Jump to content

      













Photo

Setting an Asking Price for a Condo with Rental Income Potential


  • Please log in to reply
20 replies to this topic

#1 rambaldi

rambaldi
  • Member
  • 168 posts

Posted 29 June 2017 - 09:08 PM

Say if a strata removes its rental restrictions and a condo goes up for sale as the first one under the new bylaws, what formulas do people use nowadays for establishing a price for the condo with rental income potential?



#2 sebberry

sebberry

    Resident Housekeeper

  • Moderator
  • 18,457 posts
  • LocationVictoria

Posted 29 June 2017 - 09:09 PM

I'd be interested to know what value increase can be expected with a lifting of such a bylaw.


  • Matt R. and rambaldi like this

Victoria current weather by neighbourhood: Victoria school-based weather station network

Victoria webcams: Big Wave Dave Webcams

 


#3 Sparky

Sparky

    GET OFF MY LAWN

  • Moderator
  • 10,623 posts

Posted 30 June 2017 - 04:42 AM

Maybe the price will go down. Not everyone wants to live in a building where your neighbour is not an owner.
  • Jill likes this

#4 lanforod

lanforod
  • Member
  • 7,283 posts
  • LocationSaanich

Posted 30 June 2017 - 06:26 AM

Maybe the price will go down. Not everyone wants to live in a building where your neighbour is not an owner.

There are some of those, yes but they are far outweighed by investor buyers, or people who want the option to do that should they move on later. Market values are higher in buildings with no rent restrictions and even higher if that building is also zoned to allow short term rentals.
I suspect it would take some time for a building changing to no restrictions to build the value up again. Marketing would be needed.
I've never heard of one that has done this.

Edited by lanforod, 30 June 2017 - 06:27 AM.


#5 MarkoJ

MarkoJ
  • Member
  • 4,831 posts
  • LocationVictoria

Posted 30 June 2017 - 06:36 AM

I would add 10% over previous comparables and see what the market bears.

Literature notes anywhere from a 3 to 15% increase.

 

As someone noted might take a bit of time for realtors/buyers to recognize that the building has lifted the restriction.


Marko Juras, REALTOR® & Associate Broker | Gold MLS® 2011-2018 | Fair Realty

www.MarkoJuras.com - MLS® from $899 and $1,000 cash back for buyers | www.834sales.com & www.promontoryforsale.com - Building(s) specialist 

Looking at Condo Pre-Sales in Victoria? Save Thousands!

 

 


#6 MarkoJ

MarkoJ
  • Member
  • 4,831 posts
  • LocationVictoria

Posted 30 June 2017 - 06:37 AM

I suspect it would take some time for a building changing to no restrictions to build the value up again. Marketing would be needed.
I've never heard of one that has done this.

 

Happened last night at the Parc.


  • rambaldi and lanforod like this

Marko Juras, REALTOR® & Associate Broker | Gold MLS® 2011-2018 | Fair Realty

www.MarkoJuras.com - MLS® from $899 and $1,000 cash back for buyers | www.834sales.com & www.promontoryforsale.com - Building(s) specialist 

Looking at Condo Pre-Sales in Victoria? Save Thousands!

 

 


#7 Mike K.

Mike K.
  • Administrator
  • 51,402 posts

Posted 30 June 2017 - 07:09 AM

Parc?

Know it all.
Citified.ca is Victoria's most comprehensive research resource for new-build homes and commercial spaces.


#8 MarkoJ

MarkoJ
  • Member
  • 4,831 posts
  • LocationVictoria

Posted 30 June 2017 - 07:12 AM

Parc?

 

160 Wilson last night removed their rental restriction.  93 of the 122 owners voted. I don't know the exact vote but it was super close.


Marko Juras, REALTOR® & Associate Broker | Gold MLS® 2011-2018 | Fair Realty

www.MarkoJuras.com - MLS® from $899 and $1,000 cash back for buyers | www.834sales.com & www.promontoryforsale.com - Building(s) specialist 

Looking at Condo Pre-Sales in Victoria? Save Thousands!

 

 


#9 lanforod

lanforod
  • Member
  • 7,283 posts
  • LocationSaanich

Posted 30 June 2017 - 07:20 AM

The interesting part about a vote like that is it can't be grandfathered. Going the other way, existing owners can be grandfathered. But removing the restriction doesn't have a way to do that.



#10 MarkoJ

MarkoJ
  • Member
  • 4,831 posts
  • LocationVictoria

Posted 30 June 2017 - 07:32 AM

The interesting part about a vote like that is it can't be grandfathered. Going the other way, existing owners can be grandfathered. But removing the restriction doesn't have a way to do that.

 

Not sure what you mean? It is "grandfathered" in that no one is forcing you are the an owner to rent out your unit once the rental restriction is removed.


Marko Juras, REALTOR® & Associate Broker | Gold MLS® 2011-2018 | Fair Realty

www.MarkoJuras.com - MLS® from $899 and $1,000 cash back for buyers | www.834sales.com & www.promontoryforsale.com - Building(s) specialist 

Looking at Condo Pre-Sales in Victoria? Save Thousands!

 

 


#11 lanforod

lanforod
  • Member
  • 7,283 posts
  • LocationSaanich

Posted 30 June 2017 - 08:07 AM

Not sure what you mean? It is "grandfathered" in that no one is forcing you are the an owner to rent out your unit once the rental restriction is removed.

 

Sure, but you can't effectively grandfather everyone. Guaranteed to get rentals somewhere in the building.

 

In the reverse situation, grandfathering means that in spite of the new no rental rules (or limited number), if you're grandfathered you can rent regardless.



#12 MarkoJ

MarkoJ
  • Member
  • 4,831 posts
  • LocationVictoria

Posted 30 June 2017 - 08:15 AM

Sure, but you can't effectively grandfather everyone. Guaranteed to get rentals somewhere in the building.

 

In the reverse situation, grandfathering means that in spite of the new no rental rules (or limited number), if you're grandfathered you can rent regardless.

 

I don't comprehend the logic. That is why there is a 75% vote threshold to change bylaws. 75% or more of the owners are agreeing to the fact that there will be some rentals somewhere in the building.

 

Your argument, I believe, is that a rental somewhere in the building will have negative externalities for those that are owner-occupiers?  The reverse situation also has negative externalities, such as the value of your condo drops 10% overnight even though you are grandfathered to continue renting.


Marko Juras, REALTOR® & Associate Broker | Gold MLS® 2011-2018 | Fair Realty

www.MarkoJuras.com - MLS® from $899 and $1,000 cash back for buyers | www.834sales.com & www.promontoryforsale.com - Building(s) specialist 

Looking at Condo Pre-Sales in Victoria? Save Thousands!

 

 


#13 lanforod

lanforod
  • Member
  • 7,283 posts
  • LocationSaanich

Posted 30 June 2017 - 08:21 AM

 

I don't comprehend the logic. That is why there is a 75% vote threshold to change bylaws. 75% or more of the owners are agreeing to the fact that there will be some rentals somewhere in the building.

 

 

Your argument, I believe, is that a rental somewhere in the building will have negative externalities for those that are owner-occupiers?  The reverse situation also has negative externalities, such as the value of your condo drops 10% overnight even though you are grandfathered to continue renting.

 

 

Isn't that their main argument against renters? Kind of my point.

 

 

For the record, I don't agree with rental restrictions. Regardless of the effect, I'm just stating it isn't effectively possible to grandfather against a 'rentals allowed' new rule for individual owners, while it is possible to do so for a 'no rentals allowed' new rule.

 

It's very common for existing, or at least original, owners to be grandfathered when applying new rules to strata bylaws. One of the common new rules applied is rental restrictions. 



#14 MarkoJ

MarkoJ
  • Member
  • 4,831 posts
  • LocationVictoria

Posted 30 June 2017 - 08:30 AM

Isn't that their main argument against renters? Kind of my point.

 

It is a topic on its own! Based on personal experiences, I don't agree that rentals allowed has significant negative externalities but I know many would argue that.


Marko Juras, REALTOR® & Associate Broker | Gold MLS® 2011-2018 | Fair Realty

www.MarkoJuras.com - MLS® from $899 and $1,000 cash back for buyers | www.834sales.com & www.promontoryforsale.com - Building(s) specialist 

Looking at Condo Pre-Sales in Victoria? Save Thousands!

 

 


#15 Mike K.

Mike K.
  • Administrator
  • 51,402 posts

Posted 30 June 2017 - 10:39 AM

Parc Residences?

 

Holy smokes, I've known people who've rented there for eons. I had no idea it restricted rentals.


Know it all.
Citified.ca is Victoria's most comprehensive research resource for new-build homes and commercial spaces.


#16 spanky123

spanky123
  • Member
  • 11,722 posts

Posted 30 June 2017 - 11:18 AM

I would add 10% over previous comparables and see what the market bears.

Literature notes anywhere from a 3 to 15% increase.

 

As someone noted might take a bit of time for realtors/buyers to recognize that the building has lifted the restriction.

 

With interest rates on the rise, the 3%-4% returns you can make on a rental will no longer make any sense. Either property values will have to drop or rental rates increase to get that type of incremental valuation in my opinion. 



#17 LeoVictoria

LeoVictoria
  • Member
  • 3,103 posts

Posted 30 June 2017 - 01:32 PM

With interest rates on the rise, the 3%-4% returns you can make on a rental will no longer make any sense. Either property values will have to drop or rental rates increase to get that type of incremental valuation in my opinion. 

 

They don't make sense today.   Basically just speculation on increasing property values. 



#18 MarkoJ

MarkoJ
  • Member
  • 4,831 posts
  • LocationVictoria

Posted 30 June 2017 - 02:32 PM

Parc Residences?

 

Holy smokes, I've known people who've rented there for eons. I had no idea it restricted rentals.

 

Originally it was unrestricted when built then it moved to restricted but original owners were grandfathered (hence the people you know who rented) and now 10 years they have gone back to unrestricted.


  • Mike K. likes this

Marko Juras, REALTOR® & Associate Broker | Gold MLS® 2011-2018 | Fair Realty

www.MarkoJuras.com - MLS® from $899 and $1,000 cash back for buyers | www.834sales.com & www.promontoryforsale.com - Building(s) specialist 

Looking at Condo Pre-Sales in Victoria? Save Thousands!

 

 


#19 MarkoJ

MarkoJ
  • Member
  • 4,831 posts
  • LocationVictoria

Posted 30 June 2017 - 02:33 PM

With interest rates on the rise, the 3%-4% returns you can make on a rental will no longer make any sense. Either property values will have to drop or rental rates increase to get that type of incremental valuation in my opinion. 

 

True, but everything will fall together if this happens. The unrestricted building will still command a premium over the restricted building. 


Marko Juras, REALTOR® & Associate Broker | Gold MLS® 2011-2018 | Fair Realty

www.MarkoJuras.com - MLS® from $899 and $1,000 cash back for buyers | www.834sales.com & www.promontoryforsale.com - Building(s) specialist 

Looking at Condo Pre-Sales in Victoria? Save Thousands!

 

 


#20 LJ

LJ
  • Member
  • 9,215 posts

Posted 30 June 2017 - 06:56 PM

The Finlayson at Bear Mountain just had a strata meeting and cancelled short term rentals, must be over 30 days now.


Life's a journey......so roll down the window and enjoy the breeze.

You're not quite at the end of this discussion topic!

Use the page links at the lower-left to go to the next page to read additional posts.
 



0 user(s) are reading this topic

0 members, 0 guests, 0 anonymous users