All Forum Posts by: Cindy H.

Hi Abi. Thank you. Our strategy is pretty simple - buy and hold with modest cashflow, maximized the mortgage amortization rate (30 years). Our siding is a bit strange "tile" and isn't the best installation but we are going to leave it. Our windows are outdated and it would make sense to upgrade these to be more energy efficient but we'll see how our utility bills go in the next year or so. We don't plan to gut the house...the suites are in reasonable shape.  Immediate rennovations included replacing plumbing fixtures, cleaning out the main drain, taking down some tree branches that overhang the neighbours / power lines (we did that ourselves), fixing / installing screens in all of the bedroom / kitchen windows. Painting the bathrooms and re-connecting the fans.  The furnace is mid-efficiency so likely not going to replace that but need to do some repairs around the chimney (install a better support for the chimney).  In general, asbestos is found mostly in the ceiling insulation (vermiculite) but can also be found in mud / floor tiles (although my asbestos industry contacts say that this is mostly in commerical buildings). You can get the mud / flooring tested for relatively cheap. In terms of priority I would make sure that all of the fire code issues are dealt with (smoke / CO alarms, window openings, smoke separation) there's great info on the calgary.ca website for this. As far as future upgrades, likely re-shingle the roof, install better soffit vents (can be done from outside) and might consider replacing all of the windows, crack sealing and weather stripping. Might replace some of the tiled bathroom showers with plastic inserts (just easier to maintain).

Hi Abi. We bought our first investment property (in Calgary) in Feb 2021 (1956 bungalow) and as people are saying most homes of this vintage have asbestos. That being said, if it's not disturbed, you don't need to worry about it (but this will add to the demo costs when you gut / rebuild. In our primary residence, we had the seller remove the asbestos in the attic as part of the contract because we knew the soffit venting wasn't sufficient and wanted to fix that. Regarding sampling - if you want to negotiate this with the seller, you can get samples but for attic insulation in Alberta, any vermiculite in attics for certain years it is ASSUMED to have asbestos and testing isn't really needed. However, if you are demo'ing on your own and can prove that your insulation is "asbestos free" then sampling can be in your favour. WISE ABATEMENT in Calgary (Jason is the owner) does great work.

In terms of the abatement process. Find a good abatement contractor, have them provide a scope / description of work to be done. Ensure you also arrange air quality sampling after the work is done to make sure their are no fibres present and a signed air clearance report should be provided to you. If you trust the company, they can do it or you might consider a different company to do the air sampling.

Regarding advice, really do not underestimate your montly / annual costs - especially for repairs (operating and capital). We did the full calculations with capital and operating maintenance expenses and although we've only been running for a few months, our cashflow is either zero or just below - partly because we have been trying to be pro-active about taking care of some of the important maintenance stuff up front. 

For your zoning, not sure if you plan to change from MC to residential but I would say leave your zoning as this has best future investment value? Most people want to move from single residential to multiple to commercial - seems like the property you want is already there.

Finally, if the property has been on the market for more than a week, insist on making the sale conditional upon inspection. Some properties are priced to the point where they are bought without inspections - but this usually happens within days (or hours) of it being listed. Hopefully you have a great realtor to work with who can help you negotiate an attractive offer that protects you. 

For our property, we were able to negotiate a significant reduction on our initial offer after the results of the inspection...

Good luck!!

Thanks William. All great advice. If we decide we need to remove the attic insulation and haven't confirmed presence of ACM, we'll definitely take precautions and make sure that our tenants are out (the remediation contractor wouldn't do it with occupants anyways) and then they'll have to do air clearance testing (I've actually managed a few asbestos remediation projects so luckily I have a bit of info on this too). I'm thinking it might be worth getting the attic insulation material tested. If it doesn't have sufficient concentration of ACM, then I guess we don't need to worry about it.

I know people are saying to look in older neighbourhoods that are close to downtown.

Keep in mind that many office towers in downtown Calgary are empty due to the migration out of oil & gas etc although I've also heard of some high tech companies eyeing up this space. The downtown has a ways to go before it really recovers, some parts of it are likely better than others but I'm not on top of it because it's a segment I'm not interested in.

There may be some interest in rentals in the south part of Calgary, particularly around the South Health Campus (new hospital).  I'm sure some saavy investors bought townhouses etc in areas like Auburn Bay, Seton who are doing very well. As per normal, run the numbers to see if it makes sense.  It also depends on your market segment. Houses at the "entry" level might be able to go lower, but not much in some areas as they are approaching land value.

Thank you Hai! Our principal property (the one that has the basement suite) has a HELOC of well over $200,000 if we need to access cash quickly.

So we bought a rental, 30 yr amortization, monthly payments. Is it worth increasing payments to 2 per month, bi-weekly, making extra principal payments to reduce the mortgage? We've allocated expenses to everything we could think of so in reality our cashflow will likely be higher than our "estimate". Assuming we won't need to be doing repairs immediately and vacancy is 0% at the moment, should we just put that "extra" cashflow into a separate fund (earning no interest) or should invest any extra, then pull out (if liquid) or use our existing HELOC to cover any major expenses? How do you manage the cashflow on your rental?

We just purchased a rental (1950's raised bungalow) and assumed the tenants in three suites. The home inspection showed that there's a bit of work to do and I wanted to get some opinions on priority for repairs. Tenants are smokers and the main floor tenants have a cat and a dog (I know). Leaking faucets etc are pretty obvious, but I'm also thinking my priorities are weather proofing and ventilation (rent includes utilities).  Based on the list of findings below, what would be your priorities?

1) vermiculite (likely asbestos containing) in attic underneath blown fibreglass - not an issue unless we need to access / do work in the attic (see ventilation below)

2) soffits are poorly vented but I was told there are ways to vent them and install baffles without going through the attic

3) three bathrooms have no ventilation fans (they have windows) and the ceiling on two of them is peeling / potential mold or rot

4) main kitchen hood fan is removed and didn't seem to be vented to the outside anyways

So considering the tenants are smokers (saw windows open with space heaters on during the inspection) I'm thinking the ventilation issues are priority to a) improve the indoor air quality b) reduce the amount of heat leaving the home. If I can install the vent fans into the wall I don't need to disturb the attic insulation but I know I can't have vents underneath soffits (I don't really care how it looks from the outside - if a vent pipe needs to be constructed to snake up around the soffit)...

Or should I just remediate the attic insulation (around 10K), be done with it and go to town with venting everything through the roof?

I will also be investing some time weather stripping / sealing around windows etc.

Roof needs to be re-shingled as well so maybe the interior vents should all be installed first? Then do the soffits with the roof or if we remediate the attic?

Love to hear your thoughts

Cindy

Hey all - thought I should update you! I sold my original home, bought another one to live in, paid it off completely (mistake), renovated basement suite to make it legal (thinking short term rental so I can schedule visits from family and friends as our main floor space is limited).  We just bought a rental property with 3 suites, positive cashflow, needs a bit of work but because it's fully occupied (we assumed the leases) we'll just take care of some of the immediate repair needs (I will probably start a different thread on prioritizing repairs. That one's under a mortgage amortized over 30 years :).

We've decided to try REI and just bought a raised bungalow with three suites in Calgary that already have tenants. Positive cashflow around 300/month which isn't too bad from what I'm hearing. We'll see how it goes. Lot of my friends say don't bother with being landlords because of the hassle but I think I'm going to like it. I like people in general no matter what their walk in life. We have to coordinate some repairs but our tenants seem cooperative and keen so far. We're not changing the lease on them (it renews May 1) for this year but we'll monitor things (like utilities which are included in the rents) and see what needs to be done for next year.

Hi Brianne,

I really appreciate your input!

My current property is in Macewan, typical family starter 4 lvl split, close to schools. My new property (and the one we want to live in) is in Lynnwood/Ogden. 

1) I agree...rental is less...I was getting $1800 in 2017 but could afford to drop it easily as I was paying for a property mgr before and now I don't need one

2) From what I've researched, I can only deduct the interest (against rental income) if the interest is incurred to pay for the property being rented.  So the old house which I was considering renting is already paid off...no more interest left on it.  The new property has a basement suite, so I could deduct some of the interest on the financing for the new one against rental income.

3) completely agree...as Clayton indicated as well above

4) I know it's a waiting game...but I really don't think prices are going to increase again for a long time.  Plus, if I can reduce the debt on the new house, then we would have full equity plus cash to consider if another investment opportunity came along...and then those renters would pay our equity (or at least part of it) and if prices drop further (which they likely will..) we'll be in a better position.  Plus I would prefer an investment property closer to my main residence to reduce transportation costs...

5) mortgage vs heloc...yes...I need to perhaps do some math on this...because I'm getting paid a varying rate per month (I work from home on a daily paid employment contract)....the challenge with the mortgage is that if we decide, we can't simply pay it off at once or put money over a set amount against the principal.  I'm a bit leary of entering into a mortgage after realizing that I did it all wrong for my first home (5 yr, fixed rate, 35 yr amortization in 2002)....although I did change my payment to bi-weekly, increased the payment amount and managed to pay it off in 13 years..