What are Capital Gains and How do they Work?

/ Khalid Keshavjee / Leave a comment

When people buy investment real estate, they look to see how much the property will provide cash flow (money left over after paying expenses) and how much the property will appreciate (grow in value). The goal being to find a property that can generate the greatest yield for the money invested, and will turn the greatest profit at the time they choose to sell.

When an owner decides to sell, and assuming they make a profit on the sale, they are taxed on the gain from the sale- called capital gains tax. While there are a number of different tax details that an accountant can discuss further, capital gains are taxed on the difference between the sale price and the purchase price assuming that value is positive. If an owner loses money on the sale, as in they sell it for less than they bought it, it is called a capital loss, as they lost money on that sale.

This is particularly important for landlords who have owned their property for a number of years, and especially in cases where there has been strong appreciation in the property. Currently, capital gains is not taxable on a personal residence- a place that you own and occupy.

Capital gains are calculated as the difference between the sale price and the purchase price. If a person bought a home for $300,000 and sold it years later for $500,000, they are taxable on the gain of $200,000. However, capital gains only applies to half of that gain- in this case $100,000. They are taxed on that amount at their tax rate. People who make more money are taxed at a higher rate than those who make less.

A common question that we get at Amhurst is, “am I taxed on the amount I make after I pay off my mortgage or only on how much I made after the sale?”. The answer is it does not matter how the property was financed initially, the tax is payable on the full amount of gain.

Looking for a property manager who can advise you on what rental properties to buy or sell? Contact Amhurst today!

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The Hidden Costs When Renting

/ Khalid Keshavjee / Leave a comment

All set to move into your own rental place? Found a place that you are proud to call home? Before you move in, here are some of the things that you need to account for financially:

Security Deposit

Almost all landlords across the city will ask you for some sort of security deposit in order to lease you a property. This money is held in an interest-bearing trust account (meaning that it has to be held in the bank for your term) and is kept in order to cover anything that you damage in the home outside of regular wear and tear. This deposit cannot be more than one month’s rent, and cannot be charged except for damage that goes beyond regular breakdown of items in a home and thorough cleaning on move out.

Ensuring that you account for up to two months of rent upfront (your security deposit and the first month’s rent) is important when you are planning to rent a place.

Tenant Insurance

You are renting someone else’s home. They (and/or their condo) are responsible to insure the building and associated risks. Their insurance does not cover your contents as a tenant nor your liability for damage caused, knowingly or unknowingly, while you are renting. This is why you as a tenant are often required to buy tenant insurance.

This is easy to get from your bank or insurance advisor. Whoever insures your car or other assets should be able to advise you on the coverage needed and the cost. Even when it is not required, it is a good idea to ensure that you are protected. Should you be found responsible for a major insurance issue, such as a flood, fire or otherwise, you may be responsible for the deductible on the homeowner or condo’s policy, which can run thousands of dollars. Many condo buildings have a water deductible of $25,000 to $50,000 per claim, which may be your responsibility. Your tenant insurance would cover that cost in most cases.

Moving Costs

Moving home is expensive. Aside from the cost of buying new furniture and moving your contents, many condos charge a moving fee. This is done to ensure that no damage is caused by you moving in, and for someone to block off the elevator during your move. Depending on the condo, it can run as high as $500 or more. The fine for moving without booking an elevator can be exorbitant.

Ensure you read and follow the bylaws of your condo, which your property manager should give you in advance of moving. Be advised that this fee can be charged for both your move in and your move in depending on the condo. If you are unsure of the fees, contact your property manager.

Looking for a landlord who can help you understand the ins and outs of moving? Contact Amhurst Property Management at 403-237-0477 to make renting a breeze.

The Alberta Budget And Taxation For Your Rental Property

/ Khalid Keshavjee / Leave a comment

The proposed Provincial Budget for 2019 has a number of items that are of note for people who own investment real estate. In a precious article, we talked about how investment property owners may be impacted should the budget pass. That article focuses on different measures that will impact your costs. This article focuses on how the new budget impacts your tax position as an owner.

As a disclaimer: Amhurst manages rental properties for owners, and is not a tax authority, income tax specialist, or The Government of Alberta. This article is not written to provide tax advice for your situation, nor can we accurately predict what the government will do next. Please consult your accountant or tax professional for advice on your specific situation.

Corporate Income Tax Reduction

This is a big one for owners who hold their rental property (or properties) in a corporate structure such as a hold-co, corporation or other incorporation structure. The Alberta Government decreased the corporate tax rate from 12% to 11% on July 1, 2019, and has announced a further decrease of one percent per year each year until 2022. Decreasing corporate taxes to 8% in 2022 will make Alberta the province with the lowest tax rate in the country, and will give Alberta a lower combined (federal and provincial) tax rate than 44 American States (page 8).

In doing so, The Alberta Government will be looking to make Alberta a more competitive place for people to invest. This is important for owners who hold their real estate in a Canadian Controlled Private Corporation (CCPC) and who are seeing positive cash flow. This move decreases the income that your corporation would pay on income made over the course of the year, and also would decrease the capital gains tax if you sell an investment property.

The government also announced that they would hold the small business deduction at 2%. Small businesses are currently taxed on active income up to $500,000 at this amount. Because it is active income, rental income would not apply nor likely would selling a rental property. Discuss this further with your tax accountant to see if this is applicable to your situation.

Increasing the Capital Cost Allowance

Houses are not designed to last forever. Over time, the physical building depreciates and upgrades are made. The Income Tax Act allows for individuals and businesses to claim the depreciation on the value of a capital expenditure based on a fixed formula.

The current budget allows for an accelerated capital cost allowance (CCA), in line with the Federal program already in place. While currently unclear, this likely will not apply to new purchases of income properties. It seems to be geared towards capital for clean energy and more active income ventures. Specifics on this matter may be introduced down the line, but it appears to be more clearly for other capital programs. As noted above, speak with your tax adviser to see if this is something worth doing in your situation.

Municipal Funding and Property Taxes

In today’s economic climate the government says on page 129 that ” When hard-working Albertans see their incomes shrink and struggle to make ends meet, they have to face their fiscal realities – and so do governments “. The Province will cut municipal finding quite substantially. This includes cuts to operating funds, grants programs, capital projects, transportation projects and more.

In order to make up for a shortfall in revenue, expect property taxes to increase substantially next year. This likely will hit both commercial, owners who have already seen huge increases in the past year, as well as residential owners.

Expect in the new year that your property taxes will increase, but with the economy where it is, it may be tough to pass the cost on to your tenants. At Amhurst, we constantly watch the market to determine where and when rents can be increased. If the market does improve in the new year and the prevailing market rents increase, it would be ideal to pass any increase on to your tenants, but it is unlikely at this point. This may be a landlord cost for the foreseeable future.

The Bottom Line

At the end of the day, there is a little bit to like for owners, especially those who own their properties in a corporate structure, as well as a little bit not to like, in terms of increasing property taxes. This budget is a big step for the province in terms of fiscal pruning, but expect more significant changes in the upcoming Federal Budget.

Photo courtesy of Jason MacIntosh of The Canadian Press

3 Questions to Ask About Your Condo Budget

/ Khalid Keshavjee / Leave a comment

For condos with a December year end, November is the month where most condos put together their budgets for the upcoming year. The way that condos typically budget is they look at their expected expenses for the following year and then divide that by the unit number of unit factors. They then multiply that number by the number of unit factors owned by each unit to determine your condo fees for the following year. Unless it is a newly built condo, most condos look at the past few years worth of data to determine what is expected in the upcoming year.

If you own a unit in a condo, be it an apartment, townhouse or even a commercial unit, this is an important time as your condo fees may be on the rise. As condos begin drafting their budgets, here are three things to look at:

Is Our Reserve Fund Adequately Funded?

A large chunk of your condo fees (between approximately 20-60% depending on the size of your budget and needs of your property) goes towards your reserve fund. This is your condo’s purse to cover major equipment failure and capital improvements that your needs to do. The amount that should be in your reserve is determined by a Reserve Fund Study which is done every five years and outlines what your condo will need in terms of replacements and upgrades over the next 20-30 years.

Your reserve fund is an estimate of what will break down and what will need to be done at what time. Each year, your property manager should review the reserve fund to see what is expected that year, and if it is needed, ensure it is taken care of. Your reserve fund then will be more or less full than expected depending on when certain expenses are done.

For example if your reserve fund has $600,000 in it at the beginning of this year, and you have a new roof schedule for 2022, but your roof needed to be replaced this year. Your condo then spent $400,000 replacing a roof, now your reserve fund will have $200,000 left in it. On paper, your reserve fund will appear under-capitalized based on when expenses are expected, but given you have taken out that amount for a roof earlier than expected,and you won’t need to replace one for another 20-30 years (assuming proper maintenance), your reserve fund should be close to properly capitalized based on current needs.

It is important to ensure that your reserve fund is fully funded. If there is an emergency for your building, such as needing a new boiler, siding, or other large capital work, and your reserve fund does not have enough to cover the work, your condo may have to declare a special assessment. That means you and all your neighbours will have to pay out of pocket to cover the bill for work and to top-up the reserve fund. Your reserve fund study sets out the amount that should be in the fund at any given time in order to ensure you do not have to have any unplanned expenses.

Additionally, if you want to sell your condo, prospective buyers will want to look at the reserve fund study and financial statements to ensure it is properly capitalized. Having an underfunded reserve fund is risky for buyers, as they will think that a special assessment or large increase in condo fees may be upcoming. This makes it harder for you to sell your unit.

At budget time, it is important to ask your property manager or confirm using your reserve fund study and financial statement that your reserve fund is properly capitalized.

What Capital Projects Are Planned Next Year?

Although we all wish our homes will stay modern and beautiful forever, the fact of the matter is that times change, styles and change and things don’t look as beautiful as they used to. Every few years, it is important for a condo to make improvements to ensure that the common areas and building(s) keep looking presentable. Not only does it make owners and tenants feel at home and help attract business, it also enhances property values.

As an owner, it is important to know what capital projects are planned for the upcoming year. Whether that means something small like new lobby furniture or something larger like new windows or siding, condo owners should understand what is upcoming in the next year. This impacts your day to day living situation in the building, but also may impact your financial position.

If major repairs are being done to your property, they should ideally be coming out of the reserve fund. However, sometimes your reserve fund does not have enough money in it to cover the anticipated expenses, or your condo may elect to do a special assessment in lieu of taking money out of the reserve fund. A special assessment is where your condo requires all owners to pay out of pocket for an expense over a certain time frame, and can be quite costly for unit owners. Ensuring your condo does not have any special assessments planned for the upcoming financial year is a key question to ask at budget time

What Is Our Contingency?

While your condominium manager or budget planning team on your board will look at the previous year’s financial statements to determine what the next year will look like, at the end of the day it is a best guess.

Certain areas such as management fees or audit and legal fees should be quite close to actual, but other costs such as utilities or repairs can vary wildly depending on how the year goes. A prudent property manager will ensure that there is a little bit of leeway in your budget to account for fluctuations. They may even use a separate line item called contingency to build that into your budget directly. In either case, ensuring that your budget is not too tight is important.

At the end of the day, all the money collected and spent is your money. It does not disappear if you do not spend it, and it is not advisable to borrow money to cover a shortfall. Condominiums are also not allowed to take money out of the reserve fund to cover a shortfall in their operating account.

If your budget is a little bit looser and you do not spend it in that financial year, the money can remain in the account as a surplus that is carried into the next year. If your property manager accounts well, you should have very little surplus or deficit in your account at the end of the year. In a future post, we will cover what areas we anticipate an increase in your condo budget this year.

Unhappy with your condo’s budgeting process? Not getting enough out of your condo’s manager, contact us at 403-237-0477

Photo Credit: Chris Murray/Money Under 30

3 Ways The New Alberta Budget Impacts Your Rental

/ Khalid Keshavjee / Leave a comment

Now that the Federal Election has ended, the Provincial Government under Premier Jason Kenney has released their 2019 Budget. With low oil prices, high unemployment, and dissatisfaction with the government in Ottawa, this budget is designed to help put Alberta back on track. Because a budget it holistic, it tackles everything from healthcare to education to social services, but there are a few notes for investors who own rental property in Alberta

Tourism Levy

If you own a property that you rent out for short terms like on Airbnb or Vacation Rental By Owner (VRBO), this affects you. Currently, the government has a 4% tax on all short term accommodations such as hotels and B&B’s, but it has not been applied to short term rental suites. To level the playing field, the province will impose a 4% tax on all short term rentals starting in 2020. This tax will be implemented right through the listing website, but will make short term rentals less appealing as compared to hotels or other accommodation choices.

Electricity Regulated Rate

In 2016, the Provincial Government at the time announced plans to cap the electricity rate at 6.8 cents per kilowatt hour. What that means is if the electrical rate went above that amount, the government would pay the difference. This budget will eliminate that credit.

If you own a rental property where you cover the cost of electricity for your tenants, this may increase the cost of your electricity bills. If you live in a condominium, expect that your condo fees may increase as well as electricity costs are going up. How much is still to be determined, but expect that electricity bills will increase.

Carbon Tax Removal

As of June 4th of this year, Alberta no longer has a carbon tax. That means it costs you a few cents less to fill gas or to heat your home. It also means that many Albertans also won’t receive a rebate cheque for their climate usage.

With Alberta repealing the provincial carbon tax, the Federal Government has legislation in place that mandates either a carbon tax or cap and trade system for pollution in each province. Starting January 1, 2020, a carbon tax will be imposed on Alberta starting at $20 per tonne of carbon dioxide used and rising to $30 per tonne in April next year. The latter is the level that the carbon tax was at before it was repealed. This will then rise by $10 per year until 2022.

Expect that this will raise your gas bill by a little over 6.50 cents per litre and just under 6 cents per cubic metre of natural gas for home heating as of April, with a greater increase in the coming years. For landlords that provide heat for their tenants, and for condos that include heat as part of condo fees, expect bills to increase next year.

In a future piece, we will cover the tax impact of the new provincial budget on your rental property.

Photo courtesy of Jason MacIntosh of The Canadian Press

How does the Federal Election Impact Your Rental Property?

/ Khalid Keshavjee / Leave a comment

Canada’s Federal Election is on October 21st, and each party is in the final days of campaigning for your vote. For people who own investment real estate, this time of year is important to know how the federal election will impact their properties.

We have gone through the Conservative, Liberal and New Democratic Party platforms to see how they impact you. Take a look:

The Conservative Party of Canada

The Conservative Party’s approach has typically been to reduce taxes in order to ensure there is more money in your pocket. The logic being that you know what you need better than the government. This election is no different

Removing GST from Home Energy Bills

One incentive that landlords will use, especially in slow markets, is to include the utilities in the rent. While it may cost them a few hundred dollars more per month, especially in a house, it is often less than leaving a property vacant. This proposal, if passed, could be very good for landlords.

Reviewing the Mortgage Stress Test

In 2018, the Federal Government put in place a stress test on all mortgages. A homebuyer would have to be able to afford a mortgage two points higher than their current interest rate or the average interest rate as calculated by the Bank of Canada, whichever is greater.

This limited the number of people who would be able to qualify for a mortgage, and especially first time homebuyers. It also affected people who wanted to switch their mortgage to a new lender, leaving people locked in at higher rates.

The Conservative Government wants to remove the stress test on pre-existing mortgages, and allow first time home buyers to take out a 30 year mortgage, provided it is insured. The New Democratic Party also wants to allow first time home buyers to take out a 30 year mortgage.

For rental property owners, this is both good and bad news. On the one hand, it would make it easier for landlords to switch their mortgage to whichever institution gives them the best rate, however, it limits the supply of people who are going to rent.

Most Canadians still prefer to buy than rent, and by making buying easier, less people will choose to rent, driving rents down. This particularly impacts rentals in the middle and upper brackets, as those had seen some growth since the stress test was first introduced. However, it likely will not impact the less expensive rentals, as those who rent in those brackets will still be unable to afford to buy a home. Investors who are looking to buy a rental property may want to look at their investment strategy if home ownership is made easier

Green Home Renovation Tax Credit

The Conservative Party also wants to make it easier for people to make their homes more efficient. Capital improvements are expensive, especially for owners of rental properties, but making a home more efficient can save on utility costs and can make a home more desirable for tenants. This tax credit is for 20% of the cost of a renovation between $1,000 and 20,000 that makes your home more efficient. This would include things like efficient heating systems, solar panels, new windows, or other major projects.This would increase the value of a home, and likely make it easier to rent, as it would decrease a tenants utility costs

Liberal Party of Canada

The Liberal Party also understands that home ownership is a major part of The Canadian Dream, and something that directly impacts most people.

Prioritizing Low Income Housing Support

One of the major points that the Liberal Party has talked about is making housing more affordable for Canadians. The majority of their plan revolves around increasing the number of affordable places to live across the country. This includes working with developers to build new low income housing, allocating underutilized Federal land to develop new programs, and working on Housing First initiatives to help people get off the street and into long term homes.

For landlords with properties with lower rents, this increases the pool of potential tenants. Organizations that support people in moving into their own home will likely have more resources to do so. It likely will not impact those working in more expensive brackets as much.

Removing GST On Capital Projects

The Liberal Party, if elected, wants to help the supply of affordable rental units. To do this, they are proposing to remove the GST on capital investments in affordable rentals. While it is unclear as to whether this will apply strictly to new builds or to pre-existing rental properties, this could save owners hundreds of dollars if they choose to upgrade their property. At Amhurst, we find that properties that are more modern rent easier.

The New Democratic Party

The New Democratic Party has a number of suggestions that will directly impact landlords in Canada. Their general approach historically has been to increase taxes in order to increase the number of government services.

Increase Capital Gains Inclusion Rate

For investors, this is a big one. In Canada, investors are taxed for any gain they may have from stocks, property or otherwise once they sell, however they are only taxable on half of what they gained, not the full amount. The NDP want to increase the inclusion rate (how much you are taxed on) from 50% to 75%.

If you bought a home for $300,000 and sold it for $400,000, you made $100,000 on that sale. By current capital gains rules, you are taxable on only $50,000 of that amount at your tax rate. Under the NDPs proposal, you would be taxed on $75,000.

Investors in real estate buy properties to make money off of the rent, and to see some sort of gain upon dispossession. An increase in the capital gains inclusion rate is bad news for the latter point. This would decreases a property’s overall yield, and make investing in real estate a less enticing option. Not only would it drive down housing prices, it would also decrease the rental pool, as investors would be less keen on buying more properties. This could increase rental prices, especially in the middle and upper brackets.

Foreign Buyers Tax

The NDP also want to make it harder for foreigners to buy properties in Canada. This proposal is in place to limit huge changes in price, as has happened in Toronto and Vancouver, but also to limit money laundering. However, it makes it harder for non Canadians who would like to invest in Canada, either buy buying single units or whole buildings, to do so legitimately. By decreasing returns for foreign buyers, it may decrease the purchase price for some properties, particularly in the aforementioned cities, but when these units are used as rental properties, it could decrease the number of rental properties available. This particularly impacts the upper echelons of the rental market.

What does it all come down to?

At the end of the day, a party’s platform is a series of proposals of what they would like to do if elected. None of this is set in stone, or something that they necessarily will do if elected. The real answers of what they will do will become clearer once the government is formed and they release their first budget.

However, a party’s platform is a good indicator of the types of ways in which they would solve problems. The fundamental values under which each policy point is made are often more important than the actual points that they do make. Looking at how they have chosen to solve issues surrounding housing will give a good indicator of what they might do if elected.

Each party has a different vision for Canada, and each differs in key ways on what is best for Canadians and how best to accomplish it. The best thing to do is to become educated on what each party is detailing, and how it will impact you and your family’s lives.

Photo Credit: The Toronto Star

Diversifying Your Investment Portfolio

/ Khalid Keshavjee / Leave a comment

Recently, Saadat and I were at a seminar on economic trends in the global economy, and how that impacts investment strategies. One of our key takeaways was the value of alternative investments.

What is an alternative investment? An alternative investment is anything that is not a stock or a bond, can make you money, and does not tie directly to the investment market. Having alternative investments in your portfolio helps you to manage in turbulent economic times. While they may not necessarily provide you as great a return as investing in stocks, they provide a safe, steady and stable return. These can include currencies, pair trading , or even roulette! However, many of our clients have found success in owning investment properties.

When bought and managed well, rental properties provide stable cashflow to the owner in the form of rent, and strong appreciation upon sale. In most market conditions, having a good rental property should cover your operating costs, and leave you with some money in your pocket at the end of the day. If managed well, they can be used to fund your retirement down the road, as they become incredibly profitable once the no longer have a mortgage.

The biggest risk with buying an investment property is buying the wrong one. So often, clients have come to us with investment properties that they have bought and are disappointed when they do not see the yield they had expected. Often they expect a higher rent than what the market can bear. In these cases, an owner may be covering some of the costs of renting the property out. Buying the right property with the right advise can minimize this risk.

Whether buying a single investment property or making a larger investment in an apartment building or a commercial space, having the right advice is of prime importance.

Looking to diversity your investment portfolio, or have an investment property that needs managing? Contact us today

Photo Credits: Rob Berger: Dough Roller

Does Your Property Manager Understand Your Needs?

/ Khalid Keshavjee / Leave a comment

When you own a rental property, it is important to have a property manager who understands your objectives and makes strategic choices to meet those needs. Broadly speaking, there are three major groups of people who own investment properties:

Owners by Circumstance

Life changes. As families grow and change, dispossession of real estate is not always in one’s best interest. It is common, especially in low markets, for people to move to a new home, but choose to rent out their property because the price of selling would not be worth their while. In other cases, work or life could take one to another part of the world for a number of years, and they may choose to rent their property out for the time being.

Whatever the circumstance may be, having a property manager that understands your circumstances is important. Because the rental is likely a shorter term move than if it were a strict investment property, making large capital improvements may not be ideal right away- assuming the property is rental ready

Additionally, putting a tenant into the property on a very long term lease (greater than a year) may not be in your best interest. In Alberta, on a fixed term lease, the tenant has rights until the end of the term. Unlike in other provinces, an owner cannot force a tenant out of a property in order to reoccupy their home prematurely. Having a manager who understands your timeline is imperative.

Owners by Inheritance

As difficult as a family member passing away can be, having to deal with assets and wills adds additional complications. Sometimes, families are left with real estate that needs to be managed. It can be anything from a single condo unit to a whole apartment building, but because family members may not want or be able to, hiring a property manager may be a wise decision.

“Your property manager should not be getting involved in family matters, but should be making life easier during difficult times.”

In these cases, your property manager should be adept enough to consult with decision makers to understand ownership objectives. Because these situations can be turbulent, ensuring that the property is well taken care of and any potential risks are mitigated are primary concerns for any owner. If it is an investment property, your property manager should ensure that money is paid to the right people, per the terms of the trust arrangement, and that decisions are made by those empowered to do so. Your property manager should not be getting involved in family matters, but should be making life easier during difficult times.

Owners by Choice

Owners who buy a property as an investment look primarily at two factors: What does the property rent for and what type of property appreciation will I see when I sell? A good property manager knows that keeping the property occupied is most important. Not only does it minimize costs to the owner, it minimizes risk as between the tenant’s insurance (which a good property manager ensures they have) and them being in the house to notice issues can often catch issues more quickly.

A diligent property manager also looks for ways to enhance the value of your investment property. Not only do they inspect your property to look for issues, they can also advise you on capital improvements that you can do to upgrade the property. And because they manage multiple properties, they may be able to get you a better price on these projects and work with trusted trades that will get the job done right the first time. Not only does this increase the value of your investment, it often increases the asking rent for your home, putting more money in your pockets.

Having a property manager who works for you also optimizing major costs to your property through strong preventative maintenance programs. From ensuring your roof is inspected to ensuring the tenant is maintaining your home properly, they work to ensure you do not have to make capital upgrades too often.

“Retaining tenants is a best practice in property management”

A good property manager will also employ strategies to ensure tenant retention. Keeping a tenant in your home for more than one year decreases your leasing costs, and is also less onerous on your house. If a tenant is in your home and generally comfortable living there, it saves you the cost of doing major upgrades. Additionally, moving furniture and boxes both out and in takes a toll particularly on your carpets and walls. Retaining tenants is a best practice in property management, and something your manager should have strategies for.

Signs Your Property Manager Is Working For you

Every owner has different needs. Your needs may be different from the needs of an owner who has a similar ownership structure. Regardless, your property manager should be aware of your objectives, and work towards achieving them. Starting from an initial consultation with a manager who asks about your objectives, right until the day that you choose to sell the property, it is important that they are on the same page as you.

If you are looking for a manager who will work with you to meet your management objectives, do not hesitate to contact us directly.

HOW DOES A LANDLORD MAKE A PROPERTY “RENTAL READY” ?

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rental ready, Amhurst Property Management, Calgary Property

When you have a tenant that moves out of your rental property, it is imperative that the property is made ready to be re-rented. Landlords often think a property will rent as it is but this is not the case in general markets and certainly not the case in soft markets.

Here are five ways to make your property rental ready:

  1. Clear the house of unwanted items, from both inside and outside the unit. Remember, a clean curb appeal is important when you are trying to rent a house. Thorough cleaning of the unit is vital. This includes walls, floors, light fixtures, doors, frames, baseboards, walls and trim. Give special attention to bathrooms and kitchens, which are the main selling feature in any home.

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  1. Freshen the paint if required. Painting is an area owners often leave unattended, but it is a very important deciding factor for tenants. If the walls look tired, blemished, and marked, the tenant will go elsewhere. Refreshing the walls (and trim if required) can make the difference between renting the place and having it vacant. Coloured walls are typically less appealing than neutral colours. Most tenants tend to prefer neutral colours such as taupes, creams, and greys.

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  1. Attention to detail in such items as light fixtures, plug and switch plates, door knobs, and other details is imperative. If prospective tenants come to see your rental property and notice that it is missing items such as curtain rods, blinds or other items, they may pass judgment on your standard of care as a landlord. This will detract them from renting your home. Little things like a rusted shower curtain rod, a dowdy looking drape, a plug outlet with a broken cover, a stained toilet or toilet seat, can make the difference between them renting your property and going elsewhere. Think seriously about these matters as renting a house is an emotional exercise; the little things turn people away.

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  1. In cold weather, do NOT turn the temperature down in your vacant suite, just to save on heating bills. A cold house has a negative impact on potential tenants, as it does not have the homey feel. Keep the temperature above  18 degrees, so as to ensure the property feels inviting.

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  1. Finally, if something appears like it needs a renovation or replacement, such as dowdy counter tops, or cabinets or blinds, just DO IT! Tenants do not want to live in a place that feels older or poorly taken care of. It is worth putting in the time and money to keep your rental property up to date so as to maintain a steady cash flow. Sometimes, your delay in this area can leave you with a vacancy for longer than you know.

Amhurst property Management

Amhurst specializes in making your rental property rental ready! Do not hesitate to contact us for more information.

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Tenant Retention: the Lifeblood of Good Property Management

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AMHURST- tenants1

Anyone interested in Calgary property management knows the objective of real estate ownership is to recognize cash flow when not heavily leveraged, and to enjoy capital appreciation.

In a normal economy, we see a bit of both. In recessionary times, we see a dip. Overall, in a long term strategy, we see both.

How to Keep Good Tenants

A prudent property owner recognizes that tenant retention is critical, yet cash flow and appreciation is just as important. In order for the property to remain fluid and for the property to appreciate one needs to be cognizant of the fact that the landlord must provide the tenant with good service, and keep up the property. This is the dilemma that professionals deal with all the time.

When To Increase Rent?

In this arena, we ask about rent increases. If the market is a landlord’s market, we can seek to gain a small increase based on the strength of the market. In a tenant market, we are often faced with struggling to retain the tenant, who might be looking to leave unless we have been good to them, and the property has been optimally maintained.

Landlord Fairness

I have found that if a landlord is fair and just and prudent, a small increase regularly provides stability and longevity of tenancy. This stability and longevity is the lifeblood of good landlord practice. Short term “rent grabs”, in my opinion, provide only short term successes.

Rental Customer Service

I am a strong proponent of good tenant customer service at all times, regardless of the state of the economy, as well as consistent property upkeep and maintenance. The investment in real estate has to be a long term strategy, and rent increases have to be tempered with long term thinking and planning.

Ability, Stability, Longevity

If you three words guide your relationship with a tenant: ability, stability and longevity, there should be little else that would stand in your way in retaining good tenants for the long haul. At Amhurst, our retention rate has been greater than 90% over the past ten years and we believe it’s our focus on good service and good maintenance.