Any experience with Regina SK older homes?

Jay Black

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Hi there - my family has an older home in Regina (good neighbourhood) and they have been trying to sell it for a year now. No luck. Worst possible timing for them. My wife and I are trying to stay out of the picture as another sibling fronted the cash for the property so we don't want to overstep any boundaries.

As for the house - very nice home, non compliant suite in the basement which has always been a good money maker when the market was booming with workers. New floors, new bathroom, updated cabinets, new paint etc. Overall in very good condition for an older home.

Almost everyone who comes in to view the property comes in with a marble, sets it on the floor, sees that it is not level and walks out. The showings last about 3-5 minutes. There have been 50+ showings and not one offer.

Does anyone have any experience with these older homes in the Regina area and foundation/settling issues? Apparently, the engineer has said that almost all of the old homes suffer from this problem. The homes are built on clay and they are all sinking. They have been quoted 25K to brace 3 walls and get it level.

Option 1 - lower the price significantly and unload the property
Option 2 - rent it out and wait for prices to start to climb again in Regina
Option 3 - do the reno work and relist.

Just wondering if anyone here has any experience with this specific market and older homes? Also, what is the rental market like in Regina at this point?

Thanks again!
 

kfort

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This is but one of the reasons why for the last decade + I have walked away from every single opportunity I’ve been contacted about in Regina. Absolute garbage soil nearly everywhere within city limits. Drive down quance st at full speed limit and tell me I’m wrong, just hold on to your coffee and don’t wear a white shirt...

Do not expect any truly noticeable appreciation (certainly not enough to cover $30k foundation work) in the next few years.

Also don’t expect much change in the rental market over the next few years. Really really slow growth is what I would budget for.

If it was me, I would unload it. And if the listing realtor didn’t advise you that the listing price was way too high (50 showings and no offers = way way too high) I’d fire them and re-list at market value. And I mean actual market value in current condition. Foundation and all.

Basically every house built pre-1990 has this issue. And every house post-1990 is coming soon. Heck harbour landing was built on cat tails (swamp) and the millennials who all think they need mommy and daddy to back them on a new house will be dealing with this in 15 years.


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Jay Black

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Hey Kris - thanks for the reply and the insight. Good to know that others have seen this issue and its not just the contractor stringing them along. That is crazy that the entire city is dealing with those kind of soil/foundation issues. We live and invest in Kelowna and we don't know the Regina market that well.

I am extremely surprised that the agent hasn't told them to lower - it has been listed since Jan 14 - with 50+ showings and is obviously overpriced. Maybe the agent has told them to lower, but the other parties involved have said no - I am not sure.

They paid $275K for it and its listed at $269K. It should likely be around $230-$240K.

Impossible to predict, but I would assume they would be looking at at least a 5 year rent/hold before values start to work their way back up?Carry costs are $1500mo. Its a 3bed/1.5bath up, 2bed/1bath down so would assume that would pull enough to cover but I would have to dig into it.
 

kfort

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50 in 2 months is a little different. I’d say it’s that suite that is pulling people in.

I’m expecting basically 1.5-2% appreciation in Saskatoon annually (barely enough to quantify) and I would say Regina will be a little lower than that. As a suited house that will absolutely cash flow if it is in reasonable condition.

Considerations:
Is it legal? ..I’m not talking conforming, I’m talking legal. Zoned appropriately.

Do they really want to be landlords?


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kfort

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50 in 2 months is a little different. I’d say it’s that suite that is pulling people in.

I’m expecting basically 1.5-2% appreciation in Saskatoon annually (barely enough to quantify) and I would say Regina will be a little lower than that. As a suited house that will absolutely cash flow if it is in reasonable condition.

Considerations:
Is it legal? ..I’m not talking conforming, I’m talking legal. Zoned appropriately.

Do they really want to be landlords?


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Jay Black

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It is a non conforming suite. Doesn’t even have a window in the basement. No stove downstairs though. We have legal suited units in Kelowna but I know the rules are different everywhere.

Yes it’s in very good condition - ideas as to what it could rent for up and down? Would need to hit 2k to basically break even.

I am considering buying them out and holding it until the balance goes down/market adjusts and then dealing with it down the road. My wife and I have plenty of experience with buy and hold, and are in a position financially that we can help. They are getting older and need to get out of that city. They will be moving to Kelowna into one of our rentals.

Thoughts?
 

kfort

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For a 3/1.5 up & 2/1 down in Saskatoon I routinely get $1600 up (tenant pays power) and $1150 down (tenant pays power). $100- 125/ garage stall, $100- $150/ dog, $75/ cat monthly.

That said, my marketing approach is completely different than anyone else & I target dog owners almost exclusively. I had 9 turnovers last summer and raised rents on every one of them. 2+ years at 0% vacancy and from memory, 6-8 months vacancy total for a unit the last decade.

If you can’t get $2,000 total for that house something is very wrong.

Pay attention to the lifespan of the home, make sure it’s at least 10 more years. Cut the realtor commission out if you’re buying from a family member and there’s a few percent right there. You’ll be paying commission on the backend though I’d say.

If you cant cash flow a suited house in Regina at $275k total purchase price you are making very large mistakes somewhere!


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kfort

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Forgot to mention, make sure you have immediately on hand the TOTAL cost to retrofit that suite to today’s fire code. No window in the basement is downright scary, I’d cut one in before I even rented it.


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Jay Black

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Wow those are great rents in Saskatoon. I will do some digging to see what similar units are renting for in Regina. Great call on the dog friendly approach - is that $100-$150 a month extra that you tack on?

Are you allowed pet deposits in SK? In BC, we rent to dog owners and takehalf a months rent deposit.
 

kfort

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Yes that is a monthly increase for the animals.

I put it right on the lease as regular rent so that I can take an larger deposit (1 month allowed) as well. Lease states no pets, they sign a separate agreement saying pet X can stay providing blah blah blah...

Kijiji is currently your only real place to advertise (stay tuned on that!) and ~5% allow pets (click the pet friendly link). 5% of those allow dogs.

And nobody else that I know of WANTS dog owners. But they stay longer, they pay more, and a $3 box of dog treats when you send someone bye makes you literally their best landlord experience but a mile.

Fire me an email if you’d like to chat more about marketing, or search my old posts here for some tips too if you like. I’ve done a boatload of work & research on what works for this market... I’m talking running test ads for 13+ months narrowing down as far as even time of day, headline format, and thumbnail testing etc to post for maximum click through..

You can be average if you like, but it isn’t that hard to be better.


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Jay Black

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Great - will definitely fire you off a PM if we decide to make a move on this place. I think the best play is for them to just unload it and everyone can be done with it - but we will see!

Thanks again for the info/advice!