Making Housing More Affordable for Renters and Owners

6 Ways to Make Housing More Affordable

Housing is one of the highest expenses we will ever face, whether you own or rent. There are valid arguments for both sides of the rent/buy debate, but no matter what you need to do, there are ways to reduce your expenses.

affordable

RENTERS:

Offer to exchange services for reduced rent

My partner and I used to live in an apartment building, and the superintendent was an older lady. She had assistant supers who worked outside jobs, so when it snowed, there was not always someone who could shovel right away. (Don’t forget I am in Canada, and we can get whoppers of snow fall now and again!) My partner used to come home from work, and immediately grab a shovel to clear the walkways and exits. He did this without being asked, as he saw the superintendent struggling with it, or because it was easier to clean the walkway than to track in snow throughout the hallways and wait for it to be cleared. Our superintendent was not able to reduce our rent for this help, but come summer, we did not pay for air conditioning hydro charges AND she was going to give us a free window air conditioner. We did not do this for the benefits, but sometimes offering to help out can reduce your expenses.

I have also heard of agreements where the tenant is responsible for grass cutting, or snow removal, or painting units in exchange for rent reductions.

Note: Get your agreement in writing if it is a substantial amount of work being exchanged.

Pay Rent On Time For A Discount

Some property management companies and property owners will offer a discount if you pay your rent on time. It can range from 5-15% of the total rent, provided that each month, you pay on or by the due date. Ask your superintendent or landlord about getting a discount if you pay on time, every time.

Rent a Less Desirable Unit

I’m sure you’ve heard of penthouse suites as the most desirable units, and there’s always rumours about those nasty units that are like caves or crawl spaces. Some property owners have renovated basements into lovely apartments, with decent windows, a lot of natural light and they rent for less because they are a basement unit.

When looking for a new place to live, ask your property manager if there is a cheaper unit. Sometimes it’s a few square feet smaller, by an elevator, or partly in-ground… but they can be just as nice or nicer than the units that go for premium dollars.

Pay For Your Own Utilities

If your apartment has the option to be independently metered, or you are looking for a new place, try to find one that does have separate meters for utilities.

If you live in a building without separate meters, then you usually pay a share of the total bill. Problem with this is, your neighbor Jill knows she doesn’t pay for gas or water, so she runs hot water on everything, and as often as she can. You, on the other hand, wash laundry in off hours on cold water, have short showers and never waste hot water if you can help it. Why would you both pay the same amount towards utilities when it’s clear you are not the main user?

Even if the units are only metered for hydro or gas, it will help reduce your costs because you are in charge of the usage. If you are conscientious about turning off lights, using little hydro and being as energy efficient as possible, your hydro bills will be but a percentage compared to your neighbor.

Savings on your utility bills means more in your pocket!

RENTERS AND OWNERS

Rent Out A Room or Space

Renting out a room doesn’t always equal a full-time roommate. You could:

  • Rent space in a basement or empty room for storage while people are moving
  • Rent space for small businesses to store stock
  • Rent to a shift worker who works during the week in a city but resides on weekends elsewhere
  • Rent as a bed and breakfast or AirBnB
  • Rent to an international student who needs a place during the school year
  • Rent out a garage for winter storage (cars, motorcycles, summer tires, etc.)
  • Rent out a garden shed or greenhouse to growers (of the legal kind)
  • Rent out your garden to a neighbor who needs more growing space
  • Rent your parking spot if you do not have a car
  • Look into wind power or solar power – some companies will pay you to install their products on your property
  • Rent out your basement kitchen to people who need more room for canning, freezing, meal preps, etc.
  • And, of course, there is the traditional idea: rent to someone as a roommate or tenant

Note: if you are renting your space, be sure that you are not voiding your lease by having a sub-tenant or work-from-home business

Do An Energy Audit

There are people who will come in and inspect your home for energy loss. It might be drafts through windows or doors, or even electrical outlets, hot spots in the house, or more efficient ways to set up your home. Recommendations like adding more insulation or plastic wrapping windows could save you a lot of money, especially if you did not know that you were losing heat!

Certain things you can do regardless where you live, and do not need to have an auditor come through. Go to your home renovation centres and ask for the section for energy efficient items. You will find many items that you could install, even on a temporary basis if you are renting, that will help keep the house cooler in the summer, and warmer in the winter.

Note: If you think you can replicate the items for less cost, just be sure that you are not creating a fire hazard. Certain materials are fire retardant, and other materials may fail code.

 

I hope this list will get you started in saving a few dollars and helping you on your way to financial independence!

 

 

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Real Estate: 10 Simple Steps on Buying and Selling Property in Ontario

simple steps to buy and sell property
Venturing through the blogging community has afforded me the opportunity to see and read how different property transactions can be from country to country. Here’s the “average” real estate transaction process in Ontario.

Start Here

1.    The majority of buyers start with a Real Estate Agent. This is a person who is registered and licenced through an association that regulates the real estate agent’s position. The agent is the authorized individual who will arrange access to houses that are for sale, and takes the buyer through them. 

 The Bank

2.    Around the same time that the buyer is selecting an agent, the buyer should also have a bank representative or a mortgage broker who is obtaining a pre-approval for a mortgage, if one is required. A pre-approval gives the buyer an idea of what they could be approved for, if and when they need financing to purchase a home. 

All the houses… and then the contract

3.    The buyer looks at homes… often, many homes. Some people only need to see a few, and others will visit tens of houses, sometimes hundreds, before finding the one that meets their needs.  Once a home is found, the agent will write up an Agreement of Purchase and Sale, which is an offering to the sellers of what the buyers want. It’s a contract that sets out the following:
 
a.    The price the buyer is willing to pay
b.    The non-refundable deposit the buyer is willing to put down
c.    The closing date
d.    How long the seller can take to answer the contract
e.    The date for title search (to make sure the title to the property is clear and without problems)
f.     What the buyer wants included in the house purchase
g.    What the seller will not include in the house purchase
h.    What the seller rents (like a water heater) that the buyer is willing to assume
i.      Any conditions, like the buyer needs time to have the bank approve the contract, or to do an inspection of the property, or a myriad of other options.  

Seller’s Turn

4.    The seller will review the offer, and if the seller accepts, this creates the Agreement of Purchase and Sale.
 
real estate buy sell
 

Buyer’s Next Steps

5.    The buyer then needs to contact the bank for approval on financing for that house, seek out insurance, obtain an inspection, etc. Those are the most common conditions. While the buyer is working on these, the seller cannot entertain any other offers, as the seller has entered into this agreement pending waiver or fulfillment of the conditions.
 

The Old Handshake… on paper.

6.    Once the buyer waives all conditions, the buyer and the seller have made the contract firm and binding, and the agreement then should be delivered to the lawyers. If the buyer and seller are strangers, they will need their own lawyer. The lawyer will need the agreement in order to start work on the files.
 

Out of sight….

7.    Between the time that the buyer and seller sign the agreement, the lawyers’ offices will be hard at work. The buyer’s lawyer checks to make sure that the property is what the seller said it was, and that no one else has a claim to the property. The seller’s lawyers’ office starts the process of cleaning up any outstanding taxes, mortgages, etc that are to be paid on closing.
 

Time to Pack

8.    The buyer and seller do not have much to do during this time, other than to pack their homes, and to contact their utility companies. The buyer may need to finalize some steps with the bank to ensure all is well with financing.
 

Autograph, anyone? And on this one, and this one, and this one.

real estate buy sell9.    Closer to the date selected for closing, each party meet their prospective lawyer to sign some paperwork. The seller leaves a key with his lawyer, and the buyer brings in money to their lawyer.
 

Keys before Money or Money then Keys?

10.On the day of closing, the lawyers will exchange money for keys. They will also exchange the deed, which is done electronically. Because much of the process is electronic (like receiving mortgage money or registering a deed), it is unclear as to what time the transaction will close. The registration process is available until 5 pm that day. Also, once the transfer/deed is registered, that is the actual moment that ownership changes hands. The buyer will receive keys, and the seller will receive proceeds, or the money he sold his house for.
 
While there are so many variables to the above, most of the transactions close on the date chosen in the Agreement. It’s a good system, and pretty simple to follow, in my opinion.
 
 
real estate buy sell
 
Do you have questions on real estate? Ask me anything. With more than ten years in the legal part of real estate, and more than 15 years in rentals, property management, bank lending and more, I am more than happy to answer your questions. 
  
DISCLAIMER
This post is for entertainment purposes only, and shall not be relied upon. The steps above are for the purposes of illustrating a straightforward property transaction in Ontario and shall not be construed as legal advice, legal instruction or otherwise. Any questions or concerns with particulars of the above should be presented to the appropriate expert in that field of study.
 
 

Minimum Wage: the unsaid truth

The Argument About Minimum Wage

 How many people do you think make minimum wage? Can you count it in a percentage? Do you think that it’s a majority? If it’s a majority, then there’s a problem that our society is not seeking out skill training, and if we, as a country, are not attracting jobs that are higher than entry level, unskilled positions, then we, as a country, are seriously failing.
The value of the dollar varies in the hands of the beholder. This beholder has two college degrees, and is making a lower/mid 5 figure salary. XB and Mr. XB are not blessed with children, so we work hard at our jobs. As a result, we stress out when things go wrong, and give up off-time and weekends to ensure that the work is done and done right.
Side note #1: Ontario recently increased the minimum wage to $14/hour in January, 2018 and scheduled the next increase to $15/hour in January, 2019. 
Side note #2: Someone recently said: Take care of yourself, because killing yourself over a job ends in one fact: your position will be advertised before your obituary. 

How much is that a year?

A $15 min wage is a $30k/year salary. In Ontario, that means if you are fulltime, you would gross about $30k before taxes, and get two weeks paid vacation a year. This is for a minimum wage job.
College educated people are working in this area for barely above minimum wage, and benefits are a rare commodity.
It appears that we are seeing a push to increase minimum wage jobs (because who will pay much more?), and a push that is decreasing the amount of money that educated people are making, in comparison. Anything above the dreaded “minimum wage” title is supposed to be gravy.

Why go to college?

Isn’t this the question of the decade! Why go to college? What is the point of spending $25k or more on transportation, supplies, text books, food, tuition, time… why do this if all that is offered is slightly above minimum wage, if that?
Until people start realizing that $15/hour is not a fair representation of minimum wage OR …

WAIT!

Is it that those who employ either the minimum wage earner or the college-educated support staff/labourers are so heinously greedy? Or is it time that they started sharing the wealth and start paying their staff a decent wage?

Example Time

Let’s look at people who are making $40,000.00 a year.  This is a “decent” wage to most. But is it? Off the top, you lose 22% on taxes, CPP and EI. That means take-home pay is $31,200.00.
In Niagara, the average two-bedroom apartment in a decent building is $1,200.00/month. A mortgage on a $300,000 house would be $1,500.00. Then you have utilities… say $300/month. Insurance. Taxes. Maintenance. Repairs.

So, is a college education enough to own a home?

$31,200/12 months = $2,600.00. If you have a home that is “modest”, chances are you spent more than $300k. Using this example, I would say it’s fair to assume costs of home ownership, without repairs or any extras, cable tv or internet packages or telephone, would eat up close to $2,000/month. That leaves $600 for food, entertainment, transportation, health care, retirement savings, repairs, replacement of household goods, insurances, etc. Are we not allowed modest home ownership as a single income family?

I can hear the naysayers out there: get a second income, a roommate, etc. Find cheaper housing. Cut the extras.
Why are we allowing people to tell us to live in sub-par housing, have sub-par services, and deal with making less? Where do you live for less today?

Factor in children.
  • Child care.
  • Debt.
  • Annual vacation.
  • Education.
  • Student loans.
  • Transportation.
  • Elderly parents or grandparents.

I no longer think that the problem is minimum wage. If the government is saying that a basic job should pay $30k annually on a full-time basis, then that tells me a skilled, educated person who is support staff or labourer for an employer should make nearly twice as much as the example above.

So… then what?

So instead of saying the minimum wage needs increasing, we should be looking at those who are in the middle. A minimum wage increase of $2.40 (the most recent jump to $14/hr) is a cut for those who make more. We will pay more, as the companies charge more to pay for the increase in wages. We will lose options, because the cost of doing business has increased significantly. Our dollar in our pocket will not go as far. And yet, the wealthier people, the employers, the ones living in houses twice the modest price, and driving cars as much as a third of the modest price of a house, … they say, well, everyone is on salary here, or makes more than minimum wage, so it doesn’t affect them.

It doesn’t affect them.

It doesn’t affect the employers that futures are bleak, employees of the middle can no longer afford housing, and there is not a decent income anymore, because the employer needs to afford their lifestyle. (Think about a particular $19.9 million yacht up for sale recently.) It doesn’t affect employers because support staff is replaceable, trainable, and shapeable.
And for those like me, who have an opinion, well, we are not desirable. We are replaceable. We affect the bottom line.
Let’s affect it together  Talk about this problem. Let’s find a solution together.
This is why I blog.