Newbie from Ottawa

[Brad Dillman]

I'm taking 2-3 years while saving down payment to learn the REI business. I've owned several (6) homes (sequentially) over the years, but not much emphasis on investing, more concerned with family (3 kids). I own a newer home in Kanata, but less than 20% equity (getting close though).

These days I'm playing with spreadsheets to understand how things work, things like cap rate, taxes, CCA, etc. Other things on my list to learn are: 

How does property appraisal work (detailed)?

How do I qualify or credit check a tenant? Or, what would a property management company do if I hired them?

How does rent-to-own work? (not really enthusiastic about it, but I might have a one-time peculiar application for this) This is lower priority right now, more of a curiosity. 

How to estimate rent (without using cap rate)? Right now I just look at comparables, but I'm wondering if there are other rules-of-thumb, or other sources of info, etc.

When I was younger I worked in new home construction (my dad is a recently retired plumber), and still make small repairs. I don't intend to use much sweat equity, but when I look at a house or read a home inspection report I have a good understanding of it, etc. So I feel more comfortable understanding costs than I do revenues.

[Allen Seto]

Hi @Brad Dillman, nice to meet another Ottawa investor.  I will try my best to answer some of your questions (take it with a grain of salt - I am no expert in these areas).

Appraisal - From what I understand, banks/lenders use 3rd party companies to do appraisals.  It is based on market comparables and the condition/upgrades of your specific property in comparison.  Keep in mind that to a bank (and the appraisers) they will appraise it at what they think they can sell it for if the property owner defaulted and was foreclosed on.  So what "value" you put on your home may differ from what the appraisers say.  Quite frustrating when you are trying to re-finance to pull equity out....

Credit Check for Tenants - Check out Tenant Verification Services https://www.tenantverification.com

Rent-to-Own - There are many ways to go about this.  I suggest reading this book (which is Canadian specific!):  https://www.amazon.ca/Investing-Rent-Own-Property-Investors/dp/047073759X

Estimate Rent - Looking at comparables is the best way.  Kijiji, Realtor.ca, Padmapper, Rentometer are all great resources.

Best of luck. I recommend you check out OREIO here in town. It is a great REI group, very well run, and they meet once a month. Check out the website: http://www.oreio.org

Hope this helps.  Keep active and keep digging through Bigger Pockets!