Ask Ozzie

Q:

My wife and I - aged 66 and 62 - have our home paid off, and are thinking of getting a mortgage on our home and investing that money in a second property. We like the Fraser Valley. Your thoughts?

A:

Be careful. There is a wide divergence in activity in the Fraser Valley For instance, in the single-family detached market in February:

- In Richmond, 198 homes sold out of 619 listings, for a ratio of 32 per cent, and the average months inventory is just 3.1.

- In South Surrey/White Rock, however, only 126 homes sold out of 575 listings, for a ratio of 21.9 per cent. There is a 4.6-month supply of houses based on recent listings and sales.

- In Langley, only 11.3 per cent of active listings sold and there is 8.8-month supply of inventory. And in Abbotsford, there were only 41 sales among 745 listings.

Ozzie Jurock is a senior real estate adviser at www.jurock.com.

Q:

I own an 8 unit (2 four plexes) building in Salmon Arm. The units are already strata titled and we would like to sell them individually. Is there a legal requirement to set up a Strata council, establish monthly strata fees and a CRF prior to listing the units? If so would this be done by a lawyer? Any advice you could give me on this would be greatly appreciated.

A:

I like Salmon Arm.

I sold the building on 302 - 420 4th Ave and still own a very large suite there.

I assume you have 8 titles?

IN BC, WHEN YOU SELL MORE THAN 5 UNITS ... EVEN IF YOU OWN THEM ... YOU ARE CONSIDERED A DEVELOPER AND MUST HAVE AN OFFERING MEMORANDUM.

The memorandum must show a budget (including strata fees) and you must also put - I believe 5% of the budget - into the strata fee pot right on day one.

That would definitely have to be done by a QUALIFIED lawyer. Go to the FiCom website for details.

The council must be set up within 90 days after you have sold them. (You can't have a council without members.)

Much success,

Ozzie

Q:

I own an old home in Tsawwassen that I am renting out. It is not in great condition and I am thinking that I should sell it before major items happen. The assessed value is 479,000. It is basicaly lot value as the house is valued at less than 20,000. I own a condo in South Grandville in Vancouver. I work for the City of Vancouver and will retire in 4 years with a healthy pension plan. My question is, should I put the proceeds of the sale of the home in another rental property? Thanks very much.

A:

Personally I always like the certainty of rental income that is also coupled with the potential for capital appreciation.

There is also the fact that interest at the bank is in the 2.5% - 3% range - historical lows.

In an ideal world of course you find a property that cashflows based on say - 25% down payment - and the tenant pays off the rest over time for you.

In Vancouver that is no longer possible. However in the general Mission, Abbotsford, Chilliwack areas there are fine duplexes, 4-plexes or simple near new condos that give a much better return on your investment.

I would pick a realtor in those areas and see what my money would buy, how much income it would bring and then decide.

Finally make sure that you have a good professional Realtor in Tsawwassen who gets you the best price possible for your existing home

Much success.

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