Quote:
Originally Posted by WhipperSnapper
No. Vancouver is a fair bit more expensive to buy but a fair bit cheaper to rent. I really don't know how landlords are making any money.
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A lot of landlords or would-be landlords make the lion's share of their money through the appreciation in value of their properties, not rent. Some people in this group leave their properties empty because dealing with tenants is not even worth it. When your house is going up by $300,000 a year and you might want to sell at any time it is not worth having tenants that pay $2,500 a month.
I will say that it's puzzling how a lot of people hold on to their houses for no particular reason. I know a bunch of examples like this and the owners often don't even really understand how they could make more money by selling, with less hassle. They've been landlords (usually slumlords) for years and years and they just carry on doing the same thing. They're the people who rent out the $900 a month apartments in $1.5M teardowns. They do not seem to be waiting to time the market.
It's a bit strange how the Vancouver housing bubble has made multi-millionaires out of a bunch of random people who would, umm, probably not otherwise have prospered much financially. These are not shrewd, driven investors. They're crazy cat ladies who now own $5M worth of Vancouver Specials, etc. My old landlord was a very modest guy who did odd jobs and inherited a big house from his parents. His house is worth $2M+ now. He does the same thing now he has been doing for probably 40 years, renting it out to tenants and performing dubious minimal upkeep when needed. He should probably sell it and move to a small town somewhere but I'm not sure he has the faculties to take a step back and consider his situation. He'll probably just pass his house on to his kids.
Some other people have basement suites and the like to make a bit of extra cash. They would be living in and paying for their house either way, so it seems like a net win, although I think a lot of them wouldn't be making much money if they did everything above board. For example, you're supposed to have permits for your suite and the work you do, you're supposed to pay income tax on the rental income you get, and the capital gains exemption on houses doesn't apply to the portion of your property that's used as a rental even if you live there (for a lot of Vancouverites that alone would make having tenants not worth it, but I doubt they all pay their taxes correctly).