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Expert Advice

Michael Dominguez, investor and realtor, outlines the key calculating methods that buyers should undertake when assessing the value of a property.

The first is the comparison method. If I own a three-bedroom home with two baths in a subdivision, the first thing I should know is what other similar properties are selling or sold for in that area. From there, add or subtract based on key features in the home.If the last three homes all sold for in the $240,000 to $255,000 mark, there is a good chance your property is also valued the same.

The second method of determining value is based on the revenue it delivers. The most common method of calculating that is by CAP Rates. The CAP, or capitalization rate, is defined as the ratio between the net operating income (NOI)  produced by an asset and its capital cost or alternatively, its current market value. The CAP rate is calculated  annual net operating income divided by cost (or value).

For example, if a building is purchased for a $500,000 sales price and produces $30,000 in positive net operating income (the amount left over after the fixed and variable costs) during one year, then the cap rate is 6 per cent ($30k/$500k).

In 2014, investors in the Greater Toronto Area (GTA) are willing to purchase a property that has a much lower CAP rate then they would have been willing to do in 2010. Specifically, in Toronto, where once 6 per cent was the low number, now I’m seeing deals transpire at rates under 4 per cent. Even in Oshawa, where once 8 per cent was acceptable. Capitalization rates are an indirect measure of how fast an investment will pay for itself. A property with a CAP rate of 10 per cent, the payback is 10 years. At 6 per cent, it is 16.6 years.

Debt repayment, however, is not factored in when determining the NOI. If it were included, the CAP rate would be much worse on a building that had a mortgage versus another that is owned free and clear. The owner’s property financing must have nothing to do with a property’s worth.

Now, let me share with you the importance of consistently raising your rental amounts. For example, if you had a property that can be resold with a 6 per cent CAP rate. If you find a way to increase your rent just $10 a month, that works out to $120 a year. That works out to a value increase of $2,000. Therefore, increasing the rent by $10 a month raises the value of the property by $2,000.

An increase of $100 a month means a property value increase of $20,000. If you have the option of doing a repair to a unit and it would cost you $10,000, you can increase the rent by $100 a month, should you do it? My answer is that not only will you receive the extra rental money, but you have built double the equity in your building.

While some believe these figures only matter when you sell your property, this is not always true. Once you have built enough equity in the building, you can do a bank refinance and get much of your initial investment and/or renovation costs out of the property, while still maintaining a debt to equity ratio that our very conservative banks will accept.  

Be careful when you see CAP rates. The listing real estate agent or seller may not be including all of the actual expenses or be using projected rental revenues rather than actual numbers. I can show a 10 per cent CAP in all of my properties if I exclude yard maintenance, property management, basic repairs and waste removal. I can also show a zero percent vacancy rate and tell the buyer it is always rented.  However, the fact is that these things exist. Get the numbers they provide, and as you are doing the walk through of the property, look for the renovations and services that are not includes in the operating expenses provided.

Investor and Realtor focused on cash flow generating properties in southern Ontario. Besides adding properties for his own portfolio within Oshawa, Cobourg and Orillia, Michael is building a joint venture team for these markets. As a realtor, with ReMax Jazz Brokerage, he uses those investor mindset skills to make a valued member of his clients' power teams. You can reach Michael at This email address is being protected from spambots. You need JavaScript enabled to view it. and follow him on twitter @durhamhome or on his website http://www.durhamhome.ca/.

After what seems like a long period of saving money, you decide to put it towards an investment. You approach your financial planner and propose the idea of investing in a property. The financial planner is hesitant and suggests that it’s not a good idea.

Should you find yourself in this scenario, it’s no reason to panic or put off your property investment dreams. A financial planner’s concern about direct property investment may have more to do with their lack of knowledge in this area, as opposed to the asset class itself, says Owen Davis, of DFG Property Services.

“It’s natural for experts to stick to what they know well and are comfortable with. Many of the more traditional financial planners aren’t licensed to say, ‘go buy that actual property’ so they’ve never really developed an understanding of direct property.”

“Direct property investment is now firmly in the mix for most financial planners when crafting investment strategies for their clients. Clients can purchase properties in their personal name or inside their Super."

Owen says it’s best to interview more than one financial planner about the types of investment strategies they specialise in.

“Like any professional advice, always get a second opinion before making major decisions and ensure you understand what’s being recommended.”

So what sort of characteristics should a good financial planner have?

Well, a good test is to ask the financial planner ‘What’s your opinion on direct property investment and using my super to invest in it?

If you see any of these telltale signs, Davis says it’s best to move on to somebody else:

They look blank or seem vague.

This is an indication they are uncertain or inexperienced with direct property investment.

They dismiss the idea outright.

If there’s no explanation of why it’s a bad idea for you specifically, they may be doing what’s easy and comfortable for them, rather than what’s best for you.

They say it’s a great idea, without saying why.

This can be a sign of a planner who is too eager to please and isn’t taking into consideration your personal circumstances before allowing you to invest.

“A good financial planner is always focused on what’s right for your personal circumstances, and they will make a concerted effort to find out what those are before giving advice,” says Davis.

Let’s say you own an investment property and you’re at risk of things turning pear-shaped. Perhaps you overextended yourself financially, or you’ve run into trouble with dodgy tenants? Whatever the problem, there is always a potential solution. Helen Collier-Kogtevs from Real Wealth in Australia explains.

1.    Reinforce your finances

If you are facing financial difficulties for a particular reason, such as a prolonged tenant vacancy, then you need some funds to help you manage the situation at hand. My advice would be to immediately focus on creating a buffer account. If you don’t already have a cash buffer account at your disposal to help you deal with unexpected financial emergencies, I suggest you focus on creating one immediately. Savings from your salary, tax returns, redrawing equity in your home loans – do whatever it takes to create a cash buffer account, ideally offset against your PPOR mortgage, so that you are in a position to make clear decisions, without being ‘forced’ to sell any of your properties from a place of desperation. At the same time, make a serious and concerted effort to pay down any ‘bad debts’ such as credit cards, as they chew through your disposable income and divert precious funds and resources away from your investing pursuits. Ultimately, if you do not have a tenant, you want to do what you can to get a tenant in place to ensure you have some rent coming in so that you are not having to fund the full mortgage repayment each month.

2.    Get your head out of the sand

Often when a situation is turning negative, we may avoid facing up to it – and this can be a very costly mistake to make. I’ve seen many investors who have needlessly gone to the wall financially, often because they didn’t face their financial woes early enough. The sooner you take a proactive approach, the sooner you can put the right steps in place to turn your situation around.

3.    If necessary, seek help

A trusted property mentor, a friend in the industry, a colleague who knows property inside out – turn to those people you know and trust for advice, as they will be able to help you review your situation from a clear, unbiased and objective place. Importantly, they can then help you to strategize how to move forward in a positive way. Remember, there will always be new opportunities to create wealth through real estate, and by having a clear strategy and flexible, honest approach, you place yourself in the best possible position for property success.

Tim Collins from Student Rental Investing explains the art of writing a good ad to attract great student tenants.

We are getting to that time of year where students are beginning to think about where they are going to live in September, especially if they haven’t already got accommodation organized for the upcoming year.  So you may be thinking:

-How do I stand out from all the other ads on Kijiji?  

-What should I write to get the most attention for my ads on the off-campus housing web site?

-What resonates with the millennial generation?

Whichever type of website you’re going to advertise on, I suggest doing some research to see what your competition is like. On many sites you can see the date the advertisement was published and how many views it receives.  This will help you in understanding what people are clicking on.  

Great ads will typically contain the following information:

 

1.    An interesting and catchy title.  

If you use titles similar to everyone else’s you’ll blend in with the other ads.  Stand out and be creative “This house includes free Kraft dinner on move in day” or “So close to college you can wake up late and still be first to class” – You get the idea, make it amusing and different to get more attention.

2.    Key info on Location/ Availability/ House/ Transit

A short intro is fine “This Student Rental is located just a few hundred metres from the University. Less than a five minute walk and you're sat in your class starting your day!” After that, get to the point.  Gen Y wants information clearly laid out which can be easily consumed. They don’t want be trudging through a romanticized description while trying to figure out if unlimited Internet is included. Use bullet points and be concise.

3.    Take great pictures

As the famous quote goes “A picture speaks a thousand words” so this is a key component of your ad.  If you see an ad with no pictures or ones of messy rooms, it’s sending a message to your potential tenants.  It’s not easy to take new photographs when the rooms are occupied.  At change over time, when the rooms have just been cleaned, take your pictures and then save them in a folder so they’re accessible for future use.  If you really want to stand out shoot a video walkthrough.  This can also allow for students to get a feel for the place prior to a showing.

Finally, make sure you are clear with your instructions of how to be contacted and the best way for people to engage with you.  Not surprisingly, gen Y likes to text so if you are open to this write it on your ad. Set up a separate email and text number (they are available free online) so that you can batch your times to respond for maximum efficiency.

Margaret O’Sullivan from O'Sullivan Estate Lawyers Professional Corporation explains the issues of cross-border, multi-jurisdictional, domestic trust and real estate

Canadians are increasingly mobile within Canada. Employees are transferred and move with their families to another province, couples decide to retire in a province with a more moderate climate, or seniors decide to move to be closer to their children and grandchildren. But in changing jobs, lifestyle and family connections, our legal "lives" are also changed. It is surprising how significantly the basic laws that govern property rights on marriage breakdown and death differ if we survey each province's and territory's regime. This fact is not well-known among most Canadians, and can lead to unexpected results.

In a recent presentation I made at the Annual International Estate Planning Institute in March in New York City, I had the opportunity to speak on this topic, and surveyed each Canadian jurisdiction (see my presentation and the full survey). Here are a few highlights:

-To divide family property, most Canadian jurisdictions use a "proprietary" model - which focuses on the division of specific assets (B.C., Alberta, Saskatchewan, New Brunswick, Nova Scotia, Newfoundland, and Yukon). Generally, this model is considered more flexible, provides less certain outcomes, and is more narrow in scope in the type of assets divided.
-The other model used is the "compensation" model which divides the value of property built up during the relationship, not the property itself, with certain types of property excluded, such as gifts and inheritances (Manitoba, Ontario, Quebec, P.E.I., Northwest Territories and Nunavut). Generally, this model is considered less flexible, produces more certain outcomes since a formula is used, and is broader in scope, since it typically also includes business assets, leading to a greater equalization of property.
-Some provinces have extended a claim for division of property on breakdown of a relationship to certain cohabiting spouses, not just married ones, (including B.C., Saskatchewan, Manitoba, Quebec, Nova Scotia, Northwest Territories and Nunavut) based on specific conditions being met, including length of the cohabitation. The rights of common law spouses can change dramatically if a couple moves to another province or territory.
-A dramatic difference is that death is not a triggering event for a property claim in all Canadian jurisdictions: claims on death are not available in B.C., Alberta, P.E.I., Yukon (under pending Alberta legislation, death will be a triggering event for married spouses). Where a claim can be made, some limit it to married spouses only (Ontario, New Brunswick, Newfoundland, and Quebec (unless the couple have entered into a "civil union")). Saskatchewan, Manitoba, Northwest Territories, Nova Scotia, and Nunavut allow claims on death for certain cohabiting spouses.

Consider the result if a couple moves from Ontario to P.E.I. to retire, and one of them changes their will to exclude the other. While resident in Ontario, the surviving spouse would have had a claim to equalization of their family property, which is not available in P.E.I. leaving the spouse in a far different situation than they may have expected. Or if a business owner moves from Ontario with her common law spouse to Manitoba, and the relationship breaks down. Had the breakdown occurred in Ontario, there would be no statutory claim for property division, and in Manitoba there is.

The overarching question is why is there not more harmonization and uniformity in Canada on certain fundamental issues relating to property division? Recent provincial updates of their legislation seem to reflect each province or territory still "doing its own thing", which leads to disharmony, as well as unpredicted and unexpected results for the average person. And it also leads to the critical need before making that move to also understand the legal implications, and plan accordingly.

 

The comments offered in this article are meant to be general in nature, are limited to the law of Ontario, Canada, and are not intended to provide legal advice on any individual situation. Before taking any action involving your individual situation, you should seek legal advice to ensure it is appropriate to your personal circumstances.

 

If you’re like most new homeowners, the warmer weather and longer days may have you thinking about how to make your yard as beautiful as your new home. But before you dig in, there are a few things you should consider when planning landscaping or building additional structures around your house.

When building your new home, the builder has taken care to ensure that water will not accumulate at or near the foundation. Any landscaping that alters this grade could lead to poor surface drainage, ponding, flooding, basement dampness, or foundation settlement – all of which could result in damage that may not be covered by your new home warranty.

When planning to add flower beds, a pool, a deck, a second driveway, or any new structure around your home, take care not to alter your property’s drainage patterns. The Ontario Building Code requires that a building should be located or graded so that water will not accumulate at or near the building or adversely affect adjacent properties and that exterior foundation walls should be extended a minimum of 150 mm above the finished ground level.

Lot grading requirements vary from municipality to municipality, so before making changes to what your builder has put in place, check with your local building department to understand the requirements that apply to your home. In general, the following guidelines should be followed:

  • •    The top of your foundation should be above grade a minimum of 150 mm for masonry cladding and 200 mm for wood cladding.
  • •    Grade the lot so that the land slopes away from your house for at least 1.8 metres around the foundation.
  • •    Do not change the elevation around the lot perimeter.
  • •    Extend downspouts so water flows away from the house and does not collect next to the basement walls and windows. No matter how much the elbow joint of the downward drain spout disrupts your flower beds, don’t take it off or water will drain from the roof straight down into your foundations.
  • •    Ensure surface drainage is directed away from window wells and exterior stairwells.
  • •    Swales (depressions in grading between tract properties that are intended to manage water run-off) should be located within the limits of the lot and have a maximum depth of 150 mm and a side slope of 3 to 1.
  • •    Don’t cover up weeping holes (small openings located near the base of masonry structures). These allow water inside a building to move outside and evaporate. Raising the grade above weeping holes could not only allow water to back up and weaken your foundation, but may also allow insects and small animals to enter the building.

Understanding this information before you start landscaping will save you time, money, and frustration. It may also help keep your basement dry and your warranty in place. 

For more information about how to protect your new home warranty, visit tarion.com or find us on Facebook.

Michael Dominguez from Durhamhome.ca advises investors on why you should not be tempted to repeat past mistakes.

We all know the expression, those that do not study history, are doomed to repeat it. I look back to the American real estate crisis that hurt so many real estate holders.

The investors in the U.S. in the mid-2000s that focused on cash flow in their investments, rather than appreciation, found that even though the value of their investment dropped, their cash flow remained solid. In fact, some found cash flow actually improved, as the new stream of renters (people that lost their homes) increased rental demand, thus allowing rental amounts to stay strong and in some cases, increase.

Fast forward five years and look at the Canadian market. I see so many investors jumping into the new condo builds in Toronto. I have asked a number of the investors what kind of cash flow they are generating.

The cash flow, including maintenance fees, for those new builds Toronto condos are well into the negative side. This means that each month, in order to maintain the property, they need to take money out of their own earnings, to sustain the property.

They reason this decision in a few ways.  First, I’m told that the value of the condo will go up, so any monthly expenses are more than offset by the rise in values. Investors reply that it is because real estate always goes up in value. That is a very dangerous bet. As a realtor, I do believe that now is a wonderful time to buy. But never assume the values will rise. That is not investing, that is gambling.

Second, I’m told that the expenses they incur is principle on the mortgage. If you look at the pure expenses, then they are up. While technically that is true, the reality is you still need to supplement your property with outside funds to keep it afloat. What happens if you can’t continue to do that? Then you are in a very precarious position and will either need to incur further personal debt to keep the property afloat or you may lose the property.

The third one, though less common, is something I hear a lot. My expense numbers are fixed and in time, the rent will increase. Again, that is speculating. Unless you have a defined plan to increase rents, or other means of increasing income, such as renovating, this property is a cash flow loser.

I always look for properties that will produce positive cash flow. This means if I never sold another property ever again as a Realtor, my properties are paying for themselves. And Ii the economy takes a dive, and the values of my property instantly drop by 10 to 20 per cent, I know that I’m still chugging away making positive cash flow. It sucks to know that the property is worth less than I paid for it, but I’m confident that in 20+ years, with my debt on the property all but gone, I’ll have a good chunk of wealth built up.

Now don’t get me wrong, I feel the market conditions are right for further growth in Ontario real estate. Interest rates will remain low, the economy is stable and we are seeing population growth. It is all good. Also, if you are able to obtain a desirable property that is creating positive cash flow wealth, it is probable that a property like that will remain desirable in the future.

When people tell me that real estate is too risky, I ask them where they have been most successful in building their wealth. The typical response I get is that they don’t have any sizable investments. If I could find a better, safer, long term investment, I’d buy it.

There is a reason why I choose to invest in real estate. But remember, not all real estate is the same. Be smart in your selection and work with a team that can get you what you require.

Michael Dominguez is an investor and award-winning Realtor focused on cash flow generating properties in southern Ontario. Besides adding properties for his own portfolio within Oshawa, Cobourg and Orillia, Michael is building a joint venture team for these markets. As a Realtor, he uses those investor mindset skills to make a valued member of his clients' power teams. You can reach Michael at This email address is being protected from spambots. You need JavaScript enabled to view it. or on twitter @durhamhome

Forget shares and term deposits. Here are 10 reasons why you made the right call to invest in property.

1. You have more leverage
Property offers more financial leverage, and the more leverage you have, the more quickly you can build wealth says Rocket Property Group founder, Ian Hosking Richards.

“For example, if I purchase a property for $400,000 I can put down a 10% deposit and borrow 90% from the bank.  If that property increases in value by 10% I have made $40,000, because I have only contributed 10% of the purchase price but I get 100% of the growth,” he explains. “So if it goes up in value by 10% in the first year I have effectively received a 100% return on my initial deposit.  And if the original deposit and other buying costs came from my existing equity, it means that I have borrowed the full cost and do not need to put any of my own cash in, but still get 100% of the growth.  I would aim to purchase a property that has great potential for growth and pays for itself even on high borrowings, so for me it is hard to imagine any other investment that is more attractive.”

2. Investing in property is simpler than you think
The amount of paperwork you need to produce and information you need to assimilate can be daunting at first, but the investment process in itself is remarkably simple.  There are no complicated steps you need to take. As long as you’ve got your finances sorted out, you can start doing your research to find the right property. If you apply thorough due diligence in terms of getting inspection and valuation, there’s little risk for you to overpay or buy a dud property.

3. You have “control” of your investment
Unlike other investments classes, property offers you with many options in terms of growing the value and income on your property. You can also control where you buy, how you buy and when to sell.

4. You have stability
Real estate is less volatile than stocks or mutual funds, especially in uncertain economic times. The continuing demand for housing fuelled by strong population growth ensures property prices are supported in general. It’s also worth noting that the price drops most people fear are NOT real losses until you actually sell the property. If the property was purchased correctly and generates a healthy cash flow, the investment can be sustained until the price gets back up again.

5. Property is an easy asset to understand
Unlike the share markets where there are complicated terminologies you need to get your head around, real estate is relatively simple. You know what a house, unit or a townhouse is and you don’t need a 60-page prospectus to tell you all about it.

6. The taxman helps you pay off your investments
You can claim a range of tax deductible expenses through your investment property, which will help reduce your tax bills and improve your cash flow. A good accountant can help you cut your tax expenses by the tens of thousands of dollars, legally through your investment property.

7. Your tenants pay your mortgage
Another advantage to property investing is that tenants are paying down your mortgage while you sit and watch your investment grow in value.

8. Property offers predictability
Property is undoubtedly more predictable than other investment-classes.  With well-chosen property, you can look out to 18 or 24 months into the future and know which direction the market pressures will be pushing, unlike the share markets where anything could change within seconds.

9. Property is recession-proof
Property with strong cash flow can ride uncertain times such as during a recession for simple reason that it meets a basic need- housing. People will always need a place to live, even during difficult times. They would do everything just to have roof over their heads. They are prepared to forgo other luxuries just to have enough money to pay for their rents or mortgage.

10. Property can make you rich
Real estate makes more billionaires than any other asset classes. In the recent Forbes Billionaire’s List, it reported that a total of 135 property tycoons now make up the world’s wealthiest list with 14 property billionaires joining the ranks this year alone, boosted by surging property values around the world.

Negotiating doesn’t come naturally to a lot of people. It’s scary, daunting and intimidating. But with a bit of research and insider knowledge, you too can score a great deal using the tactics buyer’s agents use. Empower Wealth’s buyer’s agent Cate Bakos shares her top tips.

1. Using ‘stock on market’ information. While a certain type of property in a specific area should have a price tag commensurate with other houses of its type in an area, supply and demand will adversely affect the predictability of a sale price. Often I will deliberately source property in an area based on the buying advantage at the time; for example, if a 3 bedroom dated house is on the market alongside many others of its kind. This ‘micro glut’ can give a buyer anything up to a 5% edge, and possibly beyond if the glut is serious.

2. Finding out enough about the vendor’s plans and expectations. If you have this information, you can make an offer compelling to them, and with the focus on their ‘terms’ needs as opposed to their preferred price. For example, I recently negotiated a fabulous price on a property based on appealing to the vendor’s needs. She was going to auction that Saturday for a property she loved; so I staged the settlement date to either give her the 63 days required, or alternatively (at her request), to convert to 120 days should she be unlucky and miss out. This meant that she had flexibility with her own arrangements and could comfortably bid on the property she loved.

3. Having a robust comparable sales analysis to equip the agent with to defend your offer. Agents will often tell the vendors an optimistic target in order to get the listing. In these cases, the agents then have to defend the offers they receive from buyers and entice the vendor to accept the market sentiment in relation to the real value of their property. This is known as conditioning the vendor and most vendors are loathe to tolerate this with the agent who initially told them the big price in the first place. I find that if I am the bad guy who gives the agent the supporting information to defend my price, the agent and their vendor are more willing to consider the lower offer. Scientific analysis and supporting documentation might be bad news to a vendor who wanted a dream price, but this form of information is generally considered and often accepted by a vendor.

4. Making two different offers with differing terms. Rather than offending a vendor with a low price, I often submit TWO prices. The low one has the terms which are enticing, but the higher offer has tough and almost intolerable terms.The win for the vendor and their agent is that the vendor has choice. Obviously I need to be prepared to honour both, so I make sure that the ‘win’ for my client (in the event that the vendor picks the higher offer), is strong enough to make the deal worthwhile for them (ie. super-long settlement with access prior to commence works).

5. Time-stamping your offer with a sunset clause.  If I feel that the agent might be inclined to either shop my offer around, or if he/she is working with other buyers on the same property, I might put urgency on my offer. It can sometimes force the vendor to make a decision and it can close out the other buyers who haven’t had time to complete their due-diligence. It’s a delicate balance though – no vendor likes time pressure and it can backfire and cost you the deal if you read the situation wrong. Only apply pressure if you are confident that your offer and terms are acceptable as-is.

6. Making the offer UNCONDITIONAL. This is the strongest and most compelling of offers. The offer should be in writing and without conditions if you are keen to have the most favourable terms above all other competing buyers.Just be aware that in Victoria, the cooling off period lasts for three business days unless the offer is signed by a real estate agent themselves.

7. Incorporating some win-win conditions into the contract. Incorporating clauses such as “use of campaign photos for advertising online for rent prior to settlement”, and “access prior to obtain tradesperson quotes” can be a huge advantage to the buyer and of little concern to the vendor. The time to do this is at the negotiation table, not afterwards.

8. Exploring the option of doing further business with the agency. Every agency wants ongoing business with new buyers. The obvious two opportunities for the agency are either new listings or new rental properties. I leverage my ability to offer either or both when I meet a new agent.

9. Bluffing with “another house” if you feel that the agent is bluffing with “another buyer”. Buyers often complain to me that they are being pushed by agents who suggest ‘other buyers’ are on the property.Most of the time, this may be true. But for those who I feel are lying about it, I bluff them right back with my ‘other house’ theory. Two can play that game.

10. In the case of two shortlisted properties; letting BOTH agents know that two offers are on properties and the first will be successful. This is only advisable in an environment where the agents are accepting verbal offers. I never endorse making two written offers. It can result in buying two houses.

11. Sharing with the agent a limited budget or yield. Often, when I am at the absolute end of my tether with budget (and only when I am confident that there are no other buyers competing with me on the property), I may share with the agent that I am out of budget.They can lean on their vendor heavily with this fact and it takes the sting out of a lower-than-hoped-for offer by moving the focus from the property to the client’s budget. In many cases, the vendors flex to accommodate the buyer.

12. Off-markets!! These are the most exciting form of purchase for me as a Buyer’s Advocate right now in a Seller’s market environment. Off-markets are like secret listings which nobody else knows about. The opportunity to do a fair deal without competition is a huge bonus for many buyers who have consistently missed out due to competition. Staying close the agents and having strong relationships is the key. A good buyer’s agent will get multiple off-market opportunities every week.

Tim Collins from Student Rental Investing talks about why now is the best time to update your student rental.

One of the biggest complaints people have with student rentals is that they get run down quickly. It’s true that the rentals endure considerable wear and tear, as you’ve got six adults living in a space. One of the initial ways of mitigating the run down effect is by selecting materials that are appropriate for high traffic, such as flooring that is scratch resistant, functional kitchens etc.

After the end of April many students vacate the properties and go home, so that’s when we can get in and do any necessary renovations while causing the least inconvenience for anyone. It’s also a great time to clean up the outside of the property, remove garbage and get things looking good.

What you should look for during summer clean up:
•    How is the condition of the flooring?
•    Are the toilets flushing well and not constantly running?
•    Is the painting tired and scuffed in need of freshening up?
•    Are evestroughs clean and directing water away from the house?
•    Is the outside of the property clean?
•    Are there and dents in drywall to fix?

Of course, if you have more major things to do such as replacing the roof, or gutting the kitchen or bathrooms the same applies in terms of the summer being the best time.

During the year, I advise landlords to visit the rental periodically to see how their condition changes over time. I aim to visit my properties once every four to eight weeks to see how things are going.  I do have a property manager who does a great job but I need to see them to constantly evaluate the potential upcoming maintenance. 

For more information, check out www.studentrentalinvesting.com

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