On November 14, The City Council passed new regulations that prohibit individuals from renting out short-term properties on Airbnb and similar sites unless the spaces rented are in their principal residences. That means rooms over a separated garage, mother-in-law houses and even many basement suites are now off limits for short term rentals. Businesses will be completely prohibited from offering short-term rentals such as Airbnb.

The City Council claims it is doing this in an attempt to alleviate Vancouver’s severe housing shortage. The city’s vacancy rate is 0.8 percent, and rental costs are among the highest in the country. Half of the city’s population rents their housing, and no wonder. An average home costs over a million dollars. The result is that many people just cannot afford to live in Vancouver, and businesses often have a hard time finding employees. The City Council is hoping the move to restrict Airbnb will influence people to turn their short-term units into long-term rentals that will help alleviate Vancouver’s housing crisis.

The interesting thing is that the analysis presented to the City Council by city regulations officials shows no good evidence that the new restrictions will have any impact on the long-term rental market.

Airbnb has responded that the targeted units were usually used by family such as visiting relatives and would never be rented out long-term no matter what regulations the City Council passes. In that light, it does seem quite a stretch to argue that everyone who might occasionally rent their coach house for a few days on Airbnb would want to rent it long-term. There is quite a difference in the obligations, and many just would not want renters constantly underfoot. Instead, it’s possible some people may lose their homes, because they simply can’t afford them without the Airbnb income.

The Vancouver City Council has passed additional restrictions. Those renting on Airbnb or similar sites must now pay a $54 one-time application fee and $49 a year for a license. They must display the license number on their listing, and failure to do so will result in a $1,000 fine. Whether or not Vancouver wants to invest in the labor hours of constantly combing through Airbnb to try to catch people without a license remains to be seen.

This is far from the first time that a major city has regulated Airbnb and its cousins. Seattle just passed a tax on short-term rentals of $8 to $14 per night. Toronto is currently wrestling with short-term rental rules and is expected to come to a decision this month. New York bans short-term rentals altogether unless a host is present, and San Francisco requires licenses and registration.

The post Vancouver City Council Reins In Airbnb appeared first on KBL Law Corporation.

The life of a real estate investor isn’t as easy as it might seem, but if done properly you will be one step closer to your early retirement dream.

Here are three tips for successfully launching your future as a real estate investor in Vancouver:

1. Keep it simple

First, only invest in rental property that is easy and inexpensive to maintain

Many beginning real estate investors in Vancouver make the mistake of thinking that the more lavish amenities their rental property has – things like lush landscaping, state-of-the-art kitchen appliances, and high-end flooring – the more they can charge for rent and the more profit they’ll make.

But they forget that the profit for a typical real estate investor is made up of two things:

1. Income from the rents that come in and…
2. Monthly expenses such as the mortgage, taxes, insurance, repairs and maintenance, and collections and attorney fees if a tenant goes bad on them.

While it’s true that a lavish property will demand a higher rental price than would a basic, plain vanilla property, with a high-amenity property there will also be more money in expenses going out by way of higher maintenance and repair expenses. That’s because tenants in Vancouver don’t take care of their place the same way that an owner who lives in the house would.

Fixing those high-end appliances, maintaining the landscaping, and patching and painting each time a tenant moves out doesn’t come cheap, and if you’re not careful the profit you thought you were going to make turns into a loss.

Investing in a rental property with basic appliances, landscaping and fixtures may not be as exciting as owning a lavish property, but the reason you’re investing in income property is to make a profit. A basic house or condominium means that both the expenses and the net income of the rental unit will be much more routine, and lead to a more stable predictable profit.

2. Be prepared for what it takes

Next, ask yourself if you really want to be a landlord. This is part of the life of a real estate investor. There’s an unwritten rule in property management that if a problem is going to occur, it will happen at the worst possible time, and not during normal business hours during the weekday.

So as a landlord you’ll need to be prepared for the occasional late night call from the tenant with a clogged toilet or a furnace that won’t start in the dead of winter. If you fix things yourself you’ll need to be a jack-of-all-trades, or if you call a professional be prepared to pay a surcharge for after hours or weekend work.

After buying their first rental home or two, most investors enlist the service of a Vancouver property management company to screen tenants, prepare the leases, handle rent collection and deal with any maintenance issues that arise. Property management agreements can sometimes be one-sided and not in favor of the landlord. Notary publics in Vancouver can review the property management agreement, but by law they’re not allowed to give legal advice or recommend any changes to the contract.

Experienced real estate investors enlist the services of a good Vancouver real estate attorney to ensure that the management agreement is fair and balanced and that their money and investment is protected.

Know the law

Last but definitely not least, you need to understand the landlord-tenant laws in Canada. As a real estate investor, don’t make the common beginner mistake of using a boiler-plate rental agreement for tenants and assume that’s all you need to know about Canada’s landlord-tenant laws.

That’s a big mistake, and many times landlords unintentionally violate the law and end up receiving a notice of violation or having to spend a lot of money defending themselves against a accusation of discrimination.

Smart landlords understand that there’s a lot more to dealing with rental property than meets the eye, and enlist a real estate attorney in Vancouver who understands the landlord-tenant laws and who can help them adhere to both the spirit and the letter of the law while at the same time protecting and maximizing the return on their investment.

The post Three Tips for the Beginning Real Estate Investor appeared first on KBL Law Corporation.