Real Estate Question? Ask David...
“Real life answers to your Real Estate questions”
Dear David: What is a “Buyers Agent”?
— Wondering
Dear Wondering: Generally, a “Buyer’s Agent” is a Realtor who works as part of a team; they are commonly tasked with showing homes to buyers and following up on inquiries from signs, ads and possibly the internet. Often times these Realtors work almost exclusively with buyers and may have limited experience handling listings. If you’re meeting an agent for the first time, it’s important to establish how much experience they bring to the table. When it comes to understanding the market, finding opportunities and negotiating, a highly experienced Realtor may be better equipped to lead you through the process from start to finish.
Dear David: My parents plan to downsize shortly. They don’t speak much English. Any advice?
— Lost In Translation
Dear Translation: My heart goes out to those shopping for a home in a second (or third) language. The decision can be hard enough without a language barrier! While using Realtor.ca requires English proficiency, the “translate” button on my website (goinghome.ca) allows visitors to browse any listing in Canada, in the language of their choice. While the translation isn’t perfect, we’ve gotten a very good response from it. When it comes time to make an offer, it would be great if you (or someone your parents are comfortable with) could join in the meeting with their Realtor to ensure they fully understand the details of the transaction.
Dear David: We want to add a garage on our rental property. The estimate for the addition is about $125,000. Can we write this off as a direct expense against our income?
— Hoping For A Break
Dear Hoping: To figure out what you can write off and what you can’t, you need to differentiate between “current expenses” and “capital improvements”. Current expenses can be written off and are tax deductible. These generally include smaller projects that keep your existing assets in good working order. Touching up paint or re-paving the driveway would fall into this category, as long as they do not improve the property beyond its original condition. On the other hand, capital improvements are major repairs/ upgrades that improve the property beyond its original condition and have long term benefits. Often, these are projects of considerable value. Adding a garage falls into this category. As a rule of thumb, capital improvements can’t be written off all at once. Depending on the type of property you own, you should be able to depreciate a portion of the project each year. Your accountant needs to help you make the most of these deductions.