How Students Can Negotiate in Alberta’s Renters’ Market

By: Penelope Graham, Zoocasa

 

It has been a tough few years for the Albertan economy; the oil industry downturn has depressed growth, leading to wide-scale layoffs and slashing migration to the province. While this has created financial hardship for many – and put the squeeze on Edmonton and Calgary real estate markets – landlords are also bearing the brunt.

 

These economic factors have led to the slowest rental market since 1988, according to the 2016 rental market data released by the Canada Mortgage and Housing Corporation (CMHC). Vacancies in the province are up to a whopping 8.1%, an increase of 5.6% since last year. To put that into perspective, rental vacancies are just 0.6% in Vancouver, and 1.7% in Toronto.

 

Albertan rents have also dropped by 5.1%, to an average of $1,100 per month.

 

Oil Cities Hardest Hit

 

The hardest hit regions are those with close oil ties; Cold Lake tenants dropped a drastic 26.2% compared to 2016, as out-of-work industry employees left the area. The Edmonton housing market has also suffered, with a vacancy rate of 7.1%, up from 4.2% last year – that’s the biggest jump in 20 years, reports the CMHC. Calgary follows with a 7% vacancy rate. Sought-after mountain destinations like Canmore, however, continue to be competitive, at 1.4%.

“Provincial vacancy rates rise for a second consecutive year, as rental supply outpaces demand,” stated Lai Sing Louie, CMHC’s regional economist for Prairies and Territories.

Tenants are also living in their rentals for shorter periods of time, with a big hike experienced in turnover last year, at a rate of 37.1% across the province in 2015, compared to the national average of 20%. That nearly doubled to a rate of 51.8% in Cold Lake, and lowest in Canmore at 14.1%.

Tips for Student Tenants

While that’s disheartening news for landlords and those affected by oil’s downturn, a silver lining lies in more affordable housing options for students, as Calgary and Edmonton are officially renters’ markets.  According to the CMHC, you can now expect to pay these average rents, depending on unit size:

Primary Rental Market by Bedroom Type

# Bedrooms      Vacancy Rate       Average Rent

Bachelor                   7%                         $838

1 Bedroom               7.40%                    $1,003

2 Bedrooms             8.80%                    $1,195

3+ Bedrooms           9.10%                     $1,307

 

Source: CMHC Rental Market Report, Alberta Highlights

The biggest slowdowns are being seen for larger units with multiple bedrooms, offering an affordable opportunity for students to split rents – good news, as university residence units are slated to rise. It’s also a great chance to negotiate with your landlord on rent reductions, utilities and other perks. In fact, reports the Globe and Mail, Boardwalk Real Estate Trust – a Canadian real estate rental giant – has invested roughly $7 million in incentives in order to appeal to renters.

The bottom line for student renters: Understand current market rates – and your negotiating power – during Alberta’s renters’ market. 

What’s Your Credit Card Personality?

By RateHub.ca

 

Everyone has a unique relationship with money, and personality plays a big role in shaping how you approach spending and debt. Identifying your spending personality can help you choose the best credit card for your needs, single out your bad financial habits and attitudes, and provide insight into how to improve them.

 

As a student, you might not yet have a lot of experience with credit cards. Keep these personalities in mind as you delve into the world of credit.

 

Here’s what your credit card spending personality says about you:

 

The big spender

You’re materialistic and not afraid of debt—you whip out your credit card without a second thought when paying for things like groceries, takeout, and clothing, and might even splurge on big-ticket items such as the latest iPhone or a new car. Status is important to you, and this can lead to impulsive spending on shiny new things to feel validation.

 

If you don’t have deep pockets, especially if you’re a student, you’re spending your way into serious debt. This is an incredibly bad place to be—you need to audit both your spending and your attitude. Put together a monthly budget and scale back your spending. If you’re carrying a balance each month, look for low-interest and no-fee credit cards to save on fees.

 

The shopper

Similar to the big spender, shopping gives you a high. But instead of buying high-priced status items, you tend to stock up on smaller impulse buys. For you, shopping provides entertainment when bored, relaxation when stressed, and a self-esteem boost when you feel like you’ve found a “deal.” Unfortunately, you end up buying a lot of things you don’t need. You might find yourself in thousands of dollars of debt with nothing to show for it.  

 

The thing is, you probably care about money and are aware of your overspending. Whether or not your chronic shopping falls into addiction territory, you should focus on paying down your debt by consolidating it onto a balance transfer credit card to save money.

 

The avoider

Dealing with everyday money management makes you uncomfortable, so you avoid even the smallest tasks such as budgeting, saving, and paying off credit card debt at all costs.

You might also be a big spender or a shopper, but your financial irresponsibility stems mainly from your apathetic attitude toward money—you don’t keep tabs on your bills and debts and are regularly late with payments. You might want to improve your situation, but feel discouraged by where you are now.

 

You need to confront your issues—paying late charges and making only the minimum payment will just keep you in debt longer. It’s time to educate yourself about credit cards and ease yourself into reality: Map out a budget, debt payment plan, and savings goals. As a student and a financial amateur, you may benefit from credit counselling.

 

The value hunter

You’re the antithesis of the big spender: You love a bargain and want value for your money. You like to comparison shop and use your credit card strategically to make purchases. Your meticulous nature makes you an ideal candidate for a rewards credit card. Whether you’re looking for flights and hotel rooms, cash back, or free movies, rewards credit cards are a great opportunity for people who know how much they spend and what they spend it on.

Remember, don’t lose sight of the big picture and overspend for the sake of earning points. Check out the best rewards credit cards that match your monthly spending profile.

 

The reformed

You may have previously been the big spender, the shopper, the avoider, or a combination of all three, but you’ve turned over a new leaf and are debt-free, or well on your way toward it. Congratulations! Like the shopper, using a balance transfer credit card will allow you to prioritize paying off your debt rather than racking up new charges. Only transfer the amount you can realistically pay off before the 0% interest rate period ends (usually after six or 12 months).

 

The responsible veteran

You’re a model example of financial responsibility, the personality the others strive to be. Here’s why: You’re focused, goal oriented, and don’t use money as a psychological crutch. You set a monthly budget and stick to it, know exactly what you spend, pay your bills on time, and have a good credit score. Not only are you in control of your debt, but you have an emergency fund. If you have a different spending personality, keep in mind that the responsible veteran is not born, but made.

 

The bottom line

You might see yourself reflected in more than one of the above categories—that’s ok. The good news is that personality may be ingrained, but anyone can learn, practice, and eventually master good financial habits.

 

RateHub.ca is an independent financial product comparison site that empowers Canadians to make smart financial decisions by comparing rates on mortgagescredit cardssavings accounts and insurance.

Student credit card rewards series: travel

By RateHub.ca

Banks assess eligibility for credit cards on a number of factors, including credit score and income. Because both of these are likely to be fairly low while you’re studying, as a student you’re unlikely to be successful if you apply for most mainstream credit cards.

Luckily, however, there are some great options designed specifically for students. In this series, we’re looking at the best student credit cards for rewards.

 

What are travel rewards?

Many students love to spend their vacations travelling; learning about new cultures and travelling the world is practically a rite of passage. There’s only one problem – the cost!

A good way to help offset this expensive habit is by having a student travel rewards credit card. With this type of card, you collect points on your everyday spending which you can redeem against a range of travel-related categories. There are a number of travel rewards programs in Canada and they all work differently. So, before deciding on one, make sure you understand the way it works.

Although the thought of collecting travel points can be attractive, it’s also important to use your credit card mindfully. Try to only use your credit card for purchases you know you can afford to repay to make sure you avoid interest charges and keep your net return positive.

 

Which travel cards can I apply for as a student?

As the name suggests, the MBNA Rewards MasterCard credit card for Students is specifically aimed at students, so it’s a great option available to those in university who want to start collecting travel points.

Key travel reward features

·       Rewards type: travel, MBNA Rewards Program

·       Earning rewards: 1 point per $1 spent

·       Redeeming rewards: $0.01 per point

·       Spending bonus: 1,000 points after your first eligible purchase (worth $10)

·       Anniversary bonus, 1,000 points each year on you account anniversary (worth $10)

 

How does the MBNA Rewards Program work?

The MBNA Rewards program is one of the most popular travel programmes in Canada and has a range of redemption categories including flights and hotels.

Unlike some programs which vary their redemption rates, the MBNA Rewards Program is fixed and the value of an MBNA Reward point is set at $0.01. This might not sound like much, but this is equivalent to a 1% return, and depending on how much you use your card, your points can quickly add up.

 

Next in the series: cash back student cards

 

RateHub.ca is an independent financial product comparison site that empowers Canadians to make smart financial decisions by comparing rates on mortgages, credit cards, savings accounts and insurance.

Five things students should know about getting your first credit card

By RateHub.ca

 

Applying for your first credit card is a rite of passage for many college and university students. A credit card is a good first step in establishing a credit history and score, which can mean the difference between getting approved or refused for future credit cards, loans and mortgages, rental housing and even jobs. Here are some things you should know about researching, applying for, and using your first credit card:

 

Do the research

Students as a group are typically bombarded with credit card offers, but don’t sign up for the first offer you see – you shouldn’t base your decision on free t-shirts and Frisbees. Compare rates for the best credit cards in Canada and identify which type of card you need based on how you plan to use it: textbooks, groceries, rental cars, train tickets home, late-night pizza, etc., and the type of rewards you want in turn. Apply for the student credit card that offers you the best overall value.    

 

Ask questions

The “best” credit card for you is the one designed to meet your specific needs. Sit down and ask yourself: How do I spend my money? Will this card help build my credit? Can I graduate to a better card in the future? How quickly will I earn rewards, and what are they worth?

 

When you have little to no income, it can actually be even more important to earn rewards on the spending you are doing. But don’t pay extra for rewards programs – look for no-fee options that have cash-back rewards on groceries or gas or offer points towards free movies. For example, the BMO SPC Cashback MasterCard has no annual fee, offers 1% cashback on all purchases, and entitles you to Student Price Card (SPC) discounts of 10-15% at hundreds of retailers and restaurants to save on everything from clothing and fast food to haircuts and car rentals.

 

Another option is the StudentAwards MBNA Rewards MasterCard, which earns you one MBNA point for every eligible dollar spent to be used toward cash back, travel, brand-name merchandise, retail gift cards, or charitable donations. Right now, new signups will receive 1,000 bonus points on their first purchase, plus 1,000 bonus points each year on the anniversary date of the credit card account.

 

Know the facts

When shopping around, be aware of the nuts and bolts: the card’s credit limit, interest rate, fees and penalties, cash advance fees, how the balance is computed and use a credit card rewards calculator to compare different options. Know exactly how your card works so you can make your card work for you.

 

Check your credit report and know your score   

One of the most important reasons to use your credit cards responsibly is to build up your credit score.  Simply put, a credit score is a three-digit statistical representation of your creditworthiness on a scale from 300 to 900. The higher your number, the better – the lower it is, the riskier you are in the eyes of lenders. A credit report is a record of your past and present use of credit cards and loans, and can include bill payment history on any internet, cable or mobile phone accounts. You can access your credit report and score through Canada’s major credit bureaus, Equifax and TransUnion.  

 

Pay it off  

Building a credit history at a young age is beneficial, but whether you’re trying to establish credit, rack up rewards, or both, the bottom line is the same: don’t charge any expense you can’t repay in full when your monthly statement arrives. Ideally, your credit utilization should be below 35% of your available balance. Remember your credit report at least once a year for errors and signs of identity theft.

 

RateHub.ca is an independent financial product comparison site that empowers Canadians to make smart financial decisions by comparing rates on mortgages, credit cards, savings accounts and insurance.

Should Students Buy a House or Rent?

By Sheila O’Hearn, Zoocasa

 

As an undergraduate, first time from home, my rite of passage was renting with fellow students.

But home ownership is a thought some enterprising college and university students are entertaining or putting into action. Is one method better than the other?

 

Some sources suggest that young people today seek the “good life”, with their heightened sense of civic and economic savvy. I’ve observed that living for the moment – a creed that was more readily embraced by preceding generations – has shifted to living with a plan.

 

One point is certain: the decision to buy or rent as a student is dependent on three major factors: what your budget allows you to do with the least amount of stress, vision, and lifestyle choices.

 

Here are two examples of students with foresight: The first is an entrepreneurial homebuyer on a mission, and the second is a pragmatic-thinking student who chooses to rent. Neither individual depended on parents to foot the bill; both figured out how to live within their means.

 

A student homeowner’s story:

 

Canadian student Arthur Churchyard was a rural planning Master’s student at the University of Guelph. He used his scholarship money to combine his studies (Arthur’s “Onaen” Project) with a house purchase. His goal was to transform the landlord-tenant relationship into a cooperative partnership, by exploring low-cost ideas for “green” rental housing.

 

In his first year of home-ownership, he made impressive changes to his 1970’s house, aided by his student tenants, who volunteered free labour to the project. He also applied for and received government grants and other incentives, in addition to forging partnerships with Guelph businesses and organizations.

 

The project proved a success. Tenants benefited by paying lower utility/rental costs and sharing fresh, locally grown food; they also furthered their own studies by gaining first-hand experience with housing retrofits and sustainable budgeting. The community and environment benefited from demonstrated sustainable practices that have grown green housing initiatives. As landlord, Arthur benefited by collecting rents that went towards his mortgage; he made many improvements to the property, adding value; he strengthened his financial portfolio and investment power. As a student, he achieved recognition in his field and secured his future career.

 

Arthur’s home-ownership experiment is unique, but other enterprising students have also purchased homes with like-minded friends. They pooled their money together for a collective down payment, and then after graduation, sold their piece of real estate.

 

Oil-rigging student’s rent story:

 

Some students consciously choose to rent. I interviewed one youth who worked on the well-paying oil rigs for three years, salting away money, intending to put it towards a sizable down payment to buy some Edmonton real estate. He currently attends university, financed through scholarships and school loans.

 

“I decided to rent, even though I had saved enough money to offer a down payment of 25% on a house,” says the 27-year old. “But I also had deferred school loans. It was bugging me a lot and, looking back, I’d be in real trouble now if I had gone ahead and bought a house. It made more sense to keep the apartment I had and put those funds into paying off my debt.”

 

The student weighed other considerations, despite tax breaks. He reasoned that he’d still be in school debt, while having to cough up continual cash-flow for the following:

 

·      property taxes

·      mortgage interest

·      house insurance

·      utility bills

·      maintenance, repairs, upgrades

·      property management

 

He thought about the idea of living in a home he owned and renting rooms to other students. “But my time and energy for both unpredictable and regular maintenance and repairs stopped me,” he notes. “I need to focus all my energy on school, and I don’t know yet what university I’ll be attending, or what province, after I get my Master’s. I want to be free to pick up and go, so, renting has been the best option for me.”

 

Buying versus renting:

 

The debate on buying or renting rages on, and the real-estate landscape has changed significantly. Interest rates are low, but house prices continue to soar, and those fantastic bidding wars are not making the process any easier. Add to these, precarious job markets and job security. Buying a home now may not be in the best interest of many students and young people on budget constraints.

Renting has its pitfalls too. One source argues that gentrification does not serve renting up-and-coming generations. As big businesses and prospective high-income homeowners transform low-cost neighbourhoods, youths are often the first to be ousted.

Nevertheless, students have options either to rent or buy, perhaps more so than any other preceding generation. Let’s take a look at the benefits of either preference:

Benefits of buying a house:

·      Pride of home ownership and increased equity

·      Opportunity to strengthen financial/investment portfolio

·      Option to rent rooms to fellow students, allowing you to offset expenses and some or all of the mortgage; or to buy collectively

·      Mortgages will end eventually; renting never ends

·      Every good home-improvement project is entirely in your own hands, and every improvement adds value to your home, if you decide to sell in the future

·      Young mortgagees are likely to burn their mortgages much earlier in life, freeing them up for other pursuits.

Benefits of renting:

·      Considering that living independently may be a new experience for a student, renting alone or with others is a tremendous milestone to increase self-reliance and self-confidence

·      Unlike home-owning, renting saves a lot of money that can be applied elsewhere

·      Less equity is needed and, therefore, renting is more cost-effective for students

·      With proper notice, students are free to move for whatever reason, or to travel to a new job in a new area after graduation

·      As a considerate, responsible tenant who has paid rent on time, the ability to rent elsewhere is easier with a great landlord reference

·      In some circumstances, include a terrific landlord reference when applying for jobs to showcase your dependability and integrity.

Cut your debt:

Whether looking to buy or rent, you’re wise to eliminate/decrease outstanding debt FIRST, from student loan to credit card. Living without the frills, from a car to electronic devices, and applying those costs to shrink your debt load, will make your life easier to manage, plus you’ll be amazed at how quickly it can decrease. Once hefty arrears are reduced, the time to rent or buy is far less stressful.

Experts agree that your mortgage or your rent should never exceed 30 per cent of your income, and your total debt payment (including regular monthly bills) should not exceed 50 per cent of your income. Decreasing unnecessary debt load becomes even more crucial, in order to meet your goal of successfully living independently.

So, do the math, then decide what works for you: to buy or to rent.

Zoocasa is a real estate brokerage based in Toronto.

 

Sheila O’Hearn is a freelance and creative writer, and has worn many hats throughout her career, from general staff reporter to magazine editor. She has a keen interest in business entrepreneurship and currently writes for several outlets. Visit her LinkedIn for more info.

Is Your Student Rental Housing Up to Code?

By: Penelope Graham, Zoocasa

When it comes to a student’s budget, living arrangements are likely the heftiest line item. For those who aren’t able to live with parents (and want to avoid residence dorm life), finding affordable, safe housing is vital.

 

Renting a suite in a private home rather than a rental-purpose apartment or condo can be an appealing option, and a win-win for both tenant and landlord; rent for these suites are often slightly lower than market rate, while homeowners can use the payments to help offset their mortgage and real estate costs. And, with new government rules that allow home buyers to use 100% of rental suite income to qualify for a mortgage, more of them are taking on the task of being a landlord.

 

While that’s great news for affordable housing supply, it could also mean your landlord is a total newbie – and you could be vulnerable as a renter. Many existing income suites have been built illegally or may not be up to code. While an inexperienced landlord may not realize their suite’s status, others are willingly running under the radar. If caught, they could be forced to turf their tenants and turn their units back into single-family housing – and you’re out of house and home.

 

It’s important to know whether your rental housing is up to snuff. Here’s what renters should be aware of:

 

Is it Legal?

 

Depending on your city, there are a number of legal ways homeowners can add rental suites to their property:

 

-       A secondary suite is a separate living unit build into a single-family house (usually the basement);

-       A garage suite is a living unit built above or beside a free-standing garage;

-       A garden suite is a fully separate building located on the same property as a house (often in the backyard).

As well, according to the Second Suites Guide, a secondary suite must include the following to be legal:

 

·      The residence must be at least five years old

·      The house must be detached (different regulations exist for adding suites to semi-detached and rowhome houses)

·      The exterior of the home cannot be significantly altered

·      The secondary suite cannot be larger than the rest of the home

·      It must have its own separate entrance, bathroom, kitchen and living facilities

·      It must be up to fire code, have a minimum 15-minute fire rating, and at least two escape routes, one of which must be a door leading to the outside

·      It must meet municipality parking requirements

 

Was it Built Safely?

There are also a number of safety codes and regulations that homeowners must observe when adding a rental suite to their home. First, new builds must be in accordance with their area’s zoning and bylaws. While many cities, including the Edmonton real estate market, encourage the development of suites, there are some neighbourhoods that are exempt due to being heavily industrial, or zoned for business purposes.

 

Homeowners must also get the required building and development permits before altering their home in any way. Those who don’t run the risk of being fined, or even being forced to remove their improvements – so be sure to ask about this detail before signing your rental agreement.

 

Renters should also keep an eye out for terms like “retrofitted” on listings – this can be code for a suite that lacks the features it needs to be considered up to code.

 

Do You Know Your Rights?

It’s important to know what your landlord is and isn’t responsible for, and your rights as a tenant. Living in a separate suite means your tenancy is governed by the Tenant Protection Act in your province – and both you and your landlord should be familiar with it. For example, even though your suite is part of your landlord’s home, they must still provide a minimum 24-hour notice when entering your suite, they cannot restrict whether you have visitors, and they cannot discriminate against you regarding your background or lifestyle choices.

Generally, your provincial Act will enforce the following:

·      Your landlord has the right to collect rent on time, to not have their property damaged, and to not be harassed or disturbed by the tenant

·      The tenant has the right of security of tenure, meaning, you can occupy the suite until there are valid, proven grounds for eviction – even during an ongoing dispute.

·      The tenant has the right to live in a suite that is habitable, safe and properly maintained

·      The tenant has the right to reasonable enjoyment, meaning they can have overnight guests, cook foods of their choice, and come and go as they please.

 

Penelope Graham is the Managing Editor of Zoocasa.com, a leading real estate resource that uses full brokerage service and online tools to empower Canadians to buy or sell their home faster, easier, and more successfully.

Five things students should know about getting your first credit card

By RateHub.ca

Applying for your first credit card is a rite of passage for many college and university students. A credit card is a good first step in establishing a credit history and score, which can mean the difference between getting approved or refused for future credit cards, loans and mortgages, rental housing and even jobs. Here are some things you should know about researching, applying for, and using your first credit card:

 

Do the research

Students as a group are typically bombarded with credit card offers, but don’t sign up for the first offer you see – you shouldn’t base your decision on free t-shirts and Frisbees. Compare rates for student credit cards and identify which type of card you need based on how you plan to use it: textbooks, groceries, rental cars, train tickets home, late-night pizza, etc., and the type of rewards you want in turn. Apply for the card that offers you the best overall value.    

 

Ask questions

The “best” credit card for you is the one designed to meet your specific needs. Sit down and ask yourself: How do I spend my money? Will this card help build my credit? Can I graduate to a better card in the future? How quickly will I earn rewards, and what are they worth?

 

When you have little to no income, it can actually be even more important to earn rewards on the spending you are doing. But don’t pay extra for rewards programs – look for no-fee options that have cash-back rewards on groceries or gas or offer points towards free movies. For example, the BMO SPC Cashback MasterCard has no annual fee, offers 1% cashback on all purchases, and entitles you to Student Price Card (SPC) discounts of 10-15% at hundreds of retailers and restaurants to save on everything from clothing and fast food to haircuts and car rentals.

 

Another option is the StudentAwards MBNA Rewards MasterCard, which earns you one MBNA point for every eligible dollar spent to be used toward cash back, travel, brand-name merchandise, retail gift cards, or charitable donations. Right now, new signups will receive 1,000 bonus points on their first purchase, plus 1,000 bonus points each year on the anniversary date of the credit card account.

 

Know the facts

When shopping around, be aware of the nuts and bolts: the card’s credit limit, interest rate, fees and penalties, cash advance fees, how the balance is computed and how credit card rewards are calculated. Know exactly how your card works so you can make your card work for you.

 

Check your credit report and know your score   

One of the most important reasons to use your credit cards responsibly is to build up your credit score.  Simply put, a credit score is a three-digit statistical representation of your creditworthiness on a scale from 300 to 900. The higher your number, the better – the lower it is, the riskier you are in the eyes of lenders. A credit report is a record of your past and present use of credit cards and loans, and can include bill payment history on any internet, cable or mobile phone accounts. You can access your credit report and score through Canada’s major credit bureaus, Equifax and TransUnion.  

 

Pay it off  

Building a credit history at a young age is beneficial, but whether you’re trying to establish credit, rack up rewards, or both, the bottom line is the same: don’t charge any expense you can’t repay in full when your monthly statement arrives. Ideally, your credit utilization should be below 35% of your available balance. Remember your credit report at least once a year for errors and signs of identity theft.

 

RateHub.ca is an independent financial product comparison site that empowers Canadians to make smart financial decisions by comparing rates on mortgages, credit cards, savings accounts and insurance.