It happened again. Another potentially fantastic rental property was listed. I couldn’t wait to tell my waiting buyers. The apartment was exactly what my buyers wanted. It was nearly perfect except for one fatal flaw: the numbers. Rental income was shockingly low. The asking price though, was quite high. The classic landlord blunder had happened again: rents had not been increased over time, and now there was no way the rental income would support a mortgage for the asking price. The numbers didn’t work.
Here’s the thing. In Manitoba, rent can only be increased in minuscule amounts. In 2013, the allowable increase was 1% – not even close to keeping up with inflation. If a landlord skips even one year, they’re behind by that much forever, unable to catch up unless the tenants move out.
Missing rent increases for 5, 10 or 20 years leaves income numbers in the dust, unable to catch up. One unit I saw recently had rents of $480 on suites that typically go for $7-800.
What does rent have to do with property value? Even eager buyers will see these discrepancies in the numbers, and return wallet to pocket. It can take a lot of effort and trouble to try to dramatically increase rental rates. Buyers will not be willing to pay full price to buy a problem property. And it is a problem. Maybe not for the seller, who paid off the mortgage a long time ago and is just happy to have income from the property, (though they are missing out on thousands of additional dollars this way!). But it is a problem for the person who must now support a mortgage with low rents. The list price needs to reflect that.
There are good reasons for keeping rent low. I know of several landlords who do this to help people who could not otherwise afford a home. I highly respect and admire their sacrificial kindness. Most times though, I think the landlord simply would rather avoid the discomfort of asking for more money from their tenants every year. It’s easier and ‘nicer’ to just let it be.
But, when it’s time to sell these apartment buildings and fourplexes, the low rent becomes a deterrent to buyers. It hobbles the property value and the REALTOR’S ability to sell. If you absolutely must keep rents low, put a plan in place for the day you do want to sell. Know the rules, and plan ahead to avoid paying a higher price for your kindness than you intended.
What is it about coffee that obsesses us so?
We “go” for coffee (which really just means, “visit”)
“Morning coffee” is a mandatory ritual for many. (or is it most?)
You can even be a coffee connoisseur, indulging in expensive coffee machines, or resolving to buy grounds from Columbia or wherever because they are of superior price. Er, I mean quality.
We cradle these coffee cups in our hands all day. We bring them to work, and can’t even part company with our beloved coffee long enough to drive somewhere. Why?
I’ve discovered the secret to coffee’s allure. I’ve discovered, “The Secret of Coffee”. Behold.
The Secret of Coffee
what is it about the hot splosh of coffee
that fills a mug all bubbles and swirls
warms hands through porcelain
what is it about coffee for two
each cupping warm mugs
leaning forward all smiles
comforts and befriends
no matter who
I love it. This is exactly how I feel about coffee, especially when I’m sharing it with a friend or chatting with a client. Now we know the secret – coffee loves us back. It makes perfect sense then, that we would take it everywhere…
What’s your favorite way or place to enjoy coffee?
(Are you holding one right now?)
I followed him* through each room, making notes and taking measurements. My client had requested a home valuation, and we were about to enter the Great Room. He waved a hand across the room as though revealing a King’s dining hall. It wasn’t.
The mid-century home had, at one time, been owned by someone my client greatly admired. He eyed my notes, hinting I should include that tidbit as a selling feature. The “timeless classic” was adorned in brightly colored floral wallpaper, as was the style at the time. He hiked his eyebrows and eyed my notes again.
Room by room I was shown mid-century ‘original features’ which, I gathered from the arched eyebrows and wide grin, he assumed added value to the home. To his surprise, it didn’t.
The 20-30 year old buyers who will most likely purchase an older house like this, don’t dig ‘dated’. They do not worship the historical roots of floral wall paper, and experience little nostalgia because of panelled walls, or arched stucco doorways. If they buy the home it will be in spite of these things, not because of them.
If I may, I’d like to offer a few quick tips about what does NOT add value to your home, no matter how passionately you believe they should.
- “Original” or “Classic” are names for Barbeque sauce, not to be mistakenly assigned to shag carpet or floral wallpaper. If it is not the current style, it is dated. Dated décor is the opposite of a selling feature.
- Dated Architecture is, in general, not a selling feature. No, yours is not the exception unless it is an historical landmark to the general population (not just ‘owned by grandpa and built with his own hands’), and has remarkably sound structure not in need of a ridiculously expensive overhaul. Most likely, that’s not you.
- Sentimental Features. Anything that was ‘built by hand’ by a relative of yours, or was brought over from the Mother Land or Old Country… anything that is valuable to you because of sentiment does not convert to a higher price tag. Sorry. I know this is hard to hear. It just doesn’t. (Would you pay more for a home because someone’s great grandfather brought the fireplace mantle from England a hundred years ago? )
Look, styles change for a reason. It’s the rare buyer that wrings their hands wishing to find an old house – the tinier the better – that still has original windows and vintage wallpaper, with a side of timeless vinyl flooring. It is rarer still that a buyer would expect to pay more for these ‘features’.
The best bet, if you’re selling your house anyway, is to let go of the emotional attachment to it.(or at least the hope that the new buyers would pay extra because of it) No one will share your emotions about the house. If you’re wanting the extra dollars, renovate it to meet current buyers’ expectations. Add modern features that will attract modern buyers. THEN we can talk about how those affect the valuation, deal?
*not meant to reflect a specific person. This is a ficticious character created from a combination of my experiences.
This job is so personal. We see the inside of people’s homes – from their bookshelves and master bedroom to how they and their children behave. We act differently in our own homes than we do in public, don’t we? Real Estate agents get to see the inside of someone’s home and life like most people never will. We’re the outsider on the inside.
It’s a unique perspective to have.
There is so much pleasure in glimpsing the personal lives of people. Hang on – I`m not talking some kind of creepy voyeurism here. What I mean is that I love seeing those couples that joke with each other, and respect each other. It’s a joy to watch their children play together, help each other, and be awesome. (The opposite of how movies and commercials depict children.) I also delight in the whole process of helping these wonderful people find their dream home.
The thing about pleasure though, is that it often mixes with pain. Sometimes what`s behind the scenes is painful. Homes get sold because of divorce, death or financial desperation. People struggle so hard sometimes, and it’s difficult to watch -especially from that up-close view we get sometimes. Those are the moments I sometimes wish I didn`t care, and could heartlessly go about the business of buying and selling.
Do you ever wish you could stop feeling pain? If so, I just want to encourage you with what helps me in those moments. It`s okay to feel sad. More than that, it`s actually necessary -how would we know joy without sorrow? They are inseparable.
“And how else can it be?
The deeper that sorrow carves into your being, the more joy you can contain.
Is not the cup that holds your wine the very cup that was burned in the potter’s oven?”
-Khalil Gibran, “On Joy and Sorrow“
What also helps is, after I give myself permission to feel the sadness of it, I then make myself find the joy. What am I thankful for or glad about. And I move forward with both tucked in my heart. If you are discouraged or sad this week, know it`s okay. Sad is allowed.
The secret is not to stay there.
What helps you step out of sadness?
I pulled into the parking stall and walked toward the restaurant. I was about to meet with my buyers to write an offer on their first home. As I approached the building, I noticed a couple seated on the curb. I wondered if maybe they were hungry. Maybe they were homeless. As I neared though, I recognized the couple – they were my buyers.
“Excuse me,” I called to them with a smile, “You look homeless – would you like to buy a house?”
They laughed, (I’m so glad they get my humor) and together we went in and signed, all smiles.
It got me thinking though. I joked that they were homeless, but technically, they were! They were about to buy their first home. It reminded me of my time volunteering at a homeless shelter in Winnipeg. It was years ago, but I still remember the joy of interacting with guests and working with caring volunteers. I also remember the fear and sadness in the faces of those with no home. We all need a home.
There is something about having a place to call your own. The difference between renting and owning is staggering. As a long-time renter turned home-owner, I know. It changed the way I live. Lifestyle change aside, the permanence of home ownership also gave me a sense of safety and belonging.
I love being able to help others – especially first-time home buyers -step into that new lifestyle, and experience that pride and safety. It’s a beautiful thing to escape homelessness, whatever the form, and I’m so glad to have a part in making that happen.
Maintenance on a house is a big responsibility! If your house needs attention and you don’t nurture it with protection it will become cranky! It will loose value.
When I shop with buyers they are quite conscious of the condition of windows! Buyers are looking to find what additional work is needed to repair a home. Many times a buyer will walk away from an option because they don’t want all the work or they would not be able to afford the repairs or replacements.
So whether you are planning to sell your house or stay in your house you may want to consider taking care of your windows!
At our house, we have really large windows. I love having the large windows because I feel like I can see the whole world from inside! My world that is. Our very own park. The seal was broken in two windows and made the glass look foggy. Unattractive! It was blocking my view! Rather than replacing the whole unit, we replaced the glass. $672. That was for very large windows!
The paint had chipped off of the wood on the exterior window frames. The wood was exposed to the elements and at risk of rotting. We did not want the expense of replacing our massive windows. We have three the same size that were in poor condition.
I heard about window cladding from a client named Jennefer. She told me how the frames can be wrapped and protected from the elements. That had me curious! I contacted
Jason’s partner Nancy responded quickly and made an appointment for Jason to come by. He gave us an estimate of $6.50 /sq ft to clad the 5 windows that were in need of repair. Our Quote was $1085.50. We said YES! The following week Jason came two days in a row and did the work. My bill? $1085.50 just like the quote! The results?
In the future I want to see log siding replace this vinyl siding. The property we are on is in a great location and we find it to be a fulfillment of our dream. We want to stay! Our house is small, mature, and simple. It feels like a cottage because of the pine kitchen and trim. It’s home. It’s where love lives.
Our windows have been preserved and we saved money! That sentence is a good story. That sentence would have been my husbands version of this blog.
When you call Jason to get an estimate on cladding your windows, let him know that you heard about his services from me!
Sutton Group-Kilkenny Real Estate
I’m looking forward to spending some time with my flowers. … if I can find them. The crazy pace of these last months – that and the amazing amounts of rain – have kept me out of the garden. Weeds are growing tall…
Can I just say I love gardening? It’s where I do my best thinking and get the most epiphanies. After spending some time weeding and planting, I’ll come back in the house call, “Wendell! Wendell!” and proceed to bestow upon him my new found wisdom. He doesn’t seem to mind.
I don’t know what it is about putting our hands in the dirt, working with it and having it under our fingernails. Somehow, there on my knees among Daisies and the Lillies, weeding becomes thoughtful. Prayerful. Maybe it’s the quiet. Or the kneeling. Or watching the simple but miraculous growth happen for yet another year. Perhaps it’s the gratefulness of being a homeowner and having free will to plant what I want! My dream was to plant trees and shrubs and watch them grow. It’s kind of symbolic! When ones life has been transplanted, somehow we crave being rooted! Stability within a changing environment. Either way, it’s peaceful and refreshing, and I can’t get enough of it! I’m so glad my day off was a sunny one so I could garden!
And the results of garden therapy are clear:
My favourite plant is the rocket ligularia:
Me after gardening:
I feel cleansed, content, satisfied and relaxed!
How about you? What is your therapy? What refreshes you?