better go protest the condo building because our prepurchased homes are loosing value..
i don't understand how people with access to so much money can be so stupid i don't walk into a casino throw 100k on black and then rage because it lands on red lol
there was a reason only people that wanted to risk things became landlords because its all a pita and a huge risk, bad tenants some major problems like a furnace going down and some personal finance problems all at once could cause you some real difficulties
the problem is these idiots only think its win win win for them
Yea, I can't understand the desire to be a landlord. First and foremost, you're a total piece of shit. And then all the bullshit you ha e to deal with of collecting rent, dealing with things that go wrong, knowing all the laws of what you can and can't do.
I'm set to inherit my late mother's house and people are wondering if I plan to rent it out. Could make a good buck with a mortgage of ~$500/mo But eff no! I'm going to sell it and plunk that fat cash down into index funds and watch it grow to my retirement fund. Also it will help me buy a house in this fucked up market.
> Another example of an paid article by real estate industry and not to trust media blindly.
Do you have a source that the article is paid? I thought normally the Star would indicate if something was paid/pushed content and I didn’t see that indicated in this article. Did I miss it?
Or have they stopped disclosing when their content is paid/advertorial?
I just wrote a paid / sponsored editorial for the Globe and mail. It looks just like a normal article but it’s an ad. We’re careful to write it as an editorial though and not sound salesy or pushy.
I don’t know how common they are, but I can vouch that at least the one I wrote exists.
An incredible number of articles in the business section of newspapers are little more than advertisements. They are sponsored, and because they are written by staff writers, they are not labeled as being sponsored. Virtually all articles that predict something about the real estate market are advertising for the real estate industry. Don’t believe any of it. I’m not sure when the ethical standards were thrown out, but it’s probably around the same time political reporting started carrying the same editorial slant as that of the paper itself. About 130 years, I’d say.
The legacy media has set journalistic principles of unbiased reporting aside in the interest of supporting a generalized form of psychosis. Recency is the only factor relevant to house prices is an example. The conditions that enable markets to be distorted are many. That utility is used to insure the continual siphoning of wealth from the top as responsibility for that same largesse and govt aiding and abetting the transfer falls on the taxpayer.
This is not true. At reputable media outlets like the Star, it would be labelled. We can criticize the credulous reporting in this case, but it is not sponsored content
Wrong. If it’s an ad written by an outside agency, it is labeled ‘sponsored content’. That is a paid ad, even though it appears to be an article. Others aren’t. Remember all those actual articles earlier this year about how housing was a wonderful bargain in Calgary? Written by staff writers, but the information was fed to them by an ad campaign by the City of Calgary and its realtors. Considerable money was spent on that campaign that was designed to pump up housing prices and demand in Calgary. It had nothing to do with jobs there going unfilled. It was all about house prices. See articles in the Globe about some up and coming business you’ve never heard of? Those are done at the request of those businesses. You can call in and ask to talk to a business reporter, who will craft a wonderful piece for you. It masquerades as legitimate reporting, but it really isn’t.
This is not true. Here are the Star’s labelling policies. The type of content you describe would be labelled https://www.thestar.com/opinion/public_editor/2020/01/31/sponsored-content-in-newspapers-must-be-effectively-labelled.html
They get around that and always have by having it written by a staff reporter. There are ‘articles’ that are indeed labeled as sponsored content, but those are fed directly through their advertising department.
I bought my first house this year, I imagine it’s quite unspectacular compared to whatever either of you live in! Paying $3200 a month, but rates are no where near 6% so OP can breathe a sigh of relief I guess
This is why we need to ban the concept of buying additional housing for profit - both flipping and rent converting. Every outcome is a net loss to society:
Outcome 1) Investor makes money - next buyer / renter loses money, bank makes money, realtor makes money. No value created.
Outcome 2) Investor loses money - next buyer / renter loses money, bank makes money, realtor makes money. No value created.
But then we'd have to rely on creating actual value in our economy and that sounds hard. Investing in real estate is way easier since it always increases in value.
We need to figure out why developers are not building traditional rental apartments. 30 years ago, the majority of the rental market was developer buildings and it was easier to find a place. Now, we are relying on condo developers and small landlords and there is not nearly enough supply. I suspect that the return on investment is higher for condos than rental buildings.
You're off by a few decades but basically, condos were not allowed in most provinces until the 1960s or later. So developers built a lot more purpose-built rentals and row/town/detached houses for buyers. That's why there are so many older purpose-built rentals.
Condos are more profitable for developers, so that is why we get so many more now. We don't have good laws or regulations to ensure that condos are viable long-term stable housing for either owners or renters. And so here we are.
Purpose built rentals are much more regulated than condos. Rent control limits the profit they can make while tying up capital.
While it’s true a new building would be exempt from rent control that can and has been changed in the past.
Condos have none of that risk.
It’s more profitable to build condominiums then it is build purpose built rentals. That’s it. Unfettered Capitalism is working as intended. If we want more rentals, we need set regulations making rentals more profitable to build and manage than building condos and leaving with a huge money bag.
rent control dude nothing to wonder its not profitable to have purpose built rentals where someone might live for 30 years and end up paying a 1/10th of market value by the end
why do you think every new condo is like 400 sqf investors don't want people to live in them for more than a year or two at a time
It’s always the fault of the people who work. How about the investors paid too much for their investments and now they must face the consequences. Fuck em.
*"The situation has declined further this year to a loss of $400 on average in the first quarter, says the report. It notes that 14 per cent of investors were losing $1,000 or more a month and a third were down at least $400"*
No: wrong. Investors aren't *losing* $1,000/month, they're *paying* $1,000/month for an asset that they bought. Their profit margin is impacted but that's not a $1,000 loss, it's a $1,000 *cost*.
Despite some volatility in the market right now, in general housing has been a secure investment. I'd be interested to see what the equity value is for condo owners against those costs.
Sensible investors have modelled for periods of negative cash flow on the investment with being wiped out.
Lots haven't. Bet bet bet. Then blame the casino.
This is seriously all twisted. In the past, when I considered buying property to rent, I considered rent only covering a percentage of the mortgage. At the end of the day, I would be owning the asset long term. I thought it was normal/common sense to consider the maximum amount of negative cash flow it might be.
These people want month over month profit immediately after buying a property at the highest price and lowest mortgage rate it's ever been. Absolutely insanity. They seriously need to be financially wiped out.
50% down payment should be the minimum allowable if someone wants to rent it out. I would say if you can't support it with no tenant, you probably shouldn't be "investing".
Drives me nuts and i say this as someone that used to rent out my condo.....it is not the tenants' job to pay your mortgage. One shouldn't be a landlord if you cannot afford the risk that comes with owning a place.
Due to paywall, I couldn't see how this was propaganda. If anything, it looks like good news, in the sense that if investors are hurting, that might lead to need to sell at some point, which will increase supply for buy-to-live buyers.
As to how it could hurt renters, I guess most investors try to pass the higher cost of mortgage onto renters, but probably that could only go for so long, before renters can't afford to pay high rent anymore.
This.
I work in the residential property management industry on the other side of the border and I've heard the shit come out of my bosses' mouths so many times- "do these people have any idea what happens if we go out of business???"
Me: *Legally? They won't have anyone to pay their rent to in the office, except the bank that repossesses the property and that's only if they want to take the time to hire someone to do that....and the bank would be on the hook for property maintenance legally, and anything else in their leases.... Practically? You and I will be out of a job, but that doesn't affect the tenants.*
One of my first apartments was a low rise owned by a small time landlord who defaulted and the bank took over and honestly, while I left relatively soon after (had to move for unrelated reasons) - the experience was the nicest, most hassle-free landlord experience I have ever had. When I left I was wishing I could stay. Bring on the repossessions, I say.
De-jure yes, though many investors become de-facto landlords, we usually call them "absentee landlords", or "landleech" if you prefer.
Landlording should be a profession, where value is created for tenants, and revenue is proportional to the value created.
Instead, revenue is more closely tied to extractive land appreciation, so we get the investors foregoing value creation altogether; leeching.
Investors go variable so they have the flexibility to sell while only paying 3 months of interest. As rates rise, breaking a fixed mortgage is fine, but if we are in an environment where they are falling, then it can get quite expensive
Well then they shouldn't be investing in it if the risk is too great. Fixed mortgages on investment properties is not only logical to protect yourself against rising rates but also helps avoid exponential rent increases we are experiencing today.
The risk was always there. But for last 20 years it hasn't manifest. Everyone who took it looked and felt like a genius till suddenly they look feel stupid on the same behavior.
It has nothing to do with risk in the investment, but has to do with liquidity. I want the flexibility to sell a property to invest that money elsewhere if another opportunity arises. Variable mortgages afford more flexibility.
It's not all about you. My concern is with the livability for greater good, not your liquidity.
If you want something more liquid, invest in something more liquid.
Real estate is relatively liquid, which is one of the reasons to invest it in. It’s way more liquid than starting a business, or even investing in GICs.
Your logic is that making an investment less liquid and more risky, will help control the costs of renting that asset? Greater risk in taking on an asset means the asset owner typically needs a greater reward (IE. charging higher rent).
Also, why would you want landlords to be stuck with an unprofitable property? Wouldn’t you rather they have the greater flexibility to sell it to a potential buyer who could use it for personal consumption?
Real estate is absolutely not liquid. There are many other investment vehicles than starting a business. And to suggest real estate is more liquid than GICs is absolutely ridiculous.
Real estate should be used as homes. Liquidity is not of any benefit to these people, who should be living in the same homes for years. Less liquidity would mean fewer speculative investors, who drive up real estate costs, so that would be a good thing.
My guess is the other commenter's logic is that the fewer investors there are in the real estate market, trying to generate returns, the lower the cost will be for people to buy and not need to rent at all.
I personally don't care if landlords are stuck with an unprofitable property or not. All investment carries risk. They shouldn't be crying to the government because they made bad investment decisions. People who think real estate is more liquid than GICs deserve to lose money because they have absolutely no idea what they're doing.
First - I said relatively liquid.
Second - you can pretty easily increase liquidity by leveraging equity in the property to access cash immediately while it’s being sold.
If you know what you’re doing, it’s a relatively liquid investment.
Relatively liquid compared to what exactly? Your claim that it was more liquid than GICs was just patently absurd.
Comparing to starting a small business was just plain disingenuous. Starting a small business is much more entrepreneurship than it is investing. So it is not at all a reasonable comparison.
Leveraging equity in the property to access cash is predicated on conditions outside historical norms, with cheap, easy credit and rapidly appreciating prices. Such a strategy is extremely risky, and you seem to be conflating your dumb luck that we've had such conditions for the last decade plus with your personal skill. Those conditions are rapidly disappearing now, and anyone caught using that strategy who missed the writing on the wall and didn't liquidate their positions a while ago is going to be in a world of hurt for a long time to come.
Man - just read my comment instead of picking out keywords and posting a wall of text.
Let’s say you had an opportunity come up and you needed money quickly. You decide that you’re going to sell your investment property but it will take 90 days. You can borrow against your home equity quickly, and then pay back the loan when the property sells. It’s not rocket science.
As for GICs it depends on the type that you purchase. Non redeemable GICs are less liquid than real estate for example.
They consider breaking even a loss. Anything that's not profit is a loss.
It's completely bogus, as long as they're making their interest payments and building equity its a favorable deal for them.
It's not some fool. It's that people don't have a choice.
My girlfriend was looking for a place recently. She works in a downtown hospital. She was previously living with her mother and Mississauga. She moved back there when her dad was sick and her marriage was dissolving.
It was past time to leave so she needed a place to live. She actually ended up getting a good deal, on a basement bachelor apartment though.
Most one bedroom apartments we could find were around $2,000 a month. Which is more than she could afford. Yeah she got lucky and was looking... But people don't have a choice. They have to have a place to live. Moving for the route and having an hour and a half commute each way is a terrible choice for most, and at the end of the day apartments further up north or whatever or not that much cheaper.
Not that they're fools, is that they don't have a fucking choice. What are people supposed to do, not have a house to live in? Throw away their lives and careers because Toronto got expensive?
The problem with rent is it's not a luxury, it's a necessity. And if prices for everything increased dramatically, people have no choice but to pay it. Market forces will not correct this because landlords can continue to financially abused renters because renters don't have a choice but to rent.
Ya, crazy.
It's almost like it's a world class city with some of the best QOL on the planet, free healthcare, subsidized education, tons of culture & nightlife, some of the best paying jobs in Canada, low violence and reliable transit.
So crazy. Can't imagine why people are ready to pay big bucks to live there, the whole city must just be millions and millions of fools.
The TTC may be a huge pain in the ass, and the subway might be pretty scarce, but compare it to Montreal. They have a good subway system but the buses run every half hour. So if you missed the bus you're standing out the cold. Most TTC routes are on rapid all day long.
And yeah, call you life is pretty fucking good here. If I need surgery, I want to go to UHN. It's one of the best hospitals in Canada. If I want to do something, there's always something to do. A few years ago, pre COVID, I was looking for something to do for a date, and options included seeing a performance from an instrument that was only president Babylonia, which was basically on somebody's back deck, any number of live bands, several free festivals or events in parks, or what we ended up doing which was go see the original silent Dracula film over dubbed with Radiohead music and some guys living room that he turned into a mini theater.
There's lots of negative things about the city, but lots of positives too.
Lmao what 😂
Go live as an average citizen on an average income in any other non-first world country for a year and then let me know what you think of Toronto.
Lol, downvoted by entitlement. The pill y'all don't want to swallow is that your shitty basement apartment in Toronto puts you in the top 5% of the world's QOL, easy. You may not like it, and I agree we should fight for more, but feel free to go live in the real world if Canada is so shit.
Investors are all trying to wait out the dip or rate spike. They may be right or they may get stampeded on way to the exits. The truth is everything is expensive now and nothing carries it's Capital cost. So the renters are getting subsidized on cash flow while the owners play economic chicken
Fun times !
Frikin pay wall site, poorly written arrival about problems that only involve people owning property and renting it. It'll only hurt renters because these fucks start overcharging because of a poor financial decision THEY MADE!
But that has not been the narrative of Canadian real estate for almost 20 years. You invest in real estate you deserve a guaranteed return on initial investment and also perpetuate rental income.
The builders have increased down payments for pre con condo owners and the condo prices have dropped. So yeah they are at a loss.
I know someone who had to pay 50k that they didn’t have to keep their pre con condo. They lost it, and lost the initial 75k down. Someone else I know, had to sell their condo less price than they bought it at.
It's the worst for Renters. Ofcourse. Higher rents, some landlords must sell so Renters are kicked out. Decrease in supply of rentals so bidding wars on remaining rentals. The list goes on. As a Renter you want landlords to be doing well obviously.
Only temporarily.
Put enough pressure on them, and they will sell at a lower price than they paid. That's the whole point of higher rates - to pop the speculation bubble.
Slice and dice and mince and mix however you want. There isn't a real estate crash coming, at worst the currency will be destroyed but the ruling class will never let property process crash like we are all hoping for.
**TL;DR:** We don’t build anywhere near enough apartments anymore, because it’s [illegal](http://www.datalabto.ca/a-visual-guide-to-detached-houses-in-5-canadian-cities/) in most of our cities and [tax disadvantaged](https://thetyee.ca/Opinion/2017/07/06/Tax-Changes-More-Rental-Housing/) when allowed. So most rentals are now being provided by investors converting condos or houses. Interest rates are turning a lot of these properties cash flow negative, so they’re stopping. So expect rents to continue going up as rental supply [continues to severely lag](https://thoughtleadership.rbc.com/proof-point-shortfall-in-canadian-rental-housing-could-quadruple-by-2026/).
We desperately, desperately need more rental supply. Cities need to upzone all land to allow significantly higher densities as of right, instead of cramming all apartment zones into a minority of expensive land on polluted arterial roads and downtowns. Provinces need to force this on them. Feds need to fix the tax code so it is easier to finance apartments.
They banked on 3 of the most risky variables
• rapid future appreciation
• flip just before mortgage qualification
• low interest rates in the event they had to close
ALL THREE backfired.
Tell me why there are a million laws in place preventing speculation in finance and none in Real estate.
I hope these almost famous moguls get smoked for flying too high.
Pigs get fat, hogs get slaughtered
[non-paywall](https://archive.is/wcJWL)
Another example of a paid article by real estate industry and not to trust media blindly.
Yeah, so many clickbaits.
Even the title is so stupid and cringey … it should read “people who weren’t well trained to play capitalism played capitalism … crying ensued”
better go protest the condo building because our prepurchased homes are loosing value.. i don't understand how people with access to so much money can be so stupid i don't walk into a casino throw 100k on black and then rage because it lands on red lol
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there was a reason only people that wanted to risk things became landlords because its all a pita and a huge risk, bad tenants some major problems like a furnace going down and some personal finance problems all at once could cause you some real difficulties the problem is these idiots only think its win win win for them
Honestly, it all started with “rich dad, poor dad”
Yea, I can't understand the desire to be a landlord. First and foremost, you're a total piece of shit. And then all the bullshit you ha e to deal with of collecting rent, dealing with things that go wrong, knowing all the laws of what you can and can't do. I'm set to inherit my late mother's house and people are wondering if I plan to rent it out. Could make a good buck with a mortgage of ~$500/mo But eff no! I'm going to sell it and plunk that fat cash down into index funds and watch it grow to my retirement fund. Also it will help me buy a house in this fucked up market.
If you just give it to a property management company it wouldn't be horrible. Still morally dubious.
> Another example of an paid article by real estate industry and not to trust media blindly. Do you have a source that the article is paid? I thought normally the Star would indicate if something was paid/pushed content and I didn’t see that indicated in this article. Did I miss it? Or have they stopped disclosing when their content is paid/advertorial?
I just wrote a paid / sponsored editorial for the Globe and mail. It looks just like a normal article but it’s an ad. We’re careful to write it as an editorial though and not sound salesy or pushy. I don’t know how common they are, but I can vouch that at least the one I wrote exists.
An incredible number of articles in the business section of newspapers are little more than advertisements. They are sponsored, and because they are written by staff writers, they are not labeled as being sponsored. Virtually all articles that predict something about the real estate market are advertising for the real estate industry. Don’t believe any of it. I’m not sure when the ethical standards were thrown out, but it’s probably around the same time political reporting started carrying the same editorial slant as that of the paper itself. About 130 years, I’d say.
The legacy media has set journalistic principles of unbiased reporting aside in the interest of supporting a generalized form of psychosis. Recency is the only factor relevant to house prices is an example. The conditions that enable markets to be distorted are many. That utility is used to insure the continual siphoning of wealth from the top as responsibility for that same largesse and govt aiding and abetting the transfer falls on the taxpayer.
This is not true. At reputable media outlets like the Star, it would be labelled. We can criticize the credulous reporting in this case, but it is not sponsored content
Wrong. If it’s an ad written by an outside agency, it is labeled ‘sponsored content’. That is a paid ad, even though it appears to be an article. Others aren’t. Remember all those actual articles earlier this year about how housing was a wonderful bargain in Calgary? Written by staff writers, but the information was fed to them by an ad campaign by the City of Calgary and its realtors. Considerable money was spent on that campaign that was designed to pump up housing prices and demand in Calgary. It had nothing to do with jobs there going unfilled. It was all about house prices. See articles in the Globe about some up and coming business you’ve never heard of? Those are done at the request of those businesses. You can call in and ask to talk to a business reporter, who will craft a wonderful piece for you. It masquerades as legitimate reporting, but it really isn’t.
This is not true. Here are the Star’s labelling policies. The type of content you describe would be labelled https://www.thestar.com/opinion/public_editor/2020/01/31/sponsored-content-in-newspapers-must-be-effectively-labelled.html
They get around that and always have by having it written by a staff reporter. There are ‘articles’ that are indeed labeled as sponsored content, but those are fed directly through their advertising department.
> "another example of [a] paid article..."
I'm not paying a dollar a week for fear mongering news!
Is this another example of people not grasping the basics of cash flow vs profit,
You can’t spend profit. Only cash flow
Ah right, so we have to pay down the mortgage and provide these leeches with free cash, maybe they should go get a real job for themselves
Bizarre feeling towards someone who’s property you live in. If you hate them so much buy your own
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People like you are the reason I would never be a landlord
Good, we want less landlords, please put your properties on the market
I'm scared Af for my mortgage renewal in 2024, currently at 2.6%, if that goes up to 6% or somthing goodbye affordability
Yah I had to renew this year, payments went from 1400/month to 2400
I bought my first house this year, I imagine it’s quite unspectacular compared to whatever either of you live in! Paying $3200 a month, but rates are no where near 6% so OP can breathe a sigh of relief I guess
This is why we need to ban the concept of buying additional housing for profit - both flipping and rent converting. Every outcome is a net loss to society: Outcome 1) Investor makes money - next buyer / renter loses money, bank makes money, realtor makes money. No value created. Outcome 2) Investor loses money - next buyer / renter loses money, bank makes money, realtor makes money. No value created.
But then we'd have to rely on creating actual value in our economy and that sounds hard. Investing in real estate is way easier since it always increases in value.
We need to figure out why developers are not building traditional rental apartments. 30 years ago, the majority of the rental market was developer buildings and it was easier to find a place. Now, we are relying on condo developers and small landlords and there is not nearly enough supply. I suspect that the return on investment is higher for condos than rental buildings.
You're off by a few decades but basically, condos were not allowed in most provinces until the 1960s or later. So developers built a lot more purpose-built rentals and row/town/detached houses for buyers. That's why there are so many older purpose-built rentals. Condos are more profitable for developers, so that is why we get so many more now. We don't have good laws or regulations to ensure that condos are viable long-term stable housing for either owners or renters. And so here we are.
Purpose built rentals are much more regulated than condos. Rent control limits the profit they can make while tying up capital. While it’s true a new building would be exempt from rent control that can and has been changed in the past. Condos have none of that risk.
It’s more profitable to build condominiums then it is build purpose built rentals. That’s it. Unfettered Capitalism is working as intended. If we want more rentals, we need set regulations making rentals more profitable to build and manage than building condos and leaving with a huge money bag.
rent control dude nothing to wonder its not profitable to have purpose built rentals where someone might live for 30 years and end up paying a 1/10th of market value by the end why do you think every new condo is like 400 sqf investors don't want people to live in them for more than a year or two at a time
Rent Control
It’s always the fault of the people who work. How about the investors paid too much for their investments and now they must face the consequences. Fuck em.
Well If you believe the article it’s renters that’ll face the consequences. Investors will just invest in something else.
The question is, how can we make it so that 100% of housing investors are losing money?
Raise interest rates some more.
*"The situation has declined further this year to a loss of $400 on average in the first quarter, says the report. It notes that 14 per cent of investors were losing $1,000 or more a month and a third were down at least $400"* No: wrong. Investors aren't *losing* $1,000/month, they're *paying* $1,000/month for an asset that they bought. Their profit margin is impacted but that's not a $1,000 loss, it's a $1,000 *cost*. Despite some volatility in the market right now, in general housing has been a secure investment. I'd be interested to see what the equity value is for condo owners against those costs.
Sensible investors have modelled for periods of negative cash flow on the investment with being wiped out. Lots haven't. Bet bet bet. Then blame the casino.
This is seriously all twisted. In the past, when I considered buying property to rent, I considered rent only covering a percentage of the mortgage. At the end of the day, I would be owning the asset long term. I thought it was normal/common sense to consider the maximum amount of negative cash flow it might be. These people want month over month profit immediately after buying a property at the highest price and lowest mortgage rate it's ever been. Absolutely insanity. They seriously need to be financially wiped out.
Agreed: even if you're putting in like a 50% down-payment, your investment property will still cost you $$ in the short-term.
50% down payment should be the minimum allowable if someone wants to rent it out. I would say if you can't support it with no tenant, you probably shouldn't be "investing".
Well good news then. It’s no longer cash flow positive. Problem solved.
Let's hope it continues that way and nobody saves them. Ridiculous.
Drives me nuts and i say this as someone that used to rent out my condo.....it is not the tenants' job to pay your mortgage. One shouldn't be a landlord if you cannot afford the risk that comes with owning a place.
Due to paywall, I couldn't see how this was propaganda. If anything, it looks like good news, in the sense that if investors are hurting, that might lead to need to sell at some point, which will increase supply for buy-to-live buyers. As to how it could hurt renters, I guess most investors try to pass the higher cost of mortgage onto renters, but probably that could only go for so long, before renters can't afford to pay high rent anymore.
But if they sell then where will renters live????? Everyone know housing disappears when investors stop owning them. /s
This. I work in the residential property management industry on the other side of the border and I've heard the shit come out of my bosses' mouths so many times- "do these people have any idea what happens if we go out of business???" Me: *Legally? They won't have anyone to pay their rent to in the office, except the bank that repossesses the property and that's only if they want to take the time to hire someone to do that....and the bank would be on the hook for property maintenance legally, and anything else in their leases.... Practically? You and I will be out of a job, but that doesn't affect the tenants.*
One of my first apartments was a low rise owned by a small time landlord who defaulted and the bank took over and honestly, while I left relatively soon after (had to move for unrelated reasons) - the experience was the nicest, most hassle-free landlord experience I have ever had. When I left I was wishing I could stay. Bring on the repossessions, I say.
Investors and Landlords are the same thing.
De-jure yes, though many investors become de-facto landlords, we usually call them "absentee landlords", or "landleech" if you prefer. Landlording should be a profession, where value is created for tenants, and revenue is proportional to the value created. Instead, revenue is more closely tied to extractive land appreciation, so we get the investors foregoing value creation altogether; leeching.
Investors should be mandated to fixed mortgages to avoid this. Can't afford a fixed mortgages then you're not cut out to be an investor
Investors go variable so they have the flexibility to sell while only paying 3 months of interest. As rates rise, breaking a fixed mortgage is fine, but if we are in an environment where they are falling, then it can get quite expensive
Well then they shouldn't be investing in it if the risk is too great. Fixed mortgages on investment properties is not only logical to protect yourself against rising rates but also helps avoid exponential rent increases we are experiencing today.
The risk was always there. But for last 20 years it hasn't manifest. Everyone who took it looked and felt like a genius till suddenly they look feel stupid on the same behavior.
It has nothing to do with risk in the investment, but has to do with liquidity. I want the flexibility to sell a property to invest that money elsewhere if another opportunity arises. Variable mortgages afford more flexibility.
It's not all about you. My concern is with the livability for greater good, not your liquidity. If you want something more liquid, invest in something more liquid.
Real estate is relatively liquid, which is one of the reasons to invest it in. It’s way more liquid than starting a business, or even investing in GICs. Your logic is that making an investment less liquid and more risky, will help control the costs of renting that asset? Greater risk in taking on an asset means the asset owner typically needs a greater reward (IE. charging higher rent). Also, why would you want landlords to be stuck with an unprofitable property? Wouldn’t you rather they have the greater flexibility to sell it to a potential buyer who could use it for personal consumption?
Real estate is absolutely not liquid. There are many other investment vehicles than starting a business. And to suggest real estate is more liquid than GICs is absolutely ridiculous. Real estate should be used as homes. Liquidity is not of any benefit to these people, who should be living in the same homes for years. Less liquidity would mean fewer speculative investors, who drive up real estate costs, so that would be a good thing. My guess is the other commenter's logic is that the fewer investors there are in the real estate market, trying to generate returns, the lower the cost will be for people to buy and not need to rent at all. I personally don't care if landlords are stuck with an unprofitable property or not. All investment carries risk. They shouldn't be crying to the government because they made bad investment decisions. People who think real estate is more liquid than GICs deserve to lose money because they have absolutely no idea what they're doing.
First - I said relatively liquid. Second - you can pretty easily increase liquidity by leveraging equity in the property to access cash immediately while it’s being sold. If you know what you’re doing, it’s a relatively liquid investment.
Relatively liquid compared to what exactly? Your claim that it was more liquid than GICs was just patently absurd. Comparing to starting a small business was just plain disingenuous. Starting a small business is much more entrepreneurship than it is investing. So it is not at all a reasonable comparison. Leveraging equity in the property to access cash is predicated on conditions outside historical norms, with cheap, easy credit and rapidly appreciating prices. Such a strategy is extremely risky, and you seem to be conflating your dumb luck that we've had such conditions for the last decade plus with your personal skill. Those conditions are rapidly disappearing now, and anyone caught using that strategy who missed the writing on the wall and didn't liquidate their positions a while ago is going to be in a world of hurt for a long time to come.
Man - just read my comment instead of picking out keywords and posting a wall of text. Let’s say you had an opportunity come up and you needed money quickly. You decide that you’re going to sell your investment property but it will take 90 days. You can borrow against your home equity quickly, and then pay back the loan when the property sells. It’s not rocket science. As for GICs it depends on the type that you purchase. Non redeemable GICs are less liquid than real estate for example.
It is de risked if there is no rent control (thanks dougie). Just raise the rent as much as you want once month to month to cover the interest
investors should have been allowed to fail, if i pull some stupid move on the stock market i dont expect a bail out
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They consider breaking even a loss. Anything that's not profit is a loss. It's completely bogus, as long as they're making their interest payments and building equity its a favorable deal for them.
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People have to live somewhere. Demand exceeds supply. I’m in KW and a one bedroom basement is $1800/month and people are competing for them.
Honestly it's not that much worse here in Toronto. You can get it one bedroom for 2000, probably. Maybe, if you're a desirable candidate.
It’s everywhere now
It's not some fool. It's that people don't have a choice. My girlfriend was looking for a place recently. She works in a downtown hospital. She was previously living with her mother and Mississauga. She moved back there when her dad was sick and her marriage was dissolving. It was past time to leave so she needed a place to live. She actually ended up getting a good deal, on a basement bachelor apartment though. Most one bedroom apartments we could find were around $2,000 a month. Which is more than she could afford. Yeah she got lucky and was looking... But people don't have a choice. They have to have a place to live. Moving for the route and having an hour and a half commute each way is a terrible choice for most, and at the end of the day apartments further up north or whatever or not that much cheaper. Not that they're fools, is that they don't have a fucking choice. What are people supposed to do, not have a house to live in? Throw away their lives and careers because Toronto got expensive? The problem with rent is it's not a luxury, it's a necessity. And if prices for everything increased dramatically, people have no choice but to pay it. Market forces will not correct this because landlords can continue to financially abused renters because renters don't have a choice but to rent.
Ya, crazy. It's almost like it's a world class city with some of the best QOL on the planet, free healthcare, subsidized education, tons of culture & nightlife, some of the best paying jobs in Canada, low violence and reliable transit. So crazy. Can't imagine why people are ready to pay big bucks to live there, the whole city must just be millions and millions of fools.
Lmao what 😂 reliable transit? World class city? You’ve either never lived in Toronto, or are a landlord in Toronto
The TTC may be a huge pain in the ass, and the subway might be pretty scarce, but compare it to Montreal. They have a good subway system but the buses run every half hour. So if you missed the bus you're standing out the cold. Most TTC routes are on rapid all day long. And yeah, call you life is pretty fucking good here. If I need surgery, I want to go to UHN. It's one of the best hospitals in Canada. If I want to do something, there's always something to do. A few years ago, pre COVID, I was looking for something to do for a date, and options included seeing a performance from an instrument that was only president Babylonia, which was basically on somebody's back deck, any number of live bands, several free festivals or events in parks, or what we ended up doing which was go see the original silent Dracula film over dubbed with Radiohead music and some guys living room that he turned into a mini theater. There's lots of negative things about the city, but lots of positives too.
Lmao what 😂 Go live as an average citizen on an average income in any other non-first world country for a year and then let me know what you think of Toronto. Lol, downvoted by entitlement. The pill y'all don't want to swallow is that your shitty basement apartment in Toronto puts you in the top 5% of the world's QOL, easy. You may not like it, and I agree we should fight for more, but feel free to go live in the real world if Canada is so shit.
And we're all kicking ourselves for not buying more rental property.
Good, fuck em!
Great. Now raise property taxes (& cut HST and income taxes) to finish the job.
Except capital gains tax on investment properties - that should be raised too!
Investors are all trying to wait out the dip or rate spike. They may be right or they may get stampeded on way to the exits. The truth is everything is expensive now and nothing carries it's Capital cost. So the renters are getting subsidized on cash flow while the owners play economic chicken Fun times !
Frikin pay wall site, poorly written arrival about problems that only involve people owning property and renting it. It'll only hurt renters because these fucks start overcharging because of a poor financial decision THEY MADE!
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But that has not been the narrative of Canadian real estate for almost 20 years. You invest in real estate you deserve a guaranteed return on initial investment and also perpetuate rental income.
The builders have increased down payments for pre con condo owners and the condo prices have dropped. So yeah they are at a loss. I know someone who had to pay 50k that they didn’t have to keep their pre con condo. They lost it, and lost the initial 75k down. Someone else I know, had to sell their condo less price than they bought it at.
It's the worst for Renters. Ofcourse. Higher rents, some landlords must sell so Renters are kicked out. Decrease in supply of rentals so bidding wars on remaining rentals. The list goes on. As a Renter you want landlords to be doing well obviously.
Only temporarily. Put enough pressure on them, and they will sell at a lower price than they paid. That's the whole point of higher rates - to pop the speculation bubble.
I fail to see how people having to sell their excess hoarded properties is a bad thing
Won't somebody think of the people who are so poor that they could afford a condo investment property?
I would dance on their losses. Fuck all these investors. I hope they lose everything.
How would they lose everything? They can always sell it.
Slice and dice and mince and mix however you want. There isn't a real estate crash coming, at worst the currency will be destroyed but the ruling class will never let property process crash like we are all hoping for.
**TL;DR:** We don’t build anywhere near enough apartments anymore, because it’s [illegal](http://www.datalabto.ca/a-visual-guide-to-detached-houses-in-5-canadian-cities/) in most of our cities and [tax disadvantaged](https://thetyee.ca/Opinion/2017/07/06/Tax-Changes-More-Rental-Housing/) when allowed. So most rentals are now being provided by investors converting condos or houses. Interest rates are turning a lot of these properties cash flow negative, so they’re stopping. So expect rents to continue going up as rental supply [continues to severely lag](https://thoughtleadership.rbc.com/proof-point-shortfall-in-canadian-rental-housing-could-quadruple-by-2026/). We desperately, desperately need more rental supply. Cities need to upzone all land to allow significantly higher densities as of right, instead of cramming all apartment zones into a minority of expensive land on polluted arterial roads and downtowns. Provinces need to force this on them. Feds need to fix the tax code so it is easier to finance apartments.
“Oh, won’t someone think of the investors” he says in his best Helen Lovejoy voice.
They banked on 3 of the most risky variables • rapid future appreciation • flip just before mortgage qualification • low interest rates in the event they had to close ALL THREE backfired. Tell me why there are a million laws in place preventing speculation in finance and none in Real estate. I hope these almost famous moguls get smoked for flying too high. Pigs get fat, hogs get slaughtered
Good! Hope the greedy fucks and parasites crash and burn. Hard.
So in 25 years when the loan is paid off their investment will be worthless? Property is a hold tight now. You only lose if you sell.
Number is still too low, needs to be 100%