Rentiers

When Peter and Cynthia sold the working farm west of Toronto to Tom, their kid and heir, they needed a place to stay while they planned the next move. Enter friend Peter, whose duplex in town was half empty. So P&C signed a one-year lease, and everyone got happy.

Nine months later Pete took a job in Calgary, listed and sold the place. The new owner, he told the tenants, planned to convert to a SFD. Soon P&C received the new, obligatory Ontario document, called “Notice to End your Tenancy Because the Landlord, a Purchaser or a Family Member Requires the Rental Unit N12.” Sprawled across that notice in reverse type is this dramatic message: “This is a legal notice that could lead to you being evicted from your home.”

The tenants had other plans, even though their lease had but 90 days left. They wanted to stay, and decided to oppose. If Peter (the original landlord) had wanted them out at the end of their lease he would be obligated to either (a) find them equivalent accommodation or (b) pay them a cash settlement equal to one month’s rent. (This is now the law in Ontario.) The new owner was exempt from that – but only if he could prove he or an immediate relative was physically moving into the rental unit. The tenants figured a renovation didn’t qualify, and hired a lawyer. They won – a payment equal to four months of rent in return for not proceeding to provincial arbitration.

P&C therefore lived for 12 months and only paid for eight. The new owner had to cough up more than $10,000, plus pay his lawyer. And another adventure in landlording ended badly.

Meanwhile in BC, the NDP government is drafting serious changes to its Residential Tenancy Act and under consideration is a suite of changes championed by a pro-renter lobby in Vancouver. Included is a four-year rent freeze, the elimination of security deposits, allowing tenants a longer legislated grace period for missed rent payments and a prohibition on evicting any tenant for any reason without a dispute resolution hearing.

Meanwhile in Ontario universal rent controls are now in place, covering every unit – even new condos – and it’s mandatory that a standardized provincial rental agreement  be used. That form prevents the LL from writing in ridiculous things like “no cannabis can be grown in the bathroom and iguanas over 32 pounds are not permitted.” If the landlord does not use this form, a tenant may demand that the lease be altered and has the legal ability to withhold a month’s rent. Seriously. And the NDP is not even in power yet.

The politics of renting is growing extreme. The vacancy rate in Van nears zero, and sits at just 1% in the GTA. Now that debt-snorfling Canadians have made their real estate unaffordable and a huge swath of the population will never own, political parties know where many votes lie. Just over 63% of people living in YVR own real estate, and in the GTA it’s 66%. Renters are fertile ground, and appear to be struggling just like over-leveraged homeowners.

In Toronto, for example, a recent report on affordable housing found 47% of renter households fork over more than 30% of their income to landlords. To handle that, it’s estimated an hourly wage of $24 is required (Ontario’s current minimum is $14). The average one-bedder condo (often just 500 or 600 feet) rents for $1,800 – and condos are provide most of the rental stock, since the construction of traditional apartment buildings has plunged.

Meanwhile, of course, the average condo in the GTA sells for $601,000 and in Van the benchmark price is over $701,000. So, after carrying costs (downpayment, mortgage, insurance, property taxes, monthly fees) how does an owner make any money leasing a condo out?

They don’t. Being a landlord these days earns you not only hate and disrespect, but can also deliver losses. As the politics of renting becomes more prominent in the big cities, the situation will only grow more dire.

Consider the facts.

Rents may be too much for renters, but they are too low for owners. Four in ten landlords in Toronto who bought in the last few years are experiencing negative cash flow. In essence, renters are being subsidized.

Ownership costs are escalating. Property tax rates edge up every year, as do insurance premiums – set to rise further with the legalization of potentially-dangerous home grow ops. Condo fees are completely out of the control of unit owners, and the next time a mortgage renews, it will be at a higher rate. By the way, as an owner pray you never get a special assessment for new windows, parking garage restoration or replacement elevators.

Rent controls are likely to become more pervasive, restrictive, all-encompassing and economically debilitating. The government doesn’t care if mortgage rates go from 2.5% to 5% or the condo board loses a lawsuit and increases fees. Rents stay stuck.

In fact, pro-renter government policies will be the norm. Ontario’s new law that tenants have to be paid cash just to leave when their lease runs out is a perfect example. Getting rid of a tenant now is a major challenge. In the future, it may be next to impossible – at least without the spending of great time and significant money.

Remember, of course, that rent is considered income. Landlords have to add their positive cash flow (if there is any) to all other income and pay tax on 100% of it. Investors making money on financial portfolios in the form of capital gains gets a 50% tax break – and don’t have to fix any toilets.

If you want to be quietly loved, buy ETFs. If you’d rather have a bureaucrat up the wazoo, get a tenant.

123 comments ↓

#1 dakkie on 06.01.18 at 5:11 pm

Rising Interest Rates THREATEN Canadian Housing Bubbles! – This Won’t End Well

http://www.investmentwatchblog.com/rising-interest-rates-threaten-canadian-housing-bubbles-this-wont-end-well/

#2 Pendulum on 06.01.18 at 5:22 pm

Landlords have to add their positive cash flow (if there is any) to all other income and pay tax on 100% of it. Investors making money on financial portfolios in the form of capital gains gets a 50% tax break – and don’t have to fix any toilets.

————
Landlords get access to cheap leveraged credit, that allows them capital appreciation well beyond the growth in measely unleveraged balanced portfolio.

And they can deduct they expenses, while portfolio owners with registered and unregistered accounts only get to deduct them on one.

And lets face it, in BC at least, its widely know that the CRA has zero teeth. Everyone and their mother has a suite, rental condo, or house where tax evasion is the absolute norm on undeclared rental income. Part of the price appreciation is attributed to banks granting even bigger mortgage to those with suites – so everyone gets a suite, and prices oddly go up. And while the CRA has FINALLY started to clamp down on this, it does not ignore that many landlords received huge income gains tax free – illegally – for many many years.

So the pendulum is starting to swing in favour of renters away from the ownership society – its only 10 years too late…

What capital appreciation? That ship has sailed. As for evading taxes, are you approving of criminal activity? – Garth

#3 Yvrmc on 06.01.18 at 5:27 pm

For the first time since I was 21 a lot of years ago, I’m a renter . I’m kinda liking the no responsibility lifestyle . I’m invested and retired , kids gone , and a travelling fool . How are all those million dollar mortgages working out for ya ?

#4 Eco Capitalist on 06.01.18 at 5:34 pm

So it’s far too expensive to own and it is getting too expensive to rent. I don’t recall a socially acceptable 3rd option, oh wait, housing co-ops. Europe has them and university students have them (well, they do in Waterloo, anyway).

Snowcrash had people living in abandoned shipping containers. Ready Player One had the stacks. House Porn is trying to convince people that Tiny Homes are where it’s at.

Where will the people of tomorrow live?

#5 Brad B on 06.01.18 at 5:36 pm

My GF (realtor) says Toronto is the new New York if you can’t afford it get the hell out. I’m like whoa! In todays age you gotta have Garth Turners money to buy a steak and rent a room in this insane city. Maybe she’s right? Stick your money in all the ETA’s you want in the end it won’t matter. Imagine all these people working their asses off just to have real-estate or renting while doing their grocery shopping at the dollar store for years on end. What a life!

#6 Margaret on 06.01.18 at 5:40 pm

I am a landlord in BC, on Vancouver Island. Our town is in dire need of accommodation for seasonal staff and the businesses feel the pressure of not having staff because there is such a housing problem. The district has been aware of this forever. No one is building rent a designated apartment building, and now, who would? Of course condo sales are uppa uppa, cause you’ll have to buy to find a place. the District is trying to force property owners…town of 2000, on the beach, rent instead of go Vacation rental. It’s our property, to start with, and safety compliant necessary of course…and your place is cleaned weekly..you have access to your property if you need to reno, or have family over…and you make money without full time occupancy of tenants that now you cannot get off your property without a lot of trouble…wonder why airbnb is making a fortune?
I’d say my experience with tenants has been 0-50…half are good people, the other half …not.

#7 jess on 06.01.18 at 5:59 pm

Visa network crashes and sparks card payment chaos

Millions left unable to pay in shops, petrol stations and railway stations across UK and Europe

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#8 The Technical Analyst, CSTA, CPD on 06.01.18 at 6:00 pm

Going from a home owner to a renter has been wonderful. Best thing ever for the finances and a heck of a lot less stress. Even though I could buy the whole building I rent in, I’ll rent thank you.

I don’t know why home owners think rent is “throwing away money” when paying mortgage interest, condo fees, property tax is all the same but even more.

Now I do worry about the pot/cannabis. Hopefully the building doesn’t turn into a druggy hot box.

In sum, life’s harsh reality:

RENT and LIFE or OWN and SLAVE.

#9 Bob on 06.01.18 at 6:06 pm

#yvrmc #3

Wow you are so smug. I guess everything worked out for you? Jerks like u make me sick. So diapointed in people.

#10 tccontrarian on 06.01.18 at 6:12 pm

“Consider the facts.

Rents may be too much for renters, but they are too low for owners. Four in ten landlords in Toronto who bought in the last few years are experiencing negative cash flow. In essence, renters are being subsidized.”-GT
————–

Clearly, an unsustainable situation! When landlords realize this and that the good ‘ol days of capital appreciation are gone, I’m guessing they’ll decide to sell, en mass!
This should lead to excess supply which, along with higher interest rates/B20 ect., will accelerate the decline in prices. A positive feedback loop…

That’s what my crystal ball is showing, anyway…but I could be wrong as it may be…”different this time”!

TCC

#11 jas on 06.01.18 at 6:16 pm

Meanwhile in BC, the NDP government is drafting serious changes to its Residential Tenancy Act and under consideration is a suite of changes championed by a pro-renter lobby in Vancouver. Included is a four-year rent freeze, the elimination of security deposits, allowing tenants a longer legislated grace period for missed rent payments and a prohibition on evicting any tenant for any reason without a dispute resolution hearing.
————————————————————–

WTF this country is coming to???
We have orange dippers in AB too, but I think they are not bringing in such ‘effing’ law there. May be its time to make a move to AB while RE prices are depressed and hopefully in the next election the dippers will be thrown out.
Oh! WTF is going on in these times, its beyond me?

#12 Keith on 06.01.18 at 6:19 pm

Changing the RTA in B.C. in favor of the renters is meaningless. The vacancy rate is so low, landlords are disregarding the existing rules and daring tenants to defy them. Most don’t.

That said, the proposals are stupid. Rent control provides a small amount of short term relief, meanwhile property taxes and maintenance costs continue their merry upward spiral. The enforcement process for both sides is lengthy, bureaucratic and damages are difficult to collect. Badly maintained rental housing stock is trouble for everyone.

The federal government used to build 25,000 co op housing units per year, until we hit the debt wall in the mid nineties. The missing proposal is incentifying rental construction through the tax system, and now the land and building costs mean that you can’t do it anyways. Latest False creek development plan includes 1800 affordable housing units, with a land cost of zero and a price tag of 305,000 – each.

Easier to Airbnb or VRBO the housing you own. You can even farm out the cleaning and administration, there are companies that will do it for you. Better cash flow, less hassle.

#13 VanMan on 06.01.18 at 6:21 pm

I have typed this same reply for the past 5 years on this blog… nobody wants to rent long term for all of the reasons above. It’s why AirBnb listings have exploded, plus you can make so much more $$. I know there is politispeak of clamping down on this… but have a look at the site. There are 1000’s upon 1000’s of listings in the lower mainland. Imagine if Airbnb didn’t exist….

#14 MediOgre on 06.01.18 at 6:23 pm

Yes .. this is the time when the owners get tested. Those that hold on tooth and nail will win. Those that roll over will get run over. Nothing worth doing was ever easy.. and one last ism… real estate generates wealth. Guess what, the President of the United States is a real estate guy. go figure. Rich Dad Poor Dad Guy… you guessed it. oh and a self help guru. you can do it too

#15 Chaddywack on 06.01.18 at 6:30 pm

Meanwhile my apartment has been without hot water for 4 days now and the tenants above me are making noise daily…..

and I still have 7 months left on my lease…..being a tenant is grand!

I guess the lesson is neither a landlord or tenant be!

#16 Stone on 06.01.18 at 6:32 pm

#3 Yvrmc on 06.01.18 at 5:27 pm
For the first time since I was 21 a lot of years ago, I’m a renter . I’m kinda liking the no responsibility lifestyle . I’m invested and retired , kids gone , and a travelling fool . How are all those million dollar mortgages working out for ya ?

——-

Congrats. Job well done. =)

#17 Fake News Again on 06.01.18 at 6:34 pm

Tony on 06.01.18 at 2:47 pm
Re: #185 Fake News Again on 06.01.18 at 11:57 am

Tax cuts and tariffs are a last ditch effort to create inflation. Nothing more nothing less. I foresaw this years ago.

_______

In order to have inflation….people have to be spending. With TAX TAX TAX by Govt trying to “shore up Govt Worker Pensions”….the plebs that fund Govt HAVE NO MONEY. Until 25% of the countries Govt – all three levels – ARE FIRED – you will never see inflation.

#18 PGer on 06.01.18 at 6:38 pm

The only landlording I do is through a REIT etf. I would never, ever, ever be a landlord in this crazy country.

The politicians are pandering to renters simply because there are a lot more votes there than for landlords. Just like raising the minimum wage vs business owners – simple political choices. Count the votes.

#11 jas
“Oh! WTF is going on in these times, its beyond me?”

It’s called the rise of a new generation (the millennials), who have been taught (by their very progressive and wealthy teachers) that socialism is a good thing and government will look after their every need (just like their mommy used to). The politicians are just playing to that.

IMO we’re in for a world of hurt until (if ever) this bunch grows up. Usually something serious happens that changes things.

#19 BlogDog123 on 06.01.18 at 6:44 pm

Back in the early 90’s I had a “slumlord” landlord, owned 3 or 4 houses in Hamilton. Actually he was a really nice wrinkly old guy, but his houses were crap. Load ’em up with students, charge rent and hope for the best…

Co-worker rented houses, hard to pick the good tenants from bad who might mis-treat the place…

Nowadays, I can’t imagine with these looney rental laws how anyone can make money or get rid of vandalizing deadbeat scum.

Going the ETF route sounds like a lot less hassle.

#20 The Real Mark (not the imposter) on 06.01.18 at 6:44 pm

“There are 1000’s upon 1000’s of listings in the lower mainland. Imagine if Airbnb didn’t exist….”

If Airbnb didn’t exist, you’d probably have investor groups buying up entire condo buildings or substantial chunks thereof and turning them into more traditional style hotels.

Still imposing similar demands on the RE in the major cities.

So the whole thing about Airbnb is a big red herring. Banning Airbnb or regulating it will do absolutely nothing in and of itself to RE prices. Cracking down on subprime credit, landlord families, and de facto non-recourse speculators will, and is far more effective at quelling the RE bubbles, especially in the post-2013 peak era, than any other such initiatives.

#21 TheDood on 06.01.18 at 6:46 pm

#2 Pendulum on 06.01.18 at 5:22 pm
……… And lets face it, in BC at least, its widely know that the CRA has zero teeth. Everyone and their mother has a suite, rental condo, or house where tax evasion is the absolute norm on undeclared rental income. Part of the price appreciation is attributed to banks granting even bigger mortgage to those with suites – so everyone gets a suite, and prices oddly go up. And while the CRA has FINALLY started to clamp down on this, it does not ignore that many landlords received huge income gains tax free – illegally – for many many years……..

____________________________

All it takes for this to come to a grinding halt is a dozen or so to get caught, audited, and handed 5 or 6 figure invoice for taxes overdue. Word spreads, and they all fall into line. CRA has big sharp teeth when they bite, and it hurts!

#22 Danny on 06.01.18 at 6:46 pm

“Four in ten landlords in Toronto who bought in the last few years are experiencing negative cash flow.”

Garth I would be interested in the source……is it a verifiable fact or a volunteered fact by landlords and does it include the mortgage these landlords hoped their tenants would help pay for….you know the “Bank of Tenants”

I am sure those slum landlords supporting Ford could substantiate it?

In case some steel workers missed the news…Ford said he “looooves you”..Sure that will help! Genius.

#23 Mac on 06.01.18 at 6:49 pm

…and the needle continues its drift further to the left. How people be so unbelievably ignorant and short sighted is beyond me.

#24 Bibi on 06.01.18 at 6:50 pm

Canada is a country with huge land mass and small population. The building material is basically crap made in China. The wages are average. And the housing costs and rents are through the roof. How did we get here, Garth?

#25 Dolce Vita on 06.01.18 at 6:58 pm

Saw on Instagram your Lunenburg, Nova Scotia, Bank sky colored dome (replete with M. Buonarroti scaffolding f/Yvonne I read).

You and the Romans would have gotten along well as far as domes go (i.e., stark):

https://www.alamy.com/stock-photo-coffered-ceiling-dome-of-pantheon-oculus-rome-lazio-italy-109310346.html

Me, more a Basilica di Santa Maria Maggiore dome kind of guy – mouse over, click to enlarge:

https://www.istockphoto.com/it/foto/basilica-papale-di-santa-maria-maggiore-gm471215823-11374019

…although, it’s creator is long gone and took more than a millennia to complete the Basilica.

An unfair comparison.

But Garth, live a little.

Baroque or Renaissance jazz that bank dome up a bit more (no need to fly the previous owners colors).

_______________________________

Happy Italian Republic Day to Cdn. expats (Festa della Repubblica Italiana).

IF we still have a Republic left by the end of the summer…

#26 greyhound on 06.01.18 at 6:59 pm

Our Dec puts on the big 5 banks are providing a nice ride as real estate continues to get crazier. 4 out of the 5 are down today! Beats being a landlord, anyway.

#27 crdt on 06.01.18 at 7:01 pm

#10 tccontrarian on 06.01.18 at 6:12 pm

Clearly, an unsustainable situation! When landlords realize this and that the good ‘ol days of capital appreciation are gone, I’m guessing they’ll decide to sell, en mass! This should lead to excess supply which, along with higher interest rates/B20 ect., will accelerate the decline in prices. A positive feedback loop…

——————–
What actually will happen is landlords realize capital appreciation is gone, they will get richer because reasons. Sorry ol’ chap, this real estate bubble will double by the end of 2018 and with Trump’s new Trumpiness he will trump because reasons..

#28 Bibi on 06.01.18 at 7:07 pm

So the parents sold his son a farm. He is called an heir, but he actually paid for it likely by taking on huge debt. This is so funny and cruel at the same time. Just brilliant! I am amazed how Anglos do these things!

#29 Ace Goodheart on 06.01.18 at 7:12 pm

Just had that same situation with a fellow landlord/buddy of mine trying to get some peeps out of his building so he could reno and re-rent for more $$$.

Had a side wall that had a lean at the top. We knew it was going to fall down. Question was, when? Had been leaning for years. Cracks opened up more like maybe a millimeter per year. Was taking forever.

Had already lined up the bricklayers and knew what the cost was going to be. Had done everything other than put up the scafolding.

So what do we do? Have a long, hard look at that wall. It’s not structural, but it looks it. If those bricks were to fall, the building would look pretty horrible (though it would be a 6K job to fix, and we had already budgeted for that).

So we went up on the roof one evening with a six pack of beer. Drank our fill. Then we started kicking that wall. Only took a few good blows before it let go. Took a bit of the crappy old brick wall with it when it fell.

You can vacate a building if it needs major repairs. We had a hole in the side of the wall you could drive a car through. Bye bye tenants!

Rebuilt the bricks, renovated, and re-rented the beast.

Sometimes, you have to break the rules……

#30 akashic record on 06.01.18 at 7:13 pm

#171 Gravy Train on 06.01.18 at 10:19 am

#116 akashic record on 05.31.18 at 10:50 pm
“… The demand for growth is why globalism cannot exist without eliminating all … borders on the entire globe, physically, financially, politically, culturally. Even at the price of constructing t[he] most totalitarian society [that] ever existed.”

I take it you’re not a shareholder! :)

Just because among others, the James Raymond envelope from Vancouver shows up regularly in our mailbox, it doesn`t make me blind.

Especially when I personally experienced for decades how effectively imbalanced, totalitarian societies destroy economy.

I take it crossing these dots never crossed your mind. :)

#31 Nonplused on 06.01.18 at 7:14 pm

Didn’t they try rent controls in some famous cities like New York and Paris? I believe the result was that it became impossible to get an apartment.

The government cannot fix anything. If you cap the price of something you limit the supply. Everyone who’s sat through an economics course should know this.

I am not sure there will be a lot of inflation in Canada other than that caused by the dollar. Capital always goes where it’s treated best and right now that certainly isn’t Canada. I mean who in their right mind would build an apartment complex in Vancouver or Toronto for the purposes of renting it out with all these new rent controls? I think even the REIT’s wouldn’t touch it.

The economy functions best when the government keeps its hands in its pockets and does nothing.

In a free market, a lack of housing leads to higher rents which makes it profitable to build more housing. In a government market a lack of housing leads to no response from the market and shortages result.

#17 the problem is government workers spend money too. So I am not sure the net effect of taxes is negative for consumption. It kills businesses though, and killed businesses lead to killed jobs which isn’t exactly expansive for the economy.

#32 wallflower on 06.01.18 at 7:16 pm

Until provincial governments revert to landlord-friendly and rental-specific development-enticing policies, these severe rental crunches are here to stay. (Just as I see house after empty house in Vancouver, I envision empty condos in GTA being the new norm.)

#33 Entrepreneur on 06.01.18 at 7:16 pm

It does seem the only small business left in Canada is to rent your place out legally or illegally. And have to agree with #2Pendulum on that it seems that everyone is renting something out.

Talked to the newspaper guy about people renting and he said people are renting their garages out, all under the table. He said one garage has two separate rooms. People rent out whatever they have.

#34 Dan Mason on 06.01.18 at 7:16 pm

It looks easier to earn 3.25% to 3.5% on a 5 year GIC simple interest but compound interest 3.468% to 3.753% per annum.

On a $700,000 property that would mean that a landlord would have to earn as much as $26,271 a year net profit after property taxes, insurance, maintenance and repairs, legal fees, real estate fees, utilities etc. etc.

This seems very difficult these days with real estate getting harder to manage and get close to a 4%+ net rate of return.

Anyway, real estate should be earning a 6% to 8% annual rate of return over the next 5 years at least after everything except income taxes. These days that is seems very unlikely and high risk, dangerous to your money.

#35 Dolce Vita on 06.01.18 at 7:20 pm

If the economy goes bad, rent prices drop.

Just ask Calgary Landlords about 2016 and 2017 (hint: 10% drop in rents on average, similar number in vacancy rates).

Better now though, well, so they say (AB seems to be talking its way out of a persistent recession, Edmonton better, Calgary got worse again in unemployment).

So YVR and 416 landlords, thank your lucky stars that RE prices have not crashed…yet.

If they do, they will probably take a good 20% of your local economy with them.

#36 Newcomer on 06.01.18 at 7:36 pm

One big problem is that people get into the landlording business without realizing that it’s a business. If you open a restaurant (an ice cream parlor, for example) or hang out your shingle as a professional (a financial advisor, for example) you expect there to be risks and you expect there to be regulations. Restauranteurs do not expect a full dining room every night, and they know in advance that things like food safety procedures and wages for most of the staff will be set by the government. That makes them somewhat less likely to get burned. Even so, more than half fail in the first year.

#6 Margaret (my apologies, Margaret, if I’m not getting the full picture) appears to be a good example of an inexperienced business owner when she expresses dismay over government involvement, saying, “It’s our property, to start with….” She would not say, “It’s my kitchen to start with, why can’t I cook and sell whatever food I like under whatever conditions I like.” Or, “It’s my still to start with, why can’t I sell whiskey to my neighbors.” New landlords tend to forget that owning an asset doesn’t give you the right to use it for business purposes in any way they please.

They are also more prone to business mistakes such as extending credit to high-risk clients, failing to budget for operating costs and failing to budget for market fluctuations.

My guess is that a lot of people will be getting a lesson in small business reality in the next few years.

What cities need is purpose-built rentals. If they stopped issuing permits for condo buildings and provided incentives for rental only buildings, there would be no housing problem.

#37 Sheena Wicks on 06.01.18 at 7:37 pm

See what happens when they crash interest rates. It is a big mess when you give idiots too much cheap money.

If mortgage rates were even what they were back in the year 2000, 7% to 8% then we would not have this big mess.

#38 dr talc on 06.01.18 at 7:39 pm

Until 25% of the countries Govt – all three levels – ARE FIRED……………….

that would be a good start
but its a third rail (like the green belt) and no politician, including Doug Ford, will touch it: all candidates must salute “the system”. Even the opposition needs two names: ‘The Official’ and ‘Her Majesty’s’

The parties and leaders change, but the military , police , and banks don’t .

#39 conan on 06.01.18 at 7:39 pm

The new owner had to cough up more than $10,000, plus pay his lawyer.

Soon to be ex lawyer. Hate when lawyers do that.

#40 The Great Gazoo on 06.01.18 at 7:43 pm

Here’s one person’s opinion on what is contributing to high real estate prices.

https://twitter.com/JohnPasalis

John Pasalis
‏ @JohnPasalis
3h3 hours ago

John Pasalis Retweeted Amine Ouazad

This should be obvious and I don’t get why some (agents, builders and even recently CMHC) challenge this obvious fact. It’s very hard for house prices to reach 8-12X incomes without foreign money – plain and simple.

#41 TurnerNation on 06.01.18 at 7:43 pm

Re. drama teacher label, which other world leader openly weeps to reporters, nation, over events detached from him and in fact centuries old? Do that in private. This is an act.

I miss the days our PMs were lawyers. Campbell, Mulroney, Cretien, H.

MF if you are around. About this mythical 55k salaried governmental unicorn you know.
Could it be they simply are poor at their job or gaming the system, or made bad choices?

(I mean almost every Toronto Police public union member even civillians there employed is making 100k. How hard can it be?)

And of their 37.5 hours each week how much is spent doing nothing in meetings, conference calls; or in watching Youtube or fiddling on smart phone?

What of all those guaranteed and bankable sick days? And extra “wellness” (aka hangover recovery) days they get?

#42 Lolo on 06.01.18 at 8:01 pm

I’m an owner and a renter. There’s an emotional aspect to being a landlord that (for me) makes it harder to maximize returns. Raising rents, selling, evictions…sometimes hard to do when other humans face consequences of your actions. I’ve been lucky as a renter so far….underpaying by $800-900 compared to current market rates. He’s raised our rent once in the past 5 years (in YVR). As a condo owner, I think now might be a good time to sell…but I am keeping it for a variety of reasons, which includes some consideration for the welfare of the tenants.

#43 Eightlock90 on 06.01.18 at 8:14 pm

What is with people in this comment section and going on angry tirades against public sector workers and their pensions?

What are the majority of public sector jobs? Police officers, teachers, nurses, armed forces, clerks…

Last I checked all of these jobs are hiring and are probably not that hard to get into. If these occupations are so great how about some of you stop your belly aching and go apply. Tired of reading the same comments every day. Imagine being that bitter.

#44 Drill Baby Drill on 06.01.18 at 8:17 pm

We are staring into the teeth of a full blown trade war with the US of A. If the Ontario voters elect an NDP government then heaven help the Ontario tax payer because the NDP will not be able to handle the un employment costs. Canada has had relatively stable trade relations with the excited states for 150 years. This is now all ending. Forget the BS of this is not fair or reasonable or legal. We are dealing with a US President with a New York city born and raised mindset. Canada needs to adjust and bend over.

#45 Reality is stark on 06.01.18 at 8:33 pm

Let’s talk about suicide.
The reason they do quantitative easing after the financial crisis is to cut the male suicide rate. Depressions cause men to jump out of buildings.
The government creates the imbalance hoping that when the bottom falls out of asset prices a decade later the suicide problem will come up again but it won’t be as severe. For the most part the government got this right.
Where the greater fool thing comes in is that you didn’t have to play musical chairs during this decade to become a statistic.
But the government is not finished yet. They are addicted to debt and taxing wealth is much easier than managing expenditures especially after telling your employees that the terms of their employment will be even more favourable. The pie will be smaller but the public service share of that pie will be even larger. When you consider medical technology keeps people alive longer those pensions widen the gap even more.
The whole housing market thing is the little picture. The government will take back most of that artificial wealth in fairly short order. The market will take care of the rest.
Don’t be a fool and let these clowns bamboozle you. They know full well what they are doing.
Make them cut staffing costs to reflect the effects of globalization on wage compression. Also force them to educate children with emphasis on math, science and technology.
Social justice garbage leads to greater polarity between the sexes and higher taxes to make up for male reluctance to marriage.

#46 Al on 06.01.18 at 8:37 pm

If they further stack the deck against the casual long term landlord, they’ll simply not do it at all. They go with short term rental like Airbnb or VRBO or sell. Is that what they want? I can only see the sell part eventually helping rents or home ownership rates, but that will be a long time. Anecdotally I already seen owners foregoing long term renting entirely due to the new Ontario rules requiring the owner to pay the tenant one month’s rent when they move back in. As long as owners have better options, they’ll take those. I understand the reason for such a rule, to stop unscrupulous home owners from pretending to move back in to then flip the property or acquire new tenants at a higher rent price, but there has to be a fairer way to this.

This prolly won’t help long term renters in the near term, or maybe ever. Guess we’ll find out.

#47 Reynolds531 on 06.01.18 at 8:40 pm

#43 eightlock

Not that hard to get into public service?! I recently applied for a corrections job. I knew a guy. 750 applied to this one job.

#48 Reynolds531 on 06.01.18 at 8:44 pm

I think the best way to make money as a landlord is to have owned the property for thirty years already. I’ve never been able to make the numbers work.

#49 crowdedelevatorfartz on 06.01.18 at 8:53 pm

@#9 Bob
“Jerks like u make me sick. So diapointed in people”
+++++
Why because he was smart with his money, invested, waited til the kids were grown up and gone and THEN decided to stop competing in the Rat Race?
Geez man.
Whats he supposed to do?
Work to pay a bigger mortgage til he has a jammer at his desk to keep impressing people like YOU?
Nah he decided to take his well deserved and well EARNED retirement.
Rent a place that you can lock the door to, taxi to the airport, stay away for 3 months with zero worries about a rental…..

Jealous or what.

#50 The Real Mark (not the imposter) on 06.01.18 at 8:56 pm

#43 Eightlock90 on 06.01.18 at 8:14 pm
What is with people in this comment section and going on angry tirades against public sector workers and their pensions?
Last I checked all of these jobs are hiring”

They might be ‘hiring’, but they receive extreme numbers of applicants relative to the positions available. Which, in an ordinary labour market, with ordinary labour market principles, would imply declining compensation. But the unions and politicians keep pushing up the compensation, and the public servants themselves, in charge of the compensation structures, routinely grant themselves raises.

The proverbial CEO of the Province of Ontario, Premier Wynne the person whom every provincially employed public servant ultimately answers, was paid $208,974 in 2016. Putting her at #3682 on the Province of Ontario’s “Sunshine” list for 2016. Quite an unacceptable situation, IMHO. Are Wynne’s subordinates worth a lot more than Wynne, the ultimate person in charge with ultimate political accountability, herself? This is an area that the politicians need to show some leadership in reforming public sector compensation. The public is being robbed blind, not by politicians, but by the public “servants”.

#51 For those about to flop... on 06.01.18 at 8:57 pm

Recent sale report/ Realtor assistance needed.

This house in Coquitlam sold 7 days ago.

It was on and off the market several times over a 15 month period but they finally found someone willing to stump up some cash

Was it enough?

We will find out one way or the other…

M43BC

1756 Hampton Drive, Coquitlam paid 1.97 June 2016 ass 1.66 now asking 2.18

Feb 2:$2,380,00

May 2: $2,098,000
Change: – 282000.00 -12%j

2017-02-02 : $2,380,000
2017-02-15 : $2,280,000
2017-05-02 : $2,098,000

https://www.zolo.ca/coquitlam-real-estate/1756-hampton-drive

https://www.bcassessment.ca/Property/Info/QTAwMDAzWTI4Wg==

$$$$$$$$$$$$$$$$$$$$$$$$$$$$

Feel free to make a donation.

Flop For Fox Fund…

http://www.terryfox.org/get-involved/ways-to-give/

#52 FOUR FINGERS WATSON on 06.01.18 at 8:59 pm

Liberal politicians have proved more enthusiastic, and so following Seattle’s decision to “take their fair share” with a ‘head tax’ in an effort to redistribute corporate wealth to the homeless (to ‘solve’ the housing affordability crisis), lawmakers in Portland, Oregon have decided to take on the income inequality miasma – by charging a business-tax on firms with extreme CEO-to-worker pay ratios:

10% Tax on firms with a CEO-to-Worker ratio over 100-to-1; and a

25% Tax on firms with a CEO-to-Worker ratio over 250-to-1.

#53 crowdedelevatorfartz on 06.01.18 at 9:05 pm

@#43 8%annual pension increase Locked In til Im 90
“tirades against public sector workers and their pensions?”
++++
Hmmmm
Because most govt pensions are subsidized by taxpayers that dont have GARANTEED pensions?
Because most taxpayers experiences with govt workers are frustrating experiences because the unionized(protected?) jobs are essentially GARANTEED for LIFE?
Because most taxpayers can only dream of the wages, benefits and pensions that govt employees expect?
Because most taxpayers wouldnt last 6 months in the catatonic slothlike environment known as the govt “workplace”?

I could go on but you get the picture.
P.S.
I deal with the arrogant, lazy, brainless serfs of all levels of govt almost on a daily basis and the only thing that amazes me more than their mindless, pointless existance is their sense of entitlement.

Their financial day of rekoning is coming……..soon

#54 ApatheticInYVR on 06.01.18 at 9:06 pm

I have given up trying to understand what is happening in YVR. We rented a Duplex in East Vancouver for $3200 a month inc bills 2 months ago. Went to an open house last night two doors down, an almost identical unit with the same square footage selling for $1.65 million. Granted it was a bit shinier, but who would take on a $7000 mortgage (with 20%) down when you can rent for less than half than that?? I don’t think you’ll get a rent-to-price ratio that insane anywhere else in the world.

#55 Langley Going Down on 06.01.18 at 9:08 pm

Friend called the realtor up, says they need to sell place. A house – SFD.

Realtor says, you won’t get the price you could have a few months back.It you want to move it we got to list it competitively, aka for a bit less than the going rate even just a few months back.

It’s on now motha#%#@s!!!!!!!!!!!!!!!!!!!!!

This officially kicks off the roll over.

#56 Puzni on 06.01.18 at 9:19 pm

I agree, but CRA and local governments have their hands tied. Nobody enforces the rules and nobody from CRA checks on these illegal suits to make sure the income is reported by the owners. It’s been like that for 20 years. Unfortunately tax cheats win in real estate. Not legal , not right but home owners have the upper hand for now!

Not any more. The CRA is actively handing our big penalties. – Garth

#57 young & foolish on 06.01.18 at 9:25 pm

“Landlords get access to cheap leveraged credit, that allows them capital appreciation well beyond the growth in measely unleveraged balanced portfolio.”

Well, there is some truth here … if you can get the down payment to secure the property and have tenants cover all expenses (including mortgage), then your final expense out of pocket will be just that down payment

#58 saskatoon on 06.01.18 at 9:31 pm

that’s better ;)

#59 Renter's Revenge! on 06.01.18 at 9:31 pm

#43 Eightlock90 on 06.01.18 at 8:14 pm
“Tired of reading the same comments every day.”

Me too. The simplest solution would be to stop reading the comments, but for some reason I can’t! LOL

#60 swonovart on 06.01.18 at 9:37 pm

#201 Summer Vacation on 06.01.18 at 1:39 pm
…… lets make Canada great again.”

Sorry, but when was it ever great?

#61 For those about to flop... on 06.01.18 at 9:40 pm

One of my side projects from my Pink Snow Project is to try and roughly show when livable detached houses in Vancouver start selling under a million dollars again.

Not to sure how close we are ,but these two recent sales could be an indication.

944 e 33rd ave ,Vancouver, asking 1.14 assessment 1.24 ,sold 17 days ago for ?

https://www.zolo.ca/vancouver-real-estate/944-east-33rd-avenue

2243 Ferndale st,Vancouver ,asking 1.18 assessment 1.07 sold 29 days ago

https://www.zolo.ca/vancouver-real-estate/2243-ferndale-street

This one might have gone too.

Apparently been rented out to the same tenants since 1992…

M43BC

5284 Sherbrooke st,Vancouver,asking 1.1 ,assessment 1.29

https://www.zolo.ca/vancouver-real-estate/5284-sherbrooke-street

#62 The Real Mark (not the imposter) on 06.01.18 at 9:43 pm

“Well, there is some truth here … if you can get the down payment to secure the property and have tenants cover all expenses (including mortgage), then your final expense out of pocket will be just that down payment”

That’s true and all, but the devil is in the details. In Canada’s major cities, adjusted for depreciation and amortization, you cannot buy a unit that will retire a mortgage and provide a reasonable risk-adjusted return on the downpayment equity contributed.

And that’s at current interest rates, which as is pointed out by Garth routinely, are at the lower end of the spectrum in terms of the long-term interest rate cycle. A reversion to higher interest rates makes the prospect of a rental property “paying the mortgage” net of D&A even less. Meaning little to no return on equity.

The downpayment itself has opportunity costs. That is to say, it could have been invested elsewhere at a similar level of risk for a presumed return. Garth quotes 7-8%/annum being realistic for unleveraged balanced portfolios. But for a typical rental housing downpayment of 20%, ie: 5X leverage, an assumed equivalent return of 15%/annum is more realistic for the same level of risk.

The end result, what really matters 10-20, maybe even longer down the road, is that buying housing as an investment at a bad price can have a horrific impact on one’s financial health and wealth. In Canada, I personally don’t expect a foreclosure crisis to exist going forward. I just expect a lot of families who bought into the crazy 2013 apex/plateau prices to spend the next 10-20 years making mortgage payments and having little to nothing to show for it other than a worn out house in need of repair, empty retirement funds, and another 20 years to spend in the workforce as they can’t retire at a decent time.

Meanwhile their smarter peers, that invested properly, took advantage of the housing bubble to pick up out of favour un-loved assets, will be enjoying the perks of having done so. A million dollars invested in the TSX today buys $67k/annum of tax-paid-up income that will likely grow over time and for which there’s ample historic precedent of growth in a rising interest rate environment. A million dollars invested in Vancouver or Toronto RE, wouldn’t even really do much more than cover depreciation and property taxes. Nevermind actually providing a return on such capital. With large capital losses probable in the rising rate environment.

#63 FOUR FINGERS WATSON on 06.01.18 at 9:45 pm

Not any more. The CRA is actively handing our big penalties. – Garth
……………………

They should advertise that aggressively and offer a 10% recovery fee for information that leads to a tax recovery.

#64 Drew on 06.01.18 at 10:06 pm

I sold my place in Dec 2017 and rented a top floor of a duplex. I have money in the bank and being invested, and a place where I don’t have to shovel the driveway or mow the lawn. With the NDP looking like they will win the Ontario election this month, and all the real estate news provided by this site and others, I feel very relieved to have sold when I did.

#65 Kothar on 06.01.18 at 10:07 pm

The only landlord I want to be is own XRE.

#66 viorelli on 06.01.18 at 10:17 pm

A good friend who came to Vancouver about 30 years ago from Poland just cashed out. Had a successful business, now 61 and will retire within a year. Sold two detached properties recently, one residential and one commercial building. He got very lucky on residential as his property was encompassed into the land assembly area, so he is getting just shy of five for this property alone. He is moving back to Poland for good next year as it is cheap to retire, very low tax rate, and great returns on investment. A new 2 br condo in fairly central Warsaw is selling for roughly 130.000 -150.000 CAD, the rent on such property is roughly $900 – 1200 CAD, very low tax rate of just over 10% and tenants have almost no rights. Of course one must have some connection with the people in city hall and law enforcement to protect ones interests, which he luckily has as his family member and nephew are well known lawyers there, you may have to pay some bribes but still come out much further ahead than you would in Van or TO now days with ridiculous laws and taxation. He is purchasing 12 condos in central Warsaw as we speak and one condo in Brentwood mall to keep his backdoor for Vancouver open (likes to hike, ride his bike, and the summers here are quite nice). Good luck condo owners!

#67 Lost...but not leased on 06.01.18 at 10:21 pm

The traps have been sprung..
….. get it Kilroy?

I’ve noted in the past how many the Monster Houses in olde Shaughnessy Vancouver were turned into rooming houses after the Depression.

That will be a ripple compared to the great RE tsunami coming.

Gov’t policy(or lack thereof) created this mess..almost by design…as usual pitting sides( ie haves vs have nots…landlords versus tenants….millenials versus boomers)…against each other.

Then it will ride in like a white knight….using statistics to find the critical mass of voters aka “the victims” gov’t actually created and play Robin Hood.

What I foresee is stratas..especially glut of overbuilt hi- rise…ending up like USA “Section 8” housing by default….many foreclosures and either desperate owners waiving NO RENTAL bylaws to attract desperate cash flow..or Local Gov’ts become “owners” by tax default.

PS: The key is to realize Gov’t looooonng ago defaulted on it role of fair and equitable governance,.it is NOTHING BUT A PRIVATE CORPORATE ENTITY…whose sole purpose is self indulgence in quasi -survival mode.

#68 45north on 06.01.18 at 10:45 pm

pro-renter government policies will be the norm. Ontario’s new law that tenants have to be paid cash just to leave when their lease runs out is a perfect example. Getting rid of a tenant now is a major challenge. In the future, it may be next to impossible – at least without the spending of great time and significant money.

here’s my story:

we rented out the upstairs to a young girl with a baby; my wife and I cleaned up a stroller and gave it to them. A few days later, the boyfriends moved in. According to the Ontario Landlord Tenant Act I couldn’t kick them out. One dark night, two of Toronto’s finest stood behind me while I told the boyfriends to leave. The next day the girl and her boyfriends moved out. Thank God for the Toronto police.

Pro-renter policies reduce the quantity and quality of rental units.

#69 ANON on 06.01.18 at 10:47 pm

*throws to the floor the third bucket of popcorn*
Dang! The pulse is rising.

#70 Smoking Man on 06.01.18 at 10:49 pm

How do you lower rents. Remove the rules and ristrictions. Feed the Greed.

Money will flow to build units…then you get over supply and lower rents.

It’s all about supply and demand. Zero incentive right now to bring in more supply…

If I was running shit. The green belt , bid yourselves to death developers. Go nuts. Build bitches build….

That’s how you lower rents.

Where is John Galt?

#71 Bytor the Snow Dog on 06.01.18 at 10:50 pm

#65 Kothar on 06.01.18 at 10:07 pm sez:

“The only landlord I want to be is own XRE.”

Is that one of Trudeau’s new approved 120 genders?

#72 Ponzius Pilatus on 06.01.18 at 11:06 pm

In Vienna, Austria, the most livable city on the planet:
80% are renters.
Think about this.

#73 rational observer on 06.01.18 at 11:13 pm

Not any more. The CRA is actively handing our big penalties. – Garth
……………………

For Canadians, perhaps. I don’t believe the CRA has the capacity to mandate anything for offshore flippers. It also will need to be within the statute of limitations, so very few will be affected.

#74 millmech on 06.01.18 at 11:26 pm

#56 Punzi
The best part about CRA is that fraud had has no time limit, they can go back decades if they want and assess penalties and fines and compound them for years. They love to browse social media and see the people bragging about their great investments and then back check to see if they claimed the sale on their taxes. CRA also watches social media to check on lifestyle wealth ie if you brag about your big boat, truck or vacations and yet only claim 20K a year in income expect an audit.

#75 Pendulum on 06.01.18 at 11:33 pm

So the pendulum is starting to swing in favour of renters away from the ownership society – its only 10 years too late…

——-
What capital appreciation? That ship has sailed. As for evading taxes, are you approving of criminal activity? –
Garth

——-

If you bought in the last few years as a landlord, your asset has gone up at least 30% in urban centers, hence the capital appreciation. You are still ahead of the renter.

As for tax evasion, its clear from my comment that I condemn the rampant tax evasion that has contributed in part to the massive price appreciation. The CRA is FINALLY cracking down on what every Vancouverite views a victimless crime because everyone is doing it…

But even the high profile cases being advertised have a pathetic 100k in back taxes for people that had 7 houses rented for a decade.

I would encourage every pissed off renter to phone the anonymous CRA tip line and report their paid rent as income for the owner. The only way the CRA will scare anyone is if there is a massive crackdown – and the resources are just not there for that.

#76 The Real Mark (not the imposter) on 06.01.18 at 11:37 pm

I have to say, since peak real estate circa 2013, living in this 2 bedroom apartment has been a phenomenal experience. Sharing a room with my 3 siblings has provided me with a certain perspective I can only compare to a tour in Vietnam.

I look forward to the day I become someone’s wife. It will fill my life and time with meaning and purpose. For now I have nothing better to do then spend my life writing nonsense and commenting on the noncommentable.

#77 Smoking Man on 06.02.18 at 12:06 am

DELETED

#78 Newcomer on 06.02.18 at 12:11 am

Tom Davidoff, the architect of the empty home tax in BC, explains how this is the opposite of unfair, and how Vancouver zoning has punished the middle class in favor of the already rich, for no good reason other than short-sighted vote garnering. If you are pressed for time (I’m thinking of you, Garth), start at 14:15 and just watch the couple of minutes where he explains the empty home tax. You cannot hold an informed opinion on this topic if you are not aware of the points he makes.

http://vancouversun.com/news/local-news/conversations-that-matter-braking-vancouvers-housing-market

#79 MF on 06.02.18 at 12:30 am

TurnerNation:

https://www.canada.ca/en/services/jobs/opportunities/government.html

See for yourself. Look at the salaries.

I’ve already pointed it out here before. Most government spending is on benefits like the child tax, EI, OAS etc.

Blaming police who keep our streets safe, military who keep our country safe, or the poor lady answering phones is erroneous, simplistic, and delusional. Usually the voice of morons with a personal vandetta than any logic.

Btw, lower salaries too much or cut too much and you open the door to bribes as corruption. Just look at the rest of the joke that is humanity as an example.

MF

#80 Fake News Again on 06.02.18 at 12:39 am

dr talc on 06.01.18 at 7:39 pm
Until 25% of the countries Govt – all three levels – ARE FIRED……………….

that would be a good start
but its a third rail (like the green belt) and no politician, including Doug Ford, will touch it: all candidates must salute “the system”. Even the opposition needs two names: ‘The Official’ and ‘Her Majesty’s’

The parties and leaders change, but the military , police , and banks don’t .

_____

Yes well we will see what happens when the bond market collapses in a couple of years and there are NO MORE taxpayer dollars left to fund the bloated fat lazy inefficient corporation called GOVT.

#81 Paul Johnson on 06.02.18 at 12:54 am

Here’s an eye -opening renter economy story in YVR:
Some Vancouver landlords are asking tenant applicants to complete an on line “personality test,” and a Victoria startup is supplying them with the software to do it.

https://globalnews.ca/news/4248731/potential-tenants-asked-to-fill-out-a-personality-test-for-vancouver-building/

#82 NEVER GIVE UP on 06.02.18 at 1:11 am

What capital appreciation? That ship has sailed. As for evading taxes, are you approving of criminal activity? – Garth
==================================

Our very own governments wholeheartedly approve of criminal activity.

What about money laundering?
Collecting bribes payoffs and favors from Developers and Big business interests.

Casinos, Real Estate?, Foreigners embezzling from foreign banks or state owned enterprises while our Governments give tacit approval.

Lets get real about where our citizens learn how to steal!

#83 NEVER GIVE UP on 06.02.18 at 1:45 am

Almost every businessperson has been through the loss making startup period. I have worked for less than zero dollars per hour for many months in my early years in business.

My wife and I often look back and say to each other with astonishment, “how did we ever get through that?”.

It should be no different in the real estate rental business. You pay and lose for a long time then you make money. Sometimes a lot of money.

The way renters get treated is really incredible. Renters make the whole thing work and are the #1 key to a better future for those amateur Landlords who want to make it in the property business.

Renters should have a much bigger stake in the process. Without them there is no one to pay your whole mortgage off for you and lead you into a life of comfortable retirement.

The fact that you can give a month or 3 notice to evict a tenant for any reason is horrendous. I think every renter should be given a year to move out in their own time and free rent during this period. If they move out in 6 months they should get 6 months rent in cash for the unused balance.

This is a business and it is an unfair unwritten contract that the tenant is likely committed to stay and pay your mortgage for years and yet the landlord has the power to disrupt all the tenants life plans and force them into the financial hardship of moving just because they are the “owners”.

You landlords are really not the “owners”. The system is just written that way. The banks who make it possible to buy should really be given the title of owner until the mortgage is paid off.

The system as it is written is hugely skewed in favor of the wealthy and the privileged that are able to get co-signatures and other forms of credit that make a mortgage possible.

All the while the renter is paying off your mortgage. The renter is your customer. Like the customer who comes into a department store or a restaurant but gets way less respect because the rules are written in such a way that the Landlord can harm the renter easily through eviction or lack of maintenance.

Just like the sick taxation system that favors big business the taxation and rules regarding rentals is still in the dark ages. If a landlord wants to change his mind about the use of a property and evict a tenant then the tenant should be fairly compensated for financial loss and for the stress and uncertainty it causes in the renters life.

This business about using people to pay your mortgage while you wait for a good time to move family or yourself into a property is a fraud. There is no compensation for the commitment made by the tenant. You as a landlord should either be in the rental business or not or pay substantial penalties in compensation to evict.

#84 Yvrmc on 06.02.18 at 2:59 am

#9 Bob ….. yes it did work out for me and there is hope for you …. if working 12-14 hours a day , 5-6 days a week, for 45 plus years doesn’t deserve this then I’m not sure what qualifies. As for being a jerk , maybe but I’m smiling at you from Europe for another few months … keep working hateful Bob .

#85 Oft deleted much maligned stock picker on 06.02.18 at 3:49 am

How long do you think it will be before the Trudeau Liberals are so stuck for cash that they will pull a Jim Flarehty and just start stealing citizens money like the Income Trust attack of some years past. Capital gains on real estate appreciation is low hanging fruit. First we’ll approach 100% taxation due to carbon tax shortfalls, missed marijuana revenue expectations and an ever escalating civil service unfounded lianbiry and mass hiring to fudge employment numbers….and the confiscation will begin in earnest. It will be legislated as “fairness”. Poloz wants a national union daycare and this is how it will start. Vancouveetro is proposing a ‘mobility tax”….you photo will be taken on any city street and you’ll be billed for the privelage. You say confiscation is far fetched, that dividend tax credits are sacrosanct, house appreciation is tax free…and walking down the sidewalk is a right? Just remember this. I’m right far more often than I’m wrong. People pay me to forecast. Trudeau is a socialist puppet menace and greedy politicians on a string are roaming the land like hungry wolves.

#86 jason burns on 06.02.18 at 5:29 am

I own and operate apartments in Northern N.B. across the river is a small town in Quebec. In N.B. the laws are balanced between the landlord and tenant. There is no housing crisis here, on the Quebec side there is a chronic shortage of rental housing. While you may be increasing the quality of life of some people who do not pay rent for months before being evicted. These laws will harm thousands of people living without or in inadequate housing.

#87 Mike in Toronto on 06.02.18 at 5:55 am

“The new owner, he told the tenants, planned to convert to a SFD. ”

Wait, was he *actually* going to move in or not?

If not, who cares? he tried to illegally evict a lawful tenant and got burned.

If it was some stupid judge deciding “well, your move is conditional on the rennovation, which you can’t do, which means you’re not planning to actually move in…” then yeah, I feel for the guy. The lesson is to move in, deal with the place as-is for a while, *then* rennovate.

I did the same thing years ago. I didn’t have the money to do a mega-reno, but the tenants left without any problems, and I really did move in and occupy both units.

No eviction was involved, rather a reno at the end of the legal lease. The point is, leases are now irrelevant if the tenant decides to stay. – Garth

#88 I’m stupid on 06.02.18 at 6:15 am

#29 Ace Goodheart

Your post is useless. It’s the same as someone saying the job market is horrible right now and giving you examples of why it’s bad. Then you respond with it amazing if you sell cocaine.

No one wants to kick down a wall (lie and cheat) in order to make a profit.

#89 unbalanced on 06.02.18 at 6:26 am

If I miss my mortgage payment can I have some grace periods? Yea right!!!!!!

#90 maxx on 06.02.18 at 7:46 am

#8 The Technical Analyst, CSTA, CPD on 06.01.18 at 6:00 pm

“Now I do worry about the pot/cannabis. Hopefully the building doesn’t turn into a druggy hot box.”

This is going to be a hoot. What T2 is unleashing upon the masses with this cannabis crap is going to be epic. Even a single detached won’t be able to escape the stench – 5 doors away. As for multi-units, a gas mask or two might be good to hang by the front door.

You can’t even drive anywhere without the stink of it permeating your vehicle. Police will never be able to keep up with it and the roads will become an even greater hazard.

#91 Phylis on 06.02.18 at 7:46 am

Mutual MERs can be high, think about an est of HERs or RERs. Home expense ratios, rental expense ratios. Anyone care to calc a range?

#92 Lessons Learned on 06.02.18 at 8:16 am

I have been a landlord for 7 years.

Like any other business venture you embark on, there is a fair amount of research, work and key decisions to ensure that your business is set up for success. If you have attempted to be a landlord in the last 15 years in the province of Ontario or specifically the GTA and have failed – you have no one to blame but yourself. Market forces supplied you with incredible demand (clients) and you were able to pick and choose with whom you did business with, unlike many other businesses.

The type of landlord you are directly impacts the type of tenants get or end up with and the amount of stress you will experience.

Want to make the most return regardless of housing or tenant quality – be prepared to run a rooming house

Don’t want to do any repairs – be prepared to lose good tenants

Don’t want to do and general yard or seasonal maintenance – expect your tenants to also treat your property the same way

In even simpler terms – you need to ask yourself – would you be a good tenant ? I think most of us would answer yes. Would you live in your own rental ? If the answer is no, then expect your business to not be as stress free as it could be. It can still be successful, however, many landlords reference bad experiences or one bad tenant that leads them to get out of the business altogether.

You also need to remember that earning income/cash flow is still work – if you set yourself up properly it will be 90% passive.

My only regret is not doing it sooner.

#93 Geesh on 06.02.18 at 8:30 am

#71 Bytor the Snow Dog

#65 Kothar on 06.01.18 at 10:07 pm sez:

“The only landlord I want to be is own XRE.”

Is that one of Trudeau’s new approved 120 genders?

————–
Hey Bytor the Snow Dog:

Pick up your arms, your knuckles are dragging on the ground.

#94 KLNR on 06.02.18 at 8:54 am

the smart landlords I know use airBnB exclusively.
No need to deal with the BS of a permanent tenant.

#95 georgist on 06.02.18 at 9:17 am

Hi Garth. Glad to see you adopting the term “rentiers” although sadly nobody has commented on this at all.

It is the language not of the totally shitty modern economists like Krugman, but of Smith, Keynes, George and Ricardo. People who wrote down ideas with out crawling up the arse of the rich and deserve a hearing.

Garth – the other day you wrote that “land is feudal”.

1. yes, that’s why feudalists chose it – the UK was an open prison, work or starve, land clearances created cheap labour for industry.

2. nothing much changes, this is still an issue today because it comes down to monopoly. “Land is the mother of all monopolies”. Winston Churchill – also a fan of land value tax.

There is also a backlash coming against AirBnb, so landlords should also prepare for this.

#96 IHCTD9 on 06.02.18 at 9:36 am

#224 Mark on 06.01.18 at 4:20 pm
“The US’s Achilles heel has traditionally been (in our lifetimes) it’s reliance on foreign oil. That’s all healed up now.”

Healed up? Yeah right. They still import 10 million barrels of the stuff daily:

https://www.eia.gov/dnav/pet/pet_move_impcus_a2_nus_ep00_im0_mbblpd_m.htm

Let’s not let the facts get in the way of the truth. The US is still utterly reliant on foreign oil imports to power its ‘economy’. Particularly from Canada.
————-

Right, “utterly reliant”, you need to update your “facts”:

“The United States is the top oil-producing country in the world, with an average of 14.86 million b/d, which accounts for 15.3% of the world’s production. This is down from 15.12 million b/d in 2015, but it was enough to land the United States in the No. 1 spot, which it has held for the past four years running. The United States overtook Russia in 2012 for the No. 2 spot, and it surpassed former leader Saudi Arabia in 2013 to become the world’s top oil producer. Much of the increased U.S. production is attributable to fracking in the shale formations in Texas and North Dakota. The United States has been a net exporter – i.e., exports exceeded imports – of oil since early 2011.”

https://www.investopedia.com/investing/worlds-top-oil-producers/#ixzz5HH4yjIDc

#97 Igor on 06.02.18 at 9:52 am

Not a SFD but an SFD

#98 dharma bum on 06.02.18 at 9:52 am

#31 Nonplused

The economy functions best when the government keeps its hands in its pockets and does nothing.
——————————————————————–

“Governing a large country
is like cooking a small fish.
Too much poking spoils it.”

~ Lao Tzu (Tao Te Ching, Chapter 60)

#99 MF on 06.02.18 at 10:28 am

IHCTD9 on 06.02.18 at 9:36

Ouch. IH taking out the trash again.

The US learned in the 70’s that relying on these foreign idiots for their oil would be a threat to their economy and security.

The more self reliant the better.

Hopefully we can get our act together and do the same eventually.

MF

#100 Rental Problems on 06.02.18 at 10:29 am

These problems for the most part are located in the big cities, and selective provinces. All the more reason to move elsewhere for this, and other reasons to live the good life. Do your homework, and move away from the problems.

#101 For those about to flop... on 06.02.18 at 10:56 am

I guess it couldn’t hurt to put this one up again.

Comes with a free pack of crayons…

M43BC

“One Map Shows the World’s Biggest Oil Exporters.

Despite investment into alternative energies, oil is still the world’s most traded commodity. Want to know where it comes from? Here are the world’s oil exporters, ranked by revenue and global market share.

Top heavy
Over 100 countries export crude oil, but the players at the top run the game. Many low-ranking nations represent less than 0.25% of the world’s market. For them, oil exports are better counted in hundreds of dollars than millions. To demonstrate the unevenness, consider this: five exporters make up nearly 50% of all oil exports. It takes 100 countries to comprise the other half.

Top 10 Exporters of Crude Oil
These are the top ten exporters of crude oil, ranked by earnings and their percentage of the world market.

1. Saudi Arabia – $136.2 Billion | 20.1%

2. Russia – $73.7 Billion | 10.9%

3. Iraq – $46.3 Billion | 6.8%

4. Canada – $39.5 Billion | 5.8%

5. United Arab Emirates – $38.9 Billion | 5.7%

6. Kuwait – $30.7 Billion | 4.5%

7. Iran – $29.1 Billion | 4.3%

8. Nigeria – $27 Billion | 4.0%

9. Angola – $25.2 Billion | 3.7%

10. Norway – $22.6 Billion | 3.3%

One thing you should know is that earnings are measured in millions of U.S. dollars. In other words, when we say that Kuwait’s export revenue is $30,700 million, what we really mean is that their oil revenue is over $30,000,000,000!

Saudi Arabia is king
When it comes to oil, Saudi Arabia is unmatched. They command 1/5th of the world’s oil exports and earned almost twice as much as runner-up Russia, even though Russia is eight times bigger.

As of this writing, Saudi Arabia is a hotbed of political uncertainty. The country has been inching closer to military conflicts against Iran, its regional rival, and the Crown Prince recently arrested several members of the royal family. Both could have an impact on their oil exports.

Surprise: U.S. ranks #20

The U.S. has a reputation for being an oil country, and rightfully so. Still, the data shows that our role in the export market is smaller than we might expect.

Of all global exporters, the United States ranks 20th, behind countries like Angola and Kazakhstan. We own only 1.2% of the export market, and our biggest neighbors, Canada and Mexico, export much more oil than we do.

Who is tomorrow’s big dog?

Saudi Arabia holds the top spot, but their political instability could make them less attractive partners to buyers in the coming months. Meanwhile, Russia is making oil moves all over the world, and America continues to make its influence known.

In the end, it may not be the oil itself, but national ambition, that determines the top crude exporter of the future.”

https://howmuch.net/articles/world-map-of-crude-oil-exports-2016

#102 For those about to flop... on 06.02.18 at 11:11 am

I stumbled upon howmuch a couple of years ago and I never did bother to run this one but even though it’s American numbers I think a couple of people on the blog might enjoy the read…

M43BC

How Much are our Heroes Worth?

How does an employer determine how much they will pay for people to do certain jobs? Some occupations, for instance, carry more risk and intensity while others require more work experience and education. A number of jobs fall into three broad categories that provide important services to society: protect the public, save lives, and encounter danger or adventure. Here are some occupations that fall under these categories:

Protect the Public
Correctional officers: responsible for accused or convicted criminals.

Criminal investigators: visit crime scenes and carry out arrests.

Firefighters: first responders during medical emergencies and fires.

Police: protect communities and respond to criminal activity.

Security guards: monitor and prevent theft and illegal activity.

Save Lives
Ambulance drivers and attendants: operate vehicles that transport patients.

Critical care nurses: responsible for patients in intensive care.

9-1-1 operators: notify first responders.

EMTs and paramedics: treat sick or injured people at the crisis scene.

Physicians and Surgeons: perform advanced treatment for patients.

Encounter Danger or Adventure
Explosives workers: work with volatile substances.

Fishing workers: work in all weather conditions.

Hazmat removal workers: rush to scene of accidents and disasters.

Extreme sports instructors: teach sports such as rock climbing or skydiving.

Occupational Trainers: Teach or instruct courses other than those that normally lead to an occupational objective or degree.

Is the Money Worth It?
According to the U.S. Bureau of Labor Statistics 2014 data for employment, approximately 6.9 million people were employed under one of the three categories mentioned above. Below is a breakout of the number of employees and the median wages for each respective job:

Protect the Public: 2.7 million Employed | $49,368 Median Wage.

Correctional officers: $39,780.

Criminal investigators: $79,870.

Firefighters: $45,970.

Police: $56,810.

Security guards: $24,410.

Save Lives: 3.8 million Employed | $69,406 Median Wage.

Ambulance drivers and attendants: $24,080.

Registered Nurses: $66,640.

9-1-1 operators: $37,410.

EMTs and paramedics: $31,700.

Physicians and Surgeons: $187,200.

Encounter Danger or Adventure: 0.4 million Employed | $39,803 Median Wage.*

Explosives workers: $52,140.

Fishing workers: $32,530.

Hazmat removal workers: $38,520.

Extreme sports instructors: $36,020.

Navy Seals: $22,992.**

Occupational trainers: $36,020.

It is important to note that pay is often determined by a number of time and monetary requirements, including the typical education needed for entry, work experience needed in a related occupation, and typical on-the-job training needed to attain competency. Of these jobs, physicians and surgeons make the most, with a median wage of $187,200 or more while ambulance drivers make the least. Although physicians make over 7x more than ambulance drivers, they must have a professional degree and work as an intern and resident for several years. On the other hand, ambulance drivers require only a high school diploma and moderate-term on-the-job training. Each job provides an important service to society but with vastly different pay. In general, people are paid more for jobs that require more education and/or are very risky, but even with this group of “heroes”, not all pay is the same. How can an employer quantify an individual’s contribution to society and the risks involved with their work? Is the extra risk and intensity worth the additional money.”

https://howmuch.net/articles/heroes-of-america-wages

#103 Crown Prince on 06.02.18 at 11:19 am

Where is the Crown Prince since the coup against his palace took place?

#104 crowdedelevatorfartz on 06.02.18 at 11:20 am

@#94 Geesh ( Gender Equality English Speaking Humanoid)

“Hey Bytor the Snow Dog:
Pick up your arms, your knuckles are dragging on the ground”
++++++
Apologies Bytor, apparently the gender equality police dont have a sense of humour….

#105 ex-canadian on 06.02.18 at 11:35 am

Sale your house/condo
take money and run away from this fake country
soviet canadastan

#106 Gravy Train on 06.02.18 at 12:10 pm

#30 akashic record on 06.01.18 at 7:13 pm
“Just because among others the James Raymond envelope from Vancouver shows up regularly in our mailbox, it doesn’t make me blind.”

That’s like saying you’re a little bit pregnant, or the tire’s just flat on the bottom! Spare me your moral indignation about ‘globalism’ if you own shares in ‘globalist’ companies! You can’t have it both ways. Yes, it doesn’t make you blind; it makes you a hypocrite!

(Full disclosure: I also own shares—well, low-cost index funds.) :)

#107 GottaBeCareful on 06.02.18 at 12:21 pm

#yvrmc #3

Wow you are so smug. I guess everything worked out for you? Jerks like u make me sick. So diapointed in people.
———————————————-

To #84 Yvrmc

Your comment to #9 Bob is so accurate it deserved a comment.

Like you, I’ve worked hard all my life, managed to save a few dollars and sell my home at the right time.

That somehow makes me an evil person. Back then, family and government included wanted me to work hard to save money for my retirement. I did.. and now they’re trying to find ways to take it away, or say that I’m not entitled to it. Go figure.

Being an early boomer has allowed me to sell my home and business ahead of the Social Justice Warriors that will ruin that possibility for the rest of you still working.

Since I have no faith in our governments (read NDP), I’ve taken some of those ‘gains’ out of the country. Unfortunately, SJW’s are a worldwide phenomena, and I must be vigillant.

To #9 Bob… try working (and saving) for what you want, rather than expecting some gov’t agency to take it from those who’ve worked for it.

As Margaret Thatcher once said: “The problem with socialism is that you eventually run out of other people’s money.”

#108 Gravy Train on 06.02.18 at 12:42 pm

#104 For those about to flop… on 06.02.18 at 11:11 am
“How Much are our Heroes Worth?”

Great post, Floppy. :)

#109 Lost...but not leased on 06.02.18 at 1:18 pm

Garth…

Request clarification….moreso after T2 and Moroneau tax changes.

If I buy a condo as an “investment” and rent it out…say for $1000 /month…but it costs say another $500/month out of pocket to cover all monthly expenses.

…are you saying I cannot deduct the extra $500 as a business expense?

..or can I ?

You can for a while, but eventually it will be disallowed since there is no reasonable expectation of profit. – Garth

#110 Great Leadership on 06.02.18 at 1:25 pm

Freeland made two critical errors. First, why show weakness by making tariffs effective in 30 days, and secondly, if your going to target a State hit them with a few selective products based on the dollar value. Now she says there might be errors in her list of tariffs, and to let her know if adjustments should be made.

#111 NoName on 06.02.18 at 2:15 pm

Election in ON, very tiny PC majority, any minority will make libs king maker, what in essence would be lib light gov… it will be interesting to see will I be correct and how it will play out.

#112 jess on 06.02.18 at 2:16 pm

” i promise to take money from those who didn’t vote for me and give it to the people who did”

On Other People’s Money choices

in the Billions :

bailouts for bankers, airlines, car makers, etc

in the Trillions :

Middle East wars, Quantitative Easing, subsidies EVERY year for agriculture, energy, telecom, specialized tax cuts
=================
if other people money is spent on the above then
social programs health care, education and welfare, it is NOT because of running out of money.

#113 LP on 06.02.18 at 2:24 pm

Hey Flop

Somewhere on your list of professions, particularly the hazardous ones, there should have been room for teachers. And not because of the danger of shooters in the school; that’s a whole different discussion.

I’m talking about the day-to-day danger presented by kids who lash out with whatever weapons are at hand – not guns, knives etc. Last week in the elementary school where my daughter teaches one child had such a melt-town that police and an ambulance were called . The ambulance was to transport the boy to hospital in a straight-jacket.

His temper tantrum resulted in the vice principal suffering a gashed throat caused by a rubberized strip of magnet being whipped at him. A large safety glass window, the kind with imbedded wire mesh, was broken by the boy who pounded his fist and forearm against the glass. That child is in grade four and he is 9 years old. He was back in class the next day as if nothing had happened.

So many posters here often decry the salaries paid to teachers. You couldn’t pay me enough to deal with the escalating violence and danger that occurs almost daily in our schools, elementary, junior and secondary.

#114 Lost....but not leased on 06.02.18 at 2:32 pm

Pendulum swings and tide change…

Trump and Tariffs ?
—too little too late.
Take the US at its founding…if Tariffs on foreign goods were established, sufficient revenue would have been accrued to fund gov’t without extra tax burdens that ultimately were imposed. Local industries would be able to exist and prosper..free trade IS the start of the end.

Prior to WW1, US had little if any debt….however given “ALL WARS ARE BANKERS WARS”, once Woodrow Wilson was blackmailed into WW1..(and the Federal Reserve charter in 1913)the US was on the road to becoming a a major debt slave, albeit well- armed one..the rest as they say is “history”. USA has effectively been turned into the enforcing Banksters wills on a global basis.

——

Dr. E. Michael Jones book” The Slaughter of Cities”..basic premise was Cities once ad strong ethnic voting blocks.

The powers that be noted Detroits(once THE most affluent city in USA) collapse was based on many (white) workers conscripted into military WW2…Blacks from South migrated North en masse…Detroit citizens then moved to the suburbs..Detroit became hollowed out.

So now…after the voting blocks were dispersed into the suburbs…they are now diluted over a generation or two….BUT NOW THE CITY IS BEING RE-ESTABLISHED but re-invented as a free range prison….hi -density residential is wiping out commercial land as well as SFH neighbourhoods…end game will probably be 200 sq. ft. sky cells…err “strata”.

Its all about(and has always been)the” Gov’t ” herding and controlling the masses like the sheeple they have increasingly become, and ironically brainwashing them that its in their best interests and loving it.

#115 Is The King Back? on 06.02.18 at 2:46 pm

Its been well known about the coup upon the Royal Palace as at April 21, 2018 because saw it taking place. Did you not see this all on your local news? Of course the Crown Prince has been missing, not to be fooled my media announcements with old pictures in place. I have today from the Middle East (need more) that the King is back issuing a slew of royal orders and decrees which I have read.

#116 aa3 on 06.02.18 at 6:54 pm

The problem I have with the amateur landlord game is that it seems a completely useless middle man in society in most cases.

Its like the people who buy the taxi medallions with bank credit, then lease the medallions to taxi drivers. (and lobby the government to keep the number of medallions restricted.. who do you think is funding all the green anti-development organizations?)

Anyway, while I can see in time periods how being this middle man using bank credit could be very profitable, it seems sort of low-lifey.

#117 BCpipelinelover on 06.02.18 at 6:55 pm

All those looking for work pls apply to new crown corporation which will be building the pipeline. If kinder Morgan was going to spend $7.4B then the government will surely spend twice that and take twice as long. There will be lots of jobs and lots of money for all willing and able. This will cost T2 his job and result in a nation wide sweep by the orange party. Good times ahead. If only Notley had the balls to turn off the taps. I’d happily pay $2-$3 a litre for gas just to see Horgan begging Alberta/KinderMorgan to build the pipeline.

#118 Fake News Again on 06.02.18 at 9:10 pm

The nine-year US bull market has been looking a bit rickety recently. And the constitutional crisis in Italy has become the latest cause for concern. Italy’s president, who holds a head-of-state position that normally remains politically neutral, has broken from tradition and inserted himself forcefully into the process of appointing and denying key governing positions. It would be a bit like Canada’s governor general suddenly telling Trudeau who he can and can’t have in his cabinet.

______

You mean like “appointing” that SLIMEBALL EX-IMF Globalist Banker Carlo Cottarelli? Left that part out did we……

#119 Ace Goodheart on 06.02.18 at 11:59 pm

#88 I’m stupid:

The wall was coming down anyway.

Problem was how to shift out the occupants, reno the building and re-rent for more money.

Solution: knock down a wall that is already being replaced.

#120 CHERRY BLOSSOM on 06.03.18 at 10:01 am

My rent was $850.00 My rent increase was $34.00 a month. My OAP increase was $6.00 a month. How is this sustainable for seniors?????

#121 B Wilds on 06.03.18 at 11:08 am

The trends here in America also merit concern. My frustration with America’s housing policy boiled over when I read a piece about how roughly 80% of new apartment construction was for the high-end luxury market. The government holds huge responsibility for a rising share of our housing problems in low-income situations because its policies avoid dealing with the growing number of tenants that are irresponsible.

Government housing cherry-picks the best of the low-income renters providing them with very low rents and nice apartments and dumps the rest on the private sector. The following piece argues the best way to address or level the playing field would be to move away from public housing and give those needing housing aid “rent only vouchers” that could be used with any landlord rather than putting these people into a quasi-government ran project.

http://brucewilds.blogspot.com/2018/02/housing-policy-feeds-and-hides-growing.html

#122 Rargary on 06.03.18 at 1:33 pm

Airdrie AB is projected population growth by 50% in 6 to 9 years… Where are these people projected to come from anyway? Is there a 50% population boom for Calgary in 5- 10 yrs we are not being told about? Pipeline perhaps?

#123 Freebird on 06.03.18 at 7:53 pm

Interesting look at New Zealand housing market/ boom and role of foreign buyers incl China by award winning doc film maker. Covers Vancouver. A few parallels to our own housing situation. (Dup post of this on Doug’s blog by mistake)

https://youtu.be/HzSAmOQuyjU