Do you have permission to rent?
Last week I was speaking with a colleague who described an owner in a strata building who had an issue with a flood. The interesting part of the story was the people living in the unit were not the owners, instead they were tenants. This was news to the Strata Corporation as the building has a rental restriction bylaw and this owner had not been approved by strata to rent their unit.
Owners must have permission to rent their strata lot from the council before they rent their unit. Permission can be granted in many forms, depending on who you are renting to. The Strata Property Act allows some Strata Corporations to have a rental restriction bylaw preventing an owner from renting without council permission. The act also has provisions allowing owners exceptions to rent to certain types of people even when the Strata
Corporation has a rental restriction bylaw.
Owner’s are permitted to rent to “family members” as described in the Strata Property Regulations. The regulations define “Family Members “ to include the immediate family of the owners. Immediate family being spouses, parents or children of one of the owners. These regulations exclude siblings, uncles and cousins as they are not “immediate family”. Strata Corporations may also grant permission to rent the unit to an owner who requests a hardship exemption. In January of 2010 the Strata Property Act was amended requiring the developer to identify a specific time on the Form J, “rental disclosure statement” stating when the unit’s rental period expires.
What happens when an owner doesn’t have permission to rent their strata lot and is in violation of a rental restriction bylaw? The Strata Corporation is in a position to identify the owner as being in contravention of the bylaws. If found to be in violation, they may impose fines up to the amount of $500. It could be determined that each day the unit is rented there is a contravention and it could be considered a continuous contravention of the bylaw which allows for a fine every 7 days.
Before you rent your strata lot. Find out if you need permission from the Strata Corporation to rent. Start by reviewing your bylaws to see if there is a rental restriction bylaw, then review the strata property act and regulations, review your form J which would have been provided with your purchase documents. Speak to a professional if you are unsure.
Need assistance managing your rental property? contact us for an evaluation of your needs.
Cartref Properties specializes in managing rental units located within Strata Corporations.
www.cartrefproperties.com
What is the average rent per square foot?
Is Average rent per square foot a good indicator for what you can rent your investment property for?
I am often asked what the average rent per square foot is for renting these days. My answer is I don’t know. Some people are confused by this reply and I will explain why I answer this way. When you go to buy a car do you ask what is the average price for a car? If you are looking for a small economy car the price will be higher than you expect and you will be disappointed. If you're looking for a luxury car the average price will be less than you anticipated, either way you won’t have an accurate assessment of what the car you want will cost.
If you're an investor looking to buy rental property to rent out, and rely on the average cost of rent in “Vancouver” to buy and rent a property, you may be disappointed with what you are able to rent your investment for. Vancouver is a large city and has many different areas and rents vary significantly from one area to the next. Two properties located in the same area can also have vastly different rent based on location, age of the property, and amenities of the building. Two units in the same building can produce different rental rates based on location within the building alone.
The pandemic has also upended the evaluation of the average cost for rent, as renters were seeking different qualities in a property. Similar to house sales, renters were moving further away from the city or looking for larger spaces, due to working from home. We found this increased suburban prices to be more comparable and created higher interest in two and three bedroom units in the city.
One major difference with renting to buying is the prices may decrease in an area and or due to economic conditions faster than selling prices fluctuate. When the economy slows down many renters look for a better option elsewhere to reduce their rent, increase the quality of the place they are living in or move to a different location in town. These actions create lower rental rates, and when the economy increases sometimes rent increases rapidly.
When we provide a quote to a prospective client, we evaluate the comparable current rents in the area at that time, evaluating what the potential rent could be. For this reason we are not so concerned about the “average rent” for a city or region. We don’t provide you an average for your luxury car and end up renting it for an economy price. We want to ensure you have a clear understanding of what rent you can expect for your property.
Need assistance managing your property? contact us for an evaluation of your needs.
Cartref Properties specializes in managing rental units located within Strata Corporations.
www.cartrefproperties.com
Why Cartref Properties?
Cartref Properties is a locally owned and operated rental property management company located in the lower mainland. We are based in Port Coquitlam BC and service areas from North Vancouver to Abbotsford. We specialise in the management of investment properties located within Strata Corporations. Our managing broker Philip Davies has worked in the property management field since 2009, managing rental investment properties, apartment buildings and Strata Corporations.
Cartref Properties provides rental management services only, focusing on providing investment owners with conflict-free management services for their investment properties. Managing rental properties within Strata Corporations requires understanding of not only the residential tenancy act but also the strata property act. Cartref Properties’ background with both, provides us with the experience to provide investors with a positive experience when managing their properties.
Strata Corporations can have many different requirements for renting your property which could lead to a negative experience, including do you have the authority to rent your property? Some Strata Corporations can restrict the number of rentals. Strata Corporations often have restrictions on the minimum length of a tenancy. There are procedures when tenants move in and out of the property which could result in costs to the landlord. What rights does your tenant have when residing in the property?. How do you respond to the Strata Corporation when your tenant receives a notice for violation of the bylaws and rules?
Since we only manage rentals we won’t be in a conflict when an issue arises between the owner and the Strata Corporation.
Need assistance managing your property? contact us for an evaluation of your needs.
Cartref Properties specializes in managing rental units located within Strata Corporations.
www.cartrefproperties.com
Is tenant turnover a good thing?
My college marketing teacher often answered questions with the reply, “it depends” which is an appropriate answer to this question. There are times when tenant turnover is beneficial to a landlord. Let’s evaluate when tenant turnover benefits the landlord.
BC Law allows owners to increase rent once every twelve months after the start of a tenancy and the increase is controlled by an amount approved by the government. These two factors limit the amount a landlord may increase rents at their properties. BC has strict limitations on when landlords may evict tenants. If a landlord uses a fixed term lease the landlord must occupy the property for six months after the tenant leaves, eliminating the landlord’s ability to re-rent the unit to another tenant at the end of a fixed term lease.
When a tenant chooses to vacate, provides notice to the landlord, the landlord has the right to re-rent the unit at market rents. When a tenant has occupied a property for multiple years, often the market rent will have increased during those times at a greater rate than the allowable amount under the tenancy laws. When a tenant has occupied a property for a long time, five or ten years the unit may be outdated compared to other properties in the market. Taking the time to upgrade the unit, with new flooring, kitchens, bathroom, appliances or fresh paint may provide an increase in the rental appeal for the property.
There are benefits for long term tenants who respect the property and always pay the rent on time, but turnover gives landlords the opportunity to increase rents and revenue of their rental property. There is no optimal time identified as good for tenant turnover though three years is perceived as a good timeframe for each tenancy. When your tenant provides notice after three years, view it as a positive opportunity for your rental property.
Need assistance managing your property? contact us for an evaluation of your needs.
Cartref Properties specializes in managing rental units located within Strata Corporations.
www.cartrefproperties.com
Stage One of a tenancy - Receiving Applications
Previously we have talked about the three stages of a tenancy. Stage one is the process of selecting a tenant. We mentioned in stage one the process of showing the property can be used as part of screening the tenant’s suitability for a rental unit. Receiving an application for the property is good news, and is the beginning of the next step in the process of screening the tenants.
After receiving the application it is important to take your time and review the information provided. When Cartref Properties receives an application we review the details of the previous address, place of business where they work and phone numbers of the employer to confirm the information is legitimate. Online searches of address locations can provide details to confirm accurate information. A common practice of applicants is to provide mobile phone numbers of people who are listed as employment references. A review of the company information online and calling the main phone number instead of the number provided, if different, can often lead to identifying inaccurate information.
Verifying information is a difficult process and even with all your due diligence something may slip through. When checking information and confirming details you find you need further information, ask the applicant to provide more for clarification. I have found this often leads to applicants who are trying to hide something from removing themselves from applying, this comes in the form of, I already found something else.
When an applicant is willing to meet your request for further information, this shows a willingness to work with you, and their honest interest in renting the property. One must still verify the new information provided is accurate.
Rushing the process of checking information and due diligence often leads to a negative experience in the rental property. I am amazed when prospective tenants come to view a property and tell me they are looking at another one the same day and then later that day they advise you they found something else. In a tenant favourable market it is more important to do your research, as tenants will play on the landlord's desire to not have a unit vacant in order to rent a property.
“Everything comes to he who waits”, Patience is a virtue, which is hard to maintain.
Need assistance managing your property? contact us for an evaluation of your needs.
Cartref Properties specializes in managing rental units located within Strata Corporations.
www.cartrefproperties.com