All Forum Posts by: Roy N.

Originally posted by Lyndsey Keller:

In our lease, we reserve the right to inspect the property quarterly. In reality, we visit some tenants/properties more than others. As a minimum, we visit all units annually. Most we visit semi-annually and certain ones (student rentals; where a major renovation was just completed) quarterly.

Yes.

Typically, we provide the tenant with a weeks notice and encourage them to be present and bring their list of issues or suggestions for improvement.

We look for signs of water damage (leaky fixtures, etc); broken, malfunctioning cabinetry, windows, and doors; we check all lights, spot check outlets; We test the HVAC and, where applicable, change the filter. We inspect all appliances to ensure the are in good working order and are being maintained in accordance with the house rules. We also test the smoke, carbon monoxide detectors and we applicable change the backup batteries. If the building has a fire alarm and/or sprinkler system it is inspected/tested once per year by the office of the fire marshal.

Personally, I have a reputation for being a little {too} blunt, so I tend to point out things that need to be changed (either by the tenant or ourselves) on the spot. I then follow-on with a letter after the inspection.

I'm with Ned Carey on this one. When I have a tenant like that, there is no lease renewal.

I would have served the required 3-months notice before the anniversary date and start looking for new tenants.

Adam Demchik:

You can bring in your own specialist to perform testing for mould. I've done it a few times, it usually costs us $200 - $400 and has saved us much more than that.

Ben Kahle:

Is what possible, the "crappy five year term" with, or without, a variable rate or incorporating a company around a building?

You should very well be able to incorporate a holding company whose sole asset is an apartment complex, this is done all the time on either side of the 49th.

As for the "crappy five year term", I'm sure if you asked your bank for one, they'd do their best {not} to disappoint ;-)

Ben Kahle

"Crappy five year terms" are the standard in the Canadian market. Rarely do folks go longer than that as the rate delta is just not worth it.

Personally, I prefer variable rates.

If you are purchasing a reasonably sized building ... say 12-16+ units, I would seriously consider incorporating the building in its own holding company. This will open-up additional options available to you when you wish to sell.

If you are fortunate, the building you purchase will be "incorproated" and you can acquire the company rather than the property ... there will be no change of ownership (for the property) and you should not have to refinance.

Torron Brinkley:

Mathew raises an essential point with student rentals. Students typically have insufficient to no credit history. Always insist on a guarantor (typically Mom or Dad) and run a credit check on the guarantor.

With students you should also:
1) emphasize with them that they (all the roommates) are jointly and severally responsible for the obligations of the lease. So it one of them becomes a Christmas Grad, its up to the remaining tenants to carry the obligations of the lease.

2) be clear that only those who are signatories to the lease live at the property. Yes, you can have guests, but if they stay more than 1-2 weeks, they need to be on the lease.

3) lay our all your "house rules" as Schedule to your lease and have each tenant read and initial the rules in your presence.

Our policy is we require every 'adult' living at one of our properties to complete an application and, if successful, be a signatory to the resultant lease. We also require all inhabitants of the property to be listed on both the application and lease.

In practice, we do not insist that adult children who are still attending school (secondary or post secondary) be signatories ... up until the age of 24. If they are still living with Mom and/or Dad at this point, we deem them to the adults ;)

Ty Burns

When you say "ugly brick siding" do you mean the house has a brick veneer (true brick wall built outside the frame) or it has a masonry siding textured to look like stone or brick?

If it is the latter, rip it off and reside the house {also be a good time to look at water/air movement and insulation}. If it is real brick, then you need to determine why it is spalling and disintegrating - usually due to the brick not drying ... common causes are poor drainage plane behind the brick (are your weeping holes plugged) or the brick was reliant on escaping heat to dry from the inside and the interior wall insulation & vapour barrier have been improved.

Mike Reimer

Though I have not lived in Winnipeg since the days when the Perimeter Hwy was actually outside the City (as was Duff's Ditch) ... and when St. James was not quite as rough-and-tumble as it is today ... I thought I'd extend a hello and welcome to BP.

My family are flat landers - some of the first settlers in and around Carberry / Glenboro and to the north by Minnedosa. I still have family there and in the City (St. Vital) and visit on occasion.

Where are your real estate areas in Winnipeg?

Taylor:

If the property is in good repair and there are no imminent large capital expenditures (new roof, HVAC, foundation, etc), then we set aside 10% of the gross revenue each year to service a) on going maintenance and b) build a reserve fund in preparation for the next large capital expenditure.

If the property has deferred maintenance when we acquire it (ie. needs a roof), then we will increase this set-aside to help fund the deferred maintenance. Obviously if we increase the set-aside to 15-20% of gross revenue, something else has to give-up claim to that cash. We expect this to come by way of a lower monthly/annual debt service ... which means a lower acquisition cost.

We use to keep this reserve in an interest bearing account, but grew bored with 1.75 - 2% interest, so we have taken a considerable chunk of it and purchased shares in a large multifamily property company; these shares pay a dividend slightly over 5%. Since the particular company continues to gobble up any building of 25 units or more in our region, we figure this is the least they could do for us ;)