Scott Simmons

Packing Tips for Busy Home Sellers

September 5, 2018 By Scott Simmons Leave a Comment

Packing correctly can simplify the burden of the entire process for a household and potentially their moving company. By packing smart, using proper protocols, and paying attention to the details, things can be ready to go far before the movers arrive and ready to unload upon arrival. Here are some tips for busy home sellers to ease the packing and moving process.

Get Rid of the Junk and Organize the Rest

Cutting back on possessions is the easiest way to simplify a move before the packing even begins. Get four piles going for every section or room of the home being gone through consisting of items to keep, throw away, donate and sell. No time to sell before moving day? Add those to the donate pile, and don’t forget about local ‘freecycle’ sites as an option to local or national donation drop off organizations. However, there are likely donation options for everything home-related, so there’s no pressure to take unnecessary items others can use.

Snap Pics of Gadget Hookups

Avoid looking for instruction booklets on how to hook up televisions, stereos, cable boxes, computers, dvd players and other electronics by snapping a few pics of the device’s back. This serves as a ready-to-go manual that streamlines hooking everything back up upon arrival at the new abode. This tip can apply to just about anything that has a complicated setup or multiple plugs. It’s also great to get some zip ties to keep cords organized, and in doing so certain cords may not even need to be unplugged for the move.

Prep With Proper Supplies and Pack Right

Running out of supplies can delay everything when moving to a new home, so be prepared with ample boxes, tape, protective wrap, cutters, etc. Most of these supplies can be obtained by the moving company hired a storage facility or at a local grocer or hardware store. Free boxes can even be found at local stores—just ask the manager. Avoid using trash bags for ‘keep’ items, as they could be disposed of mistakenly. Be sure to properly assemble moving boxes and pack them according to proper recommendations, with heavy items on the bottom and light items on the top of boxes. Have a variety of sizes on hand to avoid making boxes to heavy to be moved around in the new place.

Help Movers Help You: Label Every Box By Room

Avoid having to point and say, “That room, this room, over here” by properly labeling every box as to it’s final room destination while packing. Label the room on every side of the box to maximize visibility and reduce mover’s search efforts. Include a smaller itemized list on the box too in order to ease the search when looking for ‘must-have’ items upon moving in.

Separate By In Last, First Out

While labeling boxes, also specify WHEN the box should be loaded. Specifically identify whether that will be early in the process or as a final box going into the back of the truck that will be unloaded first. Those first out items typically consist of linens, kitchen and bathroom necessities, food items, electronics and other personal items that will be needed right away.

Pack a Last Minute Bag for the Transitional Phase

If there will be a few days passing between the time of departing the old home and arriving at the new one, prep a suitcase with everything needed until the family and the movers get to the final destination. As opposed to other situations, this might be one time in which packing a bit too much may come in handy, as unexpected incidences could delay timely travels meaning more could ultimately be just right.

Guest blogger,

Anthony Gilbert REALTOR® ABR®

The REALFX Group – Washington
7829 Center Blvd Suite 309
Snoqualmie, WA 98065

Salt Spring rental homes by the numbers

July 18, 2018 By Scott Simmons 2 Comments

I get many people asking me about buying a rental home on Salt Spring and usually spend a lot of time answering all their questions. So in this post, I hope to cover some of the factual information.

Here are the typical questions and basic answers;

What is the rental market like on Salt Spring? As most know, but some do not, the vacancy rate on Salt Spring has been zero for about the last two or three years.
What is the average rent? Kind of like how long is a ball of string, but let’s just say if one could find an average Salt Spring rental home the average rent would probably be $1500 per month.
What are the tenants like? Some are fantastic and some are not.
How much would an average rental house cost? Averages are almost impossible to figure out on Salt Spring. Home prices range from the low end at about 350k to sky is the limit.
What kind of returns can one expect to get? It all depends on what one pays, maintenance cost, rent charged, etc… Let’s look at some hard numbers here and see if we can come up with some expected returns.

Let’s just say one could find a moderately nice Salt Spring home for approx 500k that you would like to buy and rent as an investment.

One of the first things you’re going to have to do for tax purposes is figuring out how much of the price is the land and how much is the house costing you. The nice thing is the tax report shows this and usually puts a high value on the land which is not great for the depreciation of the home which can be depreciated at 4% per year.
The next thing you’re going to have to do is get the home ready for rental. If it needs work you’re going to have to capitalize this cost you can not expense it. See CRA bulletin here IT-128R and please do get independent accounting advice. This post is just general information, not advice.

The home is ready for rent and you have found the perfect tenants and signed a lease all as per the BC tenancy law.

What about the numbers?

We know the rent will be $1500 per month or $18,000 per year.

What about the cost;

taxes based on the cost of 500k one would expect to pay $2500 per year
fire insurance again based on the cost of the home one would probably pay $2000 per year
maintenance, assuming we have fixed all the main problems one could expect to pay about $300 per month or so or $3600 per year

Net profit? from the above number, we could assume to make $9,900 per year based on a 500k investment. Almost a 2% return on funds. But did you have the 500k? Probably not and the idea of buying a rental property is you can buy a leveraged investment. So assuming the bank is going to want 35% down you would have to have the 175k and borrow the 325k.

What is the approx cost of borrowing the 325k? at 3% over 25 years your payments would be $1850 per month or 22,200 per year.

So your total cost per year is approx 32,100 and your rental income is 18,000 per year so your profit or in this case the cost of ownership is $14,100 per year.

So how are you making money being a landlord on Salt Spring? Over time you’re making some money because the renters will pay part of your mortgage per year and in 25 years you will own the home outright and if luck is on your side the market might go up and the home might be worth more.

In today’s dollars if you own the property for 25 years and it’s paid for your initial investment of 175k is now worth 500k buy you had to subsidize this investment per year at a cost of $14,100 or $352,500. So you now have an asset worth in today’s dollars 500k that has cost you down payment of $175,000 plus the subsidy of $352,500 plus the property transfer tax of $8000 = $535,500

What is the risk?

The risk is that property prices do not continue to go up, maintenance cost go up, financing cost goes up, and or tenant problems or the home sits vacant and there is a shortage of tenants like there was from 2009 to until about 2014.

What is the upside?

Property prices go up and you can sell at a higher price you make what is known as capital appreciation. Please note this home will not be deemed your principal residence and any profit from the sale will be subject to capital gains tax. Please note any depreciation claimed against the home will be recaptured by CRA.

I hope this helps you make your own decision about buying a Salt Spring investment home, again this is not legal advice only general information, please do talk to your accountant and or other professionals before buying a rental home.

Cheers Scott Simmons

Salt Spring Housing Crisis explained

July 12, 2018 By Scott Simmons Leave a Comment

Is Salt Spring in the middle of a housing crisis? It all depends on who you talk to and what one defines as a crisis.

If you move to Salt Spring and have limited funds and are looking to rent a home at about $1000 per month your probably out of luck. There are basically no homes to rent on Salt Spring Island at this time and not just because it’s the usual summer madness.

If you are looking at buying a home there are about 100 homes for sale on Salt Spring at prices from 350k up to 4 million or so and in each price range, there is a fairly good selection of homes for sale and there really is no crisis if you have the means.

So instead of calling it a housing crisis on Salt Spring lets just call it a rental housing crisis. Can we all agree on that?

Why are there no rental homes for sale at this time? The scapegoat for the last year or so has been the short-term vacation rental homes (STVR). As a point of full disclosure, I do not own and or operate an STRV but are they the real culprit to all those who post ads on the community list looking for a home to rent? I just checked Air B&B and there are at least 200 or so listings for Salt Spring Island. However, some are tents, trailer, Teepee, rooms in homes. One would really have to look very closely at ever ad and see if it’s a legal B&B suite or a full-size home know as an STVR home and which by the way is illegal according to our land use bylaw here is the definition of a legal B&B;

3.13.8 Bed and Breakfast home-based businesses are subject to the following additional
conditions:
(1) Not more than 1 bed and breakfast home-based business is permitted on
any lot.
BL461 (05/13) (2) Despite Subsection 3.13.1, all bedrooms used to accommodate guests
must be located only within a principal dwelling unit or within a seasonal
cottage, if one is permitted on the lot.
(3) Not more than 3 bedrooms may be used to accommodate guests on lots
that are 1.2 ha or less in area; not more than 4 bedrooms may be used to
accommodate guests on lots that are greater than 1.2 ha in area.
(4) Despite Subsection 3.13.2, the total floor area dedicated primarily to the
accommodation of guests on any lot, including bedrooms, ensuite
bathrooms, closets and common areas, is not to exceed 50 per cent of
the total floor area of the single-family dwelling and seasonal cottage on
the lot, up to a maximum of 100 square metres.
Information Note: Under a General Order of the Land Reserve
Commission, bed and breakfast home-based businesses within the ALR are
restricted to three bedrooms that must be fully contained within a singlefamily
dwelling. The use of further bedrooms will require an application to the
Commission and its written approval.
(5) Breakfast meals only may be provided to bed and breakfast guests who
have been provided with overnight accommodation.
(6) Off-street parking for bed and breakfast home-based business uses must
be supplied as outlined in Part 7 and screened from view from abutting
lots, highways or parks by a landscape screen.
(7) Despite Section 6.1, signs for bed and breakfast home-based businesses
may be indirectly illuminated by a non-flashing light source, external to
the sign. Where illumination is provided, it must consist of a maximum
150 watt PAR lamp mounted between 1 and 1.5 meters from each sign
face.

About 10 years ago I did own and operate a legal B&B and did so for a few years and it was lots of fun. Every year on Salt Spring there are about 70 legal B&B with about 10 closing and 10 new ones opening every year. So back to the STVR homes, if you really count hard you could probably come up with 100 or so on the island that are illegal and theoretically could be rented out.

Do you really think having 100 home in the STVR grey rental pool is really making such a difference and if they were all rented out full time would be the end of the rental crisis on Salt Spring? The answer is NO.

The rental shortage or crisis is not caused by the STVR on Salt Spring. It’s caused because the island construction insustry is booming. In 2012, just a few years ago I was a landlord on Salt Spring and owned a rental home and had a hard time finding tenants. On Jan 1st 2012 there were over 100 homes posted for rent on the community list. At that time the construction industry on Salt Spring probably had less than 100 people working in it. There were very few homes being built. Who would build on an island that had 350 homes for sale at rock bottom prices? Apparently, no one would.

Now, here we are in the summer of 2018 and Salt Spring is booming with construction. Just try and call an electrician and ask them how long it would take them to come over to your home and put in a new plug? They would laugh. They do not have the time they are to busy with all the new homes going up. Or call a plumber and see if they will even answer the phone. At this time on Salt Spring I do suspect that there are over 1000 people working in the construction industry on this island. They all have to live somewhere and what do you think younger carpenters, plumbers, and electricians do for housing? Some rent but lots buy. Do they buy waterfront homes? No, they buy up all the lower end homes and renovate them over time. Once the housing resale market came back to life in 2015 the tradespeople moved back to Salt Spring from places like Edmonton and Calgary. This is why there is a housing crisis or rental shortage on Salt Spring.

When will the rental shortage on Salt Spring be over? When the construction slows down, maybe a year or two or three or four years from now. It always does just end like ever boom they do come to an end at some point.

Yes the STVR homes a grey area and some do not like it, I know I would not want to live beside a party home but then again all those tourists are keeping our market vendors, restaurants, and stores hopping all summer long.

2012 was not a fun time on the island, the island was facing stagnation and for some, it looked like we were never going to get out of the depressed state we were in. Now it’s booming and some are not happy, but would they be happy renting in 2012 when there were no jobs on the island.

If you would like to read about the economics of a rental home see this post.

Feel free to comment below.

Cheers Scott Simmons

Ban on Dual Agency BC

June 16, 2018 By Scott Simmons 2 Comments

On June 15th, 2018 the ban on dual agency just came into effect in BC.

Here is a post I wrote about how the new rules will change the way I do business on Salt Spring New Rules for BC Real Estate

As a continuation of the New Rules post, what happens if we are driving around on Salt Spring and you want to see one of my listings? What about the ban on Dual Agency? Disclosure-of-Risks-Associated-with-Dual-Agency

Can I show you one of my listings? Yes but only give you information that is in the public domain and not information about the sellers.

What happens if you want to write an offer on my listing. I would refer you to another agent who could write up the offer for you after you have signed a Disclosure-of-Representation-in-Trading-Services agreement and she would be your Realtor®.

I hope this help, please let me know in the comments below.

Cheers Scott Simmons

New Rules for BC Real Estate

June 16, 2018 By Scott Simmons Leave a Comment

On the 15th of June 2018, the new rules governing BC real estate have come into effect.

If you come to Salt Spring to look at homes and or land Scott will go over the form below and ask you if you would like agency representation and ask you to sign this Disclosure-of-Representation-in-Trading-Services as a represented part and then we can proceed to find your dream home.

The other new thing that happened on the 19th of June was British Columbia Realt Estate Association (BCREA) make a new mandatory Privacy Notice and Consent form that explains why Realtors collect private information like your name and address. Here is the form; PrivacyNoticeandConsent this must be filled out by all buying and or selling real estate in BC.

Cheers Scott Simmons

Salt Spring Island Trust Land Use Zoning bylaw 355

February 17, 2018 By Scott Simmons Leave a Comment

On Salt Spring Island the Island Trust is responsible for our local zoning. You can find our zoning info here at the Salt Spring Island Trust LUB 355. The bylaw has maps that cover every part of the island. Believe it or not every few months or so I get an email from someone saying they want to go somewhere where this is no zoning and go off grid. I usually let them know they are about 40 years late. The zoning bylaw covers all and is just being upgraded with the new industrial zoning(2018). As with the case below states, one has to check the zoning before they leap. Don’t just go on someone else’s word do check for yourself and know what you’re getting into and what will be legal at the place you want to buy on Salt Spring. Cheers Scott

Below is provided by BCREA and is interesting to read.

WHO SHOULD VERIFY ZONING?

Oana Hyatt In the recent case Laidar Holdings Ltd. v. Lindt & Sprungli (Canada) Inc., 2018 BCSC 66, the real estate brokerage advising the tenant was found 70 per cent liable for failing to verify the zoning. The tenant had walked away from a lease for commercial premises after the City of Vancouver refused to issue permits for the tenant’s proposed use on the basis it did not comply with the applicable zoning. The landlord sued the tenant to recover its losses. The tenant countersued alleging the lease was void, and also blamed the two real estate brokerages (one in Toronto and one in Vancouver) that had assisted it in the lease negotiations.

The landlord’s agent and lawyer and the tenant’s lawyer and contractor all gave evidence at trial, although they were not sued. The tenant’s requirements for the commercial premises were unusual. The tenant required approximately 3,000 sq.ft. of space in an industrial area, of which 1,000 sq.ft. would be for a seasonal chocolate discount retail outlet, and the remaining space for warehousing additional chocolate stock for distribution to other retailers.

The Toronto real estate brokerage had assisted the tenant in locating similar premises in other cities, and was aware of the zoning difficulties in finding suitable premises in those cities. The tenant’s Vancouver real estate agent located the subject property on Terminal Avenue. It was zoned I-2 permitting “light industrial uses including but not limited to warehousing, storage, distribution, and wholesale” as well as “automobile retailing (conditional) and servicing.” Retail was only allowed as ancillary use, which an expert testified meant up to one-third of the gross floor space.

The tenant’s Toronto real estate brokerage prepared the Offer to Lease, assuming and without confirming that the Vancouver agent had confirmed the zoning was appropriate for the tenant’s intended use. The Vancouver agent had not confirmed the zoning was appropriate, and assumed that a condition would be included in the Offer to Lease allowing the tenant more time to investigate zoning. This was not done. The tenant’s lawyer assumed the real estate brokerages had dealt with the zoning issue.

Upon attempting to obtain permits to renovate the premises, the tenant’s contractor was advised the city would not approve retail use for half the space. The tenant chose to walk away from the lease, without making any investigations into what the city would allow, and without attempting to sublet the space or otherwise limit its damages.

The court held that, as between the landlord and the tenant, it was the tenant who bore the risk with respect to zoning for its intended use. Therefore, the tenant was liable for breaching the lease, and was ordered to compensate the landlord. In respect of the tenant’s claim against the real estate brokerages, the court held that the Vancouver brokerage was not liable, as he had a very limited role that did not include drafting or negotiating the offer to lease. The Toronto brokerage was 70 per cent liable because it had drafted the Offer to Lease, had assumed without confirming that someone else had verified the zoning was acceptable, and had not made appropriate inquiries as to the zoning nor included any subject conditions to allow the tenant to further investigate zoning. The tenant was 30 per cent liable for its own losses, including being held responsible for the failures of its solicitor and contractor to properly advise it as to zoning.

A REALTOR® acting in a transaction where zoning may be an issue shouldn’t simply assume that their client’s lawyer or contractor will deal with zoning. It’s always good practice to confirm instructions in writing, to document any advice given respecting zoning, and to consider including a subject condition in favour of the tenant or buyer, allowing them time to investigate zoning issues.

Oana Hyatt
B.Sc.(Pharm), LL.B.

“Copyright British Columbia Real Estate Association. Reprinted with permission.” BCREA makes no guarantees as to the accuracy or completeness of this information or the currency of legal information.