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Thread: The tenants you get these days

  1. #11
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    If I buy for all cash interest rates don't matter. Even if I want to sell, I can give the buyer a sweet deal by taking back a mortgage. So interest rates don't worry me. The signs are that all governments are so deeply in debt they can't allow interest rates to rise without killing themselves. That is supposed to prevent them from allowing rates to rise, but I don't have much faith in governments doing anything that makes sense.

    To get back to the original question. How hard is it to get good tenants compared to say 20 years ago? And how do you qualify them? Assume a nice house in a good neighborhood, in top condition, with rent a little below the norm.


  2. #12
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    Quote Originally Posted by Rusty O'Toole View Post
    If I buy for all cash interest rates don't matter.
    If you buy for all cash you might as well buy REITs. Diversify your holdings and stop worrying about tenants.

    The beauty of investing in rental properties is mad leverage. If you are not employing leverage, the pain of dealing with tenants is not worth it. You can get the same cash yield from REITs.

  3. #13
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    I hear ya on the renters. I bought a beautiful 500k 1 yr old home in 2008 in BC with a view to renting for some income and keeping for retirement. Have had 4 tenants, none took care of the place. 3 different property managers, paid for inspections, all were a joke. Wrecked appliances, dishwashers treated like garburetors and then I get billed for a plumber to unplug ? central vac driven into and I just get told it needs replacing, fence driven into, irrigation chewed by dogs, 1 small dog allowed and then they sneak in an extra huge dog and 2 cats. Hardwood floors destroyed....wear and tear, lol. Property managers return damage deposits. The RTB sides with tenants when you try to get them out. Maybe I should consider myself lucky that at least they paid the rent on time (well almost) but finally had enough, took possession and redid the place top to bottom and sold for less than paid for. ROI wasnt good but that was because I bought a nice place and figured I could get quality renters, lol. Driven like a rental. With interest rates so low, seems like all the good renters took advantage and bought places of their own.

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  5. #14
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    Quote Originally Posted by GoldStone View Post
    If you buy for all cash you might as well buy REITs. Diversify your holdings and stop worrying about tenants.

    The beauty of investing in rental properties is mad leverage. If you are not employing leverage, the pain of dealing with tenants is not worth it. You can get the same cash yield from REITs.
    REITS can go down in value for reasons I can't control. I agree, REITs would be the ideal investment if they were properly managed but here we get back to the management problem.

  6. #15
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    It's hard to compare time periods...aside from historical bias, people's knowledge and experience is different.

    First off, if you were lucky and got good tenants, then you think that times have changed and people are worse. If you made mistakes when you were younger, people today look better.

    I really doubt much has changed over the years. There have always been bad tenants and there always will be. The same with good tenants. I'm sure my kids will all be good tenants, if they choose to be tenants, because they were brought up to work hard and be respectful...plus they've seen the landlord side of things.

    Sure, times have changed, people don't have 20 year job security, but that doesn't mean they're bad. I've had tenants do majore renovations at their own expense.

    I believe in the 90/10/10 rule, and always have 90% of tenants are good...hey may not be great, but only 10% of them are bad. Of those, 10% are REALLY bad. These numbers seem to hold out across my holdings.

    In reality though, no one talks about the 90%, so the bad tenants seem to always be the norm.

    Of course the rule also applies in reverse. Only 10% are great tenants and 10% of those are exceptional...who do major renovations at their expense.
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  7. #16
    Senior Member Berubeland's Avatar
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    I would say that the rental market is vastly different than it was 20 years ago. There used to be a large pool of quality tenants and now there is a pool of people in transition to home ownership. I don't think in the current rental environment you can make a go of affordable housing.

    Belleville may have changed as well, what kinds of industry you have, what the local economy is like, who is in transition, all are points you need to take into consideration.
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  8. #17
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    As a former tenant, I see these problems a lot. Bad tenants in nice places, etc. What I've discovered is that the nicer apartments had a lot more screening.

    Case in point, my first apartment had me speaking with the property manager personally (she was definitely one of the best ones out there), credit check, and employment letter. Well, she didn't need the employment letter as she personally knew my boss at the time so she knew exactly where to track me down if she had issues. At time, I didn't have any credit to my name (joy of trying to stay out of credit card debt in university) but I told her exactly what I had in my name at my previous place which was a security deposit for gas in my name, had the telephone and hydro in my name which I had ready with me but she felt comfortable enough. But the big thing was that I stayed in my previous place for 2 years which indicated stability. So, really, what made her accept me was the type of my job whom she knew my boss, my stable place of home, and my efforts to show proof that I had responsibility with the utilities. And I kept that up for the next 4 years. We still talk to this day

    Bottom line is if the tenant are making efforts to be accepted despite not having much to their names, it's a good tenant, generally which was confirmed by this woman. The places with bad tenants had landlords who didn't do all those screenings. The tenants who've stayed in multiple places over the years are the ones to watch out for.

  9. #18
    Senior Member sags's Avatar
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    Perhaps the shift from baby boomer home owners to baby boomer renters is starting to show an affect.

    Most of the boomers I know who sold their homes are living in townhouse condos or luxury high rise apartments.

    They aren't interested in cutting grass or shoveling snow and want to live in a better than average environment. Some want the swimming pools, spas, gyms,..........offered in some buildings or complexes.

    I am not sure single family homes fits their rental needs.

    Just wondering from the landlords on this forum who own rentals............who does the maintenance ?

    Our landlord has their own maintenance staff and beyond doing the day to day work, they also keep an eye on units and report any wonky activity. (such as illegal bedrooms in the basement)

    They "visit" the units every year to "replace the batteries in the fire alarms and the furnace filter"...........a valid excuse to look around all levels inside the units.

    A tenant who isn't keeping their place up gets a "it has been brought to our attention "notice in their mailbox.
    Last edited by sags; 2016-07-18 at 11:35 AM.

  10. #19
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    The problem is that Canada is a home ownership country. In Calgary for example, 70% of the homes are occupied by the owner. That is a huge number. Basically if you are a mature adult with a steady job, the odds are pretty good that you own your own home here. So who is in the other 30%. The very young (mostly single) adults, the financially less responsible, those who are broke... Of course there are a percentage of people who choose not to own for other reasons, but the odds aren't in your favor.

  11. #20
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    Quote Originally Posted by Rusty O'Toole View Post
    So, landlords tell me. Can you still find good tenants? How do you do it? Or has the country deteriorated to the point where they hardly exist anymore?
    Yes, you can find good tenants but it isn't easy.

    Find a professional organization that brings people to town and you have a potential pool of short term renters. I would not sign a lease for less than 1 year, or more than 2. I've got a professional group that brings people in for 2~3 years. I rent to them and they call me. Past tenants say good things about me because I have been excellent to them. The reason we bought the our last house is because someone called, needing a house, and we didn't have a vacancy so we purchased one and rented it to him.

    The main thing is that you have to have good properties, if you want to rent to good people. If you've ever said, "That's good enough for a rental.", you are not likely to get good tenants. I've installed crown moldings, we decorate nicely, and we keep them *BRIGHT*. Those shitty basement lights are not going to make people feel good about your house. Install 4' fluorescent, lots of them, and install daylight balanced bulbs. Paint over those dark colors with something close to white. Bright, bright, bright. People should feel warm and safe, when the walk in.

    Step 1 - find a good tenant
    Step 2 - have a good property to show the tenant
    Step 3 - build mutual respect with the tenant

    Note 1 - Dump tenants at the first major sign of trouble. If they pay late but before the legal eviction date, roll with it until 45 days prior to the end of the lease and then give them notice to vacate at the end of the lease
    Note 2 - No month to month
    Note 3 - *Anything* that causes the tenant to feel less safe is low hanging fruit, in terms of tenant retention. That gate latch into the alley that has been broken for two years because you're too lazy to fix... is a major annoyance to them and will cost you a lot of money when the tenant leaves and you need to place someone in the house. Fix it promptly.
    Note 4 - Take good care of your tenants. Treat them as you would like to be treated. If they don't respond in kind, send down the road at the end of the lease.
    Note 5 - Never rent a property to someone you're unsure of because they are the "best that is available". You will regret it.
    Note 6 - Install a dishwasher. There isn't a human alive who wants to do dishes. This is a huge rental magnet.

    Quote Originally Posted by Rusty O'Toole View Post
    REITS can go down in value for reasons I can't control. I agree, REITs would be the ideal investment if they were properly managed but here we get back to the management problem.
    I completely agree with Rusty. I own both REITs and R-E directly. I'm happy with both and the current balance but, as my net worth grows, REITs are where the money will go.


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