Curtis Leibel 780-438-2500

One thing that I always recommend to buyers when purchasing a property is pulling title on it before writing an offer.  Numerous items may show up; restrictive covenants , encumbrances, and liens – lets take a brief look at a liens here.

A property lien is defined as a legal claim on a tract of real estate granting the holder a specified amount of money upon the sale of the property.  Liens are often registered against a property acting as collateral for owed money.

There are many types of liens, the most common being mortgages.   Other liens you may potentially come across: from the city (property taxes oweing), Canada Revenue Agency (personal taxes oweing), Condo corporation (condo fees), lenders of second mortgages, or construction/renovation liens.

Any lien other than a mortgage could raise some red flags as to the ability of the owner to sell the property.  It is important to note the price you are purchasing the property vs. what is oweing against the property in order to avoid any headaches or delays down the road when transferring the property.

“Financing” condition and “Property Inspection” condition tend to be the 2 most common conditions on purchase contracts in Alberta.   You can do a lot to help your lending potential (increase income, decrease expenses) but ultimately the lender has the final say on what you can or can not be approved before.

I bring this up, because sometimes there are other circumstances that may affect lending ability specifically when purchasing a condo.

Size of the unit is often a concern.  In fact, if the unit is under 500 sq ft, certain lenders may not approve the lending and thus result in the termination of the purchase. It is important to clarify this with your lender before putting an offer in.

Condo documents can also play a role in approval.  Buildings that have been subject to special assessments, or could be subject to one in the future, may be disapproved by the lender.  It is always a good idea to go through the condo documents with extra scrutiny just for your own purposes as well to avoid unexpected costs in the future.

Another thing they may look at is percentage of owners residing in property vs. renters.  If there is a disproportionate number the lender may see this as a negative.

The unfortunate thing when purchasing a condo is that often these things can be out of your control, so it is up to the lender to decide whether or not they approve of your purchase.  The best thing to do is to give them as much information as possible and the necessary time to examine everything sufficiently.

Last year saw the completion of my first international real estate investment.  After years of research and studying, I managed to narrow down my search to some land in Nicaragua.  A lot of thought went into this, and I encourage anyone looking to make an international purchase to consider some of the following items:

1) Cost of living- My goal was to find a holiday home which is also to be used as a rental.   If I were to spend significant amounts of time down there, I would prefer it not be to expensive to dine out/do activities/entertainment.   Maintenance costs are another thing to consider as well as costs of hiring a management/cleaning company.  This is one reason why Central America was so appealing.

2) Political Stability-  Of course any investment has risk, but one would like to limit the amount.  Having a stable government with an eye towards the future and promoting tourism is key.  Nicaragua, Costa Rica, and Panama are all appealing when considering this.

3) Accessability- If it is place you want to visit often, you must make sure it easy to get to.  By staying within the western hemisphere, you can avoid significant time changes which helps ease the travel.  As well, you should really track how long it will take you to get to your property from the international airport.  It may only be a 6 hour flight….but if its another 8 hours of bus/taxi/car travel, it really adds to the trip.

4) Growth- Of course this is the most important factor me.  Anywhere you invest you want to make sure there is room for your money to grow.  You never want to be nicest or biggest place on the beach as it is unlikely there is much more room for your investment to grow.  Start small and grow from there.

Right now, the building process has just begun for us in Nicaragua and Ill do a post in the future with an update on how things are going.  Stay tuned!