Costs of maintenance for a house -

My question is: Canadian-specific

QUESTION: Hi David,

I'm a student at the Sauder School of Business at UBC in the BCom in Real Estate Program. I'm  doing some research regarding the difference between renting and owning in cities across Canada, and I'm looking for a simple way to estimate the the cost of maintenance on a given house. The information I have is the number of bedrooms, the monthly rent, and the approximate value of the house/apartment. Using that information, is there a basic way to estimate maintenance cost?

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david ingram replies:

Sorry, I have no idea now  but will send this out to my list to see if anyone else has an idea.  If they do and want credit, I will be glad to pass it on.  In the good old days, it was simply:  look at the kind of construction and use $11.66 per square foot as an example.  i.e back in 1976, $57.60 a month was $.09 a square foot for a 640 square foot condo. You might find an almost identical unit for $37.00 a month just down the street.   Then we would add in extras for a pool, tennis courts, fancy courtyards, locked parking lots, extra elevators, rooftop gardens, weight rooms, etc

I actually founded property management firms that at one time managed over 3,000 rental condominiums from Ottawa to Victoria and as far south as Phoenix.

What always intrigued me was that the monthly maintenance on a 640 standard one bedroom apartment could range from $45 to $150 a month depending upon construction and maintenance. This would be for what appeared to be almost identical units to the untrained eye.  The trained eye would see the difference in materials and the way that drains had been installed, etc. And, one of the biggest items would be the amount that the strata council was setting aside for a contingency fund or a new roof account, etc.  The amount in the contingency fund would also affect what someone would pay for a condo.

My eye was not great.  I thought I could spot good from bad, but not always. 

One of the buildings I thought was very good at 140 east 4th in North Vancouver has just received a $75,000 per unit upgrade assessment because of poor maintenance over the years.

My family's unit was bought in 1986, 22 years ago.  Divide $75,000 by 22 and you get $3,409.09  per year of 'extra' maintenance.  My ex wife only paid $48,800 for the unit in 1985.  But then I only spent $42,000 for my house. AND 

I have just spent over $50,000 on repairing 20 years of neglect on my own house and it looks worse than before I started.

However, if you want to read a new book that paints a possible horror story of owning for the future (and why you should rent), read Garth Turner's Book,  the Greater Fool.  see it at www.greaterfool.ca.  He is in Vancouver this next Tuesday and Wednesday and you might be able to see him.  I am doing an Internet  television interview with him at 5:00 PM at the Hotel Vancouver on Tuesday for instance.  You will be able to see it later at www.howestreet.com.  His book covers Japan, the United States, Great Britain and Canada among others.  If you look at his website, he shows a nice little house for sale in Detroit for $625.  To contact him, try [email protected] or phone at (416) 346-0086 contact information he displays prominently on the inside back cover of his book.

If the following picture does not show up on your email, you can find it on the front page at www.greaterfool.ca
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For sale in Detroit: 3 bedrooms, 1 full bath, 1129 square feet, lot 40 by 140, ready for immediate occupancy. Price recently reduced, to $625. (Yes, six hundred and twenty-five US dollars)
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One of my clients is in the process of walking away form a Detroit house in which he had $100,000 of equity in 2002, long before the sub-prime crisis.


check out:  http://www.greaterfool.ca/

This book contains a very good analysis of the sub-prime mess and explains that the same thing is actually happening in Canada.

I first met Garth Turner when he was the Financial Editor of the Toronto Sun and he wrote a story about my book on Income Tax. He went on to become a Conservative Member of Parliament AND the Minister of National Revenue.  He now sits as a liberal in the Federal Government in Ottawa.

His book, the GREATER FOOL is a spectacular piece of information.  You should get him out to speak to the class.

Only one more thing I have to say.  I am a graduate of the UBC Urban Lands Economics class back in 1987.

Back then, there was a question which dealt with rental condominiums.  I just printed out what i had written in my book in 1979.  I got a really nasty letter accusing me of cheating and having a copy of the student guide.  the marker had observed that my answer matched the student marker's guide almost word for word.

It turned out that the School had lifted that chapter out of 'my' 1979 book and used it for that lesson.  I did the four year course without using the the school textbooks (I just answered the questions, did the assignments and wrote the exams) so had not spotted that the chapter in question was my stuff.

Somewhere in my files, I have an apology from Robert Laing, who was the Executive Director of Professional Programs, Faculty of Commerce, UBC, at the time.
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>From www.garth.ca

Garth Turner is the Member of Parliament for Halton, Ontario.

He was first elected to the House of Commons in 1988 and served until 1993. During that time he chaired many Standing Committees of Parliament, served on Priorities and Planning, and was a member of the Treasury Board. He served as Minister of National Revenue, and ran for the leadership of the Progressive Conservative Party of Canada.

In January, 2006, after a successful thirteen years in private business, Garth was re-elected to Parliament. He now serves his constituents as a Liberal MP, after joining that caucus in February, 2007. In this Parliament Garth is known for his proactive outreach to Canadians and his belief in the future of digital democracy. His interactive Internet blog has received international attention as a first for an elected politician, and receives more than 2,000,000 hits a month.

At the same time, he has founded MPtv, an Internet television-type broadcast which takes Canadians behind the scenes with MPs of all parties on Parliament Hill. He balances his Internet profile with many Town Hall public meetings in his own constituency and across Canada.

Garth's career expertise lies in business, personal finance, real estate and taxation. He's authored many best-selling books, lectured extensively across the country, hosted Canada's most-watched business television show, and written a syndicated newspaper column carried in scores of cities.

His volunteer work has included serving as a National Director of the Sierra Legal Defence Fund, which fights to uphold environmental legislation, and as a national spokesperson for the Alzheimer Society of Canada.

His entrepreneurial spirit has led him to start many businesses, from the country's largest independent producer of network television programming, to the restoration of heritage buildings and in the hospitality industry, creating a host of jobs in our vibrant small business sector.

Garth Turner is a member of Canada's Privy Council. He was educated at the University of Toronto Schools, the University of Toronto, and the University of Western Ontario. He is married to Dorothy, and shares an emotional attachment with his motorcycle.

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