All Forum Posts by: Andrew Cameron

Can you check with any of the other property owners who have wells to see what their water flow is like? Or a local well drilling company to see what their experiences out in that area have been? The cost of a well can vary a lot. Having a sense of how other property owners have faired can let you put in a more accurate budget number for your well.

To all the Canadian investors out there, has anyone come up with a creative and LEGAL solution to claim back the HST ITC's on expenses for residential real estate? I've been a landlord for 7+ years and own over 120 properties, and this has been one issue that has bothered me from day 1. Just wondering if anyone's come up with a solution.

Before you hire an assistant please question why you want an assistant. Are you expecting to hire the assistant and have them get you organized, or do you have tasks that you can give to them directly to do? A few years ago I had to get myself more organized. I convinced myself that If I hired an assistant they would help me get my schedule and myself organized. I went a head and did it. I hired a Virtual Assistant for 10 hours a week. I sent my VA a list of tasks on the first day, and they plowed through that list. I tried to enlist then to get me more organized, but they wanted guidance on everything that they were supposed to do. Needless to say, they sat around with out work to do while I figured out how to get myself organized. It was a waste of time and money on my part. Please learn from me, and don't waste your time or money. If you are looking to get more organized search out a coach or a mentor. Just be prepared to do the work they give you. Once you've done that work, then hire the assistant!

It looks like, if you convert from MCF to kWH,  for the equivalent energy consumption you'd pay $41 in electricity vs $9 for gas.  That seems like a no-brainer.

The next question is how to distribute the heat.  You can either use duct-work or hot water.  

With Duct Work you'd use a natural gas furnace and obviously run the hot air distribution lines and cold air returns into each unit.  The downside to this is duct-work takes a lot more space and needs to be factored in to the design of the four-units.  Installing multi-zones on a furnace so each apartment can control their own temperature can be challenging and more expensive than with a boiler and hot water.  Double check the cost on this too.  

The other thing to consider when installing ductwork, and you'd have to talk to your local building official, is penetrating through fire separations.  Where we build in Canada, each unit needs to be separated with a 1 hour fire rating.  If you're running ductwork through the fire separations it will cost you more to have the correct fire dampers in place.  Just something that I'd suggest asking about before committing to this course of action.

With hot water, you can do either hot water baseboards or in-floor heat.  You'd install a natural gas boiler for these systems.  The advantage of in-floor heat is it runs at a lower temperature (110-120 F) vs hot water baseboards which run at (180 F) meaning it should consume less energy to operate.   There are also lots of aesthetic advantages of in-floor heat, and you may be able to charge a premium rent for in-floor heat.   The disadvantage to infloor is you'd need to do a concrete over-pour on the 2nd floor.  (You can run the in-floor heat pipes between the joists, but you lose a lot of heat into the floor cavities and have to run at a hotter temperature.  I don't recommend this solution.)  Both in-floor and baseboard are easily zoned so each unit can control their out temperature.  

More than likely the easiest and most cost effective method  is to install a natural gas boiler and hot water baseboards throughout the building.  

Have you checked with any local installers yet?

We have reached a point with our properties that we will have essentially built a property management company to look after our own properties. With a little more effort, and maybe one more staff member, we could look after other people's properties. However I'm unsure about the actual business side of being a property manager. For example, do you hold cash from the landlord in reserve for maintenance, etc. I know how to do reference checks, rent apartments, etc. I'm looking for tips and best practices, I don't feel like learning everything by trial and error. Does anyone have suggestions of books or resources that talk about the business side of running a property management business?

Good to hear that it worked out for you without major repairs or work.

If you get the 10" rough-in toilet, can you notch the drywall and wall behind the toilet? Maybe you can shave 1/2" to an 1" out of the wall so the actual tank is recessed into the wall. If recess a large enough area you can make it look like it was intentional.

One thing I am slightly concerned about is your comment that you don't want to sell because you'll have to pay capital gains tax.  My Dad always says, "you never go broke paying taxes."  Yes, you'll have to pay capital gains tax, so you'll pay a percentage of your sale price.  But, you'll still end up much further ahead than where you are now.  (I'm Canadian and don't know the tax rates in the US.)

Now, if you build the rentals will you have to pay tax on the income you make from renting them?  And will that be at a higher rate than the capital gains taxes?

The other thing I always and document when looking at deals are the assumptions that I made. This way I can question them to see what the probability of hitting my numbers are. It can also identify any problems with your logic and analysis.

Thomas Hickey yes you do need to keep the backup heat source. Heat pumps also give you A/C in the summer time. Not sure what your summer weather is like, but could be another good selling point for your apartments!