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Auditing Prospective Tenants; What Are Your Guidelines?

Since I first started this blog, roughly two months ago now, I’ve touched upon a range of issues and concerns which will (at one point or another) come to affect pretty well everyone who chooses to get into the business of property investment. Some of these issues are part and parcel of the day-to-day running of an investment property, such as everyday maintenance or dealing with property management firms. But some subjects have had a decidedly more distasteful theme, such as dealing with troublesome tenants or, heaven forbid, having to begin the process of an eviction. I think everyone would agree that the best solution to a problem with a troublesome tenant would be to avoid him or her altogether from the outset; whether this means steering clear of purchasing a property known to have caused trouble for previous landlords, or to do your own thorough research before taking a new tenant on in one of your own properties. This in turn raises the question of what exactly you are allowed to request of a prospective tenant prior to any sort of rental agreement being signed. The question is, more concisely, to what extent are you allowed to audit a tenant before taking them on? What are your rights as a property owner?

handshake-recruiting1

In the following few paragraphs, I hope to provide a quick summary of the sort of information you are allowed to demand of a prospective tenant. Of course, this information applies specifically to my own home jurisdiction of the province of Ontario, Canada. While these rules might also apply elsewhere in Canada or the United States, they should by no means be taken to be universal – when in doubt, I would always encourage my friends and clients to consult with an experienced Realtor in whatever region beyond Ontario they are planning to make an investment in real estate.

Any landlord will want to figure out if a prospective tenant will be a reliable one, but only certain probing questions are allowed. Can a landlord legally ask for a Social Insurance Number (SIN)? As a landlord, it’s important to understand what information you can and cannot ask the tenant to provide. A landlord needs to assess the tenant’s ability to pay rent in a timely fashion, and his or her ability to keep the premises in good repair. A tenant should be prepared to answer questions about personal credit and previous rental experiences. A landlord may also expect a tenant to share personal references and contact information of former landlords. when choosing a new tenant, a landlord can ask the person applying for the rental unit to provide information such as: current residence, rental history, employment history, personal references and income information (if credit references and rental history information are also requested).

Here in Ontario, the administrative body which governs much of the relationship between a landlord and tenant is called the Ontario Human Rights Commission. The OHRC is tasked with enforcing the Ontario Human Rights Code, a piece of provincial legislation created in 1962 with the aim of giving all people in Ontario equal rights and opportunities without discrimination in areas such as housing and the provision of other types of services. According to the Ontario Human Rights Code, the following is a very general list of what can be demanded by a landlord prior to a tenant signing a rental agreement:

A Landlord CAN ask for…

- Rental history, credit references and/or credit checks may be requested.
- A landlord can ask a tenant about their income, but they must also look at any available information on rental history, credit references and credit rating.
- Income information can only be considered on its own when no other information is made available, and only in order to determine that the tenant earns enough to pay the rent.

But please note…

- Unless the tenant is applying for subsidized housing, it is illegal for landlords to apply a rent-to-income ratio such as a 30% cut-off rule (which means only considering people if the rent is less than 30% of their income).
- A landlord can only ask a tenant for a “guarantor” (someone who promises to pay your rent if you can’t) to sign the lease if they have the same requirements for all tenants.

For a more concise table of the types of questions a landlord can or cannot ask of prospective tenants, please see below:

Auditing tenants

Table and information courtesy of the CMHC, found at: >http://www.cmhc-schl.gc.ca/en/co/reho/yogureho/fore/gest/gest_003.cfm

As I’ve mentioned above, please bear in mind that these regulations should not be considered to be universal. These guidelines, while currently applicable in Ontario, will change from jurisdiction to jurisdiction. I cannot stress strongly enough that it is a good idea to consult a local Realtor for answers to any region-specific questions that you might have. Thanks again for reading, and have a great day!


 

Over the course of my experience in the real estate business (going on seven years now), I’ve found that most people have a generally wary attitude towards the complexities which surround the process of buying and selling property. Such an attitude is, I think, largely warranted. My own profession, that of a trained and licensed Realtor, would not exist if this process was a simple one, and was entirely free of potential legal, municipal or professional entanglements.

Alas, this is not the case in the real world. By this point, chances are you’ve seen a series of commercials, in print or on television, which highlight the advantages of using a professional Realtor during the search for a home. It makes excellent sense to bring a Realtor aboard for a wide range of reasons – mandatory ongoing education and training means that a Realtor’s knowledge of current market conditions and all relevant legislation is current and entirely up-to-date. A Realtor has access to tools which make a home search infinitely more practical and efficient, as well as possessing the knowledge and experience to ensure that you avoid the many legal and practical pitfalls which can potentially lie in wait for the inexperienced home buyer or seller.

House  with "For Rent" sign

Without wanting to over-do the plugging for my own profession, all of the above is true enough when it comes to trading in single-family residential properties. However, when it comes to the portion of the market which I’ve spent the majority of my career and personal business life specializing in – investment real estate – things can become many times more complex. In a straightforward residential deal, where you’re purchasing a property for your own personal use, the property will be vacant on the closing date and ready for you to move in. If you’re purchasing a tenant-occupied building at the time of closing – either for your own use as a place to live or as an investment (or both), you don’t simply take over a pile of brick and mortar… you take over the tenants too. All of the rights and responsibilities which come with being a landlord now fall upon your shoulders, and it’s impossible for me to emphasize the following too strongly: you must be prepared for, and aware of, the inherent challenges which come along with this process.

Intimidation is by no means my goal here – buying a property with one or more tenants can be a very rewarding experience. If you’re just starting out along the path of home ownership, it is possible to dramatically decrease your living costs with a tenant subsidizing your mortgage and expenses. Because you can also factor their rent payments into the amount of house you can afford, you increase your purchasing power with the additional projected income. Alternatively, if you’re a seasoned investor looking to expand your property portfolio, dealing with tenants is all part of the game. Whatever your own situation might be, the following are, in no particular order, a list of points and tips to keep in mind to secure your own position when purchasing a tenant-occupied building. This list is by no means exhaustive, and if you’re looking for more in-depth advice geared to your own unique situation, I would encourage you to reach out to a Realtor for more personalized assistance.

• While you are in the process of writing an offer, ask your agent to include an amendment which requires the seller to notify you before altering any agreements with the existing tenants. Such agreements would include the amount of rent, the due date, access to common areas, etc. In this fashion, you can be certain that you’re aware of all of the circumstances of the existing rental agreement/s when you take control of the property at closing,

• Make certain that you are aware of the amount of the security deposit, as well as the rules surrounding its use. It should be credited you at closing by the seller, and you will refund the tenant based on the condition of the home when the tenant vacates. Make sure you follow any local rules about interest on security deposits if you’re planning to let the tenant stay on (as you would in a second property/ investment situation).

• Your purchase agreement should include prorated rent credit: this means you get part of the rent if you close in the middle of the month—as soon as you’re the owner that rent is your income. The amount due should be clearly stated in the Agreement of Purchase and Sale.

• You should speak personally with the seller and the tenant/s together before the deal closes. Rent, rent collection methods, the security deposit, date of tenant’s move out, and any changes you want to make to the agreement should be clear to everyone, and fully agreed upon.

• Especially in the case of a short sale, tenant issues can quickly turn a long process into a seemingly endless one. Include in the offer a clause to the effect that you want to be notified within 24 hours of any tenant problems, such as over-due rent or a tenant asking to stay longer than the agreed move-out date so you get a jump on any issues which might cause a delay in closing.

• In the course of designing a new lease agreement for you and the tenant/s, the move out date needs to be both clear and legal. Many jurisdictions have laws granting 30-90 days or more for the tenant to leave. Often the time allotment coincides with how long the tenant has already lived at the property. Ontario in particular has laws which are extremely rigorous in the protection of tenant rights. Always be aware of the specifics of your legal environment!

To put my advice into a single phrase – dot your i’s and cross your t’s, and be sure you know the laws of your local area—a good Realtor can help you with this. If you’re committed to the process and aware of the rules and regulations of the system, owning a rental property can be an excellent means of generating additional income, or assisting you in subsidizing your first property. Either way, always maintain your awareness, and seek out good advice!

Thanks for reading, and have a great day!

www.LeeQuaileBlog.wordpress.com


 

An Introductory Guide to Cap Rates

For those who might be newcomers to the world of investment real estate, the term ‘Cap Rate’ is something which you are likely to often hear being thrown around. While an understanding of Cap Rates is key to getting an idea of what does or does not constitute a good investment, it is far from the only factor which governs making the call as to where to invest your hard-earned funds. Therefore, for the next few paragraphs, I’ll seek to provide a serviceable definition of what a Cap Rate actually is, give an example of how it would be calculated in the real world, as well as to give examples of other important factors to keep in mind when considering marketplace Cap Rates.

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So, firstly, what exactly IS a Cap Rate? A Capitalization Rate, or ‘Cap Rate’, is a basic means of measuring the purchase price of an investment property against the projected net annual income expected to be earned from renting the property out. In even more simple terms, it’s a general measure of the property’s ‘bang for the buck’. Calculating a Cap Rate is actually a very simple process – the Cap Rate for any given property may be determined by dividing the projected net annual earnings (the overall rental income following deductions such as property tax, building insurance, utilities, etc.) by the purchase price of the property.

For a more concrete understanding, let’s take a look at a theoretical property. For example, let’s say that you’re considering the purchase of a five bed property, listed at $460,000.00 in which each unit brings in a monthly average of $600.00 in rent. That works out to $36,000.00 per year in gross annual income, assuming that the property remains fully-leased for the balance of the year. Once you subtract the usual expenses of owning and operating a rental property (say, $9,000.00 – which would include taxes, insurance, utilities, etc.), you would be left with a net annual income of $27,000.00. When we take that $27K and divide it into the $460K purchase price, we’re left with a Cap Rate of 5.87% – fairly average for many investment properties.

While by most measures, a Cap Rate of 7% or higher is considered to be outstanding, 5.0% – 6.0% as we have in our example is nothing to sneeze at either. I say this bearing in mind that Cap Rates are far from the only decisive factors which I like to take into account when considering the purchase of a rental property. Since Cap Rates have the potential to vary greatly from one location to another within the same city, and sometimes even within the same neighbourhood; there are certainly other factors which deserve to be considered when making an investment in the rental housing market. Determining the Cap Rate of a property is important, yes, but should by no means be the be-all and the end-all of your search for the perfect investment. Here are a few other things to keep in mind:

· Quality of Your Potential Tenants: Sometimes, inheriting responsible tenants upon the purchase of a property with a lower Cap Rate, versus taking over a property with a somewhat higher Cap Rate but with troublesome tenants is well worth the trade-off. Chasing tenants for overdue rent payments or dealing with evictions often just isn’t worth saving a percentage point on your Cap Rate.

· The Condition of the Investment: A turnkey property with a lower Cap Rate will definitely save you money in the short term when contrasted against a real fixer-upper with a higher Cap Rate. However, if the property is in an excellent location and simply needs a little bit of your TLC to turn things around, such a purchase is likely to make an investor with a longer-range vision very happy indeed. It all depends on your personal goals, motivations and timelines!

· Potential Income: If you are of the belief that more diligent work on either you own or your property management company’s behalf is likely to bring about a substantial increase in the property’s rent roll, then this is a prospect which absolutely must be considered. A lower Cap Rate might just be an indication of an under-rented property which might otherwise be in a great area, in great condition, or with great potential… and is just currently poorly managed.

· Appreciation Potential: Here’s something to keep in mind as it applies to the Kitchener-Waterloo market especially. I’ve written before about the continuing improvement in the condition of Downtown Kitchener – by extension, this also means that properties which have been hitherto undervalued due to location in ‘poor’ neighbourhoods will begin to benefit from more people and businesses being drawn to the Downtown Kitchener area. A smart investor will always be on the lookout for appreciation potential in less expensive areas. Just because a property is cheap now, doesn’t mean it always will be – remember: appreciation potential = equity potential.

For the start-up property investors out there, I hope I’ve managed to give you a good idea of both definition and context for Cap Rates. As always, thanks for reading along, and have a great day!


 

ESA Certification; A Vital Step in Protecting Your Investment

With today’s post, I’ll be aiming to provide some background information on ESA certification – what it is, the purpose it serves, what’s involved in a general ESA inspection, and how you should go about arranging one. ESA certification is a vital component of rental licensing in Waterloo, and as a real estate investor, it is greatly to your advantage to be informed on the matter. What follows is a quick break-down of some of the most frequently asked questions concerning ESA certification. For more in-depth coverage of the topic, I would strongly encourage you to pay a visit to the ESA (Electrical Safety Authority) website, located here.

Electrical Safety

What is an ESA Certificate?
A general ESA inspection, carried out by an ESA certified contractor, is a visual inspection of wiring and electrical devices in an effort to identify any defects which would pose a fire or other safety hazard. The inspector will be searching for exposed wiring, ensuring proper fusing is in practice, and looking out for any misuse of electrical equipment such as extension cords. Any wiring or devices hidden behind walls are not included in the general visual inspection. The general inspection covers every aspect of the property in question – this includes any outbuildings, as well as amenities such as swimming pools, saunas, hot tubs or fountains. In most cases, there will also be sample testing conducted on a number of visual outlets, in order to ensure proper functioning. Power to the property may also be switched off at points during the inspection, in order to more safely examine panels and other devices. If your property is up to ESA standards, you will be awarded ESA certification.

What is its role in obtaining/renewing a rental license in Waterloo?
An ESA (Electrical Safety Authority) Certificate is a required component in the documentation necessary to secure a rental license in the City of Waterloo. This certificate is ONLY available through the ESA itself. A list of licensed contractors is available on the ESA’s website. Once the property in question has been certified, a renewal of the certificate is required every 5 years in order to renew the rental license itself.

How much does an ESA inspection cost?
This is variable, and depends upon factors such as the contractor’s rate, or the size of the property. To quote directly from the ESA’s information sheet: “…It depends on the dwelling type and/or the reason for the inspection such as insurance, resale, Fire Code Compliance, re-connection of service, etc. The fee entitles the applicant to one inspection visit. There is a possibility of incurring additional charges if the premises is deemed inaccessible and the inspector is required to revisit the site on another day, or electrical deficiencies are identified during the inspection. The General Inspection fees must be paid at the time of the application by credit card or cheque.”

How do I arrange for an inspection?
You may either telephone the ESA directly at 1-877-372-7233, or use the ‘find a contractor’ tool on the ESA’s website.

What is the turnaround time for a general inspection?
It generally takes between 1-4 weeks from the point of request to have a general inspection carried out, and to receive the subsequent certification. So plan ahead, and make sure you book the inspection well in advance of your license renewal deadline (every April 1st in the City of Waterloo).

Bear in mind that the ESA’s site is a great resource for a wide range of electrical safety information and tips. It also gives an excellent idea of what the primary trouble spots tend to be on any given inspection. Electrical safety certification might seem to be a chore, and yet another expense for you to face as an investor and property owner. But the bottom line is that it’s a vital component of ensuring the safety of you, your tenants, and your investment itself.

Thanks for taking the time to read along, and have a great day!

LeeQuaileBlog.wordpress.com


 

Happy St. Patrick’s Day, Waterloo!

Over the past several years, something of an unofficial tradition has developed for many students attending the University of Waterloo and Wilfred Laurier University on March 17th. Ezra Street, just a block behind WLU, is transformed on St. Patrick’s day into one big block party. Estimates of the number of attendees last year exceeded 7000. Of course, having this many students (the majority of whom will, of course, be drinking) being unregulated in such a small area, has the potential of making law enforcement personnel, property owners, and university administrators alike feel very uneasy.

Ezra

While the preponderance of students are simply out to enjoy themselves, there were a few instances of trouble last year. A number of arrests were made for minor offenses, such as public intoxication, and a few more for more serious violations, such as assault and breaking-and-entering. Consequently, this year, the region plans to step up the police presence on Ezra Street, in addition to the City of Waterloo setting up a purpose-built tent Uptown Waterloo, in an effort to draw St. Patrick’s Day revelers away from the unofficial street party.

Wilfrid Laurier University itself, being the owner of a number of larger purpose-built student housing complexes on Ezra Street, has decided to attempt to regulate the number of party-goers coming into and going out of its buildings on Monday. WLU aims to achieve this regulation by issuing wristbands, and maintaining security by the building doors to ensure that not too many guests are able to flood their property. In response to these proposed measures, a number of student tenants have cried foul – making the claim that their landlord (the school itself) has no right to infringe upon their enjoyment of the Irish-themed celebration, and has no right to dictate who is allowed to enjoy their own brand of hospitality.

In this case, I come down firmly on the side of the University – and I’ll aim to outline my reasoning below.

From everything I’m able to see, the owners of the apartment buildings on Ezra (WLU) are within their rights to limit the volume of guests coming through the buildings themselves. While the Ontario Residential Tenancies Act (2006, amended 2013) states that the landlord is not to interfere in the “reasonable enjoyment” of the properties by the tenants, the operative word here is ‘reasonable’. I doubt that any law enforcement agency would call granting upwards of 7000 guests of an unregulated street party open access to a property ‘reasonable enjoyment’. See below for the full paragraph, taken right from the legislation:

22. A landlord shall not at any time during a tenant’s occupancy of a rental unit and before the day on which an order evicting the tenant is executed substantially interfere with the reasonable enjoyment of the rental unit or the residential complex in which it is located for all usual purposes by a tenant or members of his or her household. 2006, c. 17, s. 22.

Another key phrase above is “usual purposes”. That many guests (unregulated by the property owners) would not qualify as a ‘usual purpose’ of use for the property, in my opinion.

So, to all of the students and landlords out there alike, enjoy your St. Paddy’s Day! Just be sure to be respectful of the property rights of others, and stay on the right side of the law! Thanks for reading, and have a great day.

www.LeeQuaileBlog.wordpress.com


 

Spring Maintenance Tips for Property Owners

As most Canadians know, the changing seasons can be a cause for great excitement – particularly as we transition into spring this year from a winter which feels to have lasted forever. Another aspect of the changing seasons, also well-known to Canadian home owners, is the toll that rapid jumps and dips in temperature can take on certain things around the house. The alternating thaws and cold snaps which tend to characterize the spring months in Ontario are capable of putting enormous environmental stress on your property.

Spring

In this article, I’ll try to point out a few potential trouble areas to pay particular attention to when undertaking your spring maintenance. I do this bearing in mind that for real estate investors such as myself, concerns over the maintenance of a property are effectively doubled. Not only do you want to protect your own investment as a property owner; but it is also your responsibility to your tenants as a landlord (and your duty under the law) to ensure that the property is kept in a safe and serviceable condition, either personally as a smaller-scale investor, or by contracting such duties out to a property management company as discussed in an earlier post.

And so without any more ado, I present a brief list which I have compiled today of potential trouble spots. In my experience, by focusing on the areas listed below, you can ensure that you and your property will enjoy a smooth transition to the warmer weather heading our way.

- Your roof: check for water damage following thaws. Also check gutters for blockages (icicles are a good indication of a trouble zone)

- HVAC filters: these should be changed more than once a year regardless. Also, the Waterloo Rental Bylaw requires annual HVAC certification to have a rental license renewed. Also have a look at the dryer vent – a clogged vent is a money waster (dryer requires more energy to run), as well as a fire hazard.

- Have a look at your windows and screens: window screens can often suffer damage during the winter months. Check the seals around windows and doors – again, changes in temperature can damage the integrity of these important aspects of maintaining your property’s energy efficiency.

- Inspect the driveway and walkways for widening cracks – just like city streets, rapid changes in temperature can wreak havoc on paved surfaces. You also will want to reduce potential liability in the case of a tenant or guest tripping and falling on uneven or damaged surfaces.

- Watch out for cracking or peeling interior or exterior paint and finishes to freshen up if necessary.

- IMPORTANT! Replace the batteries in all smoke detectors if it’s been a while – why not make this an annual spring procedure?

- Prepare your lawn mower for action this summer (if you don’t contract out to a maintenance company) – sharpen the blades, change the oil, and make sure it’s in good working order.

- Check decks and porches (where applicable) for damaged or loose areas. Wooden decks and patios should be treated on average every five years.

- The foundation: inspect carefully for cracks or deterioration. Check bricks for loose mortar where applicable. Any hairline cracks in the basement flooring which have widened noticeably should warrant a call to a professional for immediate attention.

- Inspect your chimney for hazardous buildup (where applicable).

- Inspect and test your sump pump – snow melt and spring rain will be likely to ensure that it gets a rigorous workout as the seasons change.

- While on the topic of snow melt, it is always a good idea to clear excess snow away from the foundations of your property in advance of a thaw setting in. This will avoid excess drainage into potential trouble areas. Be particularly cautious to clear snow build up away from window wells if these are a feature of your property.

- Check for signs of termites or other pests (insect wings, tubes, or damage to wood will warrant a call to a professional for evaluation).

- Clear any yard debris left over from fall/winter.

Hopefully you’ll have found these tips to be of some use. As eager as we might all be to get on with simply enjoying the warm weather, you’ll thank yourself later for taking the time to ensure that your property is in top condition. Thanks for reading, and have a great day!

www.LeeQuaileBlog.Wordpress.com


 

The Spring Market is Just Beginning!

Three new listings have just hit the market this week! Whether you’re an existing investor in the Waterloo market looking to expand your portfolio, or if you’re thinking about making a first jump in at some point in the near future, head on over to my listings page and check them out!


 

Light Rail Transit in Waterloo Region – What is the Debate About?

For the better part of forty years now, the Region of Waterloo has been actively exploring methods and means of easing congestion on our communities roadways, and making public transport a more accessible and attractive alternative to personal automobiles. This initiative has been driven not only by environmental concerns, but also by hard demographic statistics. The area has been and remains one of the most quickly expanding population centres in all of Ontario, and the existing network of roadways and expressways simply isn’t up to the task of handing the increasing number of cars which unavoidably come along with an accelerated rate of population expansion. Just how quickly is our population projected to grow? As of 2012, the Region of Waterloo’s population stood at 543,000. By the year 2031 – 17 years from now – that population is projected to exceed 726,000 individuals. This represents an overall increase of 184,600, or roughly 34%.

It has often been wondered, in my opinion too simply, why doesn’t the Region just construct new and better roadways to handle the increasing volume of traffic? As anyone who is familiar with the traffic patterns of large cities can attest to, this is not a sustainable solution in the long term. I would imagine that a good number of readers are all too aware of what things can look like in Toronto, North York or Mississauga during many periods of the day – let alone rush hour. These communities likewise expanded, constructing new roads as they went. This expansion of the road system served to… attract more cars. The simple fact of the matter is that a city has a finite amount of room in which to grow. Roads can expand up to a point, but eventually the heightened volume of traffic will have nowhere else to go once this limit is reached, and the result is the sort of traffic nightmare often seen these days in communities such as those I’ve already mentioned.

What then, can we look to as an alternative for an expanded network of roads and the correlated increase in traffic volume? One solution which has attracted the attention of municipal legislators over the past 40 years is the Light Rail Transit system, commonly referred to as ‘LRT’. This proposed rapid transit network (the construction of which is currently proceeding, having been approved by the regional government) will take existing express bus routes, expand them, and integrate this with an initial LRT system operating mostly along the main Kitchener-Waterloo corridor of King Street. The proposal was the subject of heated debate for many years, and remains so to this day even following its approval by council and the beginning of its construction.

LRT

The primary arguments in opposition to the system, which is scheduled to begin operating in 2017, typically follow two lines of reasoning. Firstly, the expense of the project is enormous – 790 million dollars – which makes it the largest public infrastructure project in the history of the Region of Waterloo. While the Ontario Provincial government had initially stated its intent to cover the majority of the expense, this was later reduced to 300 million dollars. With the Canadian Federal government committing to carrying a share of 265 million, this leaves the Region itself with a projected 225 million dollars of the project to fund itself. This expense would, clearly, mean an increase in local taxes, which has a considerable proportion of the region’s populace up in arms. The reason for this opposition is not simply a desire to avoid increased property taxes, and takes us into the second major reason for opposition – the fact that the initial phase of the LRT system will not serve all those who will be paying for it.

One of the most vocal persons of influence to stand against the LRT project is Cambridge mayor Doug Craig. As you’ll notice after a quick review of the phase one system map (please click here for a link to the full map), primary service by the LRT system itself will be limited to a route running from Conestoga Mall in Waterloo to Fairview Park Mall in Kitchener. Cambridge will be initially connected to the system by express busses, to be linked up with the LRT system itself at a future point in time. Craig serves as a voice for many Cambridge residents, who are understandably upset that their tax dollars will be used to fund a system to which they will not have immediate access. Additional arguments tend to state that the expense is simply too high, or that the Region does not need an LRT system operating along a central corridor – that the region would be better served by an expansion of existing bus and express bus routes. While there is merit to these opinions, I personally find them to be short-sighted, and instead regard the LRT system as a smart investment in the future of our region. I will proceed to outline why I believe this to be the case.

The following quote, taken from the Region’s website (again, links provided below), neatly outlines the reasons I support the LRT system:

“Rapid transit will move people, increase transit ridership, reduce emissions, improve mobility, and contribute to a prosperous community. Rapid transit offers a means of managing urban growth to protect our countryside by preventing urban sprawl and promoting intensification in existing urban areas, while preserving the region’s precious agricultural lands, natural beauty, heritage and cultural characteristics that make this community unique. Light Rail Transit (LRT) will shape development along the corridor. Developers are more willing to invest private money near a permanent public asset such as LRT.”

Quite simply, I believe that building an LRT system to service the core of our community will be a boon to residents, business owners, and investors alike. The LRT system is a key component of the plan to revitalize Downtown Kitchener – the historical commercial and cultural heart of our Region. I’ve already touched on how and why the revitalization of Kitchener is so important to the future prosperity of the entire region in an earlier article, so I won’t dwell on it too long here. Suffice it to say that in the creation of a “permanent public asset” such as LRT, as the region puts it, Downtown Kitchener will once again be exposed to the kind of traffic which made it for so long a desirable location for business owners, and will once again make it easily accessible from residential areas located further afield. It is a little known fact that Kitchener has already had a light rail system, one which operated in the city’s heyday between the late 1800’s and the mid-1940’s. Following a tremendous ice storm in 1946, such damage was discovered to have been done to the train’s electrical infrastructure, that it was decided to spare the expense of repair and retire the streetcars. This was done on January 1st, 1947 – a move which some older residents still regard as the beginning of Downtown Kitchener’s slow period of decline.

Opening a permanent LRT corridor along the central artery of King Street once more will not only serve to attract more people to shop in the Region’s core – it will also make living there a more desirable option. The phenomenon of suburbanization has long been the bane of many city centres in Ontario, and across North America, for that matter. By connecting the core of the city to amenities located beyond the traditional reach of residents who have lived downtown, the LRT will operate in both directions; carrying commercial and residential traffic from suburb to city centre, and vice versa. To those who oppose the LRT system based on being excluded from the initial phase of construction, I would urge you to take a long-term perspective. Every major public transport network had to begin somehow and somewhere. London England’s famous 270 stations and 402 kilometres of track didn’t simply spring up overnight – the system had to grow over time to accommodate more and more areas of the city. While it may be a bit of a rhetorical stretch to compare Waterloo Region with a city of truly global significance such as London, our region is nevertheless growing at an astonishing rate. Phase one of LRT construction, I guarantee, will not be the beginning and the end of the system.

Finally, there is the question of the environmental impact of increased personal automobile volume on our roads. By building more roads and expressways and attracting more cars to our streets, we will only perpetuate the unfortunate phenomenon of urban sprawl. The region would be bound to become less centralized, and urbanization will encroach on ever increasing amounts of the beautiful countryside and fertile farmland which made our area so attractive to its first settlers, and which continues to demonstrate a hold over the imagination of the region’s inhabitants. By supporting the population and cultural vibrancy of our existing urban areas, the LRT can truly help to make living in the heart of our cities a more attractive and viable option for many residents.

For all of the reasons outlined above, I sincerely believe that to support the LRT system is to make an investment in the future not only of Kitchener and Waterloo, but of Waterloo Region as a whole. Our commitment to the project now will stand as a legacy to future residents of the region, and will serve to strengthen the growth of business and investment opportunities, region-wide. Thanks for taking the time to read along, and have a great day!

For a link to the regional government’s project website, please click here.

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www.LeeQuaileBlog.wordpress.com

Good morning everyone! Just a reminder to check out my new blog if you haven’t had a chance yet – for more tips, advice and strategies related to property investments. It can be found right here – just getting it off the ground now, but look out for more unique content in the days to come!


 

The ‘Unpleasantries’ – Eviction Regulation and Procedure in Ontario

As much as a conscientious property owner may seek to avoid an eviction under all but the very worst of circumstances, it can sometimes be the case that an eviction is the cumulative result of a series of unpleasant relations or experiences with a troublesome tenant. By its very nature, eviction entails the sort of conflict that every rational individual wants to steer away from, but the reality is that sometimes this ultimate endgame is the only way left. This article will, therefore, serve as a guide to the basics of what is entailed in the eviction process. I’ll try to give you a sense of what your legitimate grounds are – as a property owner – for evicting a tenant, an idea of what the process would involve, as well as providing a few notes on where to find more in-depth information elsewhere online. This is far from the most pleasant of topics to consider, but reality sometimes has a way of refusing to conform to our ideals. I hope you’ll at the very least find this article to be useful (if not particularly enjoyable) reading.

Eviction notice on front door

In this section, what follows is a list of legitimate grounds for the eviction of a tenant from your property. It is by no means exhaustive, and should you have any questions concerning the legality of a scenario particular to your own experience, I would encourage you to seek independent legal advice:

Non-payment of rent – notice can be given to terminate on the very date a payment is missed, but this cannot be executed until 14 days following the presentation of the notice. Notice of termination must also include an advisory that eviction can be avoided if full payment is made by the time the 14 day period has elapsed.

Personally committing or allowing someone else to commit illegal act/s on the grounds of the property. Note: the offense in question does not need to have had a conviction in criminal court. The offense must simply be proven to the satisfaction of an adjudicator on the Ontario Landlord Tenant Board.

Wilful or negligent damage to the property – the notice of termination must also include a remedy by which an eviction could be avoided.

“Substantial interference” of other tenants’ ability to enjoy the property.

Impairment of the safety of other residents.

If the number of people in the rental unit on a ‘continuing basis’ results in breach of health and safety regulations (this would constitute overcrowding).

Pets can be a reason for eviction if the Landlord and Tenant Board is convinced that the tenant is keeping an animal and that the animal(s) is substantially interfering with the reasonable enjoyment of the premises, causes allergic reactions, or is inherently dangerous to safety.

There are other grounds for eviction, such as if the landlord personally needs the apartment to live in, if they are demolishing the building, converting the building (such as to a condominium), or doing such major repairs or renovations that they would need a unit vacated.

I’d like to proceed to outline some of what is involved in the eviction process itself. Once more, bear in mind that the process is inherently something which is tailored to unique situations. Any questions regarding specific time periods on notices or opportunities for remedy should be referred to legal counsel. In most situations, before a landlord can apply to the Board to evict the tenant, they must first give the tenant a Notice of Termination that tells the tenant what the problem is. For some termination notices, the landlord must wait a specific number of days to see if the tenant corrects the problem before they can file the application with the Board. The number of days the tenant has to correct the problem is set out in the notice. If the tenant does not correct the problem and/or does not move out, the landlord can file an application with the Board and in most situations a hearing will be scheduled. At the hearing, the parties can appear in front of a Member of the Board. The Member will listen to what each person has to say and then make a decision. If an eviction order is issued, it tells the tenant when they must be out of the unit. If they do not move out, then the landlord can file this order with the Court Enforcement Office. Only the Sheriff can evict a tenant who does not leave a unit as directed by an eviction order issued by the Board.

A tenant under notice of eviction is, of course, well within their rights to take certain steps in seeking to remedy the situation before the notice comes into effect. The tenant should first read the notice to see why and when the landlord is asking them to leave. They may wish to talk to their landlord about the notice and see if the problem can be worked out. If the problem isn’t worked out, the tenant can:

Talk to their landlord about the notice and correct the problem as outlined in the notice (if the notice was given because the landlord believes the tenant did something wrong)

Leave the unit as requested by the landlord

Stay in the unit and see if the landlord files an application against them with the Board

If an application is filed, the tenant can go to the hearing and tell the Member about the situation. A tenant may also wish to phone the Board’s call centre to learn more about the eviction process and/or get some legal advice from a lawyer or legal clinic. A tenant has the right to stay in their unit until the Board issues an eviction order based on an application filed by the landlord. A tenant cannot be legally evicted without an eviction order from the Board.

For anyone seeking more in-depth knowledge of the eviction process in Ontario, the Provincial Government’s website is a great place to start. What you’ve just read in this article is in fact a condensed version of much of what is to be found there. Although it’s certainly not a process you want to have to become too familiar with, knowledge is everything in the business of property investing. Hopefully you’ve been able to take a thing or two away from this article today. Thanks for reading, and have a great day!


 

For Beginners – An Introduction to Property Management

Somewhat out of step with some of the earlier content in my blog, this article is geared towards newcomers to real estate investment. I’ll aim here to give a more general outline of what property management companies do, and how they can benefit your business once you arrive at the point where it makes sense to hire the services which they provide. I would also like to give an idea to the new investor of how much you can or should take on yourself – once you begin getting into the realm of ownership of multiple properties, or into the business of owning multiple student housing properties in particular, investing in a property management service with lots of experience can be a good move. Others may choose to take care of maintenance and tenant interactions all on their own – which can be rewarding if the time is available, but is more than capable of generating its fair share of headaches too.

property-management-2

It strikes me as best to open with a very broad definition of Property Management – typically a company which acts to serve as a liaison between the property owner and his or her tenants. A property manager provides a buffer in these dealings, when an owner is unable to attend to matters or concerns raised by tenants directly. This inability could be due to one or more of any number of factors, the most typical of which include physical distance from the property/properties, the sheer amount of property owned, or the total number of tenants involved. Property management companies can be involved in dealings across the full spectrum of property ownership – from attracting and auditing prospective tenants, to arranging contracts and payments, to dealing with any day-to-day issues which may arise over the course of a tenants lease. Day-to-day issues may include maintenance issues, dispute resolution, or difficulties with the neighbours. Some larger property management companies may even retain their own in-house legal counsel to handle any prospect of litigation, but in a smaller more student-oriented market such as KW, this is less common. Many local property management companies are more small-scale enterprises, consisting of a small group (or even an individual), who serves as an intermediary between property owners and tenants, acting to contract maintenance work, arrange legal dealings, and handle municipal issues on behalf of the owner. In some cases, while a property manager may be contracted on the basis of a set salary or monthly fee, there may also be a bonus paid out to keep all of a property owner’s available units rented. A good property manager can really come into their own when set to the task of attracting tenants – particularly if your own skill set doesn’t lend itself easily to marketing strategies!

In the search for a property manager/property management company, strong interpersonal skills, attention to detail, and solid bookkeeping abilities are key. Ideally, your manager will have a strong network of connections to local building maintenance companies and contractors, in order to efficiently handle the projects which are bound to come up with properties of all shapes and sizes. A good understanding of landlord-tenant law is also clearly vital for any prospective property manager. An effective manager will be a good ally to have in the day-to-day running of your investment, but they can quickly turn into your best friend in more unpleasant situations, particularly in understanding how to proceed with an eviction if the situation should warrant such drastic action.

As mentioned briefly above, more student-oriented markets such as Kitchener-Waterloo present an interesting case when it comes to sizing up whether or not hiring a property management company is a good move. Many of the dwellings owned by local real estate investors which cater to the student lifestyle are smaller-scale, and a good number of landlords (particularly those just starting out) opt to undertake the management and maintenance of their building personally. This can make sense when the cost of hiring a property manager is prohibitive for the small-scale investor, and given a limited number of tenants, can indeed be manageable – particularly if the owner is residing in the same town as their investment property, and is available to tend personally to issues in short order. However, once an investor begins to consider expanding their rental income, and taking on the burden of an increased number of properties and tenants or the ownership of a larger building, hiring a property management company starts to make much more sense.

I hope you’ve found this short introduction to property management helpful, and if you’re a newcomer to the investment market and would like some advice on this or any other subject, feel free to get in touch! Have a great day.

For a more concentrated source of real estate related tips and advice, don’t forget to check out my new blog, located at: LeeQuaileBlog.Wordpress.com

Thanks for reading, and have a great day!


 

Analyzing Downtown Kitchener; Recovery and Future Prospects

For more than thirty years now, Downtown Kitchener has been hung with the unenviable reputation as being Waterloo’s poorer relation. This was especially pronounced in the 1990’s when, while Uptown Waterloo was in the process of revitalization, Kitchener continued to suffer from the loss of buying power in the city’s downtown economic core, as businesses closed and rents fell. Now, however, following a sustained period of investment in the Downtown area by Kitchener’s municipal government, there are distinct signs of things turning around. The aim of this article, therefore, will be to paint a brief picture of where things stand in Kitchener’s quest to bring back the heyday of its downtown core, and to analyse the prospects for downtown’s real estate market.

DowntownKitchener1

The misfortune which befell Downtown Kitchener going into the end of the 1970’s was by no means unique to the city. Kitchener had traditionally always been a locus of manufacturing in Southern Ontario, and as these jobs began to dry up or to move away, the local economy suffered accordingly. Enormous, once thriving factories in Kitchener now stood empty. As people moved away to follow the jobs, rent and housing prices began to fall, leaving formerly prestigious neighbourhoods surrounding the city core to fall into a state of disrepair. This unfortunate set of circumstances was coupled with ever-increasing suburban growth. People were living scattered amid separate clusters of newer developments into the 1980’s, and businesses which were not positioned to cater to these areas suffered correspondingly. The advent of malls and strip malls in the suburbs were another blow to the downtown core. Downtown Kitchener had transformed over the course of a decade or two from a bustling hive of commerce, residence and industry, into a low-income area, struggling with vacant storefronts and growing drug and homeless issues.

Waterloo was not immune to the problems described above, which affected most cities and towns in Southern Ontario in the 1970’s and 80’s to a greater or lesser degree. However, it has been seen for some time now as the more desirable of the twin cities. Higher average incomes for residents and a nicer uptown area following a program of revitalization are both factors which have led to this perception. Nevertheless, Kitchener has never been without its share of high-income neighbourhoods or prosperous businesses. Being a larger city, though, these have been for the past thirty years spread out around the area, leaving the downtown core to suffer its poor reputation.

Kitchener is now undertaking a concerted and sustained effort to turn things around with its downtown core. In order to change the perception of the core, and to attract people and businesses back to the area, the city is following a multi-pronged approach. Elements of this strategy center on the redevelopment of empty factory space into chic lifestyle condos, the construction of a new light rail line to serve the cities of Kitchener and Waterloo along the King Street corridor, and a program of incentives to lure small businesses and corporations alike back to Downtown Kitchener.

Among these aspects of revitalization, condo development is perhaps the furthest along. A strong existing example of this is the Kaufman Lofts – a large former rubber footwear manufacturing plant which has been transformed into desirable and fashionable apartment-style residences. Located at the intersection of King and Victoria streets, the Kaufman Lofts are one of the first examples of what the city hopes will bring young professionals back to within walking distance of the downtown core’s amenities. Stores to cater to these new residents will follow, providing a big boost to the downtown economy. In order to further increase the attraction of the area to business owners, Kitchener is also offering a range of financial incentives, describing the program on the municipal website as follows:

“The Ontario Planning Act allows municipalities to offer various forms of financial incentives in specific areas of the city in order to stimulate private sector investment in areas in need of repair, rehabilitation and redevelopment. Incentives can take many forms, but the most common are:

• City issued grants and loans;
• Property tax rebates; and,
• Waiving of development fees and permit fees.

For example, the city offers grants to downtown building owners and store owners for specific improvements to the exterior facades and storefronts. If a store owner undertakes $20,000 worth of renovations, they are eligible for a grant of up to $10,000.”

In addition to attempts to draw more residents into the downtown area, and an incentive-based program to reignite business growth and development, a third major aspect to the city’s revitalization program is the construction of the new light rail (or LRT) system. Centring on a brand new transport hub to be built at King and Victoria (across the street from the Kaufman Lofts), the new transport system will aim to link the urban cores of Kitchener and Waterloo with outlying areas. Having a new and convenient method of transportation running down the traditional artery of Waterloo Region (King Street) is also projected to attract further residents to settle in the downtown area, where access is handy to the new transport hub, and new businesses to be established along the line where the volume of traffic and potential exposure will be greatest.

This plan, much of which is already under implementation, combines with existing growth in Downtown Kitchener’s tech and education sectors to cause me to be very optimistic about the prospects for growth in the downtown core’s real estate market. Given the recent downsizing at BlackBerry, many of the smaller tech start-ups in Kitchener, centred in the Tannery District (another example of former industrial space being successfully redeveloped, a short walk from downtown) have benefited from the recruitment of developers and software engineers. University level students are being drawn to the University of Waterloo’s Downtown Kitchener School of Pharmacy campus on Victoria Street, and to Wilfrid Laurier’s School of Social Work on Duke Street. This presents an opportunity for the real estate investor – prices in Kitchener remain, on average, well below those of Waterloo. As these new services and programs come online, prices are expected to rise, as young professionals and students seek out accommodations.

Kitchener is once again finally on the make! Prospects have not looked brighter for the city’s downtown in nearly half a century, and with Kitchener remaining the area’s major population and economic centre, this can only bode well for the future of Waterloo Region as a whole.

Thanks for reading, and if you have any questions – as always – please feel free to get in touch with me!


 

My New Blog – Advice, Strategy & Guidance for the Savvy Property Investor

Beginning today, I’m setting up an advise-oriented blog for existing investors, and for people who are seriously considering becoming involved in Waterloo Region’s investment market. As always, you’ll still be able to find the same, more detailed, information on my own listings and activities right here on this existing site. However, rather than constantly update my ‘News’ page with advice, stats, and strategies, I thought “why not blog about it”?

Check it out!

http://leequaileblog.wordpress.com/


 

Multi-Storey Development in Waterloo – What Does it Mean for the Smaller Scale Investor?

Today, I’d like to quickly address another concern which I find to be raised frequently by folks who are considering making the jump into Waterloo’s student housing market. As anyone who spends time around the universities and Uptown will have noticed, the city’s skyline has been changing dramatically over the past five or so years. It really does seem as though every time you turn around, another high-rise building is being constructed to cater to Waterloo’s booming student population. The majority of these newly constructed multi-storey buildings fall into a rough rectangle between University Avenue to the south and Columbia Street to the north, and Regina Street to the east and Philip Street to the west – an area of, roughly, twenty square blocks.

thumb-luxe01

These new structures, though not explicitly marketed towards the student rental market alone, are obviously positioned deliberately to cater to the student’s lifestyle. This rapid increase in the total number of units available for student housing, when combined with the recent implementation of the Waterloo Rental bylaw (with its more rigorous licensing criteria and protocols), has a number of smaller landlords concerned about their share of the student housing market. I hear about this all of the time – questions which can be summed up effectively in one query – “is investing in smaller-scale student housing in Waterloo still a good move?” My response, in a word, remains yes. Like any market, property investment will always carry its share of risk to the buyer. However, just as in any other form of investing, a prospective landlord will always have the power to educate themself to make smart and profitable decisions – there will always be good deals to be found in Waterloo, for those willing to make the commitment to a diligent search. What follows are a few points to keep in mind when considering the impact of purpose-built multi-storey student housing on the student housing market in Waterloo, and a couple bits of advice. As always, if you’re looking for a more detailed understanding of the dynamics of the local market, don’t hesitate to get in touch with me. I’d be pleased to walk you through any questions you may have!

The past number of years have seen attendance at both the University of Waterloo and Wilfid Laurier University increase dramatically, far exceeding the projections of both the city and of the schools themselves. Of course, as each new batch of undergraduates arrives in Waterloo, a large percentage of these students look for off-campus housing. The surge in the total student population, combined with the finite amount of land available nearby the university district for residential development has led to the need to build upwards rather than outwards. The sudden spike in the number of multi-storey buildings being constructed in Uptown Waterloo is a direct consequence of attempts by developers to maximize the number of students that can be housed on a given parcel of land, while still remaining within a reasonable walking distance to school – this is simply in line with the classic paradigm of urbanization. The schools themselves have been in the vanguard of this new development. As the number of new students began to exceed their projections, the universities had been forced to supplement their own student housing by renting from the private sector – a losing proposition, financially speaking. They therefore began to buy up property surrounding the core of the university district, with an eye to developing it into university-zoned multi-storey student residences. One of the biggest examples of such a purchase was Wilfrid Laurier University’s purchase of $59M worth of land in 2012, the development of which is clearly progressing quickly along Bricker Avenue and Ezra Street.

As I mentioned above, there will always be deals out there to be had – as long as you know what you’re looking for, and have a strong sense of the factors which govern the market. The great thing about investing in student housing is that there will always be a strong market in Waterloo. Students cycle in and out of residence all of the time, and a consistent supply of renters is much less dependent upon the ups and downs of the economy as a whole. Especially these days, with the pending development of the LRT line along King Street, the importance of a prospective property being along a major transit route is paramount, particularly if the property in question is located a little further away from the core university district. This could mean being nearby an iXpress route, as is still the case with many smaller-scale investment properties in Waterloo. And it’s also important to keep in mind that even though we are witnessing a boom in multi-storey residences, there are still many renters out there who prefer single family style accommodations for their housing – particularly when it comes to having the benefits of a back yard and increased living space. A beer on the front porch, or a barbeque in the backyard are unlikely to lose their popularity with students anytime soon! If there’s one thing a prospective landlord can depend on, it will be the unchanging highlights of a student’s time in university such as these – a lifestyle that puts the owner of a smaller-scale investment property at a unique advantage to cater to.


 

2014 Economic Outlook Seminar – You’re Invited!

Just see below for details – space is limited, so if you’re interested in being my guest at this interesting and informative event, RSVP today!

2014 Econ Outlook Invite


 

City of Waterloo’s Rental License Renewal Deadline Approaches – April 1st, 2014

As we stand now at the end of January, Spring is (thankfully) beginning to seem a bit more tangible of a prospect. And of course, for many real estate investors, this also means the approach of the City of Waterloo’s April 1st rental license renewal deadline. And whether you’ve been in the market for years as a seasoned owner, or are just in the first stages of beginning to explore the concept of investing in real estate, there are a number of FAQ’s that are always a good idea to review before going into the procedure of renewing your rental license. What follows is a list of such FAQ’s – I hope you’ll find them helpful!

Q: “How frequently must I renew my rental license?”
A: The City of Waterloo’s rental license must be renewed every year – the deadline is always April 1st.

Q: “How do I go about renewing my rental license?”
A: Residential rental licence renewal applications are available online or in person at Waterloo City Hall – 100 Regina Street South. Only completed renewal applications, including all the supporting documentation, will be processed.

Q: “Which documents specifically are included in the supporting documentation?”
A: 1) An up-to-date certificate of building insurance every year. 2) HVAC renewal documentation every year. 3) Electrical Safety Authority (ESA) renewal every five years. 4) Re-certification that your property meets all the regulations in the residential rental housing licensing by-law. Also, please note that Changes and renovations to your unit need to be submitted at the time of change or prior to the renovation.

Q: “How do I get an ESA certificate?”
A: Electrical safety certificates of inspection are only available through the Electrical Safety Authority (ESA). For more information or an application, contact the ESA by phone at 1-877-372-7233 or fax at 1-800-667-4278, or visit the ESA’s website.

Q: “Where can I find out about HVAC inspections?”
A: Visit the Technical Standards and Safety Authority (TSSA) website for information on HVAC inspections and licensed TSSA contractors. The inspection must be performed by a class one or two gas-fitter inspector registered with the TSSA.

Q: “What happens if a unit is rented out without an approved residential rental licence?”
A: Operating a rental business without a licence in the City of Waterloo is a violation of Waterloo’s residential rental housing licensing by-law (no. 2011-047) and amendment (no. 2012-004). A person convicted of this violation could be fined up to $100,000. Waterloo also may revoke a licence if there is a contravention – or violation – of this by-law.

Q: “How is the rental housing licensing by-law enforced?”
A: Waterloo enforce this by-law two ways: reactively when they receive complaints and proactively based on risk-based audits performed by enforcement officers. The audits include complaints, observations, published information, information received from other agencies and any other factors that may identify possible risks.


 

Vacancy Rates in Kitchener-Waterloo – Statistics & Explanations

In the course of my professional dealings with friends and clients alike, some of the questions most frequently asked of me relate to vacancy rates in the local rental market. Answers to questions such as how the local vacancy rate compares to that of other communities of comparable size, the province as a whole, or to the national average, are all important for the savvy investor to know. Likewise, grasping the concept of which factors lead to the fluctuation of vacancy rates is also key to making the right moves in the investment market, and to ensuring that your business moves are smart and profitable.

To this end, I’ve recently taken some time to go over the most current rental market reports put out by the Canada Mortgage and Housing Corporation (CMHC), and have taken a few of the more important points contained therein to pass along to you in this brief article. I hope you find it to be informative and helpful! If you’re seeking more in depth information or statistics, I’ll also include links to the relevant reports at the bottom of this article. CMHC is a wonderful source for such information, and these (and many other reports) are also available for free on their website. And, of course, if I can be of any help to you in getting a feel for the local rental market, please don’t hesitate to give me a call, or to send me an email. Keep on reading for those stats!

As things stood in the Fall of 2013, the overall rental vacancy rate in the Kitchener-Waterloo-Cambridge (KWC) area stood at 2.9% – marginally higher than the overall national average of 2.7%. This number remained essentially unchanged from 2012. A significant factor which has contributed to the difference between the local rate and the national average has been the recent completion of a number of larger purpose-built student residences in Waterloo. This is coupled with the fact that low mortgage rates over the past year have proven enticing to a number of former renters, who have made the transition to home ownership. Nonetheless, even as the local vacancy rate is projected to rise marginally to the end of 2014, the rate of climb will remain slight due to a projected increase in mortgage rates in the second half of 2014. Simultaneously, employment growth in Waterloo Region is expected to compensate for existing renters exiting the market in favour of home ownership. This will come about as young people, university and college graduates alike, join the local skilled workforce and move away from home for the first time – typically transitioning into rental properties.

Yet another positive point for prospective real estate investors lies in the projected net increase in the population of Waterloo Region, brought about in large part by migrants – new Canadians who are choosing to settle in the KWC area in significant numbers. These folks are statistically far more likely to rent their housing initially, further adding to the local pool of renters. Projected lower than average rent increases in 2014 will also “provide incentive to enter or remain in the rental market”, says CMHC in its Fall 2013 Housing Market Outlook (full report linked below). Finally, as mentioned briefly above, the local unemployment rate looks set to decrease in 2014. This comes in spite of recent high-profile layoffs at major companies such as BlackBerry and Maple Leaf Foods. These setbacks are expected to be more than offset by expansion in the local manufacturing sector (Toyota and ATS, to name two examples, are set to expand operations this year), as well as by diversification in the local tech industry. The shrinking of BlackBerry has led to a corresponding rise in the number of smaller tech-oriented start-ups, and talent is being drawn from all over Canada and the world to participate in this exciting era of growth and innovation in ‘Canada’s Tech Triangle’. All of this, it seems, is good news for prospective investors.

I’ll close by relating a few more statistics garnered from CMHC’s Fall 2013 reports. Bearing in mind that even as the local vacancy rate stands marginally above the national average (2.9% as opposed to 2.7%, respectively), it remains below, and well below in some cases, that of other Ontario communities of comparable size. Here are just a few examples of Ontario cities with higher vacancy rates than KWC’s 2.9%: Barrie 3.0%, London 3.3%, Peterborough 4.8%, St. Catharines-Niagara 4.1%, Windsor 5.9%, and Hamilton at 3.4%. The overall provincial vacancy rate stands at a slightly lower 2.6%, as of October of 2013, but this number must be taken with a grain of salt, affected as it is by the downward pull of the city of Toronto’s exceptionally low rate of 1.6%.

As I hope to have made clear, the Kitchener-Waterloo-Cambridge area, with its growing employment market and high-profile academic institutions, remains an attractive market for the real estate investor. Please see directly below for links to a few of the reports I’ve consulted, and keep me in mind for any further questions or concerns. I’m always willing to help. Thanks for reading!

CMHC Rental Market Report (Fall 2013) (Ontario Highlights)

CMHC Housing Market Outlook

CMHC Fall 2013 Rental Report (Region Specific)


 

Attention Investors!

Two new listings have just hit the market in Uptown Waterloo! These investment properties, located at 134 and 138 Erb Street West, Waterloo, are both in a prime position to capitalize on the local student housing market. Taken together, they also present a possible development opportunity. Feel completely free to get in touch for more information! For links to the feature sheets which contain some financial details, and more, see below.

134 Erb Street West, Waterloo

134 Erb Temp

138 Erb Street West, Waterloo

138 Erb Temp


 

New Listing! 80 Hickory Street West, Waterloo

80 Hickory Edit

Fresh to Waterloo’s student housing market today comes this single detached property, licensed for five students. Ideally situated between the campuses of Wilfrid Laurier University and the University of Waterloo, this is a prime location well suited to the student lifestyle. Easy access to GRT bus routes, including iExpress service, and a short walk away from many of King Street’s amenities: bars, restaurants, and services.

For further details, including in-depth financial information, please follow this link to find the property’s feature sheet.


 

Your Winter 2014 Real Estate Update

With a heavier winter this year than many folks can recall in recent history, things may seem to be quiet on the local real estate front. Nevertheless, stats recently released by the Kitchener-Waterloo Association of Realtors (KWAR) reveal some welcome news for those who are hoping to buy or sell on the local market. 2013 was a record year in terms of dollar volume of sales (over two billion!), and the total number of properties moved exceeded what was seen in either 2011 or 2012. 2014 Looks set to continue this upward trend, as interest rates remain low enough to provide a strong incentive to buyers.

For more on this story, and a range of other useful home ownership tips and strategies, please follow the link below to find my Winter 2014 Real Estate Update:

Winter 2014 Real Estate Update

I’ll close by wishing you and your family the very best in 2014 and, as always, absolutely feel free to get in touch with me for answers to any questions!


 

New to the Market this Week – 5 Cardill Crescent, Waterloo

This clean, modern, and purpose-built five unit building is ideally situated to cater to the Waterloo student’s lifestyle. Constructed in 2012 to exacting specifications, 5 Cardill Crescent features 25 beds, plenty of parking, and a location convenient to both universities, public transit, and a host of other Waterloo amenities. This is a great turnkey investment opportunity!

For additional information, including financial details, please follow the link below.

5 Cardill Crescent, Waterloo


 

Two Brand New Listings, Just Steps from WLU!

Fresh on the market this week – 47 & 59 Bricker Avenue Waterloo. These properties are a student housing investor’s dream come true. There is no better location in all of Waterloo! Just follow the links included below for further details.

47 Bricker Avenue, Waterloo

59 Bricker Avenue, Waterloo


 

Your Fall 2013 Real Estate Update!

Hello again! Hopefully everyone’s making the most of this chilly December weather. With Christmas time just around the corner, it’s likely that the last thing on your mind is real estate. However, it’s never too soon to begin laying out some ideas for the much busier Spring 2014 market; whether you’re looking to buy, sell, or to invest in the near future. I’m ready to act as your source for insider knowledge and sound advice – just get in touch, and we’ll get started.

Your Fall 2013 Real Estate Update

Please follow the link above to find my Fall 2013 newsletter. It’s full of useful and current facts and statistics to consider if you’re hoping to make a move in the next few months.

Finally, many thanks for continuing to bear with me as the new website gets off the ground. It’s on the way to completion, but in the meantime, hopefully you’ll have a look around and find some useful information!

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