Baby, we got a bubble!?

[Migos]

Well, according to this article only 1.5% of all tenants were delinquents in 2011: http://www.thestar.com/business/real_estate/2011/03/04/is_it_too_hard_to_evict_lousy_tenants.html

That's really a very low delinquency rate. Most people will do whatever they can to pay their rent and stay in their home. Citing one example of a criminal who is defrauding landlords is simple propaganda.

Is it propogranda to suggest that landlords regularly raise rents more than inflation or the allowable increase? I haven't heard of that happening in practice. If it only happens 1% of the time, is it irrelevant?

Also, the article you posted states that 4.5% of tenants had eviction notices filed but were able to pay before the eviction notice. Considering eviction takes 3+ months (maybe years if you have a sophisticated cheat like Nina Willis), the landlord is still stuck cash flowing expenses out of his own pocket. Making mortgage payments for 3 months isn't exactly chump change for most people.

 

[Condo George]

http://business.financialpost.com/2...s-housing-prices-surge-out-of-reach-for-many/

 

[slicecom]

This thread is about 'Bubble' and it used to very interesting/exciting to visit this thread. There were always predictions about the coming armageddon -- 6 months from now or may be around X-mas or next Spring and the slaughter of lambs, that is, unsophisticated investors. Then there used to be posts strongly against these predictions of gloom and doom sayers. I used to sit up in my rocking chair to read these 'expert' predictions,

Now the posts are boring -- about condos becoming unaffordable even more, inflated condo prices, facilities for the children of parents living in downtown, various unreadable charts. I hardly move in my rocking chair.

Can someone, please, go back to the 'Bubble' posts and bring some excitement to this thread?

Haha you're not kidding. I went back and read the first couple years of this thread. The vast majority predicting an imminent crash, every link to data used as a citation that the "bubble" has burst. Some people patting themselves on the back for selling their condos in 2009 and getting out of the Toronto real estate market right before the "inevitable imminent crash". People literally yelling "TIMBERRRRR" with glee. Must have been fun times.

 

[cruzin4u]

It shows that there's risk involved in becoming a landlord - you never know when you're going to get stiffed. If an individual investor is barely cash flow positive in the best case scenario, they are exposed to big losses if the rent cheques stop coming, or the have to make repairs due to tenant neglect or willful destruction. In today's market (high sale prices vs. low/declining rents) investors are not properly compensated for the risk they take, IMHO. I personally would not be a landlord given the risk.

As someone that has done some concierge/security work in the past, I can tell you that some landlord's do have their work cut out for them when it comes to renters. I have seen some absolutely disgusting stuff from tenants that would shock most. Sure, the landlord can keep the deposit - but it goes beyond that. I have seen units where you would literally need a forensic clean up team to come in and clean up the unit (and not because of a dead body).

 

[TheKingEast]

As someone that has done some concierge/security work in the past, I can tell you that some landlord's do have their work cut out for them when it comes to renters. I have seen some absolutely disgusting stuff from tenants that would shock most. Sure, the landlord can keep the deposit - but it goes beyond that. I have seen units where you would literally need a forensic clean up team to come in and clean up the unit (and not because of a dead body).

Absolutely. My last tenants left my place a complete dump. I have to get a new dishwasher, new light fixtures. Had to paint it several times to get rid of the cat pee smell. dented walls, found a way to melt a part of the microwave. Broke the blinds. I've had to spend thousands to get the place ready for the next tenant. Anyone who says that landlords have it easy is completely out of touch. Not to mention, while there may not be a high delinquency rate (I'm not sure how accurate those numbers are)...that number does not account for late payments. I've had a few bounced cheques in my day. Few and far between, but it happens.

You really do have to have a tough stomach to be a landlord. Especially if you're very involved. I don't hire agents, I do everything myself. It's a lot of work.

Some tenants just don't give a shit.

 

[NorthYorkEd]

Some tenants just don't give a shit.

It's not just tenants. We just viewed a unit for lease the other day (with the listing agent) and the place was disgusting. No effort to clean up or "stage"; there were soiled paper towels piled up under the kitchen sink, floors and walls were scuffed and damaged in many spots, and the appliances were in bad shape. All for over $2200 month. If I was the agent, I would have been humiliated to have to show this pile. But then again, some tenants apparently like to live like lowlife animals, and some landlords just figure it isn't worth a bit of effort to try and make their places appealing or livable.

As tenants, we have treated our current unit as we would our own home. But I guess you either have civility, consideration, and common sense, or you don't -- tenants and landlords alike.

 

[Auraz]

It's not just tenants. We just viewed a unit for lease the other day (with the listing agent) and the place was disgusting. No effort to clean up or "stage"; there were soiled paper towels piled up under the kitchen sink, floors and walls were scuffed and damaged in many spots, and the appliances were in bad shape. All for over $2200 month. If I was the agent, I would have been humiliated to have to show this pile. But then again, some tenants apparently like to live like lowlife animals.

As tenants, we have treated our current unit as we would our own home. But I guess you either have civility, consideration, and common sense, or you don't -- tenants and landlords alike.

That's why Brand New mentality is what's all the rage about downtown. Speaking from a realtor perspective Ive seen disaster units on Bay St corridor. If I was the listing agent Id be embarrassed too but some don't even view the unit. Don't even post Pictures but put a lockbox and MLS listing and get cut a cheque.

 

[nrb]

Absolutely. My last tenants left my place a complete dump. I have to get a new dishwasher, new light fixtures. Had to paint it several times to get rid of the cat pee smell. dented walls, found a way to melt a part of the microwave. Broke the blinds. I've had to spend thousands to get the place ready for the next tenant. Anyone who says that landlords have it easy is completely out of touch. Not to mention, while there may not be a high delinquency rate (I'm not sure how accurate those numbers are)...that number does not account for late payments. I've had a few bounced cheques in my day. Few and far between, but it happens.

You really do have to have a tough stomach to be a landlord. Especially if you're very involved. I don't hire agents, I do everything myself. It's a lot of work.

Some tenants just don't give a shit.

And how much money have you made from it?

 

[TheKingEast]

And how much money have you made from it?

That is besides the point and maybe this is part of the problem. Tenants feel like owners have made bundles of money so it gives them the right to treat the unit like trash. Also, I have not sold the property so I have not made anything on it yet. I'm sure if the laws changed a bit and allowed landlords to charge renters for damage, tenants would take better care of their units. A damage deposit would go a long way. Tenants have so many rights...maybe landlords should get some too.

 

[NorthYorkEd]

I'm sure if the laws changed a bit and allowed landlords to charge renters for damage, tenants would take better care of their units. A damage deposit would go a long way. Tenants have so many rights...maybe landlords should get some too.

As a tenant, I agree with this. But I would also suggest that there should be incentives for landlords to keep their units appealing and/or up to date. Apathy is a two-way street.

 

[interested]

As a tenant, I agree with this. But I would also suggest that there should be incentives for landlords to keep their units appealing and/or up to date. Apathy is a two-way street.

I agree that tenancy is a 2 way street.
As a small landlord, I am very attentive to my few tenants needs. I do my level best to get any issues resolved and quickly.
I also take good care of my property and maintain them in good order.

I try and screen my tenants carefully. I speak to previous landlords if/when possible and try and get references. I have turned down tenants who have offered full rent if I cannot reasonably satisfy myself they will treat my property with respect. I have even gone to their place to see how they are presently living in some cases. I realize this may still allow them to pull the wool over my eyes and if someone is malicious there is nothing one can do.

I have found that I go out of my way to treat the tenants well and generally (though I have had a couple of tenants from "Hell" over 20 years) the tenants tend to treat me the way they are treated.

That said, other than slum Lords, I think most landlords as most tenants are descent.

To TheKingEast's point....he is right that the amount being made or lost by the landlord is not at hand here and gives no one the right to cause damage or not pay the rent. No one forces the tenant to rent. The tenant can decide where to live and nothing should give the tenant to take the approach that the landlord is making money so that means I can thrash his place.

Remember, lots of landlords lost lots of money from 1989 to 1994 as their investment dwindled.
Present condo pricing does not cover the mortgage/expenses so damage on top of it means the landlord is in a negative position unless he sells the unit at a profit. Prices will not always be rising even if they have done so for an extended period of time.

Finally, if one plays this to its logical conclusion and tenants have too many rights and decide en masse to abuse them, finally landlords dump the properties, the prices would then come down, places will not be maintained as well (landlords with negative cash flows and declining assets don't throw money at the assets), and when no one buys as landlords, less product ultimately gets built causing supply shortages and the result is dumpy places commanding high prices. In other words...respect has to be bilateral and everyone "wins".

 

[TheKingEast]

As a tenant, I agree with this. But I would also suggest that there should be incentives for landlords to keep their units appealing and/or up to date. Apathy is a two-way street.

For sure. I've had various issues along the way that I dealt with quickly. I boy new so I can avoid spending money fixing things. I have had good tenants in the past. The last were terrible. To the point I considered getting out of the rental game. Cat puss everywhere. They were late on a payment and I didn't botch about it. Fixed any issues they had quickly. Issues they created themselves. They left and and everything was damaged from the microwave to the carpet to the bloody fob. They broke the fob lol. They gave it back to me taped up.

Some landlords are bad and so are some tenants. The laws protect the tenants. I was a tenant at one point too. Never would have felt comfortable returning a place that was destroyed. Lesson learned.

 

[Migos]

Consumer debt inclusive of mortgages up 7.7% year-over-year.

http://www.theglobeandmail.com/glob...ts-153-trillion-report-finds/article23263701/

Lot of heavily indebted folks out there...

 

[James]

It's that time of the month again where TREB releases its market watch update: http://www.torontorealestateboard.com/market_news/market_watch/. Direct link to PDF: http://www.torontorealestateboard.com/market_news/market_watch/2015/mw1502.pdf.

For the detached market, both sales and sale prices saw a year over year increase for the month of February. Overall trend of upwards momentum continues for this hot sector of the market as expected, while condo prices were relatively flat.

Some other important stats:

Detached homes, Toronto west = $790,926 average / $681,100 median sold price
Detached homes, Toronto central = $1,584,194 average / $1,317,500 median sold price
Detached homes, Toronto east = $693,005 average / $634,000 median sold price

Condo townhouses, Toronto west = $369,637 average / $389,000 median sold price
Condo townhouses, Toronto central = $553,363 average / $470,000 median sold price
Condo townhouses, Toronto east = $362,839 average / $360,000 median sold price

Condo apartments, Toronto west = $300,084 average / $279,500 median sold price
Condo apartments, Toronto central = $428,757 average / $384,750 median sold price
Condo apartments, Toronto east = $268,830 average / $253,100 median sold price

 

[James]

Average price of Toronto detached home shoots past $1 million

Link to full article: http://www.thestar.com/business/rea...onto-detached-home-shoots-past-1-million.html

After reading the aforementioned article and discussing with others, one of the most frequent comments that will arise is,"Who are buying these houses? And who can actually afford these?". My response is typically along the lines of "there's a lot of money floating around in Toronto!"

Referencing another Toronto Star write-up from last year (article: Toronto ranks 15th on global list of millionaires per city), apparently 1 in 44 people in Toronto fall under their millionaire classification. The study was conducted by WealthInsight (press release: OVER ONE IN EVERY 30 A MILLIONAIRE IN LONDON) who defined millionaire as "individuals with net assets of US$1 million or more, excluding their primary residences" (source: Revealed: Global cities with the highest percentage of millionaires). While in London, England, 1 in every 30 would be classified as a millionaire, Toronto isn't that far off. Keeping in mind this is not including equity in your primary residence, I don't think it's unfair to say that there are a lot of high net worth individuals in the city.