Rental Madness

September 5th, 2014 · Property Management

Mercedes Racer  (LOC)Business is good and continues to get better, I finally hired a fantastic new property manager. She’s the bees knees with a proven ability to find quality tenants 100% of the time. She’s also one of the most diligent and ethical people I know. I’ve just been too busy and it only makes sense to get someone aboard who can provide the same or better level of service I provide.  So if you happen to get Dina on the telephone instead of me, say hi.

It’s been really busy this year and I can’t help but be happy about the number of properties I rent and manage increasing every single month.  I have a few clients I’ve worked for for over 10 years now. That’s even longer than I’ve been in business as Landlord Rescue. Some people found me from my previous employer. They saw my photo on the web and called me up. One of the tenants I placed is still in the unit from over 10 years ago, a landlord’s dream.

The Most Qualified People Doing The Important Crucial Work

The most important part of the entire landlord business is the “Tenant Acquisition Process” and that is where most people have the most problems. The biggest mistake is probably thinking too much about your own needs and compromising and taking chances. The second biggest problems is underestimating how important it is to screen for niceness and decency in a tenant. After all you may end up in a 10 year business relationship.

Yet in most management companies, the people with the most experience are not doing the work that is the absolute cornerstone of the entire business. Selecting quality tenants is the single most important task in property management.   Without that you have a house built on sand. In most management companies, this crucial task is relegated to underlings. Not at Landlord Rescue.  Renting property is still my favourite task, I get out of the office and meet new people.

Last month, when Dina started, she asked me if she could do N-4′s or Non payment of rent notices. We did not have any. Not one. This month I did one, but it wasn’t for a tenant I rented to, it was for a tenant on a property I took over from another manager. A triplex, it had two units empty, one for over nine months.

We also managed a back to back rental in a condo in Mississauga, I like to rent back to back if I can. It’s a little more nerve wracking for us, as we have to coordinate the trades and old tenant move out and new tenant move in gracefully. For the owner it saves a month’s rent which makes a big difference. We don’t always succeed but we do try to rent the unit while the tenant is getting ready to move.

It’s a strange accident of fate that renting and managing condos pays us a lot more than managing rental buildings.  So my clients benefit. We benefit. My passionate commitment to providing a service with real value, with guarantees, to investors is paying off.

Life is Good.

 

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Water Theft?

August 17th, 2014 · Personal House, Property Management

rusty waters

So yesterday I heard an entirely new situation. So the resident of the super nice homes I manage calls me with a complaint. His wife went outside and caught the neighbor filling a bunch of 5 gallon pails to water her garden. In the rain no less.

In the past they noticed that their hose bib was not where they left it so they suspect it’s been going on for quite a while. They knocked on their neighbors door to discuss the issue with with them. The neighbors did not answer.

So he called me, and we had a good laugh about the joys of multiculturalism and we tried to figure out a way to keep the water theft from going on. We know she knows it’s wrong because she startled when she saw the resident looking at her and apologized and ran away. Then they would not answer the door.

My only suggestion other than turning off the water every time they go away, was to call 311 and ask them what to do. Other than that the Police?

Anyone else ever dealt with this? Please let me know in the comments.

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See You Later Robin Williams

August 13th, 2014 · Excellent Service Awards

Robin Williams Dead at 63

I’m sad Robin Williams is dead, it’s too final. Despite what looked like a fantastic life, he hung himself. He had a wife and kids that loved him and seemingly everything to live for, he’s dead today because the pain of living was greater than the pain of being dead. He didn’t owe me anything to keep on living in pain so I wish him well, he provided me with laughs and joy.

I think my favourite line of his is in Mrs. Doubtfire as Mrs. Doubtfire recounts her amorous adventures with Mr. Doubtfire. Apparently Mr. Doubtfire’s idea of foreplay was to shout “Brace yourself Effie ! ” As a young woman I remember laughing my head off relating all too well to the comedy.

Mental Illness Is Very Common

Mental illness is very common everywhere, in fact if we are all honest, the “mentally ill” are probably more common than the sane people. As a manager you are all too often going to deal with crazy people of all types, from people having a bad day to full on hospitalizations. If you’re lucky it’s not you. :-)

I remember one nice professional lady who did have some kind of issue discussing how someone was messing with her toothpaste and messing up her house. She was 100% convinced that someone was entering her suite and moving her stuff. As I looked through her file, it became clear that either she was the victim of a long standing conspiracy by building staff or something was wrong with her. The building had changed her lock 20+ times and police had come. Her TV also talked to her even when unplugged. That was the major clue to a problem I could never fix.

When I was doing evictions full time there was no shortage of drug and alcohol addicted individuals who were simply so caught up in their disease they could no longer manage money. One guy punched our accountant in the face when he refused to give him a rent receipt for rent he hadn’t paid so the tenant could file his income tax. We couldn’t even get rid of him as he moved from apartment to apartment in the building as a visitor.

No one is too mighty to be spared mental illness. When I was in college I used to help a guy named Neil buy eggs and shop for food, he had been a guy with a family and great job, and kids when struck down by schizophrenia later in life. A majority of us are either ill to some degree, have been ill, work with people who are ill, or have family affected by mental illness.

One of my friends Dave, hung himself in a park. He was funny and smart and played the guitar and we even flirted a few times. He had 2 children and struggled with addiction.  Like Robin he had people who cared for him, but the pain of living and struggling was too great.

RIP Robin

 

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Rental Market Report

August 12th, 2014 · Property Management

SoftThe effects of the wholesale dumping of condos onto the rental market is having noticeable effect this year. This is prime rental season and properties are moving but nowhere near as fast as last year. Properties are very price sensitive this year as well. In other years you might get away with an extra $100 in rent, but this year supply is plentiful and you will not get any calls at all until the price goes down.

I’m having to work really hard for my money this season and we are not seeing any price increases only decreases in the condo world. To put this in perspective, I have suites I’ve managed for 6-7 years that are renting for the same price I originally rented at. The maintenance fees have gone up steadily during that time.

So if you are having a hard time, you’re not alone. I was also speaking to a colleague in Ottawa and they too have the same problem. Houses they would have rented in a week before are taking a month. I’d say prices are actually trending downwards as landlords have no choice but to lower prices in a market with outrageous amount of supply.

Sorry about the bad news, but it is what it is.

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Drinking The Kool Aid – REIN Membership

August 5th, 2014 · Rental Property

SCARY CLOWN FACESometimes comments deserve their own blog posts.  I asked a long time ago if REIN membership was worth it? My generous offer to read over their materials and review them is still open. At this point I don’t even know if Rein Membership is worth it because I still haven’t seen their “stuff” Frankly, I’d think these hugely successful property owners would be too busy with their properties to bother with teaching other people unless it was more lucrative than property investing.

REIN Ownership Change

There was also a changing of the guard over at REIN and Don Campbell has taken a back seat to new President Richard Dolan. From Richard’s website his specializations. “Research areas Dolan maintains expertise in include: Positive Leadership Psychology, Happiness Economics, Behavioral Finance and Investor Resilience. Dolan’s business ideology is in growing one’s brand promise, communication prowess, competitive advantage and immunization from commoditization.”

That sounds very happy to me and it sounds like the kind of thing that lines his pocket and not yours.

Reader Comment About REIN

You become a product of the company you keep and the advice you listen to.

If you keep hanging around with people that have turned their only rental into a Home Office, (This means me)  or someone that had a tenant who didn’t look after the suite, or pay rent, (Every single landlord ever eventually) then you will end up with the same quality of results.

I purchases 2 properties “blind myself” 16 yrs ago, then stopped  for 3 yrs because I was told it was a poor investment by friends and associates, then met a contractor putting in my lawn sprinkler system, got chatting and he Told me about the REIN group, as he was an active REIN member with over 20 properties, so I looked into, liked their philosophy and ideas, and what they said about “Networking with like minded positive people and only take advice from people who have actually done and succeeded at what you are interested in”, and avoid all the “Dream Stealers” who know it all but have not actually done it, or tried it, but failed because they didn’t treat investing like a business.

I purchased 5 more single family properties by refinancing my first 3 and pulling out over $250,000 of their equity into a new larger mortgage (which the renters paid for plus still some Positive Cash Flow) , until 2010 when the marked stumbled. My property prices were still cash flowing positive, but prices were stagnant so I figured maybe Canadian Real estate was done it’s run for a while, so I cancelled my $100 monthly info only membership with REIN and spent on $35,000 learning strategies and taking mentoring courses for investing into US real estate, and US Tax Lien and Deeds.  Looked great. I am making a little at it, but it is a huge unknown and risk investing in a different country where it is difficult to Network and build a quality Investment contact’s team. (This sounds like the money would have been better spent on down payments on property)

I just restarted my REIN monthly info only membership last month, realizing that Canada is the best place to invest! I put a deposit on TWO great brand new Town Home units in Central Alberta that will Positive Cash Flow me over $300 each initially, and go up every year, plus $5000 mortgage paid down by my renter every year, not to mention if I figure in an extremely conservative 3% annual home price appreciation, I will make over 33% Return On my Investment of $55,000 …. on each of the properties! I have not found any other investments ANYWHERE that have produced anywhere close to 33% ROI (not even 10% after all fee’s are taken off, usually they spend more time going down than up).(Clearly REIN membership gives one the ability to predict the future price increases)

I am so happy I re joined the REIN “community”. They educate, inform of present market conditions and inspire me by being able to listen to, read about, and “Network With” abroad and at monthly live conference events filled with over 400 “Like Minded Positive and Serious Investors” at all different stages of there success in the business. I am so happy I rejoined! Just by being guided to make this recent purchase I will build (predicting the future again) over $35,000 annually (and growing each year), so ya, I think the “small” investment in myself of $3,200 has paid for it self about 10 Times just on this one deal in first year, and then infinitely there after.

Start associating with Positive People, and Avoid Naysayers like the Plague, as they are just Dream Stealers, because as you know, “misery loves company”! :) Cheers, here is to your Health, Happiness and Success!

Math is real

You can count all the chickens you like before they hatch, the bare facts are that you did not make anything until you sell the house. All your predictions of cash flow and return on investment are just dreaming until you collect the cold hard cash. Saying this is just pragmatic and not “dream stealing.” No one needs to “dream and have vision” to be a real estate success or failure for that matter. What is necessary is to have a concrete business plan and method of execution and leverage your personal assets to make the best possible choices. If you are right you are right. If you are wrong you are wrong.

Cash Flow Is Not The End of The World

All these systems of investing to make millions have a huge emphasis on positive cash flow when 99% of the properties being sold in the places where appreciation is the highest do not cash flow. Beating the rate of inflation by a half of a percentage point is not really something to aim for in investment. Most of the time your “cash flow” will end up at less than one month’s rent at the end of the year. If you have to paint between tenants you’ll have to take it out of next year’s “profits” A furnace or a roof is going to be 5 years or so of cash flow. Can we just stop bullshitting ourselves? Please?

Your investment house or condo is not going to be paying you. You are going to be paying it. Know what you are doing. It’s ok, it really is. You can stop fudging the numbers and admit your dirty landlord secret.

There’s nothing wrong with it. You like so many other people are trying to improve your lot in life and invest your money wisely so it grows. All that for less than a case of beer per day :-) It’s a positive thing. For many of you, your rental house is a hobby or second job and that’s ok too.

Providing housing for people to live is one of the most valuable services that can be provided in my opinion and it’s why year after year I keep renting to tenants, managing property and working for landlords.

Cash flow or not, lying to yourself and changing the numbers is a far more serious problem than not cash flowing.

There’s No Such Thing As A Free Lunch

There is no such thing as passive income. No one is giving away money and if people did start giving away money, you still have to work beating back all the other people who want their share of free money. Investment returns are higher in Oshawa and Hamilton? I’ve rented and managed places in both those markets. You will work for the extra $50 in cash flow I can assure you. The tenant profile is interesting. Does that mean that you as a landlord can’t make money there? No it doesn’t. It means that you will do extra showings, extra screening, enjoy extra vacancy, do extra cleaning and do extra repairs. All those things add up to extra work.

But what do I know about Durham and Hamilton? I have managed town house complexes in both those areas for several years and I still manage several houses in Oshawa, Whitby and Pickering. I think my experience with over 100 properties over many years qualifies me to say something about the subject.

Challenging Ideas Is Good

At heart I am a scientist, I want to see data, and I want to challenge ideas and I’m seeking the truth. I don’t need people who confirm my bias. my ideas and business plans need to stand up to negativity and questioning. They will certainly be challenged out there in the marketplace. I like a good argument based on the facts but when you start name calling you’ve ceased being productive. In short, every time you call me a “dream stealer” you’ve stopped thinking and retreated to your tower of belief.

REIN teaches that real estate is about cash flow and that has nothing to do with believing anything. It’s analytical. So why the hate ? Why the pep rallies? Why is belief necessary? I already know that real estate can be a good business because I live it every single day.

Cults scare me, even business cults.

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