For A Real Estate Investor-A Landlord-Tenant Privacy Quiz

For Rent London Ontario Houses

   A landlord-tenant privacy quiz

For a real estate investor, residential landlords and real estate brokerages, you will be impacted by the latest changes to the Personal Information Protection and Electronic Documents Act (PIPEDA) beginning Nov. 1. PIPEDA is Canada’s federal private sector privacy law that sets out the ground rules for how businesses, including landlords, must handle personal information in the course of their commercial activity.

Under PIPEDA, landlords must:

  • Obtain a tenant’s consent to collect, use or disclose a person’s personal information.
  • Identify the reasons for collecting the personal information before collection and only ask for the limited information needed for what a reasonable person would consider appropriate to the circumstances.
  • Provide an individual with access to the personal information the holder has about the individual and allow them to challenge its accuracy.
  • Only use a tenant’s personal information for the purposes for which it was collected.

The time limit for PIPEDA court applications changed from 45 days to one year.

As of Nov. 1, PIPEDA will include a mandatory requirement for organizations to give written notice to affected individuals and to the commissioner about privacy breaches and to maintain records for 24 months about each breach.

All businesses (and landlords of every size) must ensure that personal information is protected by appropriate safeguards including physical measures (locked filing cabinets, restricting access to offices, alarm systems), technological tools (passwords, encryption, firewalls) and organizational controls (security clearances, limiting access to a “need-to-know” basis, staff training, agreements).

You say you knew all this already? What about the case where a landlord and tenant had a verbal tenancy agreement (permitted under the RTA) to allow the tenant to grow up to four cannabis plants but the landlord discovered 60 plants? Here’s the answer.

 Here’s a 20 Question Landlord-Tenant Privacy test:

Ask Questions For A Realtor

  1. Do you need a tenant’s SIN number for most things?
  2. Do you need permission to capture a tenant’s face on a surveillance camera?
  3. Do you need written permission to do a credit check?
  4. What minimum information is needed to do a credit check?
  5. Is it against the law to demand a tenant’s SIN number?
  6. Can you deny a tenancy applicant because they didn’t give you their SIN number?
  7. Can you use the SIN as a general tenant identifier, for example in your accounting system?
  8. Can a landlord ask for a driver’s licence, tax information, pay stubs?
  9. Can you look into a tenant’s background by looking at social media postings or calling another landlord?
  10. Can you put a tenant’s name on a “bad tenant” list?
  11. Can you verbally disclose bad tenant behaviour to other landlords, for example a phone reference?
  12. Can you take pictures of a tenant’s apartment and contents if you suspect a tenancy agreement breach?
  13. Can you set up surveillance cameras in your building that capture tenant faces?
  14. Can a tenant ask what information you hold about them?
  15. Can other tenants collect information on a tenant?
  16. How long can you retain a tenant’s information?
  17. Is there a prescribed process for personal information destruction?
  18. Can you disclose personal information to pursue a debt?
  19. Can police agencies demand tenant information from you?
  20. Can police agencies demand the landlord allow them entry to a tenant’s unit?

Short (and incomplete) answers go here

How will you score? As a Landlord and Investor, you may want to know these, or at least your Realtor and Lawyer should? Ask them, you may be surprised.

Would Warren Buffet Invest In London Ontario Real Estate?

  Would Warren Buffet invest in London Ontario real estate? I do not know but if he did, he would use the sound principals that he employs every time he invests.

Using his mentor’s ( Benjamin Graham) advice of : “Price is what you pay; value is what you get”, he would do well.

In this classic 2014 letter to shareholders he compares real estate to a mouthy neighbor shouting his estimate of your farm’s value over the fence at you, while you are busy producing food from the land and the sunshine. The mouthy neighbour has all the advice in the world but never produces.

Or my take of this, the complainypant who says real estate is overpriced, underpriced, interest too high, too low, waaaaah, waaaaah, or neighbours, co-workers or a family member giving advice on real estate.

The wise real estate investor looks at the long term picture, can project revenue over the long haul and does not even think about appreciation or speculating.

 A mentor of mine asked me many years ago“If I want shade 20 years from now, when is the best time to plant a tree?”

Income properties now for sale in London Ontario

How Not To Buy A London Ontario Income Property

Most London Ontario real estate investors miss the boat because by the time they have confirmed all the facts or ‘run their numbers’ (usually erroneously) or gathered solid information, the market is gone or the property is sold.

London Ontario Real Estate Investing Wrong Numbers

I see this daily, the fence sitters, the ‘time is not right’ folks or in 75% of the cases, their analysis of the property and income is faulty, that their illusion of cash flow, appreciation and risk tolerance is to blame!

A good real estate professional relies on what he hears, a great real estate professional assimilates all the available facts, sifts out the chaff, and makes the go/no go decision on his/her ability to adhere to what I call the brutal truth.

Great investors never buy what the market is doing, they don’t care. It can be up, it can be down, the motivation of the investor, be it the buyer or seller, takes two to tango!

You buy on expectation and sell on results! Period.

As J.P. Getty said “Investors bank on climate, while speculators bet on the weather.” In other words, the real estate market works more like a barometer than a thermometer.

Getting good and accurate information and then being able to act decisively on the incomplete information is what really separates the wannabees and the wealthy.

set your goals with real estate

Income properties now for sale in London Ontario

 

Slow Wealth With London Ontario Income Properties

We get tons of calls every year for people wanting a fixer-upper, especially after they have just watched some TV show where a couple bought  something, fixed it up and made gobs of money! Really?

Fixer upper

What about a couple who are handy or even want to be handy and who do not have to keep up with the Jones’s for appearance sake? Instead of buying that $400,000 or $500,000 home with the finished basement, nice schools, close to work, 2 car garage and then busting your butt to ensure all your monthly bills are paid?

And then, hoping that your home will increase in value in 5-10 years.

What about the couple who buy a smaller home outside for cash or put 5-10% down, have a 1-2 year plan to fix the place up and sell it and repeat this 4-5 times in 10 years?

Look at the math. Instead of a $1000 plus going to interest every month, you buy something where that interest goes perhaps $600-$800 goes to fixing your place up. after 1-2 years you sell it, you may earn $20,000  to $40,000 plus but lets say you only net $15,000? That’s low but stay with me here.

You do that 5 times or more? If you compared the couple who has had only one house after 10 years, mortgage poor or to keep up with their friends, go deeper in debt and get a bigger home, or the couple who uses their sweat equity and common sense after 10 years?

I have 14 couples now who followed this plan and let me give you 3 scenarios:

  • Couple number 1 lives in a $360,000 home, no mortgage and are under 35 years old and have no debt

  • ​Couple number 2 live in a condo now, no mortgage and are living off the rental income of their last 7 homes they bought, and instead of selling, they rent out
  • Couple number 3 are into house 3, it’s worth about $375,000, they owe just under $100,000 on it and their first home they bought, they scraped, borrowed and begged to come up with a $5, 281 down payment!

 

Are the above 3 different than most? Yes. you see, they are willing to pay the price in time, effort and I’ll use this dirt word prestige, to build their financial stability. Now, at the end of the day, 10 years from now, who is living the good life?

Is it easy? Safe? Nope! Is it wise and financially prudent? You bet!

So I ask, do you have what it takes or are you going to go through the rest of your life in debt and looking well off or no debt and feeling well? If you have what it takes or want to learn more, why not give me a quick call at 519-435-1600 now?

 Some Income Properties For Sale

London Ontario Income Properties , 4 Types of Money

   Money, The 4 kinds when investing in London Ontario Income Properties

Most investors in real estate and in fact, most business owners think of money in an abstract way and do not truly understand the brutal truth or refuse to acknowledge what money really is.

Briefly, money can be broken down into 4 parts, being

  • Profit
  • Income
  • Flow
  • Equity

You can have all the profit you want but without flow (cash flow) you cannot pay your suppliers (that is income out), your service providers, employees or your investors or lenders. Without flow, you erode your equity because you must borrow to keep afloat, if you are late in paying your monthly commitments, it erodes your profit and equity because of late fees, interest charges (income again) and or finding another supplier or support person or employee.

Real Estate Investing in London

I have seen many real estate investors with properties that have increased in value (equity) but they themselves are digging into their pockets to stay afloat and they think they are doing well!

I have seen many real estate investors who have great tenant incomes but forget about flow, profit and equity.

In turn, I have seen landlords with decent income (money in, money out) but have poor cash flow because of little profit!

Some guru’s say profit is perspective but I say unless you take all the 4 rules of money, apply them to the property you are thinking of buying or selling, you are not getting the true value of what money is.

I know, I know, I hear this all the time, my property increased 12% last year, or, “I never have vacancies”, or “My mortgage payments are low” and on and on.

This ezine is not the place to go into detail about the 4 rules of money, so I hope I have changed your perspective about money, I know my clients have and their financial health has improved considerably and in turn their future money worries have subsided and in some cases, vanished!

When you are ready to strategically invest in real estate, who are you going to call?

Income properties now for sale in London Ontario

Real Estate Investing London Ontario Common Mistakes

Avoid 12 Common Mistakes Made by Novice Investors in Real Estate (and Experienced as Well!)

Real estate investment has provided many investors with positive cash flow, tax benefits and the satisfaction of making an impact in others’ lives.   However like any investment, real estate has intricate nuances and market trends that when ignored can cause an investor tremendous heartache.

invest in real estate

Unbelievably, many first-time investors are willing to part with their hard-earned cash without taking the time to study their investment.

They rely on traditional trends and gut feelings.

Before you risk your investment, take the time to learn all you can about your market.  By aligning yourself with the right professional, you can avoid these 12 common mistakes and you’ll ensure an excellent return on your investment.

1.   Failure   to  Determine   Your  Time  Need–  Cash flow, capital appreciation,  tax benefits, loss of management, equity pay-down and pride of ownership are just some of the things that need to be addressed before you make that investment.  A service-minded real estate professional can be a tremendous asset by taking the time to evaluate your needs and making sure you’ve got all your bases covered.

2.   Not Checking out the Seller or Seller’s Realtor’s  Numbers– Claims of extremely high rates of return run rampant in real estate investment.   Don’t  get caught up in the excitement  – check everything: rents, payment history, taxes, expenses, deposits, future modifications…everything!  Make sure you have the right agent.  It’s like having a good insurance policy against overlooking all the seemingly insignificant but very important details.

3.   Forgetting You’re Buying a Business– Owning investment property carries great potential for creating wealth and…some potentially difficult decisions.    Evictions, re-investment into the property and time management all need careful consideration. Remember this is not a “hands-off’ business.

4.   Avoid Negative Cash  Flow– Property that eats cash every month can drain your  working   capital. This creates stress, frustration and can become quite painful.  Predicting constant appreciation is extremely difficult if not impossible for the unseasoned investor.  A strain on your cash flow may cause you to sell the investment before the benefits of ownership are ever realized.

5.   Failure to do a Thorough Inspection– Look under every rock! Hire a professional inspector. Ask the tenants about pest problems, structural damage or recurring problems. Don’t overlook anything! A value-driven real estate professional will help you find the right inspector and can help you avoid costly mistakes.  When investing your hard-earned money, be sure and use sound business judgment!

6.   Failing  to Have  Adequate Insurance– Investment property brings liability.   Tenants, cars, parking lots, and property liability- the list is quite extensive.  Adequate insurance coverage is an absolute must!

7.   Inspect, Approve, and  Confirm All Documents– The list of documents  that need to be proofed can be overwhelming  to the first time investor.    Building permits, zoning  laws,  rental and lease applications, health licenses, laundry leases, underlying  loan documents, by-laws, title policies, inspection reports, purchase contracts, insurance…don’t attempt to do it alone.  The right professional can remove most of the stress and bring the transaction to a conclusion smoothly.

Inspect Everything

8.   Get a Bill of Sale For All Property Involved– Many types of personal property (appliances, furniture, fixtures, etc.) can be involved in an investment sale. Be very detailed…know who owns what!

9.   Charge Fair  Rents–  Vacancies,  turnovers and lease terminators  are your biggest    expense. Charge fair rents, treat your tenants with respect and respond as quickly as possible to their needs.   It’s  a lot less costly in the long run to take care of the little problems before they become big problems.  Vacant property is your Achilles heel.

10.   Select  Qualified, Good  Tenants From the  Start– Take  the  time  to check  references.    Previous landlords,  employers,  financial  references,  credit,  judgments  are  all  vitally  important.    If  there  are  any questions, investigate fully.  A little work up-front can save tremendous problems later on down the line.

11.   Make Sure  You get Tenancy  Letters– Get letters from tenants confirming the status of tenancy. Make sure their version of the rental or lease agreement corresponds with the seller’s interpretation. (If you are adopting tenants from a purchase)

12.   Don’t Spend  Positive Cash  Flow– Most successful investors have free and clear properties. Be sure to re-invest your cash flow back into the property payment and speed up the amortization schedule.   This decreases your debt load and increases your equity…which builds your net worth.

Investment property can be one of the most rewarding aspects of your financial portfolio.  Be certain to have all your “ducks in a row” before you invest.

get your ducks in a row

Do your homework and for goodness sake, work with a professional Realtor who knows income properties!

Income properties now for sale in London Ontario

 

 

 

Rent Prices Soaring in London Ontario

What are causing rent and lease prices to rise in London Ontario? Shortage of rental units, property taxes, property prices or just because a landlord wants to finally make some money?

rents rising

I have been getting  our new investor clients tenant leases that make them more than happy and all to glad to invest in London.

Our existing investor clients know that rent and lease prices have increased in London Ontario substantially over the last 6 months and this London Free Press article backs it up!

Ontario New Rental Lease Law is Flawed

Ontario’s flawed standard lease is now law

Ontario Lease Agreement

It should never have happened this way. It’s true that written tenancy agreements for Ontario’s residential landlords have been confusing and inconsistent. Many leases are jam-packed with illegal clauses, confusing provisions and in some cases, there is no written lease at all.

Some small landlord investors are of the mistaken belief that it was easier to terminate tenancies if there is no written lease. A lot of landlords also confuse the term lease with the concept of lease term. So yes, confusion abounds, but now it gets worse, not better.

Now, for all new residential tenancy agreements that are signed (with a few exceptions), landlords must use Ontario’s new Standard Form Lease. This lease attempts to remove some confusion from the current chaotic state of affairs. No homemade leases are allowed! Its use is mandatory for condos, apartment buildings, single-family homes, rooming houses and basement apartments. This lease also replaces the agreements Ontario Realtors traditionally have provided.

The provincial lease has two parts. The first has some basic provisions along with a place for signatures at the bottom. The second part is an appendix, but really, it’s just an explanation on some of the finer points, including some details about what provisions may or may not be legal.  In Ontario, you cannot contract out of the Residential Tenancies Act (the RTA), so landlords and tenants signing the new lease can be assured that what they are signing is enforceable through the Landlord and Tenant Board.

While well-intentioned, the lease is extremely bare-boned. The standard form lease tries to be all things to all people and ends up being suitable for no one. Because it tries to be generic enough to fit all tenancy situations, it ends up fitting no tenancy situations.

Fortunately, the government is permitting additions to the lease in the form of an appendix that the landlord may draft. But keep in mind, the provisions in the appendix cannot contradict what’s in the lease and cannot violate the terms of the RTA.

The standard government lease, being inaccurate, incomplete and confusing, will likely cause more litigation and confusion. I can almost guarantee you that if you use it on its own, you will have misunderstandings with your tenant, or find that you are without a remedy when you need one. If you are interested, here’s a link to a blog I did analyzing the required lease.

The government could have resolved the issue of illegal clauses and ignorance of basic tenancy rights by creating a mandatory appendix, required to be attached to every new lease, with the same penalties to landlords if they failed to provide it as there is for failing to deliver this new lease to a tenant. However, the Ministry of Housing chose to use a hammer to swat a fly. By doing so they further confused an already confusing regulatory system.

Prudent landlords will need far more than the Standard Form Lease to protect their interests. Our firm and others are providing clients with appendices to be used in conjunction with the Standard Form Lease. As a landlord, don’t even think about using the standard lease on its own.

If you are interested in finding out more, take 15 minutes to view my free YouTube video on the new standard lease, and how you can protect yourself.

By Harry Fine

Younger Canadians Becoming Landlords

A new CIBC poll says Canadians who own a rental property earn about $2,189/month – 50 per cent more than their monthly costs – and those who rent out space in their home offset their housing costs by 70 per cent.

Ontario Landlords

“High housing costs and the growing appetite for additional revenue streams make renting out space a popular choice, especially among younger Canadians,” says Jamie Golombek of CIBC Financial Planning and Advice. “While most homeowners believe the tax benefits alone make an income property a worthwhile investment, it’s critical to understand how it fits into your overall financial plan and be mindful of all of the tax implications of going this route so you can make the most of the venture.”

In a new report, Golombek and colleague Debbie Pearl-Weinberg address some of the tax considerations for homeowners currently earning or planning to earn rental income.

Key poll findings:

  • More than one in four (26 per cent) Canadian homeowners are already landlords (15 per cent) or plan to earn (11 per cent) rental income by letting out space in their primary residence or from a separate rental property
  • Almost two-thirds (64 per cent) of current landlords own one or more investment properties used exclusively for rental income
  • $2,189 is the average amount they earn in income each month
  • $1,461 is the average amount they spend on expenses each month
  • Nearly a third (31 per cent) of current landlords rent out a portion of their primary residence for long-term (22 per cent) or short-term stays (nine per cent)
  • $1,287 is the average amount they earn in income each month
  • $1,888 is the average amount they spend on their total household expenses each month
  • 72 per cent of all homeowners believe investing in real estate is an excellent way to earn supplemental income
  • 37 per cent of homeowners say they would opt for a home with a source of rental income if buying a home today

The poll findings reveal that Canadians aged 18-34 are more apt to be landlords than any other age group. Almost half (47 per cent) of millennial homeowners are already landlords (30 per cent) or plan to be (17 per cent), compared to only 29 per cent of homeowners aged 35-54 and 12 per cent of those aged 55+.

Get More Money for your London Ontario Home

Moreover, if buying a home today, twice as many millennial homeowners than boomers say they would opt for a home with a source of rental income, at 54 per cent and 25 per cent respectively.

More than half (55 per cent) of millennial landlords own a property exclusively for rental purposes, while 40 per cent rent out a portion of their home for extended stays of a year or more (30 per cent) or short stays (10 per cent).

Among those who let out a portion of their home, an almost equal number cite additional or surplus income for spending on non-essentials (29 per cent) and to offset mortgage or housing costs (26 per cent) are their top reasons for sharing their space.

“Younger Canadians are more open to sharing their space because they see it as financially advantageous,” says Scott McGillivray, a real estate investor, contractor and television personality. “There’s definitely a shift in attitudes and a growing interest in income properties, in part driven by a desire to offset high housing costs, but also because it can be a smart way to create extra income and build wealth.”

The survey finds that the majority (80 per cent) of homeowners agree that renting out space in their home makes financial sense but value their time and privacy too much to pursue it. Further, 30 per cent of landlords say their top concern is dealing with unexpected costs for maintenance and repairs.

Despite this, more than half of landlords (52 per cent) believe it’s “worth the headache”. Among those who own a separate rental property, half say their top reason to invest is to generate passive income now (22 per cent) or in retirement (28 per cent). Another 20 per cent have invested for long-term property appreciation, and only 14 per cent cite future occupancy by themselves or their children as their main reason to invest.

Further, 74 per cent of landlords believe that even with a negative cash flow, the benefits of tax deductions alone make owning an income property a good investment, but Golombek warns that if expenses exceed income on a consistent basis, you may not be able to claim those deductions.

“Being a landlord can be financially rewarding, but it’s not easy money, and would-be landlords often underestimate the taxes they’ll pay on rental income and may overestimate what deductions they can claim,” says Golombek. “It’s important to be clear on what can and can’t lower your overall tax bill.”

Run the numbers

While landlords who own a separate income property can deduct both capital expenses (renovations, real estate commissions) over time and current expenses (insurance, interest) immediately, those who share their primary residence with a tenant can deduct only a portion of their expenses, which relate specifically to the rental area.

The poll also found that most (69 per cent) landlords admit they would discount the rate if renting to family and friends, but Golombek warns that this could limit the ability to deduct expenses or claim a loss from a tax perspective.

“It’s well worth your time up front to consult with a team of experts including your financial advisor, lawyer and Realtor to be clear about the perks and perils before jumping in,” he says.

This blog first appeared in REM Magazine, a publication for Realtors.

Duplex For Sale London Ontario, SOHO

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Pay Your Mortgage by living downstairs and renting the two bedroom apartment upstairs, great tenant who wants to stay in this well maintained duplex.

•   FOR SALE  CAD279,900 . A True Money Maker
MLS® 123305

Here you go, live inexpensively, live in the one bedroom unit on the main floor and rent the upstairs 2 bedroom with a great tenant who wants to stay! HVAC was completely installed and updated in October 2015 with two furnaces. Complete upper unit renovation, Nov-Dec 2015. Separately metered, upstairs tenant paying $850 and downstairs $750 with lots of parking. This duplex is in the up and coming SOHO district, short walk to downtown London.

Property information