Tag: property management software canada

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

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

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

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

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

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

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

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

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

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

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

The Stripper With Dirty Feet: A Tenant From Hell Story

Came across this great post by Mike Holman at Money Smarts.

The story is by Rachelle Berube over at Landlord Rescue – who runs a wicked blog that’s both funny and highly informative. Anyone making rental property management humorous deserves a Pulitzer in my books. There’s a bunch of other gems here too – like the Ultimate Guide To Giving Your Tenant Proper Legal Notice To Leave Once Your Property Is Sold or this hilarious post about renting to friends and family.

RCMP Warns Alberta Landlords and Tenants About Kijiji Rental Scam

Came across this informative piece courtesy of the Alberta Landlords Association. The RCMP issued a formal warning to landlords and tenants in Canmore, Alberta about a Kijiji scam. I took special notice of this, because this is the kind of thing that gives landlords a bad name.

Culprits posted ads on the classifieds website Kijiji advertising houses or condos for rent, with all money transactions completed through e-mail. The victims were advised that 24 hours before their arrival, they would receive a pin code to enter the property. But in one case, after thousands of dollars was transferred, all correspondence halted before a pin code could be sent. Further investigation found that the properties were never really in fact for rent in the first place (big surprise).

A similar occurrence was reported in Halifax. Check this out. There’s a nice Soundcloud clip of a rundown of how it occurs courtesy of Scott Simpson with the Halifax Regional Police.

Unfortunately, this has become a common thing. Similar incidents have occurred in Montreal, Winnipeg, and Calgary.

Most of the cases involve a landlord out of town, unable to show the unit, who asks for a damage deposit or first and last month’s rent to be wired to them. Sometimes – as in the case in Calgary listed above, someone has the gall to show up and actually conduct showings on a unit, and then ask for money.

The ALA has some valuable tips to share on how landlords and tenants can avoid getting caught up in these kinds of messes. Tenants should ask to see the property before committing anything financially, and receive a receipt for any monies given. Landlords should make sure tenants know who they are, where the property is, and give a receipt for any rent paid.

Hub Pages posted a nice little ditty on how to avoid getting scammed here. Kijiji has also posted some valuable tips on how to avoid getting victimized here.