Making Money in Real Estate

Preface xi
<p>Acknowledgments xiii</p>
<p>Chapter 1: Understanding Real Estate Investment 1</p>
<p>Why Consider Investing in Real Estate? 2</p>
<p>Understanding the Real Estate Market 10</p>
<p>Establishing Your Investment Strategies 14</p>
<p>Key Investment Strategies to Consider 15</p>
<p>Buying with Partners 17</p>
<p>Summary 29</p>
<p>Chapter 2: Types of Residential Real Estate 31</p>
<p>Condominium 31</p>
<p>Single–Family House 45</p>
<p>Property for Renovation 54</p>
<p>Recreational Property 57</p>
<p>Multi–unit Dwelling 63</p>
<p>Apartment Building 63</p>
<p>Raw Land 66</p>
<p>Summary 68</p>
<p>Chapter 3: Finding and Evaluating the Right Property 69</p>
<p>What to Consider When Selecting a Property 69</p>
<p>Where to Find a Property for Sale 83</p>
<p>Determining the Value of the Property 88</p>
<p>Summary 102</p>
<p>Chapter 4: Selecting Your Advisory Team 103</p>
<p>Common Selection Criteria 103</p>
<p>Selecting a Realtor 106</p>
<p>Selecting a Lawyer 110</p>
<p>Selecting an Accountant 114</p>
<p>Selecting a Lender 117</p>
<p>Selecting a Financial Planner 117</p>
<p>Selecting a Mortgage Broker 122</p>
<p>Selecting a Building or Home Inspector 123</p>
<p>Selecting an Insurance Broker 126</p>
<p>Summary 128</p>
<p>Chapter 5: Understanding the Financing Aspects 129</p>
<p>What Is a Mortgage? 129</p>
<p>Types of Mortgages 130</p>
<p>Sources of Mortgages 138</p>
<p>Key Factors to Consider When Selecting a Mortgage 139</p>
<p>General Contents of a Mortgage 144</p>
<p>Determining the Amount of Mortgage Available 148</p>
<p>Applying for a Mortgage 149</p>
<p>Cost of Obtaining a Mortgage 153</p>
<p>Defaulting on Your Mortgage 159</p>
<p>Creative Financing 163</p>
<p>Dealing with Negative Cash Flow 164</p>
<p>Summary 166</p>
<p>Chapter 6: Understanding the Legal Aspects 167</p>
<p>Types of Ownership of Property 167</p>
<p>Understanding the Purchase–and–Sale Agreement 170</p>
<p>Services Provided by the Purchaser s Lawyer 180</p>
<p>Services Provided by the Vendor s Lawyer 185</p>
<p>The Listing Agreement 188</p>
<p>Forms of Legal Structure to Hold Investment</p>
<p>Property 190</p>
<p>Other Legal Cautions and Protections to Consider 193</p>
<p>Summary 200</p>
<p>Chapter 7: Understanding the Tax Aspects 201</p>
<p>Local and Regional Taxes 201</p>
<p>Provincial Taxes 202</p>
<p>Federal Taxes 202</p>
<p>Income Tax 210</p>
<p>Tax Implications of the Purchase Structure When Buying an Apartment Building 226</p>
<p>Summary 233</p>
<p>Chapter 8: Understanding the Insurance Aspects 235</p>
<p>Organizing Your Insurance Program 235</p>
<p>Types of Property Coverage 237</p>
<p>Types of General Insurance 244</p>
<p>Summary 248</p>
<p>Chapter 9: Buying Your Property 249</p>
<p>Selecting the Right Real Estate Agent 249</p>
<p>Determining a Property s Value 252</p>
<p>Preparing the Offer 255</p>
<p>Presenting the Offer 256</p>
<p>Giving a Deposit 261</p>
<p>Making a Deal 262</p>
<p>Using a Lawyer 263</p>
<p>Insuring Gain 263</p>
<p>Closing the Deal 264</p>
<p>Summary 266</p>
<p>Chapter 10: Managing Your Property 267</p>
<p>Types of Management 267</p>
<p>Keeping Records 272</p>
<p>Finding the Right Tenant 275</p>
<p>Maintaining Rental Properties 285</p>
<p>Avoiding Common Fire Hazards 291</p>
<p>Improving the Bottom Line 293</p>
<p>Saving on Expenses 297</p>
<p>Summary 298</p>
<p>Chapter 11: Selling Your Property 299</p>
<p>Determining When to Sell 299</p>
<p>Determining How to Sell 301</p>
<p>Preparing to Sell 306</p>
<p>Preparing the Property 309</p>
<p>Closing the Sale 312</p>
<p>Moving On 314</p>
<p>Summary 315</p>
<p>Chapter 12: Understanding Financial and Estate Planning 317</p>
<p>An Introduction to Financial Planning 317</p>
<p>An Introduction to Estate Planning 317</p>
<p>Summary 331</p>
<p>Appendix 333</p>
<p>Form 1: Personal Cost–of–Living Budget 333</p>
<p>Form 2: Personal Net–Worth Statement 336</p>
<p>Form 3: Calculating Your Gross Debt–Service (GDS) Ratio 341</p>
<p>Form 4: Calculating Your Total Debt–Service (TDS) Ratio 342</p>
<p>Form 5: Projected Cash Flow 344</p>
<p>Form 6: Projected Income and Expense Statement 346</p>
<p>Form 7: Projected Balance Sheet 347</p>
<p>Form 8: Income Approach Worksheet 348</p>
<p>Form 9: Investment Property Analysis Checklist 350</p>
<p>Chart 1: Criteria for Determining Real Estate Cycle 352</p>
<p>Chart 2: Recovery on Renovation Costs 352</p>
<p>Chart 3: Amortization Period in Year 353</p>
<p>Chart 4: Interest Payments 353</p>
<p>Chart 5: Prepayment or Increased Payment Savings 354</p>
<p>Chart 6: Mortgage Amortization Chart 354</p>
<p>Chart 7: Monthly Mortgage Payments for Principal Plus Interest 355</p>
<p>Checklist 1: Real Estate Assessment Checklist 356</p>
<p>Checklist 2: Mortgage Checklist 364</p>
<p>Checklist 3: Real Estate Purchase Expenses Checklist 368</p>
<p>Checklist 4: Business Deductions Checklist 370</p>
<p>Checklist 5: Landlord and Tenant Suite–Inspection Checklist 372</p>
<p>Checklist 6: Master Checklist for Successful Real Estate Investing 376</p>
<p>Glossary 383</p>
<p>Further Education and Information 395</p>
<p>Index 397</p>