Category Archives: rental suites

Liberals look to ease affordability concerns with release of housing strategy

Liberals look to ease affordability concerns with release of housing strategy

The plan will put a heavy focus on housing supply building tens of thousands of affordable housing units over the next decade and repurposing other cash to maintain housing supplements.

There are expectations that the plan will also include a new portable benefit that low-income renters can carry with them through the market.

Those are just two of a number of anticipated measures aimed at making housing in Canada more affordable, particularly for the 1.7 million households that are forced to spend more of their disposable income than they should on housing.

Prime Minister Justin Trudeau will be in Toronto to unveil the details of the plan, while Social Development Minister Jean-Yves Duclos travels to Vancouver to make a simultaneous announcement on the West Coast to mark National Housing Day.

Recently released census data found that 1.7 million households were in “core housing need” in 2016, meaning they spent more than one-third of their before-tax income on housing that may be substandard or doesn’t meet their needs.

Outside of Vancouver, the cities with the highest rates of core housing need were in Ontario. In Toronto, close to one in five households were financially stretched the highest rate of any city in the country.

The government hopes that building 80,000 new affordable rental units, along with billions more in spending over the next decade, will lift 500,000 of those families out of core housing need and help a further 500,000 avoid or get out of homelessness.

The details of how the spending will roll out are of keen interest to housing providers and cities. Municipal leaders have been meeting with federal officials this week to talk about the national housing strategy.

The Liberals laid the financial backbone for the plan in this year’s federal budget, promising $11.2 billion over a decade in new spending. About $5 billion of that money the Canada Mortgage and Housing Corp. is expected to turn into $15 billion by leveraging $10 billion in private investment.

Still, most of the money won’t be spent until after the next election in 2019, which concerns anti-poverty groups.

Those groups are planning demonstrations in multiple cities today, demanding the Liberals spend the full $11.2 billion before the next election.

Source: The Canadian Press

Liberals look to ease affordability concerns with release of housing strategy

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Calling in the pros – Implementing a successful property management

Implementing a successful property management system is vital to the longevity, health and overall profitability of your growing portfolio of investment properties. Property management systems come in all different shapes and sizes, and can be completely tailored to your specific portfolio needs and wants. Rather than examining these different systems, which could take up an entire magazine, I want to explore three ways to increase your ROI by taking advantage of professional property management.

1. Set realistic expectations from day one
In my view, hiring a professional property manager is very similar to hiring an employee. You wouldn’t give a new hire a vague description of their tasks and responsibilities and then let them manage their job any way they want. You would give your employee a clear definition of their role and show them the kind of results you expect.

The same is true when engaging a property manager for the first time. The following are five simple questions to ask your PM – and yourself – as you’re working out the relationship. If everyone can answer every question definitively, you know you’re on the right track:

  • What is needed?
  • Who is doing what?
  • When will it be done?
  • How will it be done?
  • How much will it cost?

This may seem like a lot of work when you’re just getting started, but completing the above exercise will eliminate the roadblocks, misunderstandings and accidents associated with starting a new professional relationship, and will ultimately improve your ROI.

A professional PM will usually have all these roles pre-defined in their contract, but that doesn’t mean they can’t be challenged or negotiated to better suit your needs. Communicate above and beyond to maximize your results.

2. Hire a superintendent
This can be a hot topic depending on who you talk to – some investors dismiss the idea of hiring a super outright, and some absolutely can’t operate without theirs. I believe that if handled correctly, using a superintendent can be an effective management strategy for a medium to large building, especially if done in tandem with professional property management.

The greatest advantage of superintendents is that they live on site. This is extremely convenient when small issues arise that need immediate attention, like a spill in the hallway that needs cleaning or a tenant who needs to give you cash. For small, more regular tasks like mopping hallways and shovelling walkways, a super is usually the most cost-effective and efficient method. In my experience, waiting for your PM to deal with small items can take too long and not be as cost-effective.
I prefer my super to have a smaller role, meaning my PM handles all maintenance calls from tenants, major renovations, rent collection, tenant placement and regular reporting to me. It’s important to ensure the super is not impeding the job of your PM and vice versa. Each have their roles and should be complementary to each other. The PM is in charge, and the super is there to assist when needed, along with tending to a short list of responsibilities.

This PM-plus-super system frees up more time for me to focus on strategy, grow my portfolio and create value in my current assets. My accountant also appreciates the efficient system, as we save a fair amount of money on minor property maintenance with a super in place.

3. View property management as a service, not an expense
This is more of a way of thinking than an operational guideline. This particular piece of advice stems from years of wrestling with the same question over and over with my group of investors: “Paul, I like the property, and the numbers make sense to me, but when you factor in the cost of property management, the cash flow decreases, and the numbers are just average or below par. What do you think?”

There is no way to avoid the cost of property management. Either you are going to engage a professional to do it for you and pay for it out of the property’s cash flow, or you will handle the property management all on your own. You may think this will save you money or make your property more profitable. If you have spare time and energy and want to learn the business, I would encourage you to take on the PM responsibilities. However, if you’re busy with your career, family and lifestyle, like many of us are, by taking on the day-to-day management of your properties, you’re doing yourself a massive disservice.

Whether you pay a professional PM or not, it’s still going to cost you the same or more. By taking on the PM role, you’re going spend your own time, energy and gasoline and take away quality time for other activities you could be pursuing, like spending time with your family, getting some exercise (mowing the lawn doesn’t count), reading a book or sleeping. This may not sound like traditional ROI, but since most investors get into real estate to improve their lives, not just their bank balances, finding a good property manager will provide these other, highly attractive returns.

You cannot avoid the cost of property management. You either pay in dollars or you pay in your own time and energy. Either way, it must be done properly.

Source: Canadian Real Estate Wealth Magazine –  Contributor 14 Nov 2017

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Five ways to maximize your investment property

Wasim Elafech of Century 21 Bravo Realty in Calgary is among the banner brokerage’s top sales agents in the world. Century 21 operates in 78 countries with over 100,000 agents, and Elafech managed to become their number one unit producer in 2015 and number three in Canada last year, so he knows a thing or two about getting the best bang for your buck out of a rental property. He shared some of those tips with us.

1. Maintain the property
Elafech says some he’s sold properties to clients who in turn rented them out, but without putting in the necessary work. “The work you do doesn’t have to be expensive, but it has to be brand new,” he said. “It will be liveable but it won’t look good. The floors will be cracked or peeling, and when people walk in they get the impression it’s a rundown property, but they won’t if you do the work. Make sure all the fixtures work, that they’re not broken; make sure door handles are loose or need to be replaced. If the place is well-maintained, 100% of the time you’ll get more money for your rental.”

Elafech added that properties are often reflections of the people who live in them.

“A really good tenant won’t look for a rundown place, first of all, so they wouldn’t take that place. You’ll attract the type of people your property looks like. People who accept living (in shabby properties) aren’t the best tenants.”

2. Bungalows yield higher rents
Bungalows are excellent rental properties because the top and bottom floor can be rented out as separate units. “One guy I know pretty much made his whole house different rooms with a common living room, couch and TV.”

Typically, however, the upper and lower floors of a bungalow can be rented as separate units. “Bungalows are the easiest houses to sell in certain areas here because you can rent the upper and lower levels, if it’s properly treated. In an area where you’re renting a whole house to a person, you’d get, say, $1,600 a month, but if you’re renting the floors separately, you can get maybe $2,200 a month. It’s about volume.”

3. Screen your tenants
Screening tenants adequately ensures your rental investment doesn’t become a nightmare.  “I see it a lot,” said Elafech. “They don’t want to lose a month on the mortgage payment, so if it’s been sitting for a couple of weeks they’ll rush into a deal and rent it to whoever comes next, and sure enough the people either do a midnight run or don’t pay. I’m going through that now with my client.”

Elafech recommends waiting it out, even if that means the property sits empty for a month or two. Ask tenants for references and their job history. “If the tenant is reluctant, there’s usually a reason. Keep a look out for red flags.”

He also suggested hiring a rental management company if an apartment building, rather than two or three properties, needs to be maintained. While pricey, they’re well worth it – and they screen tenants.

Sometimes, though, less is more.

“I have a client that’s renting out a house with a garage for $1,000 month that usually goes for $1,800, because he has a good tenant. He cuts the grass and maintains the property. He does everything for the landlord, so that peace of mind is worth more than the money he’d get from renting the parking pad and garage in the back.

4. Rent the garage and parking spot separately
Elafech mentioned a rental property he’s currently showing. “The owner is going to park his trailer on the parking pad, rent out the garage and both floors of the bungalow separately – rental income from upstairs, downstairs and the garage.”

5. Location, location, location
Location is everything in real estate, so Elafech recommends investing in a property that’s surrounded by prime amenities like transit and schools.

“In Calgary, we have LRTs and buses. Even having shopping centres and schools nearby is important. A client had a condo with an LRT across the street, and he got more for it than a similar place he owns that had a similar layout but was a bit bigger, because it was six or eight blocks away and farther from the LRT. In Calgary, when it’s minus-40 outside, you’re not walking, or waiting for a bus when it’s cold. People pay for convenience.”

Source: Canadian Real Estate Wealth – Neil Sharma

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Ontario’s potential rental housing crisis in 11 statistics

Ontario Rental Housing Crisis-compressed

Earlier this week, the Federation of Rental-housing Providers of Ontario (FRPO) published a major report prepared by Toronto-based real estate market data firm Urbanation on the state of the Ontario rental market with a focus on the province’s largest region, the GTA.

A number of the report’s key findings will come as no surprise to those who have recently searched for rental housing in the city and surrounding region. Demand for rentals has hit multi-decade highs, according to the report, “driven by robust economic and population growth, job creation for prime renter cohorts, and a decline in homeownership affordability.”

While the report makes some encouraging observations on expected increases to the rental supply, the housing advocate concludes that a significant supply shortfall will remain and likely worsen unless the pace of construction ramps up quickly to meet demand.

Without policy action, the FRPO expects Ontario renters, especially those in the GTA, will experience mounting challenges in finding suitable housing.

Here are 11 stats from the report that illustrate the difficult market conditions that the province’s renters face:

1. The vacancy rate for purpose-built rental buildings sat at a 15-year low at the end of 2016. It was 2.1 per cent in the province and 1.3 per cent in Toronto.

2. The vacancy rate for Toronto condos — many of which are purchased by investors and added to the city’s rental pool — was even lower at the end of last year, sitting at a seven-year low of 1 per cent.

3. Eighty-five per cent of purpose-built rentals in Ontario are over 35 years old. Upgrading this aging existing stock will require a significant investment from rental owners, possibly to the tune of $5 billion over the next 5 years, the report estimates.

4. When looking at the age distribution of renters, the 25 to 34 year old demographic made up 21 per cent of total renter households in Ontario, making this cohort the “prime renter age segment.” The 35-44, 45-54 and 65+ age segments each made up 19 per cent of the total. Over the next five years, however, the prime 25 to 34 year old segment will see “accelerated population increases” thus further increasing demand for rentals.

5. Immigration to the Greater Toronto Area represented 30 per cent of Canada’s immigration total. Ninety thousand immigrants came to the region in 2016 and a similar number are expected to arrive in 2017. As the report notes, the majority of recent immigrants rent when they arrive.

6. After hitting a five-decade high in 2011, the homeownership rate in Ontario is expected to “flatten or decline in the next 10 years.” Affordability issues, higher interest rates and stricter mortgage policies are all expected to contribute to this trend.

7. By mid-2017, the cost disparity between owning and renting in the GTA remained at its highest level in more than five years.

8. On the rental supply side, purpose-built rental development reached its highest level since the 80s in both Ontario and the GTA. However, after the new rent control measures were unveiled as part of the province’s Fair Housing Plan, the rate at which new purpose-built rental buildings were proposed slowed when compared to previous quarters, with some projects originally proposed as rental even indicating a change to condominium.

9. On the rental demand side, the report forecasts that rental demand will outweigh supply by approximately 57,500 units over a 10-year period, or 5,750 units per year. This unit total “does not necessarily represent the level of additional rental development required to bring the market into a state of balance, but rather represents a level that keeps conditions from worsening over time.”

10. There is only one rental unit under construction per 1,000 GTA residents. In Vancouver, the ratio is over three rental units while in Montreal, it’s two units.

11. According to the report, rental starts need to double immediately and eventually triple from current levels just to satisfy demand.

Ontario Rental Housing Crisis-compressed

Source: Buzz Buzz News Canada –  

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The average cost of rent in major Canadian cities in September (MAP)

 

Although there has been a little fluctuation in prices, the ultra-hot Canadian rental market continues to increase across the board.

While some city’s prices for one-bedroom rentals remained unchanged since last month, the most expensive in Canada has now surpassed $2000, according to the latest report by PadMapper.

Not surprisingly, Vancouver and Toronto continue their domination as the top two cities with the most expensive rental markets in Canada.

Last month, Vancouver’s median rent for one-bedroom showed a decline of 4.8%. But one month can change a lot in this market, and the price of a Vancouver one-bedroom has jumped up 1.5% from last month bringing it to $2,020. Two bedrooms have also gone up in the city, and are now renting at $3,160.

In Toronto, rent continues to increase every month as the city saw a 4.3% hike in one bedroom rentals, which are now $1,930. Two bedrooms also increased to $2,440. The most shocking part about rental costs in this hot city is that one-bedrooms in Toronto are up 15.6% since this time last year. Let that sink in for a minute. Actually don’t, time is money…

PadMapper

Trailing behind Toronto is Barrie, which also experienced a massive 15.4% annual growth rate over the past year. One and two bedrooms have settled this month with medians of $1,200 and $1,450, respectively, in the Ontario city.

Meanwhile, Montreal remained in fourth place. Rent in the popular Quebec city has experienced a 3.5% hike to $1,190, with two bedrooms now renting at $1,520.

Back to the west coast, where Victoria remains in fifth place with its median one bedroom costs increasing by 4.5% to $1,150, and two bedrooms growing slightly higher than last month to $1,490.

The largest drop in rental in Canada was in Quebec City, where one bedrooms dipped to $810, and two bedrooms went down 5% to $1,130.

But in Ontario, Hamilton climbed up three spots on the list to become the 11th most expensive rental market in Canada. This city’s growth rate for one bedroom units is up 5.3% to $1,000, and two bedroom rent grew 2.6% to $1,200.

Calgary remains steady, as one bedrooms are $1,020 just like last month, and two bedrooms also remain unchanged at $1,300.

The cheapest city to rent on the list is still Quebec’s Saguenay, which jumped a little to $640 for a one-bedroom, and $730 for a two bedroom. It’s probably one of the only cities in Canada where you never have to think about having a roommate these days.

PadMapper

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8 Things You Should Always Do Before Signing A Lease

things to do while apartment hunting

Make sure you know the full picture before you move in with all your stuff.

Finding the perfect rental can be a challenging process— scouring listings, cramming multiple viewings into a single day, and feeling like your ideal place is a needle in a haystack. So it’s understandable to quickly pull the trigger when you find that dream home in the perfect neighborhood with a reasonable monthly rent.

But before you sign on the dotted line for the keys to that perfect apartment for rent in Dallas, TX, there are some things to keep in mind. Pay attention to these 8 details, and you’re bound to be a happy camper once you’re all moved in.

8 Steps All Renters Should Take Before Signing a Lease:

  1. Read the entire lease

    Reading your entire lease will help prevent simple problems from popping up. But you can take this one step further and make sure you’re signing the right lease for your city or state. Ordinances vary by city and state, so be sure to call your local government to find out local regulations for landlord-tenant law. Fortunately, there are nonprofit renters’ rights organizations in most major cities, so a quick phone call can help make sure you’re on the right track.

  2. Remember: It’s a partnership

    The landlord-tenant relationship can be friendly, especially if it gets off to a good start. Present yourself well on viewing day and be as polite and professional as you would be for a job interview. They are probably showing the property to many prospective tenants — and you want to stand out in all the right ways. Also remember that as much as your landlord is trusting you with their property, you are trusting them to maintain a safe and healthy living environment. Don’t be afraid to ask questions or request repairs and note the response. If they’re not willing to hear your concerns or write repairs into the lease, it could foretell problems down the road.

  3. Visit the apartment at different times of day

    Maybe the master bedroom gets gorgeous morning sunlight — but also sits right under a street lamp, throwing off even the best sleeper’s circadian rhythms. (Potential solution: blackout shades!) Visiting a unit more than once and at different hours will help you get a better sense of the space, from changing noise levels to noting the best hours for soaking up the rays. And while it’s not possible to stretch out your visits over multiple seasons, it’s always a good idea to ask the landlord about the apartment under different weather conditions. He or she may be able to prepare you for a loud radiator come winter or give you the scoop on a lifesaving cross-breeze during the summer months.

  4. Ask about alterations (no matter how small)

    Most lease agreements will specify what changes you’re allowed to make to an apartment, but it’s always a good idea, before signing, to get specific. Whether you’re hoping to install patio stones in the backyard or just put some nails in the wall, be sure to bring up those enhancements at the first viewing. Landlords can differ greatly in what customization they will allow; taking it for granted that you can “make your rental home your own” could put your security deposit at risk. And if there are things you feel compromise the safety or integrity of the apartment, have your landlord agree — in writing — to make those repairs.

  5. Understand the rules for subletting

    Subletting can be a great option for renters who might need to move out early. Maybe you’re renting while planning to buy, and your dream home comes along mid-lease, or a job unexpectedly takes you to a new state. Subletting can help you avoid breaking your lease by letting someone else pay out the remaining months — but make sure your landlord allows it or would consider an exception to the rule. Penalties for subletting can range from a hefty fine to eviction, so best to be in the clear before passing off the keys to another renter.

  6. Ask what’s included (and be clear on what isn’t)

    Utilities and other hidden costs can add up if they’re not included in the monthly rent. Even if you determine that the basics like gas and electric come with the rental, be sure to ask about hidden fees like garbage pickup, on-site parking, or monthly pet fees. Or if the property hosts an on-site gym or free laundry, factor those savings into your household budget. If no utilities are included, try to get a ballpark idea of what they might cost and budget accordingly. Asking a neighbor or the previous tenant can help give you an idea of what others spend.

  7. Talk to your new neighbors

    Get to know your neighbors, even before you sign. If they’re in the same building, you can get an expert opinion on the ins and outs of your prospective rental. They can let you know what utilities usually cost, weigh in on the dependability of your landlord or property management company, and tell you what to expect from the neighborhood. Ask how long they’ve lived in their apartment: It’s a good sign if your neighbor has found reason to renew their yearly lease. Neighbors can be good for so much more than a borrowed cup of sugar!

  8. Have your papers in order

    Competitive rental markets like New York, NY, and San Francisco, CA, often see many qualified candidates vying for the same apartment. In these cases, the most crucial thing you can do before signing a lease is to be 100% prepared. Having your paperwork ready to go with your application will expedite the process and increase your chances of signing that lease.

Is there anything you wish you’d asked a landlord before signing on the dotted line?

 

Source: Trulia.com – By Christine Stulik | Apr 12, 2017

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Toronto explores laneway homes as a solution to the housing crunch

Laneway homes could be a solution to Toronto's housing crisis, advocates say. The city is holding public consultations about this.

Laneway homes could be a solution to Toronto’s housing crisis, advocates say. The city is holding public consultations about this. (CBC News)

The solution to Toronto’s housing affordability crisis could be found in your own backyard.

In response to skyrocketing home prices, the city’s looking to loosen the bylaws around developing one of its few sources of underused land: laneways.

A proposal went to public consultation Monday, exploring the possibility of letting homeowners build a secondary suite on the edge of a property leading into a laneway.

But don’t call your realtor just yet.

Those smaller homes wouldn’t be for sale, said Alex Sharpe, one of the co-founders of the policy groups co-ordinating the public discussion.

“It’s not going to create a whole new crop of cheap houses that people can buy,” said Sharpe, who lives in one of the city’s few legal laneway homes and runs a group called Lanescape.

Laneway Toronto house

Alex Sharpe lives in a laneway home in Toronto and is the co-founder of Lanescape, which looks at the development of laneways. (CBC News)

Instead, it would build on the idea of a basement apartment. A laneway home would have more natural light, but unlike a basement apartment there would be more privacy because the backyard acts as a buffer between the main home and secondary suite, Sharpe said.

In theory, the move could benefit both Toronto’s renters and homeowners.

For property owners, it translates into an extra unit to cover the mortgage and house adult children or relatives. But it’s also a way to cool down the long-term rental market, which has seen supply shrink alongside the rise of AirBNB, studies have found.

“We view laneways as an opportunity to expand the supply of units in existing residential neighbourhoods,” Sharpe said. “They have the services, [they] have the infrastructure, the transit and they’re well-connected.

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Toronto laneway home owner1:06

“We’ve had a shortage of housing in Toronto in the last number of years and it’s growing in intensity because we’ve run out of land.”

Tiny home fever

Laneway homes may be new to Toronto, but Vancouver’s city council gave landowners the green light to start building them in 2009. Regina and Ottawa have also followed suit.

In fact, Vancouver actually provides a how-to guide to residents that includes potential floor plans for the tiny homes.

Toronto city councillors Ana Bailao and Mary-Margaret McMahon say laneways could be critical to the future of the city’s development.

Laneway Toronto

Sharpe lives in a laneway home with two bedrooms and a streamlined design. (CBC News)

McMahon represents Ward 32, Beaches-East York, where she said there’s a concern about the effect that high-rises would have on streetscapes.

“So this is a very measured approach to density,” she said of the laneway discussions. “We have concerns about privacy creep and what-not so you’re not going to see the Taj Mahal of four-storey laneway home; it’s going to be in keeping with the character of the neighbourhoods.”

Laneways rejected before

Toronto city staff cited privacy concerns — that secondary homes might overlook their neighbour’s backyards or cast shadows — among their reasons in a 2006 report that recommended against allowing laneway housing.

Uncertainty about how to deliver public services like garbage pick-up, barriers to emergency access and the possibility that residential properties would be subdivided also killed the idea from going ahead at the time.

Ana Bailao

Coun. Ana Bailao says that laneway homes are no different than allowing a property owner to rent out a basement suite. (CBC News)

But the current plan at the public debate would see all public services delivered from the front of the property, in the same way that it’s done for rental suites, Coun. Bailao said.

“We already have basement apartments in the city of Toronto,” said the Ward 18, Davenport councillor. “All we’re saying is maybe we should allow it at the back of the houses as well.”

Consultations are also happening within the planning departments about those changes and there’s a push to name the city’s laneways so that first responders would be able to navigate them more easily, she said.

Province supports laneways

And, unlike in 2006, laneway advocates now have the support of Ontario law.

The province made changes to its Planning Act in 2011, when it introduced new legislation that requires municipalities to “establish official plan policies and zoning bylaw provisions” for secondary units — including those for laneways.

“The policy at the province level is disjointed from the local level,” Sharpe said, something he said he hopes the public consultations will change.

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