Month: December 2009

I’m sure you have met at least one person in your life that is successful, motivated and self-empowered. This is someone that always seems to land on their feet, turns everything into gold and every success seems to come their way faster and thicker.

I’m also sure you have stopped to think about why these chronically successful people are so energetic, driven and successful with no apparent struggle while you seem to have such inertia impeding your progress.

Many believe that this is some unfair throw of the dice; that they just weren’t meant to become successful. Or perhaps it’s that the ultra successful people had some advantage or social lever that you didn’t. Occasionally this is true, occasionally success is inherited or stumbled into. However, more times than not, it’s created.

Success, first of all, is not a set of achievements or a combination of external factors; it is a mindset. Success is an attitude that comes from a framework of powerful beliefs and empowering thoughts. There have been many books written about this, probably some of which you have read. In the ones I have read, there always seemed to be a certain partiality – an incomplete picture – perhaps biased towards financial success or some other area but not another.

In the following list of beliefs and empowering thoughts, I would like to present a rounder view of success. One that I hope will give you a wider angle towards the meaning of success ranging from the material to the spiritual.

1. I am in charge of my life
   The belief that you and only you are responsible of what you make of a given situation. Life does not happen to you but is a result of how you respond to opportunities and challenges.
2. I can make tomorrow better
   The belief that you can change your future by your actions today. Some people are stuck in a fatalist (and dis-empowering) mindset where they believe they have little control on their life.
3. There is a lot of opportunity out there
   Successful people have their mind set on abundance and opportunity and not scarcity and lack. Trust me this makes a world of a difference. Believe that life, energy, positivity, love, opportunities, success, happiness are abundant…because they are!
4. I don’t need the approval of others to succeed
   If you are always looking for others’ approval and consent you will not go very far off and you will certainly not be self-empowered. Successful people follow their heart even when others are skeptical or do not consent.
5. My intentions have effect on my reality
   This is not to believe in magic where you can wish things into being…well almost. Most people are blind to this but successful people know, consciously or otherwise, that a focused and strong intention is indeed a powerful thing that will make a lot of things happen and certainly get you to your destination faster.
6. People are catalysts not barriers to success
   If approached in the right way and you network with the right people, you will leverage your efforts by a thousand fold. You will get things done faster by getting help from others.
7. Positive thoughts are powerful and empowering
   Successful people know very well that choosing to start a day with a positive rather than a negative outlook means having successful day as opposed to a frustrating one. It’s definitely in the attitude.
8. I am not separate from the rest
   This is a deep insight which only the truly successful and wise ones keep at heart. Commonly people believe that they are separate and cut off from the rest because they are individuals. True knowledge will tell you that everything is interconnected and success comes from acknowledging that you are not separate but one with the forces of life and the universe.
9. How can I use this situation?
   When life throws a bad streak at you or you your plans go down the gutter, ask yourself “How can I use this?”. My life changed as I started doing this. You can always turn a situation around even by just observing, learning and sharpening your attitude.
10. Hard work & perseverance are rewarded
    This is a rule of thumb even if perhaps reward doesn’t always come immediately but is paid off in the long run.
11. My past can be reviewed and rewritten
    Some people are locked in their past or think that their past circumstances determine their future. Successful people are skillful in the art of interpreting their past and reframinmg it according to their optimal advantage.
12. There are forces and energies which can help me if I’m conscious
    You might be thinking magic? Fairies? Not exactly. We cannot perceive certain subtle energies but some successful people believe in positive and negative energy flows from things and people just like ancient Chinese traditions believed in the flow of the Chi (Qi) or life energy. You can make yourself aware of this but it takes practice.
13. Failure is good
    As in point 9, empowered people can turn a failure into success by learning from it and moving on.
14. Don’t take it personally
    Get out of the trap of taking life circumstances personally or you will end up enslaved emotionally. When you get rejections, criticisms, cold shoulders, etc., put in within an impersonal bracket. They are not rejecting me, but an idea of me they have in their mind.
15. Bad patches are temporary
    We all pass through bad patches. It’s the cycle of life. But we all get out of them unless we chose not to. Think outside of the moment.
16. What I learn can be improved and refined
    Self-empowered people have a very dynamic view on life. There is always space for change and improvement especially on skills and lessons learnt.
17. I am constantly developing and expanding new capabilities
    Just like the previous point, empowerment comes from a non-static outlook where life-affirming mind states are believed to expand not contract.
18. Things are impermanent, don’t attach yourself to things
    This is a Buddhist concept which the real successful have learnt through experience. You might think that successful people are materialistic. I think the really successful are people who have a richer view on life and know how to ride life’s waves without getting emotionally attached.
19. Forget, forgive, rejoice
    Don’t get stuck in resentment and grudges. Travel light without dragging an emotional baggage full of past disappointments.
20. I already have all I need
    Self-explanatory. The path to success is through self-discovery and not world conquest as some would believe. People who have made it knew how to uncover their skills and true potential instead of obsessing with possessing

Original Source: Dumblittleman.com

Lets pick a popular investment these days – a 3 bedroom, 2 bathroom investment condo.

180K purchase price or rent at $1200 a month.
5% Down payment.

Your loan would be:
180,000
-5% Down Payment
+2.75% CMHC Mortgage Insurance (must be insured when you loan over 80% of value).
Loan = 175,700.

Payments?
Amortized over 35 years, 5 year fixed at 3.84%
Monthly Payment is $761.18

Let’s assume condo fees of $200 and Property Taxes of $1800 a year.

761.18
+ 200
+150 (1800/12)
= $1,111.00 per month.

Cheaper? Yes it is.

Now you’re telling me that $200 is low for condo fees, and what if taxes were higher – say $2000 a year?

Sure thing…

$761
+$300 condo fees
+ $166 taxes ($2000/12)
Total monthly payments = $1,227.00

Cheaper? You might not think so… but let’s really look at what is going on here.

That $761 monthly payment actually has a little over a $200 component of it going towards the loan itself (called the principal), while the other $561 of it goes to interest on the loan. Over time, this $200 figure gets larger and the $561 part gets lower until the loan is paid in full (in theory over 35 years of the amortized mortgage).

What does that mean? It means that $200 of the payment is actually being put into a savings account for you called ‘Equity’ in your home. What this means is that you are KEEPING that $200 component and putting towards the value of your home which can be recognized once you sell down the road. Just like a savings account – your money is being put somewhere to be withdrawn by you and for you at a later date.

So this means that out of the $1,227 payment (which was estimate high), $200 is being put back in your pocket and $1,007 of it will never be recouped.

Now if you were renting – how much of that $1,200 monthly payment will never be recouped?

You guessed it – ALL OF IT. Never to be seen again.

Now take into account the following:

As a general rule, real estate appreciates in value by 5% a year (more in recent years, but lets be conservative here), and what that means is that when you OWN your property, over the period of ownership the home becomes more and more valuable –which translates into a higher sale price when you sell compared to when you bought it. So you essentially MAKE money on the sale of the home! MORE MONEY you do not make when you rent. That $180,000 condo could be worth well over $200,000 in a number of years. In a great city like Ottawa that has a major economic driver like the employment rate being sheltered though the huge amount of public service employees – our economy is arguably a very stable one that would not be subject to huge fluctuations, and therefore see consistent growth over the years – exactly like what we have been seeing year after year.

So those are TWO ways that real estate make money.

But guess what – it gets better. There is a third. A little gem that should be sought out by all investors – POSITIVE CASH FLOW.

Let’s take that condo of $180,000 with payments (that were estimated HIGH) at $1227, and you rent it out for $1300 a month to a family. That’s about $70 a month in your pocket. That my friends, is called icing on the cake.

Now what if you wanted to live there? Or had a son or family member who wanted to rent out a room?

No problem. You live in one room, and you rent out atleast one bedroom for $500 or $600 a month. If there is a bedroom in the basement with a washroom – you might get $700 for the whole lower level. So apply this $500 – $600 dollars to your monthly costs of $1227 (on the high end), and you are OWNING a property for under $700 dollars a month, and $200 of it is being saved in your ‘equity’ saving account each and every month.

Less money out of pocket per month, your investment appreciating in value over the years, and potential for positive cash flow every month all mean a TREMENDOUS difference over time.

Finally – what if your numbers were better that what I described? Is that possible? Was I exaggerating?

Well – you be the judge. I have two investment condos for sale at the moment. One is $187,000 that has condo fees of $220 and taxes of $1700 a year. So the number would be better there.

I have another for $164,000 that (while needs a few thousand to upgrade), has a large bedroom in the basement that could fetch $600 a month easily, and the units themselves rent for about $1300 – while total cost would be under $1100!!!

You do the math. Either way, ownership is better. In a relatively stable and growing market like Ottawa, historically and as far as predictions go – we are not in a volatile market where property values are likely to drop, and therefore REAL ESTATE provides a great way to leverage your money, earn some income, save for retirement, and help secure your financial freedom.

Besides, you can’t live in an RRSP. Last time I checked – a roof over your head meant something.

Happy Buying, and Happy Selling!

Contact me anytime to chat.

Cheers.

http://www.MarcEvansRealEstate.com
marcevans@remax.net
613/868-4383

Ottawa’s residential housing market is weeks away from posting its best year on record in terms of unit sales and average price. Despite a slower than usual start to the year, more than 15,500 homes are expected to change hands by year-end, up 11 per cent from 2008 levels, and five per cent ahead of the previous benchmark set in 2007 (14,739). Housing values in the nation’s capital are also expected to climb, appreciating five per cent to $305,000 in 2009, up from $290,483 one year ago.

Job security and stable economic performance are the major factors influencing those considering homeownership, a decision enhanced by rock-bottom mortgage rates. While demand for housing has steadily increased throughout the year, supply has been an issue, with limited inventory reported in many hot pocket areas of the city. First-time buyers continue to represent the lion’s share of activity, driving sales of affordably priced product across the board. Townhomes, condominiums, and low rise apartment units are growing increasingly popular with this segment of the market due to price point. Revitalization in some of Ottawa’s older communities is gaining momentum as entry level buyers choose to invest a little sweat equity in their purchases. Neighbourhoods such as Mechanicsville and Preston St. are areas to watch, with housing values appreciating with every renovation completed.

Experienced purchasers are also taking advantage of ideal market conditions to move up and over to a larger home, better neighbourhood, or different housing type. Sales in the top end of the market—priced in excess of $750,000—have been steady, with the number of homes sold up moderately over 2008 figures. While real GDP growth is expected to fall for the first time in more than a decade in 2009, a solid rebound in the area of three per cent is forecast for 2010. New construction, including a new $21 million sporting event venue and training centre in Rockland, is expected to bolster economic performance in the New Year. Increased enrolment at Ottawa’s four post-secondary institutions has also prompted additional capital expenditures, including a new $112 million, 15-storey tower at the University of Ottawa, scheduled for completion in 2011; two new buildings at Carleton University; a construction trades centre at La Cité collégiale, opening in 2010; and a new $70 million construction trades centre at Algonquin College.

While the federal public service continues to provide a great degree of stability and security in Ottawa, there are concerns regarding continued layoffs within the high-tech sector. High-tech jobs have declined by about 14 per cent year-over-year. However, Ottawa’s employment rate is the highest of the 11 economic regions in the province. As such, unemployment levels in Ottawa, at just under six per cent, are relatively stable and expected to remain well under the close to nine per cent provincial average. Given a continuation of sound economic fundamentals in the New Year, Ottawa’s residential real estate market will stay the course. The number of homes sold by year-end is expected to match heated 2009 levels, while average price is expected to post further gains, rising four per cent to $317,500 in 2010. First-time and more experienced buyers are expected to work in tandem, driving activity at virtually all price points. Despite an increase in inventory in the Spring, seller’s market conditions should prevail throughout much of 2010. Low vacancy rates and volatility in the stock market may also spur some investment activity in 2010, as investors seek multi-unit residential property for a long-term hold.