Paradise Island to Disney

With Christmas almost upon us we finally stopped for a breather this weekend. In the past month we've been on two trips; the first to Bahamas and the second to Florida, in our continual attempt to avoid Canadian winter..even though winter has hardly yet hit southern Ontario.

We returned to the same resort we visited last year on Paradise Island in Bahamas. But this time, damn the luck, the kids both came down with a fever and cold the day we left. To sum it up...it was a bust. Try as we might to keep jovial, the two sick kids had the upper hand and did their best to thwart all attempts at relaxation and calm. It didn't help that the weather was cool and windy, in fact, it wasn't even nice enough to spend much time in the pool. We can't blame the kids for getting sick, but since we had already paid for the accomodation there was no way we were going to stay home so we just made the best of it. Fortunately, we did get an afternoon away at my favourite bar in the world - Hammerheads, which we followed up with conch salad and fried fish at Arawak Cay.

The trip to Florida was a completely different story. The kids were back to normal and traveled like champs. We flew into Orlanda and spent a day at Disneyworld with the kids then were met by our neighbours Jess and Andrew who flew in the next day, after which we drove to Pompano Beach, just north of Fort Lauderdale. Disney was about the last place in the world Ana or I wanted to go but Jess' mom had three tickets she didn't need which she gave to us. It was nice to go for a day to see it, but any longer would have driven me crazy. I cannot believe how people can go there for entire weeks, just not my thing I guess. It was probably the six dollar cold hot dog that turned me off. Or maybe it was the standing in lines all day long. The kids thought it was okay but I think they are still a little young to know what most of it was about. At least Stella got to have her picture taken with a princess!

The place we stayed at in Pompano Beach was excellent - right on the ocean with miles of beach. My old buddy Stillman lives in the next town over so we met up with him a couple times...and finally got to meet his girlfriend, which was long overdue. Once again, though, we didn't exactly luck out with the weather. It was nice and warm, but overcast most of the time with a little bit of rain. Nevertheless, we had a great time and explored some parts of Florida that were new to us. We also did some hunting around for real estate...but didn't find anything too interesting. We're still wary of owning anything in the US due to the distance, administration and tax issues.

As a final word, our big backyard project is COMPLETE and has already hosted a party or two. It turned out spectacular, if I do say so myself....

Stay tuned for my annual Christmas letter.

The Shift Home in Saskatoon

My brother Curtis will soon be finishing his latest development project called the Shift Home, located in Saskatoon, Saskatchewan. It's an ultra modern, super energy efficient urban dwelling that is now available for sale. I've attached a link to his website which has all the details - also at http://www.theshifthome.com/TheShiftHome-SalesSheet-Sept18.pdf.

...and if that doesn't do it for you, our cabin at Fishing Lake is still for sale and has been dropped by 20k to 139,900. That price includes all the geese and ducks you can blow away with your shotgun from the back patio.

Florida real estate

There was a business aspect to our weekend trip to Florida, namely, to check out the state of Florida real estate and the prospects of getting in to an investment property.

The verdict on real estate prospects? Poor. I've read that the Fort Myers area of Florida is one of the worst hit real estate markets in the US. Knowing this, one would expect to see some signs of slowdown in economic activity, but this was not to be found. Everywere we looked was a parade of new cars, motorcycles, and people spending money. The shopping malls were packed to the point of hardly being able to find a parking spot. Restaurants were full, people looked happy, and there were few building vacancies to be seen. There were more "For Sale" signs up than in recent years, but nothing like what we were expecting. While it's true that you can buy a house for under a hundred grand, this will still only buy you a beaten up house in an undesireable suburb, miles away from the ocean. The premium properties are still commanding premium prices, though not as high as a couple years ago. Properties that were selling for 750k are now a steal at 600k. To me, the prices still seem well out of range for the average person and far, far below what I would consider to be a great deal.

It makes you wonder, how bad is this recession really? This past weekend every single WestJet flight to southern destinations, and most in Canada too, was 95% full. This is not a sign of penny pinching consumers and the populace facing economic oblivion. Maybe people are just enjoying their unemployment and spending their severance pay on enjoying life for a while.

Is it possible the real pain is yet to come?

What's wrong with this apartment?

So we've got this apartment we've been trying to rent. This was the previous residence of our worst tenant, a loser-supremo who we inherited when we bought the building. He caused us more grief, stress and wasted money than all of our other tenants combined. We've been trying to get rid of him since we bought the building, and in the process learned a great deal about the Ontario Residential Tenancies Act which seems to have been custom designed to encourage and develop a strong population of deadbeat tenants at the expense of decent landlords and honest renters.

Through some unexplained miracle, he actually moved out of his own accord at the end of January, producing tears of joy and moments of unbelievable happiness in the Olson household. The first part of February was spent renovating and it was available for rent by mid month. Well, it's still empty. We've shown it at least ten times to over 20 or 30 potential tenants and have only received a single application, from a 17 boy with a 16 year old girlfriend, new baby, and no job. You have to realize that Brantford is a seriously blue collar town with a lot of transient people. A friend of mine who's been a landlord here for many years told me the quality of tenants used to be excellent but is now absolutely terrible, as anybody who had any inclination for owning their own house, has done so during the past decade, likely because of low interest rates and easy credit. He now faces the same problems finding good quality tenants.

This property, unfortunately, is not in the best area. Though it's close to downtown and in the middle of a commercial district with all sorts of shops, it's an area that is not look too well upon. It is far from the worst area in the city, but is definitely in the lower half.

Try as we may, we've not been able to rent it. So we're changing tactics. Step one was to shorten our application form and remove some of the more penetrating questions, so we're now down to two pages instead of four. Step two is to replace the carpets with laminate flooring. We didn't want to spend money on this, but we've had a couple comments from people about a lingering smoky odour in the apartment, which is surely coming from the old carpets. Mr. Wonderful, the previous tenant, and his roommate each smoked a couple packs of cigs a day and about a bale of marijuana per week between them. Seems that two bottles of Febreze was not nearly enough to eliminate the stink so removing the carpet is the only option.

Patience is the name of the game. We're not going to make the mistake of putting a bad tenant in there, that will only cause us problems down the road.

Just another day as a greedy landlord...

Market value of rental properties

Ana and I have been discussing selling one of our rental properties in Brantford that we currently rent to students. It's a 3 + 1 bedroom house that we originally bought to renovate and resell but were not able to sell it for what we wanted so decided to keep it and rent it out to students, since it's close to the university in Brantford.

I've been wondering if we should sell it now in case the local real estate market takes a tumble. The house now is cash flow positive, especially since the variable rate mortgage payments have been tumbling, but it is not our best performing property. We discussed this last night and came to the following conclusions:

1. If we sold it now, we wouldn't make a substantial amount of profit after realtor fees, mortgage penalties, etc so it wouldn't result in a large amount of equity to put into another project
2. Our student tenants are excellent and are taking good care of the place
3. We've done a substantial amount of maintenance on the house making it pretty much maintenance free now
4. We haven't been finding many opportunities in the market, prices are still very high and there's not much quality stuff coming available
5. The local universities are expanding like mad and since university attendence usually increases in a recession, we should have no trouble keeping it filled for the foreseeable future

Since reveue generating real estate value is based on cash flow produced, it may make this particular segment of the real estate market hold up okay in a major correction. Landlords are normally very wary of reducing rents so hopefully the rental market remains strong and we'll just keep collecting that monthly cash flow!