Real Estate

Why are houses for sale if they only go up? better to hold forever?

  • Last Updated:
  • Dec 4th, 2018 4:37 pm
[OP]
Newbie
Apr 19, 2017
61 posts
27 upvotes

Why are houses for sale if they only go up? better to hold forever?

serious question... why would anyone list their house for sale... just buy another house and rent it out if you plan to move. Prices only go up dumb to sell when you know itll go up.

i get it not everyone can afford to buy a new house without selling their old one, but with all the rich people in GTA (pretty much most people are rich), and all the investors (rich people/investors are the ones who are the ones buying houses) how are there even houses for sale? it should be a very limited market. The (poor) person who sold their home (to an investor) so they could upgrade, sold there home to someone who is (smart) and will never ever ever ever sell. It has been completely removed from the resale market/inventory.

These rich people/investors know real estate only goes up. And its good cash flow. They don't sell. When they buy they hold forever, so how has it not gotten to the point there are only 100-200 houses for sale in all of GTA if most people are rich/investors? My boss at work has 100 houses in Hamilton and says he will never sell one. He will pass them onto his kids for cash flow so they never have to work if they dont want. Im sure hes not the only one with this mindset. Those 100 houses will NEVER be for sale. Completely forever removed from future resale home inventory
Last edited by Millenial1994 on Nov 29th, 2018 9:43 pm, edited 7 times in total.
24 replies
Banned
Aug 24, 2018
196 posts
119 upvotes
Many sales are to move into a bigger house.

Or baby boomers downsizing to a smaller house, or condo.
Deal Fanatic
Feb 29, 2008
6904 posts
2298 upvotes
Troll post?

BTW, I don't plan on selling any investment properties as long as they are cash flow positive and then some.
[OP]
Newbie
Apr 19, 2017
61 posts
27 upvotes
JayLove06 wrote:
Nov 29th, 2018 10:05 pm
Troll post?

BTW, I don't plan on selling any investment properties as long as they are cash flow positive and then some.
you proved my point
Member
Jan 12, 2017
387 posts
138 upvotes
Owning something valuable isn't the same as having positive cash flow you can spend.

In almost all cases, rentals are not cash flow positive unless you've had it for well over a decade, have 30+% down and own in Toronto. In much of the GTA, you may never be cash flow positive. You can rent a whole house in the 'most diverse city' for well under $3k... Definitely won't be close to covering expenses for the $1M + avg homes.
Millenial1994 wrote:
Nov 29th, 2018 8:58 pm
serious question... why would anyone list their house for sale... just buy another house and rent it out if you plan to move. Prices only go up dumb to sell when you know itll go up.

i get it not everyone can afford to buy a new house without selling their old one, but with all the rich people in GTA (pretty much most people are rich), and all the investors (rich people/investors are the ones who are the ones buying houses) how are there even houses for sale? it should be a very limited market. The (poor) person who sold their home (to an investor) so they could upgrade, sold there home to someone who is (smart) and will never ever ever ever sell. It has been completely removed from the resale market/inventory.

These rich people/investors know real estate only goes up. And its good cash flow. They don't sell. When they buy they hold forever, so how has it not gotten to the point there are only 100-200 houses for sale in all of GTA if most people are rich/investors? My boss at work has 100 houses in Hamilton and says he will never sell one. He will pass them onto his kids for cash flow so they never have to work if they dont want. Im sure hes not the only one with this mindset. Those 100 houses will NEVER be for sale. Completely forever removed from future resale home inventory
Deal Fanatic
Feb 22, 2011
5490 posts
5140 upvotes
Toronto
A lot of people sell to upgrade. They need the capital to buy something bigger.

A lot of people sell due to divorce. They need to split the assets.

A lot of people sell to relocate. Not everyone wants to be a landlord in a different city.

A lot of people sell to retire. Who cares if it will be worth more in 20 years if you will be dead.

A lot of people sell because they want to.
Deal Fanatic
Feb 29, 2008
6904 posts
2298 upvotes
Millenial1994 wrote:
Nov 29th, 2018 10:41 pm
you proved my point
I mean, they are long term investments so they will be held for a while most likely. If we're talking about primary residences, people sell those all the time to move up or move down.
Penalty Box
User avatar
Aug 19, 2008
1924 posts
494 upvotes
Millenial1994 wrote:
Nov 29th, 2018 8:58 pm
serious question... why would anyone list their house for sale... just buy another house and rent it out if you plan to move. Prices only go up dumb to sell when you know itll go up.

i get it not everyone can afford to buy a new house without selling their old one, but with all the rich people in GTA (pretty much most people are rich), and all the investors (rich people/investors are the ones who are the ones buying houses) how are there even houses for sale? it should be a very limited market. The (poor) person who sold their home (to an investor) so they could upgrade, sold there home to someone who is (smart) and will never ever ever ever sell. It has been completely removed from the resale market/inventory.

These rich people/investors know real estate only goes up. And its good cash flow. They don't sell. When they buy they hold forever, so how has it not gotten to the point there are only 100-200 houses for sale in all of GTA if most people are rich/investors? My boss at work has 100 houses in Hamilton and says he will never sell one. He will pass them onto his kids for cash flow so they never have to work if they dont want. Im sure hes not the only one with this mindset. Those 100 houses will NEVER be for sale. Completely forever removed from future resale home inventory

This is exactly why I always advise people NOT to sell unless they absolutely have to.

You're instantly giving away 4% to 5% of the property value. And in terms of percentage of equity, it's much higher than that.

I can understand the rationale behind renovating and turning over properties, but for the average home owner it's almost ALWAYS better to buy and hold as a rental.
Licenced Realtor and P.Eng
Penalty Box
User avatar
Aug 19, 2008
1924 posts
494 upvotes
Chickennbeans wrote:
Nov 29th, 2018 10:50 pm

In almost all cases, rentals are not cash flow positive unless you've had it for well over a decade, have 30+% down and own in Toronto. In much of the GTA, you may never be cash flow positive.
You've never owned a rental property in your life, have you? Because that comment is one of the most laughable pieces of misinformation I've ever read on here.

When I'm running numbers on a potential rental property my #1 rule is that it MUST be cash flow positive based on a 5% down payment.

This is absolutely possible to do in the GTA.
Licenced Realtor and P.Eng
Newbie
Mar 6, 2017
64 posts
31 upvotes
Because they cant take to heaven/hell/eternal void with them?

Make some money, spend some money, enjoy some money.
Deal Addict
Jan 26, 2016
1035 posts
842 upvotes
Toronto, ON
Donnie740 wrote:
Nov 30th, 2018 12:08 am
You've never owned a rental property in your life, have you? Because that comment is one of the most laughable pieces of misinformation I've ever read on here.

When I'm running numbers on a potential rental property my #1 rule is that it MUST be cash flow positive based on a 5% down payment.

This is absolutely possible to do in the GTA.
shhhhhhhhhhhhhhhhh Heavy Exclamation Mark Symbol
Member
May 18, 2015
454 posts
632 upvotes
Thornhill, ON
Can you show us one example of a cash flow positive property in the GTA?
Millenial1994 wrote:
Dec 9th, 2018 12:31 pm
not possible
literally impossible to lose on RE in GTA if you hold for at least 2 years.
Member
May 18, 2015
454 posts
632 upvotes
Thornhill, ON
WinterSleep wrote:
Nov 30th, 2018 2:33 am
shhhhhhhhhhhhhhhhh Heavy Exclamation Mark Symbol
Can you show us one example of a cash flow positive property in the GTA?
Millenial1994 wrote:
Dec 9th, 2018 12:31 pm
not possible
literally impossible to lose on RE in GTA if you hold for at least 2 years.
Deal Fanatic
Feb 29, 2008
6904 posts
2298 upvotes
jonkoktosen wrote:
Nov 30th, 2018 3:32 am
Can you show us one example of a cash flow positive property in the GTA?
Is this a serious question?
Member
Jan 12, 2017
387 posts
138 upvotes
Sure, it's possible to do. Did not claim it was impossible.

If you read the OP's reference to 'how are there even houses for sale?', it's clear OP is thinking that all properties can be floated in this way.

No wonder the testing in school these days is so trivial - otherwise everyone would have failed. It's a miracle that some people were able to figure out how to sign up for a RFD account and post.
Donnie740 wrote:
Nov 30th, 2018 12:08 am
You've never owned a rental property in your life, have you? Because that comment is one of the most laughable pieces of misinformation I've ever read on here.

When I'm running numbers on a potential rental property my #1 rule is that it MUST be cash flow positive based on a 5% down payment.

This is absolutely possible to do in the GTA.

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