Tips for renting your home!

If you have to rent your home, or have decided to buy and rent an investment property, it can be a bit daunting. Ontario laws are friendly to tenants; it can be hard to get rid of someone once they’ve moved in if they don’t work out. Here are some tips to find, and keep, a quality tenant.

Use a realtor.  Realtors will charge you a full month’s rent to find a tenant (the listing agent gets half of that, the agent who brings in the buyer, the other half). HST is on top of that. But in return, your property will appear on MLS with interior pictures and verified information; your realtor will take care of requests for showings, vet all applicants, and do up the paperwork.

I recently listed a property that needed some work. I found my clients a trade on short notice (he literally was able to start work the day after they took possession); recommended suppliers to them for some of the things they needed, priced out upgrades like vanity tops for them, staged the property (at my expense), took pictures, listed the property and stickhandled calls.

When I thought we had the right tenant for them, I arranged for a face-to-face meeting so they could judge for themselves. The process of renting, particularly in an active listing, can be overwhelming for an owner who has other commitments. Use a realtor, and let them handle it for you.

Fix what needs to be fixed. I’ve seen rental properties that were in terrible shape. Who wants to rent a place that has cupboard doors hanging off the hinges, or dirty walls and carpet, or dripping taps? All of those scream a landlord who doesn’t care about their own property. If you want to have a high quality tenant, the property needs to meet high quality standards. Get the work done before you list, or at least have it underway so the prospective tenants know that the property has been, and will be, well-maintained.

Stage it. For rentals, I rarely stage the entire property, it’s not worth it. But I always stage bathrooms, kitchens and make sure there are curtains up. Here’s an example of a kitchen I staged in my recent listing: a picture on the wall, a bowl of pears, some nice bar stools and a few cookbooks were all it took to make the space inviting:

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Similarly, I never leave a bathroom without a shower curtain and towels and a floral arrangement of some type, it makes a huge difference!

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And I always stage a fireplace mantel. It’s a feature; you want to show it off.

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This is another good reason to use a realtor, by the way. Many of us have staging items like this tucked away that we can pull out for listings.

Cost to my client? Free.

Change up the lighting.  You want your property to look terrific, but so many rentals I see have terribly out-dated light fixtures. Some landlords think they should cheap out and not put money into something they are going to rent, as if it’s a zero-sum game where whatever they have to spend is money they won’t get back. But that’s the wrong way of looking at things.

The better the property is and the better it shows, the more rent you can charge for it and the more likely you are to find a tenant who will take good care of it.

Changing a light fixture is such an easy fix, but can totally transform a room. I picked up this one for my clients at Rona. For $ 150, it looks like a million. Their new tenants loved it. So much better than the ugly flush mount that was there before, and it helps define the dining room space as well.

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Get a completed rental application.  Whether you are renting your property yourself or using a realtor, get a rental application completed by your prospective tenants. It will have their employment history, reference names and numbers, whether they have pets, what their financial obligations are, names of those who will be living in the property, and enough information for you to get a credit history.

Call their references. I cannot emphasize this enough. I have my clients contact the references even when I am involved as their realtor because they are the people who have to be satisfied that the tenants will be reliable.

A good tenant shows up at appointments on time, answers emails and calls promptly, and provides information. My red flags go up when prospective tenants are late, don’t respond to my questions or seem evasive. So far my gut instincts have been right, but I don’t rely on those alone. We call references. and see if those instincts are solid or not.

Do a credit check. A credit check doesn’t have to be perfect, but it should be good enough that you know that the tenant is paying their bills on time, and paying down loans. Look for consistency: someone who pays their bills on time over a period of years is going to pay your rent on time too.

Call their previous landlords. This is probably the most important call of them all. Did they pay their rent on time? Were there any issues or complaints? When they moved out, was the unit in good shape? Any problems with pets or noise? If your prospective tenant has a landlord who speaks well of them, that’s worth gold.

Don’t ban pets. Ban smoking, yes, but don’t ban pets. First of all, you can’t unless you are renting a condo that bans them. You can say you don’t want them but you can’t evict a tenant for having one, so banning them just loses you a potentially great tenant or puts you in a situation where someone who wants the unit lies to you about having one (and yes, I have heard of that happening).

Be open to persuasion. A great tenant with a well-behaved pet is probably having a hard time finding a pet-friendly rental because so many landlords refuse to consider them. You can be the person who snags that great tenant by keeping the door open. Make the pet subject to your approval, and put a clause in the lease that requires them to repair any damage the pet may cause.

Meet the prospective tenant in person before you sign an Offer to Lease. I can’t emphasize this one enough either. Meet them, assess them, ask why they are moving, find out if they like the property. Someone ambivalent about your unit will not take care of it, or stay on after the lease ends. Someone looking for a short term rental while they get ready to buy won’t stay long either. Find someone who loves your property and plans to stay there for as long as you’ll have them. That’s your tenant.

Be open and honest about your own plans. If you plan on selling the unit down the road, be sure to tell them. If you plan on moving in sometime, tell them that too. Allow your prospective tenants to make informed decisions. Communication is key.

In my last rental, the owner was in another country. She wanted a twelve month lease but after that wanted someone comfortable with a month-to-month rental because she wasn’t sure when she’d be posted back from  overseas. By being open with the prospective tenants about her plans, we found someone who was very comfortable with that arrangement. Both tenant and landlord could proceed, knowing ahead of time what would happen.

Get a deposit. You are entitled to get a first and last month’s rent deposit from your tenant. Do it. A tenant who has a hard time providing that upfront may have problems paying rent. If you are using a realtor, that deposit is paid to your realtor’s brokerage and the commission (one month’s rent plus HST) is deducted from it when the tenant moves in. The balance is sent to you.

Know the Residential Tenancies Act inside out.  There are lot of provisions in the legislation that favour tenants. It’s not easy to evict one. Do your vetting up front. But know your rights and be sure to follow the rules when it comes to your tenancy. If you have the right tenant, you’ll work most things out without worrying about the legislation. But just in case, you need to know the requirements. Good luck!

 

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Is There a Mouse in the House?

Last week, I contacted clients of mine who’d moved into their new home two weeks ago to see how they were making out. “Everything went smoothly,” they said, “but there is a terrible smell in the house! We may have to tear up the carpets!”

The previous owners had a cat; they thought the cat might have been locked up in the basement during the move and perhaps used the carpet as a litter box.

I rushed over to take a look, with a big jug of Odoban in hand, but my immediate thought was “dead mouse.” Now, normally, mice don’t enter a house until the fall when the weather cools, but we’ve had a lot of rain lately, and I think any smart mouse would welcome having a nest indoors. I recently had another client who discovered a mouse nest in her kitchen, made out of paper towels. She had no idea she had a mouse problem. And she had a cat!

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Anyway, I got to my clients’ house and sure enough, as soon as you walked down the stairs into the basement you could smell something awful. I got down on my hands and knees to smell the carpet; nothing. I borrowed a flashlight and walked around the basement but I couldn’t see any tiny carcasses. And then I saw a register on the wall where the screw was sticking out by a 1/4″. Sure enough, when I opened it up, there was the dead mouse. Problem solved.

Years ago, I had clients move into a new house who were ready to move out because of the stench. They thought maybe a raccoon had died inside a wall. Once again, it turned out to be a dead mouse. It’s amazing how much a tiny little decomposing mouse can stink up a house!

Many years ago, my father (who was in his late eighties at the time) asked  if he and his girlfriend Martha could spend a week at my cottage. They’d reconnected after many decades (she was his high school sweetie) but she refused to stay overnight at his farm; I think she was afraid people would talk. So I guess they were hoping to have a little privacy, or what I called  a dirty weekend.

Now, this was a very old cottage with lots of entry points for rodents (I later tore it down and rebuilt it), and it was absolutely mouse-infested. If I set out ten traps, I’d hear snappity-snap-snap within ten minutes. So I said “sure, Dad, as long as you keep the traps set” and warned him about the infestation.

It turned into one of those steaming hot weekends  and I decided I’d best go  out to check on them since there was no phone out there if they ran into trouble and they were both elderly.  I found my dad in his underwear (gasp!) and Martha setting the table with crystal she’d brought out for their special weekend.

But I also walked into a property that smelled god-awful. “Did you check the trap-line?” I asked my dad.

“No mice in this cabin,” my father snorted. “Of course I checked the traps. Nothing there.”

I walked  over to the cupboard below the kitchen sink and opened it up and sure enough, there was a decomposing, almost dessicated, dead mouse. I held the trap up to show him with the same glee as if I was twelve again and had proven him wrong.

“Oh Roddie,” Martha exclaimed “I told you it wasn’t the broccoli!” She’d been tossing out food all week thinking that was the source of the stench.

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Now, a mouse doesn’t need gaping holes like the ones in my old cottage to get in and make itself at home.

I was showing a client a property a couple of weeks ago and we both watched in awe as a mouse flattened itself to the width of a couple of credit cards and climbed up the brick exterior and disappeared behind a soffit.

A week later, I was at a home inspection that uncovered mice in the attic – they’d excavated holes through the insulation and they were everywhere!  I’ve read they can squeeze through a quarter inch hole.

So keep an eye out, and if you smell something awful, don’t assume your cat or dog has lost its training: take a look around for mice. One hint is if the smell keeps getting worse: that’s a pretty clear sign of decomposition.

The good news? Once you find the little carcass, it only takes a few days for the smell to dissipate. (But to help my clients along, I left that jug of Odoban with them to use on the carpet.)

 

 

 

 

 

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MosaiCanada!

Ottawa was just chosen by MoneySense as one of Canada’s best cities to live in, in fact we were ranked number one! MoneySense points out that “Ottawa is a safe and affordable city that hasn’t been caught up in the real estate frenzy that’s afflicted B.C. and much of the Golden Horseshoe. It offers great access to health care and boasts a thriving cultural scene.”

One of the great things about living in the capital is that there are some really wonderful cultural events going on in Ottawa and just over the bridge in Gatineau right now because of the Canada 150 celebrations.  I went to one of them today: MosaiCanada. It was held in the Jacques Cartier Park, which is just across the Macdonald-Cartier Bridge, just a few minutes from downtown Ottawa.

The event was free, and we were able to find free 2 hour parking nearby. There are 150 sculptures on display, representing different aspects of Canada, and it’s one of the prettiest venues you could ever imagine, next to the Ottawa River and with spectacular views of Parliament Hill.

The special thing about the sculptures, though, is that they are made out of  plants!  Here’s a sample of these stunning creations: starting with my favourite, a musk oxen. That “fur” is all made of grasses! (There was an entire herd at the foot of the Inukshuk and they were all equally realistic and incredible.)

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The bison were pretty fabulous too – there were several of them, and the ground beneath them was planted with grasses and prairie wild flowers. Behind them, a herd of galloping wild horses. Gorgeous!

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What could be more Canadian than an Inukshuk and a polar bear? You can see how big the Inukshuk is by looking at the size of the tourist in the bottom left corner.

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Bill Reid’s iconic Killer Whale sculpture was replicated in plants and it was incredible: we figure that someone must have to trim this sculpture every day to keep the details so crisp.

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This pair of horses were made out of driftwood — aren’t they amazing?

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This Chinese dragon, a gift from Beijing, was spectacular! (Jaw-dropping from the look of the woman in the photo!)

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The whole thing was incredibly beautiful! Honestly, it was one of the most amazing displays I’ve ever seen, and it made me very proud to live in Ottawa and be able to see these amazing, creative works.

The display will be open daily until October: details here. Whatever you do, don’t miss this one – it’s worth a special trip to Ottawa just to see them. While we were wandering around, we overheard several people talk about how they’ve been to amazing gardens all over the world and had never seen anything as spectacular as this.

 

 

 

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Cracks in the garage floor.

I often see cracks in garage floors; heck, I even have some in my own garage. Most people assume they aren’t a problem, but that’s not always the case.

I recently previewed a home for clients that had a giant crack running from one side of the garage to the other. Outside, the crack ran up the foundation and disappeared under the siding. (I had seen a similar crack in a brick sided home before and the brick on the garage wall had all started to sag, in that familiar step-down pattern that shows structural problems.  A bit of research on that one and I had discovered it was a serious problem — the garage was attached to the rest of the house and if the foundation is sagging, it can take the rest of the house with it.)

Anyway, I contacted the listing agent of the home I’d previewed to see if he knew anything about the crack — it was obvious that someone had tried to parge it, but  that didn’t work, the crack had expanded. And he said not to worry, a garage floor isn’t structural, it’s like a basement floor with a crack in it.

But I knew that wasn’t correct. So I went back and did more research to refresh my memory. And sure enough, what I had seen was a sign of structural damage according to this website: 

Another serious concern suggested by a floor slab crack can be inferred if if the floor cracks track to corresponding cracks in the building foundation wall. If you follow a basement or slab floor crack across the surface to the foundation wall, and if you find a crack in the foundation wall which maps onto the wall from the end of the floor crack, there is risk of more serious foundation damage and further investigation by an expert is warranted.

From what I’ve read, it can be an expensive fix so well worth being cautious. Sometimes the cracks can be “mud-jacked” which means injecting concrete into the holes and spaces beneath the crack where the ground has shifted or dropped away. But it can also require breaking up and re-pouring the entire concrete floor. And in some instances, you have to lift up the entire garage to do that.

So my advice is don’t assume that a garage floor crack doesn’t mean anything, and don’t assume that your realtor is an expert if they tell you it isn’t significant. If one side of the concrete is higher beside the crack than the other, it can be a sign of serious heaving. Anything over the width of two nickels is well worth investigating. This is one of those situations where I wouldn’t rely strictly on my home inspector, either; I’d bring in someone who knows concrete/foundations. In Ottawa, I’d call Steve and Chris at Ardel Concrete Foundations – they’re the best.

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What is an escalation clause?

An escalation clause is a clause put into an offer to buy a property by the buyer that says the buyer will pay “X” more than the best offer received by the seller. It usually contains a cap. Are they a good strategy for a buyer? I don’t think so. Here’s why.

The buyer’s agent thinks an escalation clause will narrow the gap between what his client will end up paying and what the next best offer was in a multiple offer situation.

For example, the client has a maximum price in mind of $ 600K but doesn’t want to overpay. An escalation clause indicating that buyer is willing to pay $ 5K above the highest offer would mean that if the next best offer was $ 550K, the client would only pay $ 555K instead of $ 600K. That seems sensible for the buyer, right? Well, I think that’s completely wrong. Instead, the buyer has disclosed their bottom line and a savvy seller will take full advantage of it.

By specifying in the offer itself that the buyer is willing to pay up to $ 600K, the buyer is now negotiating from a position of weakness. Why would a seller ever accept an offer for $ 555K from someone who has clearly stated they are willing to pay as much as $ 600K? The smart seller will either counter the offer back at full asking price, or send all offers back and tell the buyers to come back with their best price.

So then, an escalation clause is good for the seller, right? After all, they now know what that buyer’s top price is, and assuming it is the best offer, they can take advantage of it and get top dollar. What’s wrong with that?

Well, if I am acting for the seller, the escalation clause  adds uncertainty to the buyer’s offer. Instead of being able to accept an offer, my seller has to counter back. That applies even where my client accepts the escalation clause amount , because we have to change the purchase price on p. 1 of the Agreement of Purchase and Sale to reflect whatever calculation resulted from its use, and that’s considered a counter. The buyer can then either reject our counter or counter back, and we’ve now rejected all the other offers as we can only counter back one.

Accepting the buyer’s offer also implicitly tells the buyer that the next best offer was $5K below theirs, which is a breach of our Code of Ethics not to disclose the contents of a competing offer.

If I had a close offer with no escalation clause and one with the clause in it, I’d recommend my clients take the one that didn’t have the clause, particularly if the offer was conditional. One issue I see with accepting an offer that has an escalation clause in it  is that the buyer now knows they were $ 5K ahead of the other buyer (in my hypothetical) and may use that knowledge to try to wrest concessions in price over financing or the home inspection.

Our manager says an option for us is to simply strike out the escalation clause and send the offer back to the buyer with their maximum amount written in as the new purchase price. That gets around any disclosure issues, but it is still a counter and I don’t like counters because they mean we may not have a deal.

Overall, in a multiple offer situation, I think every buyer should come in with their best offer upfront. Now that these clauses are creeping into the business, I  may well get my sellers to sign a Form 244 (Seller’s directions for sale) saying that they will not entertain any escalation clauses in offers and that they do not want to see any offers that contain them. That would force buyers to bring their best offer in from the start and without the uncertainty and ethical issues around the use of these clauses.

(Besides, I can’t even imagine what might happen if you had a whole bunch of offers with each one containing an escalation clause: it would be a real Rubik’s cube trying to sort out whose offer was best. Again, I think I’d send them all back and tell them to come back with their best offer so we can make a decision.)

Our brokerage does not recommend the use of these clauses, by the way, they think they will cause all kinds of problems, and I agree. For our governing body’s position on them, see this link to RECO’s recent article, What you need to know about Escalation Clauses. 

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Staging works! Another example.

I helped a friend get a townhouse ready for renting over the weekend. It’s an older unit in a complex where two other units are also for rent. So the first thing we agreed was that the rent needed to be lower than theirs. And I decided it could use a little staging.

On a rental, it’s not worth staging the entire property: it would be prohibitively expensive. But you can do a lot in a kitchen and baths, and in a few key areas.

Here are my before and afters.

There is a beautiful wood-burning fireplace in the living room but nothing to show it off as a focal point. Nothing fancy – a few vases, a plant and a picture and what a difference!

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The main floor powder room was convenient and cute, just needed to be dressed up a little to show it off.

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Same with the upstairs MBR ensuite. I don’t have a “before” picture, but I can show you how I changed my mind about having a white shower curtain and went with something with more interest.

I hung the white shower curtain first but then I thought it didn’t really do much for the room. Better, but not enough.

The shower and tub surround is made up of beige tiles with peachy-red accents and looked a bit dated. While the white shower curtain hid the surround, the new one works with those accents and makes the room seem more modern. (You’ll note how I picked up the peachy-red in the floral arrangement as well.) Since the MBR has a light teal cupboard, I used a shower curtain that had a similar tone it as well.

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Much more interesting, don’t you think?

I didn’t do much with the kitchen, but it had a couple of open areas above and beside the fridge that I thought were a little odd, so I staged them with  a wooden tray, some interesting vases and cookbooks to draw the eye away from the white spaces.

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And then I popped in a few accessories on the counters and to dress up the empty shelves and add a little life.

Did it work?

Well, we’ve had four or five showings already; there was a showing this morning with someone who is very interested and we have a realtor showing tonight. So I would say yes, definitely!

 

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Flooding! What you need to do to protect your home (now and in the future) #Ottawa

Ontario is facing massive flooding at the moment; the photographs coming out of places like Rockland, east of Ottawa, and Gatineau, on the other side of the river, are astonishing. (Photos courtesy of http://www.cbc.ca)

Photo published for Quebec set to provide update on severe flooding

Photo published for Ottawa-Gatineau flooding: Maps of road and path closures

We have a lot of parts of the city where homes are constructed on flood plains; in some areas, like Britannia Heights, berms that were constructed a few years ago are holding, but in others, anxious homeowners are watching their belongings float away.

What can you do to protect your home now and in the future?

If you know you’re in a flood plain, move your valuables to the second floor and put your furniture up on blocks if you can. But the most important thing once the flooding starts is to get out of there ASAP.  Evacuation in Ottawa is not mandatory at the moment, but it’s not a good idea to stay in your home; it’s going to be very hard for first responders to get to you if there’s a problem. (Photo courtesy of 1310 News)

Turn off your power. If  water has reached your wall plugs or is above your baseboard heaters, do not enter the basement: there is a serious risk of electrocution. Don’t take any chances by going back in again on your own, either. And once you do re-enter, after the water level has gone down, do not turn the power on yourself: let your utility company do that. They will have to disconnect the meter first.

 

Once you are safely out of your home, call your insurance company to find out if you’re covered.  Flooding is considered an Act of God and may not be included in your policy unless you paid the extra premiums for a rider.

If you are insured, your insurance company can give you advice on what to do next: you may be covered for hotel and other expenses while you are out of your home.If not, call your city councillor. In some parts of the city, hotel rooms have been reserved and other spaces have been set aside. You’re not alone.

Once the flooding is over, take pictures and make a list of the damage. But don’t just assume that because  the water is gone that your property is safe to live in. There may be mould  behind the drywall.

If  you are insured, your insurance adjuster will take care of remediation, but if you aren’t, get someone with a thermal imaging camera over to take a look and  see what’s damp (most home inspectors have these). Drywall wicks water: whatever is wet needs to go. Pull it all up: carpet, drywall, plywood, anything that’s wet.

Mould can ruin a house quickly and the spores travel from room to room. With warm weather around the corner, you’ve really got to get anything damp out of the house or dry it out as soon as you can. Use plenty of fans; open the windows.  Wipe down walls with bleach or a product specific to mould, and be sure wear a face mask. Throw out anything that got soaked that can’t be salvaged. That includes the appliances if they got wet, too – don’t take a chance on anything electrical. Wires  might short out and cause a fire or worse.

After all your efforts if you see signs of mould, hire a contractor that can deal with mould remediation.

Flooding can happen any time — it isn’t always from weather, it can come from burst pipes or a sewer backup. Be sure you have that extra coverage when you renew your policy next year; for the extra $ 80 or so bucks, it’s well worth it.

One more thing: Ontario has a Disaster Recovery Program that can help with repair costs once you’ve dealt with insurance, or don’t have it. It’s a $ 500 deductible and you only have 120 days to apply. Be sure to keep a list of all damaged items, and remember to hang onto those photographs. Here’s the link.

And if you aren’t affected and want to help, the City of Ottawa doesn’t need volunteers but Gatineau does need help with sandbags. You can call 819-595-2002 to find out more or call 3-1-1 if you are in Gatineau. Finally, Constance Bay Community Centre has put out a call for volunteers to help with sandbagging efforts.

 

 

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