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rooming houses - advice please

T

TonyJohn

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Feb 23, 2008
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Hi everyone.........

I`m new to investing, new REIN member at the Vancouver Quickstart. Don, Russell, your team and everyone who attended, congratulations - an awesome event!

I`ve been checking out a recently upgraded, "nicer" rooming house in Nanaimo, cash flows quite well, fully occupied and rents paid directly via the gov`t. Advice, comments and experiences on this type of investment would be most welcome.

Thanks in advance,

Tony.
 
Have you checked into the seller`s real motivation for selling?


QUOTE (TonyJohn @ Mar 6 2008, 05:45 PM) Hi everyone.........

I`m new to investing, new REIN member at the Vancouver Quickstart. Don, Russell, your team and everyone who attended, congratulations - an awesome event!

I`ve been checking out a recently upgraded, "nicer" rooming house in Nanaimo, cash flows quite well, fully occupied and rents paid directly via the gov`t. Advice, comments and experiences on this type of investment would be most welcome.

Thanks in advance,

Tony.
 
QUOTE (eurydice77 @ Mar 6 2008, 07:22 PM) Have you checked into the seller`s real motivation for selling?

There are issues with the City of Nanaimo and rooming houses right now - there are definetely more avenues of enquiry to explore.

Appreciate your reply,

Tony.
 
QUOTE (thomasbeyer2000 @ Mar 6 2008, 07:43 PM)
check those links here:



http://myreinspace.com/public_forums/General_Discussion/61-3257-Rooming_Houses-Is_the_cash_flow_worth_the_hassle.html



know the DISadvanatge such as tougher to finance, tougher to manage, tougher to sell, tougher on the property (higher repair bills !!), less or no (?) equity upside .. offset by: better cash-flow



so: weigh pro's and con's .. walk with your eyes VERY WIDE open .. then decide !




Thanks Thomas,



These are some of the items I've come up with - nice to know I'm on the right track.



Thanks again for your input.



Tony.
 
Hi Tony

I have two properties in the Old City of Nanaimo, not rooming houses, but older houses with self contained suites. Many people saw the area as one bordering on the druggie area of town, with "iffy" tenants. I had trouble finding a property manager when my old one moved. Nobody wanted the "difficult" tenants. Finally my Nanaimo realtor, who has properties of his own, agreed to manage them. I treat him well, thank him regularly and give him an Xmas bonus with a written thank you letter.

I also had two rooming houses years ago in Vancouver. Here is some advice.

1. Buy in a quiet, nice area on a pleasant street. Avoid "druggie" areas, so you`ll attract quiet tenants. There are quiet, nice rooming house tenants out there.

2. Keep your property spotless and well maintained so you attract nice, quiet tenants.

3. Get someone else to manage it for you. Some rooming house tenants, no matter how nice they are, are prone to more personal problems that will take up your time and energy.

4. Be kind to tenants. Do things like putting up a Xmas tree in the public areas since tenants may not have one in their rooms. Or give tenants a Safeway Xmas cake. It creates goodwill and happy tenants who will want to stay.

5. Expect and be prepared for tenant turnover. I found about half of the tenants were happy long stayers.

Hope this helps!
Margaret

QUOTE (TonyJohn @ Mar 6 2008, 06:45 PM) Hi everyone.........

I`m new to investing, new REIN member at the Vancouver Quickstart. Don, Russell, your team and everyone who attended, congratulations - an awesome event!

I`ve been checking out a recently upgraded, "nicer" rooming house in Nanaimo, cash flows quite well, fully occupied and rents paid directly via the gov`t. Advice, comments and experiences on this type of investment would be most welcome.

Thanks in advance,

Tony.
 
Roomimg houses can be challenging. They seem like a sound investment since your return is always is good but consider the following before making a descision.

  • Insurance companies typically don`t like insuring these types of properties. Check with you broker to see if this is an issue.
  • Turn-over is usually high with these types of properties.Tenants in roomimg houses normally don`t properly maintain the premise. Therefore you will have to spend some extra time or money for general maintenaceI would make sure the building is up to code in accordance to your local regulations

I would budget for cleaning person atleast once a week and someone to upkeep the exterior of the building.

Good Luck!
 
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