FFFA! Rates, Redevelopment, Fraud and Stupid Pictures

It’s that time of the week again!

This is when we do our regular end of the week news round up and open topic discussion thread for the weekend.

It’s Friday Free-for-all time!

Here are a few recent links to kick off the chat:

Vancouver Facts
End of the party feel
$1200 fine for forgery
Bad home sale numbers?
Stupid RE pic awards
Little Nest pushed out by rent
Oakridge wants to grow
BC MOI for March
Hawaii uses Vancouver to cheer up
After correction US prices rise

So what are you seeing out there? Post your news links, thoughts and anecdotes here and have an excellent weekend!

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Svoimi Rukami

Woah this blog is fantastic i really like reading your posts. Stay up the great work! You realize, a lot of individuals are looking around for this information, you could help them greatly.

patriotz

“My primary concern is if I sell now and can’t find a decent house for rent within the closing period then I am stuck with whatever rental housing is available.”

Um, did you consider renting first and then selling? A couple of months rent doesn’t matter much in the big picture.

jesse

“why not pay a professional management company to be landlord”

Because paying someone costs money. Yields are already low man, why rub it in his friend’s face?

crabman

VDTF – Maybe because a professional management company keeps 10% of the rent?

chilled

I hope ‘da Pope didn’t get abducted by Realturd Aliens, or something!?!?!?!?

Vote Down The Facts

DaMann, why not pay a professional management company to be landlord?

DaMann

“once sold it’s gone”

No other condos in lower mainland to buy?

A friend of mine decided to keep their one bedroom when they bought a two bedroom. With all numbers and finances aside he absolutely hates being a landlord. He says it’s the biggest pain in the ass and he can’t wait to sell it. Don’t underestimate the crappy tenants you could possibly get and the work involved. Unload it and take the money and run. No one ever made a mistake by taking a profit…

SunBlaster

Ughh, going crazy all day, can’t decide what to do. My primary concern is if I sell now and can’t find a decent house for rent within the closing period then I am stuck with whatever rental housing is available. Friend says if in doubt better do nothing, ie rent it out instead of selling because once sold it’s gone. However I think the market will stay flat in Coquitlam for foreseeable future even with Skytrain coming-in in 3 years, so maybe selling now is a good idea, but that’s just my opinion, who knows what will happen.

SunBlaster

example
patriotz

” Once it becomes a rental things become murky and you have to pay taxes on gains from the time you started renting. ”

That being the case he’s much more likely to get a capital loss which he can apply against capital gains from other investments. 🙂

However it’s better not to have a capital loss in the first place. That is, sell now.

patriotz

“Well, nobody has made or lost anything until they sell, isn’t that what you always tell the bulls?”

That’s certainly not what I say, because I look at current revenue (i.e. rental value) versus current expenses (i.e. interest, taxes, etc).

How are owners who’ve bought in the last few years doing on that item?

Anonymous

Sunblaster: “@130 if I rent it out I will brake even when counting mortgage, condo fees and property taxes. Although 55% of the mortgage payment goes towards principle, so that’s a plus.” Three other things to consider: 1. Right now if you sell you pay no taxes on capital gains. Once it becomes a rental things become murky and you have to pay taxes on gains from the time you started renting. You will need a proper appraisal done and could end up paying extra taxes if the appraisal is low. 2. If your place is in good shape now it may not be after you rent it out for 3 years. Not all tenants take good care and there could be issues with the building out of your control. 3. Selling a place is much easier with an owner… Read more »

Anonymous

Troll: “Well, nobody has made or lost anything until they sell, isn’t that what you always tell the bulls?”

Wrong. You have lost if your all in carrying costs are higher than renting or if an investment is cash flow negative. That counts pretty much everyone who bought in the last 3 years.

jesse

“Since nominal rents have risen and interest rates have fallen since that time, I figure most folks are ahead today. But would be interesting if anyone had an example to show the contrary.”

If you had the ability to know interest rates were to fall by the level they did you could have made way more money than on Vancouver real estate.

The proper question in my view is whether buying Vancouver-area property today is a good investment. Using current interest rates to forecast the capital costs of what are in effect centuries-long investments, that will almost exclusively be sold before then, is a mistake.

Not much of a name...

@Troll

aren’t you really interested in how cost of owning has compared to cost of renting from 2004 to now.

Why 2004? That seems rather arbitrary.

oneangryslav2

@Aggregator 145

Those all may be individual business entities legally, but most of them look to be related and there are really only about 4 or 5 “conglomerates” in total.

That being said, I think that the construction trades industry in this province is starting to hurt. We’ve all seen Ben’s charts (RE-related industries as % of GDP) and we’re most likely seeing the beginning of the reversion to the mean. We all know what will (has to!) happen, we just don’t know exactly when.

Troll

@Soros — “Simple fact: Most people who bought in the last three years have LOST money and many condo buyers who bought in the last five.”

Well, nobody has made or lost anything until they sell, isn’t that what you always tell the bulls?

But all that’s speculation anyways, aren’t you really interested in how cost of owning has compared to cost of renting from 2004 to now. Since nominal rents have risen and interest rates have fallen since that time, I figure most folks are ahead today. But would be interesting if anyone had an example to show the contrary.

Beuller

Rates are going up fast now. One of the “anonymous” morons claimed it was not important and was only the same level as last February or some stupid irrelevant crap like that. Well guess what genius? It just blasted through that level last week. There have been some really stupid comments on this blog over the years but that one has to take the prize. Banks will have no choice but to raise more and soon. The US 10 year is on a tear as well so expect more QE.

The minor blip in May was due to the last few idiots with pre-approved lows from April who thought they had no choice but to buy and the real estate douche bags who took advantage of them.

http://www.bloomberg.com/quote/GCAN10YR:IND

Not much of a name...

Ah, yes….the Greater Fool.

jesse

“The ardent bulls still don’t get that in order to realize their gains they need to sell”

The flawed argument is that we look at one specific buyer, track him from 2005 (or whatever) and show how he has done compared to a comparable renter after he sells. The buyer, if he sells, will have done reasonably well in terms of return. But… he sells to someone else who will take on the investment at a worse return. The net sum is a bad investment. Bullish arguments make the subtle switch by not looking at total asset return over multiple owners and instead cherry pick the speculator who was lucky/smart enough to cash out.

I know the overwhelming majority of readers here are reasoned and can understand the guise.

VMD

CMHC Seeks CEO With Risk Management Experience Jun 3, 2013 11:28 AM PT Canada’s housing agency said it’s seeking a president and chief executive officer with risk management experience to oversee its C$563 billion ($544 billion) mortgage insurance portfolio. The next CEO should have “knowledge of the financial management requirements, particularly risk management, of a large financial services organization,” Canada Mortgage & Housing Corp. said today in an advertisement in the Globe and Mail newspaper. Finance Minister Jim Flaherty said last month the Office of the Superintendent of Financial Institutions will continue to monitor CMHC “very closely,” because it must operate like the country’s largest lenders. The government-backed agency, which had C$563 billion of insurance in force at the end of March, covers most Canadian mortgages and helps commercial lenders securitize home loans. Current CEO (stepping down): Karen Kinsley holds… Read more »

Not much of a name...

Soros

Am I missing something? Oh wait, I am. All you Bulls bought between 1999 and 2004. Those gains have been made they will never be made again. We are not debating the past we are debating the future.

Simple fact: Most people who bought in the last three years have LOST money and many condo buyers who bought in the last five.

All those bulls who bought between 1999 and 2004 have seen their values decrease in the last three years too. The ardent bulls still don’t get that in order to realize their gains they need to sell. But then if they did, they wouldn’t be bulls now would they…

hard hat

http://www.cowichannewsleader.com/news/208729941.html
link is to Johal Bros restructuring…

I’ve heard real estate in Cowichan lake is particularly stressed. Closing and revamping the schools, and soon No doctors.. Cow Lake is a 2nd home spec.. and now we’re seeing wicked de-leveraging.

George Soros

Again I don’t know where the gloat from the bulls is coming from:

2 yr returns May 11-May 13

Detached -4.4%
Attached +3.4%
Apartment -3.6%

Inflation adjusted

Detached -9.6%
Attached -1.8%
Apartment -8.8%

Am I missing something? Oh wait, I am. All you Bulls bought between 1999 and 2004. Those gains have been made they will never be made again. We are not debating the past we are debating the future.

Simple fact: Most people who bought in the last three years have LOST money and many condo buyers who bought in the last five.

VMD

Richmond Real Estate Market Report-May 2013
via realtor A Shuchat:
“1. There are less buyers for more expensive single family homes and relatively more for attached properties;
2. Many of the frustrated listings are ones that have been purchased since 2010 and had high original purchase prices. Those sellers can’t bring themselves to realize a loss. Hence the stagnant listings, expireds and terminateds. They live off hope of a turnaround.”

May Richmond SFH Sales
2013:68
2012:96
2011:146
(Better to wait for the official stats pkg this afternoon or tomorrow though, as this kind of monthly-sales stats on MLS had a history of underestimation)