Resources for Landlord

As mentioned Real Estate is part of my investment portfolio and Rentals are a sub group of that.  Recently I learnt a lot from a crazy tenant and thought that I'd share one of the most important thing I learnt - where to go to for information.

If you have questions regarding your rights and what you can do as a landlord you can go to Service Alberta's Landlord/Tenants website for information, forms, common questions etc.  If you find this a lot to read you can also called the Service Alberta number (1-877-427-4088) and ask your questions to a live service representative.   

When I was dealing with my tenant I dreaded having to dig and navigate my way through Alberta's Landlords/Tenants Legislation.  The website and the Service Alberta number really helped make things clear.

Read More

My Investment Strategy Part 2 of 3 - Real Estate

No big surprise that part of my investment strategy is in Real Estate.  I invest in Real Estate mainly through rental properties with Sis.  Currently we have three properties in Calgary and one property in Edmonton.  We have two criteria when we evaluate a property for purchase:

Appreciation potential:

• Is this property priced right or under/over priced?
• What is the price we can likely negotiate?
• How long do we expect to keep this house for?  What kind of appreciation can we expect when we sell?
•  Are there any improvement costs we will need to invest immediately to bring this property up to par for renting? 
• Are there any improvement costs we will need to invest over time to up keep or prepare the property for selling?

Cash Flow:

• Will this property be cash flow positive?  i.e. we want the income to cover expenses so we don't have to inject money into the rental monthly.

This is the primary way we invest in Real Estate.  Then we also put a small budget aside for investment in the occasional property flips, and land investment through private companies.

Read More

My Moving Checklist

With the purchase of new rentals and moving so much the last few years, you'd think I go this moving part down.  Yesterday I suddenly realized that I haven't set up Property taxes for our newest rental.  Just plain old forgot for about 2 months.   So I called 311 and they had someone send along a TIPP application (this is Calgary's Tax Installment Payment Plan).  It tells me how much I owe, what my monthly payment is going forward, and of course the penalty for being late on the outstanding amounts so far.  For my forgetfulness, I owe $76.45.

No more penalties I say.  I set out to create a checklist to remind me of things to do before/after possession of a new house and thought I would share this as well.

Moving Checklist

• Set up utilities
• Set up/Move Phone, Internet, and TV services
• Buy home insurance
• Set up Property Taxes
• Set up Condo Fee Payment
• Update Driver License
• Update Car Insurance
• Update Employment Information
• Update Schools & Register for new schools & transfer school records
• Sign up for Mail forwarding to new address
• Sign up for Welcome Wagon (Optional of course.   But is always nice to have a visit with a new neighbor and get some coupons and samples)

Other great checklists, which breaks the list into timelines are:

Canada Post Moving Checklist

Real Simple Moving Checklist

 

Mail Forwarding:

A good way to ensure you don't miss any mail is mail forwarding.  However, you will eventually want to change all your address because mail forwarding is not free.  Below is a list to help you get started in terms of thinking who you need to update your mail with.  Then as you start receiving forwarded mail at your new home you can update the address with the sender.

• Banks
•   Credit Cards 
•  Professional Associations 
•  Memberships (Costco, Co-op, Library etc.) 
•  Magazine subscriptions
• Donations
• Schools 
• Alumni 
• Cell phone 
• Doctors 
• Dentist 
• Friends/Family

Read More

Renovation Finished & SOLD!

It all happened so fast. Our renovator finished the renovations a few weeks ago. While we were waiting for the photographer to take the photos, we put up the for sale sign at the front window. Then before we even had a chance to list, a realtor called. Before you know it we had an offer. This Friday we officially sold the place.

Here are the final numbers compared against originally planned.

Estimated: 
$215,000 purchase
$20,000 renovations (the townhouse is similar to Mom & Dad’s townhouse we just renovated) $15,000 for Realtor fess, lawyer fees, etc.

Estimated Cost: $250,000
Estimated Sale price: $290,000

Actual:
$215,000 purchase
$18,622 Renovations
$19,984 Realtor Fees, Lawyer Fees, Condo Fees, Utilities, Property Taxes, Interest payment etc.

Actual Cost: $253,606
Actual Sale Price: $293,500

So we made $39,894. About $106 less than the $40,000 we estimated. Not Bad! To be honest I think we got very lucky because the Calgary housing market is pretty hot.  But $40,000 good profit so if we had a hard time and the time on market dragged on we were prepared to take less profit.  Also, the rental potential is great for this place so that was going to be our backup plan. 

Now we are pumped to find the next project.

Read More

Update on the Reno Project

We took possession of the townhouse this week.  We already had a couple of quotes for the renovation and decided on a renovator.  He's already started the demolition.  Of course we could make even more money if we did the renovation ourselves but realistically that was not going to happen in a timely manner.  With the renovator, he said he will bed one early February, which is a good time to list it.  If we were to do it, with our busy schedules it won't be done for months.

The renovator's quote was quite reasonable.  Looks like we will still be within the $20K budget including buying new appliances.

Read More

Renovation Project bought!

It's been a long process and lots of waiting.  But the Reno project I wrote about is bought.  We take position in early January.  This is perfect timing because Beau and I will be back from our vacation around the same time.

Read More

Let's buy a renovation project

I’m so excited.  Beau and I put in an offer on a townhouse.   It’s a court sale so I’m not sure when we will hear back.  However, here are the numbers if we get it at the price we want.

$215K purchase

$20K renovations (the townhouse is similar to Mom & Dad’s townhouse we just renovated)

$15K for Realtor fess, lawyer fees, etc.

Projected sale price $290K based on two similar listings in the same complex listed for $300K.  One is conditionally sold.

Projected profit is $40k.  Respectable.  Also, if some things happens to the market and we cannot sell, the economics still works out to hold this as a rental unit.

Read More

Saying Goodbye

Awhile back I mentioned that I was listing my condo.  Well, it was listed on a Friday, and sold on the Saturday.  Tomorrow is possession date.  Beau and I spent this weekend moving everything out.  We finished around 5pm.

When the everything was moved, the floors vacuumed and cleaned, I had a moment to feel sad.  I know it was the right time to let it go, but this was my first condo.  Good bye condo!

Read More

Photo Sessions

Saturday the photographer came and took the photos for AirBnb.  She loaded them last night.  They look great.  This morning I got an inquiry for a week stay.  Coincidence?  Not likely.

While she was there we talked about her taking photos for the sale of the condo when we are ready to sell.  Then tonight Beau saw an unit sold in my building for $10K more than what we were expecting to sell it for last winter.  I think the flood has really changed the real estate market in Calgary.  In view of this new information, I am going to also list my condo for sale.   I scheduled the photo session for Thursday night.  Hopefully we can list the condo on Friday.

Read More

What to do with my Condo

My Condo will be vacant starting October.  Originally, I was going to sell it.  I still plan to eventually, but October is just no the right time for me to sell.  Mainly because I have a line of credit on this condo which I may need for anther purchase in October.  Everything is a little up in the air in so it doesn't make sense to rent it out for a fixed period.

Rather than having it sitting empty until I figure it out, I thought I try short term rentals or executive rentals.  I'm going to do some research.  Stay tuned for more info.

Read More

Property ownership - It's a marathon

Just when I think we can get a break from taking care of rentals related work, our favorite tenants are moving out.  We like them because they are nice people, low maintenance, on time with the rent, and did a good job keeping up the yard and garage they were using.  Unfortunately they are moving out of province.  The thing is they are leaving 6 months before their lease is up.  According to the law they are responsible for paying to the end of the lease.  However, we are obligated to make a serious attempt to try and replace them before that happens.

Honestly I’m just bummed about having to look for more tenants.  This will be the fourth time in less than 5 months.  Oh well.  It's not that bad considering we bought both places, revnovated, and found 3 sets of tenants in those same 5 months.  Property ownership is not a sprint but a marathon.  Look at the bright side.  They gave us lots of time so we can take our time looking for good tenants.

Read More

Rent this house

In the last two weeks we have had quite a few showings for the rental.   However, most of the people that were really interested we did not see enough potential to even run a credit check.  If someone shows up willing to give you cash for security deposit and first month rent provided you don’t run a credit check, not a good candidate.  If someone fills out an application but gets all nervous when you say Social Insurance Number and Credit check, not a good candidate.  If someone shows up with 3 adults and a child for a small two bedroom and one bathroom unit, not a good candidate.  I know.  Who am I to dictate how many people is too many people for a place?  But I am being a little picky with this place because I just spent all this money renovating the bathroom and kitchen.  Wear and tear for four people is very different from wear and tear for two people.

This weekend, we booked six people to look at the house between 10 – 12, and only two showed up.  We have noticed a pattern about showings.  Most of the no shows happen on weekends and especially in the mornings.  In future we are going to do weeknight showings only.  Anyway, it wasn’t a complete waste of time, because the second couple were promising enough to run a credit check.  We called the current landlord for references and everything looks good.  Beau is going to call them today and talk about signing a lease.

As I was telling Sis about this she said are you ready for the next one?  Right now I’m not.  Beau and I spent the whole summer working on our various properties.  He has one of his own rentals coming up vacant end of this month.  I think we are just needing a little break and just run on maintenance mode for a bit.  Before you call us lazy we also have other things we are working on: like jobs, educational upgrades, friends, and family.

Read More

A House for Us

It is an exciting day today.  Beau got his mortgage approved for the place he wants to buy.  This means he can waive all the conditions.  He will get the house mid-October, do some minor renovations to the upstairs, and move in around November probably.  It has not been easy leaving in a small one bedroom with two people, and packing boxes galore.

There are some decisions for me to make.  Do I stay in my own place?  Do I move in with Beau?  What do I do with my place if I move in with Beau?  To tell the truth I’m a little excited to have a whole place to myself again.  Would be great not having to worry about respecting another person’s things, space, and schedule.  I can do whatever I want, whenever I want.

The flip side of that is the both of us will probably spend a lot of time traveling between each other places.  One of us will be living out of a bag no matter whose place we stay.  Also, we’d be paying expenses for two places.

I’m not sure what I want to do with my condo either if I move out.  I had briefly thought about doing an executive rental on my own.  However, after doing the cleaning and renting for Sis and my places, I can’t imagine having to clean and deal with customers on a regular bases.  A good idea would be to sell it.  I see a lot of condos being built in Calgary, and although my building is pretty swank when it was built I don’t think it can compete with the newer condos as time goes on.  But I’ve to reconcile myself to taking a small loss on the place. 

Also I just want Beau to make a big deal and ask me to move in with him.  The first time he moved in it just happened.  I consider it a pretty big milestone for us but we did not even properly mark the occasion. 

Read More

Got my money back

My last update, on trying to get my money back for the property tax over payment, my lawyer said it may be a a couple of weeks. However, it happened sooner than that.

I got a bunch of documents in the mail from my lawyer today. With it is a cheque for the over payment including the $25 service charge.

It's going towards my lump sum payment to the mortgage I'm trying to save for.

Read More

No word from Lawyer yet

I haven't heard back from my lawyer since I called her on Monday.  Probably it's hard to track down the seller now that they have my money.  I will give them a call on Monday to check on the status.

Looking forward to weekend though.  There is an estate sale.  From the pamphlet it looks like there are some interesting stuff so will drop by Saturday.

Sis and Bil are visiting.  Maybe we'll go browsing for furniture and other stuff for the condo.

Have a good weekend everyone!

Read More

Property tax glitch - get my money back

My home buying experience, the closing part, went off pretty smoothly. I think I was at the lawyer's for a whole of 15 minutes to go over the paper work. Well this weekend I found a little glitch. I called up the city to set up my property tax payment. Now during the closing, my lawyer said that the seller couldn't stop the payment for November's taxes. No big deal, they paid November's taxes, I will just give them same amount in the final settlement.


However, when I talked to the tax office, they told me that payment for November was canceled at the bank. Now I'm responsible for November's taxes and a $25 service charge. I don't think so. The morning I called up my lawyer and explained the situation. I forwarded her the invoice from the city, which shows that November's taxes weren't paid, and the $25 service charge. She's going to see about getting my money back. I better get my money.

Read More

Condo & my first piece of furniture

At 630 square feet I would describe my condo as cozy. It's one bedroom, one bathroom with a nice open plan. I have stainless steel appliances and an eating bar. There is a little corner fire place and a huge window in the living room. The bedroom has a decent size window too. Right now the walls are kind of a white with a greyish blue tint. I'm planning on repainting. However, there is a huge list of other things which require money, the painting will likely not happen for awhile.

I made a rule for myself when I bought this place. I will only buy one big piece of furniture (anything requiring over $250) a month. This allows me to save up for the piece of furniture and to take my time looking for the right pieces at the right price. It means I will have to live with a barely furnished apartment for awhile, but it makes the most financial sense to me. This month I already bought my big piece of furniture - the bed. I was planning to get a complete bed with mattress, headboard, and footboard(optional depending on the style). However, when negotiating for my mattress I got them to throw in the metal bed frame and delivery on top of a discount. Essentially it's a bed, just without the headboard/footboard. I think I can live with that until I find a suitable headboard I like.

I went shopping with Sis who was visiting. Then when I decided which mattress to buy she said she is going to buy it for me as her and BIL's housewarming present to me. It is very generous and totally unexpected. It feels good to have such supportive family. Also, I'm going to be a good PF blogger and save the money I would have spend on the purchase for that extra yearly lump sum mortgage payment I can make.

Read More

Condo offer Take 4

This offer followed closely after the previous offer, but I didn’t want to write about it until now. I’m sure you’ve guessed why. Because I don’t want to write about until I know that I have it for sure. Here are the details.

After the last offer fell through, we immediately put in an offer for this place. The only reason I chose the last one over this one was because of the price (this one is a little more expensive but for good reasons).

I’m going to use some numbers to make things easier but just remember I subtracted x amount from the actual price. This is because I’m not sure the blog is anonymous anymore. The listing price was $80K. After looking over the comparables, we decided the maximum we are willing to pay is $70K. My agent suggested putting in an offer at $58K to give us room to negotiate.

It was Saturday on Thanksgiving weekend that we heard back from the seller agent. The counter is $70K and it’s a pretty final offer. I understand the seller agent had to give up some of his commission in order to get his client to $70K.

There were some discussions over the comparables because apparently we were all looking at the same ones. After pulling up some blue prints etc. my agent figured out we were right. She suggested we try one more counter at $65K to see if they are bluffing. I agreed and off she goes to call the other agent.

Since it was Thanksgiving Weekend everyone was visiting and wanted to see the listing photos. I showed it to them along with photos of another unit on sale, on the same floor, same square footage, layout, and listing price, facing a different direction. Low and behold the other unit dropped their price to $69K!

Here is how I worked it out. We already made the offer at $65K, and if they accept that’s it.

What if they haven’t accepted? I strongly believe they haven’t because they were pretty firm on $70K. If this is the case my agent thinks I have two options: cancel this offer and make an offer on the other unit; or stick with $65K as our final offer. I asked if we could go back and lower our offer. My agent said but they already know we are prepared to pay $65K for it so there is no leverage. Ah…I don’t think so. I was willing to pay $65K before the other unit lowered their price. I mean the listing price of the other unit (from which we negotiate)is already lower than the final offer of this unit.

So I told her to call them back ASAP. If they’ve accepted our offer of $65K then there is nothing we can do. If not, then explain the situation and say our offer is now $63K. If they accept then we have a deal. If not, then we will make an offer for the other unit right away.

Guess what happened? They accepted the $63K.

A friend of my said if that happened to her, she’d be so offended that she'd walk away from the deal. I guess. But I don’t think the offer would be any different for the next buyer since there is a good comparable at a lower price. And you’d have to pay condo fees, taxes, mortgage etc. on a vacant apartment while the next offer comes along.

That's the story on this place. Also, the other unit went Pending two days after us. The final price on that one ended up being $62.5K. I got the keys this Friday. I am slowly moving my things in. I'm so excited. Sorry all. No photos. But I will try to give a better description soon.

Read More

Closing day

I'm a home owner today! I've been dying to write about this but didn't want to jinx it. Today it's official. I bought a condo. I will write all about the offer and negotiations soon. Have a happy Halloween weekend!

Read More

Offer on a condo - Take 3, the conclusion

An update on this offer. My agent got back to me with the counter offer, which they specified as final offer. It is $20K more than my offer. I seriously considered adding another 5K to my offer – I think the searching is wearing on me and I had thought I would be done after this.

However, the rational side of me took over from the emotional side of me (thank goodness). To begin with my first offer is 5K higher than what I think it should be at in an effort to put in my best. To counter offer by adding another 5K, puts me at 10K. Then they'd probably come back with a counter offer and I have to increase it some more. Likely I will be paying between $10K – 15K more than I wanted plus at least another $10K to upgrade things like the dirty carpet etc.

So finally I decided against putting in a counter offer. Putting in $20K – 25K more than a place is worth is a lot. Especially since I'd be living in construction during the upgrade as well. That was my Thursday night.

Read More