Archive for Real Estate

Best Home Renovations


The Home Renovation Industry

We all know what we see on TV isn’t real, but the amount of home renovation shows over the last decade has changed the way people think and their expectations about renovating homes. We are more educated about design, open interiors, and granite counter tops and let’s not forget about stainless steel appliances.

But over the years of watching TV, in my opinion people have unrealistic expectation of the renovation process. On any renovation show you might see a whole house renovated for $50,000 or a high-end kitchen installed for $25,000 and start to finished in a 30 min show. (amazing !!)

Financial side of home renovations

Total spending associated with residential renovations and repairs has more than doubled since the late 1990s to nearly $64 billion last year, or nearly four per cent of Canada’s GDP. Debt-rating agency Fitch estimates Canadian home prices are, on average, 20 per cent too high. If there’s a significant correction, or a crash, homeowners will not only be faced with both the declining value of their homes, but paying back tens of thousands to the bank on top of it—potentially leaving them on the hook for more than their homes are worth.

Before you commit to a renovation project, get a financial plan and look at your situation. Ideally you have the cash to pay in full, but most use a line of credit tied to the equity in their homes. The danger with a line of credit is it doesn’t require you to repay principal each month. “The banks often only requires interest and people fall under the assumption that they can manage the interest payments, therefore they can go ahead with the renovation. But eventually the principal has to be repaid.

Best investment for your home Renovation Buck

Obviously a renovation always sounds great, but your house on an average street doesn’t have to look like the 20 million waterfront house in the magazine. A $10,000 porcelain toilet for your bathroom in an average home is probably not going to be a good investment, nor is putting a $25,000 kitchen in a 20 million waterfront house. If it’s not up to the quality expected in the neighbourhood, don’t do it.” Also remember your new kitchen won’t be considered new unless you sell in the next couple years. Real Estate investing

If you’re concerned about resale value, stay away from personalized designs, bright colours. “Pick something relatively neutral for your countertops and cabinetry, and always think what a potential buyer would like. Although every expert seem to have different opinions on the best renovations for your money. here are just a few.

Some of the best home renovations for your money are:

1 Remodel kitchen
2 Adding additional bathrooms
3 Paint interior and exterior
4 Rental suites/ extra space
5 Basic updates/street appeal

Some of the worst home renovations for your money are:

1 In-ground pools
2 whirlpools/spa’s
3 Sunrooms
4 Expensive landscaping
5 Skylight replacement

This is Percentage recovered upon resale written by Style At Home

Kitchen upgrade: 75% to 100%
Bathroom upgrade: 75% to 100%
Interior painting: 50% to 100%
Roof replacement: 50% to 80%
Replacement of furnace or heating system: 50% to 80%
Expansion (addition of family room): 50% to 75%
Doors and windows: 50% to 75%
Deck: 50% to 75%
Installation of hardwood floor: 50% to 75%
Construction of a garage: 50% to 75%
Fireplace (wood or gas) 50% to 75%
Central air conditioning: 50% to 75%
Finished basement: 50% to 75%
Wood fence: 25% to 50%
Interlocking paving stones on driveway: 25% to 50%
Landscaping: 25% to 50%
Asphalt driveway: 20% to 50%
Pool: 10% to 40%
Skylights: 0% to 25%


Everybody knows the age-old story of wanting to keep up with the Joneses but choosing the right renovations and the correct contractor can make your renovation a success. Remember Location, Location, Location



Real Estate Investing

Investing in Real Estate

We own our own home, a single family house that we purchased 20 years ago and it has been a great investment and a nice place to raise a family. Other than our house we own REITs (Real Estate Investment Trusts). We do not own rental properties, not that I am against rental or commercial real estate. We already have a big portion of our net worth in real estate, and the last few years the real estate market has been crazy overpriced. There isn’t many good deals to be had in the Victoria area and it’s tough to find rentals with a positive cash flow. It seems that most of the very wealthy people I personally know have made their money in real estate. Real estate investing has pro’s and cons.

-have a real asset to leverage against
-you get monthly income
-you can insure your investment
-you control your properties
-Not very liquid and high commissions to sell
-Constant maintenance and finding tenants
-Highly leveraged unless you can pay cash
-cash flow issue can arise with vacancies


We do own some REITs but not many as our primary residents is still a big part of our net worth. REITs also have pro’s and con’s. I have an equal weighted REIT that owns all the Canadian REITs so it is very diversified and yields around 6%. You can see my portfolio structure Here.

-They are very liquid, you can trade them with a click of a button when the stock markets are open.
-Low cost commissions, the cost depending on your brokerage between $4.95-$9.95 to sell/buy.
-No maintenance, you don’t have any toilets to unclog or worry about tenants not paying their rent.
-Payment options, you can use leverage or you can purchase with a few hundred dollars.
– You are more diversified and can buy any region and mix of usages. Residential, commercial, industrial, etc.
-Tax efficient, you can put them in a tax efficient account.

-Volatile, REITs are like stocks and move up and down with the market.
-Interest rate sensitive, when interest rates go up REITs go down as a rule.
-No control, you have no direct control over what management does except to buy or sell.

Final Thoughts

Personally I like owning both real estate and REITs. They are a great diversifier in a portfolio as well as you get a nice yield. If the real estate market ever does get back to nice evaluations in Victoria area I will be seriously looking into picking up some rental properties for our portfolio.

Here is a YouTube video for your enjoyment. It’s 7:00 min. Marc Faber is somewhat bullish on Canada. If you are interested I have written a post here about YouTube copyright policies.

Marc Faber on Canada, Real Estate and Investing in Canada.