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Show us Your Investment Property: Gerrard East

Yes, Virginia, there is such a thing as a house in downtown Toronto for less than $500K, and savvy investor Cindy Wennerstrom walks CREW through just such a property and her renovation plans for increasing ROI. Jemima Codrington reports.

Video transcript below:

Jemima Codrington: Today we are in the [coctional ] El Dorado here to check out another one of your investment property. We caught up with Investor and Renovation Expert, Cindy Wennerstrom on this week’s Show us your Investment Property.

Wennerstrom bought a house estimated over a 100 years old in October of last year. Located in a little interior area of Toronto, the property cost $488,000. The house will be renovated into 3 separate one bedroom, one bathroom units, each with self contained laundry and state of the art appliances.

Cindy Wennerstrom, President, Oro Properties Inc.
Cindy Wennerstrom: I chose this property because it had charm. It’s a older home, it’s probably a 100 years old. It has all the original base boards, trims, mouldings, doors. It needs a little bit of work, which I like because we like to add a little bit of lipstick. But there are some great features in old homes, like this brick wall behind us, which is actually the old chimney.

But all we did was expose the [latent] plaster and have this great feature that it’s added to both the bedroom in the main floor and this living room on the second floor. Also we will be exposing a wall in the basement that’s all brick and so we just had a lot of features that are going to be appealing to renters.

Not only that, but the way that it was set up was a non-legal triplex. So immediately I saw the opportunity to convert something that was not legal into legal triplex. There is a demand for investment properties, believe it or not lots of people are leaving the condo market and are trying to get into neighbourhoods like this one, that’s close to all the amenities, but not as concrete jungle as living downtown because they are starting families, but they need help with their mortgage.

So they can live in one unit, rent out the other two and live for free. So actually the strategy was it’s a great investment from an investment perspective. Never wanting to sell it’s a great investment because you are going to get huge cash flow with 3 units versus 2 units or one unit. So it just, it has a lot of potential.

Jemima Codrington: Wennerstrom’s thrifty approach to renovation has helped her to improve the property’s appeal to tenants without breaking the bank.

Cindy Wennerstrom: This top unit was pretty easy to actually make it look pretty. All we did was paint, it had just a really stark white paint,

Jemima Codrington: On the wall effect

Cindy Wennerstrom: It’s attractive. You know, it doesn’t look good at all when it’s white and stark. It looks like a hospital execution. The back room was relatively newly renovated. So what we did was swap up the old style sink and faucet with a new top mounted wall sink with a high faucet, put a really big mirror right across the wall, just to let that bathroom feel even bigger than it is and new light fixture and we are going to take away some of the older you know towel rods and stuff like that, put more modern fixtures in, you know $20, $50, $100 fixtures but not tens of thousands of dollars.

To renovate an entire bathroom, we are looking at somewhere between $5 -10,000 depending on how crazy you want to get. But I think I spent all of $500 on the bathroom and it’s going to look pristine when it’s done.

Jemima Codrington: Yeah.
Cindy Wennerstrom: The kitchen, that kitchen was actually just recently renovated, so it looked pretty good, but it had older faucets, so I put in new faucets, we are putting a micro oven above this stove, we swapped out the ancient appliances for new stainless steel

Jemima Codrington: Okay, so it’s a huge difference.
Cindy Wennerstrom: Oh, it was awful before I and we’ve added laundry. So now this unit will have its own self contained laundry in the unit. So it’s a really, you know it’s a great one bedroom unit for a professional couple or individual that just wants a beautiful space close to town. We also swapped out light fixtures, fitted beautiful [ lamps __ ] and really modernises the place but not very much money.

Jemima Codrington: And in terms of rent for this unit, what do you think you may yield, that you will get for this?

Cindy Wennerstrom: We have this unit advertised for $1550 a month. I am happy with anything you know $1450 around. So I mean the cash flow when you look at the entire building you can get those kind of rents from 3 units, the building is very comfortable.

Jemima Codrington: Okay so this floor is still under construction a little bit more. So what are we doing with this one here?

Cindy Wennerstrom: Right now, we are, we just finished fire rating, because when you are legalising property, you have to fire rate between your entrances and exits between units and between floors. So the whole new [drive] all over here, the floors will be sanded and stained, next I have to top it with colour to hide all the imperfections of these original floors. This wall we expose, so again we have

Jemima Codrington: This is the same as

Cindy Wennerstrom: Yeah, the same two panels.

Jemima Codrington: Yeah, that panel. Okay, cool.

Cindy Wennerstrom: So we have exposed chimney brick wall here and we kept the original mantle that was here, we thought it was an interesting piece.

Jemima Codrington: Yeah.

Cindy Wennerstrom: You can put some closets on either side of this mantle, because this is going to be in the bedroom and then in the living room, we are putting in new light fixtures of course. We have really nice high ceilings here which is nice. In the kitchen, new appliances, we are changing the doors to the bathroom, because right now the bathroom door opens to your kitchen sink.

If you see a rental where the kitchen and the bathroom are in the same room, most people aren’t going to rent it.

Jemima Codrington: Yeah.
Cindy Wennerstrom: So we are flopping the doors to the other side, so you enter from the living room.
Jemima Codrington: Okay.

Cindy Wennerstrom: And [number one here] is again minor renovations here, aside from all the dry wall dust because of the new wall and we should be able to rent it out for at least $1550 [or above].

Jemima Codrington: And so this is the basement unit and this is going to be pretty much a complete renovation.
Cindy Wennerstrom: Yes.

Jemima Codrington: Right, okay.

Cindy Wennerstrom: So the basement, you can see from the kitchen and the bathroom room that we are here. We are not keeping any of it. And not only that it’s a low ceiling, if I can touch the ceiling.

Jemima Codrington: Yeah I know, I am little close up here.
Cindy Wennerstrom: Claustrophobia. So what we found, when we did an exploratory test dig in the furnace room is, we have double [padding] here, double brick [padding] which means we can down about 8 more inches and not to have to not to underpin or [betch] and so it will be within code requirements. So we are going to be able to steal quite a bit of height
Jemima Codrington: Yeah.

Cindy Wennerstrom: Probably 6 or so inches. So you can imagine, if we were down here
Jemima Codrington: Yeah

Cindy Wennerstrom: it would be a lot better, so
Jemima Codrington: and I guess downfilling is quite expensive though.

Cindy Wennerstrom: It’s really expensive. Not that digging and pouring new concrete in it.

Jemima Codrington: ¬¬Uh-huh

Cindy Wennerstrom: But it is still substantially expensive, but the trade off the value it adds the house will be substantial.

Jemima Codrington: Yeah.
Cindy Wennerstrom: So and it makes for a much more rentable space. I mean you know you can only give a small market that can fit in an apartment like this.

Jemima Codrington: Yeah and fitting. And this is the wall as well, you said it’s going to be exposed brick too

Cindy Wennerstrom: Yeah. And this whole wall because it’s a semi detached home, they have bricks separating the two units. Most likely where fingers were crossed that seems to be that, seems to be what’s here, so we are going to expose the entire wall and makes bricks separate out of it as this does

Jemima Codrington: Going to look really nice.

Cindy Wennerstrom: No like a funky buy, you have to do different things to basements to make them a little bit more appealing because no one really wants to live in a basement. But as long as you can make it you know dry.

Jemima Codrington: Yeah, natural light.

Cindy Wennerstrom: Natural light, have some windows, we will have a glass door back there will, you know better expose this window and try to get more lighting to the unit and you know lower it so it’s got more height and so a really sexy fun kitchen, bathroom. It’s going to be very very very rentable. And not just for a basement rent because basement rent is anywhere between 650 and 950 let’s call it. Ours rent will be between a $1000 for a really short one

Jemima Codrington: Short one
Cindy Wennerstrom: Oh this high, upto but if it wasn’t you could get $1250 to $1300. So this unit here will be marketed for around that $1500 price point, well 15, 13, 15.

Jemima Codrington: Yeah.

Cindy Wennerstrom: Plus utilities. So you get

Jemima Codrington: Are you getting yard space out in front as well.

Cindy Wennerstrom: Yeah, just a little bit of yard space out here and looking to reconfigure the entire back entrance way so it’s appealing. Right now again it’s short and to duck to come in and give them a little bit of a you know feeling that they have a little bit of a yard.

Jemima Codrington: Yeah. No, it’s nice. And so what when you are

Cindy Wennerstrom: Yeah.

Jemima Codrington: Will they, they will be, good planning, good planning. But when you are thinking about a renovation and thinking about which [level] of standard you want to do it towards, what is your kind of, do you have a benchmark, do you have rule that you follow?

Cindy Wennerstrom: Yeah, I do. If I wouldn’t I will live in it myself, I won’t rent it. So I bring all my units up to a standard where I will be comfortable living in it and you know I have high standards so what I would live in and what I would want it to look like. So as long as it meets those criteria I am done and I don’t want to leave, I kind of feel very comfortable in it.

Jemima Codrington: So the job is done.

Cindy Wennerstrom: It’s a job well done, yeah.
Any tips for renting out a unit?

Cindy Wennerstrom: Some people think staging is just to sell a home. But when you are renting your properties, you are really selling them to the renter. So I think that staging is a essential in the renting game and what I like to do is take something as simple as this bed, it looks brand new like a nice beautiful headboard and bed.

But what this is, this is material on cardboard and this is a [blurb up] the head. So we just put some really nice bedding with some Accent cushions on it. Night tables are just you know $20 night tables and $10 lamp. So it doesn’t cost a fortune to stage your unit and so it’s amazing and the renters can emotionally connect to this space and see how their furniture will fit. So is it selling your place to the renter a lot faster?
Legalized Triplex

  • 3 x1 Bed/1 Bath Units
  • Purchase Price $488,000
  • Rent Cashflor: $4,400/month

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