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.

Landlords, Tenants, and Floods. This Is For You Alberta.

Came across this great piece at Law Now, that touches on the mess that Alberta’s floods have wreaked on both landlords and tenants in the province. The Centre for Public Legal Education Alberta has developed an info sheet to help people – both landlords and tenants-to understand their rights and responsibilities after the terrible flood.

There are a lot of great “pro tips” here, but one thing in particular jumped out at me when reading the fact sheet. The definition of a “frustrated tenancy”. According to the CPLEA, it’s as follows:

A rental agreement can be frustrated, which occurs when something happens that is out of the control of both parties, and makes continuing with the agreement impossible. There are many reasons why a tenancy can be frustrated including if the property is destroyed, if there is an order under the Public Health Act that says the property is unfit for human habitation, if the property is so damaged that a reasonable landlord would not fix the damage, or if it is so damaged that a reasonable tenant would not be willing to remain living there.

Check out the fact sheet here. It’s great.

Basement Unit Renovation 2: This Time We Mean Business

Construction on the basement apartment is continuing. In my first post on the project, I discussed some of the obstacles I was facing as I transformed a dank and crappy basement unit into something someone will be proud to live in. Well, since then, there’s been a significant amount of progress. Insulated pot lights are in. Framing is complete. Sound proof insulation is in. The entire unit was re-wired, and I brought it up to code. Part of bringing the electrical up to code included replacing the breaker panel with a new one, and completely eliminating all of the knob and tube electrical that was in the place.

So – all this to say, this past couple of weeks was about the bathroom.

Bathrooms are important. Seriously. 

Screen Shot 2013-07-01 at 6.08.51 PMThe old bathroom sucked. It was like a bathroom in a plane. After literally taking the entire place down to the beams, I framed a proper stand up shower stall that was a perfect square, versus the angled and uncomfortable one that was there before. I opened up the bathroom significantly by having a plumber pin some elaborate pipe work against an interior wall, creating a bigger space to have a bathroom. Check out the picture to the right here. This is a glimpse of what it used to look like. I didn’t even want to take a full photos of the catastrophe.

What’s up next? Well – drywalling is continuing into this week. Tile work is being done in the bathroom next week, and I’m going to be purchasing some appliances in the next couple of weeks for the kitchen. All in all, on schedule. I’m planning on having the place available for rent for September 1st.

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.

 

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.

Landlord Is Sued By Tenant For Being Too Considerate

Being a landlord can be tough work, but a recent Toronto civil suit brought forth by Gerry Danforth underscores this fact with a degree of emphasis not seen before. Mr. Danforth recently sued Amanda Boileau, his landlord for the last 23 months, and cited the reason for the case as her “complete and total reliability and overwhelming personal consideration” in a suit asking for the maximum $5000 judgement allowed in Canadian small claims court.

Mr. Danforth went on to provide a few key examples of what Ms. Boileau has a tendency to do, which included but were not limited to 24/7 contact for any emergency, proactive measures to ensure that fire alarms were working and functional, as well as immediate concern to even the smallest of minor issues like a leaky faucet or broken window.

“There was an instance last year when Amanda came by my apartment and followed up on whether a creaky door was working quietly after the application of some WD-40 to the hinges. I’m not sure who she’s trying to impress, but to add insult to injury, that same day just happened to be my birthday, and she had the audacity to wish me a happy one”, said Danforth as he checked an important text message outside of the Toronto courthouse.

According to Danforth, Ms. Boileau’s other transgressions include things like 48 hour notices on dropping by or entering the apartment to repair items, a full extra day than is required by law, and being responsive to suggestions about purchasing him a new refrigerator for his unit.

“She literally listened to me, agreed with my assessment that the fridge I had was noisier than I would have liked, and proceeded to purchase me a stainless steel model with a built in purified water spout”, said Danforth. “I find Amanda’s personality and accountable nature compromises my ability to assume all landlords are jerks and to perpetuate the stereotype that they are the housing equivalent of dictators.”

The case is hearing closing arguments this week.

Why Tenant Screening Is Wickedly Important

Mistake #1 for landlords: renting on a hunch. It’s insane.

When we built Renting Well, we made it a quick priority to include access to background checking within the app. To make this happen we were fortunate to partner with BackCheck, Canada’s leading background checking service. One of the reasons we did this was because basic credit checks are just one piece of the pie. It’s good to have access to other background checking elements like employment verifications and a criminal background check. I had the opportunity recently to sit down with Iain Murray at BackCheck to discuss some interesting stats when it comes to landlords “checking” who they’re renting to:

  • 10% of Canadians have a criminal record. That’s over 3 million people. 
  • 28.5% of tenant applicants will have poor credit.
  • 12.1% of tenant applicants will lie about their employment.
  • Almost 25% of landlords would not recommend a former tenant to another landlord.
  • About 45% of BackCheck’s small landlord customers will request a criminal background check.

Conducting criminal background checks is more important than landlords might realize — an individual with a criminal history, who continues living a life of lawful offense, can have a great impact on a building and even an entire community. While a check is not exclusionary, it has the potential of reducing the number of thieves and violent ex-criminals who wish to neighbour among other tenants.

With that said, a criminal check can uncover any one of a number of offenses — not just violent crimes. People get charged with minor offenses like fraud and theft — things which most landlords would want to know before making a decision to rent to a tenant or not. There is no such thing as too much information for a landlord. Any kind of criminal background is something you should be aware of. Landlords have the right to refuse to a tenant because of their criminal history and ultimately the responsibility lies with you when it comes to introducing new tenants into your property. Check out this great info sheet published by Crime Prevention Ottawa in September 2009 that discusses how landlords can avoid and overcome the challenges of crime and disorder (such as drug dealing) on their property.

It’s Tricky Being A Condo Landlord

Canada’s condo market has exploded in the last 10 years. I live in Ottawa, and as I write this post, I’m peering out my window and looking at a condo that is about 90% complete and ready for move in. With new apartment construction slow in urban centers, and with an increase in desire for individuals to live in central downtown areas, condos have represented a great first time investment for many real estate buyers. Many live in them for a period, and then rent them out when they’ve outgrown them (if they get married, decide to have children, etc). Since many of these newly constructed condos can include luxury amenities – landlords have attractive new dwellings to market for a demographic that considers the lifestyle that a condo affords attractive. In lots of ways, they’re a home run when it comes to tenancies and demand – but in other ways, they can be more management intensive with respect to operation and significantly trickier to cover the costs on. I’ll tell you how. First – here’s some tasty stats about condos in Ontario:

  • Over one million people live in condominiums in Ontario.
  • There are about 525,000 condominium units in Ontario.
  • Toronto had the fastest growing high-rise condo market in North America in 2011.
  • About 50% of new home sales in Ontario are condominiums; 60% of homes sold in the GTA.

Condos are different than a traditional single or multi family dwelling. If you’re renting them out, they’re bound by two different pieces of legislation in Canada. The Condominium act, and the Landlord and Tenant Act (applicable in any province). In english, this means that you and your tenant are bound by two laws when it comes to residing and renting the unit out. There’s an obligation to the condo board, and there’s an obligation to the landlord and tenant law. Ultimately – this is more of the landlord’s problem than the tenants.

Here’s an example of what I’m talking about. Let’s say you’re renting your condo out to a tenant. Everything’s going smashingly. Then one day, the condo board (there is one for any condo) decides to conduct a fire safety test on all of the units and advises the property management company to retain the services of a fire safety organization. The fire safety company goes around to the units and knocks on doors. The condo has permitted them to enter any units as required. They do their job. The condo owner didn’t mention this was going down, and the tenant is furious because they should have been given 24 hours written notice, as per the LTA that someone was entering their home for a maintenance related item. Who’s at fault here?

Condo boards can have a tremendous amount of influence on how a building is lived in. While most are required to allow an owner to rent out their unit, boards can and often do ask to vet a prospective tenant before the landlord agrees to allow them to move in. Condo boards can sometimes have specific policies when it comes to pets. Rent to someone with 3 great danes, and the board could and would make your life a hassle if it didn’t sit well with them. Many condo developments require tenants to sign a statement agreeing to abide by bylaws and additional “house rules”. Many also require landlords to post a one-month’s-rent damage deposit to cover any damage to the common property by their tenants. Managing the relationship with a condo board as well as with your tenant is a trickier situation as you can see. Managing pressure from both the condo board and your tenant can be stressful.

Are you a condo landlord? Share your stories with us!

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.

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). 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 optionsHave you used a  mortgage broker for your rental properties? Share with us!