My son was a Laurier student recently graduated was renting in Waterloo. Had no intentions in buying a property so did not do any sort of property analyisis for positive cash flow. A house came up for sale across the road. Asking price 189.900 . the house is a raised bungalow 40 years old around the corner from high tech park in Waterloo, close to U of W, shopping, bus stop across the road. We offered 188,000 was accepted houses in that area three years ago with upgrades were going for around $220,000. The house past inspection but needed a new roof, furnace and some windows. We put a roof and new furnace in rent paid for part of expenses. The house was in good condition hard floors and did not need any work. We plan on doing cosmetic changes when we sell.When my son moves out I will only be able to have three students since I will not be able to get a license (legal license property across the road). We did not know (nor did my real estate agent know about the 75 metre zoning bylaw for licensed student housing. We were planning on dividing the rec room to have a fifth bedroom. Five students you make your money. With three students I might have a slight negative cash flow because I will have to pay for student insurance $2000 a year when my son moves out. I just want some feedback that even though I cannot get a license was it still a good solid investment since KW is number one place to invest. We plan on holding it if we can afford to for at least another 5 years bought in 2003.
feed back on investment
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What property do you own? Maybe I`d like to buy it.
I do property management in Waterloo and specialize in student housing.
Realtor unaware of lodging house license - Its been my expereince that everyone and there mother is aware of lodging houses in Waterloo - non investors included because students make up such a high % of population in certain areas that it affects the community. There should be no excuse for a realtor not being able to inform you of this prior to purchase. Have you taken this up with their brokerage? Did the realtor offer any compensation or refund of buyer agency fee?
Insurance - $2000/year is way too high for 3-4 student renters - I have a 15 bedroom one that costs about $2150 - I think a 6 bed duplex insurance is ~ 1300.
As for your question:
It will depend on your specific property and your goals whether you should hold on to it. Keep in mind there`s never any guarantee of appreciation, you can be have large unexpected maintenance expenses, tenants defaulting and causing damage. Considering how low rental rates on residentail properties vs student poperties if you`d consider a longer time span (due to transaction costs) it would likely be worthwhille for you to sell your house and purchase one with an accessory apartment - this should allow you to maintain your leverage to general waterloo area housing prices well also offering upside in the investment market, and much better immediate cash flow from operations.
QUOTE (invest @ Nov 17 2007, 07:33 AM) My son was a Laurier student recently graduated was renting in Waterloo. Had no intentions in buying a property so did not do any sort of property analyisis for positive cash flow. A house came up for sale across the road. Asking price 189.900 . the house is a raised bungalow 40 years old around the corner from high tech park in Waterloo, close to U of W, shopping, bus stop across the road. We offered 188,000 was accepted houses in that area three years ago with upgrades were going for around $220,000. The house past inspection but needed a new roof, furnace and some windows. We put a roof and new furnace in rent paid for part of expenses. The house was in good condition hard floors and did not need any work. We plan on doing cosmetic changes when we sell.When my son moves out I will only be able to have three students since I will not be able to get a license (legal license property across the road). We did not know (nor did my real estate agent know about the 75 metre zoning bylaw for licensed student housing. We were planning on dividing the rec room to have a fifth bedroom. Five students you make your money. With three students I might have a slight negative cash flow because I will have to pay for student insurance $2000 a year when my son moves out. I just want some feedback that even though I cannot get a license was it still a good solid investment since KW is number one place to invest. We plan on holding it if we can afford to for at least another 5 years bought in 2003.
I do property management in Waterloo and specialize in student housing.
Realtor unaware of lodging house license - Its been my expereince that everyone and there mother is aware of lodging houses in Waterloo - non investors included because students make up such a high % of population in certain areas that it affects the community. There should be no excuse for a realtor not being able to inform you of this prior to purchase. Have you taken this up with their brokerage? Did the realtor offer any compensation or refund of buyer agency fee?
Insurance - $2000/year is way too high for 3-4 student renters - I have a 15 bedroom one that costs about $2150 - I think a 6 bed duplex insurance is ~ 1300.
As for your question:
It will depend on your specific property and your goals whether you should hold on to it. Keep in mind there`s never any guarantee of appreciation, you can be have large unexpected maintenance expenses, tenants defaulting and causing damage. Considering how low rental rates on residentail properties vs student poperties if you`d consider a longer time span (due to transaction costs) it would likely be worthwhille for you to sell your house and purchase one with an accessory apartment - this should allow you to maintain your leverage to general waterloo area housing prices well also offering upside in the investment market, and much better immediate cash flow from operations.
QUOTE (invest @ Nov 17 2007, 07:33 AM) My son was a Laurier student recently graduated was renting in Waterloo. Had no intentions in buying a property so did not do any sort of property analyisis for positive cash flow. A house came up for sale across the road. Asking price 189.900 . the house is a raised bungalow 40 years old around the corner from high tech park in Waterloo, close to U of W, shopping, bus stop across the road. We offered 188,000 was accepted houses in that area three years ago with upgrades were going for around $220,000. The house past inspection but needed a new roof, furnace and some windows. We put a roof and new furnace in rent paid for part of expenses. The house was in good condition hard floors and did not need any work. We plan on doing cosmetic changes when we sell.When my son moves out I will only be able to have three students since I will not be able to get a license (legal license property across the road). We did not know (nor did my real estate agent know about the 75 metre zoning bylaw for licensed student housing. We were planning on dividing the rec room to have a fifth bedroom. Five students you make your money. With three students I might have a slight negative cash flow because I will have to pay for student insurance $2000 a year when my son moves out. I just want some feedback that even though I cannot get a license was it still a good solid investment since KW is number one place to invest. We plan on holding it if we can afford to for at least another 5 years bought in 2003.
Thanks for your reply. We could have got out of the deal since my real estate agent new our intentions so my lawyer stated. I am from Elora and my real estate agents office is in Fergus (does not sell in Waterloo). In all fairness to him we did not give him much notice for his help. (is also a friend) We were told the property would go fast because of the price. It had not gone on the mls listing but was about to. It happened so fast we did not have time to look into anything. The real estate agent for the couple we bought off should have said something to my real estate agent. From what I have read the day you make your money is the day of purchase. I don`t think I overpaid for the property. As for appreciation the house next door which was not in very good shape on the inside and was reroofed after purchase went for $215,000 this summer. I should be able to get $220,000 as is right now. I am not a real estate expert but I think that is not a bad appreciation in two and a half years. What do you think? I thought KW area has not yet peaked in appreciation from what I have read. When I look at the price of the student houses I would have had a much larger mortgage so I think it all evens out.(if I was looking for detached with five bedrooms.)
Where do you get your insurance? Right now I am with Toll insurance but was told when my son moves out they will not insure. I got my quote from Sutherland insurance in Guelph.
Why has Waterloo set the limit to three but in Guelph you can have four with no license? I don`t think they are as stringent as Waterloo. My friend bought a semi with four students took over lease and it is not licensed. Four students rent would give me approx $500.00 extra a month after my expenses. But three is leaving it tight. Hopefully nothing major goes wrong. Our goal was not to have the property more then 10 years. If Don Campbell is right about the area I can`t see it not appreciating. The same house in Elora which is very expensive for a small community would have been $20,000 more. We were surprised at the price of this house I guess that is why we bought it.
Thanks again for your advice.
Where do you get your insurance? Right now I am with Toll insurance but was told when my son moves out they will not insure. I got my quote from Sutherland insurance in Guelph.
Why has Waterloo set the limit to three but in Guelph you can have four with no license? I don`t think they are as stringent as Waterloo. My friend bought a semi with four students took over lease and it is not licensed. Four students rent would give me approx $500.00 extra a month after my expenses. But three is leaving it tight. Hopefully nothing major goes wrong. Our goal was not to have the property more then 10 years. If Don Campbell is right about the area I can`t see it not appreciating. The same house in Elora which is very expensive for a small community would have been $20,000 more. We were surprised at the price of this house I guess that is why we bought it.
Thanks again for your advice.
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I see - I`d still examining selling the property, and purchase one that has a good cash flow, so even if it doesn`t appreciate much you have a decent ROE from operations.
Where is your property located (Address?)
Insurance - Van allen insurance should be able to help, please let them know Adam Hoffman referred you -
Marg Ten Hove
RIBO
Van Allen Insurance Inc.
622 Elma Street West
Listowel, ON N4W 1W3
Telephone 519-291-2470
Fax 519-291-2471
[email protected]
Where is your property located (Address?)
Insurance - Van allen insurance should be able to help, please let them know Adam Hoffman referred you -
Marg Ten Hove
RIBO
Van Allen Insurance Inc.
622 Elma Street West
Listowel, ON N4W 1W3
Telephone 519-291-2470
Fax 519-291-2471
[email protected]
- Joined
- Aug 29, 2007
- Messages
- 2,042
My take on the property is that based on the info you gave, no license, repairs needed, comps in the area, you paid market value ( no money made going in) and now have approx. $200000 invested (purchase price plus repaires). Estimating 5% interest holding this property is running around $10000 per year in interest and lost income on cash. Expences for, vacancies, advertising, repairs, matinance,taxes, insurance, etc run at 50% of rental income over the term (some years 0% others through the roof) I would say with 3 renters (guessing $1200-$1500/month rent) you will have a negative cash flow of $750/month if you hold this property.
You can speculate on appreciation but, after 21/2 years, if you sell at $220000 you wouldn`t even break even on this property due to real estate fees and expences.
Having said that it would be my advice to sell now while your son is still there. It may be difficult to get your price locally due to the lack of license, and it will take time, so advertise externally to reach parents of next years students.
You can speculate on appreciation but, after 21/2 years, if you sell at $220000 you wouldn`t even break even on this property due to real estate fees and expences.
Having said that it would be my advice to sell now while your son is still there. It may be difficult to get your price locally due to the lack of license, and it will take time, so advertise externally to reach parents of next years students.
QUOTE (invst4profit @ Nov 19 2007, 12:44 PM) My take on the property is that based on the info you gave, no license, repairs needed, comps in the area, you paid market value ( no money made going in) and now have approx. $200000 invested (purchase price plus repaires). Estimating 5% interest holding this property is running around $10000 per year in interest and lost income on cash. Expences for, vacancies, advertising, repairs, matinance,taxes, insurance, etc run at 50% of rental income over the term (some years 0% others through the roof) I would say with 3 renters (guessing $1200-$1500/month rent) you will have a negative cash flow of $750/month if you hold this property.
You can speculate on appreciation but, after 21/2 years, if you sell at $220000 you wouldn`t even break even on this property due to real estate fees and expences.
Having said that it would be my advice to sell now while your son is still there. It may be difficult to get your price locally due to the lack of license, and it will take time, so advertise externally to reach parents of next years students.
Responding to your reply:
I think I would be stupid to sell now I would like to make some money on this property. My goal is to have renters pay my mortgage and sell in the future. I know I did not buy under market value but I did not overpay. You really cannot comment if you have not seen my property or what is coming in and what I am paying out. As I said was not even looking at investment property price was right bought it. I was hoping to have some postive feed back on my purchase.
is in The The home is in good shape it was looked after well just tired. I would be crazy to sell now. All I know I bought a detached home for under $200,000 dollars in an area that has the most growth potential. I am not going to be rich on this investment but I will make money when I sell,but I have to hold. (that was my goal) There are no repairs needed at this time the roof and furnace was the only thing we knew when we purchased. Actually the furnace could have lasted it did not break down we chose to replace it with a high efficiency furnace figured we would save on gas bills and add value bonus rent paying for the bulk of it. Rent this year paid for new roof.
Don Campbell states the tech triangle there are not many cash flow properties but has the greatest potential to increase in value in Ontario. Remember economic fundamentals. I am near industry universities, growth potential, steady flow of students in the area. (I hear they love houses). It would be nice to be able to have four or five not meant to be. At least I do have the option with students to rent rooms as opposed to just families. Last year when I looked for new tenants I had no problem finding them. By the way advertising is cheap I work at a high school, also off campus housing website is only $20.00 a month. I had renters the first month I advertised.
I hope to hear form someone who thinks it was not a bad investment.
You can speculate on appreciation but, after 21/2 years, if you sell at $220000 you wouldn`t even break even on this property due to real estate fees and expences.
Having said that it would be my advice to sell now while your son is still there. It may be difficult to get your price locally due to the lack of license, and it will take time, so advertise externally to reach parents of next years students.
Responding to your reply:
I think I would be stupid to sell now I would like to make some money on this property. My goal is to have renters pay my mortgage and sell in the future. I know I did not buy under market value but I did not overpay. You really cannot comment if you have not seen my property or what is coming in and what I am paying out. As I said was not even looking at investment property price was right bought it. I was hoping to have some postive feed back on my purchase.
is in The The home is in good shape it was looked after well just tired. I would be crazy to sell now. All I know I bought a detached home for under $200,000 dollars in an area that has the most growth potential. I am not going to be rich on this investment but I will make money when I sell,but I have to hold. (that was my goal) There are no repairs needed at this time the roof and furnace was the only thing we knew when we purchased. Actually the furnace could have lasted it did not break down we chose to replace it with a high efficiency furnace figured we would save on gas bills and add value bonus rent paying for the bulk of it. Rent this year paid for new roof.
Don Campbell states the tech triangle there are not many cash flow properties but has the greatest potential to increase in value in Ontario. Remember economic fundamentals. I am near industry universities, growth potential, steady flow of students in the area. (I hear they love houses). It would be nice to be able to have four or five not meant to be. At least I do have the option with students to rent rooms as opposed to just families. Last year when I looked for new tenants I had no problem finding them. By the way advertising is cheap I work at a high school, also off campus housing website is only $20.00 a month. I had renters the first month I advertised.
I hope to hear form someone who thinks it was not a bad investment.
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Good post invst4profit
Invest - What is the address of your property?
Invest - There are lots of cheerleaders in real estae - pretty much everyone you talk to - you should welcome the free consulting that is being provided to you
You purchase wasn`t a good investment - investments don`t cost you money each month - your property is a liability.
For certain there are cash flow properties in the tech triangle - its called Waterloo Student housing and management intensive low income renters - Where else can you buy a townhouse for $189k that rents for $2065/month? Or a 6 plex that rents for $3935/month with an asking price of 339k? etc.. You can even purchase detached houses with accessory apartments and get 6 legal beds without a license out of some of them.....
You should expand your time horizon to never sell and look for a property that generates a nice ROE from operations even without any capital appreciation - pay off your mortgage in 10 years time with cash flow generated if you don`t need the cash immediately
- Seems like your throwing away $800 rent each month to avoid paying $10 000 in transaction costs - All for gambling on capital appreciation which might not happen, and which you can be exposed to on a property that generates nice cash flow.
Invest - What is the address of your property?
Invest - There are lots of cheerleaders in real estae - pretty much everyone you talk to - you should welcome the free consulting that is being provided to you
You purchase wasn`t a good investment - investments don`t cost you money each month - your property is a liability.
For certain there are cash flow properties in the tech triangle - its called Waterloo Student housing and management intensive low income renters - Where else can you buy a townhouse for $189k that rents for $2065/month? Or a 6 plex that rents for $3935/month with an asking price of 339k? etc.. You can even purchase detached houses with accessory apartments and get 6 legal beds without a license out of some of them.....
You should expand your time horizon to never sell and look for a property that generates a nice ROE from operations even without any capital appreciation - pay off your mortgage in 10 years time with cash flow generated if you don`t need the cash immediately
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Sorry invest. Some times I lie to my wife when she asks if I think she is gaining weight. That dosn`t cost her or me any money and avoids hurt feelings.
On the other hand I don`t like to see others lose money and am honest as possible with others regarding there investments when asked. You asked "was this a good solid investment". Actually based on your own words this property is speculation not investment. An investment earns income , speculation is gambling on apprecation.
I don`t have to see your property to know what the costs and expences will average. Rental expences WILL eat up 45% to 50% of the rent (excepting slum landlords) leaving the rest to service the loan plus profit.
I believe you will hemorage cash, suffer through the normal nightmares of student rental and ultimatly be thankful to be out from under this property.
You don`t know me so gather all the info you can, take my oppinion with a grain of salt and develope a landlords thick skin.
On the up side you did buy at market value and.......well....I don`t know what else to say.
Honestly, good luck
On the other hand I don`t like to see others lose money and am honest as possible with others regarding there investments when asked. You asked "was this a good solid investment". Actually based on your own words this property is speculation not investment. An investment earns income , speculation is gambling on apprecation.
I don`t have to see your property to know what the costs and expences will average. Rental expences WILL eat up 45% to 50% of the rent (excepting slum landlords) leaving the rest to service the loan plus profit.
I believe you will hemorage cash, suffer through the normal nightmares of student rental and ultimatly be thankful to be out from under this property.
You don`t know me so gather all the info you can, take my oppinion with a grain of salt and develope a landlords thick skin.
On the up side you did buy at market value and.......well....I don`t know what else to say.
Honestly, good luck
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Invest4profit,
I`m wondering if you own any rental properties and if so how long have you owned them?
I`m wondering if you own any rental properties and if so how long have you owned them?
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- 2,042
Owned my rental properties many years ago. Started my family and stopped managing the properties myself. I had so much trouble with property managers that i sold out to my brother. Took the secure employee path. Invested in funds, someone else manage them. I have stayed involved through my brothers properties but now that the kids are gone and I am facing retirement I am getting back in.
My re-involvement in ownership is what got me onto this site and others. On the surface the game appeares to have changed alot but the basic principals are the same. Presently only have 2 properties.
I have looked at lots more but they didn`t fit my business plan. I have very strict guidelines that are not easy to fill. Going to look at another one on monday. It`s an old 3 bed 2 story that the agent says needs some cosmetic work. I can only guess what that means. Apparently a university student inherited it this past summer and want`s to sell to pay his education. I expect he can`t pay the bills so will be motivated to sell. Asking 129,000, no offers, so might work out for me but not at that price. May work better as a flip. Have also heard of an old triplex that is part of a estate. I prefer lower range multy units away from the city.
My plans are modest, I am not interested in being rich, I intend to work back up to 10 good solid units in the next 5 years to hold and manage myself when retired.
My re-involvement in ownership is what got me onto this site and others. On the surface the game appeares to have changed alot but the basic principals are the same. Presently only have 2 properties.
I have looked at lots more but they didn`t fit my business plan. I have very strict guidelines that are not easy to fill. Going to look at another one on monday. It`s an old 3 bed 2 story that the agent says needs some cosmetic work. I can only guess what that means. Apparently a university student inherited it this past summer and want`s to sell to pay his education. I expect he can`t pay the bills so will be motivated to sell. Asking 129,000, no offers, so might work out for me but not at that price. May work better as a flip. Have also heard of an old triplex that is part of a estate. I prefer lower range multy units away from the city.
My plans are modest, I am not interested in being rich, I intend to work back up to 10 good solid units in the next 5 years to hold and manage myself when retired.