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The residential rental market


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#1 Holden West

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Posted 30 August 2007 - 10:46 PM

As we're coming up to September 1, the busiest day for rentals in most University cities like Victoria I'd thought I'd start off a thread with a recent Tyee article on the rental crush.

I attended my first apartment viewing only three heady days into August. Its Craigslist ad promised a location only minutes from the beach. After a leisurely walk over, my idyllic summer evening turned quickly into a battleground scene. Dozens of flip-flopped, lululemon'ed denizens milled about the front grounds of a building in the most prized postal-code in the city. For them, Beverly Hills 90210 means nothing, nor does the rent-controlled lower-eastside in Friends. These lotus-eaters' fabled Shangri-las are Kitsilano, the West End and Commercial Drive. And to nab those coveted 1 or 2BR suites, Vancouverites often resort to bribery and bidding wars, lies and fists-full of cash.


And when I wrote an e-mail describing us as "mature, grad-students, responsible and allergic to pets and loud-noise," Elana added "neat, quiet and Asian females," hoping to reap the benefits of reverse discrimination.


The U.S. has everything from transferable affordable housing tax credits issued to affordable housing developers who sell them to provide early stage financing, to dedicated affordable housing mutual funds. He says B.C. (and Vancouver in particular) is in fact one of the least progressive jurisdictions in North America.


So, any tips Victoria's hidden affordable gems? Horror stories?
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#2 Savannah

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Posted 31 August 2007 - 05:43 AM

Just from personal experience, usually August is insanely busy in property management.

Not this year.

Everything's rented. We have October 1st vacancies, but only one two-bedroom lower suite for September 1st left. The property manager can afford to be 1) picky about tenants and 2) get a very good rental rate for the owner.

Dog? Previous landlord references not great? Smokers? Forget it.

#3 G-Man

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Posted 31 August 2007 - 06:48 AM

I am a big fan of the properties rented by David Bowman the owner of the old Cherry Bank Hotel. He owns quite a few working class places in Fairfield and James Bay. Generally with limited pet restrictions. Also he is a great guy and will work with you on fixing up your place if you want. I lived in one of his places for 3 years in JB and was very happy. Don't know where you would pay rent now that the Cherry Bank is gone though. If I had to rent again I would start with him without a doubt.

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#4 Galvanized

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Posted 31 August 2007 - 09:53 AM

...
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#5 G-Man

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Posted 31 August 2007 - 05:46 PM

Sounds like long term tenants. He does leave you on your own for maintenance of the yard and such but I saw that as a positive.

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#6 Caramia

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Posted 31 August 2007 - 06:07 PM

IMO in a landlord that quality is gold
Nowadays most people die of a sort of creeping common sense, and discover when it is too late that the only things one never regrets are one's mistakes.
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#7 gumgum

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Posted 06 June 2008 - 06:46 AM

Greater Victoria, Kelowna have lowest vacancies in Canada
Lack of apartments, conversion to condos, make it tough for renters
Carla Wilson, Times Colonist
Published: Thursday, June 05, 2008


#8 Caramia

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Posted 06 June 2008 - 07:13 AM

Love that by-line "Lack of apartments, conversions to condos ..."
And then in the article that follows she does nothing to back it up, or give one example of where there has been a recent mass conversion of rentals to condos. Let alone mention that around 30% of new condos have actually been converted to rentals.

#9 jklymak

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Posted 06 June 2008 - 07:22 AM

I think a lot of the condo conversions are also rentals.

The thing is - the CMHC vacancy rates don't include any of those products. They just include managed apartment complexes. So who knows what the actual vacancy rate is? I think they are moving away from this, which is a good thing given that apartment complexes are a dying breed.

#10 Ms. B. Havin

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Posted 14 August 2008 - 09:21 PM

This is kind of interesting (via Seattle Post-Intelligencer, Aug.12):

Project's developers make switch from condos to rental apartments

By AUBREY COHEN
P-I REPORTER

When Moda Condominiums started accepting reservations in September 2006, prospective buyers lined up hours early and quickly locked up all 251 units.

Now, with the Belltown building two months from completion, Moda's developers have changed it to rental apartments.

"The market and the financing conditions for condominiums have really taken a drastic turn," said developer G. David Hoy, head of HMI Real Estate Inc. "The vast majority of (Moda's) buyers decided not to proceed with the purchase of their unit."

Some buyers found they could no longer get a loan, particularly for second homes or investment units, while others just got cold feet, Hoy said. "Because the vast majority have bailed out on us, we have no choice now but to turn it into a rental."

The slow market made trying to find new buyers a daunting prospect, he said.

Moda initially made news because of its "New York-style living," with units as small as 296 square feet and prices starting at $149,950 - cheap for Belltown. Sizes ranged from studios through two-bedroom condos.

Rick Hooper, policy director for Seattle's Office of Housing, praised the project for providing more affordable for-sale homes downtown, close to jobs and transportation.

"To find a developer who's able to put an attractive product on the market that hits that lower price range is fantastic," he said.

Several prominent area projects have switched from condos to apartments in recent months, citing the slowing for-sale market and relatively strong one for rentals. As of March, the average rent for a Belltown studio apartment was $1,045, up nearly 10 percent from a year earlier; the studio vacancy rate was 4.3 percent, up from 3.4 percent a year earlier but still far lower the March 2006 rate of 5 percent.

Moda still could go back to being condos at some point, Hoy said. "I guess when the market turns, we'll have to evaluate it at that time."
P-I reporter Aubrey Cohen can be reached at 206-448-8362 or aubreycohen@seattlepi.com. Read his Real Estate News blog at blog.seattlepi.com/realestatenews.
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#11 Nparker

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Posted 14 August 2008 - 09:28 PM

So how does the developer get its money back from this conversion to a rental property? $1000/month/unit is still a lot less than upwards of $150,000/unit up-front now. Doesn't their financier want its builder's mortgage paid back now?

#12 Koru

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Posted 14 August 2008 - 09:35 PM

So how does the developer get its money back from this conversion to a rental property? $1000/month/unit is still a lot less than upwards of $150,000/unit up-front now. Doesn't their financier want its builder's mortgage paid back now?


pure speculation...but they might have deep pockets?...financed themselves or have very very flexible lenders?...it is certainly a little different...but...at least they haven't abandoned and left a shell!

#13 VicHockeyFan

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Posted 14 August 2008 - 09:58 PM

As we're coming up to September 1, the busiest day for rentals in most University cities like Victoria I'd thought I'd start off a thread with a recent [url=http://thetyee.ca/Life/2007/08/31/RentalFever/:bb562]Tyee article[/url:bb562] on the rental crush.







So, any tips Victoria's hidden affordable gems? Horror stories?


You would be dumb not to have a copy of a letter on hand, written by previous landlord(s) extolling your virtues.

Or do the old To Die For reference letter:

Larry doesn't know his wife also sneaked a quickie with a famous TV exec (George Segal), who tells her that a famous female broadcaster got started through a letter of reference that she really wrote herself about how "Miss So-and-So is of moderate intelligence and, more importantly, can suck your cock till your eyes pop out."

Suzanne prepares such a letter when she visits Ed Grant (Wayne Knight), the fat local-station manager whom she manages to cajole into making her a weather girl.


http://www.rollingst...7134/to_die_for

#14 Mike K.

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Posted 14 August 2008 - 10:02 PM

It's only a matter of time before those units are converted to condos.

Developers will do this when the market slows and they're faced with having to reduce unit costs. Instead they absorb the construction costs, make some income from rentals and eventually sell the units when the market picks up.

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#15 G-Man

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Posted 15 August 2008 - 07:35 AM

I noticed a couple of recent completions have for rent signs on them.

#16 Caramia

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Posted 15 August 2008 - 08:44 AM

Or go bankrupt...

#17 Koru

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Posted 15 August 2008 - 10:53 AM

I think the only developers you are going to see doing this anywhere are the ones with deep pockets, they can afford to absorb the construction costs, and offset the short term financial hit by a rental income from the properties and when the market rebounds, return the apartments to condos, they are the "smart" longer term focused investors...

The fly by night development firms or ones that thought they'd take advantage of the credit fueled "boom" won't have the pockets and will jump ship, in some cases leaving an empty shell of a building, until another developer comes in and cleans up...It happens from time to time around the world

#18 Holden West

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Posted 08 January 2009 - 09:18 AM

From today's "On the Street" column on the subject of sales of rental apartment buildings:

Barsalou said the seven sales representing 348 suites and an aggregate value of $38.8 million -- an average of $111,494 per unit -- were negotiated in the first half of 2008 with closings up to October. The well then went dry.

It is the lowest sales volume since 1999 when just seven buildings comprising 84 suites were sold for a total of $4.5 million. Apartment sales in 2005 and 2007 hit high watermarks with 33 building sales in each year. However, 2007 was remarkable in that the total value of the sales hit $162 million -- nearly $100 million more than 2005 -- for a record average of $125,448 per unit.


So, essentially an apartment has less than half the value of a condo.

Barsalou said apartment buildings will continue to offer a safe investment as Victoria's rental vacancy rate remains the lowest in Canada at 0.5 per cent for the coming year and rents continue to increase. Average rents in the region rose seven per cent in 2008 from $765 to $818. The largest jump was in three-bedroom units, up 12 per cent to $1,180.


That is a huge hit for apartment dwelling families. I have no idea how an average single parent with two kids could cope.
"Beaver, ahoy!""The bridge is like a magnet, attracting both pedestrians and over 30,000 vehicles daily who enjoy the views of Victoria's harbour. The skyline may change, but "Big Blue" as some call it, will always be there."
-City of Victoria website, 2009

#19 G-Man

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Posted 08 January 2009 - 10:43 AM

^ Make the kids sharea a room, I did when I was a kid.

#20 Ms. B. Havin

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Posted 08 January 2009 - 11:21 PM

^ With your sister? How did that work out when you both hit puberty?
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