Advice from fellow BC landlords

[MrBrown]

Appreciate any advice fellow landlords can provide... I've been burned before by bad tenants who took advantage of the pro-tenant stance of the law in BC and caused damages or broke clauses in the tenancy agreement.

At one time I had to pay tenants to leave!

I'm particularly hoping for a legal way to work around the limitation of damage deposit which is "The security deposit cannot be more than half the first month’s rent".

About to rent a brand new $300k worth condo at say $1,000 a month. $500 damage deposit is a bad joke.

Also - if anyone has experience with services for landlords such as the following please share.
http://bclandlords.ca/

Thanks!

 

[sybian]

Don't advertise the 1000 a month...Advertise at a higher rate, and you'll get a whole different client base...Then when you find someone you may like ,tell them it's only 1000, and they are very happy. Because you advertised at a higher monthly rent, you may be able to charge more for the S.D....But you may want to ask a Lawyer about that.
This has worked very well for me in the past, and a agreement for a Bi-monthly inspection for appliances ,and condition of the dwelling works well.
I did evict someone from one of my rentals by turning off the power, but that was an extreme case, and only happened once....I don't usually have a problem evicting someone.
It is very different up here in the Interior ,than down there.

 

[MrBrown]

Don't advertise the 1000 a month...Advertise at a higher rate, and you'll get a whole different client base...Then when you find someone you may like ,tell them it's only 1000, and they are very happy. Because you advertised at a higher monthly rent, you may be able to charge more for the S.D....But you may want to ask a Lawyer about that.
This has worked very well for me in the past, and a agreement for a Bi-monthly inspection for appliances ,and condition of the dwelling works well.
I did evict someone from one of my rentals by turning off the power, but that was an extreme case, and only happened once....I don't usually have a problem evicting someone.
It is very different up here in the Interior ,than down there.

Thanks Sybian.

Indeed, it will likely be higher than $1,000 and I will do a better job at screening the tenant but still... it doesn't take much to cause thousands in damage.
The bi-monthly inspections is a great tip, thanks!

My ideal tenant is a single lady in her 60s without a cat

It's also very different if your a 7 foot tall guy in cowboy boots!
Me, I'm a gentle city slicker...

 

[princeofdarkness]

Mr. Brown, treat your revenue property like a business.

I've enlisted reputable property management companies to oversee my investment properties, both commercial and residential.
They will do the searches, advertising, filtering, credit and reference checks, enforcing bylaws where applicable, conduct regular property inspections, tax and or utility payments, monthly reporting and so forth. There will be a one time upfront fee depending on your negotiated and agreed upon terms but again, that is the cost of doing business. Monthly fees can range from 5% to 9%.

You set the parameters with the Property Management Company. ie. Pets, smoking or smoking pets etc.

Good luck.

 

[clu]

How about buying your own insurance against damage and adding the cost to the rent? In theory you can insure anything.

 

[sdw]

Appreciate any advice fellow landlords can provide... I've been burned before by bad tenants who took advantage of the pro-tenant stance of the law in BC and caused damages or broke clauses in the tenancy agreement.

At one time I had to pay tenants to leave!

I'm particularly hoping for a legal way to work around the limitation of damage deposit which is "The security deposit cannot be more than half the first month’s rent".

About to rent a brand new $300k worth condo at say $1,000 a month. $500 damage deposit is a bad joke.

Also - if anyone has experience with services for landlords such as the following please share.
http://bclandlords.ca/

Thanks!

Lease the Apartment. The rules are completely different. You are guaranteed payment for the term of the lease, you can even sell the lease agreement to a third party. The tenant must leave at the end of the lease term. You may bill the tenant if damage prevents you from leasing to a new tenant.

CMHC has a .pdf on their site: http://www.cmhc.ca/ourhome/pdfs/English/R8.pdf

 

[sdw]

How about buying your own insurance against damage and adding the cost to the rent? In theory you can insure anything.

Insurance companies have a clause in the standard agreement that says damage by a tenant isn't covered.

 

[johnsmit]

My family rented aptments for over 40 yrs . And I had a few rentals at one time
It all about your due diligent . Having a proper rental agreement ..and checking the peopke out be for you rent to them .

I agree it depends on how much you ask for rent as to who can afford to rent your place ..so you will get a certain aplicant.

But it does not matter some time .. people change .. and there sercomstances change too ..and they may find them selves not being able to pay the rent or full full 5he terms of the lease ....

Your security deposit will not cover any major damage or loss of the rent .. no matter what you would like to raise it to.
And suing for damagesis a very expensive process..usually with no return.

Even a management company can screw up when ggetting you a tenent. .you just need to take refrances .. more then one and check them ..

Personal I have been a renter for the last 10 yr.. ..and I also have defaulted on my rent .. and lived in my truck ...
But renting in many way is better then owning ..and the only worry are ...can't you pay the rent ..or if the suit get sold and you have to move ..which happens alot in this owner rented market .

Usually when you here thd horrible stories about what tenent have done ...or where landlords had to pay the tenent
To move...the landlord .did not follow the rules to the letter. If you want tenent out you need reasable cause ..you allso have allways keep the place in proper repair and livable ..if you don't that ..then yes the tenent will get the better of any judgement.

 

[Feenix]

I am unsure if tenant damage is not covered in a standard agreement. But, landlords can get coverage to cover damage and loss of rental income due to tenant damage. I know first hand.

Mr. Brown, Angela is correct. Most steps you might take to get a higher security deposit would not be viewed favourably by a court or Tenants' Review Board. They would look at your intent, and probably deem any scheme you came up with as an attempt to get around the law. Ultimately, that is the question to ask yourself when in doubt. How would the court view my actions?

Best advice has already been mentioned. Do a thorough credit and past history check of your tenants. That includes talking to the landlord previous to the current one. The current landlord may want to get rid of this person and give you a false positive report.

There are companies which specialize in providing tenant reports. PM me if you would like a reputable name.

Turning the utilities off to get rid of a tenant is also illegal. You can often terminate a lease early by paying the deadbeat to leave. It is often less expensive that having him stay on.

There are also at least two great real estate investment groups in the Vancouver area that are terrific resources for questions such as yours.

 

[MrBrown]

Thanks everyone for chiming in. Great advice though not everything as applicable to me.

Had I numerous properties or remote properties a management company would make more sense.
This is one condo 5 minutes away which is manageable.

sdw - excellent tip. I'll look into the lease option. If I can avoid dealing with the tenant's review board that will be my preference.

Feenix - I see where you're coming from. I'll have to justify my actions although I am a fair person who's been fooled once if not twice by bad tenants. I'll pm you for more info about tenant screening etc.

Thanks again everyone!

John

 

[clu]

Insurance companies have a clause in the standard agreement that says damage by a tenant isn't covered.

As Feenix wrote as well, I was talking about insurance specifically for this purpose, not the standard insurance.

 

[Feenix]

I see nothing in the CMHC link that contradicts my comments that landlords must follow provincial laws. In fact, that article reiterates that point.

I fail to understand how a lease will circumvent the BC Tenacies Act. Leases in BC are for a fixed term. If a landlord wants to terminate he/she must have reasonable cause.

However, that does not address the ratio of SD to rent. That is one of the inequities of the legislation. We own a $500K asset and can only collect a $750 SD. And, as has been mentioned, it is almost a waste of time and money to chase tenants for arrears or damage.

For what it is worth, in AB landlords can collect a full month's rent for both pet and SD. And they can increase rent once every 12 months by whatever the market will bear.

 

[vancity_cowboy]

too bad harper and mackay didn't get around to introducing a federal rental board - they sure would have protected the landlords... IN SPADES!!

 

[MrBrown]

too bad harper and mackay didn't get around to introducing a federal rental board - they sure would have protected the landlords... IN SPADES!!

It begs the question why it's provincial and not federal...

With this government and especially our new minister of justice landlords are totally screwed.

Might as well turn our investments into social housing.

 

[MissingOne]

...Had I numerous properties or remote properties a management company would make more sense.
This is one condo 5 minutes away which is manageable...

I guess it depends on your tolerance for hassle. I own one rental property. I've had a rental company looking after it for years.

The beauty of it for me is, I don't have to think about it. The rent lands in my bank account every month, and that's all there is to it. We've had one difficult tenant - the management company dealt with it.

If I want to spend time on business, I can make more per hour in my profession than I ever could managing the rental.

 

[badbadboy]

I own up in the Okanagan and it's managed for me. Sure they take an outrageous amount for what little the do other than:

Go after renter's who damage the place.
Go after renter's who don't pay on time.

Both are important issues for me so I continue to use them as my agent.

I also own in the Greater Victoria region and rent it out to a local. The only thing I am so thankful was putting in a clause saying "no professional work, no home based business and having a quiet place between the hours of 08:00 and 22:00 hours.

First renter I had was allegedly a U Vic Student but turned out she had one class at UVic and was running a home based business with multiple phone lines and was starting the business at 4 AM to handle the Eastern Phone calls.

I met with her after multiple complaints about the loud noise at 04:00 and she denied it. I then had the Strata Manager visit at 4:00 AM the next morning and he confirmed she was loud and on the phone unable to talk to him. She left on her own accord since she was non compliant with our lease/rental agreement.

BTW if you are renting to Students put in a paragraph saying NO PARTIES. It may or may not hold up but with all the students I have had it has worked well. I meet with them and say "pre drink at our place and NO way will you have the party come back here, agreed?" Never had a problem after that talk.

 

[hedgeman]

One tactic that last couple landlords have used on me (i'm a very quiet, clean and respectful tenant) is they have asked and I agreed immediately to them coming to where i lived currently at the time, just to see what kind of place i keep with no notice to clean up etc...how a person lives can tell you a lot of what kind of tenant they would be for you...just a suggestion

 

[meaghanmcleodDELETED]

Actually another thing, is ask to see inside their car. If the inside is a garbage can on wheels, their home will likely be too.

 

[badbadboy]

Actually another thing, is ask to see inside their car. If the inside is a garbage can on wheels, their home will likely be too.

If that's the case, I wouldn't even have myself as a tenant. An SP catching a ride recently said "BBB, you need to clean this shit up lol"

 

[Larry Storch]

Actually another thing, is ask to see inside their car. If the inside is a garbage can on wheels, their home will likely be too.

Sorry Ms.Mcleod, but I must disagree as well. My truck can look a little 'lived in' after a while, but my place is clean. I'm in the cleaning business so I can have the whole place done in less than half an hour, but it's easier to just keep it that way.

(special note to the ladies who may be about to PM me about cleaning their places. I don't do residential unless we can arrive at some sort of "arrangement' :eyebrows: )