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The Kitimat Rental Market in 2018: Boom or Bust?

Worst case scenario, LNG Canada will decline the financial investment
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The constant buzz around town remains locked onto not if, but when, LNG Canada will give Kitimat the Final Investment Decision (FID).

This topic sparks emotional debate whenever it is brought up and for a good reason. If the FID is successful, the LNG Canada project will launch Kitimat back into a ‘boom’ period and some people will, I imagine, literally be dancing in the streets.

Worst case scenario, LNG Canada will decline the financial investment, the natural gas facility will not be built and many lives and businesses in Kitimat could be negatively affected.

The question I am asked most often is “Do you think the rental market will pick up anytime soon?” My answer to that question is always the same. The rental market in Kitimat is chugging along just fine despite the fact that revenue property owners have had a tough year or two.

Rents have had to be significantly lowered. Some property owners have chosen to leave their houses vacant for over a year rather than risk having to spend money on damages caused by negligent tenants, or animals.

Let’s face it…the financial boom caused by the last major project in town is long gone. My advice to revenue property owners is to not worry about whether the projects are happening. No one will know the answer to that question in advance. All anyone can do is be prepared.

If the rumours are correct and LNG gives the thumbs up to start the project later this year, then the population of Kitimat will increase rapidly by approximately 5,000 workers and their families. If this happens, the rental market is going to sizzle like bacon on a hot griddle!

Be ready for the boom.

The decision to turn your home into a revenue property should be considered very seriously and with great care. If you decide to jump into the revenue property market to take advantage of the upcoming increase in rental demand, there are ways to protect your investment while keeping repair and maintenance costs to a minimum.

If you currently own a revenue property, now is the time to complete small repairs and renovations.

In my experience, 80 per cent of costly repairs and damage control due to tenant neglect or animals can be avoided by following a few simple steps:

Inspect the home at least once per year

Tenants will often not tell landlords about minor plumbing leaks or other issues. Some tenants are scared they will be blamed, while others simply don’t care and therefore don’t report problems.

Some tenants don’t want to feel like they are bothering their landlord. Performing a physical walk-through of the interior and exterior of the house at least once per year can avoid many costly repairs.

A homeowner can personally perform the inspection or have a friend, family member or professional company perform the inspection. If the property has a tenant, then refer to the Government of B.C. website for information on entering the premises.

Perform seasonal maintenance checks

At the beginning of the year, complete a physical inspection of the revenue property. Many small items, such as minor leaks or condensation, can become a big, costly concern if a tenant doesn’t report the issue.

In April or May, complete an exterior inspection. Clean out the gutters, cut back trees from the roof, walkways and power lines, clean out flower beds and perform a lawnmower maintenance check so it’s ready to go when the grass grows. In October, complete a winter preparedness check.

Change furnace filters. Shut off exterior water sources. Clear out the gutters. Perform a snow blower maintenance check so it’s ready to tackle the long and snowy North Coast winter. Identify any areas where air or moisture can enter the home and repair accordingly.

Check that water pipes are insulated or that existing heat tape is in good working condition. Show your tenants how to light the furnace in the event the pilot light goes out. Post important utility contact information by the furnace or water heater. Show the tenant where the main water shut off is located in case water pipes freeze or leaks occur.

Rental turnover

If a tenant vacates and leaves a huge mess, contact a local professional to help remove all garbage, get the interior cleaned top to bottom and have the necessary repairs done so that the property is ready to earn money again. For larger renovations or repairs, it is recommended to get three estimates to compare costs and project timelines.

Ask for help

Just because you own a hammer doesn’t mean you can replace drywall. Using a general contractor or handyman service is a great way to get small projects done without emptying wallets. For those properties that have a significant mess to clean up, it is recommended that the revenue property owner contact a professional cleaning company.

When hiring a contractor to perform work at the house, it is important to remember that you get what you pay for. There are many people looking for work in Kitimat, but that doesn’t mean everyone has the skills and tools needed to properly complete the work.

Avoid additional expenses and headaches by hiring a reputable and responsible contractor or handyman service.

While these types of companies will generally cost a little more, the workmanship is guaranteed, proper insurance and licensing is in place and any problems can be dealt with quickly.

By following these few simple steps, a revenue property can withstand fluctuations in the rental property market. With proper planning and upkeep of a revenue property, it won’t matter whether the projects are coming or not. Kitimat has plenty of renters to go around.

I am legally obligated to state that I am not a licensed property manager. I have managed over 1400 units over a 10-year span and have extensive knowledge about and experience with the Kitimat rental market.