What Does a Property Manager Do? Here’s the Job Description

If you’ve recently started out in the real estate business and have glanced at the property manager job description, you might think you’re saving money by skipping this expense. You can handle all these tasks—right?

Think again. Half of the appeal of investing in rental property is the passive income it yields. Maximum financial reward for minimum effort. Everyone has the time to be a landlord for one property, even two. But once you have a handful under your belt, the workload can become a bit overwhelming.

Owning real estate shouldn’t be a job; it should allow you to live life on your terms, give you the freedom to enjoy life when and wherever you wish. But you can’t do that if you’re spending all your time managing your properties. Whether you have just four or five properties or an entire empire, it’s best left to the experts.

You’ve heard the phrase “Jack of all trades, master of none”? Don’t be Jack.

Purchasing your first rental property is just the beginning of your real estate journey, because being a good landlord is almost as important as making good deals. BiggerPockets’ free guide How to Become a Landlord: Managing Rental Properties for Real Estate Investors will teach you everything—from setting rent to handling evictions.

Property Manager Job Description: The 10 Key Tasks

Here’s how a property manager can help you grow your real estate business:

1. Setting the right rates

Pricing your property competitively is vital for every landlord. Too high and you won’t fill the space. Too low? Good luck making money. A property manager knows the micro market, local area, and current rental rates, enabling them to correctly value your buildings’ worth and price the units accordingly.

2. Marketing and advertising

You lose money every day your property is empty. Exposure helps you find tenants, and a property manager can help you create a coherent marketing strategy that will develop your brand, establish your reputation, and boost interest from prospective tenants.

3. Complying with housing regulations

State and federal laws around housing and evictions can be rather confusing. A professional property manager can walk you through everything, from paying taxes, discrimination laws, and needed certificates. But be warned that you are still liable if your property manager gets into legal trouble, so make sure they know what they’re talking about.

4. Finding good tenants

Property management companies find higher-quality tenants for filling vacancies because of their rigorous screening processes. These people often sign longer term leases, inflict less wear and tear, and cause fewer problems. If you work alone, you might find yourself drowning in applications—but a professional property manager can assess applicants quickly and easily using a comprehensive screening process, including background and credit checks.

5. Collecting and depositing rent payments

Strict rent collection is crucial to financial success. A property manager acts as a buffer between you and your tenants so you don’t have to chase up late payments or listen to complaints.

RELATED:How Much Does Property Management Cost? Here’s What Fees to Expect

6. Providing customer service

If you’re not a people person, it may be best to have someone else deal directly with tenant complaints. Not everyone has A+ communication skills—and that’s okay. A positive, smiley, helpful property manager will build up a rapport with your tenants and placate any problems with practiced ease. A company also ensures there is someone tenants can contact, even when you’re on that two-month Caribbean cruise.

7. Handling maintenance and repair

Let’s be honest—no one wants to be woken at three in the morning because a pipe burst in a rental unit across town. When things inevitably go wrong, your property manager brings a set of management skills that help quickly and efficiently handle any problem. Remember, your tenants want problems solved immediately. Delays can lead to complaints. Thanks to their wealth of experience in real estate, property managers can also suggest preventative maintenance before a problem has even occurred.

8. Managing vendor relationships

When you do require maintenance or repairs, it can be a hassle to get the right tradesmen for the job. A good property manager will know reputable, reliable, licensed workers—and have good relationships with them. They should also have established policies to prevent any problems when the workers enter the property, which protects you from litigation.

9. Assisting long-distance investing

As your property empire grows, you may wish to begin looking for investments outside your immediate area. If you sign a contract with a state or nationwide property management company, you can rest easy. Your properties are all being looked after to the same high standard as you enjoy in your own town.

10. Maximizing profitability

If you intend to live off the revenue from your real estate business, you need to dedicate your time to searching for new investments. Once you’ve got a few rented properties under your belt, you’re probably ready to expand. But how can you do that if your time is spent dealing with tenants, addressing problems, and collecting rent? With daily operations handed over to your property manager, you’ll have more time to scour the market for that next investment.

Financial Benefits of Hiring a Property Manager

Don’t forget that hiring a property manager is financially sound. You may feel somewhat reluctant to fork out for this service, but it will pay dividends in the long run. These experts can maximize your business profits by creating distance between the property owner and tenants.

Most charge between four and 12 percent of your monthly rental rate—but remember that higher percentages often lead to a higher quality of service. Less is not more in this case, and a good property management company can be worth its weight in gold. Don’t skimp on this aspect of your business; it’s not worth it.

Of course, it’s important to do some thorough research before you hire your property management company. Ask your property manager these 20 questions before signing on the line.

RELATEDHow to Spot a Great—Not Just Good—Property Manager

Do Landlords Need a Property Manager?

Clearly, a property manager wears a lot of hats. But maybe you think you can spare the expense and do the work yourself. The property management job description encompasses more than just basic tasks. Before you dive into managing your own properties, think about if you can:

  • Negotiate a decent rate on maintenance issues with a surly contractor
  • Convince a mostly broke renter that paying rent is more important than buying steak
  • Keep track of at least three and as many as a dozen separate streams of incoming and outgoing money. Don’t forget rent and security deposits, some commingled and some not, across anywhere from four to a dozen different accounts… while being able to provide proof at any given moment of what went where, when, and why
  • Advertise property inexpensively and effectively without sacrificing your ability to get a tenant who will pay a reasonable rent and not destroy the place before move-out
  • Avoid signing a mostly reasonable-looking new tenant (who ends up destroying the place)
  • Handle all of the property maintenance—including those 3 a.m. floods
  • Communicate with, placate, and motivate tenants who have conflicting goals and priorities.

Property Management Advanced Skills

That job description is just your run-of-the-mill, no-frills property management. If you want a top-of-the-line real estate empire, you need all those skills at their peak level—plus the ability to:

  • Navigate a court case, remaining professional and calm while tenants make absurd claims about how you ate their dog and that’s why they’re late on rent for the third month running
  • Comprehend the effects that the large-scale and local-scale market movements are having on each client’s properties. In addition, predict how that will affect your ability to charge, your future costs, and the client’s risk levels
  • Work with finicky city inspectors to bring buildings that were—just last week!—70 percent hellhole into the realms of livability
  • Comprehend the systems used by your writers, inspectors, agents, photographers, builders, vendors, and so on well enough to troubleshoot and help guide them toward effective solutions.

This might seem easy to you, or maybe even fun. If that’s the case, feel free to dive into the property management world solo. But if you find the above job duties frightening, hire an expert to deal with the nitty-gritty.

However, you must remember: It’s your business. You’re the CEO, the big cheese, the top dog. Therefore, don’t get bogged down in the day-to-day running of things. Leave that to someone else, someone qualified and experienced and capable of making you lots of money. As a real estate investor, it’s your job to sit back and watch the money roll in.

Source;Engelo Rumora – BiggerPockets

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How Much to Charge for Rent in 2020: A Landlord’s Guide

rent-sign-front-yard

So now that you have an investment property or two under your belt, you are probably considering the possibility of renting them out. However, determining the right property rent rates can be difficult at times. Not sure how much to charge for rent? You’re not alone.

After all, if you charge too much, you’ll likely have higher vacancy rates—but if you undercharge, you’ll lose out on profit.

Here’s how to check if your rental unit is priced correctly.

Purchasing your first rental property is just the beginning of your real estate journey, because being a good landlord is almost as important as making good deals. BiggerPockets’ free guide How to Become a Landlord: Managing Rental Properties for Real Estate Investors will teach you everything—from setting rent to handling evictions.

First: What Is Market Rent?

The term “market rent” refers to the current average rent price for nearby rental property. Remember, rent is determined by the real estate market value. So when determining how much to charge for rent, what other landlords are charging is valuable information.

However, keep in mind additional variables that can affect your rent, such as:

  • The number of bedrooms and bathrooms
  • Any special amenities
  • Square footage
  • Single-family homes vs. apartments or condos
  • Garage or storage space available to tenants
  • Pet policies

Prospective tenants may place more value on certain amenities, like pet-friendliness. That might mean higher rents. Just pay careful attention to your return on investment—and your boundaries.

Read More: The Ultimate Guide to Fair Market Rents

Calculating Market Rent Prices

In addition to browsing local rental listings, we recommend signing up for Rentometer, which costs about $100 per year. This website allows you to compare monthly rents for similar properties by city or zip code. It gives you the 75th and 90th percentile, so you can estimate the highest applicable rent and the lowest rent. Most likely, your property is going to fall somewhere in the 90th percentile.

This is a great place to start, so use it as a baseline. Don’t blindly rely on the data provided on Rentometer though, because you don’t know what those properties look like. Pairing this with your own research is the best strategy. For example, go on Apartments.com or Zillow and find nearby properties that resemble yours. Pay attention to the year built, the number of units, amenities, convenience, interior and exterior finishes, and inclusion or exclusion of a washer and dryer. It’s unlikely that you’ll find an exact match, but this is still enough to get a good estimate on the rent.

You can also go low-tech—simply drive around your neighborhood. If you pass any properties up for rent, call their owners and ask how much they are charging. This will give you a rough indication of how much you should be charging.

These methods will help you understand the viability of different rental rates.

Know How Occupancy Rates Affect Rental Price

What’s the average occupancy rate in the area? Is it 95 percent or 85 percent? How’s your property’s occupancy rate compared to the region’s? You don’t want it to be higher or lower by too much.

If your occupancy rate is much higher than the regional average, then your rent is probably not aggressive enough. If it’s a lot lower, then your rent might be too high—or you might have a much bigger issue than just pricing.

Check In With Your Property Manager

Property managers are great resources, but don’t rely on them completely. Ask them about the current market rents and for a market report to determine how much to charge for rent.

For the report, your property management company can give you a list of comparable properties with the current rents, which you can then verify yourself—either by researching online or visiting the properties in person. They can also advise you on what amenities might increase your rent. For example, if your property lacks a dishwasher, adding one might be an easy way to raise rents by $50 per month. Of course, you should carefully calculate your potential return on investment before making any major changes.

If you don’t have a property manager, real estate agents can also help you assess the local rental market.

Don’t Skip the Site Visit

Once you’ve found a couple similar nearby properties, call or visit the property as a potential renter. Ask questions regarding the current rent, unit size, amenities, utility bill, and any special features. Preferably, you should visit the site to get a good feeling of the property overall.

Go through these steps at least once or twice a year for each of your properties. Studying the current local market increases your rental income, helps you properly manage your current properties, and ensures you make better acquisitions in the future.

All that information is helpful, but serious investors need to dig deeper to know exactly how much to charge for rent. Follow these rules to arrive at the perfect price.

1. Minimum rent requirement

The rent has to be high enough for you to be able to afford expenses and provide cash flow.

Let’s assume your expense ratio is 50 percent, covering both the economic losses and the operating expense. Thus, in the case of a $500 rental, a 50 percent expense ratio would leave us with $250 to cover three very important things:

  1. Debt service—such as your mortgage
  2. Capital expenditure (CapEx) reserve
  3. Cash flow

You’ll likely find that $250 is simply not enough to cover all three of the above. And since debt service is mandatory, the choice we face is between our profit and CapEx reserve. What we often see is landlords pocketing the money left over after debt service, then getting excited about their great cash flow. But eventually, something will happen—maybe their house gets trashed and they need to replace the flooring, water heater, and stove.

What they suddenly experience is that tragic feeling in the pit of their stomachs which accompanies cash flow in reverse. All of the money they thought they’d made suddenly transfers from their account to their contractor‘s.

Related: How to Really Calculate Cash Flow on Your Next Rental Property

This is what happens when one has to make a choice between CapEx reserves and cash flow. That’s why you need a minimum rent. There’s no hard-and-fast rule, but for apartment settings, this is often around $650—and likely more like $750. For single-family rentals, this minimum rent requirement is much higher.

2. Maximum rent requirement

We are always looking to fulfill two objectives: to both protect and grow our investment. Just like there is a minimum requirement for rent, there is also a maximum. We have to be able to appeal to the widest cross-section of the potential audience. If you buy rentals that are too high within the scope of your market, this becomes difficult.

Shoot for rentals between the 55th and 70th percentile of market rents. This appeals to stable, reliable tenants but isn’t so exclusive that only a tiny sliver of the marketplace can qualify.

3. Focus on price per square foot

In order to truly compare apples to apples, you have to price your rentals on a per-square-foot basis. Let’s say you purchase an apartment building currently renting one-bedrooms for $525, and online research indicates the market could withstand a $150 rent increase.

But how big are those comps? If they’re 850 square feet, and your rentals are 600 square feet, that market research is no longer relevant—even if they’re both one-bedrooms. Can you convince people, for example, to pay even $625 if units that are 250 square feet larger are available for $700? Unlikely.

With the above information, you should now be well equipped to set an appropriate rent price for your investment properties.

Source; By Jay ChangJay, a civil engineering graduate from UCLA, is an active investor, developer, and writer.

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HOUSE HUNTING IN THE MIDST OF A GLOBAL PANDEMIC

Raymond C. McMillan, BA., Mortgage and Real Estate Advisor – June 27, 2020

I read somewhere many years ago that “where there is a crisis, there is always opportunity”. You may be wondering where to find this opportunity. Covid 19, completely obliterated the spring housing market and will probably do the same for the summer market. These are possibly the two busiest period for homebuyers and sellers. With the recent physical and social distancing guidelines introduced and enforced by all levels of government, it has certainly crippled the real estate sector and change the way sellers and buyers engage each other. However, all is not lost as we discover new ways to house hunt and view homes.

Savvy realtors have quickly figured out how to market homes online and are doing virtual tours that allow potential home buyers to get a real life feeling of homes they are interested in viewing or purchasing. New home builders have also quickly adapted and have also made the virtual home buying experience very user friendly and interactive. Many of the floor plans can be configured by you to show the placement of furniture and appliances to get a sense of the available space. With resale homes, you can use the placement of furniture and appliances by the current owner and occupant as a guide. In the event the home is empty, it could be a bit more challenging to get a good sense of the space as a first-time home buyer, but a good realtor should be able to help you with this.

In areas where home showings are still permitted, and if you are comfortable doing them, you mayt want to exercise extreme caution when visiting homes for sale to avoid being exposed or infected by Covid 19. A few of my recommendations to keep yourself safe and reduce exposure are:

  1. Always wear a mask and gloves.
  2. If you have a pre-existing health condition, I would recommend avoid doing in-house viewings
  3. Only visit homes where the current owners or occupants have vacated the homes to allow for the viewing.
  4. Avoid touching personal items and appliances as much as possible.
  5. Do not under any circumstances view a home at the same time with another individual or family not connected to you
  6. Ensure your realtor is also wearing personal protective equipment and maintaining physical and social distancing guidelines.
  7. Practice the necessary hygiene once you have completed your viewing and returned home to eradicate any potential exposure.

If you are uncomfortable with doing in-house viewings stick to virtual viewings. There are many homes being offered that way, and you are sure to find one in your preferred neighborhood, at your desired price that you absolutely love. So be patient and enjoy the home buying journey.

The writer: Raymond McMillan is a mortgage and real estate consultant who has been in the banking, mortgage and real estate industry since 1994. He has been licensed as a mortgage broker since 1999 and has helped many people purchase their homes and invest in real estate. You can reach him at 1-866-883-0885 or visit www.TheMcMillanGroupInc.com

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HOUSE HUNTING IN THE MIDST OF A GLOBAL PANDEMIC

Raymond C. McMillan, BA., Mortgage and Real Estate Advisor – June 27, 2020

I read somewhere many years ago that “where there is a crisis, there is always opportunity”. You may be wondering where to find this opportunity. Covid 19, completely obliterated the spring housing market and will probably do the same for the summer market. These are possibly the two busiest period for homebuyers and sellers. With the recent physical and social distancing guidelines introduced and enforced by all levels of government, it has certainly crippled the real estate sector and change the way sellers and buyers engage each other. However, all is not lost as we discover new ways to house hunt and view homes.

Savvy realtors have quickly figured out how to market homes online and are doing virtual tours that allow potential home buyers to get a real life feeling of homes they are interested in viewing or purchasing. New home builders have also quickly adapted and have also made the virtual home buying experience very user friendly and interactive. Many of the floor plans can be configured by you to show the placement of furniture and appliances to get a sense of the available space. With resale homes, you can use the placement of furniture and appliances by the current owner and occupant as a guide. In the event the home is empty, it could be a bit more challenging to get a good sense of the space as a first-time home buyer, but a good realtor should be able to help you with this.

In areas where home showings are still permitted, and if you are comfortable doing them, you mayt want to exercise extreme caution when visiting homes for sale to avoid being exposed or infected by Covid 19. A few of my recommendations to keep yourself safe and reduce exposure are:

  1. Always wear a mask and gloves.
  2. If you have a pre-existing health condition, I would recommend avoid doing in-house viewings
  3. Only visit homes where the current owners or occupants have vacated the homes to allow for the viewing.
  4. Avoid touching personal items and appliances as much as possible.
  5. Do not under any circumstances view a home at the same time with another individual or family not connected to you
  6. Ensure your realtor is also wearing personal protective equipment and maintaining physical and social distancing guidelines.
  7. Practice the necessary hygiene once you have completed your viewing and returned home to eradicate any potential exposure.

If you are uncomfortable with doing in-house viewings stick to virtual viewings. There are many homes being offered that way, and you are sure to find one in your preferred neighborhood, at your desired price that you absolutely love. So be patient and enjoy the home buying journey.

The writer: Raymond McMillan is a mortgage broker and real estate consultant who has been in the banking, mortgage and real estate industry since 1994. He has been licensed as a mortgage broker since 1999 and has helped many people purchase their homes and invest in real estate. You can reach him at 1-866-883-0885 or visit www.TheMcMillanGroupInc.com

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Wave of homes could hit market when support programs end: RBC

Photo: James Bombales

Toronto, Vancouver and many other major markets across Canada began the year in seller’s market territory with high demand for housing and tight supply giving home sellers the upper hand in transactions.

The COVID-19 pandemic abruptly changed that, shifting the national market away from favouring sellers and into balanced territory. And more changes are coming, according to RBC, which published a housing report this week that predicted more listings will be coming online in the months ahead, potentially tilting the supply-demand balance into buyer’s market conditions.

In a note titled “Canada’s Housing Market Woke up in May,” RBC Senior Economist Robert Hogue wrote that, to date, listings supply and buyer demand have mostly ebbed in lockstep during the pandemic. This alignment has allowed the market to maintain balance and prices to remain steady, so far.

There were hints that this was shifting in national home sales data for May published by the Canadian Real Estate Association (CREA) this week. New listings spiked 69 percent in May from their April lowpoint while sales rose 57 percent. While this may not appear to be a significant mismatch, Hogue believes there’s further supply and demand “decoupling” ahead for the market.

“The delay in spring listings will likely boost supply during the summer at a time when homebuyer demand will still be soft — albeit recovering. The eventual winding down of financial support programs is also poised to bring more supply to market later this year,” Hogue wrote.

“Economic hardship is no doubt taking a toll on a number of current homeowners — including investors,” the economist continued. “Some of them could be running out of options once government support programs and mortgage payment deferrals end, and may be compelled to sell their property.”

The federal government announced this week that the Canadian Emergency Relief Benefit (CERB) would be extended for another two months, with the scheduled end date now pushed back to early September. The maximum period that one can receive CERB payments was increased from 16 weeks to 24 weeks. Mortgage deferral programs being run by Canada’s large banks are also set to end in the fall.

In commentary published yesterday, Capital Economics’ Senior Canada Economist Stephen Brown wrote that the huge sums paid out through CERB since March have seemingly offset the losses to household income suffered during the same period. This will allow for a stronger economic recovery than was previously anticipated, he wrote.

But even in his relatively upbeat take, Brown said that household income is likely to still fall eventually as employment will remain lower than its pre-pandemic level even when CERB ends in September. He went on to point out that high-earners who lost jobs during the pandemic and are now receiving CERB will have certainly taken a hit to household income, which will bode poorly for the housing market.

When it comes to the anticipated shift from balanced conditions to a buyer’s market for Canadian real estate, Hogue predicted that the timing will be different depending on the market.

“We expect the increase in supply to tip the scale in favour of buyers in many markets across Canada, some sooner than others,” Hogue wrote.

“Vancouver and other BC markets, for example, could see buyers calling the shots as early as this summer. It could take a little longer in Ontario, Quebec and parts of the Atlantic Provinces. Buyers already rule in Alberta and Newfoundland and Labrador.”

Nationally, Hogue predicted a seven percent decline in benchmark home prices from pre-pandemic levels by mid-2021. However, he wrote, “a widespread collapse in property values is unlikely.”

Source: Livabl.com – Sean MacKay Jun 17, 20200

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“We wanted to do the impossible—fit three families under one roof”: How one big brood is weathering the pandemic in their Markham home

Top from left to right: Pak Hung Ho, Roger How Cho Hee, and Christine How Cho Hee Bottom from left to right: Eric How Cho Hee, Charlotte How-Fang and Li Wen Fang

Before Covid-19, Eric How Cho Hee, an IT consultant, and Li Wen Fang, a social worker and psychotherapist, ambitiously decided to build a grand family home in Markham for themselves, their parents and an uncle. Their friends thought the well-meaning but wacky idea would never work. But as it happens, living in one giant 7,000-square-foot household bubble is smart when you need each other most.

Eric: In early 2017, my father was diagnosed with Alzheimer’s so I thought it would be best to move in with my parents. I owned the house where they lived in Markham, and we were going back-and-forth frequently to visit each other every week, anyway.

Li Wen: We wanted to do what seemed like the impossible: fit three families under one roof. My parents spend most of their time in Australia with my brother, but they would visit Canada occasionally for long periods before the pandemic, so we wanted to include space for them, too.

Li Wen’s home office is directly across from the front door

Eric: At the time, Li Wen and I lived in an 1,800-square-foot side-split nearby for six years. We liked the area, but the house was nowhere near big enough for our new needs. In September 2017, we sold the mortgage-free house my parents were living in for more than what we paid for and used the money to raze our place and build a new multi-generational home. We rented a house while our new one was being built. The 7,000 square-foot update by Solares Architecture would have enough room for us, our two year old, Charlotte, our four parents and Li Wen’s 70-year-old uncle, Pak Hung Ho.

Li Wen: My uncle Pak took care of me when I immigrated to Canada in 2001, and now that he’s getting older, I wanted to return the favour. My friends weren’t optimistic about the idea—most people choose to live apart from their extended family. But we ignored the naysayers and plunged right in.

The dining room, living room and kitchen were designed as one large space, so the family can hang out and enjoy meals together. The quirky fireplace is by Stûv
The double-height loft space is one half floor up from the main level. It’s also Charlotte’s preferred play area

Eric: When plans were submitted to the committee of adjustment to apply for variances, one neighbour speaking against our application suggested we needed such a big home to run an Airbnb business. Our architects decided to submit a finished plan and it was available for everyone to see.

Li Wen: Our trick to making it work was to ensure everyone has their own private space carved into the plan. We wanted each area to feel like its own cushy apartment—with a staircase and elevator connecting the halves. We asked for heated floors and shower benches for the older set. And a 17-foot-long pool and sauna in the basement.

Charlotte is a regular at the basement swim spa. She’s a natural at wading in the water

Eric: Li Wen, Charlotte and I moved in in October 2019 while other areas of the house were still being worked on. The rest of the household joined us in November, once the house was in a more finished state.

Li Wen: We hired Renee Godin of Interiors by Renee, who sourced all of the furniture and oversaw the decor, which was helpful in such a large, segmented home. She suggested adding colours and patterns because the house felt too white and sterile. But the bright orange Blue Star oven in the kitchen is Eric’s doing. He’s the cook in the family and he wanted something nice.

Uncle Pak is set up to host morning tea in his section of the home

Eric: My wife and I pay for all of the utilities, housekeeping and property taxes. Before the pandemic, my parents and Li Wen’s uncle would buy the additional items or other foods they needed. But we all share. We don’t divvy up the bills and we don’t charge them any rent. I go buy all groceries, and everyone takes turns cooking the various meals. I used to browse and see what’s on sale when I went to the store. Now it’s more focused. I grab and go. I’m out in less than an hour.

Li Wen: Uncle Pak’s area is dubbed “the tea room” because that’s where the family starts the day, with a tea ritual. My parents have an amazing wing on the other side of our bedroom; they are living in Australia now but that could change. Despite the endless space to wander, we mostly kick back together in the kitchen. A wall of large patio doors bring a lot of natural light into the kitchen, and they slide open easily for the seniors to access the patio and backyard. The 17,000-square-foot backyard has allowed the seniors to get fresh air in safe surroundings as the weather has gotten better.

A floor-to-ceiling window looks out at a portion of the expansive backyard
Patio doors slide open for easy access from the main level

Eric: The house isn’t complete yet. Since November 2019, we have slowly been adding finishing touches, like window coverings and missing cranks plus drywall touch ups. But we consider ourselves very lucky to be living in our new home. The combination of common space and private space has allowed us to weather the pandemic rather well. That’s not to say there is no tension, but that’s to be expected even during the best of times.

Li Wen and Eric’s master suite has a windsor bedframe and wallcovering, which gives it a woodsy cabin vibe
A view of Eric and Li Wen’s balcony from the backyard

Li Wen: One of my friends hasn’t seen her mom in two months because they didn’t allow visitors in her long-term care facility. I feel lucky everyone is together and safe at home. Eric and I are both working from here. My home office is directly across from the front door. It doesn’t have a separate entrance, and I haven’t seen patients here, but I do talk to them over video conference. Before the nice weather, in the early days of the lockdown, Charlotte would constantly knock on my home-office door during my calls with clients. That was tricky, but despite the disturbances, I’m happy to not have to commute to Scarborough every day like I used to.

Eric: I had negotiated working from home twice a week before the pandemic, so shifting my routine to full-time at home hasn’t changed too much professionally. Our built-in babysitter brigade takes turns watching Charlotte as she sprints around the backyard, where she collects branches and plays with her new mini-kitchen. She also has a small slide and a water and sand station.

Li Wen: Charlotte has become the main source of entertainment for all the adults. Before this, she was in daycare most days and we didn’t have that much time with her.

Charlotte’s bedroom has mini midcentury-modern furniture and a toddler-size trundle bed

Eric: The different areas of the house have helped us keep our daughter entertained, too. She uses the swim spa regularly. She has become pretty good and comfortable at wading in the water.

Li Wen: Eric has nurtured a love of baking, churning out four to five loaves a week. He makes farmer bread and baguettes. We used to buy bread from Longo’s, but nothing is fresher than this.Sign up for our newsletterFor the latest on Toronto during the reopening, subscribe to This CitySign me up!

Eric: Every two weeks, we also get a box of produce and meat delivered from a farm. Still, the seniors really miss going for dim sum each Sunday. And they have a touch of cabin fever, despite all the room to move about and the indoor pool.

Li Wen: To combat the boredom, my father-in-law, Roger, does weekly Zoom meetings with his geriatric day program. They exercise for 20 minutes and then talk about the news, but it’s hard because he can’t hear very well. Other seniors have attempted to boldly escape. One day, I found my mother-in-law, Christine, sneaking out. She said she was going for a walk, and that she wanted to start the car so the battery wouldn’t die. I think she might have been headed to one of her favourite spots: the supermarket. They are not as nervous as us—they’ve seen so much in their lives.

Source: Toronto Life – BY IRIS BENAROIA |

PHOTOGRAPHY BY RENEE GODIN |  JUNE 19, 2020

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CMHC Acknowledges Its Role In Forced Resettlement Of Black Canadians

The Africville Museum is seen on the site of the former community of Africville in Halifax, M.S., Tues....
The Africville Museum is seen on the site of the former community of Africville in Halifax, M.S., Tues. Feb. 24, 2015. Canada Mortgage and Housing Corp. has acknolwedged its role in the forced resettlement of Africville residents as well as a lack of diversity in its ranks today.

“We reject racism, white supremacy and wish to atone for our past racism and insensitivity,” the mortgage insurer said.

Canada Mortgage and Housing Corp. acknowledged a lack of diversity in its ranks and its role in past acts of racism on Friday as it pledged to overhaul how it does business.

The federal housing agency said it will re-assess all of its practices through a racialized lens to an effort to eliminate discrimination.

It also used the statement to acknowledge its role in funding the forced resettlement of Black people, most notably from Halifax’s historic Africville and Hogan’s Alley in Vancouver.

CMHC’s decision was prompted by anti-Black racism demonstrations held across Canada and the U.S. after the death of George Floyd, a handcuffed Black man in Minneapolis who pleaded for air as a white police officer pressed his knee against Floyd’s neck for nearly nine minutes.

Watch: Trudeau addresses racism, systemic discrimination in Canada. Story continues below.

“We haven’t done nearly enough. CMHC must set a high standard,″ the agency said in a statement.

“We must all stand together with our Black co-workers and the victims of murder, oppression and the systemic racism that exists everywhere.”

Black people make up 3.5 per cent of Canada’s population and 5.2 per cent of CMHC employees.

Those who are Indigenous amount to 4.9 per cent of the national population and 2.4 per cent of the CMHC workforce.

“At CMHC, we would once have congratulated ourselves for our diversity,” CMHC said.

“This is however no achievement when too few of our people leaders are Black or Indigenous ― none among senior management. And diversity isn’t enough: it’s where we start.”

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Kike Ojo-Thompson, who runs diversity, inclusion and equity consultancy Kojo Institute, said CMHC’s statement seemed like it was written in the voice of someone who really understands the moment the country had been plunged into.

She found it interesting that CMHC was so forthcoming with data around their Black and Indigenous employees, “particularly because their numbers are so low.”

“The first step to an accountability framework and accountability approach is to actually show your data, so that you as well as the community can know what the target is,” she said. “If you’re low, we know you’ve got to get from zero to three, or three to five, and we’re not going to expect 10 tomorrow… so exposing the data is very helpful.”

Among the measures announced Friday, CMHC said it will create specific targets for adding Black and racialized people to its leadership and senior management ranks.

Evan Siddall, president and CEO of Canada Mortgage and Housing Corp in an interview on June 16,
Evan Siddall, president and CEO of Canada Mortgage and Housing Corp in an interview on June 16, 2014.

It will offer leadership training and professional development to support the progress of Black and racialized employees and provide mandatory anti-racism training for all staff.

People with lived experience of racism will now be involved in a re-assessment of CMHC’s recruiting, evaluation and promotion processes and its diversity and inclusion efforts.

“We reject racism, white supremacy and wish to atone for our past racism and insensitivity,″ CMHC said.

“Racism has been built up and reinforced for centuries, whether against Black, Indigenous people or people of colour. Only a sustained and focused effort will eliminate it.”

Ojo-Thompson said there were some measures missing from the statement.

She would have liked to see CMHC mention an external advisory body.

Such a group must be external, she said, because it offers protection and accountability in organizations that may otherwise punish people who speak out.

She also wanted more clarity around who exactly came up with the new policies and promises CMHC made and how much flexibility they offer if people suggest further ideas.

“What you’ve told me is, ‘This is what I’m going to do,’ so my question is, ’If I say that there’s something missing, will you do that or is this all?‴⁣

Source: Tara Deschamps Canadian Press Updated 06/14/2020 10:19 EDT

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Genworth and Canada Guaranty Won’t Adopt CMHC’s New Mortgage Rules


Following the announcement of CMHC’s new mortgage rules last week, Canada’s other two mortgage insurers, Genworth Canada and Canada Guaranty, confirmed today they will not be following CMHC’s lead.

“Genworth MI Canada Inc….confirms that it has no plans to change its underwriting policy related to debt service ratio limits, minimum credit score and down payment requirements,” the company said in a release.

Similarly, Canada Guaranty said it “confirms that no changes to underwriting policy are contemplated as a result of recent industry announcements.”

To recap CMHC’s mortgage rule changes, the following will apply to insured mortgages (those with less than 20% down payment) as of July 1, 2020:

  • Maximum Gross Debt Service (GDS) ratios will be lowered to 35% (from 39%)
  • Maximum Total Debt Service (TDS) ratios will be lowered to 42% (from 44%)
  • The minimum credit score needed to qualify will rise to 680 (from 600) for at least one household borrower
  • Many non-traditional sources of down payment that “increase indebtedness” will be banned
    • It has been confirmed, however, that borrowers will continue to be able to use a loan from their RRSP through the Home Buyers Plan, a home equity line of credit (HELOC) on one of their second properties, or a HELOC on a property owned by their parents if the money is gifted.

“We acknowledge the potential ‘pro-cyclical’ negative impacts on housing markets of CMHC’s decision to tighten underwriting,” CMHC CEO Evan Siddall wrote on Twitter in response to criticism. “However, the benefits of preventing over-borrowing far exceed these costs. Not acting also exposes young families to the tragic prospect of foreclosure.”

Why the Other Insurers Won’t Adopt the New Rules

In explaining its decision, Genworth Canada President and CEO Stuart Levings said the company’s current underwriting policies for insured mortgages already allow it to “prudently” manage its risk exposure.

“Genworth Canada believes that its risk management framework, its dynamic underwriting policies and processes and its ongoing monitoring of conditions and market developments allow it to prudently adjudicate and manage its mortgage insurance exposure,” Levings noted, “including its exposure to this segment of borrowers with lower credit scores or higher debt service ratios.”

Similarly, Canada Guaranty said it has been well-served by its existing underwriting criteria over the years and sees no need to make adjustments now.

“Canada Guaranty utilizes a dynamic underwriting process where our underwriting policies are consistently updated to reflect evolving economic environments and emerging mortgage default patterns,” Mary Putnam, VP, Sales and Marketing of Canada Guaranty, said in a release, adding this has resulted in the lowest loss ratio in the industry.

“Recent insurer announcements relating to down payment and minimum credit score represent a very small component of Canada Guaranty’s business, and we will continue to be prudent in these areas,” she said. “Given implementation of the qualifying stress test and historic default patterns, Canada Guaranty does not anticipate borrower debt service ratios at time of origination to be a significant predictor of mortgage defaults.”

Observers saw the announcements as a positive for borrowers who will continue to have some options in the markets should they not be able to meet CMHC’s stricter qualification standards.

“We like this decision,” noted National Bank of Canada analyst Jaeme Gloyn. “The decision will help soften potential negative impacts to the housing/mortgage market as we argued against tinkering with mortgage underwriting criteria in light of the COVID-driven housing market slowdown.”

NBC had estimated that CMHC’s new rules relating to debt service ratios and credit scores could have impacted up to 20% of CMHC-insured borrowers.

Impact of CMHC’s New Mortgage Rules

So what are the impacts of CMHC’s new rules on borrowers shopping for high-ratio mortgages?

CIBC’s Benjamin Tal estimates the change will mean about 5% of homebuyers will no longer be able to qualify for a mortgage.

For those who can, it will mean a reduction in their buying power.

“Fewer people will qualify for a mortgage, and if they do, the maximum they can borrow will be around 10% or more less than it is right now, ” wrote Ross Taylor, a mortgage agent with Concierge Mortgage Group.

Taylor notes that a household earning $120,000 would currently qualify for a mortgage of around $565,000 plus insurance. With CMHC’s stricter rules, that same household would only qualify for a mortgage of approximately $502,000 plus insurance costs.

“…keeping good credit hygiene is more important than ever if you want to buy a home, especially if you need mortgage insurance,” Taylor adds.

Source: Steve Huebl· News Mortgage Regulations·June 8, 2020

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Genworth and Canada Guaranty Won’t Adopt CMHC’s New Mortgage Rules


Following the announcement of CMHC’s new mortgage rules last week, Canada’s other two mortgage insurers, Genworth Canada and Canada Guaranty, confirmed today they will not be following CMHC’s lead.

“Genworth MI Canada Inc….confirms that it has no plans to change its underwriting policy related to debt service ratio limits, minimum credit score and down payment requirements,” the company said in a release.

Similarly, Canada Guaranty said it “confirms that no changes to underwriting policy are contemplated as a result of recent industry announcements.”

To recap CMHC’s mortgage rule changes, the following will apply to insured mortgages (those with less than 20% down payment) as of July 1, 2020:

  • Maximum Gross Debt Service (GDS) ratios will be lowered to 35% (from 39%)
  • Maximum Total Debt Service (TDS) ratios will be lowered to 42% (from 44%)
  • The minimum credit score needed to qualify will rise to 680 (from 600) for at least one household borrower
  • Many non-traditional sources of down payment that “increase indebtedness” will be banned
    • It has been confirmed, however, that borrowers will continue to be able to use a loan from their RRSP through the Home Buyers Plan, a home equity line of credit (HELOC) on one of their second properties, or a HELOC on a property owned by their parents if the money is gifted.

“We acknowledge the potential ‘pro-cyclical’ negative impacts on housing markets of CMHC’s decision to tighten underwriting,” CMHC CEO Evan Siddall wrote on Twitter in response to criticism. “However, the benefits of preventing over-borrowing far exceed these costs. Not acting also exposes young families to the tragic prospect of foreclosure.”

Why the Other Insurers Won’t Adopt the New Rules

In explaining its decision, Genworth Canada President and CEO Stuart Levings said the company’s current underwriting policies for insured mortgages already allow it to “prudently” manage its risk exposure.

“Genworth Canada believes that its risk management framework, its dynamic underwriting policies and processes and its ongoing monitoring of conditions and market developments allow it to prudently adjudicate and manage its mortgage insurance exposure,” Levings noted, “including its exposure to this segment of borrowers with lower credit scores or higher debt service ratios.”

Similarly, Canada Guaranty said it has been well-served by its existing underwriting criteria over the years and sees no need to make adjustments now.

“Canada Guaranty utilizes a dynamic underwriting process where our underwriting policies are consistently updated to reflect evolving economic environments and emerging mortgage default patterns,” Mary Putnam, VP, Sales and Marketing of Canada Guaranty, said in a release, adding this has resulted in the lowest loss ratio in the industry.

“Recent insurer announcements relating to down payment and minimum credit score represent a very small component of Canada Guaranty’s business, and we will continue to be prudent in these areas,” she said. “Given implementation of the qualifying stress test and historic default patterns, Canada Guaranty does not anticipate borrower debt service ratios at time of origination to be a significant predictor of mortgage defaults.”

Observers saw the announcements as a positive for borrowers who will continue to have some options in the markets should they not be able to meet CMHC’s stricter qualification standards.

“We like this decision,” noted National Bank of Canada analyst Jaeme Gloyn. “The decision will help soften potential negative impacts to the housing/mortgage market as we argued against tinkering with mortgage underwriting criteria in light of the COVID-driven housing market slowdown.”

NBC had estimated that CMHC’s new rules relating to debt service ratios and credit scores could have impacted up to 20% of CMHC-insured borrowers.

Impact of CMHC’s New Mortgage Rules

So what are the impacts of CMHC’s new rules on borrowers shopping for high-ratio mortgages?

CIBC’s Benjamin Tal estimates the change will mean about 5% of homebuyers will no longer be able to qualify for a mortgage.

For those who can, it will mean a reduction in their buying power.

“Fewer people will qualify for a mortgage, and if they do, the maximum they can borrow will be around 10% or more less than it is right now, ” wrote Ross Taylor, a mortgage agent with Concierge Mortgage Group.

Taylor notes that a household earning $120,000 would currently qualify for a mortgage of around $565,000 plus insurance. With CMHC’s stricter rules, that same household would only qualify for a mortgage of approximately $502,000 plus insurance costs.

“…keeping good credit hygiene is more important than ever if you want to buy a home, especially if you need mortgage insurance,” Taylor adds.

Source: Steve Huebl

Mortgage Broker NewsMortgage Regulations·June 8, 2020

Industry Reaction to CMHC’s New Mortgage Rules


Obtaining mortgage insurance for a home purchase is about to become more challenging on July 1, particularly for first-time buyers.

The Canada Mortgage and Housing Corporation (CMHC), Canada’s national mortgage insurance provider, unveiled stricter underwriting policies on Thursday for insured mortgages. The measures include:

  • Limiting Gross Debt Service (GDS) ratios to 35% (from 39%)
  • Limiting Total Debt Service (TDS) ratios to 42% (from 44%)
  • Raising the minimum credit score to 680 (from 600) for at least one borrower
  • Banning non-traditional sources of down payment that “increase indebtedness”

“COVID-19 has exposed long-standing vulnerabilities in our financial markets, and we must act now to protect the economic futures of Canadians,” said CMHC CEO Evan Siddall in a statement.

“These actions will protect homebuyers, reduce government and taxpayer risk and support the stability of housing markets while curtailing excessive demand and unsustainable house price growth.”

What do the Changes Mean for Buyers?

CMHC’s changes will effectively reduce homebuyers’ purchasing power by up to 11%, according to RateSpy.com.

“Someone earning $60,000 with no other debt and 5% down could afford approximately 10.9% less home under CMHC’s new rules,” the site noted. “That’s like jacking up the minimum stress test rate from 4.94% (where it lies today) to 6.30%!”

Roughly 18% of CMHC’s high loan-to-value originations had a Gross Debt Ratio of more than 35%, according to a report from RBC Economics.

And about 5% of CMHC’s originations had credit scores of less than 680, according to data from Mortgage Professionals Canada.

CMHC Going It Alone?

One of the biggest questions since a leak of the new rules made the rounds on Thursday has been whether CMHC’s competitors, Canada Guaranty and Genworth Canada, would have to adopt the stricter underwriting measures as well.

According to the RBC Economics report, they won’t, at least not for now.

“Genworth Canada (MIC) and Canada Guaranty (CG) confirmed to us that they have not been told to adopt any or all of the same underwriting changes,” the report notes. “…although we would not be surprised if they were to eventually adopt some (e.g., down payment sources, credit score) or even all of the changes.”

For what it’s worth, that same report notes that it’s “interesting” that CMHC delivered the announcement, since mortgage insurance market changes have historically been announced by the Department of Finance.

Mortgage Industry Reaction

The announcement elicited wide-ranging opinions from throughout the mortgage industry. Here are some of them…

“I think the changes are well-intentioned, but poorly timed. I understand the rationale, but the people most at risk of default are already in their first home and insured. Disqualifying purchasers now won’t improve the quality of the portfolio already at risk,” Mortgage Professionals Canada CEO Paul Taylor told CMT.

“If house prices do soften, from a public policy perspective, that’s precisely the time to bolster support for first-time buyers. Making homes more difficult to finance will, once again, reserve properties for purchase by the already well-capitalized.”

Taylor added that the timing of the announcement, in the midst of a global pandemic, could further slow the market, on top of the 9-18% home price reductions forecast by CMHC.

“The Federal government is spending billions of dollars to support a struggling economy,” Taylor said. “These changes actively suppress activity.”

Ron Butler of Butler Mortgages Inc. also understands CMHC’s motive, acting essentially as an insurance company.

“They must be prudent in the face of an economic disaster,” he said. “It’s hard to argue against better credit scores when you’re insuring a $940K mortgage. (And) 680 is simply a proper credit score.”

And while first-time buyers may face the brunt of this policy change, Butler noted they can easily choose a lower-cost property, which may be easier in certain regions compared to others.

“Ultimately, I’ll  take these changes over a 10% minimum down payment any day,” Butler said, referring to the policy change floated by Siddall several weeks ago.

Wrong Time to “Tinker” With Policy

While many understand where the policy adjustments are coming from, others are adamant that now is the worst time to implement such changes.

“I would argue against tinkering with mortgage underwriting criteria in light of the pandemic-driven housing market slowdown,” True North Mortgage Founder and CEO Dan Eisner told CMT. “Some of these changes may be needed, but the timing is questionable…it’s as silly as buying an umbrella after a flood. Now is the time to be encouraging economic activity.”

Asked which measure will be the most restrictive for first-time buyers, Eisner said first-time buyers will be most-impacted by the increased income requirements.

“Keep in mind, this change arrives not too long after the Department of Finance implemented the qualifying rate stress test, which already pushed many homebuyers out of the market.”

Responding to critics, CMHC CEO Evan Siddall wrote on Twitter: “We acknowledge the potential ‘pro-cyclical’ negative impacts on housing markets of CMHC’s decision to tighten underwriting. However, the benefits of preventing over-borrowing far exceed these costs. Not acting also exposes young families to the tragic prospect of foreclosure.”

Some, including Butler, foresee a brief increase in home-buying as people rush to purchase before the new rules take effect.

“There will be a minor spike in sales based on this change, and then comes the September Cliff,” Butler said, referring to an expected drop in activity once the widespread mortgage deferral programs come to an end this fall.


Source: Steve Huebl · Mortgage Broker News · June 5, 2020

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