Edmonton Real Estate Blog

A home may be one of the biggest investments you ever make. Saving up a down payment is just the first step. Find out more.

A good investment in a renovation should increase the value of your home by at least the amount of money you spent, or close to it. A bad one doesn’t get you much of your money back. Here are some investments that have proven to return their value, or close to it:

• Low-cost improvements that make your home look better: Painting, new wallpaper, and items like new rugs and curtains help to brighten and improve the look of a home, and add value to your house if they are done close to the time of sale.
• New or improved kitchens and bathrooms: Improvements to your kitchen and bathroom seem most likely to increase the value of your home. Keep in mind that these improvements lose value over time.
• Improvements to the living room and the master bedroom: These are also good investments and will usually return most of the money you spent, if not more.
• Investments in more efficient use of energy: Oil, gas, and hydro costs continue to go up. That’s becoming more of a concern when people are looking to buy a home. You can make your home more energy efficient as an investment in its value. Some government programs help reduce the costs of these projects. Also, consider buying appliances that waste less energy.
• Keeping up with repairs. If you do a little at a time, you can avoid doing a lot of expensive repairs at the same time. A reasonable amount to spend yearly is 1% to 2% of the value of your home.

What are some renovations that don’t add much value to my home?

• Swimming pool: Make sure you want a pool before you invest in a pool. The cost of putting in one won’t show up in the price that you get when you sell a home.
• Costly appliances: Most people won’t want to pay an extra $4,000 for your home to pay for a $7,000 refrigerator instead of a $1,200 refrigerator. If you pay thousands of dollars for top-of-the-line appliances, enjoy them. You probably won’t get your money back if you sell them with your home.
• Costly landscaping: The way your home looks from the street can really help interest buyers. It’s called ‘curb appeal.’ But if you spend $30,000 in landscaping, don’t expect to get it all back. Most buyers probably won’t see or appreciate the value.
• Renovating in an area where homes are being torn down: Tear-down activity involves homes being sold, torn down, and replaced by bigger, more expensive homes. If someone is going to buy your home and tear it down, a renovation won’t return any of your money. The buyer will have no interest in the building, just in the land.

Remember: Don’t assume you will get all your money back from a renovation

The key to renovating is to keep the house in good repair and do the renovations you want to enjoy. If you think you might be selling in the near future, focus on renovations that are more likely to get your money back.

The results are in from a recent survey of designers conducted by the National Kitchen & Bath Association (NKBA) to reveal the key design trends for 2010. The results of the NKBA 2010 Kitchen & Bath Design Trends Survey confirmed the continuation of a number of existing trends in the marketplace, but also uncovered others that indicate shifts in the direction that kitchen and bath style will take this year. Below are 2010’s seven kitchen trends and four bath trends.

KITCHENS

1. Traditional is the New Contemporary

Traditional will continue as the most popular kitchen design style in 2010, with contemporary following closely behind, while the Shaker style is seeing a surprisingly strong resurgence. Shades of whites and off-whites will be the most common kitchen colors in 2010, while brown, beige, and bone hues will also be popular.

2. Cherry on Top

Cherry will remain the most popular wood for kitchen cabinetry, followed closely by maple, while alder increases in use. As for the finishes placed on those cabinets, medium natural, dark natural, glazed, and white painted will all be common. Other colors of painted cabinetry and light natural finishes are in decline, however, as are distressed finishes.

3. Floored by Tile

Ceramic and porcelain tile, as well as natural stone tile, remain popular kitchen flooring options, but hardwood will dominate the kitchen landscape more than ever in 2010. For countertops, granite continues to be the most popular option, but quartz will nearly catch up in popularity. For backsplashes, ceramic or porcelain tile and glass will serve as the primary materials.

4. Flexible Faucets

Standard kitchen faucets will become less standard in 2010 in favor of more convenient models. Pull-out faucets continue to increase their market dominance, while pot filler faucets will also become more prevalent. Kitchen faucets will most often be finished in brushed nickel, followed by stainless steel, satin nickel, and-surprisingly-polished chrome.

5. Undercounter Refrigeration

French door and freezer-bottom are the two most popular styles of refrigerators, and side-by-side refrigerators remain a popular option. A surprising trend is the extent to which undercounter refrigerator drawers are being used in the latest kitchen designs. Perhaps even more surprising is that undercounter wine refrigerators have been recently specified by half of kitchen designers.

6. A Range of Cooking Options

The tried-and-true range continues to serve as the workhorse for cooking, although the combination of a cooktop and wall oven is beginning to overtake it. Gas will maintain its position as the most popular type of cooktop over electric, although induction cooking continues to gain in popularity due to its energy efficiency.

7. Dishwasher-in-a-Drawer

Standard dishwashers, with the traditional door that pulls from the top down, will once again be easily the most common type in 2010. However, an increasing number of dishwasher drawers will be installed in kitchens this year for their convenience and their ability to wash small loads of dishes in each drawer, thereby saving water and electricity.

BATHROOMS

1. In With the Old, Out with the New

Traditional will be the most popular design style in bathrooms in 2010, as contemporary designs will be a distant second, followed by the Shaker style as an even more distant third. Beiges and bones will be the most common colors used in bathrooms, followed by whites and off-whites, and then by browns, indicating a somewhat subdued color palette this year.

2. Ceramic and Granite

Ceramic and porcelain tile will be the dominant flooring materials in bathrooms this year, while natural stone will continue to prove popular as well. Though increasingly popular in kitchens, hardwood flooring won’t become common in bathrooms in 2010. For vanity tops, granite will remain king, with quartz and marble also proving popular options.

3. Simple Fixtures

Perhaps more than ever, the most common color for fixtures will be white. Bisque and off-white will be the only other fixture colors at all common in new or remodeled bathroom. For sinks, simple undermount models will be most popular, followed by integrated sink tops, drop-in sinks, vessel sinks, and pedestal sinks.

4. A Nickel for Every Finish

Faucet finishes in the bathroom are similar to those used in current kitchen designs, with brushed nickel continuing to lead the way in 2010. Polished chrome and satin nickel will also be incorporated into many bathrooms, just as they had been throughout 2009. These faucet finishes will be followed by bronze and stainless steel.

When you are looking for top dollar for resale, you need to pay a lot of attention to detail. People are smarter than they were six years ago. They can really see through a quick and dirty renovation job.

OK, so our economic future is uncertain, energy costs keep rising and the Visa bills are already mounting from pre-holiday spending. Add to that the construction of a new home or pricey renovation and the bank account is sure to run dry.

Not so fast. Ottawa designer Ulya Jensen says with careful planning, selective choices and an eye to the future, you can stretch your budget without compromising on good style.

But the owner of Ulya Jensen Interiors admits the process can be daunting. What fixtures to choose? Hardwood or carpet on the floors? And what about the colours?

With so many decisions to make, she says buyers can get mired in “analysis paralysis,” setting themselves up for costly design mistakes.

Earlier this year, Jensen moved into a new home in Westboro — a home she and her boyfriend bought while it was still under construction and tailored to their needs while it was being built.

Fresh from that experience, she offers these tips to help buyers get the most bang for their buck when buying a new home or renovating an existing one:

HAVE A VISION

As a designer, Jensen is trained to have a vision — a good idea of what she expects the house to look like when she’s done. And as soon as she saw the 2,200-square-foot Westboro semi-detached under construction last spring, she knew how she wanted to tweak it.

Jensen wanted an open-concept main floor, which includes a living room, a kitchen and a dining area. Builder Frank Curcio of Bedrock Developments Inc. had planned to put up a wall between the kitchen and the dining area. Jensen worked with him to do away with the wall and make other changes.

“You don’t want to make mistakes,” says Jensen. “It’s good to get in early, but you do need someone to keep you in check.” Which is why she suggests working with a designer if you don’t have a vision.

“It’s very difficult for the average person to envisage the finished product,” she says. “If you can’t see where you are going, you aren’t going to be able to know where you need to go.”

WISE UPGRADES

“We didn’t go crazy on the upgrades,” she says, adding that while she might not have chosen the builder’s oak floors, they decided it wasn’t worth changing. They decided to put the extra money into upgraded vanities and quartz countertops.

“We upgraded only four light fixtures — but they are in smart places.”

You also have to be ready to make decisions quickly. “We had only three days to choose the lighting fixtures,” she says, adding this is when vision comes in handy.

Yes, it’s your home — possibly the home of your dreams. “But you always have to keep resale in mind,” warns Jensen. She tries to do that by being on the cutting edge of design, so that in five years, the home will still look fresh and contemporary.

Actually, the designer got a whole lot of experience in the resale market. She is co-host with Peter Fallico of Home to Flip, a 13-episode real estate-meets-design reality series on HGTV Canada.

“When you are looking for top dollar for resale, you need to pay a lot of attention to detail. People are smarter than they were six years ago. They can really see through a quick and dirty renovation job.”

RESTRAINED COLOURS

It’s best to keep to a few, quiet and related colours.”Because new homes are so white, a lot of people put in more colour than necessary. You don’t want to go crazy with colour on the walls. You can add colour with the furnishings.”

Her Westboro home is full of cool tones of soft grey. “This whole house is the same colour,” she says, explaining that the tone and intensity change from room to room.

PAPER PLAY

Jensen got the plans from her builder, and then made to-scale paper cutouts of her furniture. Every night, before moving in, she sat down with the plans and the cutouts and moved her furniture around to determine the best fit.

“Not everything from your last place works,” she cautions. “Sometimes you have to let some things go.”

Another advantage to playing on paper is that you may be able to order new furniture months before you move in.

ONE FINAL PIECE OF ADVICE

If you can handle it, don’t be afraid to take on a big job. Otherwise, says Jensen, you will find yourself living with someone else’s renovation, or someone else’s idea of what a new home should look like.

A sold sign is displayed in front of a home in Toronto December 15, 2009. A red-hot housing market fueled by cheap money has helped Canada climb out of recession, but fears are growing that it could be a bubble much like the one that brought the United States to its knees.

OTTAWA – As Canada’s red-hot real estate market shows no signs of slowing down in 2010, analysts are beginning to caution some buyers that their best move may be to step to the sidelines.

“If you’re somebody in a situation that you have only five per cent down and you’re stretching to get in the market with a 35-year amortization, I think that would be a very precarious situation right now,” said BMO Capital market economist Robert Kavcic.

Conversely, he said, “if you’re sitting on a pile of cash and looking to move into the real estate market, it would almost be a no-brainer to just wait for lower prices.”

Notes of caution simmered to the surface this week after realtor Royal LePage forecast home prices would continue to “appreciate significantly” during the early months of the year. Already in 2009, they’re up 19 per cent, according to the Canadian Real Estate Association.

The trouble is that while prices are rising, incomes are not.

Yet rock-bottom borrowing costs continue to lure buyers, and investors are rushing in – despite a shortage of listings – for fear that if they don’t get into the market now, they’ll miss their chance.

“It’s absolutely not debatable that housing prices cannot rise faster than incomes over the long term,” said Will Strange, professor of real estate and urban economics at the Rotman School of Management.

Sooner or later, incomes have to rise, or home prices fall, for balance to be attained.

Many analysts argue that home prices are not yet out of line with the incomes it takes to pay for them, Strange said. Yet with the job market still weak, and unlikely to drive new employment and higher wages, odds are that if something’s got to give, it will be prices.

“If I didn’t personally have most of my wealth tied up in housing, this would not be the time that I would choose to jump in,” Strange cautioned.

At the same time, interest rates have nowhere to go but up, which could leave some buyers in a position similar to U.S. homeowners, who had houses worth less than their mortgages after the subprime bubble burst and prices crashed.

“We’re certainly urging people to error on the side of caution,” said Bruce Cran, president of the Consumers’ Association of Canada.

“If you’re paying an amount of money, whatever that might be, that you couldn’t sustain if interest rates rose by say 25 or 30 per cent – I can see that being a problem for a lot of people.”

Canada’s not headed for anything similar to the U.S. subprime mess because lending standards here are higher and because people can’t just walk away from their homes as they can in the U.S., other than in Alberta.

But there may yet be an economic impact if home prices turn down, as home values relate directly to the economy, fuelling spending as they rise and tightening personal budgets as they fall, Strange said.

For now, many observers are predicting, as does Royal LePage, that the market will find its balance later this year as rates rise and more listings come on the market.

In the meantime, there are still many good reasons to buy a house, Strange said, “but don’t buy it because you think the price is going to go up.”

Emotions are a big part of the homebuying process. People have to feel good about the house they are considering purchasing.

Both physically and financially, there has to be a comfort level or the cheque won’t be signed.

The location might be perfect and the price may fit, but the house might need some work– and the cost of, say, new kitchen cabinets, flooring and windows might just be enough to break the deal.

Laura Parsons, Calgary-area manager of national business development for the Bank of Montreal, has heard this scenario countless times from those on the front lines of the real estate industry.

“I talked with one realtor who showed clients something like a hundred homes and there was always something wrong,” she says.

“They couldn’t put a deal together.”

Banks want to help realtors sell homes to get the financing business, so Parsons had to find an answer to the you-scratch-my-back, I’ll-scratch-yours problem.

In the back of her mind, there was something she recalled that might solve the problem–some financing vehicle that would help both realtors and potential homebuyers.

After much mulling, it came to her.

More than five years ago, Canada Mortgage and Housing Corp. introduced a Purchase Plus Improvement Program (PPIP) that would allow homebuyers to finance the purchase of the home plus the cost of immediate renovations–all in the original mortgage.

Because there was no big flag-waving, horn-blowing announcement of the program, it’s been under-utilized to some extent.

Parsons decided it was time to brush the dust off the PPIP–which is available through both CMHC and Genworth Financial Canada –and put it to better use.

“We wrapped our arms around how to deal with this issue and came up with mortgage staging–our way of helping people fix up their homes without spending much extra money on a mortgage payment,” she says.

In a nutshell, here’s how the PPIP works,

A home is purchased for, say, $400,000. Based on a five-per-cent down payment and a 35-year mortgage plus things like the mortgage insurance, PIT (principal, interest and taxes). and property taxes, the monthly payment would be $1,524.

But $50,000 worth of renovations are needed to bring the home up to snuff at move-in. Add this amount to the original mortgage and the monthly cost goes up just $169–less expensive than taking out a separate loan.

When the decision has been made to make an offer on a home that needs upgrading, Parsons says the offer is conditional for a longer-than-normal period to arrange for a contractor to look at the place and give an estimate for the work.

If everything is satisfactory, the timing of the work is then between the buyer and contractor.

Bart Dutchak is one of the early success stories for the program.

The 32-year-old bought a unit in a 25-year-old condo building in April, knowing ing full well he was going to be spending money to fix it up on his own–things like laminate for new countertops, as well as new flooring, crown mouldings and baseboards.

“I worked for two solid months after work to get it done,” he says.

The bill was $10,000– which, when added to his original mortgage, didn’t make all that much a difference to the monthly outlay.

He shopped around, but he says he couldn’t find a lender who would let him add the renovations onto his original mortgage.

“Then the Bank of Montreal treal said, ‘Yes,’ and I was pretty excited to be able to combine everything,” says Dutchak, who is a senior draftsman and detailer at Canam Steel. “It just made it all so much simpler.”

Elena Salikhov, Calgary based based area manager for business development for CMHC, says the program was established to help people wanting to make improvements that would increase the value of the property.

The key to the program is that the cost of the renovations must be reflected in the expected future value of the home.

In the example of the $400,000 home with $50,000 worth of renovations, CMHC or Genworth must agree the home would have a value of at least $450,000 after renovations are done.

So, with CMHC and Genworth worth firmly on side, Parsons set out to find other partners who would help increase the profile of the mortgage program.

Because she is involved with the Canadian Home Builders’ Association-Calgary Region, Parsons explained the program pro-to its Renomark committee, which represents many of the city’s renovation contractors.

Unlike Dutchak, some people don’t want the challenges of doing the renovation themselves. They’d rather hire the work out.

Paul Klassen, president of Pinnacle Group Renovations by Design Ltd., was in the Renomark audience for Parsons’ address and says the timing was uncanny.

As part of the company’s five-year strategic plan, Klassen developed a 3-D application to show people how a renovation would look when complete.

The fact a program was available to help clients pay for it was an added bonus.

“I ran out to speak to her, explaining that this was a perfect marriage for us and would be another tool in our business arsenal,” he says.

Since that meeting, he has talked about PPIP with a couple of his clients.

“What we thought was a wall (to a renovation decision) has become a door,” says Klassen.

Parsons then went in search of a supply partner. Because of prior business dealings with Rona, she received the support of Mel Anderson, manager of the retail chain’s Crowfoot location.

“We thought it would tie in well with services we were already offering at the store,” says Anderson.

Rona has an installation department that includes designers and estimators. They also have programs and facilities to assist customers with all aspects of a renovation.

“We are an option to hiring a contractor,” says Anderson. “We can walk customers through the design and buying processes right here in the store, or we can go to their residence and give them an estimate.”

With program partners on side, Parsons says consumers are able to take advantage of another federal government program that might save them money and time.

“Its been around for a long time, but few have taken advantage of it because they don’t realize the little impact it will have on them financially,” she says.

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In Short

If you intend to buy a home that needs some immediate upgrades, the Purchase Plus Improvement Program may be the answer. A qualified mortgage consultant can guide you through the process:

– Step 1: Mortgage pre-approval– Arranging a pre-approved mortgage not only protects you if interest rates increase, it also gives you a

clear price range for your new home. At least a five-per-cent down payment is required for a PPIP mortgage.

– Step 2: Obtain cost estimates for upgrades– Once you have found a home, you need to get written quotes from licensed contractors on the planned renovations.

– Step 3: Mortgage application–For example, with five-per-cent down, your mortgage consultant would apply to a lender for whatever’s lowest: 95 per cent of the purchase price plus 95 per cent of the cost to finish the renovations, or 95 per cent of the “as improved” market value, determined by the institution which insures the mortgage after the renovations.

– Step 4: Finalize purchase–Your realtor and mortgage consultant will walk you through this part of the process. The funds for renovations will be sent to your lawyer in trust when the mortgage closes.

– Step 5: Complete upgrades–The lender will hold back funds for the renovations until the work has been completed and inspected, at which time the contractor can be paid.

———

The Buyer

Bart Dutchak.

AGE: 32.

BACKGROUND: A senior draftsman and detailer for Canam

Steel, Dutchak bought an apartment condo in a 25-year-old building that he knew needed some renovations, including flooring, baseboards, crown mouldings and countertops. Using an estimate of the renovations costing $10,000, Dutchak shopped around for a lender who would add this cost to his original mortgage through the Purchase Plus Improvements Program offered by Canada Mortgage and Housing Corp. and Genworth Financial Canada. He got in touch with a Bank of Montreal mortgage official and received approval. He did the renovations himself over the course of two months working in the evenings.

NEW YORK (CNNMoney.com) — Home remodelers are getting less bang for their bucks. For the fourth straight year, renovation jobs have added less to resale values relative to their costs, according to an annual Remodelling Cost vs. Value Report released this week by the National Association of Realtors.

The average remodelling job cost $50,908 in 2009 and added $32,497 to the value of the home, a ratio of 63.8%. That was down from a cost-to-value ratio of 67.3% in 2008, when the average was $49,866 and the added value was $33,568.

One common renovation, a mid-priced bath remodel, for example, runs an average of $16,142 and adds only $11,454 to the resale value of a house — recouping just 71% of its cost. In 2008, the same job cost less — $15,899 — and typically added $11,857 to the home’s value, recouping 74.6%.

The most financially successful jobs are smaller-scale, lower-cost renovations that improve the exterior appearance of homes. In this down real estate market, curb appeal is king.

“Once again, this year’s report highlights the importance of a home’s first impression,” said NAR President Vicki Cox Golder, owner of Vicki L. Cox & Associates in Tucson, Ariz.

Ron Phipps, a real estate broker in Rhode Island, said how the house looks from the outside is more important than ever.

“If you’re driving down the street and the house doesn’t have great appeal, it doesn’t matter how nice it is inside,” he said.

But here’s the kicker: Clients are savvier than ever in their shopping. Even though the costs of home improvements are less likely to be returned on resale than they have been in prior years, sellers may still have to bite the bullet and do the remodelling if they want their house to sell at all, he said.

“It’s kind of intriguing,” said Phipps. “Buyers are using the unimproved houses to negotiate lower prices, but they wind up buying the remodelled homes.”

So, if there are two similar houses in the area, buyers will use the listing price of the one that has not gone through a metamorphosis to get the seller of the renovated house to slash their price. Buyers want to pay for the caterpillar but get the butterfly.

Seller must play along if they want to make deals. “You get to sell the house more quickly if you do the renovations,” Phipps said.

Biggest pay-offs

The major job that returns most in resale value is an upscale replacement of siding using fibre-cement. The job costs an average of $13,287 but increases home value by $11,112, or 83.6%. A vinyl siding replacement returns 79.9% of costs.

Adding a basement bedroom is also fairly cost effective, averaging $49,346 but adding $40,992 in value, an 83.1% return.

“Increasing liveable square footage with a new deck or an attic bedroom is usually more valuable than just remodelling existing space,” Phipps said.

The return on investment for some jobs varies greatly by region.

In New England, where winter are long and cold, vinyl window replacements reap a better return than they do in the warm South Atlantic region, where poorly insulated windows don’t mean as much expensive heat leaking away.

So, although replacement windows cost more in New England — an average of $11,155 — they add $9,152 to home values there, recouping 82.3% of their cost. In the South Atlantic states, they cost $9,705 but add just $7,417 to home values, 76.4% of their cost.

On the other hand, buyers in the South Atlantic seem to reward sellers for adding living space more than they do in New England. Maybe thrifty Yankees hate having to heat those extra rooms.

Finishing a basement returns 84.4% of its $55,357 cost in the South Atlantic and only 64% of the $65,715 New Englanders spend for the job.

Among the remodelling jobs faring the worst in return on investment were large, upscale kitchen remodels. They cost an average of $111,794 in 2009 and added $70,641 in recoupable value, just 63.2%.

That was down a whopping 7.5 percentage points from their 70.7% return on investment in 2008 . At the height of the housing boom, in 2005, upscale kitchen renovations returned more than 80% of their costs.

“A lot of the things that, historically, had huge value, don’t have as much today,” said Phipps. “If you want to redo a kitchen, it may no longer make as much sense to use upscale appliances — Viking ranges, Sub-Zero refrigerator. Buyers may not pay any more than they would for a home with GE appliances instead.”

Of course, most remodelling jobs are done to please homeowners. Any increase in home value is a bonus, not an end in itself. But for anyone thinking of selling in the near term, keeping an eye on the bottom line is always a good idea

By Les Christie CNNMoney.com

Interest rates are about to start rocketing higher. Savers, get ready

You now have roughly six to nine months to get a personal plan together for dealing with higher interest rates.

After that, the ride begins. Where it ends depends on how smartly the economy and inflation snap back, but we could be looking at a prime rate of more than double the current 2.25 per cent by the end of 2011. Let’s look at four ways you can prepare:

1. Home buyers, lock down your mortgages

If you absolutely must buy a house in the overheated market in some big cities, then consider insulating yourself against rising rates by taking a five-year fixed-rate mortgage. A quick scan of mortgage brokerage websites shows five-year terms priced in the range of 3.69 to 3.99 per cent, while the big banks are advertising specials as low as 4.19 per cent.

Forget the research that shows you’ll save on interest over the long term if you go with a variable-rate mortgage. If you’re stretching for family cash flow to buy a house, then cost certainty is more important than potential savings.

Anyway, today’s five-year rates are quite good by historical standards. Bank of Canada data show the average five-year rate over the past decade was 6.8 per cent, which compares with a typical posted rate today of 5.5 per cent at many banks (this rate is bogus – always ask about the kind of discounted rates mentioned just above).

Note that seven- and 10-year mortgages are available today for rates as low as 5.2 to 5.3 per cent. I’ll have to investigate further, but this sounds reasonable from a historical point of view.

2. Homeowners, face the music

If your mortgage comes up for renewal in the next few years, brace yourself for higher rates and, thus, potentially higher mortgage payments. Suggestion: ask your lender for your projected mortgage balance at maturity and then use an online mortgage calculator to figure out how much your payments would be at various interest rate levels. Try: canequity.com/mortgage-calculator.

One suggestion for accommodating higher mortgage payments is to reduce your overall monthly debt carrying costs by paying down your line of credit.

Emergency measure: lengthen the amortization period on your mortgage on renewal. This is costly in terms of extra interest, but it will take the pressure off in terms of your payments.

Longer amortization periods are only a remedy for people who went with the standard 25-year payback period when they arranged their mortgages. People who started with a 30- or 35-year amortization have already played that card.

3. Enough with the bond funds already

As of the end of November, bond funds had the highest year-to-date 2009 sales for all broad fund categories at $11.3-billion. Bond funds were an ideal refuge during the worst of the bear market, but now they’re vulnerable to rising rates.

Already, a rising rate outlook is hurting bonds. In December, the biggest bond mutual and exchange-traded funds in the country were down anywhere from 1 per cent to 1.6 per cent. If interest rates move up modestly and gradually, then gains in bond funds will be hard to come by. If rates spike higher, bond funds will be money losers.

Investors buying bond funds for safety might consider guaranteed investment certificates as an alternative, particularly those from smaller banks and credit unions (all should be members of deposit insurance plans). Returns at the high end are typically in the range of 1 to 2 per cent at best for a one-year term, but rising rates will help on this front.

Balanced funds are hot these days, too. Remember that the whole point of these funds is to mix bonds and stocks together. You could argue that this approach just adds to your risk right now.

4. Savers, get ready

The benefit of rising interest rates is better returns for savers and conservative investors who rely heavily on GICs and high-interest savings accounts. High-interest accounts today pay no better than 1 to 2 per cent and, frequently, even less. These accounts will automatically start paying more once rates start rising. Among the beneficiaries will be all the people who have used high-interest products for their tax-free savings accounts.

With GICs, you’ll want to have money maturing later this year and 2011 to capitalize on higher rates. As ever, the best strategy for the most people is to invest equal amounts in GICs with maturities of one through five years. This laddering approach means you have money available for reinvestment every year, which means you’re good for the next few years of rising rates.

Follow me on Facebook. I’m at Rob Carrick – Personal Finance.

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Higher, but by how much?

Here are some recent forecasts of how high interest rates will rise this year and in 2011. The rate used here is the Bank of Canada’s overnight rate. Banks are currently setting their prime lending rate two percentage points above the overnight rate, which is currently 0.25 per cent.

You are about to invest in your most valuable asset. Many home buying steps are standard yet there might be slight variations depending on the real estate laws and regulations where you live. Here are our top 10 recommendations to make you more confident as you embark on your home buying journey.

1. Your Credit Rating
Getting your finances in order is probably the most important step you should take. Your credit reports are an ongoing look at how you manage your finances. You must know exactly what your credit reports say about your financial history before you apply for a mortgage, because the reports play an important role in the mortgage approval process and in determining the interest rate and other loan terms that a lender offers you.

2. Understanding How Mortgages Work
Get familiar with the mortgage laws, structure and options. That way, you will be able to decide on the right loan and lender — crucial to your home buying success. It’s up to you to determine which lender is best for your needs, and it’s always a good idea to have at least a bit of background about the loan process before you talk to a lender.

3. Getting a Mortgage Pre-Approval
Do you know how much house you can afford? Probably not, unless you’ve talked with a lender. Pre-approval helps you in other ways. Consider this scenario. A home seller gets two similar offers. One is accompanied by a letter from the buyer’s bank that states she is pre-approved for a mortgage in the amount of the offer. The other has no supporting documents. Which offer do you think the seller will consider first?

4. Sorting Out Your Needs and Wants
Buying a home isn’t as difficult as you might think, even if you’re short on funds. But the process will go a lot smoother if you get familiar with your real estate market and narrow down your wants and needs before you start looking at houses.

5. Preparing to Work with Real Estate Agents
Real estate agents represent buyers, sellers, or both — and in some states they can work as neutral facilitators for either party. It’s essential to understand agent duties and loyalties before you make that first phone call.

6. The Great Home Search
The Internet is a great tool — you can spend endless hours searching the public version of the Multiple Listing Service website. Plus, your agent will give you multiple listing sheets to study. You can also pick up House For Sale magazines and read classified ads in your local newspapers. You might even plan afternoon drives to preview neighbourhoods. These are all excellent ways to see what’s available out there.

7. Pre-Offer Investigation
Deciding whether or not you want to buy a house involves a look at its structure and its features, but there are many other topics that are every bit as important to your purchase. Appoint a professional to conduct the home inspection. Study what kind of house is it — site built, modular or manufactured. Consider its market value and resale potential. Do others have a right to use the property? Can you live with the deed restrictions? Is the reported square footage accurate? Is the heating system efficient? And so on.

8. Making the Offer
There’s no one set of instructions that can cover all the differences in real estate laws and customs that exist throughout, so the mechanics of making an offer and its specific contingencies depend greatly on your location. That’s why you should sit with your agent, attorney or advisor to fine-tune your offer and take care of all the contractual considerations.

9. Avoiding Last-Minute Changes
As your closing date nears, everyone involved in your real estate transaction should check its progress on a daily basis, because staying on top of things means you’ll know immediately if there’s a problem that must be dealt with.

10. Before Closing
Most of your home buying concerns are behind you now and you’re on your way to closing, also called settlement, or the event that transfers ownership of the property over to you. You will encounter issues specific to your location and your transaction, issues that can best be explained and handled by your local real estate agent, your lender, your attorney, your closing agent, or others who are helping you complete the home buying transaction.

Never hesitate to ask questions. Ask as many questions as necessary to help you understand the entire home buying process. You are making a long term commitment and spending a major amount of money–you’ll feel much better about the transaction if you stay informed and understand what’s happening every step along the way.

The HGTV.ca Editorial Team

Who doesn’t need more storage space in their home? From closets and attics to kitchens and laundry rooms, we’ll show you some innovative storage ideas that can help eliminate the clutter around your home. So what are you waiting for? It’s time to get busy cleaning up that mess!

Closets

Closets are the first place to look when improving storage in your home. Replacing old hanging rods and shelves with adjustable metal shelving and wire baskets should be high on your priority list. It’s not that hard to do, and can make a great DIY project.

Here’s how to go about it:

• Start by cleaning everything out of the closet.
• Remove the old shelf and rod.
• Locate the wall studs and mark their position.
• Secure the horizontal track to the studs on the back wall near the top of the closet.
• Hang the vertical supports on the track and secure them to the wall.
• Cut the wire shelves to length with a hacksaw or reciprocating saw.
• Attach shelf supports to the vertical supports.
• Install hanging rods, shelves, and baskets.

Under Bed

A lot of good storage space can be found under your bed. To access the stored items, build one or more large open boxes that fit under your bed from plywood or medium density fiberboard (MDF).

 Install casters to the bottom of the box and a handle on the front to allow it to easily roll in and out.

Laundry Room

Your laundry room is another area of the house that can usually benefit from some serious organization. Some ideas for laundry room storage include:

• Add a store bought or built-in storage unit that has been sized to hold an individual laundry basket for each member of the family.
• Install shelving on your laundry room walls above the washer/dryer as well as along the area near the ceiling to store cleaning supplies and detergent, as well as tools and other items.
• A great DIY project that can make your laundry room more functional is to install a built-in ironing board, complete with an electrical outlet and storage for your iron, into the laundry room wall.

Attic

Attics are a great place to store items that aren’t damaged by extreme temperatures. To increase the storage space in your attic, consider building hanging shelves that are attached to the rafters.

Here’s how to go about it:

• Determine the pitch of your roof and the width you want your shelves.
• Using these measurements, build “L” shaped brackets cut from 2″x 4″ lumber to support the shelves.
• Use a chalk line to mark the position of the brackets on the rafters.
• Attach the brackets to the rafters with screws, making sure the shelf support is level.
• Slide 1″ thick shelving onto the brackets.

Kitchen

There are a number of ways, from lazy susans to sliding bins, to increase storage space in your kitchen. One simple way to free up a drawer and make the lids to your pots more accessible is to mount a bathroom towel rack to the inside of a cabinet door. Here’s how to go about it:

• Start by attaching one of the towel rack brackets to the cabinet door stile at the proper height.
• Next, hold the other bracket in place and measure the length of the towel rod.
• Cut the towel rod to length with a hacksaw.
• Insert the towel rod in the two brackets and screw the second bracket to door.
• Place lids on the towel rack with the handles facing out.

Bookcase

A DIY built-in bookcase in your living room or den makes the perfect place to store books or display memorabilia and photographs. Store bought models are also available.

To build a bookcase:

• Start by making a cutting list and cutting the stock (plywood, MDF, or solid wood) to size for the bookcase and shelves.
• Assemble the bookcase.
• Construct a separate recessed base below the bookcase.
• Assemble the bookcase and base.
• Attach a frame to the front of the bookcase.
• Prime and paint or stain and finish the bookcase and base.
• Install bookcase in room.

Bathroom

Bathrooms can always use some added storage space. There are a number of options available, including:

• Build or buy a shallow hanging cabinet to attach to the wall above the toilet for storing towels, soap, and toilet paper.
• Add a built-in window seat or a freestanding chest in your bathroom to serve as a place for clothes and to sit when dressing, as well as for storage space inside.
• Install a built-in, recessed medicine cabinet, such as Nutone’s locking bath cabinet on the wall above the sink in the space between two studs.

Charging Station

A recessed wall cabinet with an electrical outlet mounted inside is the perfect place to keep cell phones, iPods, and MP3 players while they’re charging. It also doubles as a convenient place to hang your keys.

 by Danny Lipford

These days everyone’s on a budget, so we’ve come up with some inexpensive ideas on how you can remodel your kitchen, bath, or living room for under $1000

Bathroom

If you do the work yourself, remodeling your bathroom doesn’t have to be that expensive. Some projects, like painting, are not difficult to tackle while others, such as tiling a floor, require more expertise.

Here are some of the most common bathroom upgrades with approximate DIY prices:

• Paint walls and trim ($75)
• Replace bathroom accessories ($100)
• Install new sink faucet ($100)
• Replace sink and vanity ($400)
• Tile floor ($225)

When tiling a floor, be sure to buy 10-15% extra for waste so you’ll have plenty of tile to finish the job.

Living Room

Most renovation efforts in living rooms, family rooms, dining rooms, and bedrooms involve painting, window treatments, ceiling light fixtures, and replacing the flooring, all of which can make great DIY projects.

For those on a budget, the least expensive flooring to install is either carpet or laminate flooring at about $2 per square foot. Though more expensive than carpet, laminate flooring makes a great do-it-yourself project while installing carpet often requires professional installation. Replacing the light fixture in the ceiling with either a new model or a ceiling fan is the perfect way to finish out the room.

Here’s approximately what it will cost to remodel your living room:

• Paint ($150)
• Window treatment ($50)
• Ceiling fan or light fixture ($100)
• Carpet or laminate flooring ($700)

Kitchen

A minor kitchen remodel is another great homeowner project that has a high rate of return on your investment should you decide to sell your house.

Start with a fresh coat of paint on the walls and cabinets. The kitchen receives a lot of traffic, so a kitchen and bath enamel is the best choice, since it holds up to repeated cleanings. The key to painting in the kitchen is to thoroughly clean the surfaces of any grease or grime before painting. You should also lightly sand or apply a liquid deglosser to cabinets before painting to improve adhesion.

Next, consider updating the knobs, handles, and hinges on your kitchen cabinets with new ones. Take your old hardware with you to home improvement center so you can match the size and holes to the new hardware.

A kitchen floor also take a lot of abuse, so replacing it may be high on your priority list. Ceramic tile is the obvious choice, with prices between $1 to $2 per square foot for materials if you do the work yourself.

If you have any money left over, consider replacing your countertops. There are a number of inexpensive choices available including plastic laminate and solid surface.

Here are the approximate costs to remodel the kitchen in your house:

• Paint walls and cabinets ($300)
• Hardware for cabinets ($100)
• Tile floor ($340)
• Replace countertops ($400-$800)

If you budget carefully and do the work yourself, you can make big improvements to every room in your house without spending a fortune.

Source: www.DannyLipford.com