Edmonton Real Estate Investor: tenants

This was an ad posted on Ontario's Kijiji site. A one day rental for a house party. Entrepreneurial idea and hey I might do it if the damage deposit was big enough. Heck you can even go to the party - sounds "win-win" to me. Love the smokers and tokers part! They'll probably be to hungry to destroy anything.

Wanted: House Needed For 1 Day

Date Listed 02-Jan-10
Price Please contact
Address Scott St, Whitby, ON, Canada
View map

I cant throw a party at my house, but im willing to pay someone to use their house for a party. they can be present, there will be a list, and people will not be allowed in if they are not on the list. if you want you can bring your own people to this party. it is my bday and i just wanna throw a huge party. house should have a backyard for those smokers and tokers.

What do you think rent or don't rent?

Ontario investors saw their 150-year-old investment property trashed by unscrupulous tenants. Animal carcasses, toilets rigged to run continuously, a mountain of garbage and an incredible mess are the legacy left behind. Unfortunately, it took 14 months to get the tenants out, by that time they had all but destroyed the beautifully renovated and furnished property.

Lucky for us Alberta has this country's most owner-friend tenancy act. You can get good-for-nothing tenants out in much more quickly than 14 months.

The thing to learn from this is to diligently screen your tenants and keep checking up on the property. Do whatever it takes, within the law, but make sure you or your property manager gets into the house every once in a while to make sure there is nothing going awry.

What a shame.

I was delighted to see that Don R. Campbell updated his blog recently. The newest post shows how to be a successful investor rather than a statistic on the MLS - care about your tenants.

"That means that the absolute first step in becoming a sophisticated real estate investor is to begin to think of your tenants as clients or customers. Without them you do not have a successful business no matter how hard you work or how many properties you own. Change your thought paradigm from tenant to customer and your marketing and business opportunities will begin to grow exponentially." Don R. Campbell

REIN (Real Estate Investment Network) actually has a series of publications that help you rent your properties and treat your tenants in a way that keep you the most tenanted and talked about property on the block.

Photo Courtesy Edmonton Sun

I woke up the other day and, of course first thing, checked my email. My mom sent me this link with the ominous message of

"Do you see why I am terrified of renting?"

I keep suggesting that she rent out her house instead of selling it, the passive cash flow is a great source of supplementary income for retirement.

So I click on the link and read this,

House Left Covered In Crap - Landlord found post-eviction 'nightmare'

What a title! The images it invokes...not pretty.

The landlord rented the upper suite unit to a young woman, with three cats, for two years. He was unable to get references because she had just moved out of her parent's home. After an eviction notice due to unpaid rent, he came to change the locks only to find this:

"A "nightmare" of cat feces, garbage and a small pet cemetery greeted landlord Dennis Hillman when he went to check whether an evicted tenant had vacated his west-end rental suite Sunday."

"So revolting was the mess left in the three-bedroom main-floor suite at 8756 151 St. that the fire department refused to enter when Hillman called them yesterday, out of concern for the firefighters."

"Filth and trash coated the carpets and floors and the bathroom door wouldn't even open due to a mountain of trash."

"Cat litter and piles of cat feces were strewn throughout the suite and a couple of syringes were left in a bedroom."

"Perhaps the most disturbing discovery were several dead pets in cages in a back bedroom."

This kind of mess doesn't happen overnight. It takes care and attention and it would NEVER happen in one of our suites. Our property manager is diligent and we insist that she go through the houses about twice a year to see how the properties are faring.

The landlord said he didn't realize the state of the house because the curtains were always closed. However, the poor lower suite tenant got so used to the horrendous smell that she didn't even notice it anymore.

If you have a great relationship with all of your tenants they will tell you about the funny smells that you may be missing.

The lower tenant may have to move out during cleaning; due to the health risks posed by the parasites found in cat waste that can be passed to humans.

This is the worst scenario for a landlord - an empty rental property with extreme clean up costs and mortgage payments that still must be made.

To Read Full Article Click Here

New to land lording?

It isn't a walk in the park but it also isn't all 4am broken toilets. In fact it has never been 4am broken toilets for me. One reason is that our properties are managed by an outstanding property manager. Caroline is incredibly efficient and really good at anticipating any work that may have to be done. She deals with all the day to day stuff so we can focus on the big picture.

So my first bit of advice is:
1. Get a property manager- if you are too busy now with work, kids etc then adding property management into the mix will be too much. A good property manager is hard to find so get references and check them. Their rates vary but are in no way indicative of the PM's quality, an expensive PM isn't necessarily the best- just the most expensive.

Tenant blues?
Tenants are your business partners. They take care of your investment and hopefully leave it in a condition that builds equity into the property rather than decrease value. Singularly the most important part of your real estate experience should be to find quality tenants. The ideal situation is to build a relationship with your tenants where you provide safe, clean, attractive housing and they proctect your asset.

2. Screen, Screen, Screen
Check your tenants out like your are going into business with them because you are.

*Get references and call them. Past landlords not current as they might try to pass along a problem tenant with a good reference

*Photo copy their ID and keep it on file. If you can't spell their name you can't take any legal action against them.

*Know everyone who lives in the property and get their names first and last. If the person who is on the lease leaves but her roommate, who isn't stays, you are in a bad way legally. Get everyone on the lease again get ID.

*People look good and dress nicely but it doesn't mean they keep their homes that way. Visit your potential tenant at their current residence so you can see them on their home turf.

IF You have good tenants, TREAT THEM WELL.
They are like gold. Let them know that you appreciate what they are doing.

3.Treat Good Tenants Well-We give our tenants rewards for long contracts or for a house well maintained. If they have to move we try and help them get into one of our properties in their target location.

Useful Links:
REIN-an incredible group of investors who together own over $1 Billion in Canadian Real Estate
Landlord Source Center-a lot of resources for landlords including a bad tenant list.

"Every renter in Alberta is in danger of being gouged because of the Conservatives' refusal to protect them from huge rent increases," Martin told a news conference. "This government has chosen to listen to the interests of the big landlords and real estate investment trusts like Boardwalk rather than those of ordinary Albertans,..." NDP MLA Ray Martin Edmonton Sun Opinion Kerry Diotte

I'm just not feeling it. Of course the newspapers are on and on about the evil "Big Landlords" who are raising rents $500 a month, twice a year. What about the last 3 or 4 years when rents were next to static with little or no rental increases? The rents are finally catching up to the market, a market that did a 52% increase last year and 16% so far in 2007. Many properties still carry negative cashflow.

The Alberta Affordable Housing Task Force decided to not enforce rent control because in the end it doesn't work. It stifles new building and in the long run reduces rental units available.

"However, Mike Chopowick, of the Federation of Rental-Housing Providers of Ontario, said rent increases are often the result of costs, like utility or maintenance costs, that "are beyond the control of landlords."

Rent controls for Alberta, he said, "are certainly ill-advised at this time. It looks like a knee-jerk reaction."

The holidays are a great time to show appreciation to your equity building partners - tenants. Good tenants can really make or break your investment. They take pride in their home and it shows in the neighbourhood and in your returns. We often give our tenants gift certificates, movie passes and long term tenants get turkeys or other holiday fare. Of course the tenants that call at three am with the toilet plugged get a plunger.