Rentals are Not Condos and We Need Them

December 18th, 2017 · Kids & Family

There is a giant difference in this life between wants and needs. It’s not really popular but I am by nature exceedingly pragmatic. We have a huge problem in this city of Toronto and the city of Vancouver with housing. First we have a lot of people with unrealistic expectations of housing and that problem is getting worse and worse.

First I want to take a moment to appreciate Toronto Community Housing Corporation, who has often been a victim of censure on this blog. My main problem with the city of Toronto is not the way they maintain their buildings, but in their hypocrisy.  Reality says as a tenant you cannot expect a whole lot of service for $200 per month and that fact is borne out in those buildings. Regardless, because of TCHC, there are a lot of low income people who have a house that is warm and dry and for that I am really grateful. I do not envy the people who work there. Of course no one wants to say, you get what you pay for, but you get what you pay for.

Champagne Dreams – Beer Budget

Rentals are all about fighting the good fight of reconciling the budget. You get what you can afford. The landlord is in effect your housing parent, continually forcing you to stay on budget. There is no rental credit card. The owner of the building decides what he pays for, and in most cases you get some what decent service, and have a warm and dry place you can afford.

An experienced landlord knows that things like boilers and roofs cost millions of $$$ and will be saving money for it well ahead of time.

Basically in most rentals if you are on a beer budget, you get beer, probably Bud Light, realistically that’s not a minor accomplishment in today’s bat shit insane Toronto market.

This is what we need a lot more of, just rentals all over the city. I had that idea that the City of Toronto should allow up to rental 6 plexes everywhere in Toronto that is currently zoned for single family. Why not? Frankly I don’t give a shit about what the neighbors say. The neighbors all want changes that will increase their property value, but we need housing more than we need to enable their feelings.

We need Walmart level of housing, not Coco Chanel housing and we need a lot of it. Nothing will provide that more than rental housing that is large enough so that the occupants don’t have to move when the place is sold.

Condos Are Not Rentals

While we are lucky that the condo market has provided a lot of rental housing, the condo structure of ownership was never designed for rental housing. First of all it’s just too expensive and fancy. Second once the condo is sold, the tenant is usually displaced.Third costs for condos are rising a lot faster than rents are increasing. For example in one of the condos I  manage maintenance fees went up 12.6% but the rent increase maximum is 1.8% in Ontario.

Not to be rude, but any idiot can see this is not going to provide a long term solution to the housing need, landlords aren’t going to continue to sign up for a money losing rent subsidy situation once prices go down. They just won’t.

In the past, owners turned to AirBnB situations to make more money but now the city has made a bunch of rules to prevent that which I think are going to fail badly. It’ll be like herding cats to figure out who is renting what etc. and the AirBnB website has said quite clearly that they aren’t going to police the rules of every city to make sure that their hosts comply.

Again the core problem is landlords won’t sign up for a money losing situation, and asking them to is just as crazy.

I see condos as way too expensive to provide housing for most people, and offering way too many services. Like one of the buildings I manage a unit at pays over $200K per year just for security, are you that important that you need a security guard now? You can’t let yourself into the building? Honestly when buildings hired actual concierges, it was really nice, but when they outsourced that to security companies that pay poorly trained employees minimum wage and they don’t know anyone in the building, and they can’t take mail or keys, I’m just not sure what the purpose is.

So we need to adjust our expectations of what as a society we can realistically afford for housing and use evidence based housing information to make out decisions.

One fact is undeniable, condos by the simple process of being bought and sold, are unstable as rental housing. Period. The solution to that is to provide a number of rentals buildings too large to be emptied upon sale, and too simple to be really expensive, and to build them in single family neighborhoods to avoid straining infrastructure.

City Role

The cities role is to tell people how to build what they want them to build and what will sail through approval. Then figure out how it could be financed and work to expedite it all. Building what the city wants you to build should be simple and easy. The city needs to look at it’s own friction points and ask themselves how are we going to change this?

We also need rental only zoning perhaps as I mentioned in the single family areas, with an emphasis on above ground dwellings. Basement apartments aren’t a long term solution to housing either. Nice 3,4,5,6 plexes, are nice manageable buildings for smaller landlords with pride of ownership, and can provide density in single family areas without disrupting the entire community.

Landlord is not a dirty word.

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Warm Fuzzies of Meeting Old Tenants

December 7th, 2017 · Property Management, Rental Property

Landlord Rescue’s first business plan didn’t even include property management, we were solely a leasing company that found great tenants for landlords. That business (even more than regular property management) was based on no news is good news. I would rent a place, and not hear back from the landlord for 1-2 or more years or maybe never. One of my tenants is still living in the place 15 plus years later.

There is a vacuum of information for the rentals you do that are good, until the owner calls you back and asks you for another tenant. If there are problems the owner is definitely in touch to let you know. This is tough sometimes.

The other day I was lucky enough to hear from one of my previous tenants and that was really nice. I used to manage a town house complex in Oshawa, and as happens when the place turned over hands, I was let go. But the other day I met up with one of the tenants who still lives there from 7-8 years ago, and the place has gone through a number of managers, and she told me that I was the best one so far, one of the people who followed me in that position stole a bunch of money, and drama, drama, drama.

It was really nice to get some positive feedback from a tenant. Not to mention one of the challenges of my job is getting the owners to spend money to pay to repair things, and that’s not always easy especially when it’s a building. Like the owner of that townhouse complex paid $70,000 for new windows and a month later a tenant used a circular saw to cut the plastic window frame so he could fit his air conditioner in. Basically that was the one final straw that broke that landlord’s back, and he sold his complex.

My point is oftentimes a my job just involves an absence of pain and so even though you do a lot of work and set up for things to flow smoothly, no one notices. People just don’t go around saying “holy crow did you notice that house is ok and the tenants paid the rent in full and on time?”

However this does make the rare instances where a tenant or owner praising you feel even more meaningful. For instance I got another call the other day about a property in Brampton, where we’d had a bit of a challenge with the tenant as she was moving out, and some vacancy as we searched for another tenant. The owner was like “Looks like things have settled down over there” of course it’s been a year since our troubles which just goes to show what I’m talking about here.

As a property manager you have to keep your own head on straight, because most of the time neither your tenants or your owners know when you are doing a good job, and sometimes that’s just leaving things alone when that’s what’s called for.  Deciding to do nothing is a valid choice. Recognizing and accepting that not all problems can be fixed. I have a tenant who hears voices, tenant disputes, poverty, lack of money management skills and world peace. All of this is way above my pay grade.

Everyday, you just plug away and do your best.

Warm Fuzzies Welcome

 

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Brad Lamb/Fortress Project Cancelled

December 4th, 2017 · Fortress Real Developments, Property Management

In another lesson on the interconnectedness of all things canadian real estate, Brad Lamb has cancelled the Jasper House condo, which has been 50% sold for 3 years as a favour to the people who invested their money and are expecting a condo to be delivered.

What remains to be seen is what will happen to the poor mom and pop investors who were encouraged to risk their money in a “sure deal” flogged by Fortress. Will they lose their money?

The Fortress is Underwater.

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Ben Myers

December 1st, 2017 · Fortress Real Developments

For posterity, here is Ben Myer’s photo mocking Marc Cohodes, roving chicken farmer, Canadian goat herder, and general genius/crazy man short seller.

Ben Myers is trying to egg on Mr. Marc Cohodes. My guess is the egg will be on his face. The peak is in peeps, when you start stirring up the chicken coop, the shit’s on you.

Cockadoodledoooo!

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CRA flagged “Ponzi Like” Fortress Syndicated Mortgages – FSCO To Blame

November 30th, 2017 · Fortress Real Developments

I am so sick of the cowardly enforcement squeaks of Canadian Regulators. They might as well be in bed with the criminals, they are so lazy and weak. They have the intestinal fortitude of a reused Kuerig Pod.

Investors lose money, real money in these schemes and we are the laughing stock of the world when it comes to money laundering, mortgage fraud, white collar criminals and general lack of prosecutorial gumption. If you don’t lose a case ever and you settle every case for fines you never collect, what the hell good are you? Your job is to protect the Canadian people from predatory schemes. Just do it.

Landlord Rescue Journalism Prize Awarded to Matt Scuffham on Reuters

When I read this article about FSCO and Fortress the mortgage syndicators today, I just about jumped for joy.  The article begs the question, why would FSCO ignore so many egregious violations of so many rules? CRA even flagged Fortress as a “Ponzi like Scheme” and I can’t help but agree. It reeks of collusion and complicity.

Then when you start looking into their projects, it gets worse, and regulators aren’t doing anything except waiting around for them to go bankrupt. Investors will lose even more money… then investors will be told it’s your fault you didn’t do enough due diligence. Then once one of the many projects does go bankrupt investors will be told, this is is a civil matter hire a lawyer. Lawyers will say, the money is all gone, so it isn’t worth pursuing it and Jawad keeps driving his Bentley while senior investors have to get jobs to pay back the HELOC said mortgage broker (Double ending commissions) got for them, to play interest rate arbitrage with shitty pre-construction condos and shady developers.

 

Surely the government can find some people with some stones here in Canada, to stop this kind of malfeasance.  We need forensic accounting, and seizure and sale of assets to make Canada an unsafe place for white collar crime. Enough is enough.

Stop the madness!

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