All Forum Posts by: Matt Geerts

@Luc Boiron Oh yeah! Being a poor landlord I didn't even consider that people might be renting out houses that are twenty years newer than both my rental and my own home.

I believe that any unit first occupied for residential purposes in November 1991 or later are not rent controlled. Double check the RTA.

@David Chwaszczewski be careful about regional differences. None of your advice is legally valid in Ontario. a) leases do not end in Ontario. b) Rent increases are controlled to match provincial price index, and even if PPI is huge, rent increase is capped at 2.5%.

Due to these rules, you will never recover a lost year of potential rent increase, so your best bet is to find a way to make paying the extra rent appear to be good value to them. 

Oh, I forgot to mention. In Ontario your "last month's rent deposit" is due interest paid to the tenant every year. The interest on that deposit is equal to that year's guideline maximum rent increase. If you do not increase the rent by the maximum, you must pay your tenant the interest on that deposit equal to the max rent increase. If you DO increase the rent, the last month's deposit interest is withheld because it now boosts the deposit up to the new last month's rent value.

@Account Closed if you've been steadily upkeeping and improving the property, there is no reason at all why you should shy away from raising rent. It isn't like rents in your area are dropping and you need to fear vacancy.

Post your three months notice tomorrow. Rent control this year in Ontario is a BLISTERING 2.0%, which I believe is the best number that we've seen in many years. Grab it before they lower it next year.

Greg, I was personally shocked to find that my cash on cash return was higher on some low-end apartments if I paid in full instead of financing. I ended up writing a whole new spreadsheet to test a range of down payment, expenses and rates to prove it to myself.

Nathan, there are some properties that ROI better with or without financing. There are very few hard rules in Real Estate, so run the numbers in both scenarios (BP calculators can help, but a spreadsheet can be better) and decide for yourself for that particular property.

Kyle, kudos on beating the system! Now your rent is an additional income so your next hack might qualify for a killer loan.

@Kyle Scofield Great job! 

If you don't mind me asking, why did you choose to lease option with 20% down instead of just mortgaging? Don't you Americans have some federal 3% down payment loan available to you? 

Make sure you keep a side fund for rainy days so you never get stuck unable to make a payment and losing your entire down payment!

@Brent Byers those are a bit different. Not speaking from experience, I think that a refi is better than a HELOC if you plan to use it all right away.

To compare, a 100k property that you owe 50k on, they'll let you be indebted 80k so you have 30k to play with.

a) HELOC: The bank opens a 30k line of credit, secured by your house, usually at a point or so above your mortgage rate. You can use the money however and whenever you'd like and pay it back and use it again... it's just a line of credit.

b) Refi: The bank closes your mortgage and opens a fresh one at 80k, and hands you 30k cash.

Both have originating fees. HELOC is at a higher rate, but you aren't instantly paying for it and you can use/pay/use all you'd like. If you're going to immediately put all 30k into a down payment on another house, then a refi makes more sense because you are instantly tying it all up and you won't need the flexibility - so enjoy the lower rate.

You may get nailed on a refi if you are not at or near the end of your mortgage term.

Personally, I used a HELOC to buy my rental property and I have learned more since. I think it wasn't the right way to do it.

There may also be some tax advantage to HELOC... I'm not sure if you can claim the interest of the 30k that you refi'd out as a business expense, but you CAN claim the HELOC interest. This isn't a big deal.

No cap gains protection in Canada. HELOC it and go shopping.

Of course, I didn't just run the numbers on three dozen properties to confirm that opinion like you are about to do, right? Opinions don't run businesses.