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"Real Estate Bits - 2"

February 2006

Money Matters

Presented By: Nino Pasquariello - Manager - Scotiabank

(416) 932-3885 Ext. #7000

E-Mail: nino.pasquariello@scotiabank.com

Practical Tips To Boost Your RSP
 

A registered Retirement Saving Plan (RSP) is one of the most effective ways to save for your retirement - contributions are tax-deductible and your savings compound tax-free within the plan. But finding the cash to make your maximum contribution is not always easy. Here are some helpful tips on making your contribution for this year and beyond.

 Act Now - Here's Why!

Many of us probably carry some unused RSP contribution room. While it's reassuring to know that you can always play catch-up when you have the cash, unused contribution room potentially represents the loss of many years of compound growth. And as your contribution room grows, it becomes more difficult to make large lump-sum payments to catch up.  

Here's A Quick Action Plan To Help Keep You On Track

• With your advisor, or using an RSP calculator such as the Scotia RSP Reality Check(tm) tool, determine what you'll need to live your desired lifestyle in retirement.

• Next, determine what part of that will need to come from your investments.

• Then, match your RSP contributions to your targets.

 Now - Here Are Some Ways To Find That Cash

Should You Borrow?

To help you maximize your contribution, consider borrowing to top up this year. This is a particularly attractive solution today, with interest rates still near historic lows.

The potential tax refund from your higher contribution can then be used to repay part of the loan. By repaying the loan in a shorter time frame, the return on your investment could outweigh the interest costs of the loan.

Invest Your Bonus

Why not use any extra cash you received from a raise or bonus to top up your contribution? If you receive a bonus, tax is withheld from your payout at your highest rate. However, you can avoid this in future by arranging with your employer to have any future bonus payments put directly into your RSP, provided you have the contribution room. The bonus is treated as income, but you get the full deduction, and your money goes to work for you - tax-sheltered - right away.

Other financial windfalls include a severance package or an inheritance, or smaller amounts from a reimbursement cheque for a dental or prescription bill, for instance. And of course, any potential tax refund you receive this year can be put to good use for next year's contribution.

Transfer Existing Investments

If you are finding it difficult to maximize your contribution, you can contribute eligible investments held in a non-registered account to your RSP and claim a deduction for the market value of the security. To employ this strategy, you need to have a self-directed RSP. And there are some caveats.

If you contribute an asset that has appreciated in value, it may trigger a taxable capital gain. However, if you contribute an investment that has decreased in value, you are not allowed to claim a capital loss against any gains.

Start A Good Habit

Putting money aside is not always easy. Instead of waiting to see what's left over at the end of the month, try to turn saving into a regular habit. Once formed, good habits (just like bad ones) are hard to break. The best way to do this is to set up a pre-authorized contribution (PAC) plan. Money is automatically withdrawn from your bank account every month and directed into the investment of your choice.

For future contributions, a PAC plan may be the right solution for you. It is convenient, adds discipline to your savings goals, can help you maximize your contribution, and you won't have to scramble for the cash at RSP time.

If you are investing in mutual funds, investing a set amount on a regular basis lets you take advantage of dollar-cost averaging - you purchase more units when prices are low, and fewer when prices are high. Over time, this can reduce the average price you pay.

Find out how easy it is to take full advantage of RSPs this year by contacting Nino Pasquariello, Branch Manager at Scotiabank - Yonge and Eglinton branch - (416) 932-3885 #7000.

Regards,

"Tricks Of The Trade"

"Contracts"

From the moment you decide to trade in real estate - you're confronted with the inevitable "contracts" to peruse and sign. If you're selling a property you have the TREB MLS Listing Agreement & Data Sheet, the Agency Brochure and finally the Agreement of Purchase and Sale (aka "Offer") to sign. If you're buying a property you sign the Buyer Broker Agreement, the Agency Brochure and finally the previously mentioned "Offer". By the time you're finished you feel as if you've signed your life away. You still have a mountain (okay just a little hill) of paperwork ahead of you awaiting signature as you meet with your Banker, Lawyer and Insurance company. At the end of it all - you sort of understand why celebrtites complain about signing autographs. Well - not really. Let's see - if I made $15,000,000 a movie - I'd just program a little machine to pump out my freshly minted signatures. This may not happen any day soon.

Finally you've bought a home - sold one or both. "Enough already", you exclaim, "I'm done with the signing". This would be a BIG mistake if you need to hire an Architect, Contractor or Designer to help you with renovations. If you're smart you'll draw up a contract, drag out your lucky pen, look for the signature line and press hard. Now, I'm not a lawyer (always speak with your Lawyer if you feel the need for clarification on any issue) but I do know that contracts with the Trades are an important thing. Here are a few tips to remember about hiring people to work in your home. For the sake of ease I'm using the term "Contractor" to include anyone who works on your site and with whom you have a well defined contract.

• "Always" have a contract. Okay if the kid next door is painting your deck your Lawyer doesn't need to peek at the serviette on which you wrote the details - but for any significant work you need a clear understanding of who does what - where - when - why and for how much!

• If a Contractor balks at signing a contract - move on!

• What does the "vibe" feel like with this person? Do you like him/her?

• Does he/she have a business card? References? Are they bonded and insured?

• How long has he/she been in business?

• Get any and all "estimates" in writing.

• Compare the figures in the final contract with the figures in the estimates and ask for clarification of any significant differences.

• Discuss upgrades from the original scope of work that you may wish to do as the job progresses and remember that the Contractor may not have planned for these. Do you have a slush fund for upgrades/surprises?

• Ask for references! Does this Contractor bring jobs in on time and on budget?

• Go and view his/her finished projects and also a project currently underway. Check out the current work site. Is it neat and well organized?

• Does this Contractor look after getting any and all permits?

• How well does he/she seem to understand the building code?

• Do you need a general Contractor to manage your entire project or are you going to "sub" your own tradespeople?

• Do you have time to manage the subs? Do you want to?

• Who brings sample materials?

• Who brings supplies? Where are they stored?

• Do you need the services of a Designer?

• Payment Schedule? By the hour or the project?  HINT - will you be around to see who is working?
  1/3 to start (materials & start up)
  1/3 at a previously agreed upon time.
  1/3 on completion (with an agreed upon hold back in the event of any unfinished details).

• Who manages the site on a day-to-day basis?

• Does this Contractor have his/her own crew of skilled trades with whom he/she has worked on a number of successfully completed jobs?

• Clean up clause.

• Late finish clause & consequences.

• Who surrenders the final building permit?

• Has he/she ever been sued?

• Does he/she have a "licence" or trades associations?

• Do you need any special insurance/liability coverage during your renovations? Speak to your Insurance Company?

• If you're doing a major renovation on a vacant property - how secure is the site at night?

• Does the contract cover start to "final" finish? On your big day - do you arrive home to find out that the contract didn't include the painting?

Okay - I'm tired now - but I know you get the idea. Clarification and a well drawn up and signed contract - covering all the issues (reviewed by your Lawyer). You see - it really wasn't "curiosity" that killed the cat - it was a disgruntled home owner who didn't think a contract was important.

Regards,

Rosemary ...

Okay, Okay - Here's "The Joke"

"Still On The Topic Of Aging"

Two elderly ladies had been friends for many decades. Over the years they had shared all kinds of activities and adventures. Lately, their activities had been limited to meeting a few times a week to play cards.

One day they were playing cards when one looked at the other and said, "Now don't get mad at me....I know we've been friends for a long time.....but I just can't think of your name! I've thought and thought, but I can't remember it. Please tell me what your name is." Her friend glared at her. For at least three minutes she just stared and glared at her. Finally she said, "How soon do you need to know?"

Guest Columnist

Glen Gogal
"Houseworx"
The Home Inspection Group

(416) 391-3245
E-Mail: g.gogal@sympatico.ca

Here are some interesting ways to estimate a home's age if it's building date is unknown.
Combine this information with common sense and professional advice to reach an accurate age estimate for a house.

Working 10 Tips For Dating A House

1. Toilet: A toilet tank or lid without a date stamp means that it was probably maunfactured after 1990.

2. Sink: Raised numbers on iron fixtures or numbers stenciled in white on the underside of bath, kitchen and laundry sinks indicate the date of manufacture.

3. Gas Shut Off Valves: Gas shut-off valves on water heaters and furnaces often have the original municipal-inspection tag attached. If it is still there, it should have a date (often hand-written) with the approval date for gas-metre installation.

4. Breaker-Box: Look for dates on labels of the electric breaker box. If the UL symbol is on this tag - immediately below is the month and year of approval - usually a date within 5 years of installation.

5. Water-Heater: Most water heater labels note the date of manufacture, although some note the date the warranty expires. Yellow energy efficiency stickers became mandatory about 1970.

6. Heating & Cooling Units: Most furnaces and air conditioning units date of manufacture is on an attached label.

7. Sliding Glass Doors: The home was built prior to 1960 if sliding glass doors are not made of tempered glass.

8. Rafters: Manufactured trusses became popular in the late 1960's. Rafters with centre-to-centre measurements that exceed 24 inches suggest that the home was built before 1960. Full 2x4 rafters also known rough-hewn rafters often exceed 24 inch centres and were common prior to 1945.

9. Fireplaces & Chimneys: Brickface spalling usually indicates a house is more than 40 years old. The lack of a damper generally means that the house was built prior to 1940. A chimney without clay flue tile liners was most likely build before 1945.

10. Water Supply & Waste Pipes: Galvanized water supply pipes were replaced in most locations with copper between 1965 and 1975.Cast iron waste pipes were often replaced between 1970 and 1975.

Regards,

Glen.

Note: This information is from Harvard University's Joint Center for Housing Studies. However many of these tips are helpful determining the age of various systems in a Toronto home.

Ask An Expert?

 These are just some of the professionals who can help you with your home ownership concerns. If you subsequently choose to establish a business relationship with any person/company then you should be sure to define the specific details of the relationship or business contract before you proceed.

• Ask A Lawyer?
• Ask A Painter?
• Ask A Surveyor?
• Ask A Designer?
• Ask An Accountant?
• Ask A Tradesperson?
• Ask A Home Inspector?
• Ask A Financial Adviser?
• Ask A Colour Specialist?
• Ask An Insurance Broker?
• Ask An Interior Decorator?
• Ask A Web-Site Designer?
• Ask A Kitchenware Retailer?
• Ask A Landscape Designer?
• Ask An Employment Lawyer?
• Ask A Banker/Mortgage Broker?
• Ask A Firecode/Retrofit Specialist?
• Ask A Garden Sculpture Specialist?
• Ask A Basement Waterproofing Specialist?

The above article(s) provide information that is of a general nature only and is never intended to be a substitute for advice specific to your particular concern. No one should act upon such information without appropriate advice and/or consultation.

Business Referrals: 

Client & Networking referrals are the foundation of a successful real estate agent’s career.  Over many years in this industry I have enjoyed the confidence & repeat business of my clients.  I appreciate your on-going support and want you to know that I will always look after friends & colleagues you refer to me with professionalism, care and respect.

Please Call Me With Any Real Estate Questions.
I'm Always Here To Help!

Rosemary Wright

Sales Representative - Sutton Group-Bayview Realty Inc.

Bus: (416) 483-8000 Fax: (416) 463-0159

Web-Site: www.rosemarywright.com

E-mail: mail@rosemarywright.com

Direct Page: (416) 582-1216

"Professional Service With A Personal Touch"

This newsletter is never sent unsolicited. If you wish to be removed, please reply to this e-mail with the words: "Remove from Newsletter" in the subject line or call me at (416) 483-8000 to request removal.

The intent of the newsletters - "Real Estate Bits " & "Real Estate Bits -2" is to provide information to you regarding real estate. Personal details such as your name, contact information and address are never revealed to anyone without your consent. In accordance with the new Privacy Act, your consent must be given (either implicitly or explicitly) to receive these newsletters. If you do not want to receive my newsletters - please notify me. My newsletters are not intended to solicit Buyers or Sellers who are currently under contract with any Broker.

The information and opinions contained, statistics and articles are courtesy of TREB, CMHC or other individuals or companies and are believed to be reliable, but their accuracy is not guaranteed. Sutton Group-Bayview Realty Inc. and Rosemary Wright accept no responsibility whatsoever for any loss arising from any use or reliance on the accuracy and timeliness of the information contained herein. Every endeavour is made to ensure accuracy. These newsletters do not render financial, legal, accounting, home inspection or professional advice. They are for general educational purposes only. They do not offer do-it-yourself advice. We encourage you to always contact the appropriate professionals or specialists to address your individual needs.

E&OE