sure your vacation home can be rented.

If you’re like most people who purchase vacation homes, then you’re probably thinking of only living in the home for a portion of the year. So, the question then is – what happens to the property during the other half of the year when you and your family are not there?

Well, as you may already know, many people who buy vacation homes rent them out during non-holiday times. This enables the home to be occupied all year-round, which can help with its maintenance. After all, if you have renters a part of the year, that means you’ll know and be able to resolve any problems with the property quicker. Also, having renters will allow you to gain rental income from your vacation home for at least a portion of the year, which, needless to say, can help finance the home.

But, is your potential vacation property rentable? Is it in good enough shape to be lived in for a more long-term basis? Does it have all the amenities that renters in the area would consider must-haves? All these questions, and many more, need to be asked when starting to tour potential vacation homes.

Truly consider the location of the vacation community before making any sort of purchase.

The community in which you’re thinking of buying a vacation property is, more likely than not, scenic and safe and relaxing. So, in the traditional sense of “location”, your potential vacation home will more than meet those requirements. However, when mentioning “location” in reference to vacation homes, I’m speaking about something very different – I’m speaking about the distance the vacation property is to your normal residence.

This is one other point that should be considered. Is the community and the vacation home that you’re looking at within drivable distance of your regular residence? If not, then you may want to carefully consider your options. After all, if the home is not at least somewhat close by, then how are you going to make any necessary repairs to it? And, realistically, how often will you be able to check on its premises? In the end, purchasing a vacation property that’s within 90 miles of your normal residence can be a big plus.

John Lusink Speaks About Helping Clients Stage Their Homes

So, you’ve agreed with your client on a listing price; you’ve taken photos of your client’s home; you’ve published a listing; and along with publishing a listing, you’ve published an open house date. Such an incredible amount of work. But, now after all that work has been done, you, as the agent or broker, can kick up your feet and rest until the day of the open house, right? Well, as we all know, the answer is no – the work is not quite over yet. One very crucial step is missing – and that step is preparing your client’s house aesthetically for the eyes of all those prospective buyers who will walk through that door come open house. In other words, the missing step, the step that is a necessity prior to any home showing, is “staging” the home.

Now, naturally everyone has their aesthetic preferences, and, indeed, some agents may differ greatly in what they feel correctly staging a home entails. However, despite the room for subjective opinion on the matter, there are certain core tasks that should always be completed in order to properly stage a home.

In order to help experienced and inexperienced agents alike, I’d like to go over a few very basic tasks that are critical to preparing a property for a showing.

Depersonalize the home as much as possible

Temporarily ridding your client’s home of a portion of his or her personal items helps stage the home in two ways: one, it helps remove clutter, which is arguably the greatest enemy to successfully preparing a property to show; second, depersonalizing a home provides prospective buyers a much easier opportunity to visualize how their belongings will look in the home.

Now depersonalizing the seller’s home does not mean that every single item of the seller’s has to be removed from the premises. Instead, focus on temporarily removing such things as family photos and quirky decorations and out-of-the-ordinary furniture pieces.

Beyond that, some industry experts recommend that in staging a home, a hotel-chic aesthetic should be strived for. What exactly is a “hotel-chic” aesthetic? Well, just think of some of the style elements found in a typical hotel room and think of how that can be applied to a residential home.

So, to that point, in addition to removing clutter from the home and depersonalizing it, consider adding crisp, new hand towels to the bathroom; or consider adding a few bars of designer soap in the bathroom too; and beyond that, investing in matching ensembles, such as matching trays and waste baskets and tissue holders, is never a bad idea.

Don’t Forget “Curb Appeal” Staging

As it goes, sometimes we’re so focused on perfecting the interior of the house prior to prospective buyers visiting that we forget that the exterior of house is in many ways even more important. The term “curb appeal” is bandied about in the real estate world so often in part because the front of the home is the first thing a prospective buyer sees.

So, keep curb appeal in mind when staging a home and ensure that the front of the home – the area of the front yard all the way to the home’s front door – looks as clean and tidy as possible.

If a little bit of work is needed to rake some leaves and pick up any pieces of trash, then you or the seller can probably do that on your own. However, if more work is needed in order to heighten the home’s curb appeal, then consider hiring a gardener to quickly come and mow the line and trim the hedges and complete all the other exterior tasks that need to be done.

How Does the Kitchen Look Again?

As most agents and brokers should know, probably the most important room in any home – the room that garners the most amount attention from a buyer – is the kitchen. It’s for this reason why, when staging a home, the kitchen must be a focus of your efforts.

If the home needs any sort of major aesthetic upgrades prior to the open house, and if there happen to be budgetary constraints, then, monetarily, the kitchen should be first in line. Above all, regardless if kitchen upgrades are needed or not, make sure that at the time of the open house, every square centimeter of the home’s kitchen counter is free of clutter.

Call On An Expert

Now let’s face it, we as real estate agents and brokers know a thing or two about pricing a home and closing deals and networking with prospective clients. But, there are probably others in different industries who are more knowledgeable when it comes to interior design and styling and all the other core skills associated with successfully staging a home.

That’s all to say that you as an agent should never feel that it will reflect poorly on you if you reach out to others who can help you better stage a home. If you happen to have a friend or acquaintance who is an interior designer, then consider asking them to visit the property prior to the open house, so that they can offer their opinion on what else needs to be done to the home’s interior in order to better stage it. Alternatively, there are organizations, such as the Real Estate Staging Association, or RESA, who specialize
in home staging and who offer not only literature on how to properly stage a home, but directories of professional home stagers, some of whom may be in your area.

Yes, staging a home is a critical step to selling it, but always know that there are experts on the matter and resources out there that will help you stage a home perfectly.

The Economics of the Modern Income Property by John Lusink

If you’ve kept up-to-date recently on the latest real estate news, you probablycame across several headlines mentioningAirBNB, a website that’sreceived an increasing amount of press recently. AirBNB is a site that connects travelers who need lodging in their destination city with individuals who have available residential space and who are willing to provide it for a fee. For travelers, staying in someone’s apartment or home provides a cheaper and arguably more authentic way to experience a new city compared to the traditional route of staying at a hotel.

Now the originalintention of the site was pretty anodyne – connect hosts with travelers. However,as the site has grown in popularity in the past several years and as people have discovered that they can make a tidy profit from renting out their propertyon AirBNB, to the ire of city governments and hotel chains everywhere, it’s led some people to buy residential property, like a home or a condo, solely for the purpose of listing it on the website. City governments claim that this growing trend is leading to an artificial and unfair increase in rents, but that’s a topic for a separate discussion.

Regardless of whether city governments have a valid point, I think this subject provides a neat segue into a broader discussion onthe risks and rewards associated with buying a residential property for investment purposes. Buying a property for investment purposes means that you intend not to live in the new property, but either rent it out or “flip” it for (hopefully) a nice chunk of change.

Here’s the thing – we all know that buying a residential property is a major investment. But, buying a propertyfor investment purposescarries with it a whole new layer of complexity, as well as additional risks and questions that need to be asked before you make the big investment plunge.

With that said, here are some basic tips on what you need to consider prior to purchasing an investment property.
Before You Buy Anything, Ask Yourself What You’re Going To Do With The Investment Property
The first step in purchasing an investment property is determining what type of investment you’re going to turn the property into. Are you going to immediately resell it for a profit? Are you interested in something more long-term in which you’ll rent out the property to tenants?Make this determination first before you do anything else.

If You’re Going to Rent Our Your Property, Then Create a ProposedProfit vs. Cost Model
Okay, so you decided to rent out your investment property. If that’s the case, then prior to deciding what property to buy,make sure that the numbers add up. Will the rent the tenants pay you, combined with any associated home owner costs, be less than the mortgage you owe on the house after its purchase? If so, then you’ll have a failing investment on your hands. So, before purchasing a property, take a look at the average rent prices in the area you’re looking at and compare these to the average mortgage rates. If the numbers are uneven, then consider looking for an investment property in a different area.

If This Is Your First Investment Property, Then Stay Local
If you decide to rent out your investment property, that doesn’t mean you can wipe your hands clean of it once you find reliable tenants. Actually, it’s quite the opposite. You own the property and now you’ve become the landlord. That means that it’syour responsibility to fix any repairs that the property may need and resolve any issues the tenants may have with the property. So, unless you have an assistant to handle all these tasks, buy a property that is close enough for you to conveniently drive to.

Always Have Emergency Funds On Hand
This is a fundamental rule for all home buying experiences, regardless if it’s for an investment purpose or otherwise. We all know how costly owning a home can be. And remember, even if you’re renting out a home, you’re not only responsible for any home repair costs, you are also still responsible for any associated home owner fees. Therefore, make sure you have enough capital set aside to cover fees and unexpected costs.