All Forum Posts by: Huong Luu

Hi Fellow REI, Looking for some advice on refunding the last months rent deposit to a tenant. Here is the situation:

Tenant gave 2 weeks noticed before their 1 year lease was up claiming the unit was unhealthy to live in and moved out with 1 month remaining on their lease. They are now asking for their last months back and threatening to report the building to the health unit. Should I return their last months rent so I avoid the headaches. Or stand my ground as the last months rent was applied to the month they moved out. 

The unit is in Ontario, Canada.

Got it. You want the highest repair cost you can negotiate with the seller and the lowest repair cost you can negotiate with the back end buyer. You can structure the wholesale deal so you don't lose anything if you don't find a back end buyer. 

If you want the higher returns, you can get into the development side of RE projects. There are a few out in Canada. They range in ROI from 12-25%. Your involvement in these would be screen the project (do you due diligence). Once you pick, there is no further work for you. The other option is lend our your money as a hard money lender. This will get you 12-15%. You can do this on your own or work with agents. Their fees are paid for by borrower.

In the B&H strategy, don't forget, the monthly cashflow is 1 thing, but appreciation growth is another. 

You can do up a simple excel to calculate this to see where the break even is. Assuming the rooms are the same size, lets say the 4/1 rents out at $450/r, the 3/2 has to rent out at $600 to make the same money. In Toronto right now, you can get $450 easily for a room. If 1 room doesn't rent, you are at 75% occupancy with the 4/1  and 66.6% with the 3/2, and the 4/1 makes you $150/m more. You also need to consider who your clients are and if you want to deal with 3 tenants or 4. Also, make sure the neighbors are not going to be an issue with that much traffic. Good luck.

If you use an agency, they will co-ordinate the 3 cottages for you. You might just need to co-ordinate the cleaners. When I was doing cottage rentals, I used kijiji and craigslist and Cottages in Canada and any we could post (before Airbnb got popular) then we switched to Airbnb. All the while using Excel to track. There are property management software tools available. You can use Zapier to connect them all. 

Best to talk to a CPA. I understand you can minimize the taxes, but you can't avoid it. Would you consider Section 85?

HI Zaher, Alberta is a great market right now depending on which side of the fence you are on and what strategy you do. If you can BRRRR, force appreciation, refi, get a HELOC, repeat and hold on for a few years for the market to improve that would be ideal. If you can't refi or get a heloc or get your money back out to reinvest, then AB is not the best place now. Here is why, you can take your money and invest in another city and get better rental income and appreciation. You don't know how long the slump will be in AB. It could be 2 yrs, 5 yrs, or longer. While in that time, your money will work better for you in another area.

I lived in Edmonton with investments. However I am not buying more in Edmonton due to the above reason. RTO and VTB in AB is a good strategy to consider for AB.

Look into the new hospital area. If you do a search on the BP site for Windsor, you will find a ton of info. Also check out CMHC reports on Windsor. 

Have you considered Kingston? Or is that too far?

@Mahesh Sam Who told you stay away from MF as your 1st investment? From your post string it appears you are looking to do remote turnkey investing, so you are not going to be involved in the daily operations. If that is the case, regardless if you are a newbie or not, MF should be considered as the ROI is better and there are more options. If you are investing locally, you can still consider MF as your 1st investment. However I would suggest you do it as a JV with someone who already is experienced.