All Forum Posts by: Marie Tai

Hello!  My tenant has a lease agreement in place that doesn't end until March next year.  However, they want to break their lease early to move into a bigger unit elsewhere.  Any idea what the rules around breaking this lease agreement would be?  They want to just give me a month's notice and then move in December (which is a terrible time to look for new tenants).  I took a look at my lease agreement and it seems to have rules around how a landlord can break the lease and how tenants can break a periodic lease, but not how they can break a fixed term lease.  On the BC Tenancy website, it seems to read that tenants can't break a fixed term lease unless the landlord and tenant both agree to do so on paper.  I do have a liquidated damages clause on my tenancy agreement though that says that breaking a lease before the fixed term will cost the tenant two month's rent.  Does that mean that the tenants can leave as long as they pay the two month's rent?  

I'm a little vague on this so I would appreciate any insight you might have on the local BC tenancy laws.

Thanks in advance!

Hi Cory, 

I think if you don't worry about the rules so much and keep putting aside money to put as your down payment, you will eventually get to the point where it would make more sense to just buy a unit than to sit on your money.  The problem with following a rule is that it holds you back from just finding a good deal and getting into the market.  As with most of the deals mentioned by the others, the earlier they got into the market, the more they could benefit from the appreciation (and experience).

With my first unit, I didn't follow any 1% rules.  I just made sure I found a solid rental unit in a good location that could cash flow after all expenses were paid.  Two years later, I have no regrets.  The unit has gone from $262K to almost $400K now, it cashflows more than it did before, I have a great stable tenant, and that unit has given me leverage to buy more units.  It was a great experience and it launched me into more purchases, new contacts, etc.

I can't remember where I heard it, but someone that was successful in REI said that finding and buying great deals is really good, but that if you simply buy and hold for a long time, all deals will eventually be great deals. If that's the case, you should simply keep running numbers and buy your first unit based on numbers that make sense for you even if it doesn't quite fit the 1% rule.

Good luck!

Marie

Hi Cody, 

That's great!  I'm glad you found a similar association.  Yeah, I find that the cost of some of these memberships pay for themselves in some of the discounts and resources that they can link you to.  

Good luck with your business!

Marie

Wow, I feel like a first year university student that walked into an upper level course.  The information in this thread is awesome (but also way over my head)!  I am looking forward to reaching your upper levels of political and market awareness.

I recently read the book "The Simple Path to Wealth" and the idea that I got out of that was to invest always and to stay strong (and in a strong financial position) to be able to weather the drops in the market that inevitably occur.  However, the thinking is that the market will also inevitably recover.  So in response to all this talk about whether the market will drop or rise, I feel like it doesn't really matter if you plan to invest wisely and hold on to your rental properties no matter if the market goes up or down.  I feel like if you don't over-leverage yourself in buying the properties, live frugally, save heavily, and always expect/prepare for the market drops then changes in the market will not stress you out that much.  In fact, you'll look forward to the drops so that you can buy rental properties at a discount.

I will look at my investments again to see if I'm in a safe position to survive a market crash, but I do plan to keep investing in local real estate.  

Hi Shane, 

I like the suggestion to find and talk with an accountant to see what method they prefer.  For me, I love Excel docs.  I dump all my rental receipts into a labeled box throughout the year.  Whenever I have time, I take the receipts and staple them onto sheets of paper, highlight the related costs, and write the value and what they are for on the sheet of paper (in case the receipt starts to fade or I forget what it's for).  Each sheet is numbered.  When it's tax time, I enter all these costs into an excel sheet with all the rental categories and include the page number beside each item in case I need to look them up.  I submit the finished excel doc to my accountant.  This makes my accounting bill very small.  However, it is a lot of work for me.  

If I didn't have this time, I'm apparently allowed to just dump this box full of receipts at my accountant's office.  She might hate me, but apparently everyone else does this each tax season.  They also sell tax folders at Staples with labels for each category in case you want to dump a folder full of categorized receipts at your accountant's office.

Good luck!

Hi Eve, 

I'm glad you're learning from the local landlords.  Yes, if you can find a previous landlord instead of the current one, that can provide you with some great information that isn't tainted by the desire to get rid of a bad tenant as soon as possible.  This was not applicable to my tenants so I just interviewed the current landlords, supervisors, and friends.  I find that if you ask the right questions, you can collect a wealth of information even in what they might be hinting or not saying.  You just have to come across as someone that is nice to talk with, friendly, non-judgmental, and trustworthy.  

Good luck!

Hi Simply, 

I think it would be helpful if you joined one of the local real estate investor groups.  I haven't gone to one yet, but I hear that there is one in the Surrey area.  I wouldn't be surprised if there was one in Vancouver too.  There are some local investors floating around in here, but I'm not sure they would readily take you up on your offer in this way.  I agree with Ryan Dossey's advice.

Good luck!

Hello Andrea, 

I'm over on the West Coast and I definitely cannot apply the 1% rule to real estate over here. However, I would just run numbers carefully on the properties you have available and start to narrow down areas in surrounding areas that have the most potential for growth in the city, appreciation, new infrastructure, etc. Find out how much the city utilities and taxes are compared to property prices and rental prices (craigslist is useful for checking rental prices), and then see where you want to start investing with the best return on investment. You might not be able to cashflow at the amazing numbers that our lovely American friends can (I'm so jealous!), but you can start applying the BRRRR strategy to rapidly grow your number of rental properties.

Good luck!

Marie

Hi Cody, 

For BC landlords, I like Landlord BC.  You have to pay for the membership, but they have really good, detailed tenancy agreement and other landlord forms pertinent to BC there (and you can claim the membership fee for taxes).  The membership also gives you discounted tenant screening services (credit score) and they offer a landlord training course called Rent it Right.  The BC Tenancy Branch also has a whole bunch of useful forms on their website https://www2.gov.bc.ca/gov/content/housing-tenancy...

I notice that you are in Calgary though.  I wonder if they have something similar for Calgary?

Oooh, I just checked out Tangerine and they have a promo on for 2.75% interest for the first 6 months in a regular savings account.  That would be a good idea if you wanted to just park your money somewhere for 6 months while you figured out what to do, right?