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Buying Property and LandlordingAny advice?


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#1 sixgunsound

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Posted 09 December 2015 - 07:53 AM

Okay, so I'm tired of renting. Not that it's a bad deal; despite living in a sketchy neighbourhood I pay very little and no utilities. So, my conundrum: the neighbourhood is gentrifying, the subway line will be open here in less than 2 years, a light rail train across Finch Street by 2021. Because I'm right next to a university with 50,000 students there is never a chance that renters will be scarce. 

 

Properties here in the north end are pretty cheap; there are townhouses built for students (ie. divided into many rooms) some of which are still under $500,000. I'm thinking about getting an attached unit with something like five rooms. I've been told that my renters should cover my mortgage and that I should live like a pauper in the smallest room until I can afford another property. My friend took a vacation to Portugal with the cash money from his washing machines. 

 

Does anyone here have any experience with property ownership or landlording? HELP ME YOU FUCKERS. 


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#2 crab man

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Posted 09 December 2015 - 08:12 AM

I would advise you to make sure the building is in very good condition. Unless you want to be a slumlord, you'll be held responsible for every single thing that breaks... I never knew you were so capitalistic. like a little trump jr. over here.


no.. no. I'm sorry. that was an inexcusable insult.

#3 w00dy

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Posted 09 December 2015 - 12:40 PM

go for it sixy, sounds like a winner mate. i would like to do the same.

 

this probably isn't applicable to your situation, but my mums letting agent was fucking shite. i bet she cost my mum about 10 grand simply because of the things she didn't do with/to a bad tenant. if you don't like telling students to go fuck themselves or want to sort out the shit they've not reported and think it might be worth paying someone else to organise it, just be careful who you employ


Edited by w00dy, 09 December 2015 - 12:46 PM.

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#4 gravity

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Posted 10 December 2015 - 04:20 AM

Renting can be a bit of a bitch.  For every story I hear of somebody doing well off it I have a comparable horror story.

 

Most of it revolves round the small print on so called "landlords insurance" which by all accounts isn't really worth the paper its written on.  For example a mate of mine was renting out a flat and went to do an inspection finding that his tenants had completely trashed the place and vacated.  When he turned up the front door was off its hinges...........

 

the upshot being that although the tenants were known to the police as people who had done this up and down the UK and the police were investigating the incident the door was off the hinges and therefore the insurance company said anyone could have done it and didn't pay out.  The damage was extensive.

 

Getting a mortgage for a buy to let is completely different to getting a mortgage for just buying to live.  Banks can be funny about that view it as higher risk so I would definitely speak to a few lenders and see what they can do for you.  That is if you are borrowing.  For all I know you could have a pot of gold in the cupboard.

 

I would definitely let the rooms through a reputable letting agency.  You want someone there who is going to manage things for you  i.e. checking reference, collecting deposits and dealing with any complaints (i.e. the boiler isn't working).  That said in the story above a letting agency was used and the fake references fooled them (or probably weren't checked that thoroughly).  Also a letting agency will make sure that you have a legal and favourable contract in place.

 

Personally I'm not sure id like living in a property while I was renting rooms.  As nice as it would be to keep an eye on the place I think the constant hassle of "my window is stuck" "the heating isn't working" "when are you fixing the light fitting" would drive me mad.  I know one guy that did that and although it wasn't a bad experience for him he always said it was a pain in the ass because he got dragged into every petty dispute as the arbiter.


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#5 sixgunsound

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Posted 10 December 2015 - 06:54 AM

Yeah, I hear the horror stories. I need to save a few thousand more bucks before I can buy though. So just asking around first ha! 


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#6 Dave C

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Posted 10 December 2015 - 08:44 AM

I have one in the UK that i rent out. Had it for 5 yrs no, without too many problems.



#7 awesem

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Posted 14 December 2015 - 03:28 AM

I ran a propery investment company a few years back. But I really only know about the NZ Property market, so it may not translate, but this is what I learned:
1) Property investment is a LONG TERM investment. If you buy in a good area, despite short term fluctuations, capital gains will always increase long term. Population and demand is not decreasing.
2) Utilize the services of a quality property manager. They will charge, but build it into your long term strategy, you wont regret having someone to fight your fights when the shit hits the fan. My mum is a property manager and she takes no crap from anyone. She's super strict on who she allows in to her landlord's properties and all of her landlords are very happy investors.
3) Be a good landlord. Treat good tenants well. They're caring for your investment. Shit tenants could ruin everything. If a good tenant asks for a new 'something' and your property manager sees it as feasible - do it.
4) Definitely talk to an 'independent' mortgage broker and structure your mortgage correctly. In NZ mortgage brokers get paid by the lenders and there's no charge or extra fees at all to you.
5) again refer to 1. Expect your investment to be LONG TERM. Buy smart at the start and stay in the market. Dont be disheartened by fluctuations if you bought smart at the start.


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#8 sixgunsound

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Posted 14 December 2015 - 10:15 AM

that's grand. 

 

im not particularly worried about fluxations in the housing market for toronto, especially with the investment in transit nearby. only gonna be worth more. 


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#9 w00dy

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Posted 15 December 2015 - 03:24 AM

i think it would be a delightful twist to live in the building and not have any of the other tenants know you own it. best of both worlds really


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#10 sixgunsound

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Posted 15 December 2015 - 06:39 AM

thatd be sneaky. theyd figure it out probably tho lol


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#11 TheNewSponge

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Posted 15 December 2015 - 01:42 PM

Also, it'd be sneaky if you murdered them all, like one a month, in an increasingly gruesome manner.



#12 w00dy

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Posted 15 December 2015 - 02:14 PM

pinning each murder on next months victim


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#13 crab man

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Posted 15 December 2015 - 03:58 PM

but then would you have to break into a jail or a police station to kill them?

#14 TheNewSponge

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Posted 15 December 2015 - 05:09 PM

Guys, I think we just wrote the next Gillian Flynn book!



#15 w00dy

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Posted 16 December 2015 - 01:37 AM

but then would you have to break into a jail or a police station to kill them?

maybe he could kill them with a time delayed method of dispatch. such as a stick of dynamite with a month long fuse or simply with a really slow bullet shot from a very long way away

 

also you have much faith in the police, id have faith in them to round up the local black or hispanic people before they thought to blame ol sixy


Edited by w00dy, 16 December 2015 - 02:47 AM.

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#16 mandible

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Posted 19 December 2015 - 08:04 AM

Renting to (trusted) friends is always good, for tax reasons.

 

So I hear.

 

Even if your mortgage is paid by the tenants, I would still throw money at it... the quicker you can shift your mortgage, the better. I took mine out for 15 years, but should clear it in 5, because I have nothing better to spend my money on hah.


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#17 doosh baggins

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Posted 25 December 2015 - 03:54 PM

Just get the cheapest properties possible, don't fix anything, and when people complain, just pretend you don't hear them. That's what my landlord does and he's making a killing. He's also a 9th degree black belt and makes a lot of money teaching karate, but I think most of his income comes from the properties.


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#18 Ayaura

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Posted 01 January 2016 - 11:20 PM

Hey sixy,

 

It is not a bad idea to invest into property, I bought a home a year ago, although were I live, 500k would have bought me a mansion on an acreage.

 

I am not familiar with the residiential tenancy act for Ontario, but I think I have heard that it can favour the tenants (ie, not allowed to evict during the winter months). I have been on both sides of the fence, a tenant for many many moons, and most recently a home owner who rents out her spare room so that she can afford upgrades on her property like gutters, porches and sheds.

 

If you can get a good tenant that is most important. Become familiar with the tenancy acts, if you are not already. It might now be a bad idea to use leases, especially since you are planning to rent to students, that way at least if anything goes sideways, you can always use the lease terminantion date as a contract end, instead of things getting messy and going to arbitration.

 

I still can't believe you are looking at 500k though, that is a hefty downpayment, especially if you want to save enough to not fall under the CMHC rules, come buy out here! There are several LNG faciliites proposed (although I know you are an envionrmentalist), but with the modernization of our Alcan smelter, we saw house prices almost double due to the influx of transient workers in the area. Rents also went up substantially which is what drove me to buy instead of rent. I started with the bottom rung of the ladder, I bought a brandnew 2014 mobile home for 100k, with 5% down, that is 5000, my morgage payments and pad rent are very affordable, and in five years I hope to own enough equity in it to sell it and put a decent downpayment on a house with a property.

 

Good luck!

 

And most important advice i can give you is to get a very reputable home inspector, do a bit of research yourself, always look in the attics and crawlspaces to check for sign of mold or rotting/cracked foundations. There was a very good documentary I saw on marketplace about home inspectors, it might be worth checking out.


Edited by Domnicella, 01 January 2016 - 11:51 PM.

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#19 Ayaura

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Posted 02 January 2016 - 12:52 PM

Just an after thought, in BC, if you live in your home and have roommates, it does not fall under the residential tenancy act, you must draw up your own contract, if you don't you have entered a verbal contract and in a dispute it can become "he said, she said" when trying to enforce any terms of your agreement. I don't know the rules for Ontario though.

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#20 sixgunsound

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Posted 04 January 2016 - 08:47 AM

Anything under 500k is only condo territory and I really don't want to pay fees. Thanks for the info tho! 


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