Rental too high

[Sparki55]

Wow, it's about time. People need protection from illegal and shady evictions. Good for Ontario.

More red tape added, less landlords to serve the renters.

[Even Steven]

The demand is there, so why not charge a higher rent.

I know somebody who recently had to change tenants. He listed his place at $1,400/month and received 80 applications. I told him to raise it to $1,700 and see what happens. He received 35 applications. So, just for the hell of it, he re-listed it again at $1,900/month and still received 20 applications, picked a good tenant, and rented the place.

So, my advice netted him extra $15,000 since his average tenant stays between 2 and 3 years. With the same expenses!

I think he owes me a case of beer or something.

[Lady tehMa]

I can see this from a few different sides.

I have a friend who is a landlord - they can't afford not to be. They have had nightmare tenants to the point that they ended up moving out of their own house whilst evicting the tenants from the basment suite. Tenants finally left but trashed the place, including leaving the oven on high with the door open, all the elements on, and the heat turned up high. In summer. It took months to make even their quarters livable again, much less the suite. The rental board screwed them over big time. Now every time they need to get a new tenant she get physically sick before interviews from the stress. Fortunately that doesn't happen often. They have upgraded the suite at every chance, too.

I have children who are still at home because they can't afford to live elsewhere, so they have made plans around that. Son will be joining the military, daughter will finish her schooling and look for work in other towns. I would love for them to live here, but it is looking like that is not an option.

I've lived in a few different places myself and only settled down here because I married a guy with roots. We probably wouldn't even be in a house if he hadn't bought the house off his parents when they were ready to leave town. Even so, the cost of repairing and renovating is eating into our bottom line. However, I wouldn't choose to rent so I'll deal with the downside (re-shingleing the carport roof tomorrow!).

The cost of everything is rising. I look a the cost of beef and wonder how long before we'll be forced to be vegetarian! It doesn't really pay to be a landlord anymore, but who can afford to buy? Who is responsible for providing housing? I have asked that last question in many threads, but there does not appear to be an answer.

[forum]

Don't worry. The market is starting to sort itself out. (with a little help from the government)

http://www.bnn.ca/video/~1196674?hootPostID=77d3e2e0fdd773cf13c336d5150284ac

[Queen K]

Just in the last few days I have heard of several people in severe rental crisis.

One said that if her landlord increases the rent on more time they have to leave the valley. Working two jobs just to pay rent is getting to be too much,

Another one took a rental under the understanding that the AirBnB will come first eight months from now. She has agreed to move out to accomodate the airbnb and is hopeful that the city of Kelowna will shut them down. I suspect she will be making her own phone call to inform by laws if the owner doesn't comply.

I heard of a woman who might be sleeping in her car by now, can't afford the rates right now and she is working.

Like what the hell? I feel like a chump for selling my rental sometimes. Other times, I'm glad I don't get those calls, "the dryer caught fire." Yes, that happened to me. And letters from strata, yes, again, happened.

So what is going to help people?

[forum]

The market will balance out. It will take time. City council is useless and do not know how to effectively handle this matter.
I doubt they care. The problem doesn't touch them. Eventually the right person will be given the power to make change. Someone smarter than the current team of leaders. Someone that isn't tied in profiting with developers and real estate.

There will be a saturation point in the market where AirBNB won't be so lucrative.

No city can last without a healthy rental and affordable housing market. Our current leaders don't understand this. They also don't understand why the crime rate keeps going up.

At this rate eventually a plumber or house cleaner will cost $350/hr.

The working class will find a better place to live.

Some people believe the working class in Vancouver is moving to Kelowna. A few are, but they find out quickly that Kelowna has high crime, no culture, subpar venues, poor paying seasonal jobs, a goofy city council, and traffic problems. So they move again.

Most move to Ontario, or Vancouver Island.

[Queen K]

I was telling someone about the dump of a house on Coronation being advertised at $2050/month and she says, "why does the city even allow that to happen."

Ya right, the city set rates.

No sense in being the intellectual in the crowd to point out that the demand set rates and the city isn't involved.

[Lady tehMa]

The market will balance out. It will take time. City council is useless and do not know how to effectively handle this matter.
I doubt they care. The problem doesn't touch them. Eventually the right person will be given the power to make change. Someone smarter than the current team of leaders. Someone that isn't tied in profiting with developers and real estate.

There will be a saturation point in the market where AirBNB won't be so lucrative.

No city can last without a healthy rental and affordable housing market. Our current leaders don't understand this. They also don't understand why the crime rate keeps going up.

At this rate eventually a plumber or house cleaner will cost $350/hr.

The working class will find a better place to live.

Some people believe the working class in Vancouver is moving to Kelowna. A few are, but they find out quickly that Kelowna has high crime, no culture, subpar venues, poor paying seasonal jobs, a goofy city council, and traffic problems. So they move again.

Most move to Ontario, or Vancouver Island.

This is the largest city/town I have ever lived in. It is also one of the prettier ones, especially for ease of access to hiking, fishing, or just enjoying nature in general. I have lived in BC all my life and haven't traveled much to any of the other parts of Canada.

Many of my coworkers and my employer aren't from here. Or from BC. None of them are from small towns, all larger. One was telling me - when I was mourning the loss of fresh air - that on any given day in Toronto, that is what the air quality was like normally. One, who has lived in Hong Kong - was talking about how quiet the city is (comparatively). We were discussing rental rates and property value and someone said "People who think that they can keep this little corner all to themselves are in for a rude awakening." Our city is changing. We are growing. I will probably move to the outskirts when I retire - maybe Joe Rich or Ellison or Lake Country - because it is getting too busy for me.

I don't know what this means for rental rates, but I can't see them coming down.

[JLives]

Kelowna doesn't really have outskirts that will be less expensive
The closest place I have found is past Fintry or Beaverdell before you see more reasonable prices. It's still pricey though and the commute sucks

[rustled]

The market will balance out. It will take time. City council is useless and do not know how to effectively handle this matter.
I doubt they care. The problem doesn't touch them. Eventually the right person will be given the power to make change. Someone smarter than the current team of leaders. Someone that isn't tied in profiting with developers and real estate.

There will be a saturation point in the market where AirBNB won't be so lucrative.

No city can last without a healthy rental and affordable housing market. Our current leaders don't understand this. They also don't understand why the crime rate keeps going up.

At this rate eventually a plumber or house cleaner will cost $350/hr.

The working class will find a better place to live.

Some people believe the working class in Vancouver is moving to Kelowna. A few are, but they find out quickly that Kelowna has high crime, no culture, subpar venues, poor paying seasonal jobs, a goofy city council, and traffic problems. So they move again.

Most move to Ontario, or Vancouver Island.

This is the largest city/town I have ever lived in. It is also one of the prettier ones, especially for ease of access to hiking, fishing, or just enjoying nature in general. I have lived in BC all my life and haven't traveled much to any of the other parts of Canada.

Many of my coworkers and my employer aren't from here. Or from BC. None of them are from small towns, all larger. One was telling me - when I was mourning the loss of fresh air - that on any given day in Toronto, that is what the air quality was like normally. One, who has lived in Hong Kong - was talking about how quiet the city is (comparatively). We were discussing rental rates and property value and someone said "People who think that they can keep this little corner all to themselves are in for a rude awakening." Our city is changing. We are growing. I will probably move to the outskirts when I retire - maybe Joe Rich or Ellison or Lake Country - because it is getting too busy for me.

I don't know what this means for rental rates, but I can't see them coming down.

We need an "agree" button here. I don't like what you're saying, but I think it's entirely accurate. We live where people want to live (and where they want to own a second or third home for rec purposes or eventual retirement or what have you), and that drives up the cost of living here.

[dominik]

The demand is there, so why not charge a higher rent.

I know somebody who recently had to change tenants. He listed his place at $1,400/month and received 80 applications. I told him to raise it to $1,700 and see what happens. He received 35 applications. So, just for the hell of it, he re-listed it again at $1,900/month and still received 20 applications, picked a good tenant, and rented the place.

So, my advice netted him extra $15,000 since his average tenant stays between 2 and 3 years. With the same expenses!

I think he owes me a case of beer or something.

I just came back to this thread, and I have to say this statement is very much the issue a rental market which is moving upwards in costs and moving out of reach of normal working renters.

Now as I have said earlier, it is up to the landlords to charge what they feel is appropriate, however what you are describing here has little to do with basing your pricing your rental pricing on actual market conditions. The worry I have in a situation like this is that you suggested to raise the rent by nearly 21% moving it far beyond what most single or dual income earners in this area can afford.

This doesn't mean that you may not get tenants that are paying this, however this is not a true reflection of what the market has to afford, but what the market is forced to pay.

I think the additional worry we should all have, is that with more and more people working 2-3 jobs to afford their "normal" rents we are seeing a change in our community. People have less money to spend in the local market, they have less time to invest time and effort into our community, and have to fight (don't mistake this with "just going to work") to live.

A lot of these are my opinions and yes I am not always right, however when we are discussing markets, and effects we are referring to facts, something which has been seen in many municipalities and other areas. The issues surrounding high rents are quite complex and by all means not easy or straight forward to resolve, but in the end part of it is being socially responsible.

[Even Steven]

...however what you are describing here has little to do with basing your pricing your rental pricing on actual market conditions.

Actually, I think it has EVERYTHING to do with actual market conditions. If people are willing to pay more, you rent it out for more. That's just good money sense. Just like when there's a job available at $20/hour you take it instead of $12/hour.

The worry I have in a situation like this is that you suggested to raise the rent by nearly 21% moving it far beyond what most single or dual income earners in this area can afford.

What you offer as far as housing doesn't have to be affordable for MOST renters. It only has to be affordable for a handful of them looking for a place currently, simply high enough number from which you pick your good dependable tenant. Who cares if it affordable to MOST? You only have to rent it to one.

[youjustcomplain]

I just came back to this thread, and I have to say this statement is very much the issue a rental market which is moving upwards in costs and moving out of reach of normal working renters.

What about normal working landlords? I own a house, and I rent out my basement suite. I have a full time job and a second job. My wife has a full time job. Why should we charge less than what the market will bare?

Now as I have said earlier, it is up to the landlords to charge what they feel is appropriate, however what you are describing here has little to do with basing your pricing your rental pricing on actual market conditions. The worry I have in a situation like this is that you suggested to raise the rent by nearly 21% moving it far beyond what most single or dual income earners in this area can afford.

Lets say you own an old 77 Bronco. It's been sitting in your garage for years. You paid $1500 for it 10 years ago. Now you can sell it for $20,000 because the market for this vehicle is hot. Do you sell it for $1500? or do you research what similar aged broco's in similar condition sell for then price yours accordingly?
It really is exactly the same thing. Why exchange a product for less money than it's worth?

This doesn't mean that you may not get tenants that are paying this, however this is not a true reflection of what the market has to afford, but what the market is forced to pay.

It's my opinion that you're %100 wrong. If I put up my basement for $1200 and I get people willing to pay it, that is a reflection of what the market is willing to pay. If I advertise it for $2500 and get no interest, then it's evidence that I'm over priced.

I think the additional worry we should all have, is that with more and more people working 2-3 jobs to afford their "normal" rents we are seeing a change in our community. People have less money to spend in the local market, they have less time to invest time and effort into our community, and have to fight (don't mistake this with "just going to work") to live.

I totally agree with this. As I said above, I work multiple jobs. Sure, I can afford my house without the second job and I could afford it without having a tenant at all, but paying down my mortgage and having vacation money for my family is important to me; just as it is with others.
Should everyone need 2 or 3 jobs just to afford to live? No ! I do it to afford more luxuries.
There are working poor, which I feel sympathy for. I was one for many years. I lived in cheap appartments and basements while I saved my money and eventually had enough for a down payment. Now I have two jobs as a choice, not an obligation.

A lot of these are my opinions and yes I am not always right, however when we are discussing markets, and effects we are referring to facts, something which has been seen in many municipalities and other areas. The issues surrounding high rents are quite complex and by all means not easy or straight forward to resolve, but in the end part of it is being socially responsible.

If people have 2 or 3 jobs to afford to live in the Kelowna area and they don't want to work that much just to afford housing, then the the conclusion is a simple one; Move to a cheaper area. Really, that's what it comes down to. Sure, it's not a easy decision, I get it. But I'm not going to be the 1 socially responsible guy who rents his basement for less than it's worth. No socially responsible real estate agent, or builder gave me a break when I built my house.

Yes, facts are facts. Housing pricing is going up. Meaning, landlords are paying higher mortgages. This is driving home owners to become landlords to offset some of the costs. Sorry that tenants have to pay these prices, but they are coming from the price of housing at the home owner level which is driven by a LOT of factors that can't be controlled by the home owner.

[dominik]

I just came back to this thread, and I have to say this statement is very much the issue a rental market which is moving upwards in costs and moving out of reach of normal working renters.

What about normal working landlords? I own a house, and I rent out my basement suite. I have a full time job and a second job. My wife has a full time job. Why should we charge less than what the market will bare?

Now as I have said earlier, it is up to the landlords to charge what they feel is appropriate, however what you are describing here has little to do with basing your pricing your rental pricing on actual market conditions. The worry I have in a situation like this is that you suggested to raise the rent by nearly 21% moving it far beyond what most single or dual income earners in this area can afford.

Lets say you own an old 77 Bronco. It's been sitting in your garage for years. You paid $1500 for it 10 years ago. Now you can sell it for $20,000 because the market for this vehicle is hot. Do you sell it for $1500? or do you research what similar aged broco's in similar condition sell for then price yours accordingly?
It really is exactly the same thing. Why exchange a product for less money than it's worth?

This doesn't mean that you may not get tenants that are paying this, however this is not a true reflection of what the market has to afford, but what the market is forced to pay.

It's my opinion that you're %100 wrong. If I put up my basement for $1200 and I get people willing to pay it, that is a reflection of what the market is willing to pay. If I advertise it for $2500 and get no interest, then it's evidence that I'm over priced.

I think the additional worry we should all have, is that with more and more people working 2-3 jobs to afford their "normal" rents we are seeing a change in our community. People have less money to spend in the local market, they have less time to invest time and effort into our community, and have to fight (don't mistake this with "just going to work") to live.

I totally agree with this. As I said above, I work multiple jobs. Sure, I can afford my house without the second job and I could afford it without having a tenant at all, but paying down my mortgage and having vacation money for my family is important to me; just as it is with others.
Should everyone need 2 or 3 jobs just to afford to live? No ! I do it to afford more luxuries.
There are working poor, which I feel sympathy for. I was one for many years. I lived in cheap appartments and basements while I saved my money and eventually had enough for a down payment. Now I have two jobs as a choice, not an obligation.

A lot of these are my opinions and yes I am not always right, however when we are discussing markets, and effects we are referring to facts, something which has been seen in many municipalities and other areas. The issues surrounding high rents are quite complex and by all means not easy or straight forward to resolve, but in the end part of it is being socially responsible.

If people have 2 or 3 jobs to afford to live in the Kelowna area and they don't want to work that much just to afford housing, then the the conclusion is a simple one; Move to a cheaper area. Really, that's what it comes down to. Sure, it's not a easy decision, I get it. But I'm not going to be the 1 socially responsible guy who rents his basement for less than it's worth. No socially responsible real estate agent, or builder gave me a break when I built my house.

Yes, facts are facts. Housing pricing is going up. Meaning, landlords are paying higher mortgages. This is driving home owners to become landlords to offset some of the costs. Sorry that tenants have to pay these prices, but they are coming from the price of housing at the home owner level which is driven by a LOT of factors that can't be controlled by the home owner.

Great reply, and I can definitely see your points. While I disagree with some (as you have done as well which again I really enjoy that type of conversation), such as the "what the market is willing to pay", since it really isn't the case anymore. We are seeing people being pushed out of homes as they simply cannot afford their homes anymore (not just in Kelowna to be clear).

We aren't seeing what the market is willing to pay, but rather what the market is forced to pay. I like your approach with your family being hard workers and still renting out and that is great especially since you recognize why you are doing this, however we are seeing a lot of people buying homes even though they aren't in that position. Which means the tenant is a required income to maintain their home purchase. Again this isn't all too uncommon, and also not a bad thing, however when the rent exceeds market/economic conditions it essentially poisons the well of home ownership.

It takes away the ability for those who are renting to save money to buy in the future, which means there will be less and less home buyers in the future due to financial restrictions (you can see some of this already in Vancouver in the Single Family Home Market, and the Stress Tests performed recently indicate a similar issue).

We have had too many financial advisers create the idea for people that it is easy and cost neutral to own a rental property when in reality it never has been. Rental properties in reality were never a money maker unless the house was paid off or purchase at such a low cost that the monthly payments didn't exceed the economic/market established rental rates. Some advisers see it as an investment, and it very well can be into a future (retirement fund upon sale etc.) yet we have many young home owners/landlords who think that now they are investors and business people because they have a rental property and need to make profit. This is entirely incorrect, and the rental market has absolutely never worked that way unless we are talking developments, or large number of purchased rentals allowing you to negotiate maintenance contractors and staff to keep maintenance costs down.

Buying a (single) rental home is an investment either into ones own retirement or into their children's future, once we are talking volume then we can talk about personal profit however only marginally.

In regards to the Bronco Comment, you are correct with Bronco (classic vehicle/or object) you can do this, with a home not so much. Unless you maintain your home from ground up (and we are talking not only basic interior maintenance) your home looses value, and will continue to do so as it becomes less and less modern, while your property may in fact gain value based on location, size, and condition.

This isn't to say that if you have a historic building you cannot make some money on it upon sale (then again there are heritage restrictions which may lower the value), but considering wooden structures tend to get "sick" over the years we are opening a series of assumptions which considering the average house age in Canada etc..

In regards to the moving away from urban centers which are to expensive though I have to say this is a solution which doesn't exist. We are seeing housing creeping up in Fernie, Nelson, Canmore, and so on and so on due to vacation homes and people starting to do this migration, however the bigger problem is that these areas simply do not have the jobs to facilitate this. We are seeing Mills and other Natural Resource Industries shutting down or moving their interests to other locations or for that matter automating a lot of their processes.

The simple plain truth is that these smaller "inexpensive" communities cannot offer the employment anymore to even cover a cost of a home in their communities.

This makes this rental issue part of a larger problem however one which needs to be addressed, and most importantly we shouldn't ignore it. Basically, just because the market is paying high rents, doesn't mean it can afford to pay high rents, economically speaking this is the dog chasing its own tail and running out of energy at some point and tire out.

This is to say that once the market doesn't have the jobs anymore to facilitate people using half or more of their income then the increase in homelessness will accelerate. At which point it will come back to bite the entire population in cost and impact.

Sorry the whole thing is a bit long winded but the issue is far reaching, and just not simple at all.

[Even Steven]

We aren't seeing what the market is willing to pay, but rather what the market is forced to pay

I think we can agree that these are the same thing.

If I advertise a rental for $2200/month it doesn't matter to me what people are willing to pay. Some people think it should be $1,000, who cares about their opinions? The only thing that matters is what people are paying. And if somebody is paying $2200/month, why on earth would I take in less and rent it for $1,000? Out of goodness of my heart? To empower renters to save? It's kinda their responsibility, not mine.