New 5-Plex Landlord - Canada

[Kate Pasinelli]

Hi, Im a new 5 Plex landlord - What are the first things I should do and are there any apps that are recommended for rents etc that are recommended. Thank you for your help!!!!!

[Cory Lucas]

@Kate Pasinelli congrats! I use Cozy, only have 3 doors at the moment myself, but Cozy is free to Landlords and reports to credit companies for your tenants benefit, helps build their credit score. I’m unfamiliar with Canada though as to their economics as to if our credit agencies are the same or not.

As for first things you should do, did you inherit tenants? If so make sure to reach out to them as soon as possible. Hope that little bit is helpful, happy Landlording! Happy to help however I can

[Kate Pasinelli]

@Cory Lucas thanks so much!I’ll check out that app, I’m not sure if Canada allows for credit reporting but I would like to find out.

[Tina Tsysh]

Congrats on the new purchase! Do any of the units need any renovations? Ideally, you would rehab each unit, move in a new tenant and raise rents to increase your income. Do the current tenants have leases in place? Leases are very important and can make a huge difference down the line. Talk to current tenants and see if they have any complaints because happy tenants will make your life easier! 

[Kate Pasinelli]

@Tina Tsysh thanks! The units are all in good shape but we would ideally like to rehab all of them to increase the rent as the rents are currently low and under market rent as it is. Two of the tenants have been there a very long time so I’m wondering how to increase the turnover it doesn’t take 5-10 years. Pay to leave? They are all on month to month so no leases in place and I didn’t want to get them to sign anything as I want all the units to turn over. I wonder what the risks are not having anything signed...

[Tina Tsysh]

If the leases are on a month-to-month basis then give them a notice saying they have an X amount of days to vacate the premises (I am not sure what that number is in Canada). Not having a lease can be very hurtful because if the tenant does something bad whether it's damaging the property or disrupting the neighbors, you can't go after him because there is no legal contract where he agrees to any rules. Also if a tenant doesn't pay rent, you can't charge him a late fee if there is no lease. All sorts of things can happen and a good-written contract is the best way to protect yourself. 

[Kate Pasinelli]

@Tina Tsysh thank you for saying this, I needed to hear that! Really puts it in perspective I’m going to look up the timelines and such for Canada and then implement accordingly.

[Andrew S.]

I would let them know that their current lease is ending in 30 days and their new lease (your lease) is starting then.  I purchased a 6 plex unit a couple years ago and it was fairly smooth transferring over leases.  With my new lease I did a rent increase in another 2 months.  I wanted to give them time to find a new place if they desired to.  I also made a regular presence at the apartment to try to let me know that I cared about it. Painting exterior doors, clean up the lawn, minor landscaping.  Arguably not "need to do" items; however it shows that you care, which makes them more willing to pay higher rents. 

You won't need to pay to have the current tenants move.  One thing to consider is that they're currently paying under market rent.  Fair assumption their apartment conditions are below nice & shiny fair market rental today?  The few thousand it may cost to increase each unit up to nice & shiny fair market rent, may be years to get paid back.  I've gradually bumped my rents up so that there is enough leftover cash flow to fund any future turnovers.  Food for thought, do what works for you. Enjoy and congrats