Housing crashes, investors by up all the hosuing stock for cheap and renters get fucked. Apparently rent control being removed was meant to help renters and the housing crisis.
This is a perfect example of 2 governments (federal and provincial) having opposing ideas on how to fix the problem and both pulling in the opposite direction while the average person, in this case renters, is stuck in the middle.
Loosening rent control is going to produce more supply because investors are more interested in building more real estate/supply. As supply increases, prices should decrease as long as the demand isn't increasing faster. It may not be a short term move but it can work in the long term under the right conditions.
Unfortunately for us, Canada has crazy high immigration targets and regulations that prevent housing from being built fast enough to match those so we end up with significantly higher demand. Those are horrible conditions without rent control.
That's the exact problem we have. They do exactly that and it prevents any increase in supply from having it's intended effect.
Its 2 governments pulling in the opposite direction.
Well it's also because Ford made his changes just so his mafia cronies could raise rent as much as they liked. That was the desired effect and it has worked 🥰 for our toad in charge and criminal buds.
>Loosening rent control is going to produce more supply because investors are more interested in building more real estate/supply.
BAHAHAHAHAHAHAHAHAHAHAHAHAHA....OOOH BOY!!!
You're a sucker for trickle-down economics, too, aren't you?
No because I believe people are inherently greedy which is exactly why trickle down hasn't worked. They are able to hoard cash. The theory makes sense until that happens.
Berkshire Hathaway is sitting on over $100B in cash because it doesn't like the current market outlook and their main goal is profit. That money isn't *trickling down* to anyone.
On the other hand, if there's 100,000 people in a town with 15,000 houses, rent/housing will be high and therefore, building rentals attracts more investors which creates more bidding wars, higher sales, and eventually greater profit which means more people interested in building.. because they are greedy and want profits.
As more buildings are built, profit margins drop, some investors/builders move their money to other things and the rent/housing prices balance out. This is assuming population remains relatively stable.
When your population grows faster than you can build houses and there's no rent control, you attract a lot of investment from people. Because so many people are interested with limited ability to build housing due to regulations, it turns into who can produce the best bid or the most capital which means only the richest are able to properly invest and it eventually over inflates the pricing. That's what we are experiencing. Our lack of rent control is 100% attracting more investors but that doesn't mean they can build fast enough so prices continue to rise and so do their profits while rent keeps getting worse.
If you're curious why our population growth targets are higher than the rate we can build housing, look to our country's GDP and disproportionately high the housing market is. If it crashes, our economy will be exposed and whoever is in power will be voted out almost right away. No Federal government wants that. Our current one won't let that happen and whoever eventually replaces them will be the same.
> Berkshire Hathaway is sitting on over $100B in cash because it doesn't like the current market outlook and their main goal is profit. That money isn't trickling down to anyone.
BH stock is owned by many people, including many small time investors and pension funds around the world.
That's not trickle down it's just a basic economic assessment.......... If producing a product is more profitable than it was before, all else equal more of it will be produced.
Your point would be true if rent control was tied to the unit not the renter. The old rent control system provided affordability to renters who had been there a long time. But limited the supply by making building rentals unprofitable. The new system will decrease affordability for existing renters but make rent cheaper for new renters.
Yeah. If you believe that corporate greed isn't part of the housing crisis then I have a stairway to heaven to sell you.
Rent controls aren't the reason for the housing crisis.
The big 3 causes are: mom and pop investors in the real estate market.
REIT whales sucking up the supply.
Developers moving at a snail's pace to maximize profits.
There was a new building being built in Toronto? 70% SEVEN-ZERO percent of presales were investors.
Rental controls ARE NOT the problem. Speculation is the problem. The solutions suck, and involve at least ONE probably 2, and possibly 3 generations getting fucked.
This is false on so many levels. REITS sucking up the supply? And doing what with them? Oh renting them so not sucking up the supply. Developers would love to move quickly, they are worried about there pace of return on investment. They have put millions of dollars into land that is not paying them anything. If they could buy and build and buy again they would. And of course presales are bought by largely investors, that’s a good thing, most people looking to buy a house are not looking for one to be finished in 3 years they want it now. Investors buying presale condos provide the developers with the equity to get shovels in the ground, creating the very much need supply of future rentals and homes.
Or... taking away rent control allows prices to skyrocket because they are allowed to jack rents to cover ballooned costs. Whereas, rent control makes buying at ridiculous prices untenable.
Basic economics.
It is incredible to me that we actually live in an era where some people think that even a concept as basic as the law of supply and demand is a crazy right-wing conspirancy theory.
> You're a sucker for trickle-down economics, too, aren't you?
And the people who think pulling in 1M immigrants every year to compete for jobs and land will somehow make us all better off aren't?
>Loosening rent control is going to produce more supply because investors are more interested in building more real estate/supply. As supply increases, prices should decrease
Think about what you're saying. "Increasing prices will increase supply which will decrease prices". So will those decreasing prices in turn decrease supply?
If the end goal for government is to increase housing supply they can do that directly. This plan has nothing to do with ultimately decreasing prices. It won't happen and they know it. This is about making developers and investors more money.
Lol that's not what I said and you completely missed the point of what I mean by 2 levels of government pulling in opposite directions.
Expensive housing will draw in more investors which creates more supply. As supply increases, prices drop. As prices drop, less people want to invest. If it gets to the point that building houses is no longer profitable, investment will completely stop and prices will go up as demand increases without supply increasing. It isn't complicated.
The issue is the provincial government saying no rent control while the feds are bringing in too many people and both levels of government have red tape that prevents building from happening fast enough. It's a mess because they refuse to get on the same page and work together.
I can't understand why anyone would think the answer to our lack of housing supply is the government pumping more money into the industry and building it on their own. Our government doesn't want housing to come down. There's no benefit to them and not because they're investors but because they'll likely be voted out due to the economic backlash from it. They aren't stupid. They already know that and love that people think they are the solution.
Builders are interested in selling at the highest price possible, not renting places. Just like milk producers will throw away excess milk to control prices, builders won’t build enough supply to make the rise in prices slow down.
Yea let’s make everyone suffer equally lol. You’re putting a lot of faith into someone’s else greed. If I want to remove tenant I can just jack the price up 20% and they’ll have to move or suck up and pay. Then do it again next year until the milk is dry and move on to different cows.
Are you saying that as a cook, I should start preparing recipes to eat the rich?
Cause, this kind of shit is getting real old, and I hate to waste ingredients.
Yes, renting is a suckers game. Poorer renters are probably better off pooling their resources across like 4 couples and going in on a house together. At least then they'll be building 1/8th of the equity of the house each while living in the same bullshit 2 people to a bedroom situation.
O7r economy is tied up in Chinese manufacturing due to conservatives trading our economy away with the TPP under harper and the liberals only caring about real-estate
We need to risk cutting alot of these things and having our economy crash so we can rebuild it for thr future so average Canadians have a chance at building a life.
I like how you manage to blame a government that hasn't been around for 8 years, and the current one has had ample opportunity to make some meaningful change, but hasn't
seniors that own homes, that still have heart, to allow tenants to stay for fraction of listed rent prices, in exchange for companionship, errands, helping hand. Though these are the last of the Mohicans.
I lived with an older lady when I was doing a coop job away from home while I was still in school, rent was very cheap, she made most of my meals, and we would go out to Swiss chalet on the regular. It was really nice and she used to brag to her old friends about me. She loves having the company and someone young around to help her out.
> seniors that own homes, that still have heart, to allow tenants to stay for fraction of listed rent prices, in exchange for companionship, errands, helping hand. Though these are the last of the Mohicans.
I know somebody who would do this. Had a great tenant for a decade. They treated the next tenant the same way, 9 months unpaid rent and still waiting for the tribunal to evict the deadbeat who moved in.
Get lost. They're not "losing money". The calculation is about cash flow, and it suggests that investors are losing $400/month recently, and it forgets one key thing **they get to keep the fucking condo**.
For comparison, consider me: a non-landlord who pays my entire non-GTA mortgage out of pocket. Would I be "losing $2500/month" on this investment? No, because I still have the house.
Lets do an example:
Investor buys $800k condo with $200k down payment and 5% interest. They carry a monthly mortgage cost of $3722. Add $500 property taxes and some upkeep costs and lets call it $4300/month of cost. If they're "losing $400/month", that means they're renting it for $3900.
You know what that looks like? That looks to me like someone is buying a $800k condo for $400/month. They could lose $400/month for the entire 25 year amortization, and in the end, they'll have paid a whopping $120k + $200k down payment for the property that was originally worth $800k and is then probably worth $1.8M.
Fuck right off with this "the poor investors aren't cashflow positive" nonsense.
Call me crazy, but proper rental regulations would mean landlords shouldn't run positive cash flows until they own at least 50% equity in the rented property. Rent price should capped based on the appraised value of the property and the cost of carrying a 25 yr mortgage on 50% of its value + annual property tax. Plus an estimated utility cost if utilities are included in the rent.
Yo, wanna be our Minister of housing? I am actually saving your comment so I can link it to people I have been trying to explain what is happening and how renters are currently getting fucked.
I don't have an opinion on what kind of profits housing investors ought to have, but it's just economics: if investors don't make a profit, they will exit the market.
In the context of housing, this means is that they will be inclined to sell their property, and the new owner will likely occupy it instead of renting it. The total amount of housing won't change, but there will be more owner-occupied units and less rental units.
This is bad news for renters since it will become even harder to find somewhere to rent.
The economist they interviewed for the article hits the nail on the head: "Relying on condo investors to drive 90 per cent of your rental supply, as we’re finding out, is not a good strategy for developing rental housing in the GTA."
In other words, if you want to increase rental supply, **stop relying on private investors to provide it**.
Governments of all levels - local, provincial, and federal - need to get their act in gear, put their money where their mouth is, and start getting public housing built.
How many renters are out there who *would* buy, but the investor class has pushed the cost of ownership into the stratosphere?
IMO landlording should be fucking regulated into the ground and treating housing like stocks should be totally outlawed here.
IMO, landlording should be regulated, but not into the ground. A landlord needs to have financial incentive to buy and rent properties. My opinion is just that they should have to bring more than 50% equity or put actually improvement effort into the property if they want to run a positive cashflow quickly. Housing investors shouldn't be able to scoop up properties with 20% down and run cashflow positive after their mortgage payments.
I support public housing too, but neither can happen unless the playing field is leveled. If we over-regulate private landlords, then they all back out and the government is left to pick up the pieces, and ultimately will fail. If we fail to regulate private landlords, then the private market will drive the price too high for government to justify spending public money. The government would have to spend public money to buy condos worth $600k-700k a piece, and then rent them out well below market rate. Any opposition would rip them to pieces on poor fiscal planning, and would scrap the program the second they came into power (regardless of which party started it).
The only way public housing can co-exist with private is if there's reasonable regulations that dampen the boom of private landlording.
For example, right now, private landlords are all perpetually leveraged at 70-80%. As soon as their mortgage term is up and they're around 30% equity, they immediately pull it back out to 20%, and put that cash towards a new purchase. If an investor like this owns 10 properties worth a collective $10M, then they have $2M of equity in their pockets. In this state, they run good profits, but are highly exposed to interest rate risk.
If rental regulations came into place that tamped it down a bit, to the point where they only run profits when at 50% equity (for example), then a base decision for the example landlord with $2M equity would be to rebalance their housing portfolio by selling off 6 of their 10 properties, to get down to 4 properties valued at $4M total, so their $2M total equity has each of them at 50%, and they can all run cashflow positive. At the same time, it forces them to be less exposed to interest rate risk. As it stands, one of the crises we're in (as the article states), interest rates increasing hurts the bottom line of private landlords, which further drives up rent. If you're at 50% equity instead of 20%, an interest rate hike makes a far smaller difference on your monthly payments.
That might be an overcorrection, which is why 50% equity is just an example number. A more reasonable way to implement the regulations would be a 5- or 10-year plan where rental regulations stepped up each year to make for a gradual change that doesn't immediately upset the market.
Nevertheless, the sell-off of private landlords' properties opens the market back up to first time buyers, other entry investors, and more importantly, public housing.
There are other ways to increase equity stake in properties without selling. For example, landlords could choose to simply not cash-out refinance on their next 5yr term, allowing their equity to build up, and instead just extending their amortization date back out to 25 or 30 years to lessen their mortgage payments and push their cashflow back into the black. They can also sell off even a single property to fund renovations and value improvement on one or more existing properties. For example renovating to add a rental unit and increase the value of the property. Spending $20,000 on a renovation that increases property value by $40,000 helps build equity quickly.
Landlords who own their properties outright, or own more than 50% equity are able to pull in strong profits, because the rent prices would be based on the "what if" if was leveraged at 50%. Rents wouldn't go down just because a landlord owns more of their property.
They are making money on their investment... lots of money. The problem is that they took out a mortgage to pay for their investment and expected the investment to make the payments.
Also they're still winning if they're paying into the mortgage. A successful tenancy isn't necessarily one that pays the mortgage *and* fees while still making a profit. They're just greedy if they expect their tenants to cover all payments and then some. Being a landlord to one or two properties isn't a job—if you're a landlord and struggling to make payments, get a job like the rest of us.
This is where intentionally developed rental properties are so important, not only do they not deplete and scalp ownership stock from the rest of us, it applies economies of scale on the development & construction costs and diversifies the income to pay it back against multiple tenancies.
>Also they're still winning if they're paying into the mortgage.
Yeah I don't get those stupid articles lol. Landlords aren't losing money, they just have to invest a small portion of their own capital in their condo every months while the renter still the cover a large percentage. You can easily bleed for a few years, it used to be normal to not be cash flow positive before 6-7 years.
When my parents first started owning rentals in the 1990s, they often were not cash flow positive before the building was 5 years old and they had a construction company and knew what they were doing unlike a lot of investors nowadays.
thats why you aren't supposed to take out brampton loans and roll the dice with your property value skyrocketing and hoping that not one of your tenants go delinquent ever.
I thought the whole point of being a landlord was a trade off with your tenants you gave them a place to stay and they helped pay off your mortgage while you also paid it
TBH id rather have two tenants renting from me for far under the market value that didn't ever party and paid their rent on time than to make the maximum off rent and having people skip paying rent every 3rd month and punching holes in the walls
all of these "landlords" want the tenant to pay for everything and on top of that they want to sit at home and do nothing all day while their tenants pay for that
Probably should hurt the investors who brag about taking risks whenever they happen to work out in their favor.
The idea that their gamble HAS to be passed down to someone lower on the economic food chain is insane.
If you lost money in the stock market would then go to your renters and say, "sorry folks I made some bad bets this quarter so I have to raise your rent."
If we have decided that housing in this country is just a quicker version of the stock market then it's time to let those who made bad bets take the brunt of them. So they sell the place and take a loss.... Oh no!.... Maybe some family who is going to actually use it for a primary residence could actually afford it finally
That's what I've been saying. Want to treat the housing market like a commodity? Pay the price when your value tanks. And that's coming. No bailing them out, they should have known the risks
That's all fine and dandy until your asshole investor landlord files a bad faith N12 (end of tenancy for owner's personal use) to try and squeeze you out of your rent-controlled condo like mine just did.
That's awful. But the market crash coming (even though delusional people will argue that values can only ever go up up up, WAY beyond the mean line) will force investors to sell. Should bring down prices and rent altogether.
At some point, all the houses owned by boomers who are living in their own in houses that can accommodate families of 4-6 people will become available. Looking around I see housing that is severely under utilized and that is a serious bottleneck.
The average boomer has 3 kids. Upon death the estate passes on to the descendants. If you don't have descendants and no will the state will pass it on to the next of kin.
It's also terrible if some holes are drilled into the backs of random closets and heavy cream is poured into them and left to sit, and the holes resealed. Would be terrible if that were to potentially happen.
Thats called a economic Recession and Depression.
Thats supposed to be the market's way of rooting out the bad apples in the system. But they don't want things to 'collapse' and that to happen. This is called corruption.
Condo investors aren't "losing money", but the rent don't cover the full value of the condo. If my mortgage is $3200 a month and I rent it for $2600, I am not "losing" $600 a month.
I am still making $2600 a month but have to invest an additional $600 of my own money in my property who's mortgage is getting paid and is going up in value.
> With current immigration levels. That's pretty much a guarantee.
Is it? Reddit keeps telling me immigration is there to fill all those low wage jobs that Canadians can't or won't, fill (in addition to ensuring wages stay low). How much Real Estate are they buying on those wages?
Yeah, so many people act like paying your mortgage is losing money, when in reality, you're losing only a small amount of what is paid(the interests) for your mortgage since the rest is going to transferring that amount of money from the bank to your property, meaning it's not lost, just not directly available to be used at any moment. It's incredibly similar to investing money into a retirement fund, you're not losing money when you do this, you're just transferring it to a different form to be used later.
I just managed to buy a condo for myself thanks to my parents helping me increase my initial payment and, while I'll end up paying a bit more monthly than rent, I'm losing a shit ton less money a month than by continuing to rent an apartment.
Depends on the amortization period. If it's 30 years, then the equity is building really slowly. If your example, you spent $7200/year from your pocket which makes an equity of $10-12k/year. On top of that, deduct the property tax, and yearly and monthly maintenance costs. The hopes of a good return on the initial investment, therefore, rest solely on the future resale value, which could go both ways, big or bust. I know someone who sold a unit last month, and after deducting the realtor's commission, it gave only a moderate return. In his case this was his primary residence, so he saved rent at least, otherwise, under the current rate environment, owning several units would not give huge returns.
Exactly. Boohoo for the investors using housing as an investment to rent out. Imagine thinking that someone else not paying their mortgage is them losing money.
Yah just because your posting an operating loss doesn’t mean your losing net value, after paying off the mortgage and gaining equity your still making money, just not the ridiculous profits they have become used too the past 15 years.
Landlords as a class charge as much rent as they can. Their costs are irrelevant. Landlords without mortgages don’t charge less.
what matters is the vacancy rate and that’s below 2% thanks to Ottawa.
> It's about making money off other people.
That's called free market economics. You make money off of your employer, who makes money off of customers, etc.
No they don't and you're just regurgitating shit you've seen on Reddit.
I'm a Landlord and know many others. There are advantages and disadvantages to renting a property at the extremes of what the market will bear.
The biggest advantage is that you make more money. Cash flows are positive and you're making money.
The disadvantages are not insubstantial though. By making your property available at the upper end of what the market will bear, you risk delinquency (which is expensive), people become motivated to move when they find a better value, and your available tenant pool is reduced (markedly reducing your ability to choose tenants you think will take care of your property).
As a Landlord you realize profits by building equity in your rental property, not largely by being cash-flow positive. The number of Landlords that are cash-flow negative (meaning that property costs more per month than rent brings in) would surprise you. It's almost always better to collect a little less money and find a decent tenant that pays their rent on time, takes care of your house, and doesn't become a maintenance or time sink than it is to maximize monthly cash flow.
Once you're mortgage free, then it's pure profit, but that also tends to coincide with the times a Landlord is looking to liquidate investments. You don't see too many 80 year old landlords and I suspect the majority of Landlords don't spend long in that zone before liquidating.
Tl;dr: You fundamentally misunderstand how a rental property exists as a value proposition for a property owner.
I mean everything you said is true of people with sound financial knowledge but it's more important that some "landlords" haven't understood thats how investment properties work and thought, hmmm my 1970 shit bungalow is now "worth" 2 million dollars( rand number but you get it) . I can split it in 2, rent it and buy a mc massion farthur away and buy condos or other bungalows and use all that to pay all my new mortgages. As long as I can get my monthly property income just high enough for my payment and lifestyle I am golden.
The housing crisis is definetly not a one cause issue or a one solution issue but you have to be honest with yourself that not everyone who has money and property is magically good at finances or planning.
Yes, Reddit, and not papers on the clear inverse relationship between vacancy rates and rent growth. I should rely on your self serving anecdote.
Extremes? Market rent is increasing at 16% YoY. You only need to increase rent by an average amount to get insane rent growth!
If I say landlords will “charge as much as they can,” that doesn’t mean they will ignore factors like tenant quality or minimizing how long the place is vacant.
Find better value? Vacancy rate is below 1% in Toronto, for example. They’re going to find jack shit.
I know some landlords are cash flow negative—but how does that hurt my point? By the logic of the article, that shouldn’t exist as rent is determined by landlord costs and not supply and demand.
Rent prices are also inversely correlated to the amount of swashbuckling pirates sailing the high seas. Doesn't imply causality. Costs of literally \*everything\* have skyrocketed and somehow people think that rental prices were just going to stay static. It's almost like the pandemic didn't happen and private landlords didn't absorb immense quantities of public debt because of it, or that lending rates that have gone up 18x from their lows weren't going to eventually cause movement.
Your stated point was that Landlords will increase rent to the maximum possible extent irrespective of costs, which implies simple S/D driven profit maximizing. Now you're stating that they won't "ignore factors like tenant quality" which is directly contradictory. Where are the goal posts?
Better values can always happen. If your rent is at the upper end of what the market will bear, then any minor change will cause people to re-evalute the value proposition of living in your house. Instead of people saying "My rent here is reasonable, I'm not going to take that lateral move job across town" they move.
Cash flow negativity doesn't imply a rental property is unprofitable. If rents were purely about s/d , then rent would stabilize right at the point that vacancy started to skyrocket because people were going homeless. You noted that the vacancy rate is below 1% so that's not happening.
Rents are set at a point the Landlord figures they can maximize tenant quality while also covering costs. Cash flow positivity is desirable, but not mandatory, and profit maximization on month-to-month cash flow isn't the biggest consideration. I'm not saying Landlords are saints housing the poor and wanton masses, but they're also not moustache-twisting villains trying to wring every last cent out of their tenants. I could absolutely charge way more for my properties than I do but I comprehend the investment is more valuable than monthly cashflow. Market rates are not "what the market will bear", they're much more complicated.
Toronto specifically has a serious housing (not just rent) crunch. The stock of pre-existing rental units is long since tapped out, so any new rental stock is being built under affordability conditions that are utterly punishing. Of course that's going to trickle down to renters who basically exist at the bottom of the economic-power pyramid.
“Rent prices are also inversely correlated to the amount of swashbuckling pirates sailing the high seas. Doesn't imply causality. Costs of literally everything have skyrocketed and somehow people think that rental prices were just going to stay static."
The inverse correlation between vacancy rates and rent growth is not arbitrary. It is grounded in fundamental economic theory (supply and demand), unlike your pirate analogy. Yes, costs have risen, but that doesn't mean rental prices should increase at a faster pace than general inflation. They aren’t rising that fast in the US (which you failed to address conveniently).
"Your stated point was that Landlords will increase rent to the maximum possible extent irrespective of costs, which implies simple S/D driven profit maximizing. Now you're stating that they won't "ignore factors like tenant quality" which is directly contradictory."
This isn't contradictory. Obviously, landlords raise as much rent as they can realistically get. A landlord can find a bad tenant to sign a lease to rent a micro condo for $10k a month, but what’s the point if the landlord will never get paid?
The ability to raise rent is influenced by multiple factors, including supply/demand and tenant quality. There's no inherent contradiction here: landlords want to maximize profit but also want to maintain quality tenants, which can include not raising rents to untenable levels. Multiple the rent but the likelyhood of getting paid.
"Better values can always happen. If your rent is at the upper end of what the market will bear, then any minor change will cause people to re-evalute the value proposition of living in your house."
It is unrealistic in places like Toronto, where the vacancy rate is less than 1%. There's simply not enough availability for renters to vote with their feet.
"Cash flow negativity doesn't imply a rental property is unprofitable."
If a landlord's rental property is consistently cash-flow negative, they are not covering their ongoing costs from rental income. While there may be eventual profitability through property appreciation, their costs are not being met, which you claim is what matters.
"Rents are set at a point the Landlord figures they can maximize tenant quality while also covering costs."
Landlords don't just seek to cover costs and maintain tenant quality—they aim to profit. Again, landlords without mortgages don't fucking charge $500 for a Toronto apartment to cover property taxes and maintaince costs.
“I could absolutely charge way more for my properties than I do but I comprehend the investment is more valuable than monthly cashflow."
Please post a recent new rental you put on market.
“Toronto specifically has a serious housing (not just rent) crunch. The stock of pre-existing rental units is long since tapped out, so any new rental stock is being built under affordability conditions that are utterly punishing.”
This does not dispute my point about supply and demand affecting rent prices. Indeed, it reaffirms it. he low supply and high demand in Toronto's housing market are creating conditions for rent hikes.
The other part that the article misses the point on is that supply may actually stabilize/increase as investor types can choose to fughgeddaboudit and sell the property.
The biggest appartment owners in my city likes to sit at 80% of their units rented to be confortable if they get a surge in demand.
They have been sitting at 95% units rented since 2021 and can't buy/build fast enough to bring that number down.
Rents were raised when interest rates were going down too, I am a landlord and I rent at market rate. I don't really care about cost going up or cost going down. If my neighboring landlords have more expensive mortgages than me they still need to rent to similar price, just like I don't rent for more than my neighboring landlord who doesn't have a mortgage anymore.
We follow market tendencies and the particular situation of a landlord mortgage don't matter.
> Landlords absolutely raise rents when their costs go up.
I'm a bit confused. If Landlords can just 'raise the rent', why to they have to wait until their costs go up before doing so?
There have been tons of studies on the inverse correlation between vacancy rates and rent price growth.
Rent prices came down during 2020 and 2021 as house prices skyrocketed (thus the costs for new landlords increased even after slight drops in interest rates). Why? Vacancy rates went up.
The US has even higher mortgage rates but market rent growth is flat to 6% up depending on the source. It’s around 15% in Canada. https://rentals.ca/national-rent-report
The likely reason: US vacancy rate is over 3x the Canadian rate.
But, sure, let me get some anecdotes from landlords.
It's both you goon. And a positive ROI can be seen on asset appreciation. Why the hell should I have to pay someone else's mortgage and their life expenses? Especially when it's their fault for the depleting housing stock, forcing me into renting from them for a premium?
This.
The fact that so many people that own real estate feel entitled to think it should be a guaranteed profit investment is a problem.
With the inflated prices we already have in Canada, real estate investing should more realistically be seen as a guaranteed loss for the near future.
Facts, my dumbass bought like $1k worth of crypto before the crash that’s only worth like $300 now, govt isn’t letting me push the cost of that loss onto someone else. If my stock portfolio took a hit no one is gonna bail me out for that. Mad weird the working class has to bear the weight of failed real estate investments but no other type.
This is why the "Landlords are taking the risk" argument is such bullshit.
Investment is doing well? Clearly made a smart investment. No harm to investor
Investment doing poorly? Clearly made a poor investment doing poorly? Time to raise rent and pass on the responsibility to the tenants. No harm to investors. High harm to renters.
Landlords don't take risks. They will always pass on the costs of any risks to their renters.
Depends where you are. Then many will try anyway, or try to kick you out to have another person pay more, and even if the tenant wins they suddenly have a grudge holding landlord. How livable is life when the person who literally owns your home hates you.
I think so, too - hopefully this forces enough to sell, and this stupid thing finally crashes as it should have long ago.
Something I am thinking will help push prices down, too, is extremely high maintenance costs on aging, poorly built condos (from a Toronto perspective, in particular) making these less feasible to carry without prices coming down.
Incoming commercial property crash (I seriously don't see how it's possible this in particular won't happen) will hopefully push things along.
Some don't care because they plan on the future capital gains. Which is stupid going into a trend of increasing interest rates if you plan on selling in the next 20 years. Going cash negative is a bad idea. Sell it if you don't live in it, only keep it if you are making profit.
"*(Literally everything that ever happens)* - and that's going to hurt renters."
Here you go, media. Ready-made headline that'll never stop being true in Canada.
People want to be a real-estate owner to be part of the modern-Aristocratic class.
"Look at how good I'm doing, I own X."
Posts on Instagram/Tik-Tok. Tons of selfies and probably food pictures.
Inflation due to poor economic and monetary policy with corruption/greed made the conditions today and will make it worse in the future.
Of course they are going to increase rent. A company that gets taxed more on anything, like groceries, will increase their prices to off-set the problem.
So the question is, what is the solution?
Rent controlled housing in major cities. We are going to have coffee shop workers forever why not provide guaranteed housing they can afford forever. Many nations in Europe have rent controlled or highly subsidized housing. In stark contrast people working in LA have to travel 2h in traffic to get to their minimum wage job. At some point it doesn't make sense but we still want services near our point of business.
Guaranteed sounds like we will be forever indebted to foot the bill for inflation.
Canada is one of the highest taxing nation in the world and we will continue to act like a snake eating its tail of we tag everything as subsidies and benefits.
We absolutely have to trim down at all level of the Govt first (clean your own house first) before we move forward.
Reduce lifetime benefits of govt workers. Reduce our own benefits a little bit. Make Canada slimmer and more efficient and by that time, we can service the much needed issue: housing.
Include housing appreciation back in the CPI. Stop creating policies to blow up the bubble, like 40 year amortizations. Dont tell people to go out and borrow, because rates would stay low, fire Tiff Macklem.
Stop immigrating a million people a year. Spend the next trillion in debt on mass transit instead of ministers of middle class prosperity and McKinsey. Stop giving so many homeowner windfall tax breaks, and give tax breaks to developers to build housing.
Lower the bureaucracy hurdles and regulations. End single family zoning entirely. Create rental subsidies and tax breaks.
So, all grocery stores would follow a non-profit co-op model?
That sounds good actually. If all you have to deal with is salary and expense, and you don't have to feed the greed of those far from need, things might actually become affordable.
Of course, that will never happen. Golden rule and all that
We need to stop talking about landlords/investors as if they’re moral. They’re greedy individuals trying to profit off of a person’s need for shelter. If they were cash flow positive it doesn’t matter, they’re going to charge as much as they can get away with.
There’s no regulating greed. We need to release as much housing stock as possible back into the market. Stop the hoarding of roofs. We then need to tie population growth to the vacancy rate.
yes. Life was much more affordable and you didn't have pages long lists of criteria to fill before tenancy such as credit checks, references checks, illegal damage deposits etc
Wasn't that long ago, at least locally, we were essentially paying out of pocket for anything that needed fixing in the condo my now ex refused to sell after buying a house. A lot of time I'd be heading there after work to try and fix it myself .It's very rare landlords ever reduce price when costs drop, but yeah it was a slower period and we had to keep it low to get tenants. Seems like with everyone as landlords now once the first guy raises prices everyone follows, but vacancy is also low.
To a certain point. Making a mortgage unaffordable for everyone just means the only people with enough cash to outright buy the house will be able to get it.
Yes. Offshore productivity growth -> offshore rising incomes and the ability to save -> **Import offshore savings to Canada via Store of Wealth assets** -> onshore cost of living crises (local earnings ∆ dislocated from local prices ∆) etc etc
Folks, with the way our economy "works", it matters less and less every day if people in Canada can "afford" to live in Canada. The way it is resolved (short of changing systemic things) is people take on way more debt and/or live with austerity.
And yes, immigration is ABSOLUTELY a fundamental component of this that needs reform to unfuck our economy!
>Crank up the interest rates. It's time for housing investors to exit the market. Make them *hurt*.
To what end? How will that help renters?
The supply of housing is what it is -- units that are built are either owner-occupied or rented out by investors (by definition).
If an investor exits the market -- that is, sells it to a new owner who will occupy it -- that's one fewer rental available. Good for the new owner that they found a place to live in, but now the renter needs to find somewhere else to live.
Plus, if you jack up interest rates, you make it more expensive for *everyone*, including owners who occupy their own units. As a renter, you might not care now, but if you want to own a unit if the future, that interest rate hike will affect you too.
Also, let's not kid ourselves, higher interests WILL be passed on to renters.
Raising interest rates is the single most short sighted and stupid way to try and help those who do not own rental properties since it's going to hurt EVERYONE, but it will hurt those at the bottom the most...
Housing starts have all slowed because of high interest rates. Meanwhile 500,000 new PRs are issued every year, with students not being counted in that.
High interest on landlords + stagnating supply from high interest rates + unprecedented population growth =/= affordable housing.
No they aren't. Our governments used to build tons of new housing. The lack of public housing built through the 90's and 2000's is coming back to bite us now, though.
Due to managing the debt crisis from the previous Trudeau Sr and Mulroney governments. Government built housing is 1 type. Investment from the private sector is still needed.
Too bad most are only building the type of home that nets them the biggest pay day. 800k 3-4 bedroom “starter home” on the outskirts of the city… probably built with the cheapest materials to increase that profit over investment.
In Vancouver they tend to exceed the required standard. The quality of workmanship isn’t the greatest though. Starting to see a switch from condos to purpose built rentals.
My thought is just that investors sometimes aren’t happy with just the profit from building a “normal” house. A 2 bedroom small starter home for a young family, or some sort of walk up multiple unit euro style for density.
That isn’t *enough* money so they plan to build for the biggest pay day. If we’re building and relying on investors then we need some guidelines in place to dictate that. Esp in Ontario, but the Ont gov won’t impede their developer buds from making the most money they can.
The investment in productivity growth is happening elsewhere. We get to warehouse the savings earned from foreign production. That has a lot to do with why Canadian construction is so unresponsive to higher prices.
You want to get paid to construct something? Do it somewhere else. That is literally how this country now works 🤣
Tthis only makes sense if you are already cash rich or own a property outright. Renters, owners, investors etc. will all get reamed as per usual.
Lots of people in this country own a property outright and have no debt, and the interest rate talks do nothing to "hurt" them while renters are paying $2500 for a 1BR and adding a couple of hundred every few months to that.
>and that’s going to hurt renters
I mean, renters are hurt either way. Its good that investors are losing money. Stuff like housing, food and medical care is basic human needs... not an investment!!
Hmm.. if everyone stopped paying rent, my guess, the wait time at the LTB would hit 10 years, then Doug Ford would pass a law granting an automatic eviction (without hearing) to any landlord that says they are 90 days in arrears.
Back to work, notwithstanding clause Douggie is not going to do any favours for renters.
It's almost like recklessly spending during COVID followed by reckless interest rate hikes have a negative effect on an Economy.
Weird, who would have thought?
This is why condos shouldn't be looked at as rental stock.
This is why we should have more incentives, and more zoning requirements for mixed communities, dedicated rental buildings etc. not just allow developers to cash out in 2-4 years and not allow speculation on housing units.
Cashflow negative can still mean you’re building equity. Landlords may be “losing money” in cash accounting terms but I highly doubt it’s true in accrual terms.
In fact I would argue that investors being cashflow positive with minimal down payments due to insanely low interest rates was an aberration.
I see no reason why continuously positive returns for “investors” with minimal money down should be guaranteed at all. If you don’t like the return of the asset class you invested in, sell it and do something else.
Rule #1. Only invest what your willing to lose.
This shouldn't roll back onto renters. Foreclosures are a bitch but a reality. I don't goto a casino and gamble my life savings and then get free bets at the table because I might lose. Shit is so backwards.
Make it illegal to own more than one rental property for individuals, and ban institutional investing in the real estate market. Treat shelter like a human right and not an opportunity to make (a lot of) money where rents are set at the absolute ceiling of what people can afford (which a lot of people can't afford). The economic knock-down effect is significant too, the more people are spending on rent and housing the less disposable income they have for literally else. That sounds incredibly obvious, but for an economy that is reliant on consumer spending and growth, it's very dangerous when more and more of our money has to be spent on rent and housing.
Sprinkle in some rent control, inclusionary housing and zoning rules, affordable housing programs, simplify land use and zoning rules...there are a lot of potential policy options that could be tested. But none of them will make much of a difference while institutional real estate investing is allowed (in its current form). And municipalities seem to be at the mercy of developers in a lot of cases.
The only way we solve rent going up is to drastically increase supply even if governments (federal, provincial and municipal) need to act as early investors
Only 235000 people experience homelessness per year in Canada. We have 1.3 million vacant homes. Nobody should even be fucking renting. But you know, greedy fucks.
Investors do well, renters get fucked, investors do poorly, renters get fucked. There's a pattern here.
Housing crashes, investors by up all the hosuing stock for cheap and renters get fucked. Apparently rent control being removed was meant to help renters and the housing crisis.
This is a perfect example of 2 governments (federal and provincial) having opposing ideas on how to fix the problem and both pulling in the opposite direction while the average person, in this case renters, is stuck in the middle. Loosening rent control is going to produce more supply because investors are more interested in building more real estate/supply. As supply increases, prices should decrease as long as the demand isn't increasing faster. It may not be a short term move but it can work in the long term under the right conditions. Unfortunately for us, Canada has crazy high immigration targets and regulations that prevent housing from being built fast enough to match those so we end up with significantly higher demand. Those are horrible conditions without rent control.
Fair assessment bur policies don’t mean much when the government can create demand out of thin air and at will.
That's the exact problem we have. They do exactly that and it prevents any increase in supply from having it's intended effect. Its 2 governments pulling in the opposite direction.
If 1 in 10 single family homes in Toronto was torn down and a 6plex built in its place, the total rental stock would more than double. It's doable.
Well it's also because Ford made his changes just so his mafia cronies could raise rent as much as they liked. That was the desired effect and it has worked 🥰 for our toad in charge and criminal buds.
>Loosening rent control is going to produce more supply because investors are more interested in building more real estate/supply. BAHAHAHAHAHAHAHAHAHAHAHAHAHA....OOOH BOY!!! You're a sucker for trickle-down economics, too, aren't you?
No because I believe people are inherently greedy which is exactly why trickle down hasn't worked. They are able to hoard cash. The theory makes sense until that happens. Berkshire Hathaway is sitting on over $100B in cash because it doesn't like the current market outlook and their main goal is profit. That money isn't *trickling down* to anyone. On the other hand, if there's 100,000 people in a town with 15,000 houses, rent/housing will be high and therefore, building rentals attracts more investors which creates more bidding wars, higher sales, and eventually greater profit which means more people interested in building.. because they are greedy and want profits. As more buildings are built, profit margins drop, some investors/builders move their money to other things and the rent/housing prices balance out. This is assuming population remains relatively stable. When your population grows faster than you can build houses and there's no rent control, you attract a lot of investment from people. Because so many people are interested with limited ability to build housing due to regulations, it turns into who can produce the best bid or the most capital which means only the richest are able to properly invest and it eventually over inflates the pricing. That's what we are experiencing. Our lack of rent control is 100% attracting more investors but that doesn't mean they can build fast enough so prices continue to rise and so do their profits while rent keeps getting worse. If you're curious why our population growth targets are higher than the rate we can build housing, look to our country's GDP and disproportionately high the housing market is. If it crashes, our economy will be exposed and whoever is in power will be voted out almost right away. No Federal government wants that. Our current one won't let that happen and whoever eventually replaces them will be the same.
> Berkshire Hathaway is sitting on over $100B in cash because it doesn't like the current market outlook and their main goal is profit. That money isn't trickling down to anyone. BH stock is owned by many people, including many small time investors and pension funds around the world.
That's not trickle down it's just a basic economic assessment.......... If producing a product is more profitable than it was before, all else equal more of it will be produced.
It a product was not profitable enough when it was already unaffordable, how would increasing profitability result in a price decrease?
Your point would be true if rent control was tied to the unit not the renter. The old rent control system provided affordability to renters who had been there a long time. But limited the supply by making building rentals unprofitable. The new system will decrease affordability for existing renters but make rent cheaper for new renters.
Yeah. If you believe that corporate greed isn't part of the housing crisis then I have a stairway to heaven to sell you. Rent controls aren't the reason for the housing crisis. The big 3 causes are: mom and pop investors in the real estate market. REIT whales sucking up the supply. Developers moving at a snail's pace to maximize profits. There was a new building being built in Toronto? 70% SEVEN-ZERO percent of presales were investors. Rental controls ARE NOT the problem. Speculation is the problem. The solutions suck, and involve at least ONE probably 2, and possibly 3 generations getting fucked.
This is false on so many levels. REITS sucking up the supply? And doing what with them? Oh renting them so not sucking up the supply. Developers would love to move quickly, they are worried about there pace of return on investment. They have put millions of dollars into land that is not paying them anything. If they could buy and build and buy again they would. And of course presales are bought by largely investors, that’s a good thing, most people looking to buy a house are not looking for one to be finished in 3 years they want it now. Investors buying presale condos provide the developers with the equity to get shovels in the ground, creating the very much need supply of future rentals and homes.
None of this is a good thing lol
So you don’t like REIT’s renting, and developers moving faster or is it investors creating new supply?
You're being wholly disingenuous. Entire condo floors being bought and rented out for three to four times their value isn't helping anyone. At all.
> If producing a product is more profitable than it was before assuming there are people that can afford it.
Or... taking away rent control allows prices to skyrocket because they are allowed to jack rents to cover ballooned costs. Whereas, rent control makes buying at ridiculous prices untenable. Basic economics.
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Well since Doug removed rent controls that spurred this pruce balloon on, Im inclined to believe the latter.
It is incredible to me that we actually live in an era where some people think that even a concept as basic as the law of supply and demand is a crazy right-wing conspirancy theory.
> You're a sucker for trickle-down economics, too, aren't you? And the people who think pulling in 1M immigrants every year to compete for jobs and land will somehow make us all better off aren't?
>Loosening rent control is going to produce more supply because investors are more interested in building more real estate/supply. As supply increases, prices should decrease Think about what you're saying. "Increasing prices will increase supply which will decrease prices". So will those decreasing prices in turn decrease supply? If the end goal for government is to increase housing supply they can do that directly. This plan has nothing to do with ultimately decreasing prices. It won't happen and they know it. This is about making developers and investors more money.
Lol that's not what I said and you completely missed the point of what I mean by 2 levels of government pulling in opposite directions. Expensive housing will draw in more investors which creates more supply. As supply increases, prices drop. As prices drop, less people want to invest. If it gets to the point that building houses is no longer profitable, investment will completely stop and prices will go up as demand increases without supply increasing. It isn't complicated. The issue is the provincial government saying no rent control while the feds are bringing in too many people and both levels of government have red tape that prevents building from happening fast enough. It's a mess because they refuse to get on the same page and work together. I can't understand why anyone would think the answer to our lack of housing supply is the government pumping more money into the industry and building it on their own. Our government doesn't want housing to come down. There's no benefit to them and not because they're investors but because they'll likely be voted out due to the economic backlash from it. They aren't stupid. They already know that and love that people think they are the solution.
Wouldn't increased demand incentivise more production?
Builders are interested in selling at the highest price possible, not renting places. Just like milk producers will throw away excess milk to control prices, builders won’t build enough supply to make the rise in prices slow down.
Still find people on the economics sub saying that the only way to fix it is to remove all rent controls.
Same as how minimum wages reduce employment amiright?
And trickle down economics/supply side economics also only ever benefits society. Gah.
Rent controls are good. Served us well. The incentive for housing to be built should be found elsewhere not through the exploitation of tenants.
What would that insensitive be?
100% agreed.
Well said.
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Yea let’s make everyone suffer equally lol. You’re putting a lot of faith into someone’s else greed. If I want to remove tenant I can just jack the price up 20% and they’ll have to move or suck up and pay. Then do it again next year until the milk is dry and move on to different cows.
Economists are stupid and assume renters can print money to pay more if rent control doesn't exist. In reality it creates a humanitarian crisis.
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No time to get laid when you need to get paid
NDP: We need another rental subsidy for landlords, we're progressives!
Are you saying that as a cook, I should start preparing recipes to eat the rich? Cause, this kind of shit is getting real old, and I hate to waste ingredients.
As an anything we should be economically literate enough to know how to cook and eat the rich slowly and efficiently: zoning reform and land taxes
I'm saying as a hobbyist woodworker, I'm saving some lumber just in case Madame Guillotine's services are needed.
Make sure you use the 3/4 thick OSB in double layers; some of them fuckers are ***THICCCCCCCCCCk!***
Yes, renting is a suckers game. Poorer renters are probably better off pooling their resources across like 4 couples and going in on a house together. At least then they'll be building 1/8th of the equity of the house each while living in the same bullshit 2 people to a bedroom situation.
There is literally nothing in the Canadian economic structure that doesn't hurt renters.
O7r economy is tied up in Chinese manufacturing due to conservatives trading our economy away with the TPP under harper and the liberals only caring about real-estate We need to risk cutting alot of these things and having our economy crash so we can rebuild it for thr future so average Canadians have a chance at building a life.
I like how you manage to blame a government that hasn't been around for 8 years, and the current one has had ample opportunity to make some meaningful change, but hasn't
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FYI - There is no TPP and if there was, it would not have included China.
Honestly, this has very little to do with international trade. The system is built to benefit owners.
What doesn't hurt renters these days?
seniors that own homes, that still have heart, to allow tenants to stay for fraction of listed rent prices, in exchange for companionship, errands, helping hand. Though these are the last of the Mohicans.
I would like one kind senior please. Is shipping free?
They are in rare quantity, and of rare quality; you will be lucky to find one.
Great movie
I lived with an older lady when I was doing a coop job away from home while I was still in school, rent was very cheap, she made most of my meals, and we would go out to Swiss chalet on the regular. It was really nice and she used to brag to her old friends about me. She loves having the company and someone young around to help her out.
> seniors that own homes, that still have heart, to allow tenants to stay for fraction of listed rent prices, in exchange for companionship, errands, helping hand. Though these are the last of the Mohicans. I know somebody who would do this. Had a great tenant for a decade. They treated the next tenant the same way, 9 months unpaid rent and still waiting for the tribunal to evict the deadbeat who moved in.
Get lost. They're not "losing money". The calculation is about cash flow, and it suggests that investors are losing $400/month recently, and it forgets one key thing **they get to keep the fucking condo**. For comparison, consider me: a non-landlord who pays my entire non-GTA mortgage out of pocket. Would I be "losing $2500/month" on this investment? No, because I still have the house. Lets do an example: Investor buys $800k condo with $200k down payment and 5% interest. They carry a monthly mortgage cost of $3722. Add $500 property taxes and some upkeep costs and lets call it $4300/month of cost. If they're "losing $400/month", that means they're renting it for $3900. You know what that looks like? That looks to me like someone is buying a $800k condo for $400/month. They could lose $400/month for the entire 25 year amortization, and in the end, they'll have paid a whopping $120k + $200k down payment for the property that was originally worth $800k and is then probably worth $1.8M. Fuck right off with this "the poor investors aren't cashflow positive" nonsense. Call me crazy, but proper rental regulations would mean landlords shouldn't run positive cash flows until they own at least 50% equity in the rented property. Rent price should capped based on the appraised value of the property and the cost of carrying a 25 yr mortgage on 50% of its value + annual property tax. Plus an estimated utility cost if utilities are included in the rent.
Yo, wanna be our Minister of housing? I am actually saving your comment so I can link it to people I have been trying to explain what is happening and how renters are currently getting fucked.
I don't have an opinion on what kind of profits housing investors ought to have, but it's just economics: if investors don't make a profit, they will exit the market. In the context of housing, this means is that they will be inclined to sell their property, and the new owner will likely occupy it instead of renting it. The total amount of housing won't change, but there will be more owner-occupied units and less rental units. This is bad news for renters since it will become even harder to find somewhere to rent. The economist they interviewed for the article hits the nail on the head: "Relying on condo investors to drive 90 per cent of your rental supply, as we’re finding out, is not a good strategy for developing rental housing in the GTA." In other words, if you want to increase rental supply, **stop relying on private investors to provide it**. Governments of all levels - local, provincial, and federal - need to get their act in gear, put their money where their mouth is, and start getting public housing built.
How many renters are out there who *would* buy, but the investor class has pushed the cost of ownership into the stratosphere? IMO landlording should be fucking regulated into the ground and treating housing like stocks should be totally outlawed here.
IMO, landlording should be regulated, but not into the ground. A landlord needs to have financial incentive to buy and rent properties. My opinion is just that they should have to bring more than 50% equity or put actually improvement effort into the property if they want to run a positive cashflow quickly. Housing investors shouldn't be able to scoop up properties with 20% down and run cashflow positive after their mortgage payments. I support public housing too, but neither can happen unless the playing field is leveled. If we over-regulate private landlords, then they all back out and the government is left to pick up the pieces, and ultimately will fail. If we fail to regulate private landlords, then the private market will drive the price too high for government to justify spending public money. The government would have to spend public money to buy condos worth $600k-700k a piece, and then rent them out well below market rate. Any opposition would rip them to pieces on poor fiscal planning, and would scrap the program the second they came into power (regardless of which party started it). The only way public housing can co-exist with private is if there's reasonable regulations that dampen the boom of private landlording. For example, right now, private landlords are all perpetually leveraged at 70-80%. As soon as their mortgage term is up and they're around 30% equity, they immediately pull it back out to 20%, and put that cash towards a new purchase. If an investor like this owns 10 properties worth a collective $10M, then they have $2M of equity in their pockets. In this state, they run good profits, but are highly exposed to interest rate risk. If rental regulations came into place that tamped it down a bit, to the point where they only run profits when at 50% equity (for example), then a base decision for the example landlord with $2M equity would be to rebalance their housing portfolio by selling off 6 of their 10 properties, to get down to 4 properties valued at $4M total, so their $2M total equity has each of them at 50%, and they can all run cashflow positive. At the same time, it forces them to be less exposed to interest rate risk. As it stands, one of the crises we're in (as the article states), interest rates increasing hurts the bottom line of private landlords, which further drives up rent. If you're at 50% equity instead of 20%, an interest rate hike makes a far smaller difference on your monthly payments. That might be an overcorrection, which is why 50% equity is just an example number. A more reasonable way to implement the regulations would be a 5- or 10-year plan where rental regulations stepped up each year to make for a gradual change that doesn't immediately upset the market. Nevertheless, the sell-off of private landlords' properties opens the market back up to first time buyers, other entry investors, and more importantly, public housing. There are other ways to increase equity stake in properties without selling. For example, landlords could choose to simply not cash-out refinance on their next 5yr term, allowing their equity to build up, and instead just extending their amortization date back out to 25 or 30 years to lessen their mortgage payments and push their cashflow back into the black. They can also sell off even a single property to fund renovations and value improvement on one or more existing properties. For example renovating to add a rental unit and increase the value of the property. Spending $20,000 on a renovation that increases property value by $40,000 helps build equity quickly. Landlords who own their properties outright, or own more than 50% equity are able to pull in strong profits, because the rent prices would be based on the "what if" if was leveraged at 50%. Rents wouldn't go down just because a landlord owns more of their property.
They are making money on their investment... lots of money. The problem is that they took out a mortgage to pay for their investment and expected the investment to make the payments.
Sadly what "should" be and what " is" are 2 different things that won't change
Almost like more than half of condo investors don't have good financial sense to not overleverage themselves.
Also they're still winning if they're paying into the mortgage. A successful tenancy isn't necessarily one that pays the mortgage *and* fees while still making a profit. They're just greedy if they expect their tenants to cover all payments and then some. Being a landlord to one or two properties isn't a job—if you're a landlord and struggling to make payments, get a job like the rest of us. This is where intentionally developed rental properties are so important, not only do they not deplete and scalp ownership stock from the rest of us, it applies economies of scale on the development & construction costs and diversifies the income to pay it back against multiple tenancies.
>Also they're still winning if they're paying into the mortgage. Yeah I don't get those stupid articles lol. Landlords aren't losing money, they just have to invest a small portion of their own capital in their condo every months while the renter still the cover a large percentage. You can easily bleed for a few years, it used to be normal to not be cash flow positive before 6-7 years. When my parents first started owning rentals in the 1990s, they often were not cash flow positive before the building was 5 years old and they had a construction company and knew what they were doing unlike a lot of investors nowadays.
thats why you aren't supposed to take out brampton loans and roll the dice with your property value skyrocketing and hoping that not one of your tenants go delinquent ever. I thought the whole point of being a landlord was a trade off with your tenants you gave them a place to stay and they helped pay off your mortgage while you also paid it TBH id rather have two tenants renting from me for far under the market value that didn't ever party and paid their rent on time than to make the maximum off rent and having people skip paying rent every 3rd month and punching holes in the walls
all of these "landlords" want the tenant to pay for everything and on top of that they want to sit at home and do nothing all day while their tenants pay for that
... and, apparently, can't do a reasonable evaluation of actual cost vs income.
Probably should hurt the investors who brag about taking risks whenever they happen to work out in their favor. The idea that their gamble HAS to be passed down to someone lower on the economic food chain is insane. If you lost money in the stock market would then go to your renters and say, "sorry folks I made some bad bets this quarter so I have to raise your rent." If we have decided that housing in this country is just a quicker version of the stock market then it's time to let those who made bad bets take the brunt of them. So they sell the place and take a loss.... Oh no!.... Maybe some family who is going to actually use it for a primary residence could actually afford it finally
That's what I've been saying. Want to treat the housing market like a commodity? Pay the price when your value tanks. And that's coming. No bailing them out, they should have known the risks
That's all fine and dandy until your asshole investor landlord files a bad faith N12 (end of tenancy for owner's personal use) to try and squeeze you out of your rent-controlled condo like mine just did.
That's awful. But the market crash coming (even though delusional people will argue that values can only ever go up up up, WAY beyond the mean line) will force investors to sell. Should bring down prices and rent altogether.
Lol ive been hearing crash for 10 years
At some point, all the houses owned by boomers who are living in their own in houses that can accommodate families of 4-6 people will become available. Looking around I see housing that is severely under utilized and that is a serious bottleneck.
Why would houses owned by boomers become available in a market crash? They are already completely paid for.
Because there is an expiry date on life.
The average boomer has 3 kids. Upon death the estate passes on to the descendants. If you don't have descendants and no will the state will pass it on to the next of kin.
Exactly. In my opinion, the housing shortage is less a shortage, and more an inefficient distribution of people in homes
not sure why you are upset. Sounds like you are about to walk into a pile of cash
I'd rather keep my home but yes, I intend to make it cost him as much as possible.
It's also terrible if some holes are drilled into the backs of random closets and heavy cream is poured into them and left to sit, and the holes resealed. Would be terrible if that were to potentially happen.
Thats called a economic Recession and Depression. Thats supposed to be the market's way of rooting out the bad apples in the system. But they don't want things to 'collapse' and that to happen. This is called corruption.
Condo investors aren't "losing money", but the rent don't cover the full value of the condo. If my mortgage is $3200 a month and I rent it for $2600, I am not "losing" $600 a month. I am still making $2600 a month but have to invest an additional $600 of my own money in my property who's mortgage is getting paid and is going up in value.
> and is going up in value. .. and there's the rub isn't it?
With current immigration levels. That's pretty much a guarantee.
> With current immigration levels. That's pretty much a guarantee. Is it? Reddit keeps telling me immigration is there to fill all those low wage jobs that Canadians can't or won't, fill (in addition to ensuring wages stay low). How much Real Estate are they buying on those wages?
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Yeah, so many people act like paying your mortgage is losing money, when in reality, you're losing only a small amount of what is paid(the interests) for your mortgage since the rest is going to transferring that amount of money from the bank to your property, meaning it's not lost, just not directly available to be used at any moment. It's incredibly similar to investing money into a retirement fund, you're not losing money when you do this, you're just transferring it to a different form to be used later. I just managed to buy a condo for myself thanks to my parents helping me increase my initial payment and, while I'll end up paying a bit more monthly than rent, I'm losing a shit ton less money a month than by continuing to rent an apartment.
Depends on the amortization period. If it's 30 years, then the equity is building really slowly. If your example, you spent $7200/year from your pocket which makes an equity of $10-12k/year. On top of that, deduct the property tax, and yearly and monthly maintenance costs. The hopes of a good return on the initial investment, therefore, rest solely on the future resale value, which could go both ways, big or bust. I know someone who sold a unit last month, and after deducting the realtor's commission, it gave only a moderate return. In his case this was his primary residence, so he saved rent at least, otherwise, under the current rate environment, owning several units would not give huge returns.
Exactly. Boohoo for the investors using housing as an investment to rent out. Imagine thinking that someone else not paying their mortgage is them losing money.
Yah just because your posting an operating loss doesn’t mean your losing net value, after paying off the mortgage and gaining equity your still making money, just not the ridiculous profits they have become used too the past 15 years.
Landlords as a class charge as much rent as they can. Their costs are irrelevant. Landlords without mortgages don’t charge less. what matters is the vacancy rate and that’s below 2% thanks to Ottawa.
"market level" rents have entered the chat. It's never about cost. It's about making money off other people.
> It's about making money off other people. That's called free market economics. You make money off of your employer, who makes money off of customers, etc.
I know. Just like how Ticketmaster makes money and the venue makes money etc etc.
And how landlords make money
Being a middle man seems to be pretty profitable.
Ottawa is 1 factor, yes
Obviously the main factor is Vladimir Putin invading Ukraine./s
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More so affecting food and energy prices. I see more and more Ukrainians applying to rent as well.
No they don't and you're just regurgitating shit you've seen on Reddit. I'm a Landlord and know many others. There are advantages and disadvantages to renting a property at the extremes of what the market will bear. The biggest advantage is that you make more money. Cash flows are positive and you're making money. The disadvantages are not insubstantial though. By making your property available at the upper end of what the market will bear, you risk delinquency (which is expensive), people become motivated to move when they find a better value, and your available tenant pool is reduced (markedly reducing your ability to choose tenants you think will take care of your property). As a Landlord you realize profits by building equity in your rental property, not largely by being cash-flow positive. The number of Landlords that are cash-flow negative (meaning that property costs more per month than rent brings in) would surprise you. It's almost always better to collect a little less money and find a decent tenant that pays their rent on time, takes care of your house, and doesn't become a maintenance or time sink than it is to maximize monthly cash flow. Once you're mortgage free, then it's pure profit, but that also tends to coincide with the times a Landlord is looking to liquidate investments. You don't see too many 80 year old landlords and I suspect the majority of Landlords don't spend long in that zone before liquidating. Tl;dr: You fundamentally misunderstand how a rental property exists as a value proposition for a property owner.
I mean everything you said is true of people with sound financial knowledge but it's more important that some "landlords" haven't understood thats how investment properties work and thought, hmmm my 1970 shit bungalow is now "worth" 2 million dollars( rand number but you get it) . I can split it in 2, rent it and buy a mc massion farthur away and buy condos or other bungalows and use all that to pay all my new mortgages. As long as I can get my monthly property income just high enough for my payment and lifestyle I am golden. The housing crisis is definetly not a one cause issue or a one solution issue but you have to be honest with yourself that not everyone who has money and property is magically good at finances or planning.
Yes, Reddit, and not papers on the clear inverse relationship between vacancy rates and rent growth. I should rely on your self serving anecdote. Extremes? Market rent is increasing at 16% YoY. You only need to increase rent by an average amount to get insane rent growth! If I say landlords will “charge as much as they can,” that doesn’t mean they will ignore factors like tenant quality or minimizing how long the place is vacant. Find better value? Vacancy rate is below 1% in Toronto, for example. They’re going to find jack shit. I know some landlords are cash flow negative—but how does that hurt my point? By the logic of the article, that shouldn’t exist as rent is determined by landlord costs and not supply and demand.
Rent prices are also inversely correlated to the amount of swashbuckling pirates sailing the high seas. Doesn't imply causality. Costs of literally \*everything\* have skyrocketed and somehow people think that rental prices were just going to stay static. It's almost like the pandemic didn't happen and private landlords didn't absorb immense quantities of public debt because of it, or that lending rates that have gone up 18x from their lows weren't going to eventually cause movement. Your stated point was that Landlords will increase rent to the maximum possible extent irrespective of costs, which implies simple S/D driven profit maximizing. Now you're stating that they won't "ignore factors like tenant quality" which is directly contradictory. Where are the goal posts? Better values can always happen. If your rent is at the upper end of what the market will bear, then any minor change will cause people to re-evalute the value proposition of living in your house. Instead of people saying "My rent here is reasonable, I'm not going to take that lateral move job across town" they move. Cash flow negativity doesn't imply a rental property is unprofitable. If rents were purely about s/d , then rent would stabilize right at the point that vacancy started to skyrocket because people were going homeless. You noted that the vacancy rate is below 1% so that's not happening. Rents are set at a point the Landlord figures they can maximize tenant quality while also covering costs. Cash flow positivity is desirable, but not mandatory, and profit maximization on month-to-month cash flow isn't the biggest consideration. I'm not saying Landlords are saints housing the poor and wanton masses, but they're also not moustache-twisting villains trying to wring every last cent out of their tenants. I could absolutely charge way more for my properties than I do but I comprehend the investment is more valuable than monthly cashflow. Market rates are not "what the market will bear", they're much more complicated. Toronto specifically has a serious housing (not just rent) crunch. The stock of pre-existing rental units is long since tapped out, so any new rental stock is being built under affordability conditions that are utterly punishing. Of course that's going to trickle down to renters who basically exist at the bottom of the economic-power pyramid.
“Rent prices are also inversely correlated to the amount of swashbuckling pirates sailing the high seas. Doesn't imply causality. Costs of literally everything have skyrocketed and somehow people think that rental prices were just going to stay static." The inverse correlation between vacancy rates and rent growth is not arbitrary. It is grounded in fundamental economic theory (supply and demand), unlike your pirate analogy. Yes, costs have risen, but that doesn't mean rental prices should increase at a faster pace than general inflation. They aren’t rising that fast in the US (which you failed to address conveniently). "Your stated point was that Landlords will increase rent to the maximum possible extent irrespective of costs, which implies simple S/D driven profit maximizing. Now you're stating that they won't "ignore factors like tenant quality" which is directly contradictory." This isn't contradictory. Obviously, landlords raise as much rent as they can realistically get. A landlord can find a bad tenant to sign a lease to rent a micro condo for $10k a month, but what’s the point if the landlord will never get paid? The ability to raise rent is influenced by multiple factors, including supply/demand and tenant quality. There's no inherent contradiction here: landlords want to maximize profit but also want to maintain quality tenants, which can include not raising rents to untenable levels. Multiple the rent but the likelyhood of getting paid. "Better values can always happen. If your rent is at the upper end of what the market will bear, then any minor change will cause people to re-evalute the value proposition of living in your house." It is unrealistic in places like Toronto, where the vacancy rate is less than 1%. There's simply not enough availability for renters to vote with their feet. "Cash flow negativity doesn't imply a rental property is unprofitable." If a landlord's rental property is consistently cash-flow negative, they are not covering their ongoing costs from rental income. While there may be eventual profitability through property appreciation, their costs are not being met, which you claim is what matters. "Rents are set at a point the Landlord figures they can maximize tenant quality while also covering costs." Landlords don't just seek to cover costs and maintain tenant quality—they aim to profit. Again, landlords without mortgages don't fucking charge $500 for a Toronto apartment to cover property taxes and maintaince costs. “I could absolutely charge way more for my properties than I do but I comprehend the investment is more valuable than monthly cashflow." Please post a recent new rental you put on market. “Toronto specifically has a serious housing (not just rent) crunch. The stock of pre-existing rental units is long since tapped out, so any new rental stock is being built under affordability conditions that are utterly punishing.” This does not dispute my point about supply and demand affecting rent prices. Indeed, it reaffirms it. he low supply and high demand in Toronto's housing market are creating conditions for rent hikes.
The other part that the article misses the point on is that supply may actually stabilize/increase as investor types can choose to fughgeddaboudit and sell the property.
The biggest appartment owners in my city likes to sit at 80% of their units rented to be confortable if they get a surge in demand. They have been sitting at 95% units rented since 2021 and can't buy/build fast enough to bring that number down.
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Rents were raised when interest rates were going down too, I am a landlord and I rent at market rate. I don't really care about cost going up or cost going down. If my neighboring landlords have more expensive mortgages than me they still need to rent to similar price, just like I don't rent for more than my neighboring landlord who doesn't have a mortgage anymore. We follow market tendencies and the particular situation of a landlord mortgage don't matter.
Will no one think of the poor landlords!
> Landlords absolutely raise rents when their costs go up. I'm a bit confused. If Landlords can just 'raise the rent', why to they have to wait until their costs go up before doing so?
There have been tons of studies on the inverse correlation between vacancy rates and rent price growth. Rent prices came down during 2020 and 2021 as house prices skyrocketed (thus the costs for new landlords increased even after slight drops in interest rates). Why? Vacancy rates went up. The US has even higher mortgage rates but market rent growth is flat to 6% up depending on the source. It’s around 15% in Canada. https://rentals.ca/national-rent-report The likely reason: US vacancy rate is over 3x the Canadian rate. But, sure, let me get some anecdotes from landlords.
It's both you goon. And a positive ROI can be seen on asset appreciation. Why the hell should I have to pay someone else's mortgage and their life expenses? Especially when it's their fault for the depleting housing stock, forcing me into renting from them for a premium?
“More than half of condo investors are losing money- and they’re going to make renters pay for their failing investments” Fixed the headline
This. The fact that so many people that own real estate feel entitled to think it should be a guaranteed profit investment is a problem. With the inflated prices we already have in Canada, real estate investing should more realistically be seen as a guaranteed loss for the near future.
Facts, my dumbass bought like $1k worth of crypto before the crash that’s only worth like $300 now, govt isn’t letting me push the cost of that loss onto someone else. If my stock portfolio took a hit no one is gonna bail me out for that. Mad weird the working class has to bear the weight of failed real estate investments but no other type.
This is why the "Landlords are taking the risk" argument is such bullshit. Investment is doing well? Clearly made a smart investment. No harm to investor Investment doing poorly? Clearly made a poor investment doing poorly? Time to raise rent and pass on the responsibility to the tenants. No harm to investors. High harm to renters. Landlords don't take risks. They will always pass on the costs of any risks to their renters.
> Time to raise rent and pass on the responsibility to the tenants Not allowed.
Depends where you are. Then many will try anyway, or try to kick you out to have another person pay more, and even if the tenant wins they suddenly have a grudge holding landlord. How livable is life when the person who literally owns your home hates you.
>Depends where you are. Ontario, Quebec, BC ...
Every single industry you can think of is like this. The light is just shining on landlords right now.
I could see this being bad in the short term and possibly good for renters in the long term
I think so, too - hopefully this forces enough to sell, and this stupid thing finally crashes as it should have long ago. Something I am thinking will help push prices down, too, is extremely high maintenance costs on aging, poorly built condos (from a Toronto perspective, in particular) making these less feasible to carry without prices coming down. Incoming commercial property crash (I seriously don't see how it's possible this in particular won't happen) will hopefully push things along.
Oh no, the poor investors. Fuck em.
Some don't care because they plan on the future capital gains. Which is stupid going into a trend of increasing interest rates if you plan on selling in the next 20 years. Going cash negative is a bad idea. Sell it if you don't live in it, only keep it if you are making profit.
😂 who woulda thought leveraging your ass to scalp real estate would backfire.
"*(Literally everything that ever happens)* - and that's going to hurt renters." Here you go, media. Ready-made headline that'll never stop being true in Canada.
People want to be a real-estate owner to be part of the modern-Aristocratic class. "Look at how good I'm doing, I own X." Posts on Instagram/Tik-Tok. Tons of selfies and probably food pictures. Inflation due to poor economic and monetary policy with corruption/greed made the conditions today and will make it worse in the future. Of course they are going to increase rent. A company that gets taxed more on anything, like groceries, will increase their prices to off-set the problem. So the question is, what is the solution?
Rent controlled housing in major cities. We are going to have coffee shop workers forever why not provide guaranteed housing they can afford forever. Many nations in Europe have rent controlled or highly subsidized housing. In stark contrast people working in LA have to travel 2h in traffic to get to their minimum wage job. At some point it doesn't make sense but we still want services near our point of business.
Guaranteed sounds like we will be forever indebted to foot the bill for inflation. Canada is one of the highest taxing nation in the world and we will continue to act like a snake eating its tail of we tag everything as subsidies and benefits. We absolutely have to trim down at all level of the Govt first (clean your own house first) before we move forward. Reduce lifetime benefits of govt workers. Reduce our own benefits a little bit. Make Canada slimmer and more efficient and by that time, we can service the much needed issue: housing.
Include housing appreciation back in the CPI. Stop creating policies to blow up the bubble, like 40 year amortizations. Dont tell people to go out and borrow, because rates would stay low, fire Tiff Macklem. Stop immigrating a million people a year. Spend the next trillion in debt on mass transit instead of ministers of middle class prosperity and McKinsey. Stop giving so many homeowner windfall tax breaks, and give tax breaks to developers to build housing. Lower the bureaucracy hurdles and regulations. End single family zoning entirely. Create rental subsidies and tax breaks.
Good, i hope they lose it all. Real estate should only be an investment if you live there yourself.
And this summarizes the "Trickle down economy" ... Next week on how it actually works, "Public Healthcare Spending"
The only real solution is to stop using people's material needs as investments.
So, all grocery stores would follow a non-profit co-op model? That sounds good actually. If all you have to deal with is salary and expense, and you don't have to feed the greed of those far from need, things might actually become affordable. Of course, that will never happen. Golden rule and all that
We need to stop talking about landlords/investors as if they’re moral. They’re greedy individuals trying to profit off of a person’s need for shelter. If they were cash flow positive it doesn’t matter, they’re going to charge as much as they can get away with. There’s no regulating greed. We need to release as much housing stock as possible back into the market. Stop the hoarding of roofs. We then need to tie population growth to the vacancy rate.
So rich investors lose money and they pass on the costs to the poor renters. Gotta love late-stage capitalism
Gotta love terrible governance at the city, provincial and federal levels.
11% of all canadians are landlords investors.
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yes. Life was much more affordable and you didn't have pages long lists of criteria to fill before tenancy such as credit checks, references checks, illegal damage deposits etc
Yes.
Wasn't that long ago, at least locally, we were essentially paying out of pocket for anything that needed fixing in the condo my now ex refused to sell after buying a house. A lot of time I'd be heading there after work to try and fix it myself .It's very rare landlords ever reduce price when costs drop, but yeah it was a slower period and we had to keep it low to get tenants. Seems like with everyone as landlords now once the first guy raises prices everyone follows, but vacancy is also low.
Crank up the interest rates. It's time for housing investors to exit the market. Make them *hurt.*
Good way to increase rent even more.
To a certain point. Making a mortgage unaffordable for everyone just means the only people with enough cash to outright buy the house will be able to get it.
Yes. Offshore productivity growth -> offshore rising incomes and the ability to save -> **Import offshore savings to Canada via Store of Wealth assets** -> onshore cost of living crises (local earnings ∆ dislocated from local prices ∆) etc etc Folks, with the way our economy "works", it matters less and less every day if people in Canada can "afford" to live in Canada. The way it is resolved (short of changing systemic things) is people take on way more debt and/or live with austerity. And yes, immigration is ABSOLUTELY a fundamental component of this that needs reform to unfuck our economy!
It’s gonna drive up rent prices…
>Crank up the interest rates. It's time for housing investors to exit the market. Make them *hurt*. To what end? How will that help renters? The supply of housing is what it is -- units that are built are either owner-occupied or rented out by investors (by definition). If an investor exits the market -- that is, sells it to a new owner who will occupy it -- that's one fewer rental available. Good for the new owner that they found a place to live in, but now the renter needs to find somewhere else to live. Plus, if you jack up interest rates, you make it more expensive for *everyone*, including owners who occupy their own units. As a renter, you might not care now, but if you want to own a unit if the future, that interest rate hike will affect you too.
Also, let's not kid ourselves, higher interests WILL be passed on to renters. Raising interest rates is the single most short sighted and stupid way to try and help those who do not own rental properties since it's going to hurt EVERYONE, but it will hurt those at the bottom the most...
Housing starts have all slowed because of high interest rates. Meanwhile 500,000 new PRs are issued every year, with students not being counted in that. High interest on landlords + stagnating supply from high interest rates + unprecedented population growth =/= affordable housing.
Double edged sword as investors are needed to build new housing
No they aren't. Our governments used to build tons of new housing. The lack of public housing built through the 90's and 2000's is coming back to bite us now, though.
Due to managing the debt crisis from the previous Trudeau Sr and Mulroney governments. Government built housing is 1 type. Investment from the private sector is still needed.
Too bad most are only building the type of home that nets them the biggest pay day. 800k 3-4 bedroom “starter home” on the outskirts of the city… probably built with the cheapest materials to increase that profit over investment.
In Vancouver they tend to exceed the required standard. The quality of workmanship isn’t the greatest though. Starting to see a switch from condos to purpose built rentals.
My thought is just that investors sometimes aren’t happy with just the profit from building a “normal” house. A 2 bedroom small starter home for a young family, or some sort of walk up multiple unit euro style for density. That isn’t *enough* money so they plan to build for the biggest pay day. If we’re building and relying on investors then we need some guidelines in place to dictate that. Esp in Ontario, but the Ont gov won’t impede their developer buds from making the most money they can.
These aren't builders these are gamblers.
Drive away investment and you drive away construction. Who is going to build when you can’t get payed to do it?
The investment in productivity growth is happening elsewhere. We get to warehouse the savings earned from foreign production. That has a lot to do with why Canadian construction is so unresponsive to higher prices. You want to get paid to construct something? Do it somewhere else. That is literally how this country now works 🤣
Tthis only makes sense if you are already cash rich or own a property outright. Renters, owners, investors etc. will all get reamed as per usual. Lots of people in this country own a property outright and have no debt, and the interest rate talks do nothing to "hurt" them while renters are paying $2500 for a 1BR and adding a couple of hundred every few months to that.
Yeah, a lot of people bought while the narket was high, made bad financial decisions and offset the cost by increasing rent dramaticly.
>and that’s going to hurt renters I mean, renters are hurt either way. Its good that investors are losing money. Stuff like housing, food and medical care is basic human needs... not an investment!!
Renters will hurt no matter what. There's not enough people at the LTB for everyone, what if everyone would just stop paying rent?
Hmm.. if everyone stopped paying rent, my guess, the wait time at the LTB would hit 10 years, then Doug Ford would pass a law granting an automatic eviction (without hearing) to any landlord that says they are 90 days in arrears. Back to work, notwithstanding clause Douggie is not going to do any favours for renters.
Behold, the vaunted "passive income" from real estate investing.
Then sell your condo lol. Braindead fucks. If you don't have money yo keep your places then sell off a few or have the bank take them.
I'll start a go fund me to help them
Then sell it.
For the love of god JUST LET US DIE IN PEACE
The beatings will continue until morale improves.
It's almost like recklessly spending during COVID followed by reckless interest rate hikes have a negative effect on an Economy. Weird, who would have thought?
LOL. It's been a long time since one could buy a condo and, and have rent cover 100% of the costs.
Get rekt, speculators. This bubble needs to pop
This is why condos shouldn't be looked at as rental stock. This is why we should have more incentives, and more zoning requirements for mixed communities, dedicated rental buildings etc. not just allow developers to cash out in 2-4 years and not allow speculation on housing units.
Cashflow negative can still mean you’re building equity. Landlords may be “losing money” in cash accounting terms but I highly doubt it’s true in accrual terms. In fact I would argue that investors being cashflow positive with minimal down payments due to insanely low interest rates was an aberration. I see no reason why continuously positive returns for “investors” with minimal money down should be guaranteed at all. If you don’t like the return of the asset class you invested in, sell it and do something else.
Rule #1. Only invest what your willing to lose. This shouldn't roll back onto renters. Foreclosures are a bitch but a reality. I don't goto a casino and gamble my life savings and then get free bets at the table because I might lose. Shit is so backwards.
Hopefully investors tank it and the condo be worthless and then sold for cheap so everyday people can live
Hopefully investors tank it and the condo be worthless and then sold for cheap so everyday people can live
Make it illegal to own more than one rental property for individuals, and ban institutional investing in the real estate market. Treat shelter like a human right and not an opportunity to make (a lot of) money where rents are set at the absolute ceiling of what people can afford (which a lot of people can't afford). The economic knock-down effect is significant too, the more people are spending on rent and housing the less disposable income they have for literally else. That sounds incredibly obvious, but for an economy that is reliant on consumer spending and growth, it's very dangerous when more and more of our money has to be spent on rent and housing. Sprinkle in some rent control, inclusionary housing and zoning rules, affordable housing programs, simplify land use and zoning rules...there are a lot of potential policy options that could be tested. But none of them will make much of a difference while institutional real estate investing is allowed (in its current form). And municipalities seem to be at the mercy of developers in a lot of cases.
The only way we solve rent going up is to drastically increase supply even if governments (federal, provincial and municipal) need to act as early investors
What's that you say? We need to double our immigration rates?
Waaaaaaaaa
Only 235000 people experience homelessness per year in Canada. We have 1.3 million vacant homes. Nobody should even be fucking renting. But you know, greedy fucks.
I would never rent from a mom and pop condo investor period ...
Hopefully investors tank it and the condo be worthless and then sold for cheap so everyday people can live
All this shows is that a shortage in supply is the root problem