Vancouver's Real Estate Market

[68style]

You're not fucked tho if you have an existing tenant, you bought it at a deflated price if that's the case... maybe paying a bit more % wise mortgage but if you didn't build extra costing into your model from the getgo that's on you I think.

What's fucked right now is that even historically high/not sustainable rental rates can't cover CURRENT costs... so like Great68 said, you have to sell and it goes back into the housing market. It's not a boon for the new owner either cuz like I said, even at current rental rates nobody can offset the buy-in/ownership/lending costs of the current market by renting out.

This, if anything, if it outpaces demand is what's going to cause a cooling. So far that hasn't been the case though and Vancouver is fucked up because there's so much foreign money here and those people literally do not care if their unit or units are not occupied... in fact seem to prefer it... they just want somewhere safe to park their $$$

[Great68]

Originally Posted by Hondaracer

Lol.. do you think that will have anything but an adverse overall impact?

Landlord X has a unit, they aren’t a wealthy person by any means but inflation and all the other factors have contributed to them being underwater with the unit

Landlord X then is forced to sell the unit, new Landlord Z evicts current tenant as part of the sale and charges whatever they want for new unit

The scenario you you described is illegal.

I also find this statement funny: "they aren’t a wealthy person by any means"

Anyone who owns a secondary home in this city is wealthier than most.

[Traum]

Originally Posted by Great68

I have no sympathy for holders of secondary properties whining about being unable to afford them due to rents being too low.

Sell it then, let it go back into the housing market. Simple as that.

The reality is -- society needs landlords because not everyone can afford to or wants to be home owners. When the gov isn't willing to step in to take on that landlord role (by providing public housing), you can only rely on the private sector to fill that gap.

But the private sector only responds to (financial) incentives. When there are no incentives to pursue landlordship -- the current GICs offer a far better return than renting without any of the hassle -- the private sector will not jump in. So where do you get the rental supply that society needs?

[Great68]

Originally Posted by Traum

The reality is -- society needs landlords because not everyone can afford to or wants to be home owners. When the gov isn't willing to step in to take on that landlord role, you can only rely on the private sector to fill that gap.

But the private sector only responds to (financial) incentives. When there are no incentives to pursue landlordship -- the current GICs offer a far better return than renting without any of the hassle -- the private sector will not jump in. So where do you get the rental supply that society needs?

Sorry but we do not need a social safety net for people holding secondary properties. If enough people truly do need to sell their secondary units because they can't afford to rent them out, then that's a net positive as more units return to the market and prices reduce. Win Win.

[Traum]

Originally Posted by Great68

Sorry but we do not need a social safety net for people holding secondary properties. If enough people truly do need to sell their secondary units because they can't afford to rent them out, then that's a net positive as more units return to the market and prices reduce. Win Win.

It is not a safety net for owners of secondary properties -- that prospect of profit is the incentive you need to entice people into becoming landlords so that rental units can be provided by the private sector. When there is no rental supply or low rental supply, the cost of rent will only go higher. And then it's a lose-lose situation for everyone involved.

[68style]

Well, I think what he's getting at is that if we didn't live in a society where homes are an investment/profit tool, then we wouldn't have a housing problem OR a housing affordability problem. Everyone could own a place and if they didn't it's because they're doing something really wrong.

[Great68]

Sorry, I disagree. I think there are a boatload of people priced out of buying only because they were outbid by these sorts of "mom & pop landlord" types thinking they could make a buck in renting real estate and taking units from others who would own to live. They are not the solution to the problem, they ARE the problem.

If those people currently renting move into ownership it leaves spaces for others to fill in those freed up rental units. Win-Win.

[Traum]

This is why I told you I am a selfish conservative at heart LOL~

[donk.]

I went out with some friends on the weekend, two of which I haven't seen in some time.

One bought a house about a year ago on variable, I think 400k loan (Kamloops)

The other bought a condo about a year ago on variable, 450k loan (Vancouver)

Kamloops is paying 100% interest, and lump sum payments on the regular now.

Same goes for Vancouver, except he was saying he doesn't lump sum, but he is going to have a large "bill" to pay on renewal.

I wonder how many other people are currently paying 100% interest, if not "110-120%" interest.

People really are holding on, no matter what happens by the looks of it.

[68style]

From a "conservative" side of things, I do think one of the shittiest things about living in Canada is that any time there's a way for people of modest income to try and make $$$... it's got maybe a 2-5 year lifespan before the government comes along and nips it in the bud with a tax or rule change.

System is riggggged.... rich have always gotten richer.

That's why people get so greedy at the mom and pop level... create a climbing over each other mentality, your neighbour is also your enemy/competitor.

I mean, what choice do you have in Canada besides stock investments and real estate? Gotta take a chance on either... and real estate at least has the word "real" in it unlike stocks just a bunch of numbers on computers. Better job? Work harder? Fallacies. Start a business? Need a lot of upfront capital and investment and leasing and overhead PLUS an idea... and at least here it's the same real estate market cost-wise for brick & mortar.

So people buy houses or condos and hope for the best. Can't really blame em.

[underscore]

Investments come with risk, if people are choosing to buy a rental property as an investment then they're choosing to take on the risk of losing money from it. None of this capitalism for their gains and socialism for their losses to protect those poor, innocent landlords b/s.

Meanwhile I know people that complained about the price of the house they bought while they own 3 rental properties lol.

[68style]

I have a friend who owns 8 investment properties (and she is at least 30-40% up on each one of them if not more on a few) and was talking to her on messenger the other day and she just bought another presale unit and told me "LOL I'm so poor now" and I was like "... yah... as poor as someone with 8 properties besides the one they live in can be ?"

People invent the weirdest narratives in their heads.

[Gerbs]

Originally Posted by Hondaracer

[url]

What’s the incentive to be a landlord when you can’t cover your costs of a rental unit?

Add in the million plus international students we will bring in next year, and good luck lol..

I’m b4 rental unit shouldn’t turn a profit communism take

I worked with rich landlords that had 5 - 20+ units. Most notable was this family who owned the entire corner unit over 40+ floors + penthouse in one tower.

They don't care about profitability as much as you think, past a certain net worth they care about preserving capital and better risk adjusted returns. They rather make 2% on their $1M condo and suffer a max price drop of 20-25%. Than to take a downside of-40% downside via index funds.

Their older units that are sitting on 100%+ cap gains + massive cash flow can help pay for the shitty ROI on the 2023 purchases. They'll become profitable in 2033 when rent catches up and price sgo up.

[Hondaracer]

Originally Posted by Great68

The scenario you you described is illegal.

I also find this statement funny: "they aren’t a wealthy person by any means"

Anyone who owns a secondary home in this city is wealthier than most.

Are you just being intentionally naive?

You can evict a tenant given 4 months notice based only on doing renovations.

Let alone everyone else who boots their tenants saying they are moving in only to rent it out again later. The amount of people who follow up if the unit has been rented again once they are booted is minuscule I’m sure.

[unit]

Originally Posted by Badhobz

i want them on their hands and knees scrubbing my tiles.

wonder if i can get these lousy intern kids to do it, and claim it as "work experience"

my cleaner came onto me so thats why i had to fire her lol. she was my age and filipino. looks wise she was like 4/10.. she kept buying me gifts that i didnt want and i had to keep displaying them or i felt bad. like she noticed i had 5-6 watches on my counter so she bought me a watch holding rack thing... also she started cooking me food and came over wearing verrry casual clothes... top with low shoulders, showing her tattoos, etc... she made me pancit which had tons of liver in it... i tried to eat a few bites but i hate liver, i had to toss it all out.

one day i was hungover in bed and she came to the door to pick up the containers. she was the nanny of my friend/neighbour across the street so it wasn't out of her way to stop by at all. i was so hungover and didnt want to talk to her so i just told her i left the containers outside the door and just come grab them. she blew up my phone with texts all pissed off, saying how rude that was that i wouldnt at least greet her or let her in, etc... ghosted her after that and never got a cleaner again.

[CRS]

Originally Posted by Hondaracer

Are you just being intentionally naive?

You can evict a tenant given 4 months notice based only on doing renovations.

Let alone everyone else who boots their tenants saying they are moving in only to rent it out again later. The amount of people who follow up if the unit has been rented again once they are booted is minuscule I’m sure.

If I thought that I was illegally evicted and the compensation is 12 months rent, you'll be damn sure that I have a notice set up for whenever a new rental or listing goes up for the unit.

What's a couple a seconds/minutes a week when the average rent is conservatively $2600 for a 1 bedroom in Vancouver?

$2600 x 12 month = $31,200

You're telling me that you wouldn't spend the time to get 30k with little to no effort?

[Hondaracer]

I guarantee you the amount of people who do that are in the single digit percentages

Also, you’re assuming the unit would be listed pubically. In the scenario I listed above, If somone is buying the unit as their 3rd, 4th, 10th, unit, they probably have a stream of tenants ready to go.

[Great68]

Originally Posted by Hondaracer

Are you just being intentionally naive?

You can evict a tenant given 4 months notice based only on doing renovations.

Your previous and current comments seem to show your ignorance to the RTA and the process. I know you're a landlord, but you are showing yourself to be one of the shitty ones that people need to stay clear of.

You understand "Renovations" must be significant right? You actually have to make an application to the RTB and they assess whether your unit must actually be vacant, and grant your renoviction. Slapping a coat of paint on the walls and doing some flooring do not qualify.

Let alone everyone else who boots their tenants saying they are moving in only to rent it out again later. The amount of people who follow up if the unit has been rented again once they are booted is minuscule I’m sure.

Sure, they can do this, they'll have 6 months of no income. If they can't afford a piddly 3.5% rent increase, they surely can't afford 6 months of rental income.

And if they are found to not be occupying the unit, or re-rent it before the 6 month period, then they can get nicely fucked by 12 months of free rent as compensation. If they can't afford a 3.5% rent increase, I'm sure they can afford paying 12 months of free rent compensation. You better believe that more people are "paying attention" when they can get 10-20K of money in their pocket. There are already dozens of reports of this happening now.

[Hondaracer]

Again, people who own multiple units know this system in and out

Get their buddy guy contractor to rip out the kitchen and bathroom for 20k and you’re done.

Going from 1600 a month to 3000 a month turns a profit pretty quickly.

I get what you’re saying but I think you’re being very naive if you don’t think this type of scenario is happening CONSTANTLY

[Traum]

Originally Posted by underscore

Investments come with risk, if people are choosing to buy a rental property as an investment then they're choosing to take on the risk of losing money from it. None of this capitalism for their gains and socialism for their losses to protect those poor, innocent landlords b/s.

Yes, investments come with risk, but at least with the residential rental market, many of the "risks" are created by the gov.

With the way the RTA is spelled out, everything is heavily tilted in favour of the tenants -- ie. it is already very much a socialist system. And despite that already socialist leaning, the provincial gov continues to make the power balance more in favour of the tenants, so the market responds accordingly to reach the equilibrium point that we are at right now -- rental supply is scarce, cost of rent is high, and nobody is happy.

Essentially, it is the gov asking for a capitalistic outcome -- ie. rental housing provided by the private sector -- while adopting an evermore socialist policy to protect the renters at the expense of the private sector suppliers. It is the gov trying to have his cake and eat it too. It cannot work that way.

It also goes back to a point I've made earlier -- if the gov wants to offer a socialist solution to the housing problem, they need to step in to provide public housing on a meaningful scale. Continuing to squeeze the private sector for solutions is not going to work because there isn't very much to give anymore.

[Great68]

Do you think the RTB is dumb? Do you think they're not putting more focus on renovictions because they know people are exploiting them?

You don't think they'd ask WHY you'd need to rip out a kitchen or bathroom if the tenant is happy with using what's there? If it's a safety/structural concern, do you not think you'd need demonstrable proof of that issue?

This RTB guideline even speaks directly to your "bathroom or kitchen" reno scenario:

Renovations or repairs that result in temporary or intermittent loss of an essential service or facility or disruption of quiet enjoyment do not usually require the rental unit to be vacant. For example, re-piping an apartment building can usually be done by shutting off the water to each rental unit for a short period of time and carrying out the renovations or repairs one rental unit at a time.

Cosmetic renovations or repairs that are primarily intended to update the decor or increase the desirability or prestige of a rental unit are rarely extensive enough to require a rental unit to be vacant. Some examples of cosmetic renovations or repairs include:

• replacing light fixtures, switches, receptacles, or baseboard heaters;
• painting walls, replacing doors, or replacing baseboards;
• replacing carpets and flooring;
• replacing taps, faucets, sinks, toilets, or bathtubs;
• replacing backsplashes, cabinets, or vanities.

https://www2.gov.bc.ca/assets/gov/ho...lines/gl2b.pdf

It's not happening as much as you think it is, and it's likely in most cases where it does it's because the tenants themselves don't know any better to dispute the notice to end tenancy. But they are getting wiser to it because the stakes are getting greater. Good on them.

[underscore]

Originally Posted by Traum

Yes, investments come with risk, but at least with the residential rental market, many of the "risks" are created by the gov.

Which the landlords are knowingly taking on by choice. Don't like it, don't buy a rental property.

[Traum]

Originally Posted by underscore

Which the landlords are knowingly taking on by choice. Don't like it, don't buy a rental property.

And I would say the same thing to the provincial gov too -- they are knowingly tilting the odds evermore towards the tenants, and yet they still hope the rental market will continue to function.

It doesn't work that way. And we end up with the situation we have right now.

[Hondaracer]

Originally Posted by Great68

Do you think the RTB is dumb?

Yes.

[68style]

Even IF single digit % levels of tenants have the follow through on things, single digit percentage chances that I could lose $50k in fines to someone on top of what I spent on BS renos doesn't make me feel very good.

I would want to be at small fractions of 1% to feel good about that.