Trusted Tips and Resources

Trusted Tips & Resources

Trusted Regina Real Estate Agent tip How to Purchase Commercial Real Estate - Part 1

 How to Purchase Commercial Real Estate: PART 1 

Every few years the real estate market suffers through a crash or a correction and underscores a perpetual dilemma for small and mid-sized businesses: Is it better to rent or own commercial property? 

Buying commercial real estate is a complex undertaking that is difficult even for experts to time right to maximize their investment value, let alone entrepreneurs or business executives whose areas of expertise are in different industries. It's also a venture rife with risk, as buyers, sellers, agents, and renters alike can suffer the consequences of a dip or spike in demand. At the same time, for a business, on the upside the potential rewards can be substantial.

Why should a business buy? "To get a greater control over the cost of the real estate component of overhead, as opposed to leasing, where you can be victimized by the market if the lease rolls over when the market is tight and, as a result, you have higher rental costs," says William Martin, chair of the real estate group in the Denver office at Kutak Rock LLPa law firm with 400 attorneys and offices around the country. "The other benefit would be investment benefits, including depreciation of the property for tax purposes and, over the longer term, asset appreciation."
 
There is no one-size-fits-all strategy for purchasing commercial real estate. That decision must be weighed by each business. The following guide will help a small business assemble a real estate search team, choose a location, and purchase property. 

Purchasing Commerial Real Estate: Deciding to Buy Versus Lease

When deciding whether to buy commercial real estate, it's important to understand the potential risks. The last thing you want is to buy property and realize a year or two later that you would have been better off renting. Here are some of the potential risks a business faces when buying:

  • Location may backfire: Today's "hot" neighborhood can become tomorrow's "not" neighborhood. Locations are trendy. Gentrification may stall. The market may go bust. The area you choose one day may become undesirable the next. Of course, the reverse can be true, as well.
  • Loss of liquidity: Businesses may tie up much of their liquidity buying real estate. It's not always easy to sell real estate, particularly in a slump. At the same time, businesses that own real estate at least have something to sell if they need a cash influx to revive a lagging business.
  • Tenuous cash flow: Tenants sometimes stop paying their rent. Other times, buildings are in need of unexpected -- and expensive -- repairs.  Your cash flow can become compromised, especially if you are forced to simultaneously pay repairs and attorney fees to handle a tenant situation.

In order to be aware of risks, do your homework. Undertake extensive due diligence before signing any contract. You also need to be hands-on with your commercial property by overseeing every level of operation and making frequent on-site visits -- otherwise, you may learn about problems after it's too late to do anything to fix them.

The decision ultimately comes down to the economics. You may want to have a real estate expert help you undertake a rent versus own analysis, taking into account growth forecasts for your business and real estate market trends. "It's really beneficial to sit down with an expert that can lay out options for you and discuss scenarios, such as in three years this is where business will be in terms of revenue, size, or people. This is how many locations we will have. This is what our space needs will be," says Hessam Nadji, managing director of Marcus & Millichap,  a national brokerage focused on real estate investment. A real estate expert can also help you figure out the costs of renting versus buying, factoring tax benefits such as depreciation.

 

Trusted Regina Real Estate Agent shares The Condo Vs. House Debate

 

Deciding whether to purchase a house or a condo has been a dilemma among first time homebuyers. Here is a quick breakdown of the pros and cons of both choices:  

Condominiums

Pros:

  1. Opportunity to live in a high-profile neighborhood; areas where houses are usually unaffordable, such as the downtown core or entertainment district.
  2. Great selection of amenities offered with condominiums; pools, gyms and party spaces being a few examples.
  3. No hassles of many property maintenance tasks; no need to cut the lawn, take care of curb appeal or do any building maintenance. These should all covered by the maintenance fee
  4. Support from building management for repairs and fixes.
  5. Security and peace of mind, especially when travelling.
  6. Depending on the building, utilities are covered with the maintenance fee.

Cons:

  1. Maintenance fees, on top of taxes and such, can become expensive.

  2. Depending on location, living space can limit growth, especially if a homebuyer wants to raise a family.
  3. You need management/builder approval for major property changes, which can be a tedious process.
  4. No real opportunity for an income property.

Houses

Pros:

  1. More bang for your buck, with greater living space.
  2. Potential for growing and renovating the property, especially when the homebuyer has a growing family
  3. Depending on location, properties come with great backyards which can serve for entertainment purposes and a space for kids to play.
  4. Potential for an income property.

Cons:

  1. Homebuyer is responsible for maintaining the property, including taking care of the lawn, property maintenance and much more – this can become very expensive.
  2. Utilities are the homebuyers responsibility.
  3. Purchasing a house in a high-profile neighborhood is very expensive – thus, homebuyers need to move further away, creating the need for everyday transportation.
  4. Unless a part of a gate community or in an area where local services like neighborhood watch are in effect, security can be a big question.

 

 

Trusted Regina Real Estate Agents 7 Smart Strategies for Bathroom Remodeling

 7 Smart Strategies for Bathroom Remodeling: 

You dream about a bathroom that’s high on comfort and personal style, but you also want materials, fixtures, and amenities with lasting value. Wake up! You can have both.

A mid-range bathroom remodel is a solid investment, according to Remodeling Magazine’s annual Cost vs. Value Report. An average bath remodel of $16,128 will recoup about 72.5% of those costs when it’s time to sell your home, and a more extensive $51,374 job returns about 63.6%. In addition, you can maximize the value of your investment by using these smart strategies, which will create a stylish yet budget-friendly bathroom.

1. Stick to a Plan

A bathroom remodel is no place for improvisation. Before ripping out the first tile, think hard about how you will use the space, what materials and fixtures you want, and how much you’re willing to spend.

The National Kitchen and Bath Association (NKBA) recommends spending up to six months evaluating and planning before beginning work. That way, you have a roadmap that will guide decisions, even the ones made under remodeling stress. Once work has begun — a process that averages two to three months — resist changing your mind. Work stoppages and alterations add costs. Some contractors include clauses in their contracts that specify premium prices for changing original plans.

If planning isn’t your strong suit, hire a designer. In addition to adding style and efficiency, a professional designer makes sure contractors and installers are scheduled in an orderly fashion. A pro charges $100 to $200 per hour, and spends 10 to 30 hours on a bathroom project.

2. Keep the Same Footprint

You can afford that Italian tile you love if you can live with the total square footage you already have.

Keeping the same footprint, and locating new plumbing fixtures near existing plumbing pipes, saves demolition and reconstruction dollars. You’ll also cut down on the dust and debris that make remodeling so hard to live with.

Make the most of the space you have. Glass doors on showers and tubs open up the area. A pedestal sink takes up less room than a vanity. If you miss the storage, replace a mirror with a deep medicine cabinet.

3. Make Lighting a Priority

Multiple shower heads and radiant heat floors are fabulous adds to a bathroom remodel. But few items make a bathroom more satisfying than lighting designed for everyday grooming. You can install lighting for a fraction of the cost of pricier amenities.

Well-designed bathroom task lighting surrounds vanity mirrors and eliminates shadows on faces: You look better already. The scheme includes two ceiling- or soffit-mounted fixtures, and side fixtures or sconces distributed vertically across 24 inches (to account for people of various heights). Four-bulb lighting fixtures work well for side lighting.

Today, shopping for bulbs means paying attention to lumens, the amount of light you get from a bulb — i.e., brightness. For these bathroom task areas, the Lighting Research Center recommends:

  • Toilet: 45 lumens
  • Sink: 450 lumens
  • Vanity: 1,680 lumens

4. Clear the Air

Bathroom ventilation systems may be out of sight, but they shouldn’t be out of mind during a bathroom remodel.

Bathroom ventilation is essential for removing excess humidity that fogs mirrors, makes bathroom floors slippery, and contributes to the growth of mildew and mold. Controlling mold and humidity is especially important for maintaining healthy indoor air quality and protecting the value of your home — mold remediation is expensive, and excess humidity can damage cabinets and painted finishes.

A bathroom vent and water closet fan should exhaust air to the outside — not simply to the space between ceiling joists. Better models have whisper-quiet exhaust fans and humidity-controlled switches that activate when a sensor detects excess moisture in the air.

5. Think Storage

Bathroom storage is a challenge: By the time you’ve installed the toilet, shower, and sink, there’s often little space left to store towels, toilet paper, and hair and body products. Here are some ways to find storage in hidden places.

  • Think Vertically: Upper wall space in a bathroom is often underused. Freestanding, multi-tiered shelf units designed to fit over toilet tanks turn unused wall area into found storage.  Spaces between wall studs create attractive and useful niches for holding soaps and toiletries. Install shelves over towel bars to use blank wall space.
  • Think movable: Inexpensive woven baskets set on the floor are stylish towel holders. A floor-stand coat rack holds wet towels, bath robes, and clothes.
  • Think utility: Adding a slide-out tray to vanity cabinet compartments provides full access to stored items and prevents lesser-used items from being lost or forgotten.

6. Contribute Sweat Equity

Shave labor costs by doing some work yourself. Tell your contractor which projects you’ll handle, so there are no misunderstandings later.

Some easy DIY projects:

  • Install window and baseboard trim; save $250.
  • Paint walls and trim, 200 sq.ft.; save $200.
  • Install toilet; save $150.
  • Install towel bars and shelves; save $20 each.

7. Choose Low-Cost Design for High Visual Impact

A “soft scheme” adds visual zest to your bathroom, but doesn’t create a one-of-a-kind look that might scare away future buyers.

Soft schemes employ neutral colors for permanent fixtures and surfaces, then add pizzazz with items that are easily changed, such as shower curtains, window treatments, towels, throw rugs, and wall colors. These relatively low-cost decorative touches provide tons of personality but are easy to redo whenever you want. 

 

Trusted Regina Real Estate Agent shares a tip on How to Pass Your Home Inspection

 

Problem plumbing 

Defective plumbing usually manifests with leaking and clogging. Looking under sinks and pipes can detect leaks. Water pressure can be determined by turning on all the faucets in the highest bathroom and then flushing the toilet. The sound of running water indicates undersized pipes. If dirty water appears when you turn on the faucet, it could indicate that the pipes are rusting.

Damp or wet basement

A white mineral deposit on the walls and basement floor indicates water seepage. A mildew odor might also be present. Sealing a crack in or around your basement foundation, depending on severity and location, runs from $300 - $1,000. To waterproof an average 3 bedroom home, is estimated at around $5,000 - $15,000.

Insufficient wiring & electrical

Your home should have a minimum of 100 amps service. It should be clearly marked and the wire should be copper. Octopus plugs indicate inadequate circuits and are a fire hazard. Cover plates on all junction boxes and outlets.

Faulty heating & cooling systems

The most common causes of poor heating are insufficient insulation and an inadequate or a poorly functioning heating system. A clean furnace, without rust on the heat exchanger, typically has a life span of 15-25 years. A cracked heat exchanger on a forced air gas system could emit deadly carbon monoxide into the home. Unrepairable, it must be replaced if damaged.

Roofing defects

Water seepage through the roof results from deterioration of the asphalt shingles (e.g. curling or splitting), or damage from a storm. When water is not properly directed through gutters and downspouts, or gutters leak, this could result in major internal problems.

Damp attic spaces

Aside from basement dampness, problems with ventilation, insulation and vapor barriers can cause water, moisture, mold and mildew to form in the attic. This can lead to premature wear of the roof, structure and building materials. The cost to fix this damage could easily run over $2,500.

Rotting wood

Rotting occurs from exposure to elements, and is most prevalent on doors, window frames, trim, siding, decks and fences.

Masonry work

Left unattended, smaller repairs can lead to problems with water and moisture penetration into the home which could lead to a chimney being clogged by fallen bricks or even a chimney which falls onto the roof.

Adequate security features

These basic safety features should be functioning properly: locks on windows and patio doors, dead bolts on the doors, smoke and carbon monoxide detectors on every level.

Structural/foundation defects

Investigate the underlying footing, basement and foundation to ensure structural integrity.

Keeping these items in mind as you walk through your home, will help you provide for any future costs and disappointments. A Real Estate Professional has many resources in place to assist you. They can recommend a professional inspector, repair services or any other housing related need you may have.

 

 

 

Trusted Regina Real Estate Agent Home Buying in Six Steps

 

Trusted Regina Real Estate Agent

 

Home Buying in Six Steps: 

NAR created the following information for members to share with their clients. The home-buying process can seem daunting to potential homebuyers, but a qualified real estate professional who understands the entire process can help ease many of these worries. Make sure your clients are prepared with these useful tips.

1) Get Ready for Home Ownership

  • Build a good credit history
  • Get mortgage pre-approval
  • Find out what type of mortgages you quality for
  • Consider hiring an attorney to review all contracts and agreements associated with the home buying process
  • Save up for a down payment (typically 10-20% of property’s value; if FHA-qualified, then possibly less) 
  • Consider closing costs which can include taxes, attorney’s fees, and transfer fees
  • Consider utilities and monthly bills, such as homeowner's assessments 

2) Find a Real Estate Professional

  • Get a referral from friends, family, and work colleagues, or search realtor.com® and look for real estate yard signs and advertisements
  • Ask the real estate professionals you interview about buyer's representation contracts and agreements; make sure you understand the terms
  • Explain your needs and expectations to the real estate professional you choose to work with

3) Find the Right Property

  • Determine what is important to you, such as particular schools, neighborhood amenities, monthly mortgage payment, public transportation, walkability, etc.
  • Make sure you include home owner’s assessments, utilities, and taxes when calculating the monthly mortgage payment

4) Finance the Property

  • Contact your mortgage broker or lender
  • The lender or attorney will run a title search to ensure there are no clouds on the title
  • Make sure you understand the financing terms—ask the lender for clarification, if needed

5) Make an Offer

  • Ensure the property is inspected by a licensed home inspector
  • Acquire title insurance
  • Make sure the title is clear, or make your offer contingent upon title clearance
  • Read all contracts before signing—make sure you understand all of the terms, ask questions
  • Place a competitive bid and be prepared to make a counter-offer
  • Keep your credit score stable and in-check by waiting to purchase any big-ticket items until long after the closing
  • Only one offer will result in a sale, so be prepared to move on if your offer is not accepted

6) Closing and Life After the Big Purchase

  • Protect your new asset by obtaining insurance such as homeowner’s, flood, disaster, and fire
  • Weatherproof your new home
  • Maintain files—digital or print—for all warranties, insurance documents, contracts, etc.
  • Keep original closing documents in a safe place, preferably outside the home (such as a safety deposit box)
  • Set up utilities bills in your name, maintain files
  • Implement desired aesthetic changes such as painting, minor construction, and re-flooring
  • Set a move date and hire movers or plan a move party with your friends
  • Get to know your neighbors and explore your new neighborhood
  • If you're happy with the work of your real estate professional, be sure to recommend her/him to friends and family 

 

 

 

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