Quote:
Originally Posted by PeanutButter
How does a developer afford to build rental only housing? The capital needed to build is so high and you're going to get miniscule rent on a monthly basis. How can they service their debt?
Regarding those kits condos, I think that product would do well in that area. There aren't any new condos there. I'm sure it will rent out no problem.
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They likely use leverage, tapping equity from other properties or their portfolio to finance new builds. It’s a debt fuelled model that works as long as rents cover service costsbut if market conditions shift or financing tightens, it can quickly get risky.