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A Replay of The ABC’s of Buying a Second Home
November 15, 2022 | Posted by: Michele Cummins
Warning, this is an automated transcript so there will be spelling mistakes throughout, including the spelling of Michele's name!
Curtis Pope:
Well, here we are another Saturday morning and it's time for the Cummins Real Estate Group show with of course the one and only. Michele Cummins. How are you doing Michelle?
Michele Cummins - PREC:
I am excellent. Curtis, thank you so much. How are you?
Curtis Pope:
I'm doing excellent. It's been a little damp, a little soggy. I guess, Jana, you aren't able to get that motorbike out for a last rider to this fall?
Michele Cummins - PREC:
No. Was it Friday, I think was or no Thursday was a sunny, like, not sunny, it was clear. So I plan on taking my bike to go to all my appointments at but it was so windy. And you know, I didn't want to mess the hair up. So I didn't take it out. But I know it's insured until in November. And so I mean, I'm hoping for another clear day between now and then. But I did have a very enjoyable last ride. The last Sunday day we had and I did all my listing appointments and everything on it. Oh, it's so fun. It's so Oh, I can't believe how much I enjoy it.
Curtis Pope:
Well, there you go. Hey, come on. It's like your you love to ride horses. Now you're writing a whole bunch of horsepower.
Michele Cummins - PREC:
It's right. It's amazing how you see things differently on a motorcycle and you just feel different. Obviously, like, when you go for a walk. It's one thing when you go for a pedal bike ride you feel and notice different things when you you know, it's funny how every aspect of transportation, you see things differently. And you couldn't be driving same roads, but somehow it's just different. And this October, the colors. Oh my gosh, I thought you have to go to East Coast to meet to have the beautiful fall colors. But for some reason I'm really enjoying them more than ever. I've been in Canada since 1998. And I don't know why but this October is the colors have been so outstanding. It's been just amazing. And just as good as the East Coast. It's just gorgeous.
Curtis Pope:
And just imagine that first time you hop on that bike and you drive down to the Oregon coast. Oh,
Michele Cummins - PREC:
I can't wait. I'm planning on it. Hopefully for next year. I can't wait to go down the Oregon coast. I hear it's one of the better or best rides in the States
Curtis Pope:
for sure. That's what I've heard as well.
Michele Cummins - PREC:
Since you love that it's candling red wine season as well.
Curtis Pope:
Well, I to me, it's always red wine season.
Michele Cummins - PREC:
Well, you know, I haven't liked red wine now for a while for since the spring. But when it gets warm, I tend to really go for the like the bubbly and the white like the white wine or the blush mixed with a little sprite or seven up right? Tend to Yeah, and then I started loving red wine again in the fall.
Curtis Pope:
Well, you know what, it's it's about that time and yeah, and you know, a book and a candle going. Yeah, that's a pretty good idea.
Michele Cummins - PREC:
Oh, so nice. I've got a stack of books. My computer is actually sitting on a stack of books that are in line for me to read. And so I gotta get my library on this call today. That's that's on my tax list.
Curtis Pope:
When you got the walk in closet done now you can work in a library for three years to
Michele Cummins - PREC:
get that done. So you know what, we have the new libraries next. So Richards plane tonight, his singer songwriter stuff and his pedal. He's his loop station and everything he has actually hasn't played live and obviously a very long time, but he's playing at one of my favorite restaurants the broken whisk in Agassi tonight. Music starts at 8pm I don't know if you can make it but it's gonna be fun.
Curtis Pope:
Pretty cool. And of course, I know that I haven't been to the broken whisk, but I know they have legendary shakes. Okay, that's
Michele Cummins - PREC:
like, what, there's something wrong there. Okay, Curtis, you have got to go to the broken whisk. Oh, yes, there are milkshakes. They've got wacky Wednesday. And where they have the wackiest, most amazing out of this world creative dish that they make dinner like it's always something different. And I love going in. And I don't want to know what it is. I try not to look at their social media so I don't accidentally see it that day. And I just say they already know they know Michelle wacky Wednesday. I mean, if I get them they're late. They're so sweet. So live and save me one knowing that I'll almost likely be there for my wacky Wednesday. And then on Thursdays they have like the most extreme creative crazy high as a tower burger that they always do a special different burger every Thursday. And Fridays. They do some kind of some more of a seafood eenie. Like they have their normal menu with all their stuff in it but they I love that they have These themed days. Oh, it's so fun. The atmosphere is fantastic. And they are wonderful. My silliness to own it. And Chef Michael and the staff they're also great. I love it.
Curtis Pope:
I'm gonna have to make the trip out there and wacky Wednesday sounds like my kind of style. So
Michele Cummins - PREC:
literally, oh my gosh, you would love it. Okay, when you go out there, send me a photo of what you get. Okay, done. Okay, cool. So, okay, I there's a date to remember. And I want to make sure everyone knows that the landowner transparency registration is coming up the end of November. So information for pre existing owners, you wonder what is this landowner transparency registration, and I didn't know about it? Well, it's really for corporations. So the requirements to file documents to the landowner transparency registry, which is the L O TR. So a transparency report must be completed and filed electronically in the My LTS a, by legal professional for some people who are existing registered owners of land as of November 30 2020, because I mentioned this on the radio show last year that it was coming up, it was starting to take place November 30. Last year, now you're required to file a transparency report. Since then, the Transparency Report must be filed by a legal professional, you know how they always give you so many? A bit of a time. But November 30, this year is you must or you know, maybe you'll get in trouble. I don't know what's the government. So it's pre existing owners must file a transparency report. Well, the only registered owners of land as of November 30 of last year, who are required to file a transplanter for those who are a reporting body. So if you are not a recording body, then you do not need to file a transparency report. Who is a reporting body? Well, the land owner Transparency Act sets out who is that reporting body so it's a person it's a person that will be reporting by only it's for pre existing registered interest in land is one of the following, okay, so it's either you owned the you own a corporation, you owe your own by a partnership, or B, it's been held in trust. So the LTA includes detailed legal definitions for corporations, partnerships and trusts for the purpose of the requirement to file a transparency report most not all corporations, partners and tourists are included. If you are not sure whether one of these applies to your circumstances, you really should contact a legal professional for advice. Don't take any chances. So, you know, I have a personal real estate Corporation and I have a holding company and so you know, anything that you have in land, you really need a report. So contact your legal professional, if you have any of the above type of thing. And, you know, if you don't want to have a legal representative East Crete, right is out of RDM lawyers, and he's a fantastic real estate and corporate lawyer, and he can help you he's out of Abbotsford. Again through RVM lawyers in his name is Creek drive, make sure you tell him that you heard about them on our real estate show. So I also you know, Curtis and I, we want to start something called what's trending. So we're gonna start a what's trending on our show. And this first what's trending, we wanted to mention of the neatest, coolest addition to downtown Chilliwack five corners if you have not been there. It is really hip. It's really cool. And it's really now it's called the 1881 district. And it's got the coolest coffee shops like the smoking gun, my favorite coffee ever. Brandon and Brittany on it. And she did the decorating and it is just a you can see how they roast the coffee right there when you're waiting, like when you're getting your coffee. It's really neat. They have the balance stern there, which is a great restaurant really delicious, like mussels and oysters and food and the field house still have brewing who doesn't love that? So it's a really cool area. So check it out. There is nothing for sale there. But there are rental units that they have above and it's just a really great area. So yeah, check it out. But
Curtis Pope:
it really did an amazing job of revitalizing that area in the last few years and yeah, they've really made it kind of cool and hip.
Michele Cummins - PREC:
Oh totally. And yeah, and I'm so I'm just so happy and proud because I love downtown. I just there's something about downtown to me that like gas town and even downtown mission I like and downtown Abbotsford is is I love it. That's why I bought my condo off the Montrose and the downtown Chilliwack now is I instantly was like Do you have I need to know if there's a for sale. I want to I want to buy a condo here. I want to buy something downtown Chilliwack now when I never ever would have thought I would ever want to buy something in downtown Chilliwack but it's really cheap. arranging. It's really great. And there's some older I love this, this structures down there because it's got some really neat architecture buildings down there as well but love that new area?
Curtis Pope:
No, absolutely. It's a very cool area for sure.
Michele Cummins - PREC:
I know we only have a couple more minutes before we go on break, and I wanted to talk about moving costs that may surprise you when you get your final bill. And then when we come back from break, we're going to talk about the ABCs of buying a second home. So moving costs now I've got clients moving up to St. John right now. And you know what you really got to think of all the moving costs, and don't just rely on a quick quote. So packing up and moving, it is obvious enough, but making matters worse for many of us Canadians is that there are many additional charges that you're often unaware of. So according to a survey by big steel box, it's the moving and storage company, if you hadn't heard of them, 19% of respondents didn't realize that they will be charged by weight, of which 36% were not aware of how they would be charged before booking 30% of respondents paid more money for their moves, and they were initially quoted, some companies make you pay 100% upfront before they even come to your door. So good prayer for that. The average cost of moves climbed for a couple of reasons. destination cities, which are rural non urban areas increases the costs and big boxes, Director of Operations Brian Hawkins said people have been leaving Toronto, Vancouver, Edmonton and Calgary because of the pandemic caught us. We can do our jobs from anywhere. So they would cash in on the housing market, of course in bigger centers and move somewhere smaller. And we have definitely seen that with the I call it the exodus from the West Coast head into the East. So whenever you take trucks off the key line, he says trucks typically go where the population is they have to get to you and back. So if there's an opportunity for them to provide a fixed price that will set consumer consumers up for when a lot of companies charge extra fees, including the storage fee if the truck has to wait a couple of days of an a fuel charge. And you were mentioning Curtis when you moved. That's kind of what you had to do. Hey,
Curtis Pope:
yeah, we had when we moved from Prince George back to the Lower Mainland here. We had to put all of our stuff in storage for like a month, we thought maybe even longer, but we found a place pretty quick. But we still had to pay to store all of our stuff pretty much for a month.
Michele Cummins - PREC:
Oh my gosh, that's a whole month. That's a long time. And that was a while ago, and prices skyrocket. It's been been?
Curtis Pope:
Absolutely, I mean, it was to give me a ballpark figure. It cost us over $6,000 to move here 15 years ago from Prince George. So in the province, it costs us $6,000. And that was 15 years
Michele Cummins - PREC:
ago. And a lot. Yeah, and a lot of times like did you when you were thinking of moving? Did you think it would cost that much until you actually sold and bought or plans to move? And then you call? It's usually one of those things you do laughs after you sell after you purchase? Then it's like, okay, let's call a moving company. But you really have to prepare your finances for it, especially if you're if you're moving far away, or at least not in the same town. Yeah, and
Curtis Pope:
there's not much that's actually cheaper than what you think it's going to be most of it costs more.
Michele Cummins - PREC:
Exactly. But um, yeah, so that that is pretty much it. I just wanted to I he had mentioned a few other things about just, you know, be be aware that costs are moving up all the time, gas prices are moving up all the time. So definitely, if you're thinking about moving out of town, one amazing one of the first when you're preparing your finances is to call the moving company to get to get some quotes and ask a lot of questions like, do you charge by weights? You know, do you charge by days or whatever you have to ask?
Curtis Pope:
Nope, sounds good. That's probably I think that's good sound advice.
Michele Cummins - PREC:
We tried to do give sound advice here on the coming scoop, little stage show.
Curtis Pope:
That's right now if people want more information about what you do as a realtor and as a real estate expert, where can they go without coming back? We're back with more right after this. And here we are. It was time for segment two of the Cummins Real Estate Group show with the one and only Michele Cummings. Now I guess sigma two here, we're talking the ABCs I think I got those right ABCs of buying a second home.
Michele Cummins - PREC:
The alphabet the A system miracle Yes, the ABCs of buying a second home. And I mean, if you have some extra money, or if you're able to take an equity pool out of your property, a home equity line of credit, or less, there's many different ways maybe you partner with a family member if you trust them, or really good friends. But you should think about buying a second home in Canada. For one, the pandemic has induced a lifestyle change among people with the majority option to stay at home, if they have no important business outside a second home, a cottage in the country. Cabin on the lake, a ski chalet up on the mountain. Like, these are things that would be wonderful to have. So why not? You're still investing in Canada, which is proven, for example, it will provide a much needed respite from your regular home that has become a place of work as well. Think of that all working from home now do you feel like you're working when you're at home? Well, maybe you do. Maybe now you're always home, and you just need to get out. No matter where you live, no matter how wonderful it is, you just need a second place you need to get away from time. So it's not an if you love your home, and it's you work from home, and you still feel like it's home and you never feel like you want to leave well, this second home just was a great investment. Because as a Canadian, we are allowed a second home without it being taxed on or vacancy tax or, you know, heart larger taxes at all when you purchase it. And you don't even have to do more downpayment, you're allowed to insured mortgages in Canada, of 5%. Down. So if you put 5% down on your primary residence and you're thinking oh, a second home, that means I got to put 20% down Well, no, that's not the case. Unless it's land only or unless there's no, you know, it's off grid. So for instance, I do have Dominic Lake, get away for sale, it's 10 acres on Dominic Lake, it's wonderful. It's an you annually, rent out trailer, capacitors are also large and a couple of cute cabins, you know, but they're, but it's off grid. There's generators for power, and there's water, but it's not potable. So not drinkable. So base consider that, you know, for them, they only want to give you 50% mortgage on it, right? So. So you'll need 50% on something like that. So there is some slight differences. But for the for all purposes, a regular house or cottage or cabin or something on property or condo, you know, you are allowed 5% down on two mortgages. So this is a great opportunity to do that. So buying a second home overview real estate is generally a good investment option. It can provide you with a path and I'm not just saying that, because I'm a realtor, it can provide you with a passive income and it can be a long term investment it can be it is a long term investment. You know, buy and hold, buy and hold, it's always a good idea. If you have the money, buying a second home is really a good move, money will always be the most important consideration. So can you afford a second mortgage unless you have hundreds of 1000s of dollars lying around? You might have to take out a second mortgage to afford a second home. So how are you going to cover the mortgage there's always financing available in to even if let's say this Dominic Lake get away this type of property where maybe you need 50% down because it's land only and you just want to camp there, you just want land only on the Harrison river. And and you just want to camp there? Well, you're allowed that. But you know you'd only be able to mortgage 50%. But there's there's private financing available. There's getting together with partners who share that right? There's ways of doing it. Even with 0% down or zero money down for you. There's mortgage brokers who could help you calculate how much money you could afford on a second house. So don't be fearful. Don't be fearful of the unknown. Just ask ask the questions. There's always incentives. There's always new ways. There's always creative ways there's and it helps guide you and set you up. So maybe you can't do it right now for what you want as a second home, but maybe you can in a year and you're thinking oh, I won't be able to do that for years and years. Well, no, if you had somebody to guide you might only take six months or a year to be able to do it or you might be surprised and be able to do tomorrow. So it's something you really need to think about and analyze. Fortunately, mortgage interest rates are extremely low at the moment due to the pandemic. However, it may not be for long as the first Canadian bank recently high Some mortgage rates from 1.99 to 2.29. In some cases, however, then some went have gone down And I just saw a sign driving by a few days ago. And HSBC, and they are advertising that they are have a five year variable rate at, catch this Curtis points 99%. Point nine 9%. That's less than 1%.
Curtis Pope:
Wow, that's, that's nuts. It really is.
Michele Cummins - PREC:
And so it's, it's possible. So if you're looking for a mortgage broker to help you, please contact Alex Cote. Alex Kota. He's amazing. And tell him again, tell him you heard about him from a radio show. But Alex cote is with your mortgage source, he's out of Abbotsford, He's amazing. He's done mortgages for me and my clients, he can help you. So experts believe that some banks may follow suit along with, you know, the raising because they can raise the fixed term rates, they are allowed to do that, again, Bank of Canada has said they will not raise the base rates until probably 2023. But but the banks can raise their term rates. So yeah, keep that in mind. So be prepared, do it. And in you know, it's just it's so rewarding. Just make the step that you've been thinking about. It's it's been on your mind, if you're wanting to invest, you want a second home. So now is a really good time to be buying that second home Canada, it's in Canada, because of the low mortgage rates, you don't know if it will be the same, you know, next year or the year after all of a sudden, it's like, Oh, I'll wait, I'll wait. And then when you do want to do it now, you know, what if interest rates are much higher, but if you can get in at a low rate, then then that's why it's so but what is the stake you wonder, so your finances, of course, are at stake. Of course, while a second home may be a good investment, you have to make sure that you will continue to be living comfortably. While financing another property, you don't want to be constantly having nightmares at night that you know, the bank is, is you know, over your head, you know, when nightmares, you want to be able to sleep soundly and peacefully. You don't want to go hungry just for the sake of making an investment. So yes, the investment will have a payoff, it will it doesn't come in this in an instant, though. My beach house, you know, the first year it didn't pay for itself the first year, the second year, it did the third year, wow. You know, it gets better, you have to spend a lot more before you start earning from a second home. And you know, it does take time to establish it, whether you rent it out as an Airbnb or vacation property or or or however you set it up. But what are the advantages of a second home so buying a second home is not a necessity, however, it comes with some benefits. Number one, it's a good investment. I know I've said that a few times. But it is it's actually a great investment. If you rent it out, you could get a passive income, you could renovate it and sell it for so much more than you paid for it, including the renovation expenses, generally the real estate properties they appreciate, which makes it a really good long term investment, if you're renting it out know that rents tend to increase over a period of time. Now we're talking, we're not talking annual leases or like month to month and we're talking you know, vacation like Airbnb. So it's different, you're not under the Residential Tenancy Act when you're doing an Airbnb. So this means that your income would also increase and by the way, then you are using it as a business and you have tax write off. So keep that in mind. Number two, vacation home. So that's another obvious incentive and an advantage, the pandemic is still ongoing here. Now, you're bound to spend more time at home for some time, who knows how long but having a second home would allow you to take a breather from your stressful life and you know, if things go back to you know what they were before or, you know what if you never they'll go back to you know, physically the brick and mortar building to go to work What if you continue staying at home for work so especially that secondary property is just a way to, to get out and, and just enjoy it. So number three advantage, new primary home instead of buying a second home for investment, you can use it as your main home. I've always said your first investments your primary residence and the second should be your vacation property. And then maybe, you know, going into so many other investments Oh, I love it. There's so much you can do. But know what you need and what's good for you and you will go far and you'll be successful. So things to consider in buying a second home now that you have the basis of buying a second home in Canada, it's time to take a look at the important factors in buying another property. So the type of property what type of property should you buy as a second home? So I always say what kind of, you know, what do you enjoy? What are your hobbies? What are you going to enjoy in a second home and then really look into theirs on it help them find Finding a property that you're looking for. There is some sites online you can research to see what how popular the area is for vacationing or tourists, and what the going rates are for. For properties if you're going to rent it out if you want a rental stream coming in, and if you want to pay for have it paid for itself then there's sites you can look into so and list of expenses so be familiar with the list of expenses when you buy a second home. To begin with, of course, you've got the appraisal fee, you've got a home inspection fee, you've got usually a land survey see sometimes you have that all these legal fees for conveyancing Mortgage default insurance so you may need that obviously if you're putting you know 5% down or less than 20% down mortgage life insurance you want that protection you want title insurance, only a few $100 Home Insurance obviously for secondary homes, property insurance, land transfer tax when you purchase and the utilities you know, think of that you may need to provide Wi Fi you're gonna need hydro, this, this and that. And then if it's new, then you know there may be a new home warranty if you build your own little cabin or something but just those are some things to consider. I hope that explained the ABCs of buying a second property and if you have questions, please reach out to us and just ask anytime. Because yeah, our information is all over the place. If you Google our names, you will find us
Curtis Pope:
alright let's get to this week's open houses today from 11 to 1pm at 24349 Walnut Avenue and Harrison hotsprings. This is a two bedroom two bathroom rancher with a lot comes in at 16 131 square feet it's beautiful and located in an amazing community only five minutes to walk to the lake price to $789,900. Today from 12 to two at 346 to seven Ireland out in Mission price at $1,399,999. This one of a kind originally owned 2115 square foot three bedroom rancher is on 1.17 acres and has to triple size garages. Also today from two to four and open house at three to 770 shoe swap court and Abbotsford 2775 square feet three bedroom three bathroom family home with a fenced backyard, all in a quiet cul de sac price and price at $899,988 And one more tomorrow from two to 4pm at 1013090 gladwyn Road in Abbotsford. This ground floor one bedroom one bathroom condo is the investors dream and it shows like new price at $359,900. This is an investor's dream. Locating a perfect location was so much around and Michelle has two brand new listings this week both in Michigan and they're just hitting the market. The first is 7807 Falcon Crest and it's wonderfully kept two storey 1900 18 square foot home with tons of usable space. Three bedrooms and a large backyard price is $779,999 and the second is also admission three to 120 Buford Avenue. This is 2332 square feet four bedroom two bathroom rancher with a basement with a huge 11,550 square foot lot tons of potential price of $899,999. For more details on these or other listings, just go to Michelle cummins.ca And join us again next week when we will talk real estate in order to unlock your real estate potential on the show real estate is maximized. Thanks for listening
If you missed last week's episode where Michele talks about Real Estate News and Stats, please go take a listen! It's well worth it!