Wealthy Landlord wants sympathy

[fluffy]

Mr. Kochhar does have a point in that purchasing real estate for rental under current market conditions is a questionable investment. High purchase prices push up the need for high rent charges, and the social unrest around those high rents brings some uncertainty into the feasibility of using accommodations to produce a revenue stream, especially with a left-leaning government in power.

[Nedroj]

https://www.castanet.net/news/Kelowna/4 ... investment

Im sorry but you own how many properties in the valley and are complaining about your costs going up?

Cry me a river.

Maybe sell one or two of your multi-million dollar properties to help yourself out and stop trying to gain sympathy from the public.

I'm sorry maybe you could point out the part where the landlord wants sympathy. Lol someone's a little envious. I would bet money you are a renter. Your Envy is ugly

And your assumptions are moronic as is your attitude and reading comprehension.

I am a renter but I also own property as well, just not here in the Okanagan. And yes you should expect a return but *bleep* happens and sometimes you are stuck holding the bag. Like I said Im usually on the landlord's side of things but not with this guy. Solely because he wrote into Castanet trying to gain sympathy from readers about how hard done by he is because there is and always has been a cap on rental increases. When he has a very simple solution which is to sell ONE of his 20+ properties (at a significant profit I suspect) to cover the extra expenses. Again in the same way I would suggest a renter who cant afford to live here move to somewhere they can.

So why did he feel the need to write to Castanet to warn other landlords about something they already know if not to gain sympathy? Why wouldnt he just do what he needs to do and move on with life? No he had to complain to the local news station about his problems.

[TylerM4]

As it turns out, one may need to produce actual value and contribute to society in order to earn a living in 2023+

Providing rental living space somehow isn't providing value or a service to others? Those looking to rent would disagree with you.

The 1st sentence in the article makes it clear this landlord is using the income to fund his retirement. You may be willing to work up until the day you die but the rest of us would like to retire some day. This landlord is certainly contributing more to society than the average retiree who uses cash investments to fund retirement.

[Nedroj]

Renter: Screw you wealthy landlord. I'm not even going to consider your concerns. Sell the property if you don't like it.
Wealthy Landlord: If that's the case, you're right. I'm better off investing in other ways. Good luck finding a place to rent/live.
Renter: HA! I really told him.

What you are failing to state and it's quite obvious too is that House or Apartment is still going to be there whether it's a rental or it's owned by a family doesn't matter, the home will still be there for someone to occupy after the landlord sells it. Maybe with the downturn in the housing market, a family will be able to afford to buy it from this guy. And in my opinion that is a win across the board. We need more families to own their homes than rental properties for a stable city.

So what is your point again? That renter will find another place to live and the previous landlord will go invest their money elsewhere and accept any risk of that investment.

[fluffy]

Providing rental living space somehow isn't providing value or a service to others?

Those building dedicated rental properties are providing value. Those buying up existing homes for rental properties are not providing value, they are simply reassigning it. They deplete the sales inventory to increase rental inventory, and if they are buying in today's market they are contributing to rising costs for both renters and buyers.

[TylerM4]

What you are failing to state and it's quite obvious too is that House or Apartment is still going to be there whether it's a rental or it's owned by a family doesn't matter, the home will still be there for someone to occupy after the landlord sells it. Maybe with the downturn in the housing market, a family will be able to afford to buy it from this guy. And in my opinion that is a win across the board. We need more families to own their homes than rental properties for a stable city.

So what is your point again? That renter will find another place to live and the previous landlord will go invest their money elsewhere and accept any risk of that investment.

My point is that there is a basic economic concept called Supply and Demand and it applies to rental housing. Yes, the house will still exist but likely not as a rental property. Your assumption that making homes available will decrease overall cost of houses and rent with it isn't entirely wrong but it is very flawed. There will always be a demand for rental housing even if housing costs reduce significantly. There are many people out there that could afford to buy a home but chose to rent instead even at today's prices. There will always be people who cannot afford to buy.

[TylerM4]

Those building dedicated rental properties are providing value. Those buying up existing homes for rental properties are not providing value, they are simply reassigning it. They deplete the sales inventory to increase rental inventory, and if they are buying in today's market they are contributing to rising costs for both renters and buyers.

I don't think you understand the concept of supply and demand. It doesn't matter how the supply was created, the demand still exists. Building new homes for rental purposes vs building for sale results in the exact same scenario - homes that could be sold are being rented instead.

You should also consider what I just posted above. You are assuming that the only reason people rent is because they can't afford to buy. While that's true for many, it's certainly not true for all:

There will always be a demand for rental housing even if housing costs reduce significantly. There are many people out there that could afford to buy a home but chose to rent instead even at today's prices. There will always be people who cannot afford to buy.

[nucksRnum1]

You would think an accountant would be someone that could find creative ways to weather this time of change.

[SAILINGONE]

Clearly, nobody here invests their own money...

If you have $1,000,000 and invest it over a 15-year period (without compounding interest, i.e. you pull the profits) it will generate $1,000,000 in 15 years. What this means is investments make ~7% year over year.

If you take the $million and buy two rental properties at $500,000 each, the following happens:

• The cost to maintain each property is ~1% of its value or $5,000 per year.

• The property taxes will be ~$3,500 a year for Kelowna, or 0.7% of the asset value

• A property typically appreciates at 3% a year, or $15,000

• The expected return at 7% is $35,000 per unit

So take the 7%, subtract the 3% increase in value and add 1.7% in costs, you get a rental return of ~5.7%
$500,000 x 5.7% = $28,500. Divide by 12 months of the year = $2,375 a month for the property.

Each year the value goes up, and so does the expected return. The rent the next year when the property is worth $515,000 will be $2,447 a month, a 3% increase.

Property values indeed do not increase at a linear rate. As we have seen values and costs skyrocket, so does the cost of the rent, however, our officials have decided the increase must be borne solely by the investors. It should be noted housing prices have levelled off from the recent boom, and likely won't be heading up anytime soon.

The warning to other landlords from this professional is, you're going to get better returns doing something else with your money. If enough landlords exit, the price will increase due to scarcity.

I know most of you think landlords are dripping in money, but consider the math I provided above and then ask yourself if you would run a charity or expect a return on your investment.

Landlords are not social services, but it seems that under every ndp/trudeau liberal wef style government, landlord are forced by the far left to fix a problem the lefties have created.

Example: a retired investor bought a 2006, 900 sqft. rental condo in 2012 for $150K with rent of $1,000 per month including heat & cable. Today the rent is $1,050 the condo value is $110K costs have gone up 60% and the returns are nil.
This condo is is a 45 minute drive from a NHL city with over a million people. Please renters & potential home buyers, the complaint person is Hellen Waite, so if you want to complain about affordable housing, go to hell-en wait

[GordonH]

Every business has its ups and downs, it’s just price of running a business.

[serpentongue]

There is a difference between creating value and extracting value.

One of these things is vampirism.

[TylerM4]

There is a difference between creating value and extracting value.

One of these things is vampirism.

Yes, we live in a capitalistic society and that's how it works. Some become wealthy while others struggle to keep up. The alternative is to move more toward socialist and/or communist practices.

[countmeout]

And your assumptions are moronic as is your attitude and reading comprehension.

Wow, bit excessive...

I am a renter but I also own property as well, just not here in the Okanagan. And yes you should expect a return but *bleep* happens and sometimes you are stuck holding the bag. Like I said Im usually on the landlord's side of things but not with this guy. Solely because he wrote into Castanet trying to gain sympathy from readers about how hard done by he is because there is and always has been a cap on rental increases. When he has a very simple solution which is to sell ONE of his 20+ properties (at a significant profit I suspect) to cover the extra expenses. Again in the same way I would suggest a renter who cant afford to live here move to somewhere they can.

Right, so sell one property and keep the remaining millions of dollars tied up in assets that provide a poor return. There is no way you're a landlord of anything... The real solution is to sell ALL of the properties and put the money somewhere that will generate 7%.

[countmeout]

Those building dedicated rental properties are providing value. Those buying up existing homes for rental properties are not providing value, they are simply reassigning it. They deplete the sales inventory to increase rental inventory, and if they are buying in today's market they are contributing to rising costs for both renters and buyers.

LOL!

Building a dedicated rental building is somehow better than buying a property and dedicating it to rental purposes?! Thats some hilarious logic. Doesn't it come to reason that the person who decided to build a dedicated rental and therefore not building a dedicated for sale is doing exactly the same thing?

[countmeout]

There is a difference between creating value and extracting value.

One of these things is vampirism.

Those whining about rents and calling the asking prices vampirism (bloodthirsty piranhas) have no idea that things cost money...

They think landlords hold some sort of insane advantage, in reality, landlords are paying for homes to rent to people. The people complaining the landlords are gouging have all ignored my math above, right over their heads it went.

Without landlords, home builders, etc, we'd all be living in huts. Expecting to have "affordable rents" means the property value must align with what is considered "affordable". If the property value is beyond what is considered "affordable" it's hardly the landlord's fault but has more to do with the cost of housing; yet here are some people screaming bloody murder and it's soo greedy to expect 7% on the value of a home.

Keep pushing our politicians, and renters! A couple more years of these restrictive measures and you'll have not much left to rent. Vacancy rate is already dangerously low, below 1% in many BC locations. As more landlords like the one in the article speak out and get out of the business, more pinch will be felt.