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Transcript:
(00:00) greetings from Phoenix Arizona uh where the opportunity sadly uh will be improved as with the unfortunate wildfires in LA and that’s not the reason I’m here I was actually here for other reasons for a workshop and Retreat and also obviously look at real estate um and the opportunity is likely great in uh the Arizona and Phoenix area anyways uh this show show this show this week’s show is titled ont rental market update with rent Panda and R rent panda is going to be sharing the owner be sharing what he is investing in himself
(00:37) where to advertise rental properties and where to look for tenants which markets are expected to outperform in Ontario for specifically tenant demand all this and more on this week’s truth about real estate investing show for Canadians since 2016 that’s right this show while not impressive in Flash is one of the the two longest running podcasts on real estate investing in Canada many shows podcasts have gone away many just just started almost no one else out there has over 300 300 hours of podcast content but uh even still this Market is forever
(01:07) changing my own investment strategy has changed based on what the market is telling me hence we all need to be up to date hence we have the founder owner of rent Panda my good friend Hart togman back on the show R Panda now manages properties all across Ontario and times uh and time the timing is uh special uh vacancies across Ontario are rising credit ratings among tenant applicants are declining inflation’s High landlord tenant board is at worse relationships between tenants themselves and tenant and staff Property Management staff is
(01:39) uh it’s all declining uh what better time to expand one property property one’s Property Management business part is obviously a good guy and he details for us his preferred investment strategy student rentals as well as which uh which which is actually a great Segway into me reading for you a chapter I just wrote and for my upcoming book the chapter is the best deal our client ever invested in it’s not what you expect it’s not one I would have ever anticipated either because I would have bought all of them the year was 2019 2013 non-conforming
(02:12) multif Family Properties were being cracked down upon in cities everywhere especially in Hamilton for a good reason tenants were getting hurt many were even unfortunately getting really hurt in fires due to lack lack or poorly maintained Fire Safety Systems uh if you’ve everone owned a property needing a window in a basement room where there previously was none or had to replace a fire escape you know the cost can be very significant uh fire escapes range between 30 to $70,000 for just just a three-story triflex University and
(02:43) colleges were growing in student population and needing more off campus hosing from private lion Lords uh student rentals uh in my experience are a best practice assessment for small landlords as the building and fire code requirements are significantly lower than that of a duplex we only have one kitchen so we don’t have the same fire risk and fire separation requirements as you would in a two or three or four family home now about the investment my property property manager and good friend Roger gave me a tip about a large
(03:11) home builder host Builder near Brock University in St Catherine’s who had new construction houses suitable for student rentals this was a high quality Builder they had won numerous awards for the nager region uh who had built now this is different this is Naga region back in 2020 2013 so the market wasn’t crazy hot uh they were actually build houses as they were sold as in they didn’t just sell it the whole plan it’s more like you know Mom and Pop would go buy a house and then they’d start building it one by one really different than the the
(03:43) world we see today and you one only needed a 5,000 total deposit 2500 upon signing another 2500 within within about a month this is over 12 years ago so so my my memories AR aren’t perfect now these were four bedroom uh four bedroom houses uh 1900 and 1700 foot semi- detached or town houses respectively uh but because we were PL buying off a plan uh working with a quality Builder who had capacity to do um custom work for us uh I was able to design the house to be an ideal safe city building and fire C compliant
(04:22) property for uh as many bedrooms as I wanted uh so I met with the vild designer and made the following changes to their plan he Shrunk The the principal bedroom formerly known as the basor bedroom to allocate more space for smaller for towards the smaller bedrooms to make them more equal in size converted the the dining room into a bedroom that I can now rent for 6,000 per year uh remove closet doors remove closet doors saving thousands of dollars these often get uh closet doors often get removed or damaged by students so
(04:55) why bother providing them and nobody complained not one finish the basement to include a three-piece bathroom that means a standup shower sink and toilet of course uh also in the basement would be two bedrooms each with an egress window which is an oversized window to allow some more sunlight and uh at the time the requirement was 4.
(05:21) 1 square feet in size which can be opened without tools for a person to climb out in case of fire uh all the walls and ceilings were insulated with fire rated sound insulation and drywall uh again these were all fire rated products we were basically following the Ontario building code as if the property was a multif family property ruins for the basement kitchen were installed uh at the time basement kitchens weren’t allowed nor will we be planning on on providing them uh to um so to limit fire risk uh but so we only did the ruins and so should the
(05:51) bylaws ever change or should our clients ever want to Suite the basement it would be extremely easy to do so uh no carpet we replaced all the pl all the carpet and the plans with uh car with vinyl plank as it is waterproof and Incredibly durable vinyl plank is basically the best practice of pretty much every real estate investor I know out there uh because it is so durable waterproof uh if there’s ever flood you can really generally just mop it up and it’s a much cheaper fromall it’s usually like half the price of a laminate and again way
(06:24) more durable than than carpet um yeah it’s just so many winds and and it’s way faster to install less tools are needed to to install vinyl plank or I old school because when vinyl plank came out it was called vinyl plank later it was called luxury vinyl plank so the acronym is lvp which I absolutely refuse to use anyways my requested change is added around 40,000 to the per to the price of the house which is a fraction of what it would cost us to have contractors renovate uh and existing house and so that would also have taken longer and we
(07:04) could have been at risk of having to get permits and of course there’s always delays in any sort of renovation project um the best now the best part here why this investment be uh became the best for that our clients have ever done was uh they can now include the cost of all these upgrades these $40,000 upgrades into the mortgage as the host would apprais for for all the work that we getting done and then and then in turn they can invest the minimum 20% down payment plus closing costs so by minimizing the investment dollars the
(07:33) return on investment ballooned as and also on the because because the investment property that costs 315 to buy $315,000 to buy these are we were renting them for $ 3,150 uh inclusive per month inclusive of utilities so that makes the gross rent yield to of uh annual rent to price at about 12% which is something you don’t see in Canada anymore so needless to say many of our clients bought these properties and of course they’re ecstatic for the returns uh the M now it wasn’t all sunshine and rainbows management of student rentals
(08:10) is not the easiest for people who want to self-manage or even from property managers uh it was a rocky ride for many some didn’t make it didn’t sold earlier than ideal um but from the few who got lucky Who had who happened to u to hire what turned out to be the best property management company in town uh Shad out to Adrian kulakowski and student rentals 101 now fast forward to 2023 when our client decided to sell one of these properties uh he sold a townhouse while the market was still pretty hot in 2023 they sold the town house for
(08:45) $84,000 in multiple offers to a mom that was desperate for a house for her kid for her kid going to Brock University now on price appreciation alone the return on investment was over 400% that 10 years over a 10 year period 400% return not factoring in uh mortgage mortgage payment the pay down of the principal of the mortgage over those 10 years and cash flow now Winterberry is the name of the street back in 2012 when we first found the area it was just the road line with empty dirt Lots on both sides of the road uh fast forward to today
(09:22) Winterberry is known as the top destination for student housing for Brock students uh it’s basically a household name for Brock University students the B the bus service drastically improved which I helped as I personally lobbied St Catherine’s transit to reroute its bus service and have pickups where our our client’s properties were located uh and what we found out was the students do appreciate the newer more modern housing style bigger bedrooms bigger house stainless Ste appliances stone countertops in the
(09:55) kitchen and bathrooms uh versus the majority of the houses in St Catherine that are rented to students were built in the 1950s they’re smaller not renovated and a lot of them do not have basic Fire Safety Systems maybe just smoke alarms but none of the none of the egress windows that we have and also fire and sound separation we had in the walls and ceilings so and then that all this translated into a big difference uh as we are my clients were able to charge a premium rent premium rents have equated to above Market values for our
(10:26) clients rental properties um because inv investors indeed value cash flow uh my clients town houses and semis actually sell more than bigger houses in the same area built by the same Builder because the incs justify those prices now these are uh these are the rewards of highest and best use investing and with a little luck um we got a lot of luck uh sadly my wife and I didn’t buy any of these as we were focused on basement apartment seding strategy uh yeah I’ve always admitted I’m not we’re not perfect university student
(11:02) rentals in general is the preferred investment strategy for the small investor since students uh student non-payment of rent is very very rare in our experience hence one avoids the risk of ending up with the landlord tenant board which overwhelmingly favors the tenants uh We’ve also been lucky with all the price and rent appreciation uh regular turnover tenants as they graduate school and leave to return home uh as TS move turnover it allows us to raise price rents to Market market and that’s just beneficial to the investor
(11:32) which is not less common in regular rentals uh Rich parents signing as guarantors helps us out as well but again it’s not always Sunshine rainbows declared student rental uh Aid lender financing is basically non-existent student rentals with A- lender mortgages at A- lender rates were either not student rentals at the time the bank appraised the property or the appraiser did not for some unforeseen reason did not notice the host with six six or seven bedrooms was near a university or college for some reason they didn’t
(12:03) think that property would be used as a student rental uh my last mortgage on a student rental was 10% from a be lender maximum 65 loan to value uh and that 65 loan to value perc loan value was based on the original value that I purchased for the home they would not recognize recent appraisals uh during re during the refinance process to allow me to take back more My Equity point is from a financing perspect effective student rentals are not scalable in my experience uh investors have to be prepared to have their Capital tied up
(12:35) until they sell why because student rentals are not a recognized use by most zoning bylaws hence Banks don’t want to uh lend on them the way that we’ want them to then there is rental licensing uh which can be another couple hundred dollars per year in Cost Plus a couple thousand UPF front between licensing fees and renovation requirements to get into compliance and that is the truth about real estate Investing For for Canadians and student rentals in my experience now if you’d like to learn more about uh other best practices in
(13:07) real estate investing uh we do have two webinars coming up uh one is on September 8 sorry January 18th uh where we will be hosting a virtual tour of properties my clients and I have purchased in the states they’ll actually be hybrid so we’ll have some seats available in person and online as well also on January 25th we will be uh teaching the best practices on how to sell a tenanted property our Focus will be on Ontario as that is our experience uh but I’m sure our um our lessons and experience can be translated to places
(13:41) like a BC and Quebec where the laws favor the tenant uh but again this is a bit of a specialty of ours uh because honestly not many real estate professionals are landlords let alone have as much experience as we do in owning as many properties as we do with tenants and and um yeah it’s kind of the sad thing about real estate investing in Ontario that the best practice uh for uh selling a rental property is to sell it without a tenant and to get it without a tenant it’s uh there’s some there’s some hoops to jump through and
(14:16) again we are specialists in this area January Saturday January 25th we will be hosting a free webinar on the subject and uh hope to see you there now on to this week’s guest again Hart is a friend I refer him clients all the time for tenant location services this may sound like a paid endorsement and full disclosure heart pays me nothing we receive zero compensation for me having heart on this show and me sending him referrals it’s too bad we’re selling the rest of our Ontario our rest of our Ontario portfolio in the near future as
(14:48) I could have asked him for some favors but no nothing we get nothing which I don’t mind uh as my judgment is not clouded uh we get along well because we’re both on a mission to help Canadians get ahead in life without taking away too much time from their lives and families by streamlining their Investments that we we help we both in different ways help them sleep at night and we both volunteer for nonprofits that support landlords Hearts company rent panda is an expert on rentals providing both property management and
(15:12) tenant location services while also using the same tools that we recommend on the show like single key and front lobby any Ontario landlord not using these companies is exposing them to exposing themselves to unnecessary risks again Hart is a professional and he uses these as well uh the risks that I mentioned they’re uh these risks don’t honestly exist in landlord friendly USA but I agress you can find Ren Panda along with a bunch of free online resources that every landlord Ontario landlord needs at rent panda.com
(15:45) [Music] top I’ve got a one and a half-year-old at home I got a new baby on the way in March I don’t think I do that so yeah no I think I do that I don’t remember that none of that doesn’t matter okay you don’t have to remember everything thank you thank you yeah so we’re gonna have two under two so that’ll keep me busy um on a journey of self-development we didn’t talk about this beforehand off camera but um I’m in a new mindset of personal development is business development which has been awesome um so that’s been about a year in the making
(16:30) and uh yeah then running rent panda on the day-to-day day so all of our rental services from software Leasing Property Management paralal Services running teams figuring out new systems dealing with the Canadian real estate market and uh yeah trying to just make the world a little bit better than the day before that sounds like a good good day-to-day overview do a lot of hard yeah let’s start with the self-development hard like what kind of hard you mentioned ice cold plunges before we were recording yeah I mean this like a
(17:05) cold shower actually like this is ice buckets um so not on the day-to-day but uh we’ve got a family Cottage up in Moka so I like the winter time best because I can drill a hole in the ice and properly get in the lake um we were up there last weekend and so sauna to cold Plunge in you know November water temperature is a lot of fun and I like seeing other people fun for you yeah it’s fun for me and when I go with other people it’s fun seeing them suffer for the first time cuz I enjoy it now so you got to push to
(17:35) the next level um but I think ultimately you know probably almost 15 years ago now I got into the world of mountain climbing uh my brother who I only realized today has has seeded all of the ideas that got me into all this crazy that I do on the dayto day but my brother came up to me I was you know 20 years old 22 maybe and he was like hey let’s go climb and kill Manjaro and I didn’t know what kilan jaro was and I was like sure you know older brother asked the younger brother to do something I’m game of course I would do
(18:04) that right and uh we ended up getting intestinal parasites that they thought was altitude sickness did a 16-hour trick through the night to get off the mountain and we were sick and vomiting on the side of the trail and my brother looked at me and was like I am never doing this again and I got hooked into mountain climbing like I just absolutely loved the experience and the camaraderie The Challenge and your face says it all it’s essentially extended suffering um so since then almost every year I’ve done a mountain climb um I run a charity
(18:37) called Summit for sick kids which is raising money to uh fund the oncology department and cancer genetics research by climbing mountains um but essentially you know extended suffering is is part of my life and I think uh ultimately true growth happens in that area of suffering and the discomfort and I think Society these days is very much positioned to make things as comfortable as possible you know people are looking for better faster easier more comfortable less work order it from your phone order it from the computer and I
(19:11) very much believe in getting your hands dirty Doing Hard and suffering to grow you know it’s not masochism but you know s a good amount of suffering really pushes you out of your comfort zone and makes you uh Excel as a human how old are you again remind me 37 37 yeah so good did you say you climb a mountain every year then trably to yeah anything local or you always traveling no I mean we’re we’re in flat country here um Rattlesnake Point looks challenging yeah yeah rattles snake point is like you know I want to throw my kid on my back
(19:47) and go hiking Rattlesnake Point with the family oh I mean go vertical don’t go walking fair enough there is good climbing at rattlesnake um so the last one as an example was Wyoming which is relatively accessible from here uh um or Denver is some good mountaineering but we flew out there and then did five days in the back country through Wyoming um and the Tetons are like absolutely beautiful you understand like you fly in and people call it God’s country because it’s just flat planes where you can imagine like millions of Bison used to
(20:17) roam back in the day and then it just kicks up into these beautiful snow cap Peaks um so yeah we did some climbing there for 5 days uh the last big big climb that we did um we did one in in Ecuador we did um akaga down in Argentina we did five mountains in 5 days as a challenge in the col or not Colorado the um Canadian Rockies so that was just like out of out of B go out and for five days straight just climb one mountain every day uh but you you get a sense of um purpose when you’re in the mountains and especially with those that
(20:51) you’re with you know no one makes best friends for life or like true deep connections sitting at the spa or going for a walk or sharing a dinner you know you share a tent with someone and you climb for 5 days and you battle the elements and you suffer together and you kind of rely on each other to survive it creates really deep connection so I think it’s just this level of life that I really enjoy sucking in as much as possible you talk about like modern day we trying to make things easier yes like in my business I always tried to make
(21:24) real estate investing as easy as possible for my clients yeah and it’s never been harder in Ontario hence I’ve Tapped Out y you mentioned some good places to invest in the states no interest too easy not necessarily too easy on that front I do think there is an element especially for new investors that are are starting out you have to be conscious that there is a journey right and not to just bring it back to mountaineering which is cliche when you talk about mountains but since I’m actually climbing mountains maybe I’ll
(21:58) use it but you know when I climbed Kodi I had a different mentality I was a young Mountaineer it was all about getting to the top I got to the top and I have a picture I wish I brought it in or have it on my phone but I’m I’m it’s not on your Instagram no nothing uh maybe it’s on Instagram but I think it was pre- Instagram days but it was me and my climbing buddy Adam and you know he’s my my co-founder of the charity were kneeling at the top with our sponsor flag and if you zoom in close on me my lips are blue my eyes are glazed
(22:28) over I have no memory of that moment absolutely zero I remember climbing up we started at midnight but by the time we got halfway up my memory was gone I was hypoxic it was freezing I wasn’t doing well and we were on a rope team right so it was the guide me and Adam roped together so if one of us Falls the other two are going to save that person um and on the way down I remember sitting down in the snow and feeling warm and fuzzy and having this thought come over me as like oh this is how people die on mountains right like your
(23:00) brain convinces you like this is warm this is comfortable your brain actually convinces you you’re warm and like don’t get up and that’s it and you literally hear stories of like near-death experiences on Everest that’s how people die and your brain is wired to make you seek Comfort um but nowadays when I’m out engineering and and my point is you know I got to the top and don’t even remember it and so if you’re doing something for that Pinnacle moment you know people climb Everest they spend hundreds of thousands of dollars a years
(23:29) training months on the mountain for five minutes at the top so if your whole goal is to be at the top in life in anything it’s a fleeting moment right because you get to the top and you realize you’re on a false Summit there’s actually another one behind you or you turn around from the top and you die on the way down or you suffer on the way down and I think real estate investing is is the same you know a lot of people see successful Real Estate Investors they see people with time freedom and freedom in life and
(23:59) they just want to get to that point and they suffer really badly and not the kind of suffering that I like but they suffer really badly throughout the journey every time a tenant calls they haven’t even picked up the phone and they’re sweating or they hire a property manager and every time their property manager calls they get emotional and angry that they have to landlord essentially and I think when they’re on that Journey they they forget about enjoying the journey and like what is the pur purpose of life if not to live
(24:25) every day and try and enjoy it and life is there to beat us down right and so if you can’t find a way to enjoy the journey you shouldn’t be doing it and there’s lots of other ways to make money and yeah us investing is a much more painless way to invest these days and if you think about yourself as a real estate investor you know you were Mr Hamilton right you were a real estate investor that was like I know this Market I’m in this market I’m G to make money in this market I’m going to show others how to make money in this market
(24:56) and others and as a real estate investor in person you tapped out like you said right you went this is enough this is the level of suffering that I’m willing to take and you pivoted into something that was comfortable for you and I’m sure there’s still some suffering involved and there’s still work to be put in um but you’re on a journey where you can enjoy that journey and I think so many investors are just reaching for the top and they’re on a journey that they’re really going to hate and they’re going to tap out without having seen the
(25:28) top or or seen a glimpse of the top um and that’s where I think people get into it without asking themselves what type of investor they are right and I know right now in my life I’m a student rental investor right I want cash flow with properties that I don’t care about the appreciation on I know they’re going to be a bit more painful right there’s that part of me coming out there’s going to be more calls you got to parent you know the students sometimes but it’s good cash flow and it’s setting me up for the next stage of my real estate
(25:55) investing career which may be a us property which may be more passive investment which may be private lending like you can pivot throughout but when you’re on that Journey you should try and enjoy every step of the way versus just aspiring for the top it was enjoyable for a large part of it yeah like a good I think I have about four dozen clients who have made a million or more in real estate investing y wouldn’t have been possible without Hamilton and St Catherine’s and AWC and all that yeah but uh yeah you we we we were joking
(26:26) before you were recording that I I called you a sis I believe fa cuz uh Ren Panda uh you yeah you refresh my memory because when I first met you you were already offering leasing services on top of promoting uh lease properties available for lease on rent Panda yes yeah okay so take us take us to why why did you start the business yeah it’s a good question so to my brother walking in the room and saying come climb kill Manjaro I only realized this literally today that um I was sitting in my office working in advertising at the time I’d
(27:04) been in advertising for a decade or so um and I came up in advertising doing the the standard things so I I worked for agency side doing client management and account management and i’ been working at Big Brands you know worked on General Motors Tropicana Del Monte um worked that life and then said you know I’m really sick of pushing capitalist product that people don’t need um had a little existential crisis and came back and and decided you know I had dabbled in the world of nonprofit but I realized that there was a world of advertising
(27:40) for nonprofits that was really awesome I could still do advertising and Leverage What I knew but help causes um and so I was in that world doing advertising for causes sitting in my office and my brother called me up and said hey I’m in thunderbay he had moved to thunderbay he was doing his PhD or finishing it up at UBC and moved up to thunderbay and had a really terrible renting experience where I may have mentioned this story to you but there was a website called homeseed homes and that website in 2016 was still
(28:12) based on the premise of you go on the website and see um rental listings and very very cursory rental listings you would each transfer the owner of that website $20 and then they would send you a Word document with a description of all the properties and the phone number of the landlord to call and that was the way that people rented properties on like the majority in thunderbay in 2016 so like it sounds like 2001 right it sounds like 1995 a Word document yeah a word doc for $20 on the tenant side this is not even
(28:45) just landlords paying for them to be featured but the tenants had to pay 20 bucks for a Word document of listings and so my brother called me up and my rental experience in Toronto was vi at.ca vi at.ca in 2016 the Pinnacle and that was that was it right but it was are they still around do people even talk they are still around are they still as no they’re not the same they’re not the same so they they did a few updates but they’re essentially just a little bit of a bygone rental marketplace right um just correct me
(29:17) from wrong but from my memory uh vi. was dominant for commercial apartment yes like almost every apartment building owner the reats were basically all using all their listings were Ona most small landlords as well so this was pre Facebook Kijiji was a little bit but there was essentially view.ca and Craigslist and so that’s how most people found it and view.
(29:42) ca was expensive for landlords to post on um but if if you drove they’re dominant in this if you drove around Toronto you probably can visualize their like blue and white view at.ca signs um and they were the dominant player and so in 2016 Thunder Bay was pay 20 bucks and get a Word document and Toronto was this website that PDF no no yeah we can’t be bothered to save it as a PDF no um and in Toronto view.
(30:09) ca I think at the time had last been updated in like 2011 like it said you know on the bottom of the website last updated in 2011 so it’s essentially an archaic website that was running the majority of the rental Marketplace so my brother was like what is life like in Toronto what is life like in Thunder Bay and we had that you know cliche moment of there’s got to be a better way so at the time you know Tech is hot let’s build a prop Tech can’t be that hard and let’s build a better Marketplace so we built a standard Marketplace and we went out and
(30:42) stole airbnb’s Playbook when they were in their early days of getting in the door of every single landlord right they couch surfed their early airbnbs to talk to those hosts and understand you know the mentality of the host and so what we did was any one that listed on the website it was completely free we offered free photography so we taught ourselves basic crappy real estate photography bought ourselves a $500 camera and went out to every single landlord who listed on the website for free and took photos and what that did
(31:15) was not only did it give us us give us a sales platform to push them through to added value tools on the website but it helped us have conversations with landlords and understand what they were looking for and so at the time what they were looking for was being fed by us and and we asked a lot of leading questions unknowingly and they wanted more tools so we built a showing schedule or we built a screening tool we built you know background checks credit checks we built a profile for tenants you know just like
(31:42) on Airbnb where we thought down the line this is going to be a rating system um we built a lease Builder we had enform Builders and we just kept adding software to the platform thinking that if you build it they will come right and as we expanded if you add more tools we will get more people and we pushed and pushed and pushed and every time we didn’t hit the metrics of how many people we wanted on the platform which in our minds was prop Tech so it’s got to be a hockey stick or else you failed um and we we weren’t hitting those
(32:11) hockey stick curve numbers so we just thought we had to add more and we had to add more and we had to add more and I read a book and I I forget the name now but it was something along the lines of like lean customer development or customer development and it was about talking to the customer essentially and we realized that we had spent hundreds of thousands building what we thought people wanted as opposed to actually going back to those original routs and talking to people and this was a couple years span so we kind of stopped
(32:38) everything and my brother and I said our prime directive is have conversations so we had probably over a thousand one-on-one half hour coffees with all of these landlords that were on in Thunder Bay in Thunder Bay we were in gu at that point Kitchener waterl anyone who was a landlord we just tried to talk to and had one-on-one convers ations and we built this standard list of questions that we asked but what I learned from the book was the magic question at the end was you know we’ve walked you through these various things that you
(33:08) may or may not want but you know what is your problem and and they all identifi their problem as a fear of unpaid rent and tenant cause damage which is every landlord right but ultimately we said if you could wave a magic wand and come up with a solution that solved that problem what would it be and in our heads they were going to say an AI based tool that would post my property and Screen my tenants and you know give me recommendations so I can just say thumbs up right and we were thinking Tech and they looked Us in the eye and they said
(33:39) find my tenants and manage my properties right and we had this aivy moment where we’re like holy we are building product and they want service right in this realization that real estate is a people business and they just wanted technology the answer it’s the human right yeah and so Tech can make it better and faster and easier and cheaper But ultimately they just wanted to hand it off to someone and so we we did a fundamental pivot of the business and just said we are no longer a prop Tech we are Tech enabled real estate right we
(34:09) will use the technology but we will have the people on the ground to empower Leasing and property management at a quality and scale that isn’t there right now and that’s been the journey that we’ve been on for three and a half four years now see you’re part of the problem making things easy yeah people get their evenings and weekends back while you go work yep for sure for sure making society’s soft heart yeah our clients may may uh disagree but I think every everyone wants to be an investor right and doesn’t want to be a
(34:43) landlord and so I think property managers are essentially just hiring out the landlording of investing um and so if we can do that I think that there is a true way to do it that is both in partnership with investors um so I really hate when investors come to us and say I don’t know anything about landlording just do it for me right we we try and teach people how to property manage so then they can hire property managers I don’t think anyone should hire a property manager without knowing intricately what that property manager
(35:14) does you don’t have to necessarily do it yourself but you should know um but you know it’s it’s very hard to manage a client that doesn’t know what we do that doesn’t know what landlording is that doesn’t know basic RTA um so for us we’re actually designing like a landlord 101 course all of 2025 is about content development for landlord education even bite-sized because if everyone that comes through us or otherwise every other property management company every other landlord can just get a little bit more knowledge than they have right now
(35:46) I think the entire industry would be much better everyone would be more comfortable not in a bad way but um it would help and and we’re dealing with a difficult rental market and like you you alluded to beforehand we are in a rental market right now where I before we get there yeah let’s talk about let’s talk about what uh about teaching uh investors like the basics of landling or like RT residential tennessy act yes what don’t people know I me everything unfortunately um it’s my house why can’t you just kick
(36:16) them out that one yeah um what is the Ontario standard lease um is my property rent controlled like it’s it’s surprising and sad to me the amount of condo investors who’ve invested in a condo and in my head the only reason to invest in a new build condo like yes there was some good returns over the last few years but the only reason to invest in that as opposed to a single family home you have no control in a condo right you lose all control the only reason is because all of the new build condos are non-rent controlled
(36:48) right and in a city like Toronto there will likely be consistent demand for condos in the long term right now we’re going through a tough time um but the amount of condo investors that come to me and I ask if they’re rent controlled or not or our entire team and they’re like What’s rent control is it’s dumbfounding like excuse me really what excuse me yeah and people say hey should I that makes sense that’s the person who bought yeah yeah versus like I’m used to talking to very educated people like EO members for example and and like they
(37:19) express no interest in being a landlord because they understand RTA y the challenge of evicting a tenant you you don’t have control if you have aant B yeah and and I think that there’s there are more nuanced things that are standard for those who have been in it for a while but you know basic maintenance right I’ve seen so many leases which says you know the first $500 of damage the tenant has to pay for seriously yeah where do this lease come from they they come so one thing that I’m finding as things get harder is
(37:52) more um you know experts come to the Forefront yeah and a lot of people and like Facebook forums are terrible Facebook groups but you know someone poses a question right hey my tenant clogged the toilet who has to pay for that or or who has to fix it right not necessarily who has to pay for it but who has to fix it and I literally was in the parking lot of of your office before I came in and I read this forum and half of the answers were the tenant right and people will just say you know whose obligation is it to fix it well it’s the
(38:22) tenants well no it’s the landlords right the landlord has an obligation to repair and M main the property M if there is negligence that cause that damage the landlord has the right to go after the tenant for the damage but right but for the RTA it is the landlord’s obligation right and people say oh what about changing light bulbs it is it is one line in the RTA right repair and maintenance obligations are on the landlord and so all of this misinformation from people that think they know the right answer or will just
(38:54) jump at an answer to say oh you know my tenant flushed a TV down the toilet whose responsibility is it well yeah the landlord can likely go after the tenant for negligence but the answer is not that it’s the tenant’s responsibility all of the onus falls on the landlord so there’s this massive world of misinformation and we’ve just gone through an election it’s not you know Russia getting involved with misinformation it’s just people that think they know the answer that are propagating incorrect answers so i’ I’ve
(39:20) actually started a property management support group on Facebook and so this is acknowledging that like I’m in competition with other property managers I want to build a network and community of property managers who can all lean on each other and be voices of reason because when you go to these Facebook groups all of the top contributors with correct answers end up being paralegals property managers people who are you know highly seasoned investors who are trying to push positive information but are usually overshadowed by just masses
(39:51) of gray area information and incorrect so yeah I think investors these days were in a perfect storm where money was cheap people ended up investing right and so there’s way too many small landlords that got into it without knowing what they were getting into and now in this market there’s a lot of people who wanted to sell a property who think well I’m not going to get what I want from the sell from the sale let me just rent it out right and and those two groups end up being landlords without actively pursuing landlording which
(40:23) involves educating yourself on how to be a landlord and joining groups and talking to people and surrounding yourself by with with friends who are investors so that you can actually ask someone who knows what they’re talking about and we just see that all on Facebook and Reddit and the masses of crap information that’s joys of social media yeah had a joh argue with me about how Canada is great for investing and the he just he’s just he’s just spting off uh economic rhetoric right and again he’s not even fully
(40:55) versed because you know for example NE Bruns just voted liberal conservative government six balanced budgets eh no we don’t want you anymore you’re You’re gone placed for the liberal government and uh so they’re going to have rent control starting next year 3% um and so you know it’s it’s all there textbooks have it all there what happens rank control yeah right yeah and fixed term leases I mean it’s like you talk to the people in the note and there’s a few key things that have caused this situation that we’re in
(41:28) right now right fix term leases rent control just basic things that if you look at other balanced markets they don’t have them right if you if you play with an open economy things balance but yeah anyways and the politicians know because there’s no way they don’t know it’s just they do it for a short-term voteing anyways gross yeah I dig gross so how is how is the rental market going so first off how many markets do you cover uh so Tech technically all of Ontario yeah um I would say very you have you have your so you have your like
(42:03) hands in the pies of all these different markets within Ontario so you know you have a good feeling of yeah and how we’ve built the business is that we have Regional centers um and we’re transparent about our operations so on the property management side we have no humans in offices in any specific region we have teams actually across the globe so that we can be 247 with our team um everyone works from home and property manager just property manag we’re not Leasing and property managing in that way we can cover
(42:36) Property Management within every region in Ontario and you know hopefully soon to be National and maybe International um but what is needed on the ground is leasing operations and the trades uh so on the trade side we have a network of Trades and we’ve actually just partnered with bid me which is a contractor bidding platform um so that if you’ve got a leaky tap and I’m managing your property we send out that work order through bid me and we have a network of 5,000 contractors who bid on the job so we get better pricing faster response
(43:06) times and in that way they cover Ontario we cover Ontario and the two companies are aligned um so we can offer better service in that way and then on the leasing side we’ve hired key individuals within Regional centers so as an example we cover the the near North right let’s call it like Barry right but we also cover ailia and Midland and all the way out to Owen Sound if you’ve got a property in tobore we can probably get there but we may say Hey listen you know it’s not going to be the quality of service so we’ll recommend you to a
(43:38) local tobore property manager the goal is that we will cover absolutely every area but I would say 95% of where people are investing were covered with key people in a region and each person can cover you know 15 200 km radius yeah so from thunderbay in the north down to Niagara in the South and winds in the west all the way out to Ottawa in the East fabulous yeah so that’s why asking questions like of like how’s the market to to you versus someone like oh I have 10 properties in Ajax yeah and they’ll it’s even better when they say they know
(44:09) everything right let me tell you how it is out in Windsor so how is the rental market so where you want to start well I think you brought up a good point of um how is the rental market is a bad question to ask not saying you asked a bad question but it’s a great segue into the rental market is a market that is harder to make money in than it used to be right and that’s why you’re wearing the hat that you’re wearing but looking at even just the Ontario rental market versus the Canada Canadian rental market um it’s a very hard Market to
(44:47) participate in um you know money has gotten more expensive it’s getting cheaper again um but you know less properties are cash flowing properties aren’t appreciating like they used to be and and a lot are depreciating so as an investor it’s harder but also when it comes to the fundamentals of renting out a property and managing that property there are less quality tenants than ever before um so we rent we we work with single key and run all of our rental reports through them and and have partnered together we ran a report on
(45:17) the quality of tenant which is very qualitative in its explanation but it can be put down to qual quantitative metrics right so average credit scores have dropped cons consistently over the last two years um the number of collections reported per set of applications has gone up so now we’re looking at 18% of all applications have collections in them and sorry what percentage 18% 18.
(45:44) like 4% I think was the last um and Bank these people have no hope of renting something like they can’t even get a credit card yeah so I mean we see a lot of like Capital One credit cards these days because Capital One will give anyone a credit card um and bankruptcies was astonishing so bankruptcies has doubled in the last year so the the numbers so they’re not they’re not going bankrupt but that they have it on yeah reported bankruptcies um at the same time income to rent ratios have shifted quite dramatically from the age- old you know 30% and under is a
(46:17) good amount right so usually you don’t want to spend more than 30% of your income on rent or on housing costs in general um the latest St and we actually pushed our our data data provider so we work with door insight as a data provider on the secondary rental market um right now if we look at the GTA household income not just personal income we’re up to 44 45% of household income is being spent on rent and that’s the average that’s just rent that’s not utilities just rent not insurance it’s an astronomical number
(46:54) when you also couple that with a market where everything is more expensive so we touched on this before we start yeah but you know there’s there’s an affordability crisis happening across the board so when you’re spending 45 and this is average again so when you’re spending 45% of your income on rent and then you add on utilities and insurance and you know your car expenses and your schooling expenses there’s not much to live on at the end of the day and so when you go to look at your housing situation if you’re at that 35% rate
(47:26) right now and you need a bigger house for your growing family and you’re in you know a rental mindset you’re not looking to buy you’re just looking to rent do you really want to move for a little bit more space or an extra bedroom that’s then going to push you into 45% or 50% of your household income and lose your rank control right so those that don’t have to move aren’t moving so what that happens is you know we’ve got all these people with Collections and bankruptcies and lower income nowhere to go nowhere
(47:53) to go and all of those who you know don’t have to to move aren’t moving so when you’re an investor with a property that you’ve bought you know when money was cheap and you’ve put a lot into it and you need a certain number to make your numbers work and you’ve pegged your rent number and you put it out in a market where there is now an over Supply because all of these investors flocked to these markets and now no one’s moving and the quality of tenants is low you’re in a situation where you’re screwed right and now finally you know it’s it’s
(48:24) not a good thing for investors but rents are dropping right and rents have been dropping for the last 9 months and whatever the CBC says is is incorrect CU you know they still say rents are going through the roof but rents are dropping and I think it’s a good thing because rents need to stabilize and they need to balance with that affordability crisis that’s happening because a lot of investors will talk about the housing crisis right they’ll say I’m building more housing because there’s a housing crisis I should be able to find tenants
(48:51) yes we can find you tenants but they will be on ODSP and they will be struggling to make ends and they will not be A+ tenants without a lot more work and a lot more effort and a lot more time so vacancy rates are you know true vacancy rates are probably four to 5% whereas cmhc reports you know 1.8 to 2% um the time on Market again the MLS will report time on Market is like 7 to 10 days well the MLS does not capture the rental market in reality in Welland right or in Kingston so time on Market our average right now is around 42 days
(49:25) right we’d love that to be well under a month but it’s just not because to get the right tenant takes more effort takes longer and as a business we are spending more on every single contract than we ever have in the past so it’s that’s more money on Advertising it’s more time and effort more trips out to a property means more gas and gas is more expensive than it used to be and so the cost of everything is going up which means as a business our margins are shrinking and at the same time you know it’s taking
(49:54) longer even with that extra effort so investors are more emotional right because I’m an investor myself sitting on vacancy sucks so when you are sitting on vacancy longer you naturally go hey leasing team property management team what the hell’s going on the whip do more exactly and so we spend more money and then it’s just this vicious cycle and and I think it’s part of the education that I wish was out there where you know like rentals.
(50:20) ca does a good job of producing a monthly rent report I wish that there was a you know communal rent report where everyone that has data got together and it was democratized data on the secondary rental market to say here’s what the actual data shows because when you look at cmhc numbers and you listen to Realtors who are selling investment properties and trying to push investment properties everything is still sunshines and rainbows but it’s just not the case and and um you know it’s part of that property manager support group because
(50:48) it’s harder as property managers and we want to get together and say hey not only do you have a shoulder to cry on when your clients are all you know barking at you left right in center but let’s work together to re-educate on what’s actually happening out there so that we can kind of temper things and hopefully balance the market a little bit yeah that’s mouthful it is I was literally looking at a pro forma from a friend for a um a multif family in pul cor because um he he has at least nice performance so I just wanted to look at
(51:18) the numbers and you know for vacancy they had 2% for cobor sound reasonable yeah yeah so the it does sound reasonable because um digging deeper into how the rental market is doing to I didn’t even finish my last point but um how the rental market is doing is the wrong question because how the rental market is doing within a city within even neighborhoods and within an asset class in those neighborhoods is really the right question to ask um so Port curn I would say is like a tertiary Market if not like a fourth tier Market
(51:54) um and they are doing really well so if you look at um not even just like Belleville but napan right like if you go outside of the tertiary markets there’s a lot of interest in those markets interesting more and more people are moving there there’s more businesses that are moving out there because everything is more expensive you know and so when you’re living and working in an urban center as an employer you’re looking at other opportunities right so those non-urban centers are starting to grow and so from a rental perspective there’s opportunity
(52:22) there um it’s you know we’re invested in tertiary markets we’re invested in student rentals there too uh but you know Peterborough was hot a couple of years ago now Peterborough is still stable but even if you go outside of Peterboro there’s some markets that are good um or if you look at you know Welland as an example wellend is kind of oversaturated if you drop down into like Fort sorry explain oversaturated like the builders built too many the investors built too many the investors built too many um from what we see at
(52:49) least so you know a lot of people money was cheap they dropped you know they heard about wellend it was cheap to buy up a property they converted a single family home the town was easy to work with exactly yeah so they they would the permits were easy to get yeah and and from like a typical real estate perspective if you look at the numbers the you know the um the days on Market has gone through the roof and also the months of of inventory is quite high it’s not usually a number that we look at in rentals but it was an
(53:17) interesting one that we started looking at a couple months ago because as you know the the inventory started to escalate and more and more people were investing there the men never caught up and so the number of new units on the market was let’s say 100 the number of units rented that month per month right the number of units rented was 48 that happens two months in a row three months in a row four months in a row all of a sudden you’ve got three or four months of inventory sitting there which means your time to lease starts going through
(53:46) the roof um so that’s a market like wellend right now it’s starting to bounce back thankfully so it’s it’s stabilizing but if you go out outside of Welland and you look at some of the smaller markets there they’re doing quite well and so 2% vacancy in Port Port curn in a multif family actually sounds reasonable to me um you know cities like Rockville or you know Cornwall they’re little cities that are kind of not gold Minds I don’t want to like push people out there but there are cities still with opportunity um and as
(54:18) like a a stable Ontario investor talking to someone who’s been telling me to get out of Ontario for a while um I still think that within an asset class and within certain markets there’s still an opportunity in Ontario um if you understand the tenant Dynamic right and it takes more work to do it so again maybe that’s the mest to me where I’m staying in Ontario for now you yeah you are yeah but there’s I think that there’s also something to diversification of a portfolio so I probably need to listen to more of your
(54:48) style of advice and diversify but do you have any assets in US denominated US Dollars no not yet no gold no Bitcoin no Bitcoin just yet although you caught me on the steps of your building reading up a building up a book about Bitcoin so um I think in my journey of investing not just real estate investing but investing in general I’m still at the very start of that Journey because the last eight years of my life has been pouring everything possible into rent Panda and now finally I’m like hey maybe I should
(55:20) diversify outside of just rent Panda into my own stuff right um and also you know I’ve seen a lot of Real Estate Investors do really well and it’s hard to sit at the table with people who have made a lot of money while you’re being the garbage man without saying hey let me be the garbage man and the Monopoly man investor behind the scenes so I’ve started to to do both it’s interesting just think being around entrepreneurs Organization for example like I meet many people who cash flow very significant money y like you know low
(55:50) six figure half Mill Mill a year in cash flow from their businesses yeah and that doesn’t exist in real estate investing so there really is I think really there needs to be some sort of balance between the two for sure you know if you’re making a mill a year you’re going to be banking something you’re like I need to put this somewhere yeah yeah for sure and and my hope with Ren panda is that we start to scale to a point where it can be a little bit more passive for me um because I think diversification of my
(56:18) skill set and my day-to-day life is part of that personal development and so you know I’ve been on this journey of working out more thinking about mental health more thinking being a father first um you know I have this vision board now of being an active dad right like I want to be the dad that at 18 when my kids 18 I can still physically dominate him right I can drop out there on on the hockey rink or the basketball court and still be an active Dad yeah um and I think doing that now will help my business but at the same time I should
(56:48) be a business person and a dad and a real estate investor and an investor outside of real estate to make sure that me and my family and my community are are uh protected and supported yeah kids are in martial arts I don’t think I’ll make it to 18 that I can beat them no yeah we’ll see we’ll see yeah because I’m trying to make them good athletes yeah the good athlete that does martial arts is tough to beat yeah maybe just raw power though like just a little just stronger than them yeah they’re doing Jiu-Jitsu so they just
(57:21) grab they grab your foot and you’re done right there’s nothing you can do cuz you can’t even reach them in the class at that night then I’ll get hurt because I’m too old for that fascinating stuff yeah so what Mar so yeah so you’re mentioned like the Beyond tertiary markets are what’s working which is fascinating but uh I guess I guess the point is also just to avoid oversaturation by the investors because uh like the gentlemen who went went went up north I don’t know if you had much interaction with them but they
(57:50) they were in like like Timmons for example like markets with like shrinking populations but they had like 200 houses in a population of like under 50,000 people yeah and that issue is it kind of underlines the problem of over Supply or or over intensification because you know it was Tim and Sudbury Susan maray and I think Kirkland lake and also they’re all really far from a major Center like Cornwall at least is a reasonable distance to OT Montreal isn’t it and a lot of the other places you mentioned they’re all on the 401 y for sure like
(58:26) so him I think s St Marine what like they’re all really far from each other yeah so I think that that’s actually a good point in terms of the opportunity that I see out there so I’m heavily invested in thunderbay we started our business in thunderbay so we know it quite well we have a team there um we know the intricacies of the city and of investing in the city um but it’s it’s a big opportunity I think these guys capitalized on until they pushed too hard hard and too fast and flew too too much vacancy but when you go to the
(59:01) North like sus Marie is a center unto its own right and so when you’re in the north if you’re in North Bay and Sudbury and Timmons you kind of look to and maybe I’m going to get you know whipped by those who live there but sus Murray is the center um and I say this from a Thunder Bay perspective where Thunder Bay is the big city for a lot of people because if you go out across the Canada Highway and there it’s yeah it’s it’s like the transc Canada highway there by way my brother lives 5 minutes off of it and he’s just got a regular house um
(59:33) everyone comes to Thunder Bay you know it’s got the university the college the hospital all of the industry and infrastructure is in Thunder Bay and there’s a ton of small communities outside of thunderbit and they’re very very small as opposed to you know yes outside of ottawa’s Cornwall which is a significant size city in comparison to the north MH but when you go to the North or even just the near North you you get into these situations where you can really dominate a market um and it can be dangerous to do that because
(1:00:03) as they’ve shown you can own a very large percentage of the rental housing within that City and so you can start to shift the dynamic and we’re finding that in thunderbay both as an opportunity but also as a risk is like from a student housing perspective we could look at creating a small fund and buying up an entire neighborhood right our last purchase or two purchases ago was a 22 ,000 house this last one was $300,000 each of these homes will gross between four and $55,000 a month they’ll net let’s call it $2,000 a month on
(1:00:38) average if you told a Toronto investor that they were going to net 2,000 bucks a month they’d ask you where to sign they’re also in the mindset of appreciation is going to be through the roof whereas in thunderbay it’s not the case you know you’re at one and a half 2% annually maybe yeah to investors probably want everything yeah yeah and so you know it’s right for us at this stage in our Journey but you can own a neighborhood right we can turn a neighborhood into a student ghetto right or we can take a student ghetto and make
(1:01:05) it better quality student housing we can you know change the the zoning bylaw like we can work at an act advocacy level to actually make change with the city and rezone that for boarding house um so I think that there’s huge opportunities but you know we’re not looking at it as the Canadian rental industry we’re not looking at it as the Ontario rental market we’re not even just looking at it as Thunder Bay we’re looking at it as a neighborhood within Thunder Bay in an asset class for a specific tenant profile and we we’re
(1:01:36) specifically targeting East Indian International students attending usually Confederation college for it programs so like you get super Niche and you can create good businesses out of it and you know that’s where I think we’re at in this industry where you know a a Canada wide rental report is almost useless you need to really drill down to the micro to understand who you are as an investor and where you want to go and educate yourself within that that realm investors can never forget that real estate is is almost Street specific 100%
(1:02:12) as literally on stage debating vacancy rates of Memphis Tennessee right and uh and uh the other gentleman with the mic said oh the bacon is really over double DED there I wouldn’t invest there I wouldn’t recommend it right and I was just talking about my client who bought a house there yeah so then I checked with our CIO goes like we literally just had an appraisal there last week and they said the appraiser said 5% vacancy expect a tenant in one in one month right right so and but again it was a nicer suburb Y and again like every
(1:02:40) everyone’s context is different yeah someone has a Reit like they’re in their say they’re doing new builds they’re in a different neighborhood than I am yeah right so it is and then yeah so I I knew the question is how is the market wasn’t uh you know yeah but it’s the perfect question to ask someone like me because because I love to talk about the fact that um most investors ask the number one question like been at events and it’s like hey what does a three-bedroom house go for in the Niagara region what like that’s not when I talk to you I get
(1:03:18) really specific yeah exactly West Mountain three bedroom upstairs with a dishwasher and one parking spot like spefic renovate this year yeah and and our team is interesting in that you know Jack who’s our our director of leasing just wrote to me and as we do it like 11:30 last night and like hey can we do a survey of all of the tenants that come through our system which is a lot and on the website and with our day-to-day interactions and ask them you know what they’re looking for and what the value of things are like amenities and it’s
(1:03:52) something like there’s no report on the value of ameni and I’m sure you’ve been asked this question by clients a lot of like should I put a dishwasher in right or should I rent laundry or furnished or unfurnish right what percent does that move the needle and we can make guesses and we can look at comparables and and guess but no one has ever surveyed to my knowledge the tenant pool and said like hey here’s a house now here’s a house within sweet laundry the exact same what would you pay for this and how much
(1:04:23) would you pay for yeah and quantitatively mapping that data to say a dishwasher is worth 3750 a month to a tenant and I think that’s the type of mindset that we need more of in this Marketplace and I give kudos to jack for mentioning that because like to think about the rental experience as a Hospitality business is something that we’ve tried to do more and more and he’s got a Hospitality background so he’s like hey yes our clients are landlords but our stakeholders are tenants still and so we need to understand both sides
(1:04:53) of the coin and if we can Pioneer dat that helps investors and tenants on both sides of the coin let’s do that and we have the Forum to be able to so it’s that kind of cool stuff that like brings me back to the days of when we were a prop Tech saying hey if we dominate every market and we are the rental Marketplace the data set is really where we can affect change Mar I want to ask you more about your international student strategy in Thunder Bay yeah like uh paint us a picture like are these are these houses
(1:05:26) these these apartment buildings what is it yeah so we’re still on the route of single family homes turned into either multi-unit student rentals or single unit student rentals um and we’ve looked at some commercial uh and converting that into residential but right now we’re looking at single family homes mostly in this market that we can put five to nine bedrooms in um the city’s cool with this like so some will be falling under like the board in house ruling and and we’ll adhere to that in others um you know we can be
(1:06:02) non-conforming because we’re looking to reform some of that zoning bylaw and push that through um but ultimately for us it’s about building safe quality student housing for a demographic that is really in in poor quality housing right now um so youve probably heard stories of you know the stereotypical Bramton landlord that has too many people in their house right they’ve got three room room and there’s nine people all sharing a room um we actually talked to the uh the college and the university in Thunder Bay and they were telling
(1:06:34) stories of not just um you know multiple occupancy within a room or or double occupancy in a room or triple occupancy in a room they were talking about bed sharing which was the first time I had ever heard about it but if you think about an international student coming to the country they’re paying more intuition usually three to four times what a local student is paying they’re being supported by family but they’re also also pushed to work hard and move towards PR so permanent resident yeah yeah so they they
(1:07:03) are um in school eight hours a day they also have part-time jobs because they want to make extra extra money um they’re looking to build credit they’re looking to stay on the good side of the university and the community uh and they’re looking to save money and so we found cases of people flipping beds so a student will rent a bed for $150 a month month versus you know or a portion of a bed I should say and they will have it for 12 hours and you know when they’re at school and at their job someone else will be sleeping in that bed and that’ll
(1:07:36) be in a room that’s double occupancy so you’ve taken a $800 a month room cut it into 400 per bed and cut it into 200 per 12-hour cycle in that bed and so that was the situation that we were dealing with in Thunder Bay and we saw it as a massive opportunity to come in and provide quality student housing it’s profitable for us it’s cash flowing property we’re bringing up the quality of housing like the actual houses are usually Sentry homes that need a bunch of work um but they can be retrofitted into high quality student housing so
(1:08:12) that’s what we’re doing and as an example um we bought one it was $220,000 to buy we put about1 to $120,000 into it and that place is grossing 50 2 to 5400 a month um and netting around 2,000 bucks usually more but that’s $2,000 with vacancy cost in there we’re paying our own property management fees so you know Ren Panda has investors in it so I’m not you know getting property management for free so we are paying for property management we’ve got repair costs banked away in there and we’re putting that at 5% vacancy at 5% so
(1:08:50) we’re running our numbers very conservatively and that net number is after all of that so it’s it’s it’s the true net what’s different about international student rental property versus like a regular rental property so if someone want to do like what what is the property how do you cater towards this this demographic yeah so the first thing is to our conversation before making sure you are the right investor for it because student rentals in general require more handholding than aren’t you well exactly so if you hire a
(1:09:22) property manager then for all intensive purposes the only difference is higher turnover um because typically you know yes students will stay for four years but the numbers show that students were really staying for like 12 to 18 months especially when you’re doing room rentals um you rooms will turn over a lot faster than the full house but you can imagine you know four or five kids getting together getting on one lease people are going to get into fights disagree move on after a year two years the group is going to break up so you
(1:09:57) need to account for higher vacancy cost and that’s why we put ours at 5% um and then if you’re not property managing right if you if you sorry if you don’t have a property manager and you are property managing yourself you need to be conscious that not only are you the landlord and the property manager you’re also kind of a parent and so when you set up the property you need to set it up thinking about a 17 to 21y old kid living in that property yeah so you should have you know a booklet of how to live in that property and we
(1:10:29) create a booklet for all of our our rooms and our houses and that’s on the bedside table when they move in day one that’s got a QR code on the front where they can pull up a video because everyone’s on their phones and they don’t actually read anything a video of how to use everything right common area rules how to clear out a lint trap how to unclog a toilet right like what to do if the shower starts backing up all of these standard things where a lot of investors who are placing families think oh it’s a family they know how to live
(1:10:56) in a house students do not know how to live in a house and when you’re dealing with International students literally like I I can’t I have University students who don’t know how to change a light bulb right right so so they you know the age-old question how many University students to take the change of light bulb yeah none because they can’t do it right yeah they literally called us to do it yeah exactly Life Broken it’s noten right the life bul is broken yeah for sure uh yeah we get calls all the time like the toilet’s not
(1:11:27) flushing properly okay what’s What’s happen is it not flushing is it going down slow is it running like there’s no question about that so um whether you’re property managing or not like the the repair costs are going to be higher right there’s going to be more wear and tear and there’s going to be more unnecessary calls right so you may have to have a plumber go out there when there was nothing actually wrong or your handyman is going to be visiting the property more um we like to do mandatory cleanings as part of our student rentals
(1:11:58) whether that’s local students or International students I think that’s a very good thing to have in place we pass along that cost or you know in some cases we eat it if necessary depending on how the market is doing but a cleaner just like with an Airbnb a cleaner is your best eyes on the property and when you think about the high use areas of a house its bathrooms and its kitchens right so and maybe like the front entrance way so clean the flooring in your front entrance way especially in the winter time so the salt doesn’t rip
(1:12:29) into your vinyl flooring or hardwood flooring right have your stove cleaned on a monthly basis like full-on scrubbed clean because those students are not cleaning the stove ever right so a deep clean once a month replaces a standard family who’s you know scrubbing it down once a week um bathrooms should be cleaned properly and regularly and when your cleaner is there have a checklist of things for them to go through right notice any light bulbs that are burnt out flush every toilet and see if it flushes properly um clean out the hair
(1:12:59) from you know your your drains especially if you’ve got lots of girls in the house not to be stereotypical but if you got hairy people in the house clean out your drains and just hiring a cleaner without a checklist of things that they should be checking is also kind of being lazy so it’s it’s in this world of you got to work harder for it but it can be lucrative and we know lots of landlords who have appreciating properties in Toronto and Kingston and London and you know waterl as a great example who have cash flow because
(1:13:28) they’re student rentals and appreciation so I think it’s a very strong lucrative Market I know you’ve got past experience in student rentals and I think it’s like the flavor right now because no one wants long-term tenants right and and I think when we did it we saw a really big opportunity because we had connections to the university and the college we understood the Dynamics of Thunder Bay and we specifically went yep it’s East Indian students coming to the city um primarily male and that is the demographic that we can capitalize on
(1:14:02) but is also in the most need uh so it it’s incredibly important for us to actually solve a problem because back to my tech days like you build a product to solve a problem and I think that’s what rental housing is is you see the problem and you know if I was a type of landlord that really loved luxury housing right and I wanted to buy a luxury home and have an executive live in it I would not be investing right now because it’s a terrible time for you know executive luxury luxury rentals so you just have to know who you are Market yeah exactly
(1:14:34) all the short-term rentals are going to midterm yep yeah there there’s no there’s yeah there’s there’s nowhere to hide in this market for sure do do you does rent Panda do student Rental Management across the province yeah for sure so it’s actually an interesting question and maybe you’ll have an answer to this but we often get asked as a property management company if we do student rentals and I think it’s because a lot of companies out there who are property managing will just say no to student rentals yeah and for us I’ve
(1:15:01) always looked at it as a rental is a rental and we’ve built our systems with tech as the backbone so we don’t care if it’s a you know Annoying family not annoying but if it’s a needy family or a needy student or a room rental in your basement and you live upstairs like for us a rental is a rental and it all runs on the same Tech system and you know some of the the setting up of a property is different um but as a property manager a work order is a work order right a repair is a repair a call is a call an email is an email the Cadence of
(1:15:38) that may change but that just means our pricing has to change and and I think uh when we started Property Management I I hated the concept of a percent of monthly rent as a fee right because it’s just a way for property managers to make more money on more expensive property that is not more expensive to manage and if was true it should actually be that less expensive property is more expensive to hire a property manager for and that’s student rentals right some people will put a premium on student rentals um but we wanted to build a
(1:16:07) system where for us it’s flat rate management and we know how much it costs us to manage a property so a duplex per unit is easier to manage than a single family home because it’s one system right it’s one furnace for two properties or two units so that is more efficient for us to make AG you know when we need to inspect two units it’s more efficient than inspecting two single family homes because there’s travel time and there’s you know lockbox entry and all the tiny little things so we charge less per unit for a duplex
(1:16:38) versus a single family home you know a 20 unit building is a different model per unit than a single family home so we tried to change the game and make it fair and actually be transparent of you know if it costs us less to manage your property we’ll charge you less to manage your property um and so you know executive rentals people when they were big people were flocking because we could manage your $10,000 a month rental for $99 a month right versus even in Toronto people were still charging three four five% in management you go up to
(1:17:10) Thunder Bay standard is 10 to 12% in management you go short-term rentals in thunderbay you’re paying out 25 to 30% in management so um yeah I think that there’s there’s still an opportunity to innovate within the space but uh you have to build the right system for it so yes so the answer is yes so yes we do certain rentals you pretty much so what you cover pretty much every real estate strategy then what don’t you cover Airbnb like what yeah so we don’t do short-term rentals um we used to because we fall into that habit as most people
(1:17:45) do of chasing shining objects yeah um and you know 25% 30% management fees look real good especially when the Airbnb is doing well um but we found that at the time it’s a separate system it’s a different business we inject Hospitality into property management but that is a Hospitality business um one day we may parse out a division that is doing short-term rentals but for us it’s long-term and even in the midterm rental space we again started to dabble in it um and you know we push it out to those who do it full-time and proper right and
(1:18:18) there are companies out there that do that but um for us even midterm rentals when we get into tenant place it doesn’t make sense right if we’re going to charge a month’s rent to place a tenant and you’re an investor that wants a midterm rental of 3 to four months doesn’t make sense logically to pay out A month’s rent so we can’t make it sense make it make sense from a business perspective so we’re just not going to do that um we can manage a midterm rental because it’s very similar to a long-term rental but we don’t do lots of
(1:18:45) them and really I like to paint the picture of us being the rental experts for you know standard long-term residential housing and that can be a room rental in your basement or your you know 500 unit purpose built apartment um because that’s all the same within our our sector yeah right you’ve been very generous with your time anything else you want to tell us about Ren Panda I mean ultimately I I think um we’re we’re trying to build a world where everyone can be a landlord um and I don’t think it’s a world where
(1:19:22) everyone should be a landlord but truly the vision is that everyone can be a landlord and it’s just about having the right products and services and tools and team to do it and I do fundamentally think that real estate is an amazing vehicle for you know wealth generation and generational wealth and it’s it’s something that more and more people can be a part of and we’re truly on that path to do it but I I do think there’s a lot of egos that need to be shed and so we’re trying to build kind of like the Allied powers of the real estate space
(1:19:56) and bring together Partners who can do it well who have the same vision who can really help support landlords um and you know other elements of the business are adapting for this Vision so one of my my aspirations for next year is to actually invest in properties as a business and offer our employees fractional ownership of that property because you know if you’re a property manager or a leasing specialist in Cornwall you know you may not have aspirations to own a property and it may not be realistic with the
(1:20:29) salary levels in that region so as a company can we enable landlording for our staff for our clients you know can we work with rent to own operators to help tenants become landlords um and so we really do want to facilitate that as as a vision um and I think that there’s a lot of growth that the Ontario and Canadian rental industry needs and it needs to catch up to the states right and and there has to be advocacy and for that goes along with it and so there’s groups like Solo or I’m a part of the landlord self-help center board um and I
(1:21:02) don’t think it’s it’s a solution that’s solvable by one entity so my my call to action essentially is not just for the investors out there but for other uh other companies other organizations other associations out there to really have an open mind to band together and to help push this industry forward to where it needs to go because as a private sector we need to push the public sect seor and government and the individuals to to do some reform and make it better for everyone where can people learn more about R Panda uh on rent
(1:21:40) panda.com if you fill out the form on rent panda saying you’re interested I’m going to be giving you a call still so I I have that mandate now we’ll see how long it lasts for but um I connect with every single new client that we’ve got coming on board and i’ like to talk to investors too because just like this you know it’s always great to have a conversation we learn a lot from our investor networks um so rent P.
(1:22:02) C is probably the best place there you have resources on your website as well do you know it yeah so we’ve got a rent report that we put out in partnership with door Insight um we’ve got a lot of blogs that are just educational we have all of your n forms on the website and um starting in January our Instagram is just going to be flooded with uh with educational content I’d love to release like a landlord 101 course and make it mandatory for everyone in Ontario but until then it’ll be free educational content um to to just hopefully make
(1:22:35) things better for us all you may talk a lot of condo investors out of buying a place with with education heart thanks for much thanks much for doing this thanks for fighting the good battle my pleasure thanks for being the the sadus as I called you because someone’s got to do it yeah someone’s got to do it well we we’ll go for a cold plunge one day so yeah all right friends that wraps up another episode of the truth about real estate investing show for Canadians hope you got as much out of this one as I did remember that whether you’re just
(1:23:03) starting out or a seasoned investor there’s always something new to learn and it’s always about building that practical knowledge base that gets you closer to Financial Freedom if you found value today please do us a favor and leave us a review or a rating share this episode with a friend or better yet join our community of Real Estate Investors who are taking action and making moves and hey if there’s a topic you want us to cover or have uh there’s a certain guest you’d like us to have on the show Dro me a line my DMs are open on social
(1:23:27) media reply to this email that this have arrived on I’m not hard to find uh you know we’re all about getting you the unfiltered truth to help you on your journey thanks again for tuning in and we’ll see you in the next episode until then stay Smart Stay curious and keep building that future catch you later

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