Students as Tenants

As property managers we must always consider tenant profile when deciding whether to approve a potential applicant as well as when considering a new property owner as a client. Recently, having procured a client with an apartment building in a student-rich locale, we decided to summarize some positive and not-so positive aspects of renting to students.

The most important factor in selecting tenants is of course their ability to meet their financial obligations and to pay their rent. Unless full-time students work part-time it is important to understand that the vast majority of students do not have the means to pay their rents. Thus it is critical (and a prerequisite for renting Kaur Property Management run buildings) that parents serve as co-signors and fully comprehend that they will be held legally and financially liable should their children default on the rent. It is advisable to have a separate agreement annexed to the lease that clearly explains this and that is signed by each tenant’s parent.

In cities with a large student population from outside the city and country, it is imperative that landlords or managers speak with the co-signors and briefly explain them the finer points of rental law in your province or state as they may be unfamiliar local laws.

Student tenants are not ones that allow owners much hands-off effort, that is to say, they can be quite a handful. They can be forgetful, extremely messy and sometimes, downright irresponsible. It is essential to complete a pre-move inspection with all student tenants to ensure that responsibility can be rightly placed should there be any damage beyond basic wear and tear. If your jurisdiction allows it, collecting a damage deposit would help mitigate any potential losses once they move out. Be certain that arrangements are made and clearly communicated when the students leave town for Christmas break or summer holidays. Often the fact that rent is payable on the first of the month gets neglected during the summer.

Although, not all students have behavior unbecoming of a good tenant, it is important to understand that the following scenarios are certainly within the realm of possibility. Young students, away from home for the first time may experience high alcohol consumption and perhaps even recreational drugs. We have managed buildings where the stench of marijuana it seemed was an every weekend occurrence. You can certainly insert clauses in your lease forbidding this behavior in the apartment but one must also understand that kids will be kids.

Why do I need a Property Manager?

Often friends and family ask why people would need a property manager if owners can do the management themselves especially for properties with not many units? My answer is usually a succinct “because it makes perfect sense”. Even in cases when property owners area able and willing to manage their own investment properties, it is financially and logistically wise to hire a competent property manager.

Investing in real estate, apart from one’s home, is a tremendous investment opportunity for several compelling financial reasons. Real estate historically is an investment vehicle that remains always relevant, valuable and important. The simple adage “everyone needs to live somewhere” is most certainly true. A property in a good location and in good condition is always a good investment that can provide rich income for years and capital gain potential. Furthermore, from a tax perspective, an investment property brings many advantages that must be leveraged and taken advantage of.

Canadians often complain that our neighbors south of the border receive many tax advantages such as the ability to write off property taxes and interest expenses on mortgages which present huge financial advantages. Despite most people’s misconceptions, these advantages certainly do exist for Canadian properties provided that the property is indeed an investment property and not one’s personal residence. One can write-off mortgage interest expenses, property taxes, repair and maintenance costs and of course property management costs.

For the large scope and amount of work that a property manager performs, it makes perfect sense to employ them. One must contemplate how much their comfort is worth. They must think what value does someone who manages potential headache (repair calls at any hour) bring? What value does a manager who oversees projects, tenant showings, rental board proceedings bring? The answer is “a lot of value”. Factor in the reduced stress and improved quality of life that a property manager presents and it is quickly clear that not having a property manager would be a severe hindrance to the investment and the owner’s quality of life.

When one factors in the added advantage and ability to deduct the expense from the propertie’s income at year-end, the decision to employ a manager is a no-brainer!

For all your property management needs, contact www.kaurpropertymanagement.com .

One tenant can be a cancer on an entire building

Appeasement

As a big history buff, I often quote the lessons of pre World War II when it was established that foreign policies of appeasement are a failure especially towards aggressors. As a property manager, I learned to follow similar thinking when dealing with tenants that are aggressive towards building management, superintendents, their neighbors and others.

In other words, often, negotiation with these types of personalities is a fruitless exercise. Recently, I secured a judgment and a writ of eviction against a tenant that had not paid their rent for several months. A very mean-spirited individual this person had convinced me that if I didn’t go through with the eviction he would become the model tenant that I was seeking and pay all amounts owed. I obliged and did not go through with the eviction.

In subsequent months, this tenant started paying his rent but his behavior was becoming more disturbing and potentially financially ruinous to me. As new tenants moved into the building, he would often cause problems with these new customers and start quarrels and arguments with them over petty issues such as distance parked between his SUV and the new tenants cars. It got so bad that once a new customer called crying due to the stress that he had caused her.

He started a similar confrontation with a second tenant that caused the new tenant to seriously question her choice in selecting our building as a place to live. At these incidents, I learned my lesson and decided that the only course of action would be to finally without reservation go ahead and evict the individual in question. Even though he had now begun to pay his rent on time, there was no excuse for disturbing new customers and new neighbors entering the building – new tenants that I had invested considerable time and effort in attracting to the building.