If you were a dictators wife what would you buy? Is being a landlord the road to riches?
by Tim Broadway
It seems that Asma al-Assad, wife of the Syrian President Bashar, found an effective way to preoccupy herself during the bloody bombardment of Homs: She went online shopping. So, while the United Nations was compiling reports that Syrian children had been raped, tortured and murdered by security forces, Ms. al-Assad, the British-born former banker, was deciding whether she wanted a pair of crystal-encrusted Louboutin sneakers ($2,100), or the spike-toed stilettos for $1,400.
Maybe Bashar leaned over her shoulder and said, “Get both, darling. It’s not like anyone’s vetting my expense account.” Then he toddled off to his computer to buy a Harry Potter film, a Cliff Richard tribute CD and some songs by Right Said Fred. (You will remember them for being too sexy for their shirts.) Nothing relieves tension at the end of a long day of atrocities like a bit of easy listening.
The Assads’ exuberance for online consumption is contained in a cache of 3,000 e-mails hijacked by Syrian opposition activists and released by the Guardian newspaper this week. The Syrian government, of course, claim the e-mails are a hoax, and when you look at them it’s tempting to agree, because they read like Shopaholic Goes to Damascus and Loses Her Marbles. Who buys a fondue pot or a $10,000 marble-topped table when, nearby, her country’s doctors and nurses are being beaten and jailed for treating wounded neighbours?
Oh, that’s right. Dictators and their families, that’s who. I’d almost forgotten Saddam Hussein’s multiple palaces and gold bathroom faucets, and his taste for art of the Frank Frazetta school, where bosomy chained wenches cower before dragons.
It’s the kleptocrat’s family members who are truly embarrassing: Annoyed at his son Uday (who had perhaps been clumsy with the red-hot pincers) Saddam set fire to Uday’s fleet of 100 sports cars. And, as the Financial Times reported this week, only Moammar Gadhafi’s death prevented his son Hannibal from realizing his dream of a launching a cruise ship where six sharks swam in a tank, against a tasteful backdrop of gilt mirrors and marble pillars. I ask you: Just how many extra pairs of underwear would you have to pack to embark on Hannibal Gadhafi’s cruise of many sharks?
In the end, though, it’s the women who get the blame: Dictators’ wives form a sort of First Witches Club, with Mercedes in place of brooms. When it’s too dangerous to criticize the men in power, they become the target for an entire population’s loathing. Ms. al-Assad, with her preoccupation with Harrods sales and gaudy candelabras, now forms an unholy Arab Spring trio with Leila Ben Ali, the despised first lady of Tunisia, said to have fled the country with millions in gold bricks, and Suzanne Mubarak, the well-manicured hand up the back of the Hosni puppet.
You have to wonder what provokes the intensity of the loathing, and ask if it’s not in proportion to the betrayal their people felt. Their strongman husbands might be brutal to their own citizens, but the wives, perhaps, were expected to be a softening influence – a buffer between the tyrant and his targets.
It’s amazing how often dictators’ wives style themselves as the mother of their people, thus worsening the betrayal when they turn out to be more Joan Crawford than Ma Walton. The late, unlamented Elena Ceausescu was “the best mother of Romania” and “mother of the fatherland,” even as she was forcing the country into penury while racking up a closet of fur coats. (Her coats and hats were sent to a Romanian leper hospital after her execution, which should have been a useful illustration for future First Witches.)
Imelda Marcos, whose helium voice was meant to distract from her cash-register eyes, called herself “mother and first lady of the Philippines.” In fact, a painting titled Motherland was unveiled in the Philippines last year, with a glamorous young Imelda collecting the halt and the lame to her, like the lovechild of Joan Collins and St. Francis of Assisi. It’s easy to laugh at Imelda, of course, and to be fascinated. (David Byrne and Norman Cook are creating an opera about her.) It’s harder to remember that she and her husband used the Philippines as their personal piggy bank.
Asma al-Assad was supposed to be a mother to her people, too: a hot yummy mummy, but still. She championed a children’s charity that was meant to teach young Syrians civic engagement. (I could barely believe it either.) But that was before the uprising in Homs – her father’s hometown, incidentally. After that she seems to have cocooned herself in online retail therapy. Because in cyber space, you can’t hear anyone scream.
Postmedia News Mar 15, 2012 – 11:00 AM ET
By Tina McFadden
CALGARY — Leaky faucets, broken water heaters, late rent — these aren’t the only issues that landlords have to deal with.
In the 12 years Rod Faulkner’s been renting out properties in Calgary, he’s dealt with unpaid gas and water bills, one physical threat and three trips through the civil court system to sue for damages.
“In the 12 years, people have scammed me in just about every way imaginable,” says Faulkner, who owns 12 Calgary revenue properties. “And every time I get scammed, it costs me money, and I learn a new lesson.”
Property managers can help landlords head off some of the challenges associated with rental properties. Typically, property management companies advertise vacancies, screen tenants, arrange for any maintenance work, deal with tenancy problems and collect rent. However, they typically charge 10 per cent or more of the monthly rent, as well as a tenant finder fee.
“All it takes is one bad tenant and costs go through the roof,” warns Gerry Baxter, executive director of the Calgary Residential Rental Association. “It’s very expensive to get rid of bad tenants. . . . More than anything, I think (being a landlord) is a challenging business.”
But the tenant headaches are still worth it, according to Faulkner, because the capital appreciation on revenue properties can pay off big-time — that is, if you can find a good deal in Calgary’s high-priced real estate market.
“Property values have definitely increased, and it’s harder to find a good property nowadays,” Faulkner says.
Realtor Janet Miller, who owns two rental properties in Calgary and one in Sparwood, B.C., says she’s figured out a way to pick good tenants — and keep them. She checks references for all tenants, and then undercharges in rent. For instance, on a single family home that would normally rent for $1,200, the rent may be dropped by $100.
“If we drop that rent to $1,100, for tenants it’s huge,” she says.
“For us, it’s not that much.”
The benefit is twofold. First, tenants don’t turn over very often. Second, the tenants rarely bother Miller with complaints.
By keeping her rents low, Miller says she also minimizes the maintenance factor with tenants.
“We have tenants who truly believe that they are flying below the radar, and they do not want to phone us when the doorbell fails,” Miller says. “They just go out and fix it. . . . They want to talk to us as little as possible because they know that they’re getting a crazy good deal.”
Faulkner doesn’t have any trouble finding tenants. But he says you need to pick your tenants carefully: “It’s a bit of an art to pick a tenant.”
And his guiding mantra when considering a property is: “Right building, right price, right neighbourhood.”
He looks for properties near downtown or the C-Train stations, as well as in neighbourhoods that exhibit pride of ownership. His portfolio includes townhouses, duplexes and triplexes, as well as the harder-to-come-by multiplexes.
He says multiplexes with four to 12 units are harder to find because they’re owned by guys like him who have accumulated properties and know how profitable multiplexes are.
“They’re not usually willing to sell them,” he says. “You can get 50, 60 years of good solid returns out of a building like that.”
A good revenue property should be “cash positive,” says Faulkner, meaning it should pay down your mortgage, and ideally, provide positive monthly cash flow after expenses.
Faulkner has managed to find the right properties at the right price (his latest purchase was less than a year ago), and he believes you can still find positive cashflowing properties in Calgary today. Again he says it all comes down to the right property, price and neighbourhood. He factors in rising interest rates when determining whether the price is right.
A systems engineer, Faulkner, 42, plans to retire in less than 10 years — many years earlier than he could retire without the revenue properties. He expects to earn approximately $200,000 in cash flow annually from his revenue properties. Alternatively, he says he’ll be able to sell his entire portfolio for $4 million to $5 million. Of course, that’s assuming he continues to make the right purchases and the economy goes well.
“You have to believe in the Alberta economy, that we’re going to have a constant influx of immigrants,” he adds. “Calgary’s forecast to grow and grow and grow.”
As a realtor for MaxWell Canyon Creek, Miller advises clients looking for revenue properties. During the past year, about 20 per cent of her buying clients purchased rental properties. She has recommended single family homes and condos — it all depends on her clients’ needs and goals.
If clients can’t come up with the mandatory down payment for a revenue property (20 per cent), she’ll suggest renting out the property they’re living in, and buying a new primary residence for themselves with five per cent down.
Miller, unlike Faulkner, believes it’s highly unusual to find revenue properties in Calgary that cover all your costs or provide positive monthly cash flow. However, she’s not looking to make money on her rental properties each month. If she starts to make money, she shortens the amortization on the mortgage and reinvests the money into the property. That way, she keeps her mortgage payments high, pays off her mortgages faster, and deducts the mortgage interest and other expenses.
In the meantime, her tenants are paying down her mortgages. By the time Miller and her husband retire, the mortgages will be paid off.
“And somebody else will have bought the houses for us,” says Miller with a laugh. She expects the income from their rental properties to account for a significant portion of their retirement income.
“The beautiful thing about buying a house instead of stocks is that somebody else is paying off the investment for you,” she says.
“I really believe in real estate as an investment.’
What real estate can do is diversify stock portfolios, says Frederick Montilla, a financial consultant with Investors Group.
“If you speak to affluent Canadians, they have a combination of everything — they’re totally diversified,” he says. “That means they have money in the stock market, they have money in their pension, they have money in their corporations, and they have rental properties as well.
“The person who has an investment property will be better off than the person who is just investing in the stock market because the person buying rental properties has two advantages — the value of their property is appreciating while their tenant is paying their mortgage, and their mortgage is depreciating,” says Montilla.
“The only problem is (real estate) is not liquid,” adds Montilla. “But if you were to compare both, the rental property will outperform the stock market returns.”
In Faulkner’s case, the revenue from his rental properties has enabled him to launch an additional business. He recently opened a liquor store in Canmore, The Market Beer, Wine & Spirits.
You have to look at your rental properties as a business, he says. “Some people get attached to them. They feel it’s their home, and when a tenant puts a hole in the wall, they feel personally affronted . . . . You have to be detached from it . . . . The only reason you’re putting in the extra effort is to make money on it.”