April 22, 2020
I had a heartfelt discussion with an investor client and I realized there are more people/landlords in a similar position of uncertainty of what to do with their condos. He is currently changing his strategy from a 2br condo in a short-term rental model and now trying to rent it to a long-term tenant.
Here’s some background about me. I have been a licensed Realtor since 2008. I am an Investment Realtor who works with Investors and am a Landlord myself. I feel the pain for ALL Landlords and property managers right now as working with tenants, government restrictions/changes, government care & benefits packages are leaving a very uncertain environment for all involved.
Where do we go, and what are the options?
Here’s some facts we discussed:
- Competition in the Rental Market
- Vancouver Craigslist (CL) 1BR condos >30days ago = 730. <30 days = 2560.
- 2BR condos >30days ago = 360. <30 days = 1420
- Good News
- Condos that are Vacant; ready for occupancy.
- Furnished? Long-term probably will not require. Easy fix!
- Dependable, predictable rental revenue
- Highest current rental rates in Canada…. Current renters will be enticed to move if it there is a financial benefit. Lower/competitive rent rates can win over new tenants.
- Bad News
- Competition… lots of it
- Timing. We are already past the 1st of the month, so proper notice for your new tenant would be 60-day turn around
- Current landlord/tenant relationship and ability to collect rent from a large unemployed population is not optimal for ALL Landlords ☹
What is your timeline need for revenue or a solution? How much more time can you continue with carrying costs? 1 month, 3 months, 9 months?
At what point is the option to SELL triggered?
You are not alone. The other 1800+ units you are competing with for rental may be in the same status, and in 60-90 days may decide to sell at that time as well. The real estate market is already tight with most Buyers withdrawing and waiting. In 60, 90-days+ other investors may need to free up their equity in their property and there will be even more competition to sell.
The Proposed Solution
Advertise and Market your home for Sale at the same time as the rental. Give yourself options.
- Bad News
- A standard closing time for a sale is approx. 40-60 days.
- As short-term finances continue to dry up across North America more and more investors will look to access their equity in their real estate = selling. This means more competition in a selling environment.
- Good News
- Your home is vacant. Many Sellers are NOT comfortable letting the public in the condo they are living in. I have a vacant 2br condo for sale that continues to get showings!
- Your home is furnished. Your home is staged! This can cost upwards of $2,000 for a 3-4 month period, and your asset shows as well as it can.
- Real estate has been declared an essential service in BC. Realtors are working. Deals are happening! No matter the market conditions there is always Buyers who need to buy & Sellers who need to sell.
- For the past 4 months leading up to now, the real estate market in Greater Vancouver has had very low levels of inventory and sales have been up 45-55% from 2019 stats.
- Technology allows Buyers/tenants to view the unit in its entirety. Here is a narrated tour I did for a vacant 2BR condo currently for sale
I hope this info gives some insight to the current competitive environment and outlook to the next 90+ days.
I look forward to discussing an additional option for you to secure your immediate financial needs. In the meantime here is a link to some great info on Mortgage Deferral shared with me from a partner mortgage broker.
If you want to get started right away, click here to enter your property info & contact info and I can call you to discuss.
Here to Help,
Shaun T. Carson
Investment Realtor, eXp Realty