The Blog

Should I pay myself a salary or a dividend? This is a common question that incorporated business owners ponder and ask their accountant about. However, accountants are not up on all the insurance and mortgage rules. And I don’t blame them. Changes with the tax rules, laws and regulations are enough to keep accountants busy enough. This world is getting more and more complex and you increasingly need experts to help you navigate it effectively. Last month we covered this question from the perspective of an insurance advisor. This month we will take you through the perspective of a mortgage broker. It is not uncommon to see tax returns of business owners where some years they have a salary and some years they will have

Interest rates continue to go up and Vancouver real estate continues to drop, in price and sales volume. In September the sales were 35.7% below the 10-year September average. As new listings come online and the sales slow, inventory is slowly building and adding to the downward pricing pressure. This is reflected in the sales-to-active listings ratio. As you can see from the table, there has been a 6 months declining trend in all categories of housing with detached homes being the weakest. As a result, this is the 5th month of declining prices. Detached houses continue with the largest month over month price decline of 2.4%. Townhomes dropped 1.9% while apartments dropped 1.6% What is expected in the months ahead?   The key to predicting

Hope you enjoyed your Labour Day long weekend. The Vancouver real estate market continues to slow in August. The sales volume was 40.7% lower than last year and was 29.2% below the 10-year August average. New listings were 17.5% lower than last August and 16% lower than this past July. Nevertheless, the prices continue to go down. Month over month, detached homes lost 2.3%, townhomes lost 2.5% and apartments were 2.0% lower. Most of this month’s real estate news consisted of different institutions revising their house price forecast downward.  RBC, TD, BMO, Desjardins and Oxford Economics all predict about a 20% to 25% price drop from the peak by the end of 2023 or the start of 2024. Also, as the banks gauge the economic data

Some people think being a guarantor is like vouching for someone. “Yes, he is a good person and he will pay”. And in a way, this is true, but it is also saying “I am so confident that he will pay, that I will guarantee this. So, if he doesn’t pay, I’ll pay!”  Yes. When he doesn’t pay, you are 100% responsible for that loan whether it is for a car or for a house. To the lender, there is no difference. They will get their money the easiest way they can. And if it is easier to garnish your wages because your son is unemployed, they’ll do it. It doesn’t matter that you have no control or don’t possess the property obtained through the

There have been studies that say around 60% of US personal bankruptcies are due to illness or medical problems. I feel so lucky to live in Canada where we have a much better medical system. In 2020, the bankruptcy rate actually dropped due to all the covid stimulus. For example in Canada in 2019, there were around 140,000 bankruptcies while in 2020, there were only 99,000. Now with the covid stimulus pretty much over, a rising interest rate environment and talk of a recession, bankruptcies will pick up. Luckily for some, their financial woes will not end in bankruptcies. The best defense is to plan ahead. Putting your head in the sand and hoping for the best is not a strategy. There are strategies to

Just when real estate demand has fallen off a cliff, the provincial government has now given details to their mandatory cooling off period. It would be timelier, if this has to do with the hot weather, but it does not. This is to protect consumers in a hot real estate market where they are compelled to write a no-subject offer. Mandatory means that even if it were a no-subject offer, there is still the option to cancel your offer within 3 days but for a fee of 0.25% of the purchase price. That is, $250 for every $100,000. So for a million dollar home, it would cost you $2,500 to back out. Of course, when the environment allows, stick with the traditional offers where you

One term that you might be hearing in the media in regards to mortgages that you never came across before is “trigger rate”. If you have a fixed rate mortgage, this will not affect you. If you have a variable rate mortgage that has payments that move along with the changes in the prime rate, this will also not affect you. However, if your variable rate mortgage payments do not change with the movement in the prime rate, then read on. When a lender produces a payment schedule for your mortgage, they base it on the amortization. That is, how many years at a fixed payment will the mortgage be completely paid off at 25 years or 30 years. In the beginning of the mortgage,

Hope everyone enjoyed their long weekend. The Metro Vancouver real estate sales activities in July were slower than June. In fact, it is at a 22 year low! Home sales plunged 43.3% from last July and were 35.2% below the 10-year July sales average. New listings have slowed but not as much as the sales. This results in a slowly growing inventory. The sales-to-active listings ratios have dropped for all classes. It is 11.8% for detached homes. 20.0% for townhomes and 24.5% for apartments. It was only in April, when these numbers were twice as large. This quick reduction of activity has resulted in month over month price drops in all categories. Detached home benchmark price dropped 2.8%. Townhomes dropped 1.7% and apartments dropped 1.5%.

Recently in the news there was a story about two couples who bought a duplex together in 2001. This was the only way they could afford a place. Since then each of the couple has lost their spouse. The property is now worth an estimated value of 3.29M and one of the two remaining owners wants to sell. The other adamantly wants to stay. As with all these group purchases, it should be viewed as a business relationship. There should be an agreement that clearly states all the roles and duties as well as what happens in various possible scenarios such as when one party wants to sell and the other does not. This will save friendships not to mention large legal bills. You don’t know what people’s