Want to know how to waste two hours of your time? Get subpoenaed as a witness and then discover that the officer neglected to update you that the court date changed, that’s how.
What a pisser as I had things I needed to get done and pushed them off to do the right thing. What’s more aggravating is this same officer never returned one of my initial calls or emails when this first started a year ago. It seems to be an ongoing saga.
I understand the police are busy, I understand they are often understaffed, but here we have a chance to put a deadbeat away who stole a vehicle at knife point and we’re screwing around. Anyway, I’ll have more updates after the 1st of September when I find out the new and updated court date!
OK, just so you know, this isn’t even an eviction. I had a tenant “allegedly” steal a vehicle from another tenant last year at knife point. I know, I get to deal with great people.
Worse yet, this was part of my pilot project to help young kids get off the street by putting them in some of my shared accommodation properties. Now just to add some perspective to this, I am not Mother Teresa, or even close!, part of this was to help fill rooms and some was indeed to try and help people who needed it.
Quick recap on the project, out of 11 tenants, I evicted or assisted nine of them to leave, the other two will never be allowed back. These were 18-24 year old kids who wanted financial assistance, housing assistance and typically had problems at home. The problem with the system I see is they were never made accountable.
They didn’t have to work for their money, they didn’t have to show up for job interviews, they didn’t have to get up in the morning. Also since they didn’t pay for anything and new housing would be found for them, they also weren’t responsible for anything. No smoking, sure, whenever Bill wasn’t around, no overnight visitors, sure whenever Bill wasn’t around. Anyway you get the idea.
Anyway, I will post more either late tonight or tomorrow as the story unfolds!!!
If you follow the Real Estate markets or own rental property it is incredibly easy to get depressed about the current market situation. As you scan the Real Estate headlines and find out sales have dropped 41% from the last year. Or as you can talk to Realtors, who will tell you about the huge amount of inventory currently for sale or you can even talk to your tenants about how they feel you need to lower rents because there are so many vacancies out there. The last trap was the one I fell into with my tenants help.
With this many options and this many negatives, it’s easy to get worried and it’s important to understand where your sources of information come from. My mistake began with talking to a tenant of mine, who was requesting a rent reduction due to the changing market. I am aware there are more vacancies and I know the market is a bit more competitive, I also know what a headache it can be to move. But they were good people so I caved in and ended up offering her a $75 reduction, which wasn’t good enough for her. So I agreed to switch to month to month while they explored their options, without doing any rent reduction!!.So now, here is how the trap unfolded.
When I collected the last monthly rent check, I listened to her story about how she felt bad for landlords like me, since there were so many vacancies out there and so many choices for renters, I may be vacant for quite a while. It was all rather depressing really.
To help elevate the potential depression, I also had another property that was just getting some renovations completed and was currently vacant, plus two more vacancies coming up. It all looked rather glum.
Next, came the reality versus what I had been told by the wrong source, or at least a source with a different agenda. Late one evening as I stressed about how long I would have empty properties, I finally had my ads all written and proceeded to post them online with less than stellar expectations. Much to my surprise by mid morning, I already had my first viewing booked for that day. Then another one came for the following day. Then two more for the other property, then a friend’s son came out of the woodwork interested in the third.
The response took me off guard as I was expecting a disappointing response, but it quickly became better and better. Now the key from my viewpoint is as follows, we like to keep our properties well maintained and updated and this is an example of this tactic paying off. Here we are not even a week later and I have all three properties lined up with new tenants. One will be vacant for less than 24 hours!
When chatting with the actual tenants looking for new places, the real view of the market emerged versus the one I was fed by the current tenant. Yes, there are a significant amount of rental properties out there, many at very low monthly rates. However, it appears there is a reason many of them are languishing on the market and steadily reducing rates and it has nothing to do with an over abundance of vacancies. Rather it has to do with tenants having options of where they want to live and they don’t want to live in dumps!
Resoundingly the tenants informed me that a majority of the “cost effective” properties were not places they would choose to live if they had options. During the economic boom earlier in the decade, people took what they could get, now the landlord and property owners that took advantage of tenants and just pocketed all the profits are feeling the results of their decisions.
So the real message behind this article? You really need to talk to the right people to get the real answers. The neighbour, or the tenant or the Realtor may have an opinion, but you have to do your own research to find out how valid their opinion really is and what is actually happening in the market.
In further efforts to streamline the process and to ensure I can get posts out more efficiently I am making a few changes again to the way I send out the posts.
Unfortunately it does require everyone to re-register, fortunately I have a simple form that will make it quick and easy.
To make sure you are rewarded for having to re-register I am putting together some more great information to send out to all the subscribers that register through this form. My apologies for the extra steps you take, hopefully the free info will make it all worthwhile and you should see it in your inbox over the next few weeks.
Remember this info will only be available initially to the newly subscribed, so please register just once more!
In a report by the Real Estate Investment Network (REIN) in early August, Calgary was ranked the number 1 city in Canada for Real estate investments. With the slower and shaky economy, the high price of home ownership, forecasts for a slowdown in housing prices increasing interest rates this has come as a surprise to many people.
So where does this type of report get its basis from? First off, the group is basing its pick of Calgary from now until 2015. So while presently it may seem less glamorous to look at Real Estate as an investment, it’s over time that it shines.
REIN bases their decision on several factors that directly affect the value of property. These key factors are population growth, job growth and increasing average incomes. Whoa, you might say! Isn’t Calgary losing population, hasn’t there been layoffs and how could average income be increasing?
This is where the long term five year view comes into play. As the global energy markets continue to stabilize over the next several years and the US continues to increases its dependency on the “dirty oil” coming directly from the Alberta oil sands, Calgary will see its economic stability ramping up. Of course as the energy industry thrives so does the rest of the provincial economy.
Although we are currently seeing a slowdown in inter provincial migration, as more jobs become available and the economy grows, this will once again turn around. Now we aren’t talking 2005/2006 out of control growth, but definitely stronger than we have seen the last three years.
Now the majority of people first moving here are not likely to be home buyers. They tend to be renters who are initially more intent on getting a good job and less concerned about buying of they are unsure how long they will stay. This is what many people who are disregarding the report are missing.
From a home owner’s standpoint, with an average price of over $450,000 for a property that may not be able to increase much is not be a good investment. On the other hand, a $300,000 suited bungalow in a rental neighbourhood that generates $2,200 a month in gross income versus a $1,070 monthly mortgage payment could be a great investment from a Real Estate investor’s viewpoint.
What are your thoughts? Is Don Campbell going out on a limb or does he have a firm grasp on what’s happening out there?
Since yesterday there has been quite a few fun little stories pop up, but let’s touch on my definition of revelations first.
As I mentioned, I’ve been getting more irritable for a while now due to myriads of minor and major headaches. These range from a partnership that has been going through a split for over a year and a half, another partner who is managing a property in Lacombe who hasn’t been able to provide any details on the property for over two years and may now be going into foreclosure, being forced by banks to sell properties in a market not conducive to sales, tenants who seem to be more concerned with their welfare than mine and I could probably go on for another thousand words with all the headaches and complaints I have.
All the pressure, all the worrying about everyone else, well it’s just worn me down. Because I have been looking at it as ongoing problems that will never subside and I think that is where the revelation comes in. This all comes back to Tony Robbins new show again, the Breakthrough. Now I quite enjoyed the show as it’s great to see people over come what obviously completely changed their lives, but what I didn’t realize is after the show Tony posts a video explaining some of the background info that gets omitted due to the show’s 44 minute time frame.
It was watching some of this post show video yesterday that I started to realize how lucky I am. Yes I have some big challenges in front of me, but some are transforming as we go along. Last week the year and a half split finally was complete, we received some very positive reviews of the property we are still trying to sell, I’m getting more calls on the vacancies we have, my new business while slowly growing is starting to get some nice results and some referrals, my family still loves and adores me (well maybe adore is strong, especially with how pissy I have been lately, but they still love me!), I have a great home and there is plenty of positive out there.
When I look at the story from the Breakthrough and how the fellow became a quadriplegic who was stuck in his house, afraid to go outside, yet has transformed his views and has become upbeat, positive and enthusiastic about his life and future. Then I compare at how I have started to look at all the negatives without seeing the positives it was a bit of a wake up call.
So while there are no guarantees I will be 100% happy all the time, I will start working on remembering the positives, the good things that are happening and try to let more of the negative wash away.
So with that in mind, here are a couple of developing stories since yesterday. Last night the police stopped by and I was subpoenaed for a courtcase later this month!!
Not against me just in case you were wondering! This relates back to my tenant from last summer who stole another tenants vehicle, cell phone and wallet at knife point. Apparently he and his buddy were caught in Ontario five days later sleeping in the car. I get to show up to confirm he was a tenant and help put him away hopefully for a long time.
The two guys who pissed me off Sunday, well this morning there was an apology text message on my phone. Apparently they are sorry about the misunderstanding and they wish they had taken my place and the fellow who wanted the discount may be interested in coming back at regular price.
I just received a referral yesterday from one of my very happy web clients, not sure how it will turn out, but after a quick look there seems to be plenty I can help them with.
On the slightly negative side, people don’t comprehend ads very well, I have been getting quite a few calls on a rent to own property and another one for a live in manager for another and it’s apparent that I need to write them with more clarity. Obviously including prices, how it works and everything comes across confusing (see look at me finding a humorous bright side!).
There’s been a lot of economic doom and gloom and it’s probably not going away for a while. If you haven’t the time, or had it thrown in your face, about how really good you may already have it, perhaps now is a great time to do so. Happy revelations!
Just noticed a story out of the city council meeting last night where the council has erased zoning restrictions on secondary suites designated for narrow properties. So what does that mean?
For some reason if doesn’t change anything for older districts that have the nice large lots (the example they use is Haysboro and University Heights) which are more suitable to add secondary suites. It does however affect areas where they cram homes in like Martindale, certain areas of Tuscany, McKenzie Towne, in all about 18% of Calgary homes.
These areas can now have legal basement suites. There are still certain rules to follow, but it cannot be denied due to zoning for these areas now which should take some pressure off landlords hoping to not get reported.
Just going to throw a few quick thoughts and items out.
Tony Robbins
Tonight (Tuesday July 27th) is the premier of Tony Robbins new TV series. I have long been a fan of his books and audio packages. If you are having some struggles in your life, want some positive reinforcement, or just want to see some stories to make you feel good, check it out tonight.
Been a busy week, Karen, the kids and I have been working on a vacant property in Forest Lawn. We are trying to teach the kids the value of working hard and getting paid for it, so our 10 year old learned to paint walls yesterday. She put in a solid two and a half hours and we will reward her for it.
It’s her lesson about life and earning money as she is constantly asking us how she can make money, now she knows and we are taking them back today to finish up!
Getting Things Done
I was up until 2:45 the other night, couldn’t sleep, so I went and worked on some of my web projects. It didn’t hit me until today that I keep falling into the same trap all small business owners have. I’m busy working in my business (as I prepare to go paint again at a rental property), rather than working ON my business.
Most of you aren’t aware I started another business up now as I need something to fill my time. I have done a ton of research on how to market websites, products and information on the internet over the last few years as I sat on the sidelines and waited for the Real Estate market to settle down. Now I am leveraging that knowledge to help small businesses and a few charities get some exposure on the internet.
With so many things on the go, it’s important to get things done! If you don’t get things done, you cannot move forward. This is why it’s so important to take some time to work on your business! Sometimes you just have to block off half an hour to review what needs to be done to get ahead. Anyway, I’m off to get things done now so I can come back and work on my business later!
I don’t understand. I thought I understood it, but I must be missing something. What I’m talking about is the Bank of Canada rate increases. For the second straight time, the prime lending rate has increased. Sure, it was only a quarter of a percent raising the Bank of Canada rate all the way up to .75% %, but it’s quite curious to me. I just don’t believe the current economic situation warranted it.
Especially, when they also release data at the same time they are forecasting economic growth to be slowing, due to household budget cutting. Is this an example of the cart leading the horse or is it chicken/egg syndrome? By increasing the prime lending rate, the cost of borrowing increases which makes mortgage more expensive, pushes rates on credit lines higher, and reduces the amount of cheap capital available to businesses.
This translates into households and businesses becoming more cautious and less likely to grow, to expand or to increase expenditures. All of which are requirements for continued strong economic growth. Now, since it’s not a huge rate increase, it doesn’t mean growth will move to a standstill, it will just slow down a tad. However, once again, is this the best time for that?
Perhaps what is more interesting is that Canada is the only Group of Seven country to raise their prime lending rate since the global recession started. And now it’s been twice in the last several months! What do we know that the other countries don’t? Yes, we came through the global downturn far better than perhaps any other country, but are we possibly shooting ourselves in the foot due to our own prior success?
During the first half of 2010, Canada as a whole saw a tremendous amount of growth and recovery in the housing markets. From Vancouver to Halifax the trend was for property values to increase with Vancouver seeing some huge jumps from the beginning of the year. Much of Canada’s economic growth can be directly pointed back to the growth in the housing market.
From the manufacturing of windows, furnaces, appliances for new homes to the actual construction involving carpenters, electricians, plumbers and more to the lawyers, realtors and banks on the back end, the Real Estate industry as a whole has a significant impact on the Canadian economy. This impact was directly responsible for much of the growth in that first half of 2010, but there are pending and newly introduced factors, such as the rate increase, that will have direct impacts on continued growth.
July brought the Harmonized Sales Tax to Ontario and BC. This tax meant to simplify some of the confusion brought about by separate Government Sales Tax (GST) and Provincial Sales Tax (PST) is directly adding thousands of dollars to home purchases. Since many consumers were aware of these pending increased costs, it helped fuel an even busier first six months of 2010. Most likely it will also lead to an even slower second half of 2010.
We’ve already seen Canada wide home pricing start to stall and even slide in some areas. Now with this new increase in rates, will it cause it to slide even further or will it just be able to maintain it’s flatness? The argument is that over the next year business and trade will provide the impetus for growth in Canada and consumer confidence will be less of a driver for economic growth, but doesn’t it go hand in hand? Happy consumers help boost business success leading to everything growing? While the rest of 2010 will once again be quite interesting, I’m just getting tired of constantly peering ahead to see what will happen and I’m really starting to yearn some consistency with the world!
First off, I missed this entirely. From everything I was seeing and hearing the economy was cooling. The housing markets had already stalled a bit after the recent changes to mortgage qualifying requirements in April, oil prices had dropped almost $10 from a few weeks ago, our dollar has dropped a nickel against the US, the crisis in Greece still has some huge ramifications and the general consensus is not much is happening right now as people wait for everything to play out.
Then again I don’t run the central bank, perhaps I missed something? I did see a report from the OECD predicting the Canadian economy has rebounded vigorously, but I don’t think vigorous was exactly the correct word? Really we aren’t doing bad, all things considered.
When you look at the horrors still facing the US (trillions in deficits, billions of pending foreclosures, huge unemployment rates) we are pretty stable. When you see what’s happening in Europe and how countries like Greece are becoming financially unstable, once again our situation doesn’t seem so bad.
I just think the rate hike may be a bit premature, our economy needs some more legs underneath it. The important part to remember is there is no additional indication of this being the trend. We all understand rates only have one way to go, but if it’s done gradually the impact should be minimal, only time will tell though.
How does the rate change affect you? Did you lock in your rate before today for an upcoming mortgage? Are you wondering whether it’s time to switch from variable to a fixed rate mortgage due to this? Ask me some questions and I will tell you my thoughts, even if I got this one wrong!
I had previously mentioned a book by Eric Qualman called Socialnomics in an earlier post this year. Here is a video the author put together with some very interesting facts about the Social Media Revolution.
Some important take aways from this are that the way we get our information is changing, more people get their information directly off the net than from the press or alternative sources. Personally we threw away our Yellow Pages as we cannot recall the last time we used them, we simply look it up on the net.
If you are a business and you are not on the internet, it’s time to rethink your strategy. If you want to show your commitment to the net, you can purchase your copy here online, Socialnomics by Eric Qualman.
It was just a matter of time before mortgage fraud started making the headlines again and over the last month, it has resurfaced with a bang. The Bank of Montreal has recently filed a civil suit against 14 groups accusing them of mortgage fraud which has cost the bank over $30 million dollars in losses.
These particular mortgages in question all apparently involve using what is called a straw buyer scheme and is prevalent in very active Real Estate markets where the values are increasing rapidly. The process involves an initial individual purchasing a property at its market value, immediately bringing in a “straw buyer” who uses their good credit to apply for a mortgage on a new much higher amount.
I’ve talked about straw buyers before, but here is a quick recap. In return for just signing paperwork as they are often told, they receive a small lump sum payment of anywhere from a few thousand to ten thousand dollars. Quite often they are even given a story about how they are helping out another family who is unable to qualify for various reasons and they are doing a huge favor and a kind gesture by doing this, plus they pocket $5k.
What occurs in the background is the initial buyer, or group of buyers has arranged fraudulent appraisals and paperwork where they increase the value by tens of thousands of dollars. This is where the extra individuals named in the charges come from, it includes appraisers, bank employees, Real Estate agents and lawyers who were wittingly or unwillingly involved. Then when the new financing comes in using the straw buyer’s credit, they get their original money back plus a large profit.
By specifically targeting the worst properties in some of the nicer neighborhoods, some of these appraisals were over $100,000 higher than the purchase price. With fast profits like this you can see why it attracted so many people in, of course what good is the money when they don’t let you spend it in prison?
Now in rising markets, eventually the property values catch up and the properties get resold at their real values so the fraud goes undetected. What has triggered the detection here is that values have not gone up and many of the properties are worth considerably less than the mortgage amounts. This has caused many of the buyers to walk away or default on their payments and has left the losses in the banks hands. Except in the case of fraud, the banks are now going after the perpetrators.
What’s most unfortunate is that many of the individuals set up as the straw buyers in this case, were new immigrants to Canada and were duped by the ringleaders who profited from all the illegalities, yet typically disappear into the night after the sale. Sure being new to a country doesn’t excuse them from having to follow the same rules as other citizens, it just makes it that much more appalling that someone would take advantage of newcomers so blatantly just to make a profit for themselves.
If the market continues to stay fairly steady and starts to grow again over the upcoming years, many other fraudulent instances that occurred will continue to remain unnoticed and get passed along with no one the wiser. However if the market tanks or we see another big decrease in values, it will be quite likely there will be considerably more cases like this making headlines! Either way this won’t be the last of the charges we see, this will probably just start a mini cavalcade of banks trying to protect themselves.
For long distance landlords, property management is essential to their business model and having great property managers can often make the difference between a satisfying experience and a nightmare. Managing remotely can be done, but it can make life a bit more taxing.
For landlords with property nearby, it can be quite a dilemma whether to give up the additional cashflow that you receive for managing your own properties versus freeing up your time by not having to deal with tenants. What a conundrum!
Fortunately, I’ve just been approached by another individual who has recently written a great article covering the pros and cons of property managers. If you are currently exploring whether hiring a property manager is right for you, this may be quite helpful, so be sure to take a read through.
To add to this I would love to get some feedback from anyone who is currently using property managers on the positives and negatives that you could share with the other readers.
The Economist magazine just released another article about an upcoming second dip in the pricing of homes in the US. I had previously explained a bit about the new round of Adjustable Rate Mortgages (ARM’s) coming up and bringing with it a new round of foreclosures in a previous posting, but this article also goes into details about some of the federal programs coming to an end.
These programs helped to artificially stabilize the housing market and now that they are set to expire, interest rates are set to rise and the US labor market continues to be so soft it is setting the stage for another substantial drop in values. Consider this another warning for you if you are looking at potentially purchasing an “investment” property in the US due to current low prices. These investments are actually much more speculative and will require much longer time frames to turn into wealth building opportunities.
Another aspect to consider regarding this is the Canadian market is still significantly different than the US market, the next wave of price drops South of the border do not translate into the same occuring here. As evidenced with the global recession while pricing did move downward in Canada, it was no where near as significant as it was in the US. We have already had our government change some of the qualifying and mortgage rules in anticipation of potential future problems. Whether that will be enough only time will tell.
You’ve seen the stats, you’ve read the news, and you are likely aware home prices are continuing the trend of increasing in Calgary and area. What they aren’t telling you is that it’s not every area of the city!
The numbers that get released are an average price and when you look at averages this means some areas are growing more, while others grow less. No less than three individuals whom I have talked to in the last month have all been getting excited that prices are going up and have automatically assumed their property values have as well, but this isn’t always the case.
As we have been working on streamlining some of our portfolio and reducing some of the properties we own, I have been looking closer and closer at trends in a couple of areas and these areas have been completely flat or worse. They have shown either no growth or crept downwards a bit in price.
To add to this, inventory levels are continuing to increase around the city and with the upcoming mortgage rule changes, we have the dual problem of more product and fewer buyers. Now before you start to think I am predicting pending price drops, just realize this is something to be aware of, not meant to cause a panic. It may result in a temporary hiccup in sales and prices, but nothing long term.
There is nothing new about inventory increasing in the spring. This quite common occurrence usually starts in March and runs into June and brings not only additional inventory, but additional sales as well. Spring fever tends to be a huge factor with Real Estate every year.
As for the mortgage qualifying changes, this will only have a short term affect on buyers. Yes, it will reduce the number of qualified purchasers, but the purchasers getting pushed out would potentially be setting themselves up for a foreclosure in the future as rates increase. By reducing future foreclosure properties, these new rules will actually help keep prices stable and over time gradually increasing. Within a couple months, these changes will be forgotten.
Now, let’s get back to my original point about not all home prices increasing equally. Since average sales price is based on averages, don’t automatically assume since the average price increased by 3%, your property automatically increased as well. I’m seeing this mistake being made by both home owners and Realtors right now and new listings are coming on board for way too much.
In the one area I am looking at, when you compare the new listings to other properties listed all seems fine, but everything that has actually sold is all about 5% less than these currently listed prices. If you have a property a buyer absolutely loves, you might be able to get away with this as you have the leverage of emotion winning out over logic. However if you either don’t have the time to wait for that person to show up or you just want to sell your property most efficiently you need to have a firm grasp of what properties are actually selling for.
You really need all the facts when evaluating a property you are about to sell, or even a property you are about to purchase. Don’t fall prey to the headlines, make sure you find out what is really happening and as Don Campbell says, “Look behind the curtain!”
