All Forum Posts by: Roy N.

Kelly,

Not to sound flippant, but we do what needs to be done ;)

We have been fortunate recently to have our units re-leased prior to their coming vacant - we've have very cooperative tenants which has enabled us to show the units as soon as we receive notice (3-months) the current tenants are leaving. This also gives us an idea of what needs to be done to the unit prior to the new tenants taking residence.

As an example, we just had two units come available at the end of April - both term leases, so we knew they were coming.

1) In one instance we had significant renovation planned - finishing the basement into livable space - and have signed new tenants for August to allow the time to get everything done.

These tenants hired their own cleaner and returned the place to us in excellent condition.

2) The second unit was coming free for the first time since we purchased the building. We had planned to repaint in our standard colours, re-grout the bathroom and replace the refrigerator. When I did the exit inspection with "the boys" there was junk left everywhere, the hardwood floors in the main hallway and living room were damaged {couldn't see the damage before due to area rugs} and need refinished and the fridge, which we had planned on replacing anyway, turned out to be {basically} ruined. On top of that they left a dozen bags of garbage on the back porch.

I took pictures, we both signed the exit inspection report, and I advised them not to expect to see much of their security deposit returned.

We then had to call our new tenant, who was due to move-in for June 01 and see if we could push her tenancy back until July ... fortunately she was able to accommodate this ... especially since we are going to refinish all the hardwood floors throughout the apartment.

This was an example of where a basic turnover: rekeyed locks; new/touch-up paint; and a thorough scrub turned into a mini-renovation and the loss of a month's rent :(

We use a separate short-term agreement addressing the storage space until the start of the lease proper {this is so they can get Tenant's insurance for their stuff in our property}. We also require they carry Tenant's insurance.

Glenn Espinosa:

How much effort do you expend on air sealing? For example, are all those pot lights boxed, wrapped and insulated from above?

We also perform energy efficient renos on our properties ... we have a core objective of increasing the efficiency of the properties we acquire by 40% or better. Thus far our lowest has been a 42% increase and our best boost a 69%.

Rick L., Stephen White :

In our application we also give the client a section to voluntarily disclose & explain anything that will/may arise from our background & credit checks.

We also require a $20.00 application fee - this covers ~50% of the costs of the checks we perform. If the applicant is successful and signs a lease with us, the $20.00 is applied towards their security deposit. I find the combination of the formal application w/ credit and background checks along with an application fee weeds out the price shoppers and many of the problem tenants before we invest any effort in qualify them.

Katherine Wieser: I presume you will hold this property personally, in which case your tax situation will be better than the nominal 44% rate affixed to passive income ... but it will still be above the 15% in John's model.

John:

Except her utilities are $6857.00 and her income tax burden will be double your assumption.

Mario Cantu:

While I also ask callers if they are familiar with the area and property, I also ask them to send an inquiry to the e-mail address in the online advertisement.

When showing a property, we setup a dedicated e-mail address for it. When a prospective tenant sends an inquiry to that address, an auto-responder sends them information on the property (floor plan, neighbourhood info, etc) along with our application form.

Bill:

I was just trying to let Thomas know there are folks here who speak his mother tongue - in the event he encounters a situation where he cannot quite express what he wants to in English. Though his written English is very good.

I'm one of those, not so rare, Canadian anomalies who learned to speak both English and French growing up, but my formal education was in English, so my writing skill is very weak in French.

Now, if I could only digest a portion of the information you share here regularly, I'd be beyond my private funding hurdle.

BTW: Who's Ron ;-)

Thomas Bernard:

Il est mon plaisir de vous souhaiter bienvenu chez "BP".

Je serais très intéressé au sujet des différences en achetant les immobiliers en France.

Veuillez excuser ma grammaire, alors que je parle toujours le français, il a été des années puisque j'ai écrit en français.

Scott W.:

We tend to be conservative in our analysis and use
- 8.33% (1 month in 12) for a vacancy allowance;
- 10.00% for maintenance and CAPX
- 7% for property management

I realise this is part of the reason I am not finding "deals" in our local market ... but I'd rather pass on a property than have to run on a string.

Because of the low vacancy rate (2-2.5%) most folks around here (including the mortgage brokers and banks) are using a 4-5% vacancy allowance. Also most vendors have no CAPX/maintenance set-aside in the "numbers" the provide us showing how wonderful the property is ;-)