Still buying rentals?
Curious to see what’s RFD sentiment on buying rental properties in today’s rate environment.
Dec 12th, 2022 6:41 am
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Dec 12th, 2022 10:12 am
I have done calculations for quite a few condos with 20%, with the current rates many of them are not only cashflow negative but also loosing money every month. Pretty much only end users are buying right now.
Dec 12th, 2022 10:16 am
Isn't the rent to purchase gap even bigger with housing in many areas of GTA?
Dec 12th, 2022 11:46 am
Try to do same calculation for houses, those are even more money losers in gta unless you find some hidden gem stone that can be salvaged with right tools or some multi residential units re.
Dec 12th, 2022 11:50 am
Why no to condos?RichmondCA wrote: ↑ Not condo rentals that's for certain.
I have a couple of pretty serious buyers but mostly for detached with conversion potential next to major transit stations as per Bill 23.
Also recently saw a 7 plex in the core sell for dirt cheap, we missed it by a bit, had some tenant risk.
For anyone not scared of renos there are some decent opportunities well below market imo but they go quick and you need capital, usually not the easiest to finance in some cases.
Dec 12th, 2022 11:59 am
Depends where you are in life. If you're younger, can service the debt (at higher rates), and have the equity for another than I don't see why not.fogetmylogin wrote: ↑ I sold everything during pandemic. Not because I predicated this but various circumstances. Only having PR and sitting on cash I am looking for a rental duplex or triplex or maybe a future retirement condo I'd rent out now.
Prices are also certainly headed lower but the right deal now could still be worthwhile. I don't understand those that are leveraged to the hilt and still on the hunt for the 4th property. The risk vs reward doesn't seem to to be there. If you are sitting on a few mil in equity or less and you have a pension the upside is really minimal and ending up back where you started even if a 20% chance doesn't seem worth it. But granted some might have more expensive aspirations or future lifestyle.
Dec 12th, 2022 12:28 pm
Dec 12th, 2022 12:44 pm
yeah, it really is area specific in comparing the two.
Dec 12th, 2022 12:53 pm
Agree, I was looking and still am (more like the getaway place for myself) in suburbs and the ratio is worse, and then thinking about that I would need to commute there and maintain the outside and inside of the house put me off completely from buying a house in the burbs for rental.krn905 wrote: ↑ yeah, it really is area specific in comparing the two.
go look at what a rental costs on the prime toronto detatched houses. the ratio of rental payment to monthly carrying costs is so much worse for those than condos.
brampton houses rent for 3k and sell for over 1mil. you can get 2500 rent in a condo for a 550-600k sale price.
same with uptown, 2.5mil + houses rent for 6k and that range...
Dec 12th, 2022 1:05 pm
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Dec 12th, 2022 1:46 pm
Lol I was going to say, alot more can go wrong repair wise and good luck chasing renters for that damages money
Dec 12th, 2022 1:53 pm
For houses it's even worse.
Dec 12th, 2022 2:11 pm
Yep, rents for 2 condos (1+1) are more than rent for 1 house. Condos can be sold separately if needed.sircheersa wrote: ↑ For houses it's even worse.
A $2m house in Toronto will rent for like $4k.
And people will say yea but they aren't making anymore land.
Yea that's why you paid $2m for it, you already paid a premium for that.
I'm willing to bet someone who bought 4 $500k condos and rented them out for $10k per month will come out way ahead.
Dec 12th, 2022 2:35 pm
It's also easier and faster to start and scale.