Next month, a group of high-profile vancouver names will launch a condo development on a golf course in Delta, B.C.

Ron Toigo, best known for owning the Giants junior hockey league and the White Spot restaurant chain, is overseeing development of a Palm Springs-style country club and 500-unit housing project, featuring a 5,500-yard golf course. His partners in the Tsawwassen Golf and Country Club include singer Michael Bublé, music manager Bruce Allen, and hockey coach veteran Pat Quinn.

“They have significant investments in this,” Mr. Toigo says. “We are all friends invested in it, and I think them being involved is a bonus for the development.”

Mr. Toigo purchased the property in 2007, but the project took more than two years of public hearings in order to extend and redevelop the golf course. The $400-million project, which has “a Disneyland feel to it,” will be sold in five phases over the next two years.

It wasn’t just a case of a famous singer looking for a random investment. Mr. Bublé, who is also one of the co-owners of the Giants, is learning to play golf. Golf is a popular passion for celebrities and athletes, which is why golf course investments are of interest.

“It was an easy golf course and Michael is really just learning the game right now – it was something he was comfortable playing,” says Mr. Toigo. “I think him being involved is a big plus. It gets down to trust, and he trusts what I’m doing.”

Like everybody else, celebrities have discovered that real estate in British Columbia is a relatively sound long-term investment. While some like glamorous golf course investments, others stick to basic housing projects. Jason Priestley, best known for his role in Beverly Hills 90210, is the star of the new HBO Canada series, Call Me Fitz. Although he makes a living from acting, he has maintained a tidy sideline buying up real estate in B.C. since the mid 90s.

“I can understand why other actors and musicians, people like that, want to get into real estate development, because although there might be slight corrections now and again, real estate certainly in my lifetime has always increased in value,” says Mr. Priestley, on the phone from Los Angeles, where he’s lived for 25 years.

He owns a resort in Ucluelet, B.C., property in Gastown, is co-owner of the acclaimed Black Hills winery near Oliver, B.C., and once owned an apartment building in vancouver. Not surprisingly, he is grateful that he chose his home province for real estate investing rather than the United States.

“I started investing in vancouver and B.C. real estate back in the mid 90s, when I was still doing Beverly Hills 90210,” he says. “I was very aggressive about it, and looking forward and seeing where vancouver was headed, and what was going to happen. I have always imagined myself moving back to vancouver, so I was trying to invest in things in vancouver that would help with that.

“I have had a great experience investing in real estate in B.C.”

In the last few years, former National Hockey League players Trevor Linden and Geoff Courtnall have been in the news for their real estate interests. Both have successfully made the transition into development, which is a common second career for athletes who thrive on competition, winning and risk. Unlike celebrities who quietly invest in someone else’s project, they roll up their sleeves and get involved in every aspect of negotiation and construction.

“There’s a risk to becoming a professional athlete – you’re giving up your life and opportunities, and education, to commit to something very, very difficult to achieve,” says Mr. Courtnall. “real estate development is very similar. It takes a lot of pieces in the puzzle to come together.”

Source: Kerry Gold, The Globe and Mail

Vancouver has emerged out the other side of the dark recession and is on track to have one of the great downtowns of the world, Mayor Gregor Robertson said at a packed business lunch Thursday.

Pointing to a string of commercial building projects and a dramatic spike in building permits, Robertson said vancouver is finished with what he called “the gut-wrenching days” of the recession.

In an upbeat speech to the Downtown vancouver Business Improvement Association, Robertson said many of the brakes businesses put on as the recession began to wash over the city in 2008 have now been released.

“Business is booming, development is cranking up and jobs are flowing into the downtown,” he said.

The city’s boost in building permit values is a good bellwether, he said.

As of last week, more than $460 million in building permits have been taken out in 2011, compared with $220 million in 2009.

“We’re back up to pre-recession levels,” he said.

Much of those values are in six stand-alone commercial towers being proposed that will deliver 1.6 million square feet of office space. “That really demonstrates confidence and real hope for business and the economy downtown.”

Robertson didn’t identify all six projects. But in March, Telus announced a $750-million development of its property at Georgia street and Seymour street and homer street, including a 22-storey tower for a new head office and a 44-storey tower of mixed residential development.

The city is also advancing on its plans for new commercial facilities around BC Place, although this month it rejected a $500-million plan for an expanded casino.

Robertson said he believes all the proposed development downtown will continue to improve the city’s international attractiveness.

“Downtown vancouver is quickly becoming one of the most thriving, energetic downtowns in the world. It will rival the downtowns of New York and London and Paris,” he said.

Robertson said his administration’s effort to lure clean technology and green businesses to vancouver had helped make it “the third largest cluster in the world” of such companies.

And he credited the revamped vancouver Economic Development Commission for much of that success, saying it was in part responsible for more than $300 million in new businesses being lured to Metro vancouver since the 2010 Winter Olympics.

Source: Jeff Lee, vancouver Sun

Canadians can now get their individual Financial Fitness Score to help discover how financially fit they are courtesy of Genworth Financial Mortgage Insurance Company Canada (“Genworth Financial Canada”) and the Canadian Association of Credit Counselling Services (“CACCS”).

This new Financial Fitness Score, the first of its kind in Canada, is available online at www.financialfitness.ca. The score is based on attitudinal and behavioral questions that were developed from financial fitness data collected in a survey sponsored by Genworth Financial Canada and CACCS. The tool helps people determine how well they are managing their finances and provides useful information that is based on their fitness level.

“Having a firm understanding of what it means to manage your money is so important to peace of mind”, said Henrietta Ross, Chief Executive Officer of CACCS.  “It’s quick, easy and free, but so rich in value. Understanding your score and what you can do to improve your situation is very empowering.”

The fitness tool is just one of a series of initiatives provided by Genworth Financial Canada in collaboration with CACCS and was launched as part of their recent Homeownership Education Week events that included live seminars and webinars on various financial topics.

“Providing this financial fitness evaluation is an extension of Genworth’s commitment to helping Canadians get a better understanding of their finances,” said Debbie McPherson, Senior Vice-President, Sales and Marketing of Genworth Financial Canada. “As The Homeownership Company, we help Canadians achieve their homeownership dreams responsibly and providing education is an important first step”.

A recent report by Canada’s Task Force on Financial Literacy concluded urgent action needs to be taken to strengthen financial understanding in Canada. Genworth Financial Canada supports this recommendation and is continuing to work with the CACCS to offer helpful financial resources for Canadians.

Get your Financial Fitness Score today by visiting www.financialfitness.ca.

Source: GlobeAdvisor.com

Starting a new business can be a challenging period for your finances. It may be tempting to utilize some of the equity in your home to fund the startup.

“Of course, the entrepreneur is an optimistic person and they’re trying to plan their business for success. They need to be aware failure is something that could happen,” says Chris Gordon, financial advisor at Edward Jones in Mississauga. “More often than not, the reasons for failure are internal, in other words, failures of the business in terms of the experience or knowledge of the entrepreneur as opposed to anything that happened in the economic environment.”

Mr. Gordon suggests exploring other avenues for funding before risking your home for a new business venture.

“Other sources of finance might be a straight business loan or asking your friends or family for money. Depending on the size of the venture, there may be venture capital or angel investors,” Mr. Gordon says. He notes that in Canada there are a variety of federal and provincial programs that the business may be eligible for in terms of loans, grants, subsidies and also intellectual capital or advice.

If, after taking financial and legal advice, you decide that you will use your home to back your business finances, Mr. Gordon says any joint owner of the property, for example your spouse, should obtain independent legal advice so they are aware of the risks.

The type of business you are running, your liability and your cash flow will all help determine whether it is better to obtain a line of credit against your home or to remortgage the property.

“A home equity line of credit is for short-term borrowing. It allows you to get away with interest-only payments, to borrow and pay back very easily,” says Kelly Wilson, a mortgage broker with Invis in Ottawa. “If you’ve got good cash flow coming in, you can make regular deposits without having to limit yourself to particular payments. That will in turn save you interest.”

Ms. Wilson says if you require the money for a longer period, for example if you are paying a lump sum into a shareholder arrangement, then a mortgage against your property may be more cost effective.

“If the loan wasn’t going to be paid back for a long time and there was a certain amount of money coming back to me on a monthly basis, I will generally look at taking a mortgage,” Ms. Wilson says. “The financing is less expensive than a line of credit. A variable rate would be as low as 2.15% versus lines of credit which are generally 3.5% to 4%.”

Mr. Gordon says business owners must check if the loan can be called in at short term or no notice. He says that it is important to have separate accounting of personal and business income and expenses, especially if you are deducting the loan interest against the business income.

“The business owner should make sure they consult with the financial planning, tax and legal professionals if they don’t have that expertise themselves,” Mr. Gordon says. “Plan the venture for success but also to keep in mind the consequences if things don’t go well and make sure that that’s not going to be disastrous for their personal finances.”

Source: Helen Morris, National Post

You walk into the open house, take one look and say to yourself: This is it. It’s the house I have to live in. Where do I pay? A bidding war? I’m in.

Over my years of buying houses, I never bought one that did not have that frisson moment, that thrill of finding a place so suited to my wants. Indeed, I have in the past decided that I wanted to buy a house in what seems, in retrospect, to be nanoseconds. (By contrast, I’ve taken weeks to decide on the right pair of shoes.)

It is no way to make an “investment,” to be sure. But, as I’ve previously discussed in this space, buying a house is perhaps the most uninvestment-like of investments.

Just about anyone who’s purchased a property or thought about purchasing knows that it is much about gut-feel, in which the senses can conspire to trump sense.

Now, as the major real estate selling season gets under way, along comes a survey commissioned by BMO Bank of Montreal to give statistical weight to the notion that intuition carries a particularly heavy weight in the house-buying process.

The survey by Leger Marketing found that more than two-thirds of Canadians cited a “good feeling” toward the property as a reason to buy. Meantime, though, good sense is not thrown out of that gorgeous bay window and into those manicured flower beds. More than 90% of house-hunters value affordability and location over resale value.

So, the axiom that there are three important things in real estate – location, location and location – might reasonably be replaced by the Three Ps: Price, place and personality.

Nevertheless, that resale value is not a big concern to these surveyed house-hunters – people between 25 and 45 who plan to buy a home within two years – is a telling sign of the real estate times.

With some dips here and there, Canadian house prices have been rising strongly for more than a decade. Indeed, even the recession created just a downward blip in the chart of ever-growing values, with the average national price rising 8.9% last month from the previous March (but just 4.3% excluding vancouver).

As a result, most of the house-hunters surveyed might never have been aware of a housing market that was not rising. I suspect many in this 25-to-45 demographic believe house prices basically keep going up forever, that though they downplay resale value in the survey, the expectation for solid gains is, well, a given. (Any significant drop in prices would surely shake that belief.)

In recent times, investors have been asked if they are stocks or bonds. If you’re a stock, you are prepared to take on more investment risk. If you’re a bond, you are not.

Perhaps, though, many people are probably houses when it comes to investing. A home is both partly a stock and a bond – and somehow neither.

It is a bond because over the long term it will likely produce modest returns through the enforced savings required by paying down the mortgage. It is a stock because the gains could be outsized if the investor were to buy and sell at propitious entry and exit points for market-timing gains.

And it is neither because it is an “investment” with many moving parts and frictional costs. You don’t live in a stock or a bond, but when the house leaks, it costs money and cuts into the investment. Meantime, the costs associated with buying and selling a property are becoming more daunting in many jurisdictions, with some observers reckoning that a house is often a mediocre investment at best.

But most young first-time buyers and mover-uppers are not fazed by such commentary. Home ownership is a cornerstone of our culture, with 70% of the population owning properties and many of the other 30% looking to join the majority.

And the real estate industry has become far more adept at marketing and selling than in the days decades ago when I was in the market. Today, houses are often professionally “staged” to produce that frisson moment. Prices are sometimes set artificially low to produce that exciting bidding war and that extra frisson of “winning.”

A house, it is said, is not a home. And a home is not strictly an investment. But does a stock have granite counters? Does a bond have stainless steel appliances?

Source: William Hanley, Financial Post

Canadians are feeling positive about their personal finances following the recession, but most of that optimism is based on the soaring value of their homes – a glow that could evaporate quickly if the housing market slumps.

In the latest Consumerology Report, a quarterly survey conducted for Toronto advertising agency Bensimon-Byrne that tracks trends in Canadian consumer attitudes, respondents were generally happy about their financial position.

Close to 60 per cent of the 1,500 surveyed in late November said their personal finances are in better shape now than a year ago, and more than 80 per cent said they expect to be doing even better a year from now.

This rosy view comes despite the fact that almost half reported that their living expenses have increased since the start of the recession, and only a minority have seen pay increases or a rise in the value of their investment portfolios.

What has changed is the value of their homes. Almost three in five said their house or condominium is worth more, or much more, than four years ago.

It appears that the boost in real estate values “is the only thing that is making them feel [positive],” said David Herle, principal of Gandalf Group, the research firm that conducted the survey.

“They feel better off than they did even before the recession, which is a remarkable situation,” he said, considering that so many people say their costs are higher, they are making less money, their jobs aren’t secure and their investments have slumped.

But that confidence is clearly fragile, because it rests on just one pillar. The concern, Mr. Herle said, is what happens if house prices soften sharply and those lower prices are sustained for some time. With so many people expecting the value of their home to help finance retirement, if that price drops “then you’d have a lot of people who really have no idea how they are going to retire.”

Another worry is what happens if interest rates move up and mortgage payments increase, along with the cost of borrowing on lines of credit backed by home equity. Bank of Canada Governor Mark Carney needs to be aware of the impact that raising rates could have on consumer confidence, because of this dependence on real estate, Mr. Herle said.

Despite these concerns, Canadians appear to be cautious in one aspect of their finances – saving money and paying down debt. Almost 40 per cent of those who responded to the survey said they will put more money into savings or debt payments in the next year, far higher than for any other category of spending.

Many Canadians will also have to spend more money on groceries and gas in the coming year because of higher prices, the survey shows. Only a small portion of survey respondents said they will boost their spending on discretionary items such as clothes and travel.

Source: Richard Blackwell, The Globe and Mail

How the Canadian housing marketing compares with other investments for 10 years to March 31 (average annual basis):

8.30% – Houses (average resale housing price throughout the whole of Canada)

8.90% – Stocks (S&P/TSX composite with dividends included)

6.10% – Bonds (DEX Universe Bond Index)

2.60% – T-bills (91-day Treasury Bill Index)

19.10% – Gold bullion (per ounce, in US dollars)

Compare that with a 37.6% increase in just FIVE years for the Greater vancouver area.

On a recent trip to vancouver, Jin Wang, a Chinese businesswoman, toured a large home – six bedrooms and seven baths – listed at $3.6-million in the British Properties, a wealthy enclave on the north shore overlooking the ocean and the city.

Ms. Wang and her husband, Hui Huang, made their money in the import and export of electronics, leveraging government connections in Beijing to do business in Shanghai. The Chinese nationals also expanded their business to domestic real estate in China.

Now, they’re looking to invest more heavily in vancouver real estate. Three years ago, the couple first bought a $2.1-million home on vancouver’s west side and rented it to a local family. Its value has since hurtled past $3-million. Back this month to scout more buys, Ms. Wang closed a deal for a $3-million home on Chartwell Drive in the British Properties and mulled the additional $3.6-million home on the same street.

Investments by Chinese buyers such as Ms. Wang and Mr. Huang are playing a role in helping to buoy the hottest real estate market in Canada, according to local realtors. Canadian realtors do not tally data on foreign investment in residential real estate, unlike the national realty association in the U.S., but widespread anecdotal reports from local players suggest investment cash from China is a small but significant factor, especially in the market for expensive homes. The additional demand may be helping to underpin a market whose prices seem to impossibly levitate above the typical local incomes in the region.

And it may increase, as more affluent Chinese aim to move, as well as invest their money abroad. There are nearly 600,000 high-net people worth at least $1.5-million in China this year, according to the consultancy Bain & Co. About 10 per cent of them have already left, another 10 per cent are planning to apply for immigration, and about 30 per cent are considering it, according to results based on Bain’s survey of 2,500 rich Chinese released last week.

The method of exit is to qualify abroad as an “immigrant investor.” In Canada, that means an immigrant must have a net worth of $1.6-million and make an $800,000 investment – figures that are twice what they were last year. The vancouver region has already welcomed about half of 10,000 or so immigrants who come to Canada annually under such programs.

Yolanda Chen and Simon Yang arrived earlier this year as immigrant investors. The couple, and their six-year-old daughter, came for the same reason cited by a majority of people from China: a better education system. Ms. Chen, who was a television executive in Shanghai, has purchased a $2-million home in White Rock, south of vancouver.

“It’s a better, and healthier, life here,” she said.

While realtors cite the influence of rich immigrants and investors on markets such as vancouver, data suggest that the absolute number of buyers in such categories is small.

In the U.S. the most recent figures show that foreigners are a factor in real estate markets but not a massive one. Foreigners spent $41-billion on U.S. real estate from April, 2009, to March, 2010, about 4 per cent of the American market. Canadians accounted for about quarter, roughly $10-billion, of that total. Buyers from China counted for $3.3-billion, behind Mexico and the United Kingdom.

Of the properties purchased, half of them were bought as a primary residence, with only about a quarter for investment purposes.

The U.S. figures are the result of a survey by researchers at the National Association of Realtors. In Canada, there are no comparable numbers, “because there wasn’t demand for us to collect these statistics,” said Pierre Leduc, a Canadian real estate Association spokesman.

The bathroom is one of the most complicated rooms in a home. With the many fixtures you must consider – each with specific technical, functional, and aesthetic demands – getting what you need means being clear on what you want.

The first step is quieting the noise of the market and its dizzying multiplicity of choice. By way of helping, I’ve collected my favourite bathroom fixtures. While some are realistic – and others fanciful – sound design is what connects them all.

The sink

When I lie back and daydream about beautiful sinks, my mind always returns to the vessel sink. Recently, it’s one in particular – the Be, from the Canadian manufacturer Wetstyle. It sits delicately on the counter, with a structural softness that pairs elegantly with a crisp stone counter and vanity. What prevents my using it more is simply cost – at $950, it’s a tough sell to clients.

The sink we use most is a white porcelain undermount that Kohler, the maker, calls its “vertical rectangular sink.” Undermount sinks have their edges concealed by the countertop, and the rectilinear shape of this one makes it a fresh alternative to round or ovoid sinks.

The faucet

The Tara (from Dornbracht) is perhaps the most beautiful gooseneck faucet ever designed. In a room of hard surfaces and straight edges, Tara exudes an effortless femininity.

Two more accessible favourites are the Purist (from Kohler) and the Atrio (from Grohe). Both are elegantly clean and tubular, and complement many lighting and door-hardware styles. I’m also a fan of American Standard’s Serin series, whose restrained chrome detailing fits nicely in the updated traditional home so popular in Canada. (It’s a great price, too.)

The toilet

Just because it’s a toilet doesn’t mean it has to be ugly. If, like me, you’re pleased by clean and contemporary simplicity, you can’t do better than the Aquia Dual-Flush, by Toto. It’s modern without being severe, and looks completely at home in transitional interiors.

The shower

Showers are like AV equipment – talk to the wrong expert and you’ll come home with a system that exceeds your needs. Better to keep it simple and buy quality, and for that I love Hansgrohe. Their showers use a patented system to infuse the water with air, which softens it while reducing your water usage. It’s a shower that pleases the body as much as the eye.

The tub

A tub may be the most beautiful object you ever put in your home. And if I’m ignoring price – and even CSA approval – without a doubt I’m taking the Ottocento, by Agape. A pared-down interpretation of a traditional cast-iron tub, the vessel is elegant and whimsical. It’s also 10 grand, and not terribly functional (it has no jets).

A more realistic favourite is the Thalassa, by Bain Ultra. An undermount, it’s framed in a box that’s then clad in wood, tile or stone. I love the Thalassa for the feeling of restrained luxury it gives a room. It’s possible that the interior styling is overcooked, but you’ll find it extremely comfortable. With the tub jets gurgling and a glass of Malbec at your elbow, you may discover that the bathroom as good a place as any to ponder the paradoxes of dreams and reality.

Source: Kelly Deck, The Globe and Mail

Whether it’s a duplex, a cottage or a Florida getaway, a second property can be a rewarding investment over time. But if you’re not careful, it can prove taxing as well. A little planning goes a long way.

The following are some common mistakes financial planners see in their practice, as well as some tips for minimizing the tax hit.

Rental properties

If you borrow money to buy or repair a rental property, make sure you arrange things so that the interest on the loan is tax deductible. That means keeping mortgages and lines of credit for the rental property completely separate from loans taken out to buy or improve your principal residence, which are not tax deductible.

“You can’t unmix money,” says Warren Baldwin, regional vice-president of financial planning firm T.E. Wealth in Toronto.

Say you have a $100,000 mortgage on your home and want another $200,000 for a down payment on a condo to rent out. Instead of raising the mortgage on your principal residence, take out a second mortgage from the same lender – at the same rate as the first – for the down payment. That way, the source and use of the money is crystal clear if and when the Canada Revenue Agency comes knocking.

The same applies for a line of credit. If the kitchens in both your home and rental property need renovating, take out two separate lines of credit, Mr. Baldwin says.

A windfall can also trip people up, he says. Say you inherit $300,000 or win the lottery and you want to buy an income property. If you already have a mortgage of roughly the same amount on your principal residence, rather than using the windfall to buy the rental, pay off your mortgage instead, Mr. Baldwin says. Then borrow the money to buy the rental property, making the interest deductible against income.

The family cottage

After decades of bringing pleasure to a family, the waterfront cottage can end up as a great source of strife if you don’t plan properly for the capital gains tax that will be payable when you die (assuming it is not your principal residence).

Say you bought a cottage for $25,000 that is now worth $1-million. Your heirs will be facing a $975,000 capital gain on which the tax hit will be about 23 per cent, says Ted Rechtshaffen, president and chief executive officer of TriDelta Financial in Toronto. If one or another of your children is unable or unwilling to kick in their share of the tax, the others may be forced to sell against their wishes, he says.

Mr. Rechtshaffen offers two possible solutions: permanent life insurance to cover the capital gains tax, or selling the cottage to the children earlier on while the price gain is still manageable.

In the latter case, say your $25,000 cottage has risen in value to $300,000 by the time you retire, and your income is lower because you are no longer working. The capital gain at that point would be $275,000, and if you and your spouse are joint owners, you can split the tax bill evenly.

“You can actually plan out when you’re going to take the capital gains hit,” Mr. Rechtshaffen says.

condo in the U.S. Sunbelt

Don’t expect to rent out your Florida condo for a month or two and deduct a year’s worth of interest and other expenses, Mr. Baldwin cautions. The CRA requires that the expenses be pro-rated, allowing you to deduct them only for those months when income was earned. And don’t try to deduct the cost of your flight down there for tax purposes.

If you earn income in the United States, it is to your advantage to file a tax return on a net rental basis with the U.S. Internal Revenue Service, says Terry Ritchie, financial planner at Transition Financial Advisers in Calgary and co-author of The Canadian Snowbird in America. If you don’t file, you will have to pay a 30 per cent withholding tax to the IRS on your gross rents.

When it comes time to sell, the IRS withholds 10 per cent of gross proceeds if the amount is more than $300,000, or if you do not use the property more than half of the time as a principal residence. This amount can exceed any capital gains tax you might have to pay, Mr. Ritchie notes.

Suppose you sell a house worth $750,000, triggering a withholding tax of $75,000, but you only had a $50,000 capital gain. The capital gains tax rate in the United States is 15 per cent, which in this example would be $7,500. “That’s a lot less than $75,000,” Mr. Ritchie says.

In this case, you can file Form 8288B with the IRS requesting that the agency lower the withholding tax to the amount of capital gains tax actually payable, he says.

As well, the IRS requires that you depreciate a U.S. rental property, which could result in a higher capital gain when you eventually sell because the depreciation lowers the cost base of the property. The good news: Canadians can claim a foreign tax credit on their filing with the Canada Revenue Agency for any taxes paid in the United States.

Source:  Globe and Mail