Saving money on maintenance costs

These are frustrating times for landlords – the price of buying apartments has gone up above what you can squeeze out of the proles for rental income, and thats just the mortgage costs. Once you add in maintenance, taxes and everything else you’ve really got to be counting on lots and lots of appreciation so you can sell for a profit to make your ‘negative cashflow’ investing work out.

So whats an aspiring land-barron to do? You can’t give less to the banks, they wont accept that – cheating on the taxes isn’t uncommon, but not highly recommended as it will just lead to bigger headaches down the road, and you can’t seem to squeeze the tenant for much more money because they’re unable to take out mortgages to cover their rent.

So where do can you save that money?

Maintenance.

But you should probably try to sell before the balconies start collapsing.

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Patiently Waiting
Patiently Waiting
13 years ago

"CBC News asked a certified independent building inspector to check the structure. Hugh Poole said there are signs of rot and severe damage everywhere.This is a building that is pretty well done," Poole said. "These people should not be living in most of these units."http://tinyurl.com/34cqwdJames, it looks like this building might be beyond the point of a few repairs. Mind you, so are many buildings in Vancouver. I wonder if at some point we'll see massive numbers of these crappy lowrises finally declared uninhabitable and torn down.Allowing tenants that have loud parties is another example of bad landlord behavior. The main reason I left my last place was because the landlord wouldn't deal with the obnoxious people upstairs.

James
James
13 years ago

As a tenant in this building, I do feel the need to correct a few errors by the CBC.Not surprisingly, the guy who's renting the apartment is trying to say that he only "had 4 friends over," rather than admitting that he'd been having a wild party with a ton of people on that balcony. The guy had *way* more than 4 friends over.It was a loud party, and I was ready to call the cops to put an end to it. (Now I know why it went silent so fast.) He had a ton of people on his deck, they were jumping, dancing and were very drunk. I remember looking out at one point and actually thinking to myself, "That guy's balcony is going to break if he keeps this up."I'm not saying there aren't things needing repair in… Read more »

grant
grant
13 years ago

Aken,This is one of the side effect of rent control.1) The only rent control is the (not-ungenerous) provincial cap on annual rent increases.2) In a fully rental building there is enough turnover to make the cap rather insignificant3) You are mistaken if you really think rents are constrained by rent control rather than market forces.Residential rental buildings are basically a negative cash flow investment.If you ever look at the goodman report, you'll see that multi-unit rentals are typically not sold on a cash-flow negative basis… most list for 5-6% NOI.wise landlords would buy multiple unit buildings during low markets, maintain the building and accept the negative cash flow situation so as to not cause a ruckuss, and sell out when the next upcycle comes.Negative cash-flow is more likely to occur DURING the 'upcycle' … when high prices drive down the… Read more »

markx
markx
13 years ago

"This is one of the side effect of rent control."I don't think Vancouver has very strong rent control. Most people I know experience rent increases below the legal limit, even in today's extremely tight rental market.

rentah
rentah
13 years ago

I rent a sfh, and have simply been paying for minor improvements and repairs myself. I haven't even bothered my landlord with this.The math works so in my favour, it's worth it not to bother him.I don't want him to do the math and sell.

tulip-Mania2
tulip-Mania2
13 years ago

"the world isn't lacking for greedy short-sighted slobs."I believe the general condition of the slum lords' properties are a tangible and visible symbol of their moral make up.Lucky for the bastards, I am not a tax investigator.

Akhen
Akhen
13 years ago

Well, simple arithmetic, my dear Watson. Residential rental buildings are basically a negative cash flow investment. The only way a property-owner makes money is capital appreciation. The City is well aware of the metrics. They’ve squeezed building owners/landlords to this point. On a macro basis, the only way the city avoids a steep decline in rental unit availability is by not clamping down too hard on landlords. Landlords are not in this as a charity!This is one of the side effect of rent control.That said, wise landlords would buy multiple unit buildings during low markets, maintain the building and accept the negative cash flow situation so as to not cause a ruckuss, and sell out when the next upcycle comes.

mold city
mold city
13 years ago

These slumlords are not necessarily new landlords, I think there are some out there that won't do basic maintenance even when they're making money off of a building – the world isn't lacking for greedy short-sighted slobs.