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.

Absolutely Insane Landlords from California Get Jail Time

Came across this compelling story from the ole’ Sunshine state of California.

Kip Macy and his wife, Nicole Macy, pleaded guilty to two felony counts of residential burglary, one felony count of stalking and one felony count of attempted grand theft. These two geniuses owned an apartment building in the gentrifying South of Market area of San Francisco. Their plan was to evict the tenants they had to renovate the apartments and then to sell them as individual units.

Nicole Macy sent fraudulent emails to the attorney of one of their tenants with whom they were involved in a civil case. In the emails, she pretended to be the victim and fired the victim’s lawyer. In another incident, she sent fraudulent emails to her own civil attorney in which she pretended to be the same victim. Then…wait for it…she threatened to “kidnap and dismember” the attorney’s children.

Together – Kip and Macy also cut the floor joists of an existing tenant’s unit in an attempt to make the floor cave in. Guess they really wanted to get rid of him or her.

Other crimes included purchasing a semi-automatic handgun and threatening to shoot the building manager, changing locks, cutting phone lines, shutting off utilities, removing a victims’ belongings from their apartment and destroying them, multiple burglaries and threatening letters to victims. All of these events took place between September 2005 to December 2007.

Here’s where it gets interesting. The couple were charged with felonies in 2008, but posted bail and escaped to Italy. They were taken into custody in Italy in May of 2012 and extradited back to the U.S. on May 17, 2013. Bail was set at $2 million for each of them. After pleading guilty to four felony counts on Tuesday, the couple are scheduled to be sentenced to four years and four months in state prison on Aug. 22.

Nuts. They need to be in jail.

 

Do You Have What It Takes To Be A Landlord?

The Globe and Mail published this great piece a few days ago entitled, “Do You Have What It Takes To Be A Landlord?”. It offers a sober look at the pros of being a landlord and the benefits of income property ownership. It’s a great counter piece to all of the discouraging things you might hear from people who’ve tried it and had it not work out. If you’re reading this, you know property ownership and property management are hard. This piece is refreshing because it paints an accurate picture of the situation with rental property ownership. In short – it’s a marathon, not a race.

Read the piece here: http://www.theglobeandmail.com/globe-investor/personal-finance/mortgages/home-buying/do-you-have-what-it-takes-to-be-a-landlord/article11636234/

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.

How Landlords Can Prevent Bursting Water Pipes in Cold Weather

Today in Ottawa it’s -38°C. It’s ridiculous. As a matter of fact, large portions of the United States and Canada are getting reamed with a cold weather snap. -20 celsius weather is being reported in places like Minnesota, Illinois, New York City, Toronto, and Montreal. It’s prime weather for water pipes to freeze and burst which can create a damage nightmare for small landlords and a more-than-minor inconvenience for tenants. This generally sucks. 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.

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

How can I prevent frozen and bursting water pipes?

  1. 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.
  2. 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.
  3. 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.
  4. Plug drafty cracks and repair broken windows that could allow cold air to get inside where pipes are located.
  5. Shut off and drain pipes leading to outside faucets.
  6. Educate your tenants on the necessity to be mindful of cold weather snaps.

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. What do you think? Do you think provincial legislations in Canada are in need of tweaking?

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. 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.

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/

 

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.

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!

The Anatomy Of A Killer Rental Listing

You have a vacancy and you’re keen on getting a great tenant in the unit. You want your available unit to stand out from the crowd in a big way. I mean – everyone does – but, you don’t know where to start to create that element of distinction, and the Instagram photos you’ve taken with your iPhone aren’tk as flattering as you thought they’d look. I’m here to tell you how to really create a great listing and what the anatomy of a killer listing looks like. I’m also going to point out listings that suck and that don’t do landlords any favours.

This is an example of a useless apartment listing screaming NOT to be paid attention to. The two sentences make me want to grab my check book, and the typo for “interested” has convinced me the landlord isn’t very smart either.

First of all – there’s a bit of a misconception out there that you need to have an SEO optimized website, dedicated to a single unit, to “properly” market it. Having a full blown website to market a unit is helpful – sure – but it’s not essential. I mean, it’s a bit of overkill. I’m only saying this because I recently met a perfectly nice person who I got into an awkward debate with about this, as they were trying to push a company in California who specializes in creating websites that include a domain that incorporates your address. “100mainstreetforrent.com” enhances the attractiveness of the available unit, and will create more interest, more quickly”, said the web expert.

Sorry buddy – as Joe Biden says, that’s a bunch of malarkey. You don’t need to buy a domain to rent a place. Real estate agents do stuff like that. The return on something like that is significant if they sell a house. Landlords are looking for the most cost effective ways to market properties for rent – not for sale. I’m here to tell you that you can write up a good rental listing and include some good photos without breaking the bank at all. Whether you’re using our great marketing listings feature – which creates a great one off micro page for your place that you can embed into a Kijiji or Craig’s List ad, or whether you’re just doing a write up on a directory yourself, you might find this useful.

After having worked at an ad agency for a year, one of the best lessons I learned was that words can often times be more persuasive than images, but if you hit the mark with both words and a great visual, you have the potential to do anything.

1. First things first – let’s talk about your headline. That’s your statement – your declaration! It stands on it’s own to attract a renter to read the rest of your listing. I’m a fan of using attractive words – like “spacious”, “clean”, “bright” and “beautiful”. I also suggest always indicating what kind of unit it is – i.e. a 1 bedroom, or a loft, a basement apartment, or a townhouse. Indicating the unit’s rent is also an essential in your headline. You don’t want to cram too much into a headline, or else it will read like War & Peace – and you’re going to lose the attention you’re demanding. Here’s an example:

“Spacious, clean, and bright 1 bedroom apartment for rent on Main Street – $950 per month”

That’s how you do it.

2. Quality Photos are essential. Having photos with a listing is going to quintuple your chances of interest. I’m serious. Not having them is crazy. I’m not saying go out and hire the best photographer you can find – but I’m also not saying that’s a bad idea either. Cost is important to note – but getting some good photos done is a good investment in my opinion. You can use them for years. You can also take good photos of your units by learning a few tips, even if you’re doing it on your iPhone.

This photo is an example of “terrible”. What did a nuclear weapon go off outside? I need sunglasses.
  • Remove Clutter and ensure you’re working with a clean area. Either ask the existing tenant to tidy it up and make it presentable, or get a cleaning done. If there’s stuff on the fridge, take it off. Temporarily remove anything that can act as a distraction from giving a good sense of the room. The purpose of the photographs are to give an impression of the environment, not the decor or the furniture.
  • Turn your flash off. If you’re using your flash, you don’t have enough light in the shot. Flashes suck. They make the place look crappy and washed out. Ensure there is adequate lighting in a space. Even better – take your photos during a sunny day. The more light in a space, the better the sense of the environment.
  • Use a wide angle. They always look better and produce a better sense of rooms.
  • Don’t take shots that look down on a room. Crouch down, or lower the tripod a bit to give a sense of height and space.
  • Use a tripod, or ensure that your camera is steady. This is a given and I refuse to give an explanation as to why this is important. Shakey and crooked shots aren’t going to do any justice to your perfectly nice spot.
  • Take photos of every room and accessible spot. You don’t need to take 1000 images of your rental, but the more articulated the unit is visually, the better the quality of your listing. Get a good shot of the bedroom, the kitchen, the appliances, the number of windows, and a good shot of the exterior of the building.
  • Organize your photos in a bit of a flow – as if you were giving someone a tour of the unit physically.
  • Your first photo in a listing should be a busy place in the unit – like a kitchen or a living room. If you post your first photo of a bathroom, it’s not exactly the greatest first impression. Bathrooms aren’t busy – unless you’re addicted to laxatives.

3. Details are important. Beisdes the obvious stuff, like the breakdown on utilities or what’s included, indicate the location in your listing. People get peeved when they don’t have an address. Give them details about close by amenities. Restaurants. Banks. Grocery stores. Let them know about bus routes. Give them a sense of how walkable the location is. Include or indicate the walk score of the place. Indicate close parks or green space. Provide a sense of the community and it’s benefits. Indicate whether laundry is available. Articulate as much as possible, so that when someone reads your ad, the possibility of a prospective tenant getting that sense of “home” is high.

What other things do you do to market your vacancies? How do you create a snazzy rental listing? Share with us!