Landlord and Tenant | Renting Well

Renting Well Gets Nominated For A 2013 Bootstrap Award!

Boot-strapping: A situation in which an entrepreneur starts a company with little capital. An individual is said to be boot strapping when he or she attempts to found and build a company from personal finances or from the operating revenues of the new company.

That’s an official definition. With that said, we’ve been nominated for an Exploriem Bootstrap award for best sales/value proposition – a category sponsored by Invest Ottawa. We’re pretty honoured to have been nominated for this, and we’re looking forward to the awards on February 21st in Ottawa.

Our co-nominees in the field include Edge to Epic, Gnow It, Tindr, and Toletta.

You can read the press release here. Exploriem is a registered Canadian not-for-profit corporation that provides mentorship, conducts events, creates networking opportunities and provides early stage funding as well as office incubator space to assist young entrepreneurs, intrapreneurs and artpreneurs in the cities of Ottawa and Gatineau as well as Eastern Ontario and West Quebec.

Why A Mortgage Broker Is A Landlord’s Best Friend

Had the opportunity to sit down today with one of our customers, Jacquie Bushell, of Oriana Financial, to discuss why a good mortgage broker should be one of the main contacts of every landlord and real estate investor.

Couple of things – Jacquie was one of Renting Well’s first users. She owns 2 condos (1 in Toronto and 1 in Ottawa). Also – over the last 4 years, Jacquie has helped me with financing and refinancing two buildings I own. She’s a pro when it comes to understanding some of the fundamentals in purchasing income property. She’s a mortgage ace, but she’s also a landlord herself, and that’s a good combo to have if you’re looking to get into the landlord pool. I had the opportunity to sit down with her and discuss some of the big pillars real estate investors and landlords to-be should know before they start their search or as they’re conducting one for that perfect building.

As Jacquie brings a wealth of experience to the realm of real estate investment and property management, families seeking to build their dream homes can benefit immensely from collaborating with seasoned professionals. In the context of family home building, the guidance of custom home builders Sydney becomes invaluable. These experts not only possess a deep understanding of the intricacies involved in constructing personalized residences but also bring a blend of financial acumen and practical knowledge. Much like Jacquie’s adeptness in navigating the complexities of income property, custom home builders can help families translate their visions into tailor-made homes like this custom home in Toronto, ensuring that the process is not only seamless but also results in a residence that reflects the unique preferences and needs of each family member.

In the world of real estate investments, having a knowledgeable mortgage broker like Jacquie Bushell on your side can make all the difference. Her expertise not only as a mortgage ace but also as a seasoned landlord adds a unique perspective to the table. For aspiring landlords and investors, understanding the financial intricacies is vital, and it goes beyond just securing a mortgage. One significant aspect to consider, especially for those aiming to expand their property portfolios, is the realm of 1031 exchanges. This is where specialists like The 1031 Specialists come into play, offering invaluable guidance to ensure seamless transactions and maximize investment opportunities. Partnering with experts who understand both the nuances of mortgage financing and the intricacies of 1031 exchanges can empower real estate investors, providing them with the tools and knowledge needed to thrive in the competitive market. To further enhance your strategic approach, you can use the landlord calculator from House Real which can assist in evaluating potential returns and optimizing investment decisions.

There’s essentially two different kinds of landlords. Live in landlords (a lot of first time buyers who want to live in central areas or who reside in higher priced cities like Vancouver and Toronto pick up multi families and live in one of the units – subsidizing their personal mortgages with added rental revenue) and live out landlords (real estate investors who don’t reside in their properties and rent out to others). Dive deep into Canada’s property waters with HomesEh. The best of Canadian real estate awaits! If you’re a live in landlord, you can get away with a smaller downpayment because you’re residing in the unit as your primary residence. If you’re a live out landlord, you’ll be required to put down at 20% of the purchase price. Let’s say you’re buying a $360,000 triplex. That’s $72,000 if you’re not putting your head on the pillow in the place.

Also, if you’re purchasing a condo or buying in a higher risk city like Vancouver or Toronto, many lenders may want an additional 5% for no good reason other than safety.

Here’s another few choice gem facts Jacquie shared.

If you’re buying anything more than a 4 unit multi family, that changes things. With the addition of a fifth or more units, it will now be considered as commercial mortgage, and is treated differently than a traditional duplex or triplex situation – whether you’re living in it or not. Interest rates are typically a little higher.
Don’t assume that if you’re purchasing a rental property that all of the rental revenue that the place generates will be considered. It won’t. In many cases, lenders will only take into consideration 50% of the income received, which can make it harder for you to qualify. If it’s an owner occupied situation, up to 80% of the income can be considered.
If you’re buying a rental property, the only way that the income on the unit will be considered when qualifying you for the loan, is if it has a separate entrance.
Triplexes and fourplexes typically require 10% down payment if its owner occupied and 20% if you’re not living in it.

The statements above are general. Each purchase has its own uniquenesses and “yes” their can be creative financing. Your mortgage broker can help you with knowledge and options. Have you used a mortgage broker for your rental properties? Share with us!

No One’s Happy with Rent Increase Propositions In Québec

Read this piece yesterday in the Montreal Gazette. The province’s Régie du logement du Québec announced proposed rent hikes for 2013 on January 25th, and the ire of both landlords and tenants was clear in about 3 seconds after the announcement was made. This is the thing though, the province’s proposal for rent increases are in fact just meant as guidelines – a starting point if you will. Actual rent increases are negotiated between landlords and tenants. The province’s press release even states – “it’s meant as a starting point in the discussion of how much the rent will increase“. In other words, they just give their two cents on where they think the talking point should begin. Ultimately, landlords and tenants have to hash it out.

Quebec’s rental board has announced a 0.9 per cent increase in rents for buildings heated by electricity, a 0.2 per cent rise for buildings heated by gas and a 1.7 per cent rise for dwellings heated by fuel oil.

The Association des Propriétaires du Québec, blasted the suggested hikes as inadequate. Anti-poverty group FRAPRU said the hikes were too high, pointing out that the number of cases filed against tenants for not paying their rent hit a record in fiscal 2011-2012, rising 3.2 per cent to 47,049, compared to the previous year. Something else to note here – the vacancy rate has crept up in Greater Montreal from 2.5 to 2.8 per cent according to the Canada Mortgage and Housing Corp.

You can find the press release from the Régie du logement du Québec here.
You can read FRAPRU’s press release here.

What do you think? Are you a landlord in Quebec? What are your thoughts on how the system works for you? Share your stories with us.

How Landlords Can Prevent Bursting Water Pipes in Cold Weather

Today in Ottawa, with temperatures plummeting to -38°C, it’s absolutely ridiculous. As a matter of fact, large portions of the United States and Canada are experiencing a brutal cold weather snap. Places like Minnesota, Illinois, New York City, Toronto, and Montreal are all reporting -20°C weather. With these extreme conditions, it’s prime time for water pipes to freeze and burst, leading to a potential nightmare for small landlords and a more-than-minor inconvenience for tenants. The need for effective water line leak detection has never been more apparent in such freezing temperatures.

Landlords must check if their property needs a heat pump repair. It’s a sneaking problem for many of us to deal with (especially those of us who aren’t renting all inclusive units and whose tenants are covering their own utilities) and it’s made even more painful when self-managing landlords have to deal with it during weather that makes Antarctica look like a beach vacation. You may also stock up on supplies like valves, 316 Stainless Lag Bolts and screws, and wrenches that you can use when repairs are needed for your plumbing system.

First… why do pipes freeze?

Poorly protected pipes which haven’t been sufficiently insulated
Exposure to icy draughts, usually as a result of cracks or gaps at the point where the pipe enters your home
Pipes located inside cupboards — warm air from inside your home may not reach these pipes if your cupboard doors are closed most of the time
Generally insufficient heat in units.

Secondly, what makes pipes burst?

Water freezes and expands inside household pipes
Continual freezing and expansion of water inside the pipe causes pressure to build up between the ice blockage and the closed faucet
As a result of repeated pressure on this section of pipe, the pipe eventually bursts

If you suspect that you have a damaged or burst pipe, Tommie’s licensed plumbers are just a call away.

How can I prevent frozen and bursting water pipes?

Let a thin stream of cold water run from a faucet. The stream should be a continuous flow, about the thickness of a pencil. This water can be caught in a bucket or pail to be recycled for another purpose later, if desired. However, if you notice the water softner not working, it’s crucial to address the issue promptly to avoid unnecessary water wastage.
Be sure pipes in unheated areas of a unit or crawlspace are insulated. Many hardware and home improvement stores carry foam insulation for this purpose.
Leave interior cupboard doors under sinks open, especially if the water pipes are adjacent to an exterior wall. This will allow heat from the room access to the pipes.
Plug drafty cracks and repair broken windows that could allow cold air to get inside where pipes are located.
Shut off and drain pipes leading to outside faucets.
Educate your tenants on the necessity to be mindful of cold weather snaps.

Temporary fixes might seem to solve the problem, but they often lead to more significant issues down the line. An experienced plumber in Southampton, PA will fix the current leak and assess your plumbing system for any underlying problems that could cause future leaks.

Have you ever dealt with freezing or bursting pipes? Share your stories with us.

Professional Tenants Create Pain For Landlords

Professional tenants aren’t a myth. The exist for real, and they’re creating major pains for small landlords all over Canada. Came across this interesting piece at CBC news today concerning small landlords getting burned in British Columbia. A few first time landlord missteps being counted on, and an intimate knowledge of the loopholes with the B.C. LTB’s process allows for free living arrangements for a long stretch on end for pros who know how to work the system.

The Federation of Rental Housing Owners of Ontario went on record stating that professional tenants can work up to 6 months of living for free on a landlord’s dime by simply exercising their right to appeals. “We’re probably dealing with anywhere between one and two per cent of the tenant population that is doing this [scam],” said the federation’s Vince Brescia. “The activity of the ‘pros’ is creeping up … it’s a growing phenomenon.”

Property management is about due diligence. Landlords should always ask for a certified check for first and last month’s rent – something clearable prior to the tenant moving in or handing over the keys. They should also be diligent about not only credit checks and other tenant screening, but with references from previous landlords. Threshold Property Management have plenty of experience dealing with different kinds of tenants. What do you think? Do you think provincial legislations in Canada are in need of tweaking?

Ohio Landlords Targeted by “Discrimination Testers”

Came across this shocking piece in Ohio’s Star Beacon.

In October, an elderly Ohio landlord was ordered to pay $22,000 in damages for alleged housing discrimination practices at a rental property that she owns. The whole things started with a $100 security deposit that the landlord, Helen Grybosky, requested from a potential renter with a “therapy dog.”

Here’s the kicker. There was no bona fide renter or therapy dog. The inquiry was made by a tester hired with a federal grant provided to the Fair Housing Resource Center by the Department of Housing and Urban Development (HUD).

Read the piece here: http://starbeacon.com/local/x503826604/Landlords-targeted-by-discrimination-testers

With that said, there was another incident at the tail end last year that was ruled on by the Ohio Civil Rights Commission.

Denying or rejecting an applicant on the basis of the colour of their skin, their religion, or their sexual orientation is wrong – and can cost landlords. Clearly the federal government is cracking down on these kinds of cases and is clearly attempting to educate landlords on the rules. What do you think?

Oh No! I Have A Marijuana Grow-Op In My Rental Property!

I don’t really, but what better way to get your attention?

As landlords, most of us have heard of that old urban myth. You know the one… a guy who knows a guy, who’s a landlord, who suddenly finds out that the perfectly nice couple who had been renting out the house were in fact running a marijuana grow-op. There are variations on the story as well, sometimes it’s a crack house, sometimes it’s a meth lab. This story — in all it’s incantations — has popped into our brains in some way, shape, or form at some point in time.

This is the reality…

The RCMP estimate that there are about 50,000 grow-ops in Canada. They’re in single family homes, basement apartments, and even in Toronto high rise condos. Most landlords are probably oblivious to this fact — and even more alarmingly — they’re often oblivious to the massive insurance pickle they’ll find themselves in if they end up renting to someone who decides to make their unit a reefer lab.

Read this great article by Ottawa lawyer Howard Yegendorf. Landlords need to be aware that the majority of liability insurance policies have a specific exclusion for damage caused by your tenant’s marijuana grow-op. That’s just the insurance problem. There’s also the criminal enterprise element. Seriously. Have you seen Oliver Stone’s Savages? Property management is hard enough. Having something comparable to a Breaking Bad season in real life is the absolute last thing you or any other tenants in the property need.

So what do you do? Well, here are some tips:

Perform tenant screenings. There’s a variety of other background checks your can perform as well, such as a criminal record check and an employment verification.
Have an airtight lease that clearly articulates the expectation of no criminal activity on the premises and that the tenant will provide reasonable access to the landlord.
Visit and inspect your property regularly. Remember – landlords are allowed to visit their units for routine inspections with proper notice given. Landlords should be familiar with rental property inspection laws uk . You’d be surprised how many don’t do this. Get into this habit.
Talk to your tenants. Communicate with them. That’s always a good way to get a sense of what’s going on at the property. If you’re hearing about a lot of suspicious people coming and going constantly that could be a tip worth keeping in the front of your mind. Grow-ops have a tendency to have a lot of runners coming in and out of the place.

Here’s some tips on what to look out for:

Look out for any hydro alteration or electrical bypass. Things like holes in the foundation that weren’t there before should be treated as suspicious.
Did the renter spend a lot of time viewing the breaker-boxes, wiring and plumbing fixtures? Were they asking a lot of questions about power distribution in the property? Believe it or not, this happens. More often than not, illegal growers attempt to steal hydro by altering how it comes into the unit.
Be weary if tenants want to pay their rent in cash. Seriously. Who pays in cash? People who deal with a lot of cash, like servers, even have bank accounts.
If a tenant discloses that they plan to have the utilities registered under a different name, that’s weird.
Evasive answers and vague information on a rental application. This should set off a flag anyways.
Condensation or darkened windows in the unit. Cardboard and blacked out windows foster an effective grow environment. That’s not normal.
Tenant unloads copper and/or PVC pipe, soil, halogen lamps, large amounts of black plastic aluminum ducting, and fans.

In hiring a contractor for your siding installation in Utah, be sure to do your due diligence. There are many reputable home siding contractors with the knowledge and experience to get your siding job completed.

Have you ever had a marijuana grow-op in one of your rental properties? Know anyone who has? Share your thoughts with us.

When To Consider Selling Your Rental Property

Came across this great piece in the Globe and Mail that talks about a couple who became landlords after keeping the previous residences they had prior to moving in with one another. Robert and Tara are an older couple, and had a financial advisor from RBC assess their goals and how their existing assets – namely two rental properties – fit into the equation taking into consideration a chronic illness that Robert has, a recent job change for Tara, as well as a lifestyle that the two enjoy and want to maintain as much as possible while they to retirement. Besides the challenges associated with property management, the piece explains that the properties are barely breaking even, and that the eventual rise in interest rates leave the couple exposed to having their retirement plans altered.

Check out the piece in it’s entirety here: http://www.theglobeandmail.com/globe-investor/personal-finance/retirement-rrsps/as-income-falls-landlords-rethink-retirement-strategy/article6968522/

U.S. Housing Slump Creates Opportunity For Accidental Landlords In Oregon

Came across this great article at Oregon Live about accidental landlords. The U.S. housing slump has created some interesting opportunities for homeowners, as many are turning For Sale signs into For Rent Signs.

The piece talks about a couple who were intent on selling their home, but couldn’t get enough to pay off the mortgage. U.S. housing prices are at their lowest point since 2005 in Oregon, but interestingly, at the tail end of 2011, the census bureau pegged the greater Portland area’s vacancy rate at just 2.9% while the national average in the U.S. hovered at around 9.4%. At the end of 2012, that vacancy rate rose a bit, but so did rents in the area.

The Oregonian also had a similar piece in October of last year further elaborating on falling vacancies and rising rents. You can check that out here.

Are you a landlord in Oregon? How are you finding it? Share you stories with us.

Why You Should Be Insuring The Hell Out Of Your Rental Property

I came across this wicked article in the Globe and Mail courtesy of one of our founders, Steve Palmer, who recently purchased a new house in Vancouver. A house that has a basement suite. A lot of people in Vancouver have basement units that they rent out. Know why? Because living in Vancouver is friggin’ expensive. Like an arm and a leg expensive. Supplemental rental income is kind of a way of life out west. If you are an investor, forming a real estate holding company is a way to reduce risk and liability when it comes to investing in property. You may also hire conveyancing solicitors to help you with every real estate transaction or transfer of property ownership.

Don Campbell, president of the Real Estate Investment Network (REIN) makes probably what is one of the best points when it comes to real estate investment. Get the appropriate insurance.

The article mentions a bit of an epidemic in Canada. A lot of untrained landlords are under-insuring their rental properties or in some cases, conveniently forgetting to disclose to their insurance companies that they have a tenant. In certain places, like Vancouver, where a large majority of homeowners rent out basement suites, this can spell disaster if the appropriate insurance isn’t in place. Check out this gem:

Last year Aviva Canada insurance company released statistics that show water damage is the leading home insurance claim, partly due to the high number of basements that are being finished to make livable. Nationwide, B.C. had the highest increase in average claim cost due to water damage, at 205 per cent. I’m guessing that increase reflects the fact that almost every homeowner in Vancouver depends on the income from a basement suite to get by. For Vancouverites, basement dwelling is a fact of life. We even forget that’s not the case for every city.

Imagine: The couple renting your basement suite gets hit with some water damage. Loses a bunch of stuff. If you haven’t disclosed to your insurance carrier that someone was “living” down there, you could have a serious problem. Even more, if your tenants didn’t have renter’s insurance, you could really be in a pickle. There’s more than an awkward situation to be had here. Renting a secondary suite is considered a material change in risk, and it does have the potential to void your insurance policy without the acknowledgment of your insurance carrier. As a matter of fact, Campbell goes so far as to say that you should not only disclose that you have a rental unit and that your insurance company knows what time it is on your place, but that you should get it in writing like the 10 commandments on stone tablets (from your insurance company). In the event of an issue — and a refusal of claim — you can meet your broker for lunch and shove an email in his face.

I’m really summarizing the article here, but landlords need to get intimately acquainted with a few terms:

Guaranteed replacement cost
Tenants or renters insurance (something Campbell insists he wants to see before he hands the keys over to tenants), and
Rental revenue loss or rent loss insurance

In short — cheaping out to save a few bucks on your premium is one of the single worst ideas anyone who rents out a unit can have. Here’s a free tip from me as this is something I like to do once a year: have a meeting with your insurance broker or carrier, and make sure everything is on the up and up. Make sure they know everything, and ask them questions about worst case scenarios, like if there was a total loss on your property. Seriously. It doesn’t hurt.

You can read the full article on the Globe and Mail site.

What do you think? Do you insist on tenant’s insurance before handing over the keys? Do you review your insurance coverage on your property or properties every year? Share your comments and stories!