# taken the plunge



## tobuyornottobuy (Nov 19, 2011)

I have taken the plunge and now have an accepted offer on a property in BC that I am planning to rent out, 
although I have been researching, i suspect the 'fun' really starts now and would appreciate any input into what you as landlords would do differently if you could (except of course...not being a landlord!)

I am also trying to come to a desicion about the furnished v unfurnished v part furnished question, has anyone found that the tax rebated of furnished negate the pitfalls of potentially shorter -term tenants and incraesed costs?

My background is that I have 2 properties in the UK, both with great tenants after learning the hard way and not fully credit and reference checking and being down $5000 and a messy court eviction! so I hope with a little due diligance I will do better this time!

Thanks in advance


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## the-royal-mail (Dec 11, 2009)

I wouldn't bother with furniture. Most people have their own and then you have to pay to get it steamed etc when they leave. There is a chance of bedbugs and damage/wear etc. Then you have the hassle and expense of replacing it later when it gets worn or damaged. Better for them to bring -- and take away their own furniture. 

Just my opinion though.


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## Berubeland (Sep 6, 2009)

If you can keep the furnished place rented - good on you - I suspect the premium rent is the primary driver behind this idea. 

Vacancy rates are over 30% in furnished places and the turnover is just par for the course. If you rent it yourself and take care of it, I suspect you can do better than that. That's here iin TO of course. 

Having said that, the far more common rental is the best, no muss no fuss. No way you're breaking even on a property in any major center in BC these days


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## tobuyornottobuy (Nov 19, 2011)

Thanks guys
I never really see any ads here that specify furished or unfurnished so wasn't aware of the premium, or what most people are doing! we could quickly get our spare sofa-bed , table and chairs and spare bed in if needs be...would still be alittle sparse though (as would our house)

Berubeland- I think I am going to break even! else I wouldn't be buying, I should see a $4400 gross return per annum on a 61000 investmemt, + have bought property 35k under similar listings (15-25k under value i think)

I keep doing the figures, and it keeps seeming to be a good investment.. (roll on bad neighbours/non paying tenants/resident vermin!!!!) i keep trying to work out what i've missed!

I dont seem to insist on quite as high a return as most folks on here, but i am feeling pretty happy with this so far..as a starting point.


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## Saniokca (Sep 5, 2009)

I somewhat second Berubeland...
Could you please give some details about your investment?
How much did you pay for the property?
What are the property taxes?
What are the maintenace costs?
What is the rent you will be collecting?


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## marina628 (Dec 14, 2010)

You got a place for $61,000 ?


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## Saniokca (Sep 5, 2009)

marina628 said:


> You got a place for $61,000 ?


I think that's just the DP


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## tobuyornottobuy (Nov 19, 2011)

Thankyou, I am mainly interested on people's feedback on pitfalls etc.....If I have messed up my investment then so be it...too late now!!!!!!!!, I am not keen in putting all the details down until I have dotted the i's and crossed the t's so to speak, but will hapily do it then-sorry, I am not trying to be obstructive, I just have read too much big brother perhaps!

Yes, I would have loved to have got a propety for 61,000...but this is a deposit on a 180,00 propety. darn!


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## Causalien (Apr 4, 2009)

Wait... You got a property for $180 000 in BC? Are you for real?


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## Saniokca (Sep 5, 2009)

It's not too late if you haven't signed. How can you say that you're looking for pitfalls and advice? What will it be worth AFTER you've purchased the property? It's not a liquid investment so you'll be stuck with it.

I'd love to be able to say "so be it" when 180k is involved...

You do have "big brother" issues...


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## the-royal-mail (Dec 11, 2009)

Saniokca, it is not necessary to quote everything you respond to. Threads are linear and are usually on topic, so we usually know what you are talking about. All this quoting is causing a lot of unnecessary scrolling and makes the thread page counts be much higher than necessary.


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## tobuyornottobuy (Nov 19, 2011)

saniocka, I feel there are elements of hostility to your post, sorry if I have taken this the wrong way. (And I don't have issues!)

It was not the value of the investment that I was asking for feedback on, and quite frankly I know you guys input alot of advice on investent values for people who come and go from the forum, I have made my own decision that it is a good investment, and therefore see no need to draw people into the discussion on that, nor the need to affirm my belief it is a good buy.
I am not trying to be ungrateful, I just dont really feel the need to waste you guys' time.
I thank you for the advice received regarding furnished/unfurnished.

Many thanks, MC


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## Four Pillars (Apr 5, 2009)

tobuyornottobuy said:


> It was not the value of the investment that I was asking for feedback on


In all fairness to saniocka, you did say:



tobuyornottobuy said:


> would appreciate any input into what you as landlords would do differently if you could


which is a somewhat open ended question for advice. Which perhaps wasn't what you meant.


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## Saniokca (Sep 5, 2009)

It probably was a bit hostile for which I apologize. It's a bit frustrating to see people asking for advice and when you ask them relevant questions they get secretive because they are afraid others will somehow steal their idea...

Here is a true story:
About two years ago a friend of mine was telling me that there is a sure way to make money in real estate without any risk. Basicaly someone taught her a "secret" method that she couldn't elaborate on. To me it sounded like someone is either pulling her in to scam other people (unlikely) or trying to scam her (probably). She clearly didn't want to tell me so I dropped the subject. Two years later she still lives with her mother in the same house.


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## Berubeland (Sep 6, 2009)

OMG if I had a list of all the "sure fire ways to make money" in real estate... 

So many scammers out there... it makes me sick.


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## kcowan (Jul 1, 2010)

Berubeland said:


> OMG if I had a list of all the "sure fire ways to make money" in real estate...
> So many scammers out there... it makes me sick.


Fixed it for you. PT Barnum was right.


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## tobuyornottobuy (Nov 19, 2011)

yes, i am sure there are many scammers. This is not sure-fire by any stretch, just for now the figures are working for me.
I guess we all have our views on what makes a good investment.

anyway here goes if you any of you are interested, my mortgage payments will be $6048 pa $2600 in costs $1000pa for repairs (though I have factored in repairs to my total cost so shouldn't (touches wood) need much for a year or 2)

rent $13,200 this factors in 1 month empty p/a (this is $50 under an identical house)

so hopefull 3552 +ve per year, i didn't initially factor repairs (due to having money aside from completeion costs).

Hopefully it will do me ok, and the appreciation as its under market vlue should stand me in reasonable sted.

Thankyou for all input, the above is just FYI for those who asked. I am excited, I dont think I am getting scammed ( I hope not!), but for sure appreciate the support of people on here so that we can all try to avoid letting excitement rule and havign us let our guard down with unscrupulous people! (sorry for such a poor expression of English there, it was a long hard day!)

MC


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## Berubeland (Sep 6, 2009)

If there's one thing I would advise you tobuyornottobuy, is to have a nice healthy emergency fund in case tenants don't pay or die or something expensive breaks and needs fixing. 

Seriously most people have no idea how close to the edge many landlords are. I have one couple I want to fire very badly. They start worrying, calling me and emailing me about the rent a week ahead of time. The rent is due on the first why should I start looking into the rent ahead of time? Seriously I manage a lot of properties now and collected 60K in rent today, give or take a few thousand. If I had one more client like this one, I would need to medicate myself for sure 

I feel bad for them, the reason they are panicking is because they have no money, zip, zilch, zero. If the tenants do not pay the rent on the first, their mortgage bounces. It comes out on the first. 

The tenant can't be late ONE DAY. The stress they go through every month is incredible.


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## marina628 (Dec 14, 2010)

My daughter rents from one of these landlords , she cashed December 1 rent on November 22 !


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## Causalien (Apr 4, 2009)

Is it me, or there's been a huge influx of posts like these where people are persuaded by RE agents to buy because they can rent it out to cover the mortgage?

Sounds like a repeat of US. Anyone can confirm? I don't lurk around RE section as much as you guys.


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## Berubeland (Sep 6, 2009)

I think so, to be honest I've noticed a huge trend in the last 2-3 years as long term landlords win the property lottery and cash out. Not just small landlords, I'm talking big deals too. 

Every large owner I've ever worked for has sold their properties.


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## tobuyornottobuy (Nov 19, 2011)

I have a contingency fund for issues, have been there done that before, would rather not use it of course!.
What I am hoping, is to get a rent-to-own tenant immediately and lock in a price that is FMV + inflation.
That way I immediately know my profit margins, and I think would be better than a long term rent on this, Ihave read the mixed views of rent-to-own, and am not sure if I could even find someone suitable. we'll see.
I'm not prepared to take just anyoneon a rent-to-own, becuase I dont want to rip off someone who really doesnt have a chance of getting a mortgage, that' not the way I like to live life!


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## Causalien (Apr 4, 2009)

Please tell me where there are houses for sale for $180 000 in BC?


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## rookie (Mar 19, 2010)

Berubeland said:


> I think so, to be honest I've noticed a huge trend in the last 2-3 years as long term landlords win the property lottery and cash out. Not just small landlords, I'm talking big deals too.
> 
> Every large owner I've ever worked for has sold their properties.


read it as they either exited the RE market because they owned something. i repeat my question, has someone done any research on how we can short it??? i have seen honest responses stating sell home builders etc etc but they are not a straight bet against residential RE values going down. i do not want any external factors in play. i want a pure bet against the residential RE, like CDSs. are there canadian equivalents??? can we short the CMHC?


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## Four Pillars (Apr 5, 2009)

rookie said:


> i want a pure bet against the residential RE, like CDSs. are there canadian equivalents??? can we short the CMHC?


At this point, it should be fairly obvious that nobody in here has an answer for you. I doubt such a "pure" product exists.

You should read the "Big Short" - it outlines this exact situation in the US market and the difficulties that investors had in trying to short the sub-prime lending market.


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## tobuyornottobuy (Nov 19, 2011)

*180,000 homes*

vancouver island. - nanaimo and anywhere north of nanaimo.

both nanaimo and cambpell river have reduced abit over the last year


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## humble_pie (Jun 7, 2009)

rookie in the US there are options drawn on the regional case-shiller residential housing indexes. As far as i know these are not retail investment opportunities. Players are usually builders hedging new housing projects.

in canada, there is a case-shiller-type index called teranet national bank house price index. Like the case-shiller, it is also broken out for particular regions & cities. Here is a link. It does not appear that the teranet indexes, or proxies for them, trade. I would suppose that large institutions can enter into customized hedging contracts, but it doesn't look like any opportunities exist for the retail investor.

http://www.housepriceindex.ca/Default.aspx


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## Sampson (Apr 3, 2009)

tobuyornottobuy said:


> vancouver island. - nanaimo and anywhere north of nanaimo.


Anywhere North? Last I checked Parksville and the Courtney-Comox area were still quite expensive.


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## tobuyornottobuy (Nov 19, 2011)

comox is expensive, still some deals in cumberland and courtenay, I am not sure about parksville but thought there were some reasonably priced homes there.
I'm new to this...don't quote me!!!!


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