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Waterproof

Happy Tuesday! It’s the day after a record-breaking rainfall drenched Toronto, leaving commuters stuck in subway stations and stranded in vehicles all across the city. Peter Kimbell, a meteorologist at Environment Canada, confirms that this rainfall is ranked among the most intense rainfalls the city has ever experienced, with 90 mm of rain within 90 minutes. In total, 126 mm of rain fell at Pearson yesterday, with the original record of 121 mm being set by Hurricane Hazel in 1954.

What does that mean for Torontonians today? Twenty thousand people are still without power, concentrated mostly in the west end of the GTA; TTC and GO Train services have been impacted; and the clean-up will continue for those in the city with flooded basements and damaged property.

Short of putting your home up on stilts, there’s not a whole lot that can be done to completely flood-proof your home, but there are a lot of things that can be done to help reduce the damage of a flood like yesterday’s.

For one thing, I listen to the warnings. So much can be prevented if the warnings put out by Environment Canada are taken seriously and not brushed off until it’s too late to do anything about it. I always have this semi-irrational fear that ignoring a flood warning will leave me sloshing around soaked and stinky carpets and picking up the pieces of ruined furniture, electronics and family albums. And then, of course, there’s the mould. So I listen, I take them seriously and I do whatever I can do last minute to prepare.

I clear my gutters, drains, and downspouts. Okay, I get my husband to clear my gutters, drains, and downspouts. That’s totally the same thing.

We don’t have anything that needs it in our basement right now, but I always do a check to see if I’ve got any furniture, electronics or appliances that are in harm’s way, so that I can raise them onto concrete blocks.

I get my hands on some sandbags and I use them anywhere I expect water to be able to seep in.

None of these are major retrofits or impermeable solutions, but a couple dollars spent could be your defense against tens of thousands of dollars in major damage caused by flood damage, so I do what I can.

I’m sending a ton of well wishes and positive energy to all fellow Torontonians still dealing with the aftermath of yesterday’s rainfall.

INVESTMENT BUG: The pros and cons of purchasing an investment property

We’re nearing the end of the second quarter now, and the real estate market is holding steady! And with more and more people looking at ways to invest their money and get the most for their return, I’ve had a few calls from clients considering investing their money in investment properties. I know from personal experience that the return on this type of investment can be great, and is definitely a great way to diversify your investment portfolio with an investment that will likely increase over time and pay for itself in monthly rental income, but I also know firsthand that the process isn’t as glamorous as it may come across on all our favourite real estate reality TV shows.

Firstly, let me make the difference between flipping properties, which has been popularized in the last few years, and owning an investment property. “Flipping” a property refers to the common practice of purchasing a “fixer-upper” property below market value with the intention of fixing it up to raise the value and re-selling in a relatively short period of time for a profit.

Owning an investment property that you plan to hold on to long term can be anything from purchasing a condo, duplex, triplex, building, etc. with the intention of renting out the unit or units on an ongoing basis.

If you’re looking at purchasing an investment property for the first time, it may be worth noting that most lenders won’t approve financing for properties of more than four units. So purchasing a triplex to rent out may be a good start, but maybe save the three-story low rise until you’re a little more experienced. Most lenders will require a minimum of 20% down, and if you’re looking to avoid mortgage insurance premiums, it might be worth it to put down more. Throw in land transfer taxes and closing costs, and you’ll see why it becomes super important to know your numbers and be sure of what your upfront expenses are going to be.

When it comes to tenants, I have one golden rule for all of my clients: you need the RIGHT tenant, not a tenant RIGHT NOW. In Ontario, the laws are usually on the side of the tenant, so do your background and pay the $29.99 for a credit check to cover your bases. If you don’t have a thick skin, develop one, quick! Complaints will come and you’ll need to know your tenants’ rights and your rights as well.

Be prepared for maintenance costs and repairs. Be prepared to put in work. Get yourself an agent who has knowledge of the type of investment property you’re looking to get into and who knows the area enough to work with you through area rental rates and capitalization rates. If you arm yourself with the right team and proper guidance, it could be the best financial decision you ever make.

 

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