Toronto Income Property Newsletter: October 2012
More of the same it seems. Of all the residential income properties that hit the market over the past few weeks, most of them have already traded and in many cases over the asking price. This speaks to continued low interest rates fuelling the buyer demand and the overall desirability of income properties in Central Toronto.
This is now the million dollar question. When will you be able to go out and buy a 5.5 or 6 cap again without having to compete? Although no one can ever say for sure, I think that it is not going to happen in the foreseeable future. Certainly, not in October, November or December. I guess we will have to wait until 2013 and see what macro-economic forces come into play that might finally stem the buyer demand.
Remember to check out the newly redesigned plex.ca if you haven’t done so already. Get your coats on everyone – the cold is coming. I also hope that you all have a very Happy Thanksgiving.
Most of us will be turning on our furnaces back on in the next few weeks if you haven’t done so already. One of the most important maintenance items that you as a landlord should stay on top of is changing your furnace’s air filter.
Most of us only change our filters once a year (if even that), which in fact may well be shortening the life of your furnace. Actually, you should check your filter monthly and often change it monthly, depending on the type of filter you use. To determine if it’s too dirty, remove the filter and hold it up to the light. If you can no longer clearly see light, change the filter.
Many costly repairs can be avoided with regular filter changing. If you don’t change the filter, lack of airflow through the furnace will cause it to overheat and shut down. Similarly, a dirty filter can cause an air conditioner to shut down because the coils freeze up when airflow is inadequate. Both events stress the system.
Filters are designed to protect the blower motor from dirt. When buying filters for this task, an inexpensive glass fiber filter will do the job. But if you want to reduce airborne dust in your home, you could start with the best of the inexpensive 1-in. disposable filters—the standard pleated filter—which costs a bit more. Better yet, to remove even more small particles, install an inexpensive, electrostatically charged fiber filter. 3M Filtrete is one common brand. Just make sure to check the filter monthly and change it when it’s dirty (not just every six months as recommended).
All other options, from a 4-in. thick mechanical air filter to an electronic filter plate system, involve electrical or ductwork changes by heating/cooling contractors. They remove more particles, last longer and cost more.
Finally, whatever filter you use, make sure you reinstall it correctly, with the arrow on the filter edge pointing toward the blower motor. Be careful not to put it in backwards as this will decrease the filter’s efficiency.
One question that I often get from my clients is whether they should offer furniture in their rental suite. Generally a furnished apartment will rent for around 10 to 20% more than an unfurnished one. Most tenants have their own furniture but there are times where renters may prefer their apartment to be fully furnished. People from out of town or who are new to the city often prefer this.
Furnished rentals tend to be for shorter terms. Some renters may only need accommodation for only a limited time, so having a bed, couches and chairs, and a television may be beneficial. For example, people coming to town to shoot a movie may only be here for a few months.
Executive rentals tend to come furnished as well. Some companies may only need your suite for a few weeks, so furnishing it allows you to complete with hotels and other short-term accommodation providers. Remember too that a lot more work is involved if you are providing a furnished apartment since there is a much greater turnover of renters. You have to clean after each renter and the amount of paperwork will be greater. That is why there are established companies that specialize just in short term rentals.
How much money should you spend on furniture for your rental suite if you decide to go that route? I would say that make sure that you buy pieces of high enough quality that it compliment the suite and is appropriate for the rent that you are charging.