What`s up (or should I say `down`) with Barrie!?

[RArora]

2.5 years back when I joined REIN Barrie was supposedly a great place to invest. We cautiously did some homework and bought a townhome there. Let`s just say Barrie has given us the most headaches.
Now to top it off the neighboring property has listed their home at the price that we bought the house for TWO YEARS back! What is happeneing and why? Is there any future really and should we be holding onto this home? Tenant profile is also not great in the town. 4 people have walked away from signed leases, 3 have not paid 1 mnth`s rent before leaving. and the others have been constantly late.

ANyone else having issues with Barrie properties as well?
ANy advice is welcome.

Thanks

 

[Rickson9]

Speaking for myself, I would sell. It is possible that you may have overpaid for that property. Good luck and best regards!

 

[Thomas Beyer]

QUOTE (RArora @ Dec 14 2010, 11:44 AM)
..Now to top it off the neighboring property has listed their home at the price that we bought the house for TWO YEARS back! ..


take a 5+ year view .. 2 years ago was still the end of the boom .. so if prices today are about the same: YOU'VE DONE WELL !!



WHERE IS THE PROBLEM ?



With rising mortgage rates 2011 will be a better year to rent .. albeit prices FLAT'ish .. for a good 2012 with slightly rising prices and rents .. and possibly a new conservative government Ontario will turn around ..



did you pay more than 12 times annal rent for this townhouse ?



Also consider to improve your property management skills or hire/fire/replace 3rd party ..

 

[RArora]

I`m trying to stay focussed on my original plan of 5 yrs for all homes, especially this one. Just gets a little disheartening-especially this yr has been awful.

We do have a PM co. we hired. AG Secure PM.
I wondered if I`m the only one having trouble or if this is pretty much what other Barrie investors are facing as well. and what they`re doing about it-if anything.

As always your advice is greatly appreciated Thomas. Infact its what I always take seriously, so thank you.
Here`s hoping things will get better. If tenants would just stick to their lease and pay on time, it would be wonderful.

Merry Christmas and a very Happy New Year.

 

[housingrental]

Hi Rasna
Have you been through the other unit for sale? Is it the same layout and in same condition with same features as the on you purchased?

 

[RArora]

QUOTE (housingrental @ Dec 14 2010, 12:05 PM) Hi Rasna
Have you been through the other unit for sale? Is it the same layout and in same condition with same features as the on you purchased?

There are no pictures of the home on mls Adam. but its probably just the same as its the neighboring home. also, I was told by my PM that a lot of investors ended up buying homes in that area (close to the GO station) so, it attracts only tenants and they are not the best kind it seems. and the landlords are not taking great care of the property. infact the owner of this home hasn`t fixed the damage done by his tenant`s oil leaking car on our driveway.

 

[CamMcCarroll]

Rasna,

On the vacancy side of things:
Sounds like some property management issues. We`ve got a few "doors" in Barrie that have had very little vacancies over the last 2 years. They are multis so I can;t comment on the single family rental market, but my sense is Barrie has a fairly strong tenant profile that can be attracted when marketing is strong and units are in good condition.
Perhaps investigate ads, and screening if done by your PM - have clear standards and expectations and communicate them clearly. if they don`t meet them, don`t settle and find someone who understands what you want.

I would agree with Thomas about appreciation over the last 2 years.

 

[JoeRagona]

Hi Rasna,

If I recall, you have the property on the same street I have several. I have no issues there, in fact my tenants are of the best you can find there. I chalk this up to my initial advertising and screening system. When I had vacancies there (two at once) I continued to press forward and fix what was wrong - (my advertising)

As well, you must look at investing for at least five years. Just because the property is still worth the same, as Thomas suggested, you are doing well - IF YOU ARE CASH FLOWING. From what I recall, you purchased a larger townhome in the high 230 - 250 range which would demand over $1500 a month in rent - sometimes that may be tough in this area.

Selling today will have you lose money. If you did your initial due diligence, you should not worry about the prices levelling off, in fact you should look at purchasing more imo

 

[invst4profit]

My guess is, as others have suggested, that your PM company is not doing a very good job in screening tenants.
Sit down with them and have them go over their screening process in detail and make it clear to them what your expectations are.

Likelihood is you will need to change companies.

 

[JimWhitelaw]

QUOTE (ontariolandlord @ Dec 14 2010, 10:48 PM)
Barrie is a horrible place to invest.


Could you please elaborate? I'm interested to know why your analysis differs from that given by REIN. Not challenging you on it (I don't know the area and don't invest there, so no skin in the game for me), I just want to know what your data and analysis looks like. Thx.

 

[housingrental]

From past posts I can gather that:



He does not like the quality of tenants that are to be found

He does not like the LTB in Barrie and he views them as notably anti-landlord



Over the last few years and repeated comments he has not been willing to provide more information than that - Ontariolandlord I'm sure you have lots of useful information to share to help others - Let us know your thoughts




QUOTE (JimWhitelaw @ Dec 15 2010, 01:35 AM)
Could you please elaborate? I'm interested to know why your analysis differs from that given by REIN. Not challenging you on it (I don't know the area and don't invest there, so no skin in the game for me), I just want to know what your data and analysis looks like. Thx.

 

[JoeRagona]

QUOTE (JimWhitelaw @ Dec 15 2010, 01:35 AM)
Could you please elaborate? I'm interested to know why your analysis differs from that given by REIN. Not challenging you on it (I don't know the area and don't invest there, so no skin in the game for me), I just want to know what your data and analysis looks like. Thx.






Jim, Barrie is a great place to park money. The growth going on through development and revitilization have kept the area strong throughout the downturn and I only see good things moving into 2012/13. If you are in it for the long haul, you can sit under the radar in areas that will benefit from the ripple effect of the new developments. Just as REIN teaches.



I don't know what OntarioLandlord is talking about, but everyone has their demons.

 

[RArora]

Thanks Joe. Yes, you remember correctly. It was for around that much and this yr after a tenant with a signed lease walked away before the move-in date and no deposit being collected by the PM co., we were forced to reduce rent to $1400. the new tenant who moved in end of June have now found another home and want to sub-let so someone else will move in Feb hopefully and pay the rent on time I hope. The PM co. has been asked every time to collect first and last month's rent on lease signing but he refuses to do so saying it is not legal. However any other co. we have ever used in Ottawa or from our own experience that is the norm and no one challenges it.


another new thing is that the tenants whose checks were going NSF were being given an N4 and asked to pay the NSF fee+$20admn fee. However we never recvd the admn fee. I was told that the landlord isnt given that fee but it is kept by the PM because of the extra running around. But I thought that's why we pay a high 10% to them for-for the times they have to do the running around. Does anyone know if that is the norm or is this just another thing that is not correct here?





I am also considering filing a claim in small claims court for the tenant who moved out with $700 of damage (carpet) and unpaid rent of $1500. we have a signed form from her accepting the damage report and the N4 and other mails with her 100 promises of settling that. Now she has just gone silent and I am considering persuing legal action. Has anyone done that in Barrie or in Ontario generally? what are the costs and timelines involved realistically?


Thanks everyone for your suggestions.


ANy other suggestions for a good PM company are also welcome.


Regards

 

[JoeRagona]

Rasna,


Seems like you are having just a bit of a challenge - nothing new in Real Estate investing. For the PM situation, it does sound odd they do not want to collect first and last. Also, they are not supposed to keep the NSF fee in my opinion ESPECIALLY if you are paying that high of a percentage.


If you are unhappy with the PM, change them - it's that simple.


Also be aware that it's a two way street, so we have to allow them to do their job the way that is most comfortable for the both of you which is why its important to do your diligence on anything before moving forward.


I'm not sure what your intentions of this property was, but if you are expecting things to stay static or just go up in a linear line, you may have to re-adjust your plans. Dips and Peaks will happen in any business and when looking at your original post it seems you are concerned a lot about Barrie's growth during the last two years which have been the most challenging economically. I think we did fine there.


The small claims court is your decision and it may be more of a hassle IMO. My dealings with problem tenant was much worse than yours. Cost me $5000 in lost rent PLUS $2500 to pay them to leave peacefully and leave my house in tact.


Another midnight move cost me about $3000. I'm not saying the money you are out is worthless, but in the end is it worth your time and effort to go after this amount when legal costs could be more than what you recover? Isn't this why we have a Staying Power Fund also?


Personally my two situations taught me how to select better tenants and if and when it happens again, I'll learn something else!


Just my two cents.

 

[RArora]

Ouch! that must have been hard for you. Was that in Barrie?


how long have your barrie homes stayed vacant for at the most or atthe least?

 

[housingrental]

Hi Rasna


Some PM companies take the fees toward their compensation, other's do not. With my company this goes to the owner. However there is nothing wrong with the PM taking the fee as long as this was agreed to by you.

 

[dplummer]

Who is incurring the NSF charge the PM or the Owner?


Doug

 

[JoeRagona]

Yes, both Barrie, but that has nothing to do with how Barrie is performing. It relates back to me and how I first chose my tenants. I take 'lessons' like this very seriously and have been in business long enough to know everything doesn't go smoothly. The more mistakes, the better prepared you are in the future.


The longest I've been vacant is six months. That is again because of me. I refused many many tenants. During this time I learned how to filter, question and choose the best tenant that I wanted.


On the flipside, I can usually buy a place and have it rented within a months time now that I have a system in place.

 

[JoeRagona]

I'm glad I read your post to the end "as long as this was agreed.."


I did not know some PM companies would take this. Thanks for pointing this out.

 

[housingrental]

There is a large variance on how billing is done from firm to firm


There are ones that seem to have additional fees for almost everything like notice of entry letter surcharge, etc... And then others, like mine, that are far more inclusive in there monthly fee... In theory for the same property the percent of gross rent charged should be lower when billing premiums apply for certain tasks. However in practice I've not seen this.