Archives for 2020

1. Less Competition – there are are fewer choices (lower inventory) so that you can refine quickly the homes you like and don’t like a lot faster. Real Estate is a cycle throughout the year, winter sucks in Calgary most of the time weather wise so the seller’s don’t want to move any more than you do but you can get a better deal not having as many competing offers.

2. Pricing/Motivation Sellers who have kept their home on the market into the winter OR are STILL on the Calgary marketplace have motivation, otherwise they would wait for spring (which is a form of speculation thinking they will get a better price). Sellers who sell in the winter on average have much higher motivation – also supply of buyers is less so demand goes up for their offers – even if they are aggressively in your favor

3. Tax advantages, there are an infinite number of tax scenarios in people’s lives – often that is affected by the end of the calendar year. What this means for you is that having a quick close in December could help the current owner save money on taxes, we all want to keep money out of the hands of the feds when we sell our homes in Calgary or anywhere in Canada for that matter.

4. Bankers get paid bonuses based on quarterly results. What this means for you is that a branch manager, district manager, national manager at a mortgage financing company has their bonus check at the end of December directly tied to “production” and they will be more incentivized to push mortgage approvals through and get them closed before year end – giving them a reason to approve your loan/make exceptions they might not at a different part of the calendar year. Getting a mortgage to buy a home in the winter can be easier than any other time of the year. Do keep in mind everyone can go into holiday mode after the first half of December, so things do slow down before the holidays.

5. Properties are looked at based on their physical interior features and structural integrity, the “curb appeal” factor does not really apply with snow on the ground in Calgary and no flowers/gardens to look at. This factor does help a buyer look at the property closer, get full inspections, which help negotiate better pricing and forces buyers to think about the value of a home inspection, when they are thinking about how old the furnace is and how much heat/water leaks could be a problem. The sellers are also thinking about these things too if they are dated and would be more willing to make concessions. Creative financing deals are also easier to negotiate during the winter months in Calgary because they want a NOW solution and would rather not wait until spring to sell the home and get out right away before the sleigh bells ring on the rooftops!

To your success,

Contact us to learn more about how to find the best deals in the winter and all year round.

Tim Reid

Respect The Hustle

When we look at building a large portfolio of rental properties in real estate investing in Calgary or any market outside our “backyard’ you need to hire a property manager. Or do you? This was what we thought when we started in multi-family buildings.

The asset was out of town and not a logistical drive time to our home base – so we hired the largest management company in the town.  Things were good for a time until the real estate train started to fall off the rails BIG TIME! Turn over, repairs, lease-up fees started to steadily rise over just about a 1 year period.

There was a staff change over at the company, which normally should not have the impact that it did if they have good systems in place.  What I learned was that the company did not own any multi-family buildings and had the following bad habits:

1. Used their own repair company that caused a bunch of issues with repeat repairs

2. Every little maintenance item was being fixed with expensive trades for items that were often tenant caused or part of normal tenant maintenance.

3. Tenant screening was not done very effectively

4. Overtime being charged for non-emergency issues

Some of the things that you need to consider when looking for a property manager are items such as:

1. checking references and referrals from other building owners

2. Deciding when you actually need a property manager

3. what is their reporting process for repairs and items that come up within the building

4. What is the tenant screening process they use

5. How often do they inspect the units?

A management company that does not OWN real estate will never treat the building with the respect it deserves, because they only think like a fee-collection machine rather than how to keep the building running smooth – for the most part, not all management companies are bad.  I have just never found one that is highly effective that does not own real estate themselves.

With this asset, the solution was to hire a resident manager and shift the asset management role in the house, which is critical for the success of a multi-family asset.

Property managers left to their own devices can wreak havoc on your portfolio – you have to manage the managers even the best ones out there – because things can change such as a key staff member leaving and causing issues until they have a great replacement.

Have a hard look at whether or not you NEED a property manager, with all the modern advances in technology having a resident manager + an asset management plan could be a better way to manage your remote assets.

To you success

Tim Reid

-Respect The Hustle