Tag: property management software

B.C. RTB Rent Increase Creating Tough Dialogue With Politicians

Much Like In Toronto, The Issue Is Supply

As per the CBC, The B.C. Residential Tenancy Branch has set the maximum allowable rent increase for 2018 at four per cent — making it the largest potential rent increase in five years. Much like in most other provinces in Canada, each year, the branch sets the maximum allowable percentage by which landlords are legally permitted to increase rents. An increase of more than 4 % has only occurred four times in the last 13 years. 4.6% in 2004. 4.0% in 2006 and 2007, and 4.3 % in 2012. This has raised the eyebrows of politicians in the province because of a pronounced rental housing crisis in Vancouver.

According to data tracked by Canada Mortgage and Housing Corporation, rents in Metro Vancouver had a sharp increase of 6.4 per cent in 2016 …. even though the rental cap that year was 2.9 per cent in 2016. Rent increases are typically capped at two per cent plus inflation, but this only applies to month-to-month tenancies. The big increase is explained by landlords typically asking for new fixed term leases after an initial one lapses. Fixed-term leases lock-in renters’ tenancy and rents for a set period of time (typically a year). When they expire, a renter’s tenancy automatically becomes month to month. But many fixed-term leases feature “vacate” clauses, requiring tenants to move out when the lease expires, unless they sign a brand new fixed-term agreement, which gives landlords the opportunity to jack up rent beyond the RTA limit. If tenants refuse, the landlord simply finds new tenants, at whatever rent they want. Unlike evictions, which require two months’ notice, the lease expiry date is legally considered sufficient notice for tenants to move on. Since there is such a low vacancy rate in Vancouver (it was characterized as a crisis last year), landlords are able to effectively employ this approach.

Selina Robinson, B.C.’s housing minister, is exploring lessening the annual rent hikes landlords are allowed to apply to tenants in the province.  She’s worried about rental affordability, something her party campaigned upon in the May provincial election. The NDP promised to build 114,000 rental and co-op homes, and give renters an annual rental home credit of $400. The City of Vancouver estimates that it will need 55,000 new rental suites in the next decade.

Robinson said legislation to fix that loophole is coming this fall. Landlord B.C., the association representing landlords in the province said it’s supportive of Robinson closing the fixed term lease loophole, but that lowering the maximum rent increase rate will simply be another disincentive to property developers considering building rental buildings, who may then decide to build condos instead.

“We’re obviously not insensitive about the current dilemma of the housing and rental housing crisis, but the frustrating part is we’ve been talking about the need for supply for 20-25 years and nobody listened to us. And we were predicting the challenges we’re seeing today. And this would be the wrong time to target that specific item.” – Dave Hutniak, Landlord B.C.

Liberal critic Sam Sullivan said he’s concerned to hear Robinson might be changing the maximum rent rate because the NDP did not campaign upon such a promise in the election.

“It’s a very popular short-term thing to do. But the long-term result can often be quite negative.”

The real issue in Vancouver, and why this is all such a big deal, is supply. There simply isn’t enough. Even high rents are generally cheaper than mortgages. As well, rentals end up being 100-per-cent used for housing local residents, a distinct advantage in a region where many are irate about the high level of investor-owned vacant condos.

Metro Vancouver housing planners estimate that, of the 18,500 new households that arrive in the region every year, about 6,500 need rentals. About 1,500 can afford high-end rents, the other 5,000 can’t. And only about 1,000 units a year are being built, almost all at the high end.

Acorn Calls For Burnaby Standards Of Maintenance Bylaw

Burnaby, British Columbia renters require more protection against landlords who don’t keep their rental units safe and healthy, says ACORN Canada. The reason? Landlords are sometimes keeping their rental units is abysmal shape – affecting low income people the most. Acorn Burnaby chairwoman Monica McGovern said the provincial Residential Tenancy Branch’s lack of enforcement is very well documented, and that has driven some cities to create their own bylaws to levy fines against landlords who don’t maintain their properties.

“We want an act because the province and the residential tenancy branch doesn’t seem able to handle the issue,” McGovern said. “We want the city to take responsibility.”

Read the story at 24 Hours Vancouver here. You can also read about the issue at the Burnaby Insider here.

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. Looking at the broader scope of maintaining property investments, it’s essential to consider the value added by regional expertise. Engaging a service such as https://www.gh-propertymanagement.co.uk/ can make a significant difference in how effectively your properties are managed. These professionals bring a comprehensive understanding of local laws and tenant needs, which is indispensable for maximizing returns.

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.

Ottawa’s Vacancy Rate Has Almost Doubled Since Last Year

Landlords  in the national capital region – take notice! Ottawa’s vacancy rate has almost doubled since last year according to this piece by the CBC.

John Dickie, chair of the Eastern Ontario Landlord Organization, estimates there are roughly 4,000 empty or soon-to-be empty apartment units in the capital. Last April, the vacancy rate was reported to be 2.1%. This year – it’s 3.7%. That’s a pretty sharp increase. To top that off, the Ontario LTB announced  yesterday that the allowable provincial rent increase for 2014 will only be 0.8%. You can get the lowdown on the guideline from the Ministry of Municipal Affairs and Housing website. This is the lowest rent increase since 1975.

In an effort to paint a fair view of the situation, here’s some interesting stats to chew on, courtesy of the Ministry’s site:

  • The average rent increase guideline from 2004 to 2013 was 2.1 per cent. The average rent increase guideline from 1993 to 2003 was 3.1 per cent.
  • The guideline is calculated under the Residential Tenancies Act, 2006, which came into force on Jan. 31, 2007. The calculation is based on the Ontario Consumer Price Index, a measure of inflation that is calculated by Statistics Canada.

The province has committed itself to making a push for affordable housing for Ontario tenants, amid what The Toronto Star reported as a crisis across the province, 4 days ago.

Here’s the kicker with all of this – the rental market vacancy rate is calculated by looking at apartments in buildings that are three units or larger, and does not include condos or homes for rent. Uncertainty in the national capital region’s public service job market is speculated to be lending itself to the rise in the rate. Some analysts also suggest the increase of condo rentals could be contributing to the high vacancy rate as well, as condo units compete with traditional apartments. Kind of hard to dispute this if you ask me. Condo landlords are offering tenants pretty nice amenities and brand new units. This is all kind of upping the game for landlords who enjoyed minimal efforts with marketing centrally located units that kind of leased themselves.

What do you think? Share your comments and thoughts.

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.

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. Work with the best builder who can make your dream home construction in Toronto and who can add the touches you want in your home.

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!

 

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. It is also advised to seek chicagoland water heater repair services before winter comes. This will help ensure you won’t have any issues with your water heater throughout the winter.

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?

  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. However, if you notice the water softner not working, it’s crucial to address the issue promptly to avoid unnecessary water wastage. Visit sites like https://diamondh2o.com/residential-water-treatment/drop-systems/ to know more about drop water systems.
  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. Knowing what causes a toilet to leak from the bottom can also prevent costly home repairs.

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?