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Turning Over An Easy Rental Condo

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Turning Over An Easy Rental CondoInvesting in rental properties is one of the best ways to grow your wealth. Many people have retired with rental income and/or become rich from their investments. However, being a landlord is a lot of work. Even the easiest rental condo can take up some time especially when there is a turn over.

In 2010, we purchased a one bedroom condo in the building next door and this unit has been the easiest rental property I’ve own so far. We pay an HOA fee and the property manager maintain the common area. I only have to worry about the interior of the condo. It’s a small place so there aren’t too many things that can go wrong. Our latest tenant stayed here for 3 years and they have been mostly trouble free. They are doing better financially so they decided to buy a brand new house in the suburb and moved out last weekend. They cleaned the condo pretty well, but there is still plenty of work left for me to do.

Being a landlord isn’t completely passive

Here is my maintenance list so far.

  • The garbage disposal was not working. I found and removed a small pebble from inside the garbage disposal. It’s working now.
  • There are sticky tapes on the wall. They used double sided tapes instead of nails to hang things up. It took me a lot of time to get these off the wall. Honestly, these sticky tapes took much more work to remove than patching nail holes. I’ll have to add a sticky tape clean up fee clause to the lease for our next tenant.
  • The carpet is in pretty good shape, but there were some stains and the edges next to the walls were dirty. I decided to call in the carpet cleaning guy and he did a nice job. This cost $200.
  • The bifold closet door fell off the track. I got new hardware and fixed it.
  • The kitchen range hood filters were full of grease and needed to be replaced. I ordered some new filters from Amazon and will install them once they arrived.
  • The smoke alarms were over 10 years old so I replaced them with new smoke alarms that you can’t open. Tenants like to mess around with the smoke alarms so it’s best to take that option away. These new smoke alarms should last for 10 years and the batteries don’t need to be replaced.
  • Replace 2 halogen light fixtures. I hate these because the halogen bulbs are so expensive. They use a lot of electricity and they run hot. One of the fixtures looked burnt out and the switch didn’t work consistently. I replaced the old light fixtures with new LED fixtures and replaced the light switch as well. The LED fixtures should last many years so I never have to deal with bulb replacement for a long time. It’s the tenant’s responsibility to replace the bulbs, but they always have a hard time figuring out how to do it.
  • The walls are in pretty good shape, but there are some scuff marks. I need to retouch the paint a bit.
  • The bathroom needs a lot of work. This building was built in the 60s and the bathroom doesn’t have a ventilation fan. I just found out the tenants kept the door close after they took a shower because the steam set off the fire alarm. That’s really bad because there was too much humidity. As the result, there are some molds on the wall and ceiling, the paint is cracked and peeling, and the towel bar is rusted out. I’m going get some help to clean this up and repaint the bathroom. It’ll probably cost around $250 and I’ll charge some of this to the tenant.

Whew, it’s been a long week and I’m almost done with these. What comes next is the really difficult part.

Finding a new tenant

Fixing up the condo is a lot of work, but finding a good tenant is even more difficult. Once the condo is ready, I’ll post an ad on Craigslist and start screening tenants. Here is what I’m looking for.

  • Good credit score: 700+
  • Steady income: Rent should be less than 25% of income. The condo will rent for $1,350 per month so a new tenant should make at least $65,000 per year. More would be preferable.
  • Recent bank statement: I like to see at least 3 months of rent in their bank account.
  • Good renting record: I’ll call the previous landlord to see if the tenant has a lot of issues.
  • Meet the tenant and see if I get a good feeling. I’ve been lucky with my tenants so far so I guess I should trust my gut on this one.
  • No pets

My rent is pretty reasonable so I shouldn’t have too much trouble finding a new tenant.

Rental condo finance

Unfortunately, I’m not making much income from this property. The rent is barely enough to pay the mortgage, property tax, and HOA. However, the appreciation is pretty good on this rental condo. We purchased it for $140,000 and probably can sell it for around $250,000 now. We put 25% down, $35,000 in 2010. Once we sell the condo, we should see a tidy profit.

Overall, this condo has been pretty easy to manage. It is just a one bedroom apartment so there aren’t too many things to deal with. I’m thinking about getting out of the landlord business altogether, though. The property price has increased quite a bit, but there are a ton of new condos and apartments being built. I have a feeling the appreciation won’t be as good in the future. If the appreciation is slow, then there is no point to owning this condo since I can’t charge enough rent to generate good income. I’m seriously considering selling it and invest more with RealtyShares when Mrs. RB40 retires. That way, we’d have more passive income. Having a rental that doesn’t generate income only works when you already have a good job.

Alright, I still have a few more things to fix at the rental. Everything should be done by Sunday, though. It’ll be nice to get this condo rented again. Do you invest in rental properties?

***If you want to invest in real estate, but don’t want to be a landlord, check out RealtyShares. You can generate very nice passive income from funding different real estate projects like apartments, offices, restaurants, and single family homes. See how I’m doing with my real estate crowdfunding investment.

Related: See how we’re generating passive income this year.

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{ 61 comments… add one }
  • [email protected] October 12, 2017, 3:25 am

    Not too bad for a tenant who stayed there for three years. Do you do regular inspections too? I have three rental properties and had the tenants from hell until this February in one of my units. What I have learned the hard way is that you shouldn’t just call the last landlord but the one before too. Sometimes the last one just wants to get rid of them!
    In Ontario, even if you stipulate “no pets”, there is nothing you can do if your tenants decide to get one. I have had that happen to me twice already.

    • retirebyforty October 12, 2017, 8:48 am

      I drop by occasionally to help change the light bulb and that kind of thing. I didn’t notice the mold last time. It was mostly on the ceiling and I didn’t look up…
      Thanks for the tips. I will call the previous landlord as well.
      I’m pretty sure we can evict or at least raise rent if they bring in pets. I usually charge a pet deposit fee if they have a cat. But this time, no pets because I don’t want to deal with the clean up. We’ll write it into the lease.

      • [email protected] October 14, 2017, 2:17 pm

        I wish we could charge a pet deposit in Ontario. All we can do is ask for last month rent, no other deposits . I do add a paragraph in my lease in case of damages due to pets but it is so hard to go after tenants (the bad ones).

    • mary w October 16, 2017, 11:04 am

      Unfortunately more and more people are playing the “service/support animal” card and then you can’t deny them having the animal. In many (certainly not all) cases it’s really just a pet.

  • Ember @ An Intentional Lifestyle October 12, 2017, 3:37 am

    I love reading landlord stories because we want to get a few rentals in the future. I’m overly optimistic about pretty much every thing, so reading how others handle landlording keeps me aware of the ups and downs of it.

    That seems like the renter was a good one if that’s all the work that needed done. I’ve heard of much worse turnover situations. But overall, I do get the desire to get out of rentals. Especially if you already have the blog and all to keep you busy.

    • retirebyforty October 12, 2017, 8:49 am

      Yes, the previous tenants were pretty good. There are some work, but that’s not unusual. We always need to do some maintenance when someone leave. I don’t mind being a landlord if the cash flow is good. This place doesn’t create any cash flow, though. The appreciation is nice, but cash is king.

  • Mustard Seed Money October 12, 2017, 3:39 am

    I personally jumped out of the rental real estate business. It became more of a headache than it was worth. I made some good money but once you have a certain amount of money set aside to take care of your expenses. It really doesn’t make it worth it. I would rather have the money sit in the stock market and collect my dividends 🙂

    • Harald @NonlinearThings October 12, 2017, 3:41 am

      I see your point, but would you also like to put your money into the stock market, when it goes belly up and your companies decide not to pay any dividends anymore?
      Collecting rent is at least a legal claim that you have…

    • [email protected] October 12, 2017, 8:35 am

      I’m in the same boat right now preferring passive equity investing to real estate. Well, I never purchased a rental property but did rent out my condo for a couple of years after moving out. I found it to be a bit of pain for a very small profit. Maybe I’d have fared better if I purchased a property based on the rental income rather than wanted it to be a home.

    • retirebyforty October 12, 2017, 8:52 am

      Each local market is very different. I feel like our market is starting to level off and it’s probably a good time to sell. We’ll probably sell in a year or two. I don’t want to put a lot of money into the stock market now, though. It seems overvalue. That’s why I’ll probably invest in real estate crowdfunding instead. That’s one way to stay in real estate.

      • Harald @NonlinearThings October 12, 2017, 1:44 pm

        I really need to look more into real estate crowdfunding. However, I am a bit scared that the projects on the different crowdfunding sites provide not enough documents for a good due diligence. Nevertheless, the whole crowdfunding stuff might become even more interesting for real estate developers in the future.

        Kind regards
        Harald

        • retirebyforty October 13, 2017, 9:14 am

          They provide a good amount of information. You should sign up and check the documents out.
          My concern would be how much checking RealtyShares does. Do they verify all the info provided?

  • Harald @NonlinearThings October 12, 2017, 3:39 am

    Sounds quite ok for me. As you mentioned the small things, like fixing the walls, getting the carpet cleaned etc are no problem. I would be more afraid of the bathroom. I assume the bathroom has no window, thus humidity will always be a problem and you can only get rid of it with tenants that leave the door open. I hope your new smoke detector won’t make any troubles – in fact shouldn’t they just detect smoke, not just high humidity?
    Anyways – if the property doesn’t make too many problems, I would stick with it and pay off the mortgage so that you have more cash flow.

    Kind regards
    Harald

    • retirebyforty October 12, 2017, 8:54 am

      Smoke detectors will trip with steam. I moved it away from the front of the bathroom so it should be a bit better. We’ll see how it goes.
      I think I’ll get a little fan for the bathroom. They can turn it on when they’re done with the bathroom. Although, just leaving the door open would already help a lot.

  • Pennypincher October 12, 2017, 4:17 am

    I’m with Mustard Seed, let the $ sit in the stock market.
    I think you need to cut a renter a little slack, they aren’t even first time homeowners yet, and don’t know the ins and outs of keeping a property up. I can clearly see that from my neighbors next door, first time homeowners. Sorta clueless!
    I would think you’d rather have a tenant that would call you w/any issue, any question at all, than to “let things go” and cost (you) more later.
    Great blog post/info for landlords, Joe!

    • retirebyforty October 12, 2017, 8:55 am

      I am cutting them a lot of slack. I only charge them $100 to clean up the bathroom.
      Next time, I’ll write “keep the bathroom door open” into the lease.

  • Mrs. Groovy October 12, 2017, 4:19 am

    We owned a few rentals years ago but neither Mr. G or I have the patience for it now. We’d need a property manager if we were to do it again.

    The appreciation on your rental is sweet! Most folks in rentals seem to choose a property based on monthly cash flow. Was it your plan to invest in a rising market?

    • retirebyforty October 12, 2017, 8:57 am

      Right. We definitely don’t want be a landlord when we’re older. Maybe just one unit for Airbnb would be okay.
      Yes, I got the unit because it was cheap. I knew it wouldn’t cash flow very well, but the price should recover. It’s about time to sell and take profit.

  • [email protected] October 12, 2017, 4:40 am

    It amazes me that the tenant would not let you know about the moisture setting off the alarm. We had a few tenants try to blame “mold” issues on us. They wouldn’t use the fan in the bathroom (and one was famous for LONG hot steam showers) or the vent hood in kitchen when they cooked. The humidity in the apartment was crazy. Then they wouldn’t turn the heat on in a spare bedroom and surface mold would show up. After we finally explained what they needed to do, everything was fine. It takes a lot of educating of tenants though (like not to use two-side sticky things!) We are debating refinancing our 8-unit place right now vs. selling it. I think we have a lot of the same thoughts as you in terms of putting money into RealtyShares, etc.

    • retirebyforty October 12, 2017, 8:59 am

      Even the best tenant can be some trouble. 🙂 Oh well…
      At least the bathroom is the only big problem we have. Good idea about educating the tenant. I’ll write some new clauses into the lease and make sure to go over them with new tenants.
      Good luck with your rental.

    • jim October 12, 2017, 10:45 am

      “It amazes me that the tenant would not let you know about the moisture setting off the alarm”

      Fair chance that they just disabled the alarm after it went off a couple times.
      Then plugged it back in when moving out.

      • retirebyforty October 13, 2017, 9:16 am

        I think you might be right. I’ve removed the smoke alarm when it goes off and put it back later.
        This is one reason why I got the new smoke alarms that you can’t remove the battery. Unfortunately, you can still disable it by removing it from the wall mount.

  • Apathy Ends October 12, 2017, 4:46 am

    Haven’t gone into the rental business yet, but I have heard some horror stories and your tenants sound pretty good!

    That bathroom issue is interesting, probably not to easy to get an exhaust fan in the ceiling or wall that vents outside. Good luck!

    • retirebyforty October 12, 2017, 9:00 am

      I’ve had pretty good luck with tenants so knock on wood…
      We can’t vent the steam. It’s just not possible with this building. I think I’ll just get a little fan to help blow air out.

  • GYM October 12, 2017, 4:57 am

    In my previous place I rented out the basement and it was a bit annoying just because one of their boyfriends starting pretty much staying there all the time even though we limited the rental to two people. I’m thinking about renting my current condo out later- or I may sell it, so thanks for this post Joe! It reminds me of the issues I might have to face if I rent. Have you thought of doing an Airbnb (since it’s right beside you) or is it not allowed in your condo? The rent from that could be probably 3x what you’re getting now but I suppose could be 3x much more work.

    • retirebyforty October 12, 2017, 9:07 am

      That’s another tenant. There should be a clause in your lease to cover that. More rent or clause for eviction…
      The minimal rental time is one month due to the HOA. They don’t want a lot of strangers coming and going. I’d love to turn it into an Airbnb unit.

      • GYM October 13, 2017, 4:38 pm

        Ah I see! Yeah, I wanted to do Airbnb later as well with my current condo but found out it’s not allowed. Some guy in my building was doing it anyway until strata reported him to city. It was weird seeing different people all the time in the elevator!

  • Natalie October 12, 2017, 4:57 am

    I own a small cabin and resort property that are rentals. I purchased (cash) the cabin (2 bed, 1 bath) 3 years ago for $40k (+$10k in repairs & upgrades) – it rents for $725 a mth & it takes less than a week to rent. The resort property rent varies (and does not come near covering all the expenses even with the mortgage paid). The resort property was paid off 4 years ago and has appreciated ($135k in 1996, $400k today). We use the resort property some during the off season and hubs would like to retire there. Both properties are managed through rental agencies and (IMO) worth every penny – learned the hard way on that!

    • Harald @NonlinearThings October 12, 2017, 7:42 am

      Hi Natalie,

      that sounds like you made a superb deal! Congratulations!! How did you find that cabin?

      Kind regards
      Harald

      • Natalie October 13, 2017, 3:12 am

        The cabin was estate property that turned into a short sale (that took 6 months to close). Having cash and buying ‘as is’ helped.

    • retirebyforty October 12, 2017, 9:08 am

      Oh wow, that cabin makes great income. Nice job.
      The resort property appreciated quite a bit. Very nice.

  • Ms. Frugal Asian Finance October 12, 2017, 5:00 am

    You condo looks so pretty! That sounds like a lot of work to do at the rental, but I’m glad none of it is major. The appreciation rate seems nice too. But as you mentioned, more apartment complexes are being built, so it’s hard to predict the appreciation rate.

    Your criteria look great! I will definitely reference this post once Mr. FAF and I buy our rental property! Thanks for sharing!

    • retirebyforty October 12, 2017, 9:09 am

      That’s not actually my condo. It’s just a stock picture. I’ll take some pictures once I’m done with the clean up. 🙂

  • Tom October 12, 2017, 5:59 am

    I always thought of having a rental property as an option, but I just don’t think it’s for me. The investment adds nice diversification to a stock and bond portfolio, but it’s just to much work for my interest. I’m not handy. Even the relatively minor DIY list Joe admirably tackled would be out of my league and interests to spend my time on. Also agree with the economics you mention Joe. My understanding is you want the monthly cash flow to be break even to slightly positive and then benefit from the tax deduction. Without large amounts of W2 income, the tax deduction is less advantageous. Thanks. Interesting post on the realities of being a landlord. I know some people can really make it work and swear by the benefits, but not me. It comes back to knowing and sticking to your strengths as an investor.

    • retirebyforty October 12, 2017, 9:11 am

      Right, even a small condo like this one is a lot of work when there is a turn over. Once I get a tenant in, there should be minimal work on my part. The cash flow for this unit breaks even so at least we don’t have to put money into it every month.

  • Jim @ Route To Retire October 12, 2017, 6:39 am

    Sounds like you had a decent run with the tenant. Rental properties are definitely more hands on than the stock market, but it can pay off a lot better as well. Personally, I like them as a hedge against the stock market. When the stock market tanks, at least you still have a good stream coming in from the property.

    We have a single family house we’re renting out as well as a duplex. I would actually like to get two more duplexes, but the market’s really overpriced right now.

    As a side note, depending on the area where you’re in, a lot of investors remove the garbage disposals from their units just because of the headaches (and money wasted) they cause. That doesn’t work for all areas, but if it’s not uncommon for a unit not to have one by you, it’s something to consider.

    — Jim

    • retirebyforty October 12, 2017, 9:13 am

      Our market is pretty high now too. It will probably keep going up for a few more years, though. I want to sell soon to take profit and if the housing market tanked, then I’ll consider buying again.
      I don’t think removing the garbage disposal is a good idea for us. I’m sure the plumbing would clog up. The HOA probably has some rule about that.

  • Katrina October 12, 2017, 7:29 am

    I sold my rental condo for a loss and good riddance. I naively went into it years ago, thinking investment property was the way to wealth. I learned the hard way that the toughest part of managing a rental unit is dealing with tenants. I’ve dealt with several tenants not paying on time and not paying at all, damaging the property and a lot of them neglected to tell me something was wrong and then I got a surprise upon inspection. Also, getting a tenant with a solid work and salary history was much harder than I expected. (perhaps that’s why they are renting and not owning homes)

    I also think that housing price appreciation will be limited or at least slow down in the near future. At the very least it gave me solid experience of what not to do with an investment property! I’m sticking with what I know which is the market.

    • retirebyforty October 12, 2017, 9:14 am

      Sorry to hear that! Getting good tenant is a huge part of it. I’ve been very lucky so far. That’s why it’s better to have rentals in a good area. We had a 4plex in a sketchy part of town previously and the tenants were a lot more trouble. It was a big headache even with a property manager.

  • Ann Brandes October 12, 2017, 8:01 am

    HI Joe: I really enjoy your blog and the simplicity of it; thank you for educating us! I have a simple question that you probably can answer in a heartbeat. I understand one should buy another rental property when one sells a rental property to avoid huge taxes. If one sold the current for example @ $250K; should one buy the next one @ $250K? If one buys lower @ $200K; does the remaining $50K get taxed please? Thank You Very Much!

    • retirebyforty October 12, 2017, 9:16 am

      Yes, I think you got it. You have to pay some taxes on the profit. You really need to talk to a tax specialist, though. It sounds complicated with depreciation and all that. I try to buy a more expensive property whenever I do a 1031 exchange.
      http://retireby40.org/defer-big-tax-bill-1031-exchange/

  • Lazy Man and Money October 12, 2017, 10:09 am

    When the mortgage is paid off though, it will make a nice income though, right? I’m holding onto my properties for that day (around 10 years from now).

    • retirebyforty October 12, 2017, 10:36 am

      Not really, the HOA and property tax are too high. The mortgage is only $500/month. That’s not huge cash flow. I’d get more cash flow by selling and investing in RealtyShares. Appreciation is the big payoff on this unit.

      • Danny October 12, 2017, 5:28 pm

        So why not sell it now while the market is good? Just curious.

        • retirebyforty October 13, 2017, 9:12 am

          There is a new building under construction next door. It might interfere with selling the unit. I’ll check with my realtor to see what she thinks.

      • Lazy Man and Money October 15, 2017, 8:24 pm

        That makes sense then. Our HOAs have gone up quite a bit, but rent has gone up even more. My thought is that every landlord has to pay the HOA from the top, so if that goes up the rents have to as well.

        Our HOA and property tax are probably only 25% of what the rent is, so when the mortgage is gone for us, that 75% is looking good.

  • Mo October 13, 2017, 7:08 am

    Hi Joe, I’m Mo all the way from Bristol in United Kingdom! I’m a big follower of your blogs and I’ve recently started my journey to FI even though I’ve had a few Buy to lets (rental properties) for 3 years now! I’ve started to invest in Stocks and shares now. The only comment that I have is that your numbers don’t add up unless you’re paying a high interest mortgage product. Is your mortgage product an interest only mortgage or repayment? I recommend since you’re still young and want to maximise your income to go for interest only mortgage product but then have an exit strategy on how you’d repay the mortgage in the long term. With interest rates being reasonably low on a $105,000 mortgage your repayments shouldn’t be more than $350 per month on an interest only product (this is using an interest of 4% which is pretty high). I would definitely look into shopping around for the right product for you by using a mortgage broker. $1350 – $350 – property tax – HOA should give you a healthy profit.

    • retirebyforty October 13, 2017, 9:12 am

      We’re paying about $500 on the mortgage. Unfortunately, property tax + HOA cost about $800.
      Even if we lower the mortgage to $350, it wouldn’t make much difference.
      The HOA and property tax are too high. That’s one reason I want to sell at some point.
      If we could use it as an Airbnb unit, that would help a lot. However, the HOA doesn’t allow that.

  • Felipe October 13, 2017, 7:19 am

    I have a condo also. About to have a large assessment, so it’s not risk free. But, as you say, maintenance is a bit easier than a house. If you have a stupid tenant, however, the damage they do to the other unit owners can be your responsibility (water leaks, primarily, or starting a fire). So be sure you have the right insurance.
    I used to use Craigslist but now use Zillow. It’s free, and it has a link for the prospective tenant to get their own credit report and bring it to you. I’ve also found the quality of prospects to be a bit higher.
    Like someone said here, when the alternative is to have stocks which can evaporate in a sell-off, the pain of dealing with maintenance and tenants might be worth it to preserve capital and provide some sort of income for the future.

    • retirebyforty October 13, 2017, 9:07 am

      Thanks for the tip. I will put it on Zillow as well.

  • Jonathan October 13, 2017, 8:53 am

    We purchased it for $140,000 and probably can sell it for around $250,000 now. We put 25% down, $35,000 in 2010. Once we sell the condo, we should see a tidy profit.
    ———–

    Once you have included the myriad costs such as closing fee, commission, etc. Not to mention TIME, energy, and repair/maintenance expenses. I doubt you would make much in terms of profits. Ownership is more trouble than its worth.

    Be mindful of the “hidden” costs.

    • retirebyforty October 13, 2017, 9:06 am

      Tax will take a big bite out of the profit too. This unit doesn’t take that much time so that part of it isn’t too bad.

  • Revanche @ A Gai Shan Life October 13, 2017, 9:47 am

    I’ve got one property and was thinking we’d add several more to our portfolio but I keep going back and forth on it. You’re right that it’s not entirely passive but I also want to have a diverse enough portfolio that if the stock market tanks, and one of us loses our job, we still have something to draw on. Whether going the real estate route that much makes sense, though, is a big question. It’s a bit more risk than my usually risk averse nature likes!

    • retirebyforty October 13, 2017, 10:12 am

      Yeah, I don’t know. Do you really want to take on more work? You’re already super busy. 🙂
      How about investing with REIT?

      • Revanche @ A Gai Shan Life October 13, 2017, 4:50 pm

        REIT is definitely a strong contender. I’m poking my nose into crowdfunding but I think that’s perhaps even more risk than I want for our money right now.

  • Mr. Tako October 14, 2017, 7:12 am

    Seems like it would be so much easier to own a REIT or try out some crowdfunded real estate investments Joe! They seem like far less work for similar returns.

  • K. McGarrett October 14, 2017, 5:27 pm

    In Vancouver there is a serious shortage of rental accommodation. Meanwhile , landlord’s rental income is added to employment income and taxed at your highest level. Rent increase limits are set by the government, presently 2.9%. Meanwhile government services like hydro have no such restriction. Maybe consider making being a landlord more appealing.

  • Dividend Diplomats October 15, 2017, 7:25 pm

    I see your point of selling, especially if you see the market slowing down and the majority of your value is due to appreciation rather than monthly cash flow. That makes sense. That double sided take issue just sounds brutal though and it is remarkable what some people will do. Thank goodness you are handy (or at least so willing to learn) to take care of the majority of your list so your expenses don’t rack up too high. $200 for carpet cleaning sounds reasonable compared to equipment rental and the time/aggravation you would have incurred.

    I’m working through not having a vent in our bathroom at my house right now. Just purchased a screen making kit so we can have a full window length screen in our window rather than our current half window screen. This will allow us to open the top half of the screen without letting bugs in while maintaining privacy. When we open the bottom screen, let’s just say it isn’t as private as you would like!

    Thanks for your summary. This is always great info to read about if I were to decide to become a landlord one day.

    Take care,

    Bert

  • Dave in Sunny FL October 15, 2017, 10:13 pm

    We had the bathroom fans linked to the light switches, after a similar issue. One comment mentioned getting a good profit when the mortgage is paid off. Bleagh! Increase the mortgage (as rents increase), and you will have access to the cash without tax because it is not “profit.” We’re doing a little better than break even at this point, but the property values are going up. You benefit so many different ways from real estate: cash flow, rising property value, depreciation (phantom cash flow), rising rents, ability to add value through improvements or ancillary services (laundry room, vending machine, etc.), access to refinancing to pull out cash, leverage with OPM, deductibility of all expenses, control over timing of sale or other events, etc., etc. (I think low equity also makes litigation less appealing to plaintiffs lawyers.) We will stay with multi-family. I use a Rental Property Analyzer tool to review deals. (And whatever you’re thinking of budgeting for maintenance, double it!). I don’t know all the details of crowd funded realty yet, but would a bank give you $75k to put in, if you agreed to put up the other $25k? (Hard to imagine that!)

  • Adam October 19, 2017, 6:30 am

    Great post. I see other landlords from Ontario and empathize with you. I’m from there, but have been in Nova Scotia the past 10 years with 2 rental properties. We actually can evict or prevent pet owners from renting here, but we had a tenant from hell who got a cat without us knowing that destroyed an entire staircase approx. $450 in damage) and they were emptying the kitty litter in bags outside the door of a walk out basement so when we finally got the tenant evicted we were left with hundreds of pounds of kitty poop. The ease collection fee we incurred was close to $1000 and damage deposit nowhere near covered our expenses. It took us over a year through the tenancy board to collect, but we finally did. I agree with RB40 .. use your gut when screening applicants and don’t rent to them if there are any red flags. We now have a family in that property that came with great references and so far so good, but with legislation changes I don’t think the headaches of being a landlord and tenant-favouring policies make it a great investment option

    • retirebyforty October 19, 2017, 10:49 am

      Ugh, sorry to hear that. Getting a good tenant is the most difficult part about being a landlord. Bad tenants just cause endless headaches.

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