If you have read my post on buying a rental property in Canada, you would know that we bought an investment property in Victoria, BC last year. Since we bought it as a pre-sale, we actually signed the purchase contract months before we took possession and rented it out.
It has been a little over a year since our tenant moved in to the brand new unit. I wanted to share our first year experience as a landlord in the midst of a pandemic. Note, since we do not reside on the island, we hired a local property management company called Duttons & Co from the very beginning. I did a lot of research before deciding on which company to use and have been really happy with their service.
Why Did We Hire A Property Management Company?
As I have mentioned, since our rental property is on the island, it wasn’t practical for us to take care of the property ourselves. We would have to rely on the ferries to get to the island and the travel time one-way would be at least 3 hours+. I didn’t expect to have to be there physically often (not that my tenant would want to see me, ever) but knowing we can’t be there in a timely manner if there was an emergency just won’t cut it.
We have been renters for years ourselves and know that things happen no matter how low maintenance you are. One very old unit we lived in had a leak on the ceiling once and it took weeks for our shady landlord to get someone in to “fix it.” It was an inconvenience to us (the water dripping noise was annoying) and it also puzzled me why he didn’t seem to care when it was his property after all. When we decided to invest in a rental, we never planned on taking care of requests like this ourselves. We are not good at fixing things here and there and we don’t really have many trade contacts (e.g., plumber, electrician).
I also had a good idea of how much the service of a property management company will cost (9% to 11% of gross monthly rent + other ad-hoc fees) and budgeted for that accordingly when we made the purchase.
Why Did We Choose Duttons & Co?
Like I said in the beginning and in my previous post, I did a lot of research on which property management company to go with. No to very little hassle is a very big want on our list because we will be paying for the service monthly. I also wanted to make sure it will be a trusted team of professionals taking care of one of our biggest investments.
I looked at all of the following before finally reaching out to Duttons & Co for an in-person meeting:
- Social Media reviews (Google, Facebook, Yelp) and how the businesses respond to negative reviews
- local forum e.g., VibrantVictoria
- how their current rental listings are being marketed, e.g., pictures quality, descriptions and reach (own website, Craigslist)
- emailed the companies for pricing and service info and paid attention to how responsive and professional their responses are
- not only did I care about what other landlords say about them, I also paid attention to what tenants say about them
I had my eyes set on Duttons & Co before I even met Barb & Zana at their office in the Fairfield area. I also loved that they did not try to sell me on the spot so I actually had to tell them I was ready to sign the contract during our meeting. The staff were so professional, friendly and respectful. I literally left the meeting thinking my landlord journey will be smooth with them managing my unit.
Our unit was rented out a couple of months after it was listed. It took longer than we expected but it was understandable as there were multiple similar units in the same building at the same time. With the building being brand new, many investors who bought took possession at the same time as we did hence the supply was high.
How Was It Like Being A Landlord In The Midst Of A Pandemic?
When the pandemic first hit Canada, companies started to layoff and everyone was worried about job security. Eric and I were lucky as our jobs were not affected at the end at all. However, there were days in the beginning when I would get worried about my tenant’s ability to pay his rent on-time or at all. Naturally, I ran numbers and scenarios to make sure we will be able to pay our two mortgages on time without our tenant and/or if Eric or I lost our jobs. We had emergency savings but we still took safety measures by being more conservative with our spending. Vancouver’s lockdown that began in late-March forced us to start working from home which actually helped with finances a lot as we saved transit costs and had to cook all meals at home.
While all of this was happening, Duttons & Co kept us updated constantly. We got our first update as early as mid-March and it continued into the Summer months. In April, our property manager got in touch with my tenant and reassured us that there should be no problem with payment. In fact, a very small percentage of their rental portfolio was affected by the pandemic and that was due to more than luck. From what I have experienced, their tenant selection process is quite robust.
Also, they recommended not to increase rent this year even though the rent increase freeze was ending in a few months in BC. We were never going to increase rent even though we were legally allowed to up to a certain % (2.6% in BC in 2020). Eric and I had decided before we started this journey that it would be preferable for us to retain a great tenant over a small financial gain.
What Did We Have To Do As A Landlord?
To be honest, not much aside from the initial meeting with Duttons & Co to set up the paperwork. This is by no means a guide to what you should be doing as a landlord, with or without a property management company. Also, the age of the building is definitely a factor in this as there are naturally less problems and/or repairs required for a new unit.
In the past year, we have done the following:
- obtain condo insurance with Schill Insurance (at the same time as our principal property)
- filed rental income on our tax return (Duttons provided us with a year-to-date statement)
In fact, we just received our first annual maintenance report of our unit. When we were renting, the property management company our landlord hired would do the same. We would get advance notice and had the option to be there or not for the inspection. The landlord’s representative basically walk through the unit to make sure everything was in working order and that there was no damage to the unit. I remembered appreciating how thoroughly the inspection was for our landlord (oddly) because it must have been such a reassuring thing to them.
For us, I did not even have to schedule or remind Duttons (in fact, I completely forgot about it). The report showed that everything was in order and there was no damage to the unit.
As you can tell, we didn’t have to do much in the last year or so. I used to hear horror tenant stories from people and was a little worried about it myself. However, at the end of the day, I believed the majority of people are like us as renters – respectful and clean. I also believe our smooth journey had a lot to do with buying a unit in a building built by a reputable developer and choosing the right property management company.
Here’s to hoping a smooth journey for years to come 🥂