News Release From Remax – Fourth Quarter Set For Further Growth?

Posted on October 7, 2009 by admin

[podcast]https://www.investors.housez.ca/wp-content/uploads/2009/10/News-Release-From-Remax-Oct-0709.mp3[/podcast]

Just the other day I received an email from a colleague with REMAX’s Western Canada’s news release from September. I guess I’m not on their mailing list if I am getting it passed on to me, I wonder who I will have to talk to?

There was two big announcements in the release. The first was that the “Canadian housing markets buck recession and trend upwards”. This release went on to say with the Is the fourth quarter headed this way?worst of the recession over, that residential real estate markets in the major Canadian cities are poised for growth in the final quarter.

I think that’s great news, but I think it may be a bit too optimistic. While it’s true many of the major cities have seen significant growth in sales percentages, much of it has been stimulated by the increased affordability brought forward by low interest rates. Nationally house values have increased by 0.5% which doesn’t exactly sound earth shattering, but then when you compare it to the US we have done phenomenal.

Also, when you consider during this last year of the recession that Real Estate has held its value it is kind of heartening. This was just an average of course and only represents the last twelve months of which I am painfully aware as I have several properties I am waiting on as they slowly recover their original values. We still have to wait a few more years before the local markets can recover back to the peaks we had seen in 2007 for local Real Estate pricing.

The second big part of the announcement for me was that they quoted an Angus Reid Omnibus Survey that asked, “In which do you feel more comfortable investing your money, the stock market or Real Estate? A surprising 77% of respondents all chose Real Estate, that is a pretty surprising number for me. Although when you get down to it, many people talk about investing in Real Estate, it’s just a chosen few who actually take action and actually do invest on their own or pursue someone to help them like ourselves. It will be interesting to see how that unfolds over the next year and how many actually jump in the waters so to speak.

As for my take on the announcement being perhaps a bit optimistic? Our Real Estate market has been incredibly tricky for anyone to forecast for quite a while now, but at the same time, it’s also been quite consistent through the last quarter of the year. As we move closer to the holiday season and as winter sets in, people aren’t thinking about a new home or even moving as much. Traditionally both sales and listings slow down and during December are the lowest of the year for both new listings and sales. My thoughts are that this year may include a bit more belt tightening than normal as people aren’t quite ready to call the recession over, no matter what press releases they read.

People just seem to be a bit more cautious right now and are filled with even more uncertainty about what will happen over the next few months. Will rates go up? Australia

This is where some will end up

This is where some will end up

was the first major nation to announce an increase in bank rates, so there is a possibility that Canada could also follow this route. It’s unlikely, but it does make people think. Other questions are will the federal government blow up and how could this affect the economy? Or will the Alberta government beat them to it? So many questions and so many concerns, all with no real answers.

Now I’m not saying the markets are going to start declining again, far from it. I just sense it will be slower again for the next few months until we move into the New Year. Sort of a rest period as the market coasts along for a little while and grabs a breather. Once we move into 2010 though I am expecting some positive market growth.

By that time, we should be feeling even more upbeat about the economy, we should have a better idea about where interest rates may be, or may be heading and we will see even more renewed optimism in the province and the country. I personally cannot wait for 2010, it’s going to be a wonderful time of new growth, new opportunities and newfound enthusiasm for those willing to embrace it.

I’ve always felt the last couple of years have been a weeding out process. It’s provided an opportunity for people to review where they are and what they have been doing (sometimes by corporate decisions out of their control) and make some incredible changes. A dear friend of ours was just let go after 20 years at the same job. Can you imagine what that’s like?

First off 20 years is amazing in this day and age, but the important part is she is taking advantage of this time, this opportunity in our eyes, to find out what she really wants to do. It’s something more people should be doing, but they get so caught up in their day to day life they miss the positives that are right out their in plain site if you have the right mindset.

Now it appears I have gone off topic a bit here, but it’s back to my point that 2010 is

While others will end up here!

While others will end up here!

going to be a very important time. By all indications it will be the resurgence of the economy with the potential for the recessionary period to be officially over. Right now and over the next year there are going to be so many opportunites for people as business picks up that I just don’t want people to look back and say it surprised them.

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Graphs I Like To See – Latest CREB Stats Sept 09

Posted on October 1, 2009 by admin

It makes my head spins sometimes trying to figure out where the market is moving to each month. I understand the big picture, I keep on trying to explain to others how Real Estate is a long term view investment and how if you look at it long term it’s a pretty low risk investment with plenty of up-side.

It’s the way it keeps moving each month that I have some problems with. After the last couple of years with huge excess inventory buyers have been having a great time, but now take a look at this graph out of the latest CREB statistics for September.

Sept_2009CREB_Absorbtion_Rate

We have been coasting along in a balanced market since about May this year. That’s four months of what could be termed a strong healthy Real Estate market. How could that be? I keep on hearing how bad things are here. I keep hearing how it’s a bubble from all these people commenting on Real Estate articles in the Calgary Herald site. Could those people be wrong and things are actually pretty good here in Calgary, and in Alberta, like I keep telling people?

People are so used to looking at their own little microcosm of the world that they miss the big picture view. We have become so spoiled for so long we neglect to remind ourselves of where we would be if the huge economic growth hadn’t of occurred here. We forget to be thankful of what we have, and not of what we want or are not able to get.

On one hand we have many individuals in horrible situations where they may lose their homes due to layoffs, over leveraging and economic pressures. Yet at the same time many of these people would not be living in the nice homes they are currently in if the economy hadn’t blossomed so much in the middle of the decade.

I don’t want to get too excited here, things look fairly rosey right now, but we know as we get deeper into the fall, the Real Estate market will tail off again. It will slow down significantly during November and more in December, but January and then February and then spring are coming up soon. And when they arrive, we will be starting those months off with lower inventory and higher expectations than we have seen in a couple years.

It may make for a very exciting 2010!

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A Must Read For Real Estate Investors – The Conspiracy Theories!

Posted on September 28, 2009 by admin

I know many of my readers are already investors, some who invest in their own properties and many who are even investors with us in our properties. So some of my thoughts coming up will be of interest or even concern for many of you.

It can be a scary ride

It can be a scary ride

First off, we have to realize that the incredible years we had in Real Estate during the mid part of this decade were an aberration. Yearly increases in property values of 30-40% are not healthy, not common, and not easily replicable except when everything comes together perfectly as it did for several years in a row here in Alberta. I’m ecstatic that I was able to be heavily involved with various Real Estate investments during that time and I am excited that I was able to drag friends and family along with us for the ride.

Whenever a great ride like that comes along, there also has to be a slide back down the slope after the fact and that is what we have been going through for the last couple of years. The recession, world credit crisis, and general economic malaise have helped drag this out far longer than it should of, but that’s part of the cycle sometimes.

We’ve always been optimistic about Real Estate and honestly, we have had our concerns about the markets the last year. You can only get continually hammered by negative news before it starts to wear you down. During the last year plus, when the markets didn’t recover as we anticipated we were concerned, often times anxious and many times frustrated with how the Real Estate market was behaving.

We have to face it, our livelihood, our dreams and our plans all revolve around what happens with our Real Estate investments. To make the burden even more over bearing, we also have many investors who we have brought on board who are also having to deal with concerns about their investments with us. Values are down and they just aren’t rebounding as fast as we would hope. While we still have positive cashflow from properties and mortgages are getting paid down each month, appreciation is such a huge positive and it has been sorely lacking.

Fortunately, we have always taken a longer term outlook with our Real Estate investments and we all just have to realize we will all see our money start to grow yet again. It just won’t be at the crazy levels previously seen. Currently it is increasing at a snail’s pace, but considering the reverse trend we had been seeing, single digit yearly growth doesn’t seem that bad in the big picture. As always the great aspect of Real Estate is we have cash flow and mortgage paydown at the end of the day and a long term view.

That’s where we sit. The problem I see that will be occurring over the next couple of years (or even faster) is going to revolve around the problems the bigger players have created for us.

As Real Estate investments currently go, with smaller deals it revolves around Joint Venture agreements. This is what we deal with when bringing investors in on a single property. When you move up the chain of Real Estate investments, you start getting into Limited Partnerships, Syndications and the officious sounding Offering Memorandums. This is where significant problems have arisen over this last year.

In certain provinces there are  regulations requiring a certain dollar amount of currently held investments and/or yearly earnings to even become involved with these type of offerings. Sort of a rich get richer scenario as it appears only the rich are allowed to play.

Of course, with Alberta being part of the wild west we have been outside of these

The Wild West

The Wild West

boundaries. Unfortunately though, with the recent goings on with companies like Concrete Equities, Shire Investments, Bridgecreek and who knows who else will be added to the list in the next six months, we have to expect this to change. This is part of my upcoming conspiracy theory!

As more details of investors getting bilked through ponzi schemes, Real Estate developers over estimating returns and numerous other problems, it will lead to the government jumping in with both feet to “help” out the investors. This will lead to nothing but additional regulations, lengthier more stringent requirements for individuals to invest in anything “off the grid” of bank stocks and mutual funds and more hoops for the little guy like ourselves.

At the same time, banks and investment advisors will be in an even more profitable situation as other investment options will dry up for the middle income families. On the other end of the spectrum, the parties that take advantage of the loop holes and work the system, and their will be plenty of loop holes initially, will not necessarily have the best intent of the investors in mind, but will most likely be concerned about getting as much investment capital as quickly as they can before that door becomes closed. This can make a very precarious situation for someone with smaller amounts of investment dollars.

So here is your warning, there will be change in the industry, in the opportunities and the way Real Estate investments will be allowed or structured. It most likely won’t be overnight, but it will take place in the near future. For small investors the ones who can adapt to the change and already have great systems in place it will be an easier transition. For investors who have been flying by the seat of their pants this will probably bring a quick demise to their careers.

Now is the opportunity for any landlords out there actively pursuing Joint Venture partners to ensure all their systems and procedures are documented and ready to go. This will help streamline any regulatory changes that do come about and also provide a place to start when moving forward. It may also be an opportune time to purchase additional properties prior to the rules of the game changing.

For potential investors, it will be even more important to do all of their due diligence and to be vocal if it appears they may be locked out of the opportunities afforded the bigger investors with larger pockets. Currently many financial advisors are changing their approaches with clients and coming up with creative ways to access more investment capital. By backing any regulations that block investment with smaller Real Estate investors it will just benefit them as alternatives get reduced.

Whatever your situation, watch for changes to come. Just be aware that not all the change will necessarily be benefiting the proper people, but perhaps protecting the financial industries instead. This is a great topic to get feedback from you on, so I would really appreciate any thoughts you may have on this. Feel free to comment ont his post, or email me directly at bill@housez.ca.

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The Media and How It Controls Attitude

Posted on September 25, 2009 by admin

Really, does the media have the interests of the people in mind anymore? They are currently mired in debts, they are getting beat down by social media services like Twitter and blogs that post information on current news faster than they do.

Shortly Google is adding new features to their search engine to provide real time news searches. As all of this unfolds and technology expands, it becomes harder for media to stay profitable as people move elsewhere to get their news. Media already understands this, you can see it as papers move to more sensationalism of headlines, or providing information that is meant to drag readers in rather than inform.

My current beef is the headlines talking about Alberta recovering slower than the other provinces. What does a headline like that do to the mindset of individuals in other provinces? You have to think someone from Ontario or the Maritimes sees this and believe there is no sense moving to Alberta for work like they used to. I have already seen this in the slowdown in calls I receive for my shared accommodation properties.

Yet when I do talk to people who came anyway because they found a job through their union, or online or via a friend, or what ever their individual reason, they are amazed at how prosperous we are. Sure we don’t see it, we only see natural gas hovering in the mid $3.00 range (although it is marginally higher right now!), oil companies laying off people and unease about the energy industries. It’s when you get the perspective of someone from Windsor where all their buddies formerly working at the factories are unemployed your opinion changes.

We recently heard a new report that oil could drop down to $30 a barrel in the near future. What a great headline, at least if you are selling papers, but in reality there are to many lunatics out there waiting to start wars in the Middle East and Africa. The fear factor alone could keep oil values up. On the other hand, if the world really is starting to recover, why wouldn’t demand for oil start to ramp up?

So in my opinion, any decrease in current prices will most likely be short term. Unless the media was lying about the recovery starting to take place that is! As a Real Estate investor, I still think we have a good thing going, don’t let the headlines put you down.

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Random Landlord Tips

Posted on September 17, 2009 by admin

Just so you know, you the readers are my best source of topics and posts. So if you have a question about Real Estate, being a landlord or wondering what the hell I do, send me an email or post a comment. That is where today’s Landlord Tip came from.

A reader emailed me and asked if it was better to show his property before prospective tenants viewed other properties or after. The context was whether it’s better to be the 6:00 appointment after work or the 8:00 after they have viewed three or four other places.

I have two components to this answer. The first one is, I love to have tenants see my property and allow me to set the bar higher than the average rental property out there. Due to our standards we strive to have rental properties that are in the top 25% of the properties out there. If you are going to do something do it right. By being in the top 25% we know a) we stand out from the crowd, b) people automatically prefer our properties to 75% of the places out there and c) we can charge a premium for a better product!

By talking to prospective tenants you get a pretty good picture of what they have already seen (you are talking to your tenants about other places aren’t you?). Typically in our area if they have looked at three properties there are two they have deemed unsuitable already. 50% of the properties for rent these days are for rent because the tenants have more choices and are able to move out of places that landlords don’t maintain. So if 50% are essentially crap, I’m only competing with one other, so it’s perfect they see mine first.

The other component is, if they view mine last, they know what property they like best. I can control the situation better by getting the application filled out on the spot and pointing out the best features of my property to reinforce how great it is. If I was the first property they saw, they would either have had to fill out the application with you already, or taken it with them to fax back. This takes a bit of the control away from you if they have to fax it back, or you have to follow up with them to see what is going on. Plus it takes more time!

One other thought to throw in. If your property has huge windows, great views and really shines when the sun is out, make sure the sun is out when you show it. If that is the biggest selling point it doesn’t make sense to show the property at 8:00 when the sun is down.

If however the property may be a bit lower than your standards, by all means who it at night where the lighting is worse. Just remember you want to strive to be in the top tier to be really successful, this means great properties, not substandard.

I will ask this in a separate post, but did anyone listen to the audio stream on the previous post? Would love to get some feedback about it!

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Bonus Landlord Tips – For After You Filled That Vacancy

Posted on September 14, 2009 by admin

I told you I had made some upgrades, so here is a new option, if you want to listen to this bonus tip, it’s available just above, so click on the arrow above (or triangle whatever you think it is) to get hear the new audio version!

I like to throw in a couple bonuses in these tips and that includes bonuses for the tenants. You have gone through the work, you have screened the tenants and you finally have your new tenant picked out. It would be nice if your work is done, but there are a few more steps you can take do to make you a memorable landlord.

Many landlords I know provide gift baskets to the tenants that include everything they might need to get started. A few snacks, some of the small sample size laundry detergents and other household items. It can make a wonderful first impression. Our little trick is to leave a couple of nice bath towels in the closet with a note welcoming them to their new home. You can pick up on the towels months in advance and stock up when they are on sale!

towel

How about tenant handbooks? These can be presented to the tenants when they move in and you do the walk through checklist with them. Then you can leave their copy of the checklist in the front sleeve of the binder. Inside the binder, you can include all the house and area information that you already prepared for the info sheets, but in more detail.

We include location of water shut off valves, furnace filter size for units with furnaces, manuals for all appliances and any specialty items like digital thermostats. Of course, make sure you have copies of most of this info for your own records! We also like to grab some of the menus that come in the junk mail and throw them in the binder as well. It’s always a challenge when you first move to an area to find some of the local delivery places and this can really help new tenants.

Of course, we have our contact information in the book, but it’s also good practice to have the information somewhere where they can quickly access it in an emergency. We have a small piece of paper that has emergency numbers on it, along with some of our most trusted contractors so they can call them directly if need be, that we laminate and Velcro into their cupboard door close to the kitchen phone jack.

It’s also important that you put the emergency numbers in the correct order on this sheet. 911 goes on the top, police numbers and fire numbers and then other emergency numbers with yours at the very bottom. If there is a true emergency such as a fire, the idea is they call 911 first and tell you later.

Hopefully this is another batch of enjoyable information for everyone, if you have suggestions you would like to add or comments please feel free to add them.[podcast]https://www.investors.housez.ca/wp-content/uploads/2009/09/Bonus-Landlord-Tips.mp3[/podcast][podcast]https://www.investors.housez.ca/feed/podcast/Bonus Landlord Tips.mp3[/podcast]

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Rental Scammers Explained

Posted on September 14, 2009 by admin

I just found this great video that explains how some of the rental scams are being run. This is some great information for any landlords who run ads on the internet (which better be anyone who reads this blog!).

Enjoy and did I mention I am figuring out new things with this latest update?

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Landlord Tips – Filling Vacancies 5 of 5 in a Series of Landlord Tips

Posted on September 14, 2009 by admin

The problem with the majority of these tips is that they are all common sense, after the fact. When you are busy rushing to fill a vacancy with everything else going through your mind it’s just natural to miss something.

A sub tip of this set of landlord tips is to prepare cheat sheets for yourself where you can have a checklist of items you need to be on top of. I am in the process of  turning these tips into a pdf format for you to download (it’s just taking me longer than thought, sorry Deb!), so maybe I should include checklists in there as well. Would that interest you?

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I recently upgraded the blog to the latest version of the software so sorry for playing with all the new add-ins like polls!

Anyway off to the final tip in this series (although I have a follow up bonus tip ready for tomorrow!).

Prepare in Advance

If you want to treat Real Estate like a business, you need to separate yourself from the regular landlords. You already have some systems in place if you have been following along, but here are some extra landlord tips and thoughts.

Prepare some info sheets on the property that you can hand out to the tenants as they go through. Most tenants have multiple properties they are trying to choose from, if you provide them with a handout that has large color pictures captured in the best possible way, details on the neighborhoods schools, shopping, bus information and everything else you can think of, who will they remember the most? Especially when they compare your information to their vague recollection they have of the other properties.

If you don’t think this would be effective, why do you think realtors have all those color info sheets at homes they sell? This also is a good exercise for you to become familiar with the area and enables you to answer many questions that can pop up out of the blue.

By being prepared you will put yourself head and shoulders above other landlords. If this takes landlord checklists, sheer repetition or just making mistakes until you figure it out it’s up to you.

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Landlord Tip – Filling Vacancies 4 of 5 in a Series of Landlord Tips

Posted on September 11, 2009 by admin

This landlord tip seems like common sense, but it is amazing how many times landlords show up just moments before the tenants do, or worse yet after they do. You never know what could be awaiting you and if you have ten sets of tenants coming in thirty minutes, that half hour hopefully gives you time to right whatever is wrong. During the winter, this is time to shovel the walk if it isn’t done. During spring or summer, it’s time to open those windows to freshen the place up.

This is also your preparation time to make sure everything is just right, the floor is clean, dust bunnies in their pens, toilets cleaned and flushed, all the lights on to brighten the property and all your information ready to go. So you must also make sure you have a package of cleaning supplies, rags and air fresheners with you as well.

If you haven’t been to the property for a few days, it is an excellent time to spray some Febreeze around or plug in a couple Glade plug-ins to help the place out. Make sure you pack some extra light bulbs just in case as well. With some of the modern fixtures you run into the new R20 or  A16 or new halogen bulbs and you cannot be expected to carry all of them around, so if you do have any bulbs out, make sure to note this and bring them next time! With the hard water around Calgary if toilets aren’t flushed regularly they quickly develop water marks, so be ready to possibly do some scrubbing.

For the adventurous and to create an even better environment, it never hurts to bring a vase of aromatic flowers in. Or if you are especially energetic, you can even pick up some of the cookies you just spoon out onto a baking sheet and bake away so the potential tenants are greeted with the scent of fresh cookies when they arrive. Tell me that doesn’t help push the popularity up of the property!

Your goal as a landlord at this time is to not just be a property owner, but also the best marketer of their property you can possibly be. Don’t forget your goal is to fill that property with the best possible tenants out there. If you are just one of five places they are viewing that day you want yours to stand out, be memorable and be the one they not only want, but feel they need to live at! Being a landlord involves wearing many different hats, hopefully this landlord advice is helping you not only become a better landlord, but a wiser one as well.

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Landlord Tips – Filling Vacancies 3 of 5 in a Series of Tips

Posted on September 10, 2009 by admin

I think every landlord has been stood up at one time or another by a tenant who obviously values his or her time more than theirs. My time is important, your time is important and if a tenant doesn’t show, you have to learn this landlord tip before you waste any more of your time!

To help minimize this occurring use this tactic to preserve your time and minimize no shows. When scheduling viewings tell the potential tenant they have to call you an hour prior to the viewing time. Let them know if they don’t call, you won’t show up. Make sure they write your number down and you are very clear with them that you will not show up if you do not hear from them an hour prior

Also, let them know if you do not answer to leave a message confirming they are coming. This way if you have a group all arriving close together (which you should if you followed the previous tip!) you don’t get buried in calls or call backs!

The most important part of this, if they don’t call you an hour before, but then call you at the meeting time wondering where you are, don’t rush over there! Reschedule and get them to follow the same process. If they can’t get it right the second time you may want to be concerned if they can follow any other instructions you have for them, such as the rules of the lease?

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Landlord Tips – Filling Vacancies 2 of 5 in a Series of Tips

Posted on September 9, 2009 by admin

The previous landlord tip went through the process of pre-screening tenants to ensure you make the most of your time. This tip gets down to the process of filling that property with great tenants once you have finished screening .

Book Crowds

This particular landlord tip can really depend on the state of the rental market and the property, but if you can schedule viewing periods for prospective tenants to all show up at once or in a certain time frame, you are set. Usually this is most effective the first week ads are running and calls are coming in.  It does  becomes harder as the ad gets older which is why it’s important to work on right away.

This works by booking time slots when you will be able to show the property and then booking viewings into those slots. As people call in, and after they get through your screening questions, then them know the two time slots you have available for viewing.

I like to pick say a Friday evening from 7 until 8 or 9 depending on the response to your ads, (OK, I don’t like to work Friday evening, but hey it’s a business and if I sacrifice one Friday to get it filled versus twenty different days, I’m happy!) and then a Saturday afternoon from 1 until 3. This covers off the best times for tenants to view, although I will do a Saturday and Sunday as well if it works better for me. This also works best if there are two of you showing the property.

I prefer to book the viewings in 10 to 15 minutes intervals depending on how many people are coming to view. This also creates a sense of urgency as I make sure to tell people there are people before or after them, whatever the case may be and once again raises the concern that someone else may get the property instead of them.

Whichever you choose, use the time you have with them to show the features of the property and get a feeling as to whether these prospects would make good tenants for you. It’s very handy if you have your list of questions along with the notes you had during your original pre-sreening chat with them. You can re-ask some of the questions for clarity and to confirm you receive the same answer!

As your prospective new tenants go through you should be able to gather a sense of whether they will be a good fit for you or not and as the tour ends you can have them fill out one of your applications right on the spot. Your goal should be to gather three or four good applications with each set of showings, but this can depend on the current market, your advertising and your times.

The other tactic I use with less than stellar potential applicants is to hand them the application (if they even ask for one) and ask them to fax it back to us. Realistically if they don’t fit the profile you are looking for to have as your renter you shouldn’t focus to much on their application. Unless someone was crunched for time the hand filled applications receive first priority, plus you can review them while they are there and clarify any messy hand writing or unclear answers.

The biggest aspect of coordinating the showings like this is to get that excitement going, it’s all part of the complete system of putting new tenants in as quickly as possible and ensuring your time isn’t wasted. In the upcoming tip number 3, I will give you an excellent process for ensuring you save even more time!

If you missed Landlord Tip #1 it is available here, Landlord Tips – Filling Vacancies 1 of 5 in a Series of Tips

If you are reading these landlord tips and don’t already receive updates in your email as new tips or blog updates come out, click the following link to register,  Investors Housez Blog Updates and be sure to share with other landlords!

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Landlord Tips – Filling Vacancies 1 of 5 in a Series of Tips

Posted on September 8, 2009 by admin

I seemed to get a pretty good response with the last series of landlord tips I put together from our own experience and from information we acquired since joining REIN. To extend the series I have put together some specific information for landlords on some tips and techniques to fill vacancies. Hopefully this helps guide a few more people to a better experience as a landlord and to possibly help curtail a few more negative experiences that could show up without following these tips.

Every landlord no matter how good they are has a vacancy at some time.   Let’s start the series with;

Pre-Screening Tenants

If you blindly accept every call or query about your property and madly dash off to show your vacant unit with the thought that this could be the one, you are already doomed to hating life as a landlord. You need to qualify each and every call, email or form of communication you have with any prospective tenants. Sure you could ask the question in person, but why not do it prior to using up any of your precious time?

Start by creating your own list of questions you would ask each prospect if you met them at the property. Hopefully you have specific questins you normally ask already, but if not, don’t fear, I have some for you.

  • How long were you hoping to sign a lease for?
    If you are looking for a long term tenant, and their answer is three months, well you may have already saved some time!
  • How many people will there be renting the place?
    If it’s a two bedroom suite and they answer just the seven of us, well you may have already saved some time!
  • When would you be moving in?
    If they answer in a couple of months and you need to fill it at the end of the month, well you know where I am going.
    If they answer tomorrow they better have a great story or you could be saddled with tenants that don;t prepare very well!
    – Side Note – our absolute best tenants came to us this way. They were in the process of moving here and the place that was supposed to be ready fro them was a mess and their moving van was 12 hours behind them. They had an impeccable list of references and I called each and every on and had glowing responses back from them within two hours confirming everything. So listen to the story, but never forget your screening and if they are golden, it all works out!
  • Have you already given notice to your current landlord?
    If they plan on skipping out early on their current landlord, what would stop them from doing the same to you?
  • How long have you been at your current address? And the address before that? And before that?
    Your goal here is to ascertain if they only stay six months before moving on, or whether they are the long term equity building tenants us landlords love. On the other hand if you like meeting lots of new people every six months, skip this question!
  • Are you currently just looking or serious about finding a place right away?
    If they are just checking out places right now and won;t make a decision for a month or two, do you really want to rush across the city to show the property? Once again if you like meeting lots of new people, skip this question.
  • The security deposit is XXX which is equal to one month’s rent. Both are due in cash prior to moving in, will this be a problem?
    If this is a problem for them, this should raise a red flag about their ability to pay rent in the future, or maybe they just aren’t ready to move into your place yet and you can let them move into another landlords place who doesn’t screen!

The real goal of all this screening is to obviously protect your time, but it also helps point out the more positive prospects you may have. If you have properties that take you thirty minutes to drive to (because you buy where tenants line, not where you live!) wouldn’t you rather know there is very little chance the people calling would ever rent from you before you met them?

These questions are just a guideline, you can easily create your own list of screening questions and run with them. Just be sure to have the list always near the phone when you are running ads and be sure to keep appropriate notes. Then if they pass all your questions with appropriate answers, you will be ready for tip #2!

If you are reading these tips and don’t already receive updates in your email as new tips or blog updates come out, click the following link to register,  Investors Housez Blog Updates and be sure to share with other landlords!

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Guest Article by Stef Lukas – Why Buy?

Posted on September 3, 2009 by admin

If you have been reading my articles for a while you will know that Stef Lukas is the Realtor who found us over four years ago and helped us out immensely. During the years we have worked with him he has become a great friend, a trusted advisor and just a pleasure to work with and to refer people to. Earlier in the week he sent us a pre-release version of his current newsletter article and we thought it was so great we asked permission to reprint it her on our site. So I hope you enjoy it as much as we did!

 

Why Buy

I think I could write a successful blog just on what I read in the Calgary Herald, Sun, each day.

Why I even read the Herald is a quandary to me, given that the paper reads more like the Huffington Post these days.

Recently they wrote a little pros/cons section on whether or not it’s the time to buy a house. Reasons to buy? High inventory, low prices, low interest rates, etc. Reasons not to buy? Prices still in decline, renting isn’t a crime, financing is more complicated, etc.

Good reasons, but what about addressing the real reasons that people buy and don’t buy? What if, instead of providing biased opinions from those on each side of the argument, we broke it down and really made it easy to figure out if it’s a good idea to buy or not to buy? What if some people don’t really buy because of interest rates after all, and what’s all this garbage about a market bottom?

What if people buy because they’re confident and don’t buy because they’re scared and the rest of the reasons are just fluff? If people buy because of interest rates, why did anyone buy a home from 1980 to 1983? Interest rates aren’t the key, market indicators aren’t the key, lifestyle accomplishment is the key.

First, let’s get this “market bottom’ theory out of our way. I’ve said it before, and I’ll say it again, market bottoms are only easy to identify once they’ve happened. Look at the stock market. By most accounts, we’ve been to the market bottom of this recession cycle.

Take a look at a stock chart, or individual stock hi/lows, and you’ll see that most stocks hit their 52 week lows on March 5th of this year. Did you buy a hundred thousand dollars worth of stocks on March 5th? If you did, you probably would have turned $100k into $300k pretty easily. What’s that? You didn’t buy on March 5th? But that was the market bottom! Why on earth didn’t you buy? What’s wrong with you? I really can’t believe you were sitting there, at your computer screen, with Etrade account open, and you didn’t pull the trigger on CAR at 33 cents. You could have turned $100k into $3,630,303 in 5 short months. Shame on you.

See why market bottoms aren’t too cool? Because when they happen, there’s usually too much fear in the market to encourage buying. What is true for the stock market is also true of the housing market. Market bottoms sound great in theory, but they’re just too darn hard to identify while they’re happening. Instead of an identifiable bottom, why don’t we just focus on a bottom trough, a trough that we’re certainly in right now.

Movements to either side of this current point are going to be prevalent, which is why we’ll see positive housing numbers one quarter, and negative housing numbers the next. We’re in a sideways market, and I’d suggest we’re in a market bottom that we’ll stay in for another year or so. As long as REO property dominate the sales statistics, we won’t see a true recovery towards a “normal” market.

Jon Stewart fans, mock Jim Cramer all you like, but he had been saying that the time to buy a house is before June 30th, 2009, and he’s probably going to prove to be right on the mad money with that recommendation.

So if we’re in the market, why buy? Do you believe the market bulls or bears? Do you focus on Mary’s 5 positive signs, or are you negative and you prefer to side with the cons? Go right ahead and rent for the rest of your life, and maybe, just maybe your landlord will let you paint a white wall tan. If you ask nicely.

What if you just let the 5 reasons to buy and the 5 reasons to wait cancel each other out, and buy for lifestyle. Housing bull? No thanks. Call me a lifestyle bull. A lifestyle bull in a confidence sapped china shop. Buy because that house you grew up admiring just came on the market. Buy because you’re confident in your job status, and that new development just slashed their prices 35%. Buy because your neighbor cuts his grass at 7 am on Saturday mornings.

Buy because the city heat is just about to make your head explode, and cool lake breezes are better than warm alley breezes any day of the week. Buy because you’ll walk a little taller if you live on that street where the Maples high overhead reach across the street and shake hands with each other Above all, buy because you want a better lifestyle for you, for your friends, and for your family, and the purchase you’re contemplating allows you to more easily obtain that lifestyle.

If you need fundamentals to buy, realize that interest rates are unbelievably low and inventory is monumentally high. Realize that whether or not the market creates an identifiable bottom, you’re not going to know when it does. If you’re hoarding cash hoping for market bottom balloons to be released from the pink unicorns soaring in the sky, I hope you have fun swimming and boating in your money vat like a decidedly uncartoonish Scrooge McDuck. Just buy because of the 320 months of summer we’re all hoping for out of life, way too many of them have already been wasted worrying about 5% market swings, and 5% interest rates.

 

Stef Lukas

Lukas Group Realty

403-256-0002

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Hope You Enjoyed The First Set of Landlord Tips

Posted on August 31, 2009 by admin

I received some great feedback from people about the tips I emailed out a couple weeks ago, so I am preparing another batch that will hopefully start coming out late this week or next. This focus will be on how to effectively show your properties (some of it covers screening!) and some techniques to make the process of renting a property a bit easier.

We have been REIN members (Real Estate Investment Network) for almost six years now and many of the tips I have previously covered and will be covering are directly out of the information we learned from the group there. Of course we have taken some and tweaked them a bit so they work better for us and I recommend you do the same with the information I am passing on to you. Taking the advice and guidance of people who have learned some of these techniques the hard way can save you a considerable amount of headache. Trust me, you don;t want to see some of the troubles I have seen by not following my own advice!

If you aren’t currently renting out a property, but have friends that are please pass some of this information on and hopefully they find it beneficial as well. It always amazes me how many people I run into that have a rental property or two and either never ask me questions, or never follow up with my offer to help them. I could understand if I was charging them per question, but everything I have given out so far is absolutely free. Apparently it is their loss and to your benefit as with some of these tips you can enter a knife fight with a tank, so to speak, and be much more prepared than your competition when it comes to owning and renting out a property.

As a final thought if I had all the tips compiled into one PDF you could download for reference, would anyone be interested? Let me know!

 

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Bonus Landlord Tips For Landlords of Course!

Posted on August 24, 2009 by admin

Just to close off my seven Landlord Tips I am throwing in two additional tips for landlords or those thinking about becoming a landlord. I’ve been getting some pretty consistent feedback from readers via email so if you are looking for more information like this, I would love to hear about it. I am also considering putting all of this together in a handy PDF file you can download as well. Then you can have all the tips together.

 

Bonus Landlord Tip #1

 

One of the secrets, that isn’t much of a secret, about Real Estate is to take advantage of leverage. Where else can you use someone else’s money (the banks in this case) to pay up to 80% of the value of a purchase and then allow you to reap the full return of the property going up in value?

I did have my former financial advisor mention to me you can do it with stocks, but during the last year, I know there are many folks out there who suffered the dreaded margin call due to this and are now paying dearly. If you have a rental property that cash flows, even if it drops $50,000 in value you don’t have to come up with extra money to pay back the bank. Then as long as you have a long term vision and hold onto the property for several years you should have a very merry outcome!

 

Bonus Landlord Tip #2

 

It is unbelievable how many times I have heard investors say, it’s just a rental when they are talking about their property and the work they are having done to it. It may be just a rental, but it is going to be someone’s home.

 

If you treat it as just a rental, that message gets delivered to your new tenants and they too will treat it as just a rental. If however, you treat it as someone’s home there is a much better chance they will take that message and treat it as their home. Wouldn’t you rather have it treated as a home?

 

Just to clarify, this doesn’t mean you need to install granite countertops because you would want them in your home, just don’t choose the cheapest products because you don’t care what happens to it. A real life example from us is a property we own that we renovated and updated to a much more modern look. The same property was also just down the street with the original shag carpet, dark brown kitchen cabinets and original fixtures. In the five years we have owned the property we have had a total of three sets of tenants, the other property has had the for rent sign out on at least six different occasions that we know of and who know how many times we didn’t see.

 

Because our property is a home we not only get tenants staying longer, treating it better and feeling like they are in a home, we also get to charge a $200 per month premium because it’s a home, not a rental. Don’t fall into the trap of owning rental properties, own homes that you rent out!

 

 

If you missed Tip #1, it is available here, Landlord Tips #1, Don’t buy where you live, buy where tenants live 

If you missed Tip #2, it is available here, Landlord Tips #2,  Spend Extra Time Screening Tenants, So You Don’t Spend Time Evicting Them Later

If you missed Tip #3, it is available here, Landlord Tips #3 – Being a Landlord is a Business, Treat it Like a Business

If you missed Tip #4, it is available here, Landlord Tips #4 – Don’t React, Pre-Act

If you missed Tip #5, it is available here,  Landlord Tips #5 – Take The Emotions Out

If you missed Tip #6, it is available here,  Landlord Tips #6 – Be Slow to Choose Tenants and Fast to Take Action on Problem Tenants

and finally if you missed Tip #7 (which is an incredibly important tip these days!), it is available here, Landlord Tips #7 – Cash Flow is King

 

If you are enjoying these tips be sure to register and get them delivered directly to your email box along with my other blog posts. Click on the following link to register, Investors Housez Blog Registration

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