Why Landlords Need To Change Their Perspective On Energy Efficiency

Came across this great piece about two Chicago landlords who decided that energy efficiency was going to be a central focus on their investment. Sandeep Sood and his wife own Chicago’s Jeffery Parkway Apartments, a 55 unit, 7 story building. They acquired the South Side building four years ago. They explain how the building was in bad shape, and one of the first orders of business upon purchase was the replacement of the building’s boiler.

“The first year we got this, we were able to retrofit a new stainless steel boiler. A little different design than your typical boiler. But we were able to increase our efficiencies by more than 60 percent with just this one measure,” says Sood. This and other efficiency upgrades cost about $110,000. Sood claims his total pay back on this investment occurred in about 2 years. Pretty impressive. In most cases, payback on efficiency investments like this occur in about 5-7 years. The Sood family’s units are all inclusive – in that they are paying the utility costs on rented units, but don’t assume that’s the only reason a landlord would do this. The piece goes on to mention a bit of a difference between older and younger landlords when it comes to stuff like this, and emphasizes the need for perspective with respect to investments in energy efficiency – even if your tenants are paying their own utilities.

Daniel Olson, the Senior Energy Efficiency Planner with the Chicago Metropolitan Agency for Planning has a supporting consideration when it comes to putting money down on energy efficiencies and consumption with rental units. Even if you aren’t covering the utility costs.

When you have happy tenants who have lower bills. They are going to lower your vacancy rates, so that you actually keep your buildings full with tenants which will increase the funds you have available,” Olson said. This is true. Keeping tenants in a unit can be less expensive than turning a unit over year over year.  The agency mapped out a regional plan that identifies energy efficiency as one of the easier measures that can move the area toward sustainability. Things like upgrades to a high efficiency hot water heaters, insulating buildings and simply changing light bulbs to compact fluorescent lights and L.E.D.s.

But it’s not all on landlords either…sometimes tenants don’t care.

The conflict between landlords and tenants stemming from “split incentives” to install upgrades has been identified as one of the top barriers to capturing energy savings in commercially leased buildings, according to an indicator survey published by the Institute for Building Efficiency in 2012. The same thing applies to small residential landlords too. What’s a “split incentive” you might ask? It’s when tenants often pay the energy costs, leaving the owners with no interest in efficiency. Or conversely, if landlords pay the energy bills, the tenants have no incentive to conserve energy.

British Columbia has focused on this issue of split incentives. They started up something called the Green Landlords Project, and they published a compelling executive report on it. Check it out here.

What’s your take on energy efficiency? Have you made investments into your rental property with respect to it? Share with us!

It’s Time To Give Secondary Suite Landlords A Break

Landlords aren’t just people who own multi families and apartment buildings. Secondary suite landlords are numerous in Canada and the United States, and it’s on the rise.

I’m going to give a bit of definition to what constitutes a secondary suite, courtesy of our good friends at the CMHC.

The term “secondary suite” is generally used to describe a self-contained dwelling unit with its own kitchen and bathroom, which is separate from the principal dwelling in a house. It can be located either within the principal dwelling or in an accessory building on the same lot as the principal dwelling. These units are also known as “accessory apartments” and “in-law suites.

Here’s an interesting  metropolitan Canadian fact. Conservatively, more than 1 quarter of British Columbia residents rent out a secondary suite to help with the mortgage. That’s a lot of people. 52% of Vancouver’s residents are renters. That’s also a lot of people. I think it’d be safe to assume these numbers are so high, because buying real estate out west is incredibly expensive. That’s a bit of an understatement.

Secondary suites are great. They provide a variety of benefits to neighbourhoods and communities. They’re also a significant source of affordable housing in serviced areas, and make better use of the existing infrastructure. They don’t change the character of neighbourhoods much and they diversify the housing types available. They also increase the number of residents living in an area, which in turn makes neighbourhood transit more viable and enhances commercial activity. Finally, they provide owners with income and increase property tax revenues for municipalities. That’s a whole bunch of double rainbows right there.

Secondary suites aren’t just popular in Vancouver and greater B.C. They’re big in Calgary too. The city has a 1.3% vacancy rate. That’s great news for landlords, but that’s pretty tight for people looking for a place to call home. To boot – mortgage rules changed in July of last year, making it a little more difficult to buy a home. As a result, Calgary is in the process of embracing secondary suites, much like the rest of western Canada, and is attempting to lax rules with respect to them as recently as before the beginning of 2013. Mayor Naheed Nenshi has been advocating easing restrictions on secondary suites for a while. One problem. Calgary’s city council doesn’t get it. Calgary’s already tight rental market is speculated to only get tighter after the flood that swept through the city. This is slated to be a key issue in the upcoming Calgary municipal election.

Secondary suites require a few things to conform legally. It’d be a lie to say that they’re all legal. They’re not. The point I’m trying to make is that the municipal laws that determine whether a suite is legal or not should be relaxed. Mayor Nenshi and several councillors have taken the position that existing suites across the city should be grandfathered in to be legally zoned suites, provided they comply with proper building and fire codes. Compliance with common sense rules like this is a given, of course.

The opposition on council have taken a not-in-my-backyard stance. They prefer the practice of having illegal suites reported by neighbours, and inspectors/by-law enforcement officers dispatched to investigate, and possibly enforce compliance with zoning and building/fire codes. Those in this camp appear to prefer want the to city focus additional resources to the inspection and enforcement of illegal suites in order to ensure the safety of Calgarians. That sounds like a relatively logical position, but in Calgary, legal secondary suites are tough to create because the province’s building code treats suites as duplexes or semi-detached dwellings with mandated separate heating and water tanks, restrictive square footage counts, among other difficult to meet regulations. To put this into perspective, according to a piece in the Calgary Herald in May of 2009, the city had shut down 2,104 “illegal” secondary suites because of bylaw non-compliance — not safety codes of any sort — since 2004. That amounts to the closure of 1 non compliant secondary suite a day. Seems a bit empirical to me.

What do you think? Are you a secondary suite landlord? Do you live in Calgary? Vancouver? Any other city that’s transitioning on the issue? Share your thoughts with us!

 

 

The Continuing Saga Of A Basement Apartment Renovation

So the continuing saga of my basement apartment renovation moves forth. I say continuing saga because it feels like a journey to Mordor.  Since my last post about this, I’ve managed to get a lot done. The walls were all covered up, mudded, sanded, and painted with what I think is a wonderful eggshell colour I picked up at Benjamin Moore paints (2026-70 for all the paint nerds). I fell in love with this colour after having used it in my kitchen at home, and since I feel a bright but neutral colour is essential for a basement apartment, I figured this was a logical choice. I think it looks good, but it also plays off the natural light in the unit.

Another recent element of this renovation was insulation. This was something important that I wanted to address, as prior to the work being done and when the old tenant was in there, I noticed a significant transmission of sound between the main floor and the basement unit. I took a cue from Scott McGillvray on this one and used Roxul Safe’n’Sound insulation. After putting the drywall up, and packing the ceilings with the stuff (hence the necessity to use insulated pot lights), it’s as quiet as a library.

Basement apartment renovation
The bedroom

The big main thing that was finished in the last couple of days was the completion of the wiring and the installation of some high efficiency electric convection heater systems by Dimplex and coupled wall mounted thermostats (3 to be exact). I didn’t want to go the regular route with electric baseboard heaters and am big on efficiency, especially if it’s electric, and especially if tenants are shouldering the hydro cost (which they are in this case). There’s a total of 4500 watts of heat in the unit, which is more than comfortable.The insulated pot lights were finished and all 18 of them use LED bulbs which are meant to last for 20 years. Considering the unit was also completely rewired, I’m curious to see how energy efficient the apartment is going to be.

What’s on Deck:

Property Management Software
Another shot of said bedroom

I’m doing a black and white tile kitchen and entrance, coupled with a contrasting darker colour for the bedroom carpet. Both the tile and the carpet have been ordered. I also have to buy some appliances, and get some kitchen cupboards and a counter top. I’m thinking of hitting up Restore from Habitat for Humanity for some of the last essentials. Beyond that, it’s taps, a bathroom basin and vanity, shower heads and handles, and a low flow toilet. I’m figuring I’ll have the place finished in the next two weeks.

Have you renovated a basement apartment? Challenges? Hurdles? What were some of your experiences? Share your story with us!

A Little Glimpse Into Why We’re Doing This…

Two years ago, we all teamed up in Vancouver with two things. A revelation and an idea.

The revelation was that we knew that the web could make what we considered to be the thankless job of being a small landlord easier. We also knew that easier and simpler didn’t have to be mutually exclusive.

The idea was to make a nifty web based software that actually achieved this fine balance. We were on our second tour of duty after having sold our first web based app- a little referral marketing product called Hello Referrals. We decided to use the proceeds from the acquisition of that product to develop what would eventually become Renting Well. There was a couple of months of us deciding over names. Rent Well. Rent Cloud. Renting Simple. Renting Easy….the list went on. Besides the fact that we couldn’t secure domain names for any of these, we felt the name Renting Well better suited the vibe of something active and didn’t fall into the dearth of other products that claimed to take years off of your life and seemed to also dwell with Lando Calrisian in cloud city.

One of the first considerations we had when building the app was how we could include less of everything. Less questions and set up. Less complication. Less of a wait to see important metrics. We felt the best course of action was something that you logged into, and essentially “got” within the first 2 minutes. We also knew that there was a necessity for the user to perform data entry in order to get those very things that we wanted quickly visible. Developing a flow to Renting Well that took this into consideration was also high on our list of priorities. Not an easy task. Some people prefer more complex analysis of what’s going on. Some people also aren’t jazzed about back data entry. As the old adage goes, you can’t please everyone – but we were still determined to get this off the ground in a broadly effective way.

We decided to focus on 3 core initial features.

  1. An easy to reference chronological logbook to track events, incidents, problems, and resolutions. 
  2. A bank statement accurate month to month, quarter to quarter, or year to year financial snapshot based on cash flow and profit and loss.
  3. Sexy listings to reduce to vacancies and get prospective tenants amped about renting a unit.

These core features are of course supported by other useful tools, but this made up the essence at the beginning. The reason we chose these cornerstones was because collectively, we knew what going to a board hearing was like without a detailed account of events. We knew how much of a pain in the ass it was to to do a year end with a shoebox full of receipts. We also just knew that landlords needed something to make available units for rent more attractive. We felt these were the most sore pain points.

So here it is – two year old hand drawn wire frames that sketched out what we saw as a simple solution for landlords and property managers – conceived on the table of a Kitsilano coffee bar, between 3 guys who couldn’t stand the variety of perplexing property management softwares that required you to have a masters degree in computer science. Managing income property is already complicated. In our minds, if you’re going to use something, you should want to use it and recognize it’s value.

The software is now actively tracking more than $85 million dollars worth of real estate and almost 2 million bucks worth of monthly expenses and monthly rental revenue. We’ve earned a healthy clip of paying customers so far and we’re getting ready to push out an updated version of the software in the next month.

Are we the biggest or the best property management solution for everyone? No. We’re a flavour in a Baskin Robbins ice cream shop full of other alternatives. We just happen to be simpler and less expensive than most of them. There’s nothing wrong with being the chocolate against the strawberry cheesecakes and caramel tiger tail swirls of the world. We’re landlords. We’ll take a scoop of simplicity.

10 Traits Of A Great Landlord

There are a variety of characteristics that make a leader great, or a manager great, or even a husband or a wife great. We thought we’d look at the important job of being a landlord through that same lens. Here’s a few items to chew on…

  • Great landlords are responsive. They respect the fact that someone is calling one of their units home, and take the job of addressing issues, concerns, and questions in a timely way, treating their tenants like customers.
  • Great landlords aren’t doormats. While treating their tenants like customers, they also stand firm with their expectations with respect to fundamental things – like paying the rent, being respectful of other tenants (if there are other tenants), following the rules, and taking care of a unit that a tenant is renting. When this doesn’t happen, they react appropriately and decisively and aren’t afraid of an awkward exchange or confrontation.
  • Great landlords know the law in their province or state with respect to residential tenancy. Knowing the law doesn’t only include being aware of rent increases. It also includes being familiar with legal dispute resolution, knowing how to do things like serve notices, and being aware of the rules for things like sublets, interest rates on security deposits or last month’s rent, and what you can and can’t do for things like pets. Know the whole law.
  • Great landlords are diplomatic. Resolving disputes with tenants shouldn’t be an emotionally charged exchange. They listen as much as they talk, and they know that you can catch more flies with honey than you can with vinegar.
  • Great landlords know that rent increases are important, when applicable. Not increasing the rent for years has an adverse affect on the property you’re managing. Expenses increase often at more than the rate of inflation. On the other side of that note – there are provinces and states that have an absence of rent control. Being a great landlord also includes not being a jerk and increasing someone’s rent by 400%, even if you technically can.
  • Great landlords understand the importance of always doing a good job. Even with a low vacancy rate, it’s important.
  • Great landlords take pride in the property they have. Being a slumlord is so 80s.
  • Great landlords are fair and flexible and expect the same of their tenants.
  • Great landlords don’t subscribe to doing things in the cheapest possible way. They approach everything from repairs and renovations to snow removal in a practical but correct and accountable way.
  • Great landlords aren’t evil. They manage to be effective at managing and operating an income property, while applying common sense to situations. They respect people’s privacy and rights even though they have the ability to enter into a tenant’s unit. They don’t dangle the ole’ “I own this place” statement above people’s heads. They even act politely and ethically when things go south.

Thoughts? Comments? Share what you think makes a good landlord great with us!

 

Lions…Tigers…and Renovating A Basement Unit. Oh My…

I’m going to share a progressing story with all of you. I’m renovating a basement apartment that desperately needed some attention.

3 weeks ago, I had a tenant move out of said basement apartment. He’d been there almost 12 years. The place was in pretty rough shape to say the least. The drywall was peeling, the lighting was dim and uninviting, and logistically, the layout of the place really didn’t make a lot of sense. It was dank, dark, and the rent that I was getting in the unit wasn’t reflective of the market norm. I was less concerned with that though. I just hated the way this place was laid out, and it looked and felt like an isolation cell on Riker’s island. When I got the tenant’s notice, I felt like this was an opportunity to give the unit the TLC it deserved. I decided to put together a budget to make my basement unit awesome. There are a few challenges with this though…which I thought I’d share with all of you.

Basement apartments are often thought of as problematic. They typically see a high turnover. Many are dimly lit. They often don’t show well because of the lack of natural light. They have a tendency to be colder and less inviting. There’s a reason for that. They’re below ground. I like to look at basement apartments, if done properly, as a place where you can have some of your best tenants. You just have to appreciate that basement units need a bit of a different approach. This is going to be a first in a series of posts dedicated to the renovation. Read on…

First order of business: Height!

This unit had more drywall boxes and creative ceiling and wall shapes than a modern art exhibit. Once I took the drywall down, it revealed a series of entombed obstacles in creating a spacious and well laid out space.

basementBack in the day they used to run humungous pipes made out of iron as supply and returns for water. Basements had all sorts of insane arteries and veins for heating, drinking water, etc. In old radiator systems, these pipes would run through a boiler. Pretty typical, except for the fact that any height that you might have is severely cramped with these massive pipes. One of the old owners of the building decided that just boxing all of these pipes up would do the trick. Well…this is 2013, and most people don’t want to live in a cubby hole. These pipes and their associated boxes did nothing but diminish the natural light out of the two windows, and decreased the height of the unit.

Allowing as much natural light into the unit as possible, is essential. One of the first orders of business was to ditch these pipes, and replace them with updated copper pipe, which was both significantly less stacked, shorter in height, and allowed a whack load more natural light into the unit. Even after putting drywall back up, I’ll have added about a half a foot of height and opened up one of the three windows in the space. At 7 feet and 2 inches of ceiling now, I was still beyond the minmum of 6 feet 5 inches for height, but it’s made a huge spatial difference so far.

In the coming week, we start on the bathroom and begin re-framing. Stay tuned.

 

Introducing Rent Receipts

Dear landlords,

We rolled out a cool new feature for our active trials and current customers. It’s a rent receipts feature in Renting Well, that makes supplying receipts for rent received from tenants a *snap*.

As you may know, come income tax time, you may get a lot of requests from tenant for receipts. You’re obligated to provide a receipt if a tenant asks for one. All that to say, adding this feature was something we were keen on getting to post launch, and is part of a series of additions we’re going to be moving forward with over the next few months.

Screen Shot 2013-04-15 at 1.12.31 PM

Firing off a rent receipt is dead simple. Next to each revenue item marked “rent”, you’ll notice a small button labelled “receipt”. Click that – and it’ll give you two options to either email the receipt directly to the tenant associated with the rent payment, or to print the rent receipt if you wish.

Questions? Comments? Share with us. We’d love to hear your feedback.

Scamming Puts Landlords In A Bad Light

I was disappointed to come across this article today.

http://vancouver.24hrs.ca/2013/04/03/online-rental-scams-pose-as-landlords

We’ve covered this topic before. The guy in the piece was caught by the cops in a casino – of all places. Way to get snagged with your hand in the cookie jar, scumbag.

In a nutshell – Michael Burley, the suspect, seemed to have some right of access to the units he was showing to prospective tenants – through advertising on Craig’s List. Through the course of his blatant misrepresentation as the landlord, he’d accept their damage deposits, with the intent it seems, of hitting the slots.

The Canadian Anti-Fraud Centre said online apartment scams are common, particularly ones in which supposed owners on an extended vacation look for renters. We covered this in a previous post.  The phony owners claim they care about a good renter more than money and advertise places well below their value. They convince people to send a damage deposit to a foreign country, promising the keys will be couriered upon payment.

Here’s the kicker. The people who do this, usually duplicate legitimate ads by legitimate landlords looking for tenants.  Victims can usually be the elderly and students. Police said to avoid such scams people need to get identification from the person renting the property, avoid using wire transfer services to pay supposed landlords, and to never rent an apartment without seeing it.

To-do Lists Have Been Pushed Live! Welcome to v1.2

Dear landlords,

We’ve pushed out a new update (v1.2 for those keeping score) of Renting Well this morning.  First thing you’ll notice is that your dashboards look a little different: we’ve added a new to-do list to the app! This is going to make it a lot easier to stay on top of what you need to get done and ensuring you’re reminded when tasks are due.

Landlord Software in CanadaIt can be anything: tenant asks you to fix a screen? Add it as a to-do! Tenant mentions that one of the outlets in their unit isn’t working? Add it as a to do! Want to remind yourself 60 days in advance that a tenant’s lease is going to expire? Add it as a to-do! The to-do list is a handy feature that includes convenient email notifications that get sent to you on the specified due date. The main purpose is to keep you on top of the many landlord duties that need your attention — whatever they are.

You’ll also notice that the app looks a little different, too. We’ve passed over things with a bit of a fine-toothed comb: redesigned contact lists, improved layouts of financials, better icons,  and a whole whack of aesthetic tweaks all designed to make the app easier and more enjoyable to use.

Kick the tires and let us know what you think!

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.