Hundreds of luxury Vancouver mansions being rented for cheap
ctvnews.ca
ctvnews.ca
The most interesting part is how this is one of the few serious sources of backpressure on rent. Normally landlords are so loathe to reduce rents that they'll let a property sit vacant for months, but this tax makes that extremely painful so they're forced to instead meet the market on rent prices.
What's the reasoning here? I've tried to talk landlords down by less than a month's rent when taken over the course of a typical year lease, been told to shove off, only to watch the unit go unrented for months until they finally drop the price.
This is especially true in commercial real estate, where your other tenants (e.g. in the same mall) sometimes have a "most favored nation" provision - if anyone else gets lower rent, they do too.
I’ve even seen it in SF lately - sign a 12 month lease and your first month is free.
I have no idea if the math works out for that, and he was negotiating, but he didn't budge a cent and we took our business elsewhere so it did seem like his hands were tied the same as your example.
The flip side to it is that I'm actually willing to move if they say no. I would rather not, because moving is a pain, but if you're not willing to take the other listing, it wasn't really comparable.
edit: However, I have only negotiated with individual landlords in AB. I have not tried in BC.
So if you are renting 60% of your units at $4k per month, you can borrow against the income you'd make if you had all 100% rented out. But if you had to lower the rent on the other 40% by $1k to get 90% occupancy -- you'd have a larger income, but be able to borrow less money.
If your goal is to use leverage to borrow as much as you can and cash out before the cycle ends (which I think is what most people are doing in RE) then this is how you do it.
Yep, the more of a mansion you have, the more you are hit, and the less likely you can get a renter who will be ready to pay the premium rate.
Moreover, "antislum" rules in some parts of regional district may prohibit subdividing the property for rent. Ironically, they were said to be passed under the influence from NIMBY people.
> While most owners contacted by CTV News said they don’t want groups renting out the homes, the rentals present a cheaper housing alternative for students and young professionals.
Huge mansions rented to a single person.
From the article: "these rentals offer a single room in a multi-bedroom house for anywhere between $700 and $1,500"
I read this with your quote as saying they don't want to rent to groups of students who already know each other, presumably because they don't want their luxury mansion turning into a frat house cum party pad and possibly getting trashed. They are renting rooms out to multiple individuals who are sharing the properties however.
An example: Bought 2013 $2,275,000 now asking $6,888,000, Bought 2016 $5,200,000 now asking $4,888,888, Bought 2016 $3,590,000 and sold for $3,250,000, etc.
For some locals, the math behind earning money from property in other ways than resale don't tell them anything. They got too used to the idea of flipping properties at six digit gain every few years.
Naturally, the "measly income" from rent doesn't look much in comparison to that to simply bother thinking about.
It was in quite bad shape for just a year old apartment.
I often went into long discourses with recent immigrants about that. Their idea of how market work is long pass the level of sane, and rational.
I keep telling them about "investing into a bubble is dumb thing to do" only to be greeted back by some bizarre "economic conspiracy theory."
Most do that on advises of some "esteemed economic gurus" from China.
That looks silly, but only until you you begin to think just how many thousands of multimillion buck properties were bought thanks to such "gurus"
It's one of the quickest and easiest ways to make money, actually. I wouldn't always call investing into a bubble foolish.
Vancouver sfh prices are down 20% from peak and even more at the top end homes.
In the past you could take the hit from leaving it empty when you were seeing $100-200k appreciation per year.
Not any more!
Also, a few hundred or even thousand homes rented to non-groups is hardly going to ease the tight vacancy rate in Vancouver. The housing issue has more to do to poor urban planning.
Foreign Owned, Non-Owner Occupied - 10% Per Year of Assessed Value
Foreign Owned, Non-Occupied - 25% Per Year
Foreign Owned, Owner Occupied - 0% Per year
I'm sure it's possible that some of these listings are legitimate, but finding a bunch of listings on Craigslist isn't proof of anything and I think it's strange to base a story on it.
Sounds like a place to go for the summer now.
I'll take that any day over SF. That's a crisis I can sign up for.
I’m making almost $200K and haven’t been pitched a senior role under $130K in years...
How can your data be soooo far off?
Overall cost of living in Vancouver (including healthcare) is still quite a bit lower than the Bay Area but there's no doubt most engineers with some experience end up significantly better off financially taking offers in the US.
$200K is a lot of money. I save most of it because I literally have nothing to spend it on. In turn I get access to facilities and lifestyle opportunities that were simply not available in the valley. 100K more still wouldn’t get me that in the valley.
Edit: my tax rate is also very comparable. BC income tax at 200K is very similar to California. Also, I eat out a lot and sales tax is only 5% on restaurants. Good restaurants are also cheaper here.
Vancouver is really not the engineering wasteland people seem to think it is.
I expanded my search to Seattle (2 hours' drive south of Vancouver) and received multiple offers over $200k USD. I'm making over three times as much as I could have in Vancouver. And my taxes are significantly lower.
That said, I wouldn't mind moving back to Vancouver someday. Curious who is paying $200k in Vancouver, and also whether you are at the high-senior level that would net $400k+ at e.g. Google in the US.
Interesting that we apparently saw two very different sides of the job market in Vancouver. Thanks for your perspective.
Most of my peers working in Vancouver as engineers (including software) all make between 60-100k (most closer to 60) with the exception of 2 at about 150k.
Note: All numbers are in CAD, and are total compensation (i.e. they include the value of any bonuses or stocks)
Well this varies from person to person, but in my experience most senior tech employees in the Bay Area are making much more than they would elsewhere, enough to offset the difference and put a lot more in their bank account each year.
I currently make several times what I was making in the last city I worked.
Vancouver like any city has its yimby tinges, but it has always built lots of housing. Multi-unit development at the moment is at all time highs.
Not to mention good luck finding anything decent quality with a 0.6% rental vacancy rate, competition is fierce.
And that's called cheap?
This article is a clickbait ad, IMHO.