“There are automated systems that provide real estate value assessments,” said Jason Upton, president of the newly-minted Aedis e-rent. “But there’s never been anything that did it specifically for rental appraisals and for specific markets. We do.”
The company, quietly launched last fall, has developed appraisal software focused on Metro Vancouver’s burgeoning rental market. It gathers intelligence from thousands of past and present classifieds, MLS listings, its own appraisers and, even, Craigslist before crunching the data and spewing out a fair market rental value.
Lender and brokers are driving company growth, said Upton, also counting credit unions among users of a service billed as “cheaper and faster” than industry averages.
The service has proved particularly handy for mortgage professionals evaluating the revenue potential of a residential property’s income suite.
Vancouver’s mature housing market has led the country in the growth of basement, second-floor and garage-apartment conversions, all done with an eye to providing a revenue stream for homeowners grappling with the highest housing prices in Canada.
“The rent appraisals a very useful tool for us given the number of income suites on the market and the fact that lenders don’t often require a full appraisal for owner-occupieds with loan-to-value ratios below 90 per cent,” said Deb White, a broker and owner of DLC White House Mortgages in Vernon, B.C.
Her brokerage has been using Aedis’s quick assessments for the past five months, even in cases where sellers can furnish lease agreements for their income apartments.
“Sometimes the rental agreements that you see can have overinflated values,” White told MortgageBrokerNews.ca, “and the economic rent appraisal letter provides the lender with a more objective valuation of the rental income potential.”
There’s also the problem of getting an appraiser access to a rental unit, said one Vancouver broker.
“A lot of times we have everything ready to go, but we’re held up waiting for a tenant to allow access,” said Garth Ellis, president of Verico Ellis Mortgages Canada, pointing to the rules and regulations of the Residential Tenancy Act, which set out restrictions on immediate access for landlords.
Calgary and Toronto brokers are increasingly in the same boat as Vancouver, with more and more homebuyers looking to defray the cost of carrying a property with the help of an income suite. The move reflects the real estate value climbs in those markets, only now coming under downward pressure.
Upton plans to adapt his automated system for Calgary and, then, Toronto – both within the year. The move anticipates the growing need for rent value appraisals separate and apart from the more-comprehensive property valuations that usually include that data.
Still, Aedis e-rent remains a niche service.
“It’s not something that all brokers will need all the time,” said Upton, “but it’s there when they do need it as a one-stop shop for economic rent appraisals.”
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