Up and Down Suites

[JBagorio]

These days a positive cash flow is hard to come by unless a prospective property is one that can be fully maximized, i.e. an up and down suite with double car garage, etc...

Just for a discussion, I would like to ask individual opinions on the subject. Is it worth it, given its side effects: I can’t help but hearing problem stories about situations where tenants were involve or the nosy neighbors don’t get along, and end up having The City knocking on the door. Is it truly worth the time and effort to put up with such headache?

Best regards,

 

[FayWong]

QUOTE (JNB @ Oct 16 2008, 11:11 AM) These days a positive cash flow is hard to come by unless a prospective property is one that can be fully maximized, i.e. an up and down suite with double car garage, etc...

Just for a discussion, I would like to ask individual opinions on the subject. Is it worth it, given its side effects: I can`t help but hearing problem stories about situations where tenants were involve or the nosy neighbors don`t get along, and end up having The City knocking on the door. Is it truly worth the time and effort to put up with such headache?
Best regards,
If yours is the only suited house in the neighbourhood it is not a good idea. But if it is zoned r2 or if there are already several houses on the block that have suits they are definately worth both the time and effort. People need affordable housing. Secondary suites supply this need. Sure there are sometimes problems, but usually it is a problem with the tenant, not with the suite.Single family homes can have bad tenants too. The risks are less with 2 suites as opposed to renting to just one family. Vacancys are less of a problem as most likely both will not move out at the same time. Less chance of your rental being used as a grow op or drug house. And at the moment in Calgary larger rentals (4-6-8suiters) cost more compared to rent received than a up and down duplex. I like secondary suites.

 

[invst4profit]

My business requires cash flow to survive and so any property that does not produce as a stand alone entity is of no interest to me. I personally do not believe in letting good properties carry the bad ones and appreciation is of little concern to me as my primary interest is the rental business.

Regarding your question on duplexes again for me it isn`t a question of being worth the time and effort but rather if it is necessary to cash flow. By being proactive in choosing good tenants and following up with strict training of tenants most problems can be anticipated and eliminated. Address complaints and act quickly when a tenant truly is causing a problem for others. Do not hesitate to evict.

As an example I would not rent to a shift worker. They tend to complain about not being able to sleep due to the neighbors kids, music etc. In fact I would avoid renting to families with kids in duplexes at all unless you can get a young family in both units. Combine compatible age groups in duplexes etc.

Also keep in mind those renting duplexes are often (not always) of a lower economic status and some (not all) are slower to learn requiring somewhat specialized handling.

Think of a new tenant like a dog in that they require strict rules and good training so as to fully understand what is expected of them. This is especially true of those in multi units.

We are in the business of managing properties and people but ultimately it boils down to the money. For enough money it is always worth it.

 

[JBagorio]

QUOTE (FayWong @ Oct 16 2008, 11:58 AM) ... But if it is zoned r2 or if there are already several houses on the block that have suits they are definately worth both the time and effort. ...

This is a good point. It is true that if you are in the area with simillar zoning and interest it will be less likely that you get into the issues...

 

[JBagorio]

QUOTE (invst4profit @ Oct 16 2008, 12:18 PM) My business requires cash flow to survive and so any property that does not produce as a stand alone entity is of no interest to me. I personally do not believe in letting good properties carry the bad ones and appreciation is of little concern to me as my primary interest is the rental business.

Regarding your question on duplexes again for me it isn`t a question of being worth the time and effort but rather if it is necessary to cash flow. By being proactive in choosing good tenants and following up with strict training of tenants most problems can be anticipated and eliminated. Address complaints and act quickly when a tenant truly is causing a problem for others. Do not hesitate to evict.

As an example I would not rent to a shift worker. They tend to complain about not being able to sleep due to the neighbors kids, music etc. In fact I would avoid renting to families with kids in duplexes at all unless you can get a young family in both units. Combine compatible age groups in duplexes etc.

Also keep in mind those renting duplexes are often (not always) of a lower economic status and some (not all) are slower to learn requiring somewhat specialized handling.

Think of a new tenant like a dog in that they require strict rules and good training so as to fully understand what is expected of them. This is especially true of those in multi units.

We are in the business of managing properties and people but ultimately it boils down to the money. For enough money it is always worth it.

Greg, I do like your proactive and preventative measures you have suggested.

 

[TommyK]

QUOTE (invst4profit @ Oct 16 2008, 11:18 AM) Think of a new tenant like a dog in that they require strict rules and good training so as to fully understand what is expected of them. This is especially true of those in multi units.

Interesting analogy.