Real Estate Weekly newspaper and REW.ca, I am also a would-be Vancouver real estate investor.
I am in the fortunate position of having a good down payment from inheritance. And of course, because of my job, I have great contacts to help me land the perfect rental unit and find a great tenant. Otherwise, I am subject to the same highs, lows and vagaries of the property-purchasing process as all our readers.
Here I chronicle my journey and share all the lessons I learn along the way. I promise not to hold anything back, although names will be changed for anonymity!
Break out the champagne! I am now officially the proud owner of my first (and likely only) investment property in Vancouver.
Following an unexpectedly quick property search and a very fast closing period, with just a few days of financing stress along the way, I have now signed all the paperwork and taken possession of my studio unit downtown.
Compared with agonizing conveyancing experiences in the UK, the legal process on both this purchase and the purchase of my condo home last year has been a dream. My legal team have been amazing, putting in all the quick-turnaround work needed, with no hiccups along the way – just making me feel like it’s all taken care of, as it should be.
Closing date and possession day came as a bit of an anti-climax, with not even a set of keys to be handed over, as the previous owners of the unit did not apparently have their own keys. So one task on my post-possession list is to put that to rights – there’s no way I’m going to be a landlord on a unit that I don’t have any access to.
First, though, I needed to ensure that the business side of the rental unit is now set up. That meant opening a new bank account for all the incomings and outgoings, so that I can keep those separate from my daily personal banking. I also needed to change the account number that I’ve given my mortgage lender, as I used my only existing chequing account details when I set up the mortgage, but then needed to amend that to the new account.
Lesson learned: I definitely should have set up my new rental unit bank account way earlier than just after possession date. Ideally I should have done it a month sooner, and certainly before setting up the mortgage.
I also had to work with the building’s property management company this week, to arrange the monthly strata fee payment to come out of my new account. They required a Pre-Authorized Debit form, with a void cheque attached – except that I don’t have any cheques yet for this brand new account. So that means a trip to the bank to authorize the form with a stamp instead. (So another advantage of having set up the new account earlier would have been that I would already have a stack of cheques, which I could use as void cheques for such purposes).
This unit already has a tenant in situ, who is in good standing, so fortunately I don’t have to worry about filling the unit at this stage – and there’s no moving in or out to deal with right now. But the other big thing I need to do is set up an automated online payment system for my tenant, as I don’t want to deal with depositing cheques every month. There are a number of online services that offer this for a small fee (usually around $5 per payment), and they offer different options, such as the tenant paying the bill through online banking, or setting up a Pre-Authorized Debit. I’m meeting with the tenant (we’ll call her Valerie) next week, so I’ll see which she prefers to do, before choosing the service. Most likely I’ll get a cheque for her for the May 1 rent, before starting an automated system for June 1, which is when her pre-arranged rent increase kicks in.
So I’m all set to meet Valerie next week, when I’ll need to get the spare keys, go over some paperwork and carry out a condition inspection for an updated report. I’ve prepared a package of documents for Valerie, which includes a copy of her tenancy agreement, a copy of the notice from the previous owners about the June 1 rent increase, the original move-in condition report from April 2015, and a letter from me outlining my expectations and rules regarding rent payments, insurance, damage and so on. I took all this advice from our Guide to Being a Landlord series, so take a look at that if you’re interested.
I’ll let you know how our meeting and the condition inspection goes next week.
Next time: Meeting the tenant and reflecting on lessons learned