Things have started moving a little more quickly in the Edmonton rental market this spring. Incentives have almost totally disappeared, and many Property Mangers and investors have said they’re starting to test the waters, moving rents up by $50-200/unit. Vacancy is down more, slightly below 4% according to Colliers, and things are (usually) renting quickly. I’m still seeing positive cash-flow in detached single family houses without a suite, with nice units renting very quickly. In one case the bank did a rent appraisal which came in $150/month higher than our assumption before purchase!

Here’s the July 2011 update to my Edmonton Rental Market Survey. We had another 36 units updated, bringing the total to over 750. I’d still like more input from investors, managers and brokers, so please subscribe and I’ll email you next time I’m pulling the data.

You can download the PDF version of the Rental Market Survey here and you can signup for updates here. Happy Renting!

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1. Buying Multi-Family – Sellers’ Market Tips It’s 2011 and Edmonton’s still a funny market when it...

Knowing what a potential revenue property will rent for is the most important and most difficult part of establishing a rental portfolio that has positive cash-flow and creates serious passive income. To help out my clients, readers and all you investors, I’ve teamed up with several investors, Realtors and property managers to come up with some ballpark numbers which should help make your lives a little easier.

Here’s the basic info for you. A screenshot follows and you can download the whole report free of charge. You can signup to recieve future updates here.

There’s a significant variation between the different areas of Edmonton, and within the different property types. Here are the highlights.

• The survey receieved responses from companies and individuals managing 744 units, with specific data for properties rented out in the past 30 days. Some additional data has been gathered by conversations with property managers. There are still gaps, so if you can contribute to the next edition of this report, please feel free to contact me.
• The greatest variance is seen in 4-bedroom houses, from $1400-1800/month, likely owning to the wider variety of product quality.
• Apartments and Townhouses made up the largest classes of properties held by contributors.
• St Albert, the South, West and Millwoods seem to hold a $100-200 premium over comparable units in the North.

Thanks to Davies Management, Prestigious Properties, Avangarde Property Management, 911 Rent, Jason Scott at Urban Mortgage Edmonton, Rentex, Candema Property Management and Glenn Simon Inc..

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There comes a point in every landlord’s life where you have a tenant who:

• Doesn’t pay on time
• Damages their own unit
• Damages the common property
• Fights with other tenants
• Does something illegal on the property
• Threatens or attacks you
• Is paying old and very low rents
• Doesn’t play well with others
• Hasn’t paid in several months

Often it’s when you’ve just taken over a new property. If you’ve just bought a multi-family property then it can be even more frustrating, because you’ve inherited 10-200 tenants all at once.

Brent’s going to be talking about this topic at the upcoming October Edmonton and Calgary REIN workshops, and he’ll also be on a panel at the Advanced Landlording and Investing Fundamentals Expo in Calgary October 16th and 17th. (I’ll be there for the Friday and Saturday I think.) If you’re at either meeting, you’ll hear him and Don talking about some strategies to kick out the deadbeats, and how we approached the reality of handling well over a thousand tenants.

To help him get ready and cover the common and interesting situations we’ve encountered in many, many years of dealing with other people’s properties, Brent and I sat down and ran through the types of situations where you’ll need to deal with a payment issue, a legal issue or just want to change the tenant demographic. One of the things we figured out is that for the tenants we’ve put into buildings that we’ve managed for a while, we have start disciplinary proceedings on less than 2% of them. For buildings we take over with poor management by the owners it’s closer to 10% and sometimes as high as 20%. (Note I said poor management by the owners, because in our experience it’s almost never the property managers’ fault, but that’s another topic.)

I’ll cover a bunch of what we discovered in a post after the ALIFE weekend, but I want your input before we finalize things.

• What was your most frustrating tenant issue?
• How have you successfully changed the tenant profile in a building?
• What are the most important parts of your tenant screening system?

Photo Credit: “Woodfall’s Law of Landlord and Tenant” by umjanedoan, on Flickr

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There’s a scam that comes around every few years. You put an ad up for one of your units. Someone copies it, drops the price and ends up suckering someone out of a damage deposit or a month’s rent and running away. It’s the oldest trick in the book – sell something you don’t own. Here’s six tested and proven tips to help prevent people getting screwed and your name potentially being smeared by angry people.

1. Watermark your photos. Include your website and/or phone number. There’s a number of free options to do this, including the Picasa desktop app.
2. Pick a unique sentence that’s just in your ads and set up a Google Alert for it (in quotes). Then every time it shows up on the web you’ll get an email about it, which should only be when you put up a new ad. **You should also do this with your personal name and the name of your business.
3. Include several references to your name, phone number or website. This means in the body of your ad, not just in the fields where they say to put your name/phone number/email.
4. Inform your  caretakers or existing tenants when you’re advertising and if there’s a property that’s been hit by fraud like this. Also let them know when there’s people who are coming to view the suites.
5. Take your ads down when you’re done with them. This should be a no-brainer, but lots of people go for a shotgun strategy with their ads, meaning they’ll take forever to get them down. (You should be smarter and use a more focused approach to online advertising, but that’s another post.)
6. Include a link to your website and keep an eye on your Web Analytics. You should see each site under ‘referring sites’, or if you want to get sophisticated create URLs that label each site and then shorten them using a service like bit.ly so even if people share the link or copy and paste it you’ll get the referring information.

Photo Credit

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You can have it cheap, good or on time. If you’re good, you can maybe have two out of three. You cannot have all three.

Cheap and Good – This will take a long time and you’ll likely end up doing most of the work yourself (assuming you’ve got some skills or like learning)

Cheap and On-time – You’ll get the suite filled, but usually for less rent or less resale, and you’ll have more complaints and more deferred maintenance.

Good and On-Time – It’ll be great, you’ll get things moving but it’ll cost a couple bucks.

I’m a fan of #1 and #3. I’ve seen to much crap and way too many management problems with #2. It’s just not worth what you save.

And don’t expect to get all three. It’s nice when it does happen, but it’s usually only one project in five or ten when you have solid relationships with your contractors and are working with quality properties.

Photo from Lenore M

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There’s a cliche in the real estate business that you make your money when you buy. It sounds all fancy and sexy to say things like:

I bought a place 25% under value.

or

I never pay more than 75cents on the dollar.

For the rest of us in the real world, buying is only the start of a long, complex and often stressful road. Guys like Russell Westcott and Don Campbell will tell you to stop grinding down sellers, buy in the right areas and pay what something’s worth. Good property management, effective leverage and economic fundamentals will make you more money than you can shake a stick at.

Good Property Management is the new Black

The most often cited cause of stress, foreclosure or gross stupidity is failure to manage a property and tenants well. Failing to buy well only results in loss of a deal or tighter cashflow. Failing to manage well results in total loss of equity, damage to your property, lawsuits, negative cashflow, midnight moves, visits to the Residential Tenancy Dispute Resolution Board and swift consumption of your reserve fund.

Managed right you’ll have steady cashflow, reliable and respectful tenants, preventive maintenance done right and a fantastic asset for your exit strategy.

The Best Advice Around

I went shopping for condos last month in North Edmonton and stopped at a complex called Castlewood (circa 109st and 165ave, Google Map and Streetview). They’re two story complexes that are listed and seem to be 3-bedrooms. My Realtor is also very experienced property manager (he only does real estate sales now) and knew that the window in the third bedroom wouldn’t meet the safety standards. We automatically walked out of the complex because I won’t waste my time on units that don’t conform. I don’t want the risk.

Not two weeks later I saw this post on myREINspace. Here’s the important parts of the post:

We have three three-bedroom townhouses in a complex of 80 units. The owners of the Condominium received a letter stating that one of the bedrooms is not to be used for sleeping purposes. It is not safe because the window in that room is 9 feet from the ground and cannot be reached and opened from the inside without the use of tools or special knowledge.

We have contacted AHS for clarifications and for solutions that we could apply in our units immediately, since our tenants have been using that room as a bedroom. All our suggestions such as pocket door, or emergency ladder were declined….

Our plan is to work with a lawyer to file an appeal and at the same time work with the Condo Board to find a common solution. The Condo Board has not been very pro-active in this regard and transferred the problem to the owners, since “all owner occupied premises are strongly discouraged from utilizing the affected room for the purposes of sleeping.” However, the officer from [Alberta Health Services] left very clear that if they have an inspection and somebody is using that room for sleeping purposes in a rental unit, the owner and the Board will have to respond. It is a huge liability.

I don’t know if it’s the same complex, but there’s at least three others I’m familiar with that have the same problem.

And that one move earned Brent every penny of his commission.

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Smart advertising means doing your homework. Investors and property managers loved the Ontario ranking report we released in October and the original national report from last June. They’re reports that will help people advertise on the right websites, save money and fill your vacancies faster.

I’m proud to announce that reports for both Edmonton and Calgary are going to be released on January 31st.

To help kick things off we’ll do a short webinar at 1p.m MST to explain the methodology, results and what it means for how you should advertise vacancies online.

To be notified when the reports are available.

Thanks are due to Ron Roth for his technical assistance and advice, and PixelJones for the great photo.

Photo Credit:http://www.flickr.com/photos/pixeljones/ / CC BY-SA 2.0

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Advertising your vacancies on the right sites will save you time and money. What many real estate investors fail to realize is that between your property and the tenant comes an advertisement. The missing link is how they find your ads, and the answer is:

This whitepaper does the heavy lifting for you if you’re in the Ontario investment market.We’ve set out to rank the highest, most consistently ranked sites for the areas identified as the Top Ontario Investment Towns by the Real Estate Investment Network (REIN).

Since it’s release to 400+ members of REIN at the Advanced Landlording and Investing Expo, this report has helped investors fill vacancies faster and with less effort.

The towns we’ve covered in the whitepaper include:

• The Technology Triangle: Kitchener, Waterloo, Cambridge (KWC)
• Hamilton
• Simcoe Shores: Barrie – Orillia
• Brampton
• Durham Region – Whitby, Pickering, and Ajax
• Ottawa
• Brantford
• Toronto
• Vaughan
• Whitchurch – Stouffville

It’s 20-pages covering the backgound and methodology of the reports, tips and tricks for advertising online, and detailed results for these areas. It’ll help make your advertising choices easier, learn how to Google like a tenant and run your real estate like a business.

You can download the report here (PDF) and signup for future reports below.

Praise for the Ontario Ranking Report:

Chris, while you were in Ireland, you made a big difference for 400+ people in Toronto. Your Special Report on the Ontario Rental Internet-site traffic was fantastic and a huge hit at A-LIFE. THANKS! And that was before the Blarney Stone….. can’t wait to see what comes next.

- Don R. Campbell, President, Real Estate Investment Network

Thank you so much for putting that report together for ALIFE & sharing it here. It is BRILLIANT! It is now one of my most frequently used documents.

- Carla Johnson, Author of Magnetic Real Estate Photography

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Stuart Lomas told an intersting story this week. He has four properties in Edmonton, two of which were vacant (one up in Hermatige and one in Millwoods) .

They were doing well with their advertising. Lots of inquiries, and plenty of prospective tenants to come and look at the places.  The rents were appropriate, and the suites were nice. Stuart was doing all the things he should, and after each showing he gave them an application form.

Six showings: zero applications

So Stuart made a simple feature sheet to give out. It had three important sections to it:

1. Address and a list of features
2. Four nice, bright, simple pictures
3. Strong call to action with easy instructions to submit the application.

Then he made a point of handing the feature sheet out with the applications when showing the units. The results?

Three showings: three applications

That’s pretty compelling math, and you’re likely using similar sheets for other  marketing efforts. I suspect that it took about an hour of his time to make the two of them. At $50/hour, that’s $100 to make the sheets. If he wasted six hours on the unsuccessful showings at an hour each, that’s a 600% ROI!

You can download the two feature sheets (PDF) here and here. And here’s what they say. Go make your own!

Welcome to #xxx Habitat Crescent

Clean, quiet and comfortable, your new home features:

• 3 cozy bedrooms upstairs, facing east and west
• Full bathroom upstairs, half bath on the main floor
• Full open basement with laundry facilties and fridge, suitable for activity or storage
• Fenced and grassed yard with a deck, patio, outdoor table, and flower beds
• Bright kitchen with newer appliances
• Two private parking spaces right at your front door
• Walking distance to shopping, dining, and schools, and right beside the park
• 5 minutes bus to the LRT, then direct to Downtown and the University

Please call (780) 555-1212 with any questions or to book a viewing.
To make this YOUR HOME, fax your completed application to (780) 555-1213,
or drop it in the mail box at the property and call (780) 555-1212 to let us know!

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Renters and Real Estate investors both have similar needs. Renters want a place to live and investors have a place for them. Getting the two parties together can be a difficult exercise. However, there is one thing which brings us together. You might jump to the conclusion that it’s just the Internet. You’d be wrong.

The internet is a disjointed web of billions of pages, from the smallest one-page site to the massive and useful. Both have one thing in common: search.

Before the birth of the internet, the field of information retrieval was working to make search a reality. Today we see the impact of search in a very profound way. People use Google (orYahoo, Bing, Ask or AOL) for almost everything on the internet. Even when we know the address of a website (like www.chrisdavies.ca), we frequently Google it. The word ‘chrisdavies.ca’ is one of the most popular keywords for this website.

Skip straight to:
The Top 15 Websites
Download the full report

The Goal of This Survey

My intention is to provide real estate investors with a list of the most visible rental websites so we can advertise our vacancies where they’re most likely to be found. There’s three aspects I’ve considered when scoring these websites:

• Search Engine Market Share
• Keyword Search Volume
• Organic Keyword Position (ranking)

Search Engine Market Share

It’s no surprise that Google is the leader when it comes to search engines with 80% of Canadian searches. The full breakdown of Canadian search engine market share can be found in my post of internet marketing resources at the end of June. This edition of the rankings only accounts for Google rankings, however the future editions will consider Google, Yahoo and Bing, each weighted appropriately.

Keyword Search Volume

Not all every keyword phrase is a popular as the next. This chart shows search volumes from Google’s Keyword Tool (Canada, May 2009). To come up with the keyword list for this exercise I’ve applied the same methodology I use in my work as a SEO at Enquiro.  Scores are weighted for the popularity of the keyword.

Organic Keyword Position (Rank)

For anyone who has a website or has done any reading around search engine optimization (SEO), it quickly becomes evident that websites get more traffic for a given keyword if they’re at the top. Enquiro did some pioneering research into this using eyetracking software, and the full report is available for purchase. (Shameless plug: the other whitepapers are great too!)

I’ve weighted each ranking based on the principles laid out in our research at Enquiro.

The Results

This report was intended as a test and began with the keywords. I used the results of my keyword analysis to cast a net and see which sites appeared organically (no pun intended). Here are the winners.

The top 15 sites  are:

1. bwalk.com
2. apartmentcorner.com
3. places4rent.com
4. 247apartments.com
5. apartmentscanada.com
6. gottarent.com
7. homerent.ca
8. rent-ontario.com
9. room4me.ca
10. viewit.ca
11. kijiji.ca
12. rentedmonton.com
13. gscrentals.com
14. canadarentals.net
15. renters.ca

The full report includes more information on:

• Methodology
• Keyword Selection
• The Full List (76 Websites!)
• Tips and Tools for Investors

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