Location: God's own country
Posted on: 08-11-06 16:58:18
Many Punjabi's do business this way .
Buy a dilapidated house in downtown (esp., Rogers road, Gerrard st.,Keele-old weston , Keele and Dundas etc...) for around $200K (in 2005).
Rent as follows :
basment - $800
GF-$900
Second floor - 3 rooms of $400 each
Loft- 2 rooms of $400 each
Total : $3700 max. monthly (average $2500-2900)
These people live elsewhere and do labour job during the day. It is a very good money making business for them. People living in Mississauga are not aware of this kind of happenings in Downtown Toronto.
For house rent, they advertise in the Toronto Star. All kinds of people come to live here. Mostly it is the divorced people, immigrants who are unable to get a prof. job, refugee's who end living up here for the single rooms. Basements and the whole GF is occupied by one income families.
It is good business in the downtown area. The owner gives $100 a month to one occupant to clear the snow and clean the common areas. I had been to one such place and the house in general is horrible and worse than houses in india. The toilets / kitchen are also not clean at all.
CD's your opinion please
TK A
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I am a Gents and not a Ladies.
Location: British Columbia
Posted on: 08-11-06 18:46:36
An article about "rooming houses"
http://www.ontariotenants.ca/research/rooming-houses.phtml
They can provide affordable housing alternatives for those who cannot afford alternate accomodations. If run illegally or not maintained properly, it can be dangerous.
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~ Morning rain
Quote:
Originally posted by tamilkuravan
Many Punjabi's do business this way .
Buy a dilapidated house in downtown (esp., Rogers road, Gerrard st.,Keele-old weston , Keele and Dundas etc...) for around $200K (in 2005).
Rent as follows :
basment - $800
GF-$900
Second floor - 3 rooms of $400 each
Loft- 2 rooms of $400 each
Total : $3700 max. monthly (average $2500-2900)
TK A
The mortgage installment they have to pay on the 175K loan should be about $1000 (for 20 year period)
The property tax should be about $200
The utilities (if the owner is paying it) should be about $300
And if you do it legally, you have to pay more taxes on the property - so it could be additional $300+
So the expenses are about $800 pluse the mortgage amount is $1000, so your net income could be $2000.
We have not put the cost of regular repairs - which should be $5000 a year (say $500 per month)
So net gain is $1500.
Now after spending just 25000 dollars on buying the house getting the income of $18000 a year in not a bad idea at all!
And as a major benefit - at the end of 20 years you will have $200K!
I think I should buy few houses in Downtown!
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A Proud Indian Canadian
Location: God's own country
Posted on: 09-11-06 10:57:02
For your information, there are tons of houses available in downtown area. As i have seen, these house owners donot maintain the house at all. They just leave it to rot and they sell these houses after 5-10 years to people who are willing to do repairs and buys a newer house nearby and rents it again.
It is really a very very good business and does not have the tension and hard work as other businesses. If your credit history is good and you have a sharp business mind, you can keep on adding houses and renting them. Maybe this is what the Jews did a few decades back.
and if you are a handy man, you are still more in luck. You can do minor repairs to the house yourself and sell it off for a better price.
TK A
Sidenote : And GG, BTW, if you happen to get rich by this method in a few years time, Please donot forget that i only gave you this idea. Therefore go to IKEA and do them a favour by buying a few 1$ breakfasts. (only until 11.00 am anyday)
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I am a Gents and not a Ladies.
Location: Canada-Glorious and Free
Posted on: 09-11-06 11:38:33
I was in a situation where I had to rent a house some time back. It made more sense to rent as opposed to selling. So I went through the same financial projections as you guys have. And so I'd like to share some experiences with you.
First, do you know that a tenant can withhold rent if even a basic repair is not done? I had a tenant who held back payment because the screen mesh in two windows in the back of the house were torn. The tenant mentioned these screen mesh windows in passing. I thought - yeah I'll do it when I get round to it. After that, I would have to get professional plumbers to replace washers in the faucets if I could not go and do it myself. So the idea that you let the property run down and expect tenants to continue renting is not true.
Twice I had tenants skip out in the middle of the night. And you know they did that after they were late in paying rent. Once they even left food in the fridge. I had to spend three days to clean out the junk they left behind. From dressers full of USED diapers to broken rusting bicycles. All of this is money out of your pocket.
And I have to tell you, it is tough morally to be a landlord. I had a divorced single mother (kids were 2 and 5) who waited until the first snowfall to tell me that she cannot afford to pay rent anymore. And basically she will become homeless if I threw her out. So I ended up supporting her through the social assistance process. I just did not have the heart to throw her out.
BV
Location: Western Hemisphere
Posted on: 09-11-06 11:56:53
In other words, all businesses look easy and promising when you are viewing them from a great distance. Once you are in you will find the pitfalls of that business along with the benefits.
I have a rental duplex as well and my first tenant bailed out in the middle of the night and he still owes me $1500. Fortunately, I have a good tenant now.
I am right now in the process of incurring $1100 worth of plumbing, dry wall and painting expenses. I can paint but not plumbing and dry wall. So owning rental properties - yes, have benefits, but one needs to be prepared to face the headaches as well.
I once had a potential tenant looking at one of the units walked away from it after seeing the unit was not yet vacated. He said that he's got all his stuff in his truck at that moment and wanted to move in right away. And here I was, contemplating credit checks and employment checks and app forms and oh Lord the whole nine yards of rental beauracracy !!
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Dimple2001
Location: God's own country
Posted on: 09-11-06 12:19:14
Dimple and BV,
yes. There might be some pitfallsalong the way but in general, if you just rent through common sense, you might end up gaining a lot more. Of course, One can expect a bachelor renting to bail out in the last month w/o paying rent but atleast you can expect him to pay for the other months that he has been there.
You can always complain to Police authorities too.
I donot think that any tenant will withhold rent for things not attended to except if he is paying a rent of more than $1500. Many landlord in the GTA who rent out tell the tenants that the Tenants are responsible for plumbing and stove repairs. It all depends on your assertiveness. In the GTA and esp. in the downtown core there are tons and tons of people who are seeking rented spaces.
TK A
Sidenote : In Saudi, the convenience shops give you a one month credit on convenience store items. So any person who is leaving the company/ country will not pay the last month bill. The shop owner pays for spies (usually other employees of the same firm) who will report to the shop owner as to whose contract is ending soon or who plans to leave the country. When the shop owner knows this, he usually pesters the guy to settle his bill a month in advance
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I am a Gents and not a Ladies.
