Skycraper Dreams

For a while there things were going pretty well.  I had evicted a troublesome tenant, I was fully rented, and most importantly I was collecting rent from everyone more or less on time.  In December when I went by to collect rent, one of my tenants informed me that she’ll be moving before the end of the month. First, off she didn’t give me the required notice period (her lease does not expire until June 2010), and second she didn’t even pay me a full month’s rent.  She thought she only needed to pay 1/2 rent and I just keep the damage deposit.  Great.

This is a real pain because this particular unit is the hardest of all my units to rent.  It’s a decent apartment, but it is a basement unit and on the small side.  Because of that I can’t put a more mature family in there as it’s really too small for any more than two adults and a couple of young children. Also most people are put off by basement units, even though this one is quite bright, clean, and dry.  On top of this, Christmas is around the corner and it’s really hard to rent a place at this time of year; I’m busy with my holiday running around and prospective tenants aren’t that inclined to look either.

So even though my tenant technically owes me rent until the end Read more…

Steve Cash-flow, Rental Profit Profit, Vacancy

I may be the best property speculator in the world, or I’m about to loose my shirt. Only time will tell now.

I recently signed the paperwork to purchase a 1,375 square foot 2 bedroom (plus den) condo in the King’s Wharf development in Dartmouth, NS.  The unit I bought is a corner unit on the water side of the Keelson building, which will be built in the first phase of this massive development.  The floor plan on my unit is below.

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Steve Condos, Speculating capital gains, Condo, King's Wharf

Good news!  My mortgage application has been approved and I’m going to be able to tap into some of the home’s equity and pull out some extra cash.  This is incredibly good news, you see.  Both of my rental properties are currently up for sale and my projected ‘net income’ (before capital gains taxes) would be no more than $20,000.  With my new mortgage I’m able to access more than $25,000 in cash without any tax implications (until I sell).  On top of that, I’ll actually double the monthly profitability of the building, keep my assets, and the passive cash-flow.  Oh, and of course the head-aches, but this stuff doesn’t happen without some effort.

This dream scenario is possible because I bought the building with 100% financing three years ago.  That meant I traded a down-payment for an exorbitantly high interest rate of 7.35% with Xceed Mortgage.  This is a self-insured mortgage, meaning that CMHC didn’t provide the insurance for this high-ratio mortgage, Xceed did.  I still had to pay an insurance of sorts in the form of a ‘fee’ that roughly equaled what I would have paid CMHC.   This high ratio mortgage, on a 3 unit rental property, that was not owner-occupied would never have met

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Steve Cash-flow, Financing, Rental Profit, Rental Property Financing, Interest Rate, mortgage, Mortgage Payment, Profit

I’m going to try and stay away from my recently favourite topic about evicting a tenant.  In fact, the outcome of evicting this non paying head-ache is that I’ve just landed a new tenant who’s going to pay me on regular basis (at least hopefully).  I don’t know why I didn’t follow through with this eviction sooner, because for the first time in more than six months I don’t have to wonder if I’m going to get paid next month.

Since I knew my eviction would be in effect for November 1, I advertised the unit for rent and the first person the responded took it.  This is great, since you all know I rent in a tough neighborhood and its hard to find good tenants.  Hopefully I’m not jumping the gun on this post, since I’m set to sign the lease and collect the damage deposit tomorrow evening, but what a weight off my shoulders.

In another development I may not sell the apartment buildings after all.  One of my mortgages is coming up for renewal at the end of December and I may be able to take out enough equity to make it worth my while to

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Steve Eviction, Financing Financing, mortgage, Profit

Being a good guy doesn’t pay your bills; at least not in this case.  As you know I decided to give a tenant a break so that she could get caught up on her rent and not have to move.  As it turns out, all that seems to mean to the tenant is “My landlord isn’t harassing me anymore so I’m not going to pay him, I’ll pay my other debts instead.”  Instead of actually making headway on the more than one month’s worth of rent she owed, she actually fell even further behind.

Because I’m soft, I’m not out about $1,200 with an empty apartment to rent, I’m now sitting on about $1,200 worth of debt, an apartment I can’t rent until my lackluster tenant vacates (November 1), and potentially another two month’s of unpaid rent.  Stupid.

I have made an appointment with the local tenancy board for October 26 to pursue by debt and enforce eviction, but because the system is so shitty I’ve got to wait 6 weeks to even get in front of them and present my case.  I’ll win, then I have to wait another 10 days for the appeal period.  Then, if the tenant is still in the building I can give her Read more…

Steve Rent Rent, tenant