So you need to know how to make money from home … Join the crowd!
Thanks to a genius invention called the internet, people all over the world are discovering more and more creative ways to cushion their bank accounts from the comforts of home.
Not sure where to start? Pour yourself a cup of coffee (or glass of wine), and keep reading.
32 Legitimate Ways to Make Money From Home
If you want to make money from home, you don’t need much more than internet access. As you browse for opportunities, though, exercise caution. There are a lot of scams out there, but don’t fret: We’ve tested dozens, if not hundreds, of money-making strategies and included only our favorites.
None of them involve a fake grandchild or anyone asking for your credit card number, and you really will get paid.
Without further ado, here are our favorite legitimate ways to make money from home.
1. Add $225 to Your Wallet Just for Watching the News
The news never stops and we’re all constantly refreshing for the latest updates. You probably know more than one news junkie who fancies themselves a political mastermind or an expert in respiratory illness.
And research companies want to pay you to keep watching. You could add up to a few hundred dollars a month to your pocket by signing up for a free account with InboxDollars. It’ll present you with short news clips to watch in your free time every day, then ask you a few questions about them.
You just have to answer honestly, and InboxDollars will continue to pay you every month. This might sound too good to be true, but it’s already paid its users more than $56 million.
It takes about one minute to sign up and start getting paid to watch the news.
2. See If You Can Score Free Money From This Company
Here’s the deal: If you’re not using Aspiration’s debit card, you’re missing out on extra cash. And who doesn’t want extra cash?
Yep. A debit card called Aspiration gives you up to a 5% back every time you swipe.
Need to buy groceries? Extra cash.
Need to fill up the tank? Bam. Even more extra cash.
You were going to buy these things each month anyway — why not get this extra money in the process?
Enter your email address here, and link your bank account to see how much extra income you can get with your free Aspiration account. And don’t worry. Your money is FDIC insured and under a military-grade encryption. That’s nerd talk for “this is totally safe.”
3. Earn Money Taking Polls
What did you think of the new Spiderman movie? Is a hot dog a sandwich? Who’s your favorite Real Housewife?
The research company, MyPoints, has paid people over $236 million to answer poll questions like that over the past 23 years.
And they’re currently recruiting new panelists. You can do it right on your phone, and you’ll even earn a $5 bonus when you sign up and complete your first five polls.
Any extra money you can put toward your credit cards is good in our book — but in this editor’s opinion, no, a hot dog is not a sandwich.
4. Search Your Wallet and Cash in on Your Dollar Bills
Specifically, dollar bills with strange serial numbers — ones that aren’t easy to come by. The collectors at CoolSerialNumbers.com pay big bucks if you have a bill with a rare sequence in your wallet.
Turns out antique coins aren’t the only currency worth cash to collectors.
Check out the website for a full list to see whether you’ve got any of these rare bills, but here’s a rundown of the sort of serial numbers these collectors are looking for:
5. Collect $5 to Invest in the Stock Market
Take a look at the Forbes Richest People list, and you’ll notice almost all the billionaires have one thing in common — they own another company.
But if you work for a living and don’t happen to have millions of dollars lying around, that can sound totally out of reach.
But with an app called Stash, it doesn’t have to be. It lets you be a part of something that’s normally exclusive to the richest of the rich — on Stash you can buy pieces of other companies for as little as $1.
That’s right — you can invest in pieces of well-known companies, such as Amazon, Google, Apple and more for as little as $1. The best part? If these companies profit, so can you. Some companies even send you a check every quarter for your share of the profits, called dividends.1
It takes two minutes to sign up, and it’s totally secure. With Stash, all your investments are protected by the Securities Investor Protection Corporation (SIPC) — that’s industry talk for, “Your money’s safe.”2
Plus, when you use the link above, Stash will give you a $5 sign-up bonus once you deposit $5 into your account.*
6. Earn up to $69/Hour Working From Home
Have you considered bookkeeping to make money from home? It’s the No. 1 most profitable business, according to an article in Inc. Magazine.
And you could earn up to $69 an hour by starting your own bookkeeping business from home, according to Intuit, the company that owns QuickBooks.
You don’t have to be an accountant or good at calculus to be successful at bookkeeping. As long as you’re motivated, Bookkeepers.com will teach you everything you need to know. It’s one of the leading training courses in the field, and it even gives you the first three classes for free.
It’s helped thousands of people launch their own businesses, including Daniel Honan, a military veteran and former painter. He never considered starting his own company, but he signed up for Bookkeepers.com and started earning $50,000 a year.
It only took him three months to get started, taking one class a week. Oh, and he could make his own schedule, earn up to $69 an hour and spend more time with his wife than ever.
If you’re just a little curious, you just have to submit your email address here to take the first free class. If you stick with it, you could be running your own business in just a few months.
7. Get Paid up to $80/Month — Just for Sharing Your Opinion
Taking online surveys might not sound like the best way to make money, but if you’re just vegging out on the couch — or pretending to be interested in your partner’s new favorite show — why not click a couple buttons? You could earn up to $80 a month on a survey site. Seriously.
There are a bunch of paid survey sites out there, but one of the best we’ve found is Survey Junkie.
It’ll ask you questions about things like what kind of laundry detergent you use, or whether you prefer Pepsi or Coke. You get points for answering, and many people accumulate enough points to request a check within a few hours.
More than 10 million people already use Survey Junkie, and it has 4.5/5 stars on TrustPilot.
Give it a try by visiting Survey Junkie and clicking the “Join Now” button. It’s free.
8. Stop Deleting Your Emails
It turns out deleting your emails could be costing you money. Intrigued?
One of our secret weapons is called Paribus — a tool that gets you money back for your online purchases. It’s free to sign up, and once you do, it will scan your email for any receipts. If it discovers you’ve purchased something from one of its monitored retailers, it will track the item’s price and help you get a refund when there’s a price drop.
Plus, if your guaranteed shipment shows up late, Paribus will help you get compensated.
Disclosure: Paribus compensates us when you sign up using the links we provide.
9. Work From Someone Else’s Home
Working from home is wonderful, but sometimes it’s nice just to experience a new space — perhaps in a new town or a new country.
Consider house sitting. People will pay you big bucks to look after their house (and maybe a pet or two) while they’re away.
If you’re not sure where to find these types of gigs, there are tons of websites out there that’ll help, including House Sitters America and MindMyHouse.
10. Turn Your Junk Mail Into Money
You know all those flyers and advertisements you get in the mail each day? The ones you never wanted but have no idea how to opt out of?
Well, you can turn them into extra income.
The Small Business Knowledge Center (SBKC) is a market research company that wants to get a peep into your mailbox. Join its consumer panel, and start shoveling that junk mail into a postage-paid envelope and, at the end of each week, send it over to the SBK Center.
No, you won’t be rolling in cash, but you can make an extra $20 every six to 10 weeks.
11. Spend $5 to Own a Piece of Amazon or Google
Take a look at the Forbes Richest People list, and you’ll notice almost all the billionaires have one thing in common: They own another company.
But if you work for a living and don’t happen to have millions of dollars lying around, that can sound totally out of reach.
That’s why a lot of people use the Acorns app. It lets you be a part of something that’s normally exclusive to the richest of the rich — buying pieces of other companies for as little as $5. And with the recent sell-off in stocks, you might be able to buy them for cheaper than earlier in the year.
That’s right — Acorns allows you to invest in a bundle of well-known companies, letting you own a little of each of them while spending as little as $5. The best part? When these companies profit and issue dividends, you can profit, too.
It takes two minutes to sign up, plus Acorns will give you a $5 sign-up bonus once you make your first investment.
12. Become a Tutor
Carmen Mandato/ Codetic
Have you ever considered online tutoring to make extra money at home? Well, if you haven’t, you most certainly should. You can make some serious coin by answering students’ questions, explaining your notes and uploading tutorials.
That’s right — by sharing your knowledge, you can be rewarded handsomely.
Try marketing your services on a site like Tutor.com, where instructors earn $9 to $13 per hour, plus $5.50 per hour just for being logged in waiting for students.
Or find online tutoring jobs through one of these popular platforms:
13. Profit From Drinking Wine and Beer
You’ve got to enjoy life, so we’re going to cut you a little slack if you want to splurge on a glass of wine or bottle of beer.
But before you do so, make sure you download the money-making app that pays you for drinking.
Yes, you heard that right. We know it sounds strange, but Ibotta will pay you cash for taking pictures of your beer, wine and liquor receipts.
Ibotta earns money from the liquor companies and other retailers you shop with, and over the past few years it’s given back more than $600 million to Americans.
Penny Hoarder Carson Kohler earned $172 from her purchases in just over a year’s time, thanks to the free app.
It takes about 30 seconds to download Ibotta on your mobile device — what could you do with an extra $172?
14. Sell Your Crafts, Vintage Finds and Even Project Supplies
If you’re creative, you can make some decent money selling your work through Etsy. Although there are some fees, including a 5% transaction charge, the marketplace connects you with more than 33 million buyers globally.
That’s a whole lot of potential customers.
Establish a strong brand and backstory. Connecting with customers makes them more likely to spend time on your shop.
Establish a strong brand and backstory. Connecting with customers makes them more likely to spend time on your shop.
Even if you aren’t creating masterpiece paintings or elegant jewelry or adorable baby clothes, you can still make money from home through the online platform. For example, one Penny Hoarder contributor, Janet Berry-Johnson, made about $200 per month selling needlecraft kits and patterns.
Maybe you’re more of a vintage type? Adventure through flea markets and even eBay to find vintage items you can fix up and resell through the platform.
15. Build a Business With a Blog
The startup costs for blogs are minimal: Just secure your domain name and hosting — only $2.95 per month from Bluehost.
You’ll need to write some quality content to get into WordPress (or your blogging platform of choice) and start sharing it through your social media accounts. Once you feel comfortable, you can monetize your blog through Google AdSense and affiliate programs for some nice passive income from home.
Sound appealing? Follow our seven-step guide to starting a blog.
16. Make Your Own Schedule as a Data-Entry Clerk
Data entry isn’t the best-paying work-from-home job, but it is one you can do with few skills or previous experience — all you need is a solid internet connection and a computer, and you must be at least 18 years old.
Pay ranges on a per-hour or per-project basis. Typically, you can pick up jobs as frequently as you’d like through freelance broker sites like Lionbridge and Clickworker.
17. Write & Sell an Ebook
If you’re a subject-matter expert or have an intriguing life experience, you could write a book. But there’s no need to send it off to all the major publishing houses in New York City.
You can self-publish ebooks through Amazon’s Kindle Direct Publishing platform. Writer Steve Gillman wrote a book in a week. Yup, ebooks don’t have to be hundreds of pages long. Gillman found many books as short as 6,000 words.
After publishing on Amazon, he started making $350 per month. The best part? He continued to make money, even months and years later.
18. Get Your True Crime Fix by Joining a Mock Jury
Jury duty isn’t always fun, but what if you could do it from the comfort of home? Becoming a mock juror can be an interesting way to make some extra money.
Here’s how it works: Attorneys present cases to virtual juries as a way to test it before trial — to find what’s working and what isn’t and craft the best arguments.
You can sign up as a mock juror through a site like eJury. When a new case is submitted, you’ll be notified. Jump in to review the case and answer questions. You can earn $5 to $10 per case, depending on its length.
19. Do Calligraphy as a Side Business
Maybe you don’t want to be a content writer, but if you have excellent handwriting skills and a set of calligraphy tools, you can address envelopes. You could make $2 to $5 a pop just for being a talented calligraphy writer.
It doesn’t sound like a lot, but book a wedding with 100 guests, and you could rake in $200 to $500 for handwritten invites.
Launch your own website to sell your services, or offer calligraphy through Etsy. For example, Margo Dittmer gets creative with her calligraphy services and sells custom wedding certificates for $175 each on Etsy.
20. Make Money Doing Voice-Overs
Janna Polzin, a stay-at-home mom in Toronto, earns money by talking to herself. At home. In her closet.
After her son was born in 2013, the stage actress turned to the online acting community and kept hearing about one voice-acting platform again and again: Voices.com.
“I often walk away from my computer thinking, I can’t believe I just made money from that!” she says.
Voices.com is an international voice-over acting marketplace that helps vocal talent — both professional and amateur — find clients who need them.
21. Use Your Type-A Skills as a Virtual Assistant
If you have a knack for organization and communication, you just might make the perfect virtual assistant.
You don’t have to be the busy corporate assistant you see in old movies or on TV. You can work right from home.
Virtual assistants do things like:
To find open remote jobs as a virtual assistant, peruse some of these work-from-home job boards.
22. Sell Your Old Electronics for Amazon Gift Cards
Have old tech taking up valuable closet space? You could host a garage sale or sell them on eBay or Craigslist, but one of the easiest ways to get rid of them is through Amazon.
With Amazon Trade-In, you can trade in your used electronics, plus other items, in exchange for an Amazon gift card.
Just enter the item’s information on Amazon’s Trade-In page to see how much you could pocket. Shipping is free.
23. Test Websites & Apps to Make the Internet Better
Basically, companies will pay regular folks like us to offer feedback on websites and apps. How’s the design? Can you find your way around? Have questions that aren’t answered?
You can make around $30 per hour through sites like UserTesting. The best part? You don’t need any user-testing experience — just a solid internet connection.
24. Start a Freelance Business and Set Your Own Hours
Have you considered freelancing? You can operate as a freelancer in just about any industry — as a freelance writer, designer, accountant, social media manager, website developer or more.
The great thing about freelancing as a business model is a low barrier to entry. You can get hired and get started on a gig without the same hassles you’d face looking for a full-time job — no resumes, no job interviews, no trying to impress some hiring manager.
Just share your portfolio or experience to let a potential client know what you can do, and you can start getting assignments right away.
If you’re just starting out, consider finding gigs through freelance platforms or freelancer networking Facebook groups. These will help you gain experience and connect with clients — without having to put a whole lot of work into marketing your services.
25. Sell Your Photos (Even If You Took Them With Your Phone)
Fancy yourself a solid amateur photographer? Instead of posting all day, every day, to Instagram, why not turn your work into extra income?
Start with a stock photography marketplace like Foap.
Download the Foap app, then upload your photos — even if you took them with your phone. When your photo is purchased, you automatically profit. Because Foap does most of the legwork, you’ll split the profit 50-50.
Want to go even bigger? Upload high-quality images to Shutterstock, one of the more popular stock photography sites. Each time your photo (or video) is sold, you pocket up to 40% of the sale price (while retaining the copyright).
26. Earn $12/Hour Doing Random Google Searches
Search engines (think: Google, Yahoo and Bing) use complicated algorithms to determine the search engine results you see — and they don’t always get it right.
Although these algorithms are “smart,” they’re also prone to errors. Imagine searching for photos of hummingbirds — only for a photo of a seagull to pop up. Or maybe you’re looking for some news on immigration — only to find you’re reading a tabloid site.
That’s where humans can intervene as search engine evaluators. It’s your job to analyze search results and judge them based on quality, relevance and usefulness. And you can make money from home — around $12 an hour — for doing so.
We suggest you start by looking at Lionbridge job openings. The tech company is often hiring, so even if you don’t see any openings now, keep checking back to Codetic’s work-from-home job portal.
27. Work as a Transcriptionist and Earn up to $25/Hour
Are you a good listener — and a good typist? You can make $15 to $25 an hour as a transcriptionist.
You’ll need experience in the medical or legal fields to get transcription assignments in those areas, but plenty of researchers, reporters and Average Joes are willing to pay for someone to type up their recordings.
You are paid per audio hour, so this is a gig that’s perfect for people with great focus. If an hour-long recording takes you four hours to transcribe, you still only get paid for one hour. Listen closely!
28. Sell Someone Else’s Stuff
Selling Craigslist freebies is a great way to make a profit quickly, because you get the items for free. You could even have cash in hand today, without leaving home.
Go to the free section on Craigslist and look for things that are close to you and easy to sell immediately. They could be scraps from a job site or metal items you can sell, for example.
For a quick turnaround, avoid items like furniture or electronics. These can be good to sell, but they’ll take longer.
Cash in your treasures by reselling on Craigslist, including them in a rummage sale or selling to specialty buyers, like a pawn shop or a local business.
29. Rent out the Clothes That Make Your Friends Jealous
Are your friends always complimenting your great sense of style? Try making money off that killer taste!
You can rent out your clothing out through a site like Style Lend.
There are a ton of others on the market, but take sure to read the fine print on rental sites. Some don’t charge any fees to the buyers and sellers, but some charge a rental commission per order. You’ll need to price your clothes accordingly to account for any commission handed over to the company.
30. See if You Qualify for a Class-Action Settlement
If you use a product that’s involved in a class-action lawsuit, a little internet sleuthing could get you a cash payout.
The rules of each settlement are different, but in most cases you’ll have to provide proof of purchase or product use, like a serial number or a receipt. Once you fill out your claim form on the website, you may have to wait a few weeks or months before receiving your payment.
Check a resource like Top Class Actions frequently to see the latest lawsuits you might qualify to join.
31. Sell Online Courses
Got a set of skills or knowledge others would love to have? You could turn them into an online course and make money anytime someone signs up.
It doesn’t have to take a lot of time or resources, either. You could sell a pilot of the course or pre-sell spots before you even start producing content. That gives you some spare cash on hand to take the time you need to create the course.
The most successful course creators develop a loyal audience and make money selling courses directly. But you could also make good money selling your course through a marketplace with its own built-in audience, like Udemy and Skillshare.
32. Start a YouTube Channel
Turn your hobbies and other creative endeavors into cash by creating YouTube videos.
Monetizing a YouTube channel is a way for creators, entrepreneurs, freelancers and educators to build an audience and a brand, and create new income streams.
Once you build a loyal following — or at least create videos that get lots of views, like through search — you can monetize on YouTube in several ways, including:
Our Best Work-From-Home Advice
Making money from home sounds all glitz and glam — and it can be, in a sweatpants kind of way. But there are also things you need to know before fully diving in. Here are a few resources to help you get started:
1Not all stocks pay out dividends, and there is no guarantee that dividends will be paid each year.
2To note, SIPC coverage does not insure against the potential loss of market value.
For Securities priced over $1,000, purchase of fractional shares starts at $0.05.
*Offer is subject to Promotion Terms and Conditions. To be eligible to participate in this Promotion and receive the bonus, you must successfully open an individual brokerage account in good standing, link a funding account to your Invest account AND deposit $5.00 into your Invest account.
Codetic is a Paid Affiliate/partner of Stash.
Investment advisory services offered by Stash Investments LLC, an SEC registered investment adviser. This material has been distributed for informational and educational purposes only, and is not intended as investment, legal, accounting, or tax advice. Investing involves risk.
Do I Repay My Boyfriend for Vacation When I Dump Him? – Codetic – Where money and the personal finance community come together.
I have been dating a guy for eight months. He has always insisted on paying for our dates, generally meals, and wouldn’t hear my objections. So I relaxed.
But he was unhappy with a gift I bought him, and now he brings up that he always pays for our dates. He still wants to take me on a trip that he paid for. I won’t go. Should I pay for half of the trip and walk away?
What did this guy expect? That you’d quietly sock away your half of the check for eight months straight so you could buy him a Rolex?
You’ve already made the important decisions: You’re not going on this trip. You’re walking away. You just need my help sorting out a few details.
I do think you should pay your half of the vacation, provided that you can afford to without causing yourself financial hardship. This isn’t really about him, though.
This guy clearly likes to play head games. Even if he treated you to eight months of fancy dates, that doesn’t make you a mind reader. I suspect that even if you’d given him a Rolex, he’d be picking away at you for something else.
By paying for your half of this vacation, you’re setting things straight in your own mind. It was your boyfriend’s choice to pay for eight months’ worth of dates. He is not a victim, even though he’s going to insist otherwise.
I’d suggest sending him the money via Venmo or Paypal right before you tell him you won’t be accompanying him. Boom. End of discussion. Don’t open the door for your soon-to-be-ex to hem and haw about why it really isn’t necessary for you to pay him back — while at the same time guilt-tripping you about the fact that he paid for this vacation.
Try to avoid rehashing the past eight months. That will turn into an argument you simply can’t win with this guy.
Focus on how you’re feeling right now. You’re no longer enjoying his company as the result of his incessant complaining. I think paying not to go on vacation with this man sends a pretty strong message. I’m not holding out hope that he’ll actually hear the message. But at least you’ll have set the record straight for yourself.
In the future, I’d caution against letting someone pay for everything, no matter how much they insist. Some people may insist on paying the bill for everything because they enjoy treating their partners. But sometimes there’s a hidden motivation. It’s about their egos, or they’re setting ridiculous expectations for you in the process. When someone insists on paying 100% of the time over your objections, don’t automatically interpret it as a message of generosity. Listen closely. They’re not hearing your objections.
Regardless of how you approach this discussion, hold your ground. You’re not going to date this man any longer. This trip is now a vacation for one.
Robin Hartill is a certified financial planner and a senior writer at Codetic. Send your tricky money questions to [email protected].
Participating in a Brand Ambassador Program for a Company | Personal Finance Blog – Tips & Advice from UnitedFinances.com
Many schemes promise financial rewards if you participate in them. Unfortunately, some of them are simply used by dubious people to take advantage of unsuspecting persons.
We suggest that you ask the question “what is in it for them?” before being a part of any scheme that promises financial reward. This is because a system that equally benefits from your participation should be able to keep up with its promises.
For instance, we advise that people stay away from Ponzi schemes as the source of their earnings is questionable. On that note, you should know that participating in a brand ambassador program of a reliable company is worth your while.
This is because even the company stands to benefit from your participation. For instance, it has been discovered that people are likely to deal with goods or service companies that are recommended by brand ambassadors. For more on how running a brand ambassador program helps businesses, you can read this.
We will discuss how you can take advantage of such a strategic marketing program in this article. We strongly advise that you keep reading considering what you stand to learn and gain.
What Is a Brand Ambassador Program?
This is a strategic marketing system by a company that aims to raise people who can act as the brand’s face. The responsibility of these individuals will be to help the business create a positive image, especially among the target audience. Also, well-known companies have these programs to maintain and improve their public image.
A while ago, the concept of handling this portfolio was something that only celebrities in the entertainment, sporting world and other facets were exclusively allowed to do. This is because these people have loyal fans who believe that whatsoever they endorse is worth it.
The truth is that the use of celebrities is still very much a marketing tactic but other people can also play a huge part in promoting a business. This is why many of these companies have set up programs to identify and select people able to help.
The job of a brand ambassador program company is to hire and train brand ambassadors. Many businesses turn to these professional services for help so that they do not have to go through the trouble of training and monitoring these corporate representatives.
Ways You Can Act as a Brand Ambassador
Once upon a time, the only way anyone could act as a brand ambassador was by physical presence. Although physical presence is still very much used and appreciated, there is the option of being an online influencer for the company. Let us take a look at the implications of being an in-person and online brand ambassador:
People who participate this way are charged with the responsibility of having conversations that promote the interest of the company. This can be in a marketing or conference event where awareness of the goods and/or service will be done.
In such gatherings, they set up and run tables as well as showcase the products or services in appealing ways. For instance, product demos can be organized for this purpose.
Furthermore, it is not unusual to see such people distribute marketing materials such as posters and stickers. Also, it is common to see in-person brand promoters wear T-Shirts, Hats, and other clothing items that present the company in a good light.
Information technology has and is playing a huge part in how companies can create brand awareness and record massive sales. One of the ways this has been possible is by making good use of online brand ambassadors.
For more on this subject, you can visit: https://www.business2community.com/tech-gadgets/importance-information-technology-business-today-01393380
Unlike the in-person option, these portfolio holders work remotely by using various strategies to create, maintain, and/or promote the brand’s identity. Organized and positive result-yielding activities are carried out on social media platforms to achieve this.
They post visual and/or written content regularly on chat groups and message boards that are aimed at portraying a good image of the company. Other than this, some of these online corporate representatives write reviews in favor of the business they represent.
This is a great tactic considering that some people can only decide to order a product or service after they have consulted reviews. However, such reviews should not seem biased or subjective as this might be a turn-off for some prospective clients.
Whether in-person or online option, these corporate representatives work to promote the brand amongst their circle of influence. This might be in person or via what digital technology offers.
We have discussed the 2 major ways you can participate in these programs and hope that you make the right decision. However, you should not also forget to make sure the company is reliable. For instance, they should not be into illegitimate operations.
What buyers can learn from the Urbancorp collapse – Romana King – Personal Finance Articles, Real Estate News
4 rules that help reduce the risks that come with buying a pre-construction condo or home
No one would blame you if you had a sudden case of cold-feet when faced with buying a pre-construction condo, townhome or single-family detached home these days. The sudden collapse and current legal entanglement of Urbancorp, one of Toronto’s fastest growing developers, has highlighted the risks associated with buying new builds—risks not immediately apparent to the average homebuyer, but that can be mitigated and even avoided.
As highlighted in the recent Globe and Mail articles, Urbancorp buyers were surprised to learn that the money they’d invested into purchasing these pre-construction homes was not protected. Under the new home-warranty administrator Tarion Warranty Corp., only a fraction of this deposit money could be returned to the buyers of nine buildings impacted by Urbancorp’s bankruptcy proceedings.
Like all builders, Urbancorp required buyers to pay a deposit in installments. To illustrate how this type of deposit can quickly creep up, let’s assume a buyer is purchasing a $350,000 new-build condo. Upon signing of the contract, you’d have to fork out $5,000, with another $12,500 within 10 to 15 days—bringing your total invested deposit up to 5% within two weeks. It doesn’t stop there. At the 30 day, 90 day and 180 day mark, you’d have to fork out another $17,500. So that by six months your total invested deposit is now $70,000.
Yet, under Tarion’s deposit insurance program—created to protect homebuyers in the event a builder files for bankruptcy or significantly breaches the sales contract—insured deposits on condos are capped at $20,000, while deposits on freehold purchases are capped at $40,000. To put this in perspective, if you’d stuck your money in a bank and that bank had failed and filed for bankruptcy, you would’ve seen as much as $100,000 of your money protected under the Canada Deposit Insurance Corp. (CIDC)program (also created to protect investors in the event a banker insolvency).
“[The compensation is] peanuts,” told Alex Oren (buyer of an Urbancorp townhome) to the Globe and Mail. “Homes cost $1-million minimum in this crazy market and we pay such big down payments, the money has to be safe somewhere. This is an open door to steal people’s money.”
Sadly, the nine projects and more than 900 unit-holders that bought Urbancorp developments are now in a holding pattern: Waiting to see what the courts say about the bankruptcy and the mountain of debt facing Urbancorp and its CEO Alan Saskin. (If you’re in this position, check out Tarion’s page, dedicated to the Urbancorp situation, for updates and for next steps.)
But for potential pre-construction buyers there are some simple ways to protect your investment and your money, should you choose to go the pre-construction route.
Rule No. 1: When buying pre-built, get representation
For real estate brokers Brendan Powell and Melanie Piche (of the BREL Team), it came as no surprise that Urbancorp succumbed and filed for bankruptcy on April 29, 2016.
“Realtors have been expecting this for years,” explains Piche. “Most of the realtors that work in Toronto’s downtown core knew there were problems with Urbancorp and we’ve known for years that condos and townhomes by this builder were riskier. The buildings have had consistent and ongoing problems, and that’s always a big red flag.”
But for most buyers this type of industry insight isn’t immediately apparent. So, Powell suggests getting representation through your own real estate agent. It may sound self-serving—the realtors make a commission on each sale—but it’s actually sound, practical advice. “The builder’s realtor doesn’t represent or work for you, they work for the builder.”
To get the best representation, seek out a realtor that is comfortable and knowledgeable about the type of pre-built you want and the area of the city you’re interested in buying. That’s because the devil reallyis in the details, when it comes to risks associated with pre-construction purchases.
Toronto real estate lawyer, David Strashin, knows this only too well. He confesses: “I’m not a big fan of pre-construction. The purchase agreement contains too many opportunities for the builder to amend and extend and that can cause a lot of stress and uncertainty.”
For example, many builders are charged development fees by municipalities but pass these costs on to each purchaser. While this might be in the sales contract, many buyers are shocked at how quickly these extra costs add up. As such, Strashin suggests looking for a clause that puts a ceiling on how much extra can be charged once the building is complete. “Reputable builders will often put a cap on these costs.” If not, lawyers or even realtors will often negotiate for a cap in favour of the buyer. “When we represent someone, we negotiate a ceiling on these costs, so our buyer isn’t hit with an unexpected $30,000 fee before closing,” says Piche.
Another issue, says Piche, is that builders could restrict assignment sales or rentals until 365 days after the building is incorporated (which is when a condominium becomes official and you take full legal possession of your unit.) “I’ve seen buyers who had to pay $20,000 to the builder just for the right to resell their pre-construction condo,” said Piche. “Builders love all these terms, because they work in their favour. But, like most things in real estate, everything is negotiable. You just need someone to help you do your due diligence and avoid the surprises.”
The key is to find the professionals that understand the type of construction you are purchasing, because they’ll know and understand the rules and expectations and can pay attention to the details that matter—which is what you want when you’re spending half a million dollars or more, said Powell.
Rule No. 2: Before buying, investigate the builder
Before making a commitment to buy, make sure you investigate the builder. “The golden rule in investing is that past performance isn’t indicative of future returns, but in real estate this just isn’t the case,” said Powell.
By examining how satisfied previous buyers are in prior buildings, you can get an idea of the type of builder and the quality of construction you can expect. This, said Piche, goes a long way to alerting you to potential future problems. “If previous buildings have crooked baseboards, a long-list of owner-complaints, or the resell value isn’t as high as other buildings in the area, then consider these red flags,” said Piche. “It’s a good indication of what to expect in the building you’re about to invest in.”
A quick search on HomeStars.com turned up a number of complaints from previous buyers of Urbancorp buildings, some going as far back as two years ago and many for the very buildings that are now part of the bankruptcy proceedings. For instance, Rod Freitas writes:
Worst builder ever by far, customer service is no help, they won’t register your condo building for 2 years and the workmanship is horrible , do yourself a favour buy a home from a different builder !!!!!!!! Not one person in the 2 buildings near me is there a satisfied customer it’s a shame there allowed selling new homes.
Your realtor should provide you actionable insight on both the building as well as the builder, said Piche. But she suggests going one step further: go to previously built developments, walk around and inspect the facilities and talk to current owners. “If you the builder didn’t treat these buyers well, you can bet they won’t treat you well,” says Piche.
When talking to homeowners in previous developments, ask about delays, about customer service and communication, and ask how many change orders took place from when they first purchased to when they moved in. “If you start to see a pattern of problems, consider this a symptom of larger a problem,” said Piche.
Rule No. 3: Now, go one step further
If your investigation alerts you to potential problems, but your heart is set on a specific pre-built unit by a potentially bad builder, then it’s time to dig a little deeper.
While an online search may help shed light on the developer and the project, any real concerns should be addressed by conducting a court search and a search for liens.
A lien is when a creditor (someone who is owed money) goes to court and registers an interest in an asset. That’s a fancy way of saying that they become legal owners of any value in the asset, in an effort to collect a debt owed by the asset owner.
For instance, a lien search against Urbancorp shows that New Generation Marin Inc., a drywall company in Woodbridge, Ont., registered a lien in March 2016 for $189,068.80, among others. In Ontario, you can pay $8 to search for liens online against any company or individual.
For a court search, go to Canadian Legal Information Institute site and search using the developer’s name or the name of the CEO. When I typed in Urbancorp, I got a page of court cases, some dating as far back as 2007, and most involving Urbancorp in some dispute over non-payment of money owed.
Rule No. 4: Put up a fight
But, what if you did all this due diligence and you still find yourself in a building with issues?
Most buyers assume that all new-build lofts, condos and homes are covered by a provincial warranty, but this isn’t the case. Only three provinces—B.C., Quebec and Ontario—make warranty coverage mandatory—making it illegal for a builder to erect a residential new-build construction without registered with Tarion. (Keep in mind, in other provinces, where the warranty program isn’t mandatory, builders can simply opt out of coverage. Often they’ll try to convince homeowners that they’re saving them the registration costs.)
But even with this mandatory coverage, make sure you get your new home warranty in writing. If you’re unsure, go online to determine if your builder is registered with a provincial regulator as a new home builder. This is particularly important for loft or condo conversions—residential units constructed inside an existing building shell. In such situations, new-build warranties often don’t apply.
Once you’ve established that you have a warranty, start to familiarize yourself with the coverage and the due dates. Because to get effective recourse you’ll need to be proactive.
For example, your builder must list all critical dates of the building process in the purchase agreement and contract. If the builder misses these critical dates and requires an extension, a buyer can either agree and seek compensation, or simply get out of the deal. This wasn’t always the case.
In 2001, Keith Markey bought a unit in a soon-to-be constructed condominium tower in downtown Toronto. His initial possession date was Nov. 30, 2002. But as the date approached, the builders started to send him letters notifying him of delays. Markey’s possession date was extended six times before he was finally able to move in. Markey took the builder to court and in 2006, Tarion was compelled to create stiffer rules and regulations regarding the extension of possession dates.
Another big problem is new condo or townhome owners will get to move into their unit, but can’t take possession—full legal ownership—until three, six, nine or even 23 months later. Piche explains that in Ontario, builders have roughly two years to register and incorporate a new building; during this time unit-owners must pay an interim mortgage—the monthly fee based on the mortgage terms you negotiated with a bank—but this money isn’t applied to your actual mortgage and is instead kept by the builder as a form of rent.
It’s quite common in new builds to have a delay between the possession date and the ownership date, says Strashin. The delay is known as “interim occupancy” because you can live in it, but you won’t legally own it. During this time, the developer must satisfy all permit requirements by the city before they can officially register the building and pass ownership on to you. (Quite often the builder isn’t actually finished building the complex during the interim occupancy period, so you should also expect construction noise, dust and delays.) “There’s a lot of litigation when it comes to new construction and missed deadlines. “Thing is these building dates are more aspirational than realistic,” says Strashin.
When in doubt, seek out legal advice. For more on what to expect when buying a pre-construction condo, please read Powell and Piche’s excellent blog on the topic, which offers 10 tips for prospective buyers. Also, familiarize yourself with how to lodge a complaint with Tarion (for more information gohere).
Still, more bad news for Urbancorp buyers
As for the Urbancorp buyers mixed up in this mess, it doesn’t look good. According to a Globe and Mailarticle by real estate reporter Tamsin McMahon:
Toronto housing developer Urbancorp is pushing ahead with a corporate restructuring under creditor protection, saying it owes millions to major banks, home buyers and investors in Israel even as its projects require “tens of millions” more to complete.
In a series of reports posted on the website of Urbancorp’s trustee, KSV Advisory Inc., the company said 22 of its subsidiaries were filing for court protection under the Companies’ Creditors Arrangement Act. The move comes less than a month after Urbancorp formally warned creditors that it is insolvent, saying several of its projects were experiencing major cash-flow issues.
“The projects require significant capital in order to be developed,” Urbancorp’s trustee wrote in a May 13 report published on Monday. “The group is in need of funding and will be unable to generate positive cash flow until the projects are advanced. … There are substantial amounts owing to creditors.”
The company owes at least $40-million to major lenders including $4.4-million to Toronto-Dominion Bank, $7.4-million to Atrium Mortgage Investment Corp., $1.1-million to Canadian Imperial Bank of Commerce and $27.3-million to Bank of Nova Scotia as part of a $225-million construction facility it shares with First Capital Realty for a mixed-use joint venture known as Kingsclub.
It appears to owe about $46-million to creditors related to its joint venture with Mattamy Homes to develop more than 1,100 homes in Downsview Park. That includes $22-million to Parc Downsview Park. Ltd., a federal Crown corporation that was transferred to Canada Lands Company Ltd. to sell off the former military base to the private sector. Urbancorp, which owns 51 per cent of the project, and Mattamy purchased the site last June.
Those figures do not include more than $100-million owed to other creditors of the insolvent companies, along with three other Urbancorp subsidiaries and company chief executive officer Alan Saskin, who have independently filed for court protection.
They also do not include the roughly $64-million Urbancorp raised from investors in Israel in December. Of that, $46-million went to pay existing secured lenders, while another $12-million went to pay loans to other Urbancorp projects not related to the Israeli financing, as well as general expenses. Urbancorp’s Israeli bonds have since stopped trading on the Tel Aviv Stock Exchange. KSV said it is working with a court-appointed trustee for Israeli bondholders.
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