Wednesday, March 24, 2010

Conditions Removed On One Property

Monday was the deadline to remove conditions on the two conditional offers. Of the two conditional offers we made we only removed conditions on the one property and decided not to go ahead with the second deal. That means we have money to invest in a second property so we'll probably be looking at another property in the fall.

The property we didn't choose was not a bad property (obviously otherwise we wouldn't have made a conditional offer) there were just fairly long list of fixes that would need to be done: New floors in one room, bracing of the foundation, New Furnace, addition of more clay to the surrounding of house to change grading so water slopes away, Eavestroughs needed to be repaired and extensions added, handrails missing or needing fixing, stairs needing fixing, direct wired smoke alarm needed to be added, along with a few other even more minor things... but because we're not actually there to do the work and would have to hire someone to do it the costs would've been prohibitive and risky (After seeing enough episodes of Holmes on Homes... it's scary enough when you're there watching... if you're not... then what?!)... meanwhile the fixes were conservatively estimated between 5K and up to 10K (Though our real estate agent was doubtful it would be 10K). We thought 10K into a 150K house might be a bit excessive seeing as getting like 10 or 20K more we would have the downpayment for another house.

It was still an interesting learning experience to have one of each happen. With the conditional offer that we didn't go through with we had to sign a form that stated we would NOT be removing conditions on the offer and so they could put it back on the market(Notification Conditions Have Not Been Satisfied Or Removed In Writing). With the property we did take it was an almost identical form except the wording was different to reflect the fact we would be removing the conditions and that the sale could go ahead (Notice to Remove Conditions On Residential Contract Of Purchase And Sale).

Since the lady that owns the property we're buying is planning on moving back to Ontario and our property manager won't really have time to schedule fixes till almost Summer we decided on closing the property in May instead of earlier.

Some new things to teach. The City of Regina (like many other municipalities) allows you to pay your property taxes automatically and in installments. (I do this in Yellowknife and I'm assuming most other places have the same system in place) Regina's system is called "TIPPS" or Tax Installment Payment Plan Service. This is a must for out of town investors like me obviously since I won't come back into town just to pay for taxes and it's probably outside the scope of service for your property manager to do this for you. Also since it is automated you know it is done. Only problem is they need a chequing account and I was hoping instead to just use an ING account (higher interest than regular banks)... I'll get the details and see if it is possible to set this up with a non-chequing account.

I will also need insurance which I'm still working on... I might need a commercial package since it is an investment property (which is probably different rates than a residential) Again I'll keep you posted.

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