Glenn Simon Inc., Suite 1217, 5328 Calgary Trail NW, Edmonton, Alberta, Canada. Tel 1-888-780-5940 Fax 1-888-276-4517
www.glennsimoninc.com email: info@glennsimoninc.com
July 30., 2015
Volume 19, Issue 3
Dear Friends and Partners,
** Summer is here and your newsletter is heading to the beach! Issues resume again September 15th. Our Blog keeps going though - so check in regularly. **
With the sun shining and summer in full swing, it's hard to imagine winter being 3 months away… I want to remember these seasonal changes (the cycle) and do my property maintenance now, so that I’m prepared for winter. I want to prepare now, for the next real estate cycle (downturn) that is coming. It’s not good or bad, it just is. You can take advantage of ridiculously low mortgage rates, conservative buys and position yourself well with rental properties during the next buying period.
I’ve attached a few links below to articles on property investment and tips to help prepare and manage downturns, including this article we wrote in ’09:
How To Keep Investment Real Estate Profitable In Any Economy
Wherever your real estate investment is located—provided you bought it at the right price and terms—there are many ways to keep your property profitable. If you analyze your real estate, update and improve your investment team, review your long- and short-term investment plans and stay focused on the end result; your real estate portfolio will be a rock solid fortress that can weather any storm.
Analyze
The first and most important thing is to carefully analyze your portfolio.What properties are doing well?
Are there properties that are slowly leaking dollars like a dripping tap?
If so how can you fix them?
If you don’t know the hard numbers on your properties, then you are risking everything that you have worked for. Keep your budgets in line and carefully evaluate every purchase and renovation. Once you have a better idea of where you stand, you can start to recession-proof your properties. First, your customers are your tenants, so learn how to keep them happy and decrease vacancies. For example:
Provide Internet or free cable
Give lease incentives or rewards for rents paid on time, or even the best garden.
Increase your revenue by adding rental units to your properties or other moneymaking add-ons like renting garages separately, extra parking spaces or coin-op laundry facilities. You can also refinance your mortgages with longer amortizations, increase rents where reasonable or rent your properties furnished.
Evolve and involve your team
Is your property management up to par?
Are you getting discount rates for a big portfolio?
If you have few properties are they being managed in a way that will help you grow your portfolio?
Are their rates competitive and are they keeping your property in excellent resale condition?
Streamline your team. I don’t mean fire everybody and do it all yourself, but rather make your team out of the best players available in your area. Once you have the all-star team, get their input and advice, use their knowledge and experience to protect and improve your assets and your position in the market. Accountants can help you lower your taxes, lawyers can protect your assets, bookkeepers keep you aware of money liquidity and property management can up the cash output of your investment property.
Be aware
Be aware of longer-term trends and statistics. Don’t get caught up in the moment—especially when making decisions. There are both positive and the negative things that are happening in headlines. Take both sides into account and be realistic as you evaluate what’s really going on. Review your business plan both short-term and the long-term and adjust it as necessary. Don’t knee-jerk react, but also don’t drift back and forth without any solid goal in site. Have multiple investment strategies all with a clear exit in place.This is not the first economic downturn the world has seen nor will it be the last. What is important is to mind your business and your properties to make them profitable no matter what comes your way.
Recession proof rentals HERE and HERE
North West Edmonton: Sherwood 4-Unit Cash flow
This massive Side by Side duplex features separate (not legal) suites down. 1963 built, located across from park. Walking distance to Parkview School and less than 10 minute drive to West Edmonton Mall. Close to downtown and Whitemud. Good access to downtown and transit.
This property has separate entrances to each suite; 2 X 3 bed and 2 X 2 bed, double garage, plus pad.
This property was purpose built and is in fair condition. Investment capital excludes $15K (PPI) budget slated for further renovations to modernize, improve value, aesthetics and rent-ability. The funds are returned at end of renovations once bank appraisal is complete.
Comes complete with great tenants making this a totally turn-key property for you. Sherwood is a mature neighbourhood that is desirable for tenants working in the west end of the city. HUGE upside potential due to the great purchase price, strong economic fundamentals and the proximity of this property in relation to Edmonton's desirable growing core.
Purchase price: $579,000
Total Investment: $139,856
Your Estimated 5 Year Profit $78,179
Your pre-tax Total ROI is 56% or 11.2% per year
These 4 suites rent for top dollar and have everything arranged, including financing structure and incredible tenants.
Your investment includes: impeccable tenant selection, financial analysis, professional inspection, insurance, financing set-up, legal fees, basic accounting, reserve fund, CMA, bi-annual statements, strategic market planning to ensure successful entry and exit, plus much more!
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Tax expert pushing for new tax in Alberta
By Kevin Maimann, Edmonton Sun, July 20th, 2015
One of Canada's most influential tax experts is pushing for a new tax in Alberta.
Dr. Jack Mintz, who is currently on the Economic Advisory Council for federal finance minister Joe Oliver, spoke Monday during a business luncheon to the Rotary Club of Edmonton.
Mintz was invited to give his views on the economic and social priorities of Alberta's new government.
He said a 7% Harmonized Sales Tax -- which would mean adding 2% to the federal GST, with the added tax to be collected by the Canadian Revenue Agency and remitted to the province -- would bring in over $1 billion. GRAB THIS STORY
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Alberta Economy: Province needs to nurture its economic gazelles
By Stephen Murgatroyd, Troy Media, July 21st., 2015
EDMONTON, AB – A colleague suggested to me recently that Alberta should stop talking about diversifying its economy. Instead, he said, we should talk about broadening the economic base.
He is right.
Of course, the province’s economy is diversified now – somewhat.
For example, Alberta opened its forests to forest companies back in the 1970s, which led to the province becoming home to North America’s largest pulp mill (Athabasca’s ALPAC), as well as several other mills. Our mills and lumber firms are efficient, productive and significant players in the Alberta rural economy, with some 18,000 jobs and significant exports ($2.7 billion in 2014). It is a $5.4 billion industry. READ MORE HERE
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National Post View: Stop delighting in Alberta’s misery
By National Post, July 24th, 2015
Alberta, a province with a population of about four million, has been dominating the country politically and economically for the past decade. But with tanking oil prices, industry layoffs, pipeline leaks, agricultural disasters and NDP political successes, many in the rest of the country are feeling a sense of schadenfreude: the delight in Alberta’s economic — and political — misfortunes.
To at least some extent, their feelings are understandable. It was not long ago that Alberta was at the top of its game: from the rise of Stephen Harper, to the increasing importance of the energy industry as central Canadian manufacturing faltered; Ontario’s debt rose and Quebec’s fiscal situation spiralled as Alberta remained blissfully debt free. FOLLOW THIS ARTICLE
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I appreciate all your calls and emails. I'm looking forward to helping you with your next step towards building real wealth.
Your success continues EVERYDAY, let me help you build for tomorrow.
“My optimism wears heavy boots and is loud.“ -Henry Rollins
Warm Regards,
Todd and Danielle Millar
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