In the last decade, there has been an increased focus on reducing our carbon footprint and reducing energy emissions. As such, Geothermal heating and cooling systems are growing in popularity with homeowners as an alternative to traditional HVAC systems. Geothermal systems have a history longer than most realize. In 1892 the first district heating system was developed from hot springs in Boise, Idaho, and eventually heated 200 homes and 40 businesses. Advances in technology have made geothermal heating and cooling systems commercially viable and suitable for residential applications.

Geothermal systems for heating and cooling use Ground Source Heat Pumps to exchange heat with the ground. Counting on the fact that ground temperatures consistently range between 7 to 24 degrees Celsius the ground can be used as a heat source or a heat sink. Once installed in a home, geothermal systems can save 20-60% on utility bills and offer a relatively short “payback period” of about 7 years. They are low maintenance and energy-efficient.

The most common type of geothermal system being used for residential purposes are “Loop Systems”. Specifically, Closed Loop Systems. Closed-Loop Systems are made up of a mesh of interconnected pipes buried in the ground. A liquid refrigerant is pushed through the “loops” by a heat pump and thus the pipes act as a heat exchanger. The most popular orientations of these loops are vertical and horizontal.

Vertical Loops are oriented in a vertical direction. Holes up to 400 feet deep are drilled in the ground and U-tubes are placed in them. Multiple U-Tubes are connected together and then connected to a pump and optional compressor. Vertical Loops are ideal for smaller lots as they require much less surface area.

Horizontal Loops are just the opposite of vertical loops. The U-Tubes are laid in shallow trenches from 1-3 meters deep and approximately 400 feet in length. These systems are less expensive to dig but require a much larger amount of surface area.

Definitely consider a geothermal system. Heating needs represent an estimated 42% of home energy consumption. Even a small geothermal system can be a cost-effective way to supplement your heating and cooling needs.

Written by:

Troy Challe of Karen Paul & Associates

This is an investment strategy that has been gaining a lot of traction in Burling and in the Halton Region in recent years and we are here to break it down for you. This is the perfect mix of house flipping and rental property investing. Why has it become so popular? It is simple – this strategy has the potential to increase net worth and deliver substantial monthly cash flow very quickly.

BRRRR stands for:

Buy, Rehab, Rent, Refinance, Repeat

Buy: You find a dilapidated house that needs substantial renovations and purchase it under market value. You are targeting real fixer-uppers in “decent” neighbourhoods. These purchases are usually funded using short-term funds meaning private money and private investors and not your large charter banks.

Rehab: Fix it up! It is prudent to set a budget and stay within it as capital costs in renovation projects are notorious for ballooning over budget. It is time to get your hands dirty – you want high-end finishes as this will help attract that A-Class tenant at the end of the project. Great houses attract great tenants!

Rent: Find the perfect tenant to rent out the house. Do your homework – hire a Realtor to help – it is important to have a trustworthy individual on the lease who pays every month on time. The cash flow of this project will rely on the quality of tenant you can secure.

Refinance: Refinancing the property at a much higher valuation compared to its purchase price will allow you to free up a lot of capital. FYI – A bank will typically want 6 months to 1 year of ownership before refinancing a home and max out around 80% loan to value. Every situation is unique, and it is important to understand the numbers while putting together your projections. Do your homework! After the refinance has been secured you use this money to pay off the short-term lender. Have your debt in a long-term mortgage with much lower interest rates, and leftover capital can be used to move into the next project.

Repeat: Do it all again!

As with any investment strategy, there are risks associated with it. If you would like to learn more on how to minimize these risks then reach out to Karen Paul & Associates and we would be happy to dive deeper into this strategy and see if it a good fit for your portfolio

Written by:

Colin Gainham of Karen Paul & Associates Inc.

The success or failure of your real estate investments depends on your ability to consistently attract and retain great tenants.

Investment properties can be a fantastic way to generate passive income but without Great Tenants who pay reliably and take care of your property that revenue and ROI will disappear.

Therefore, to attract Great Tenants you need a great property or a property that has the criteria Great Tenants are looking for. A recent survey from “Bigger Pockets” investment blog identified these 10 elements as the most sought after by Great Tenants:

1. School Quality
2. Safety
3. Turnkey
4. Close to large employers
5. Close to Public Transit
6. Upgrades & Updates
7. Appliances
8. Age of Building
9. Neighbourhood Quality
10. Rent Inclusions & Price

No matter what the budget or category you are shopping for, use these points to compare and contrast the available listing for your investment.

School Quality:

The proximity to good schools cannot be underestimated. Great Tenants with school-age children will prioritize this factor. Know what schools catch basin a potential property is in and use one of the many online resources to rank those schools. Also, don’t forget about alternative private schools.

Safety:

Whether you rent or own, Home is Home. Everyone needs to feel safe in their family home. Great Tenants will pay more for a home and neighbourhood that feels safe and secure. Look into neighbourhood crime statistics and other demographic metrics before committing to an income property.

Turnkey:

Moving is hard work and stressful. If you offer a move-in ready property that is fresh and clean you will get higher quality applicants that will respect your property.

Close to Large Employers:

Cut the Commute! If your property is close to employment centres you will find potential tenants will pay more to be there!

Close to Public Transit:

This one needs little explanation. Close proximity and easy access to various public transportation alternatives is valuable to many potential tenants.

Upgrades & Updates:

Make your rental property stand out with strategic upgrades. Not only will you attract the attention of high-quality tenants willing to pay more for finer finishes, but the tenants will appreciate the quality of the home and take care of it in return.

Appliances:

The Kitchen is the heart of the home and often where the most family time is spent. Newer, clean appliances will give potential tenants the green light to proceed. The past the basic two; fridge and stove. Consider accessory appliances such s dishwasher, built-in microwave and beverage fridge. Luxury amenities will attract Luxury Tenants.

Age of Building:

Even “Charming” well maintained older buildings can have shortcomings. For example, are there adequate mechanical systems providing heating, cooling and water supply to accommodate today’s lifestyles? If it is a multi-residential building is there an elevator? Older buildings can mean old hassles for everyone.

Neighbourhood Quality: 

This one could be called Lifestyle Quality. The more available amenities in a given neighbourhood helps support a happier lifestyle. Think of parks and trails, scenic opportunities, community centres and attractions. The more the neighbourhood has to offer the more your potential tenants will want to be there!

Rent Inclusions & Price:

Pricing your property for lease must be done with great thought. If it is priced too high you will severely impact the pool of potential tenants. If you discount your rates you may get “discount” tenants. Pricing strategy should take into consideration up to date market rates and reflect the amenities and superior characteristics your property offers. for best results consult a real estate professional.

By: Troy Challe

Good morning, Karen.

Karen,

Methinks you are a gift that keeps on giving!
 
You gave us encouragement.
You gave us sympathy.
You gave us your patience.
You gave us your expertise.
You gave us your concern for us.
You gave us a really cool cutting board to slice and dice the rest of our lives.
 
                                                                              You are one great person!
 
                                                                              Thanks,
                                                                              Amy and Knucklehead.

__________________________
Our clients say it best…

Our team of real estate sales professionals is committed to finding you, your dream home.
Whether you are looking to buy or sell, Karen Paul & Associates is with you every step of the way.

905-333-6234 | karenpaul.com | info@karenpaul.com
Real Estate Agents for Burlington • Oakville • Hamilton • Milton • Niagara
Free Home Evaluations | See Our Listings | Subscribe To Our Newsletter

Just received a very generous gift card from Karen and the team at KW.

Thank you all so  much!

It was a long journey through the Spring and Summer but we’re very happily settled in our new home now and thankful for the care, attention and professionalism we received during the listing and sale process.

Jim & Nina

__________________________
Our clients say it best…

Our team of real estate sales professionals is committed to finding you, your dream home.
Whether you are looking to buy or sell, Karen Paul & Associates is with you every step of the way.

905-333-6234 | karenpaul.com | info@karenpaul.com
Real Estate Agents for Burlington • Oakville • Hamilton • Milton • Niagara
Free Home Evaluations | See Our Listings | Subscribe To Our Newsletter

Karen & your team

With sincere thanks for all your work in listing, showing and selling my house. We are still unpacking but know we are going to love living in Burlington. Please share our thanks with your entire team.

Shelia & Gillen

PS. We got to meet the buyers. It made it so much easier for me to leave after 45 years. They are a young couple and seemed to really love the place! It made all the difference.

__________________________
Our customers say it best…

Our team of real estate sales professionals is committed to finding you, your dream home.
Whether you are looking to buy or sell, Karen Paul & Associates is with you every step of the way.

905-333-6234 | karenpaul.com | info@karenpaul.com
Real Estate Agents for Burlington • Oakville • Hamilton • Milton • Niagara
Free Home Evaluations | See Our Listings | Subscribe To Our Newsletter

Denise Thompson sent a thank you note to the Karen Paul Team with the following note…

Your professionalism, knowledge and experience were much appreciated in the sale of my parent’s condo. It has been such a relief to our family to have the condo sold and have them moved into a residence that suits their lifestyle at their ages.

It has made for an easy transition..

Wishing you continued success..

__________________________
Our clients say it best…

Our team of real estate sales professionals is committed to finding you, your dream home.
Whether you are looking to buy or sell, Karen Paul & Associates is with you every step of the way.

905-333-6234 | karenpaul.com | info@karenpaul.com
Real Estate Agents for Burlington • Oakville • Hamilton • Milton • Niagara
Free Home Evaluations | See Our Listings | Subscribe To Our Newsletter

When it comes to selling a home, there are a lot of different issues that have to be considered. One of those issues is taxes. These can be higher than expected for some home sellers, especially if they don’t understand how capital gains taxes work and how to legally avoid them.

But fortunately, there are ways to get around capital gains taxes in many cases, and to reduce the amount of tax that has to be paid in other cases. That way a home seller can save money when they sell their home, and reduce their tax burden considerably.

Here’s what any home seller needs to know when it comes to capital gains tax.

There’s a Time Requirement to Avoid These Taxes

If a home seller wants to avoid capital gains tax, they can do that by living in the home for two years out of the last five. The years don’t have to be consecutive, or the most recent ones. Just two out of the previous five will be enough. Then they can make up to $250,000 profit if they’re single or $500,000 profit if they’re married, and they won’t be asked to pay capital gains tax at all. If they make more profit than that, they’ll only need to pay tax on the difference between the amount their allowed and the amount they made, instead of the entire amount.

For example, if a single homeowner sells their house, and they have lived in it for two years out of the past five, they may make a profit. If that profit is $300,000, they’ll need to pay capital gains tax on $50,000, which is the difference between the $250,000 profit they’re allowed to make tax free and the $300,000 profit they actually received. The profit is based on the selling price of the house minus the purchase price plus any improvements that were made.

For many sellers, the requirements work out well and they don’t have to pay any capital gains tax at all when they sell their home.

Taxes Can Be Reduced for Sellers Who Meet Specific Criteria

For sellers who haven’t lived in their home for two out of the last five years, paying capital gains tax is a requirement at the time of sale of the property, in addition to any other closing-related costs. But there are ways to reduce the tax burden.

One of those is to make sure they hold onto the property for at least one year before they sell it. That way they will pay capital gains tax at the rate of 15 percent, instead of paying it at whatever their current tax rate is. For many people, their tax bracket is much higher than 15 percent so they can save thousands, or even tens of thousands, of dollars if they hold onto the property for at least a year.

After that point the property can be sold, because 15 percent is the lowest the taxes will go without meeting the two-year requirement for living in the property as a primary home. People who move frequently or who have investment properties or vacation homes may find that capital gains taxes become a bit burdensome, but they can always plan carefully for the one-year rule so they reduce their taxes as much as possible. The difference in the percentage of the profit they will owe can make a significant improvement on their tax burden.

When Selling an Investment Property, the Rules Are Different

It’s very important to consider that selling a primary home is different from selling an investment property or a vacation home. There is no way around capital gains tax for these types of properties. The only option is paying this tax at the 15 percent rate by keeping the property for a year.

Avoiding the tax isn’t possible, provided the seller makes a profit on the property. Since there isn’t a profit amount that can be made before capital gains taxes come into play, any profit will be taxable. Home sellers who plan ahead can ease their tax burden as much as possible, and can also focus on ways to prepare for the taxes they’ll be asked to pay when they sell a home that isn’t their primary residence.

Anthony Gilbert is the owner of The RealFX Group.

Anthony likes to write tips for home buyers and sellers and
believes knowledge is the best asset for anyone
involved in a real estate transaction.