Being a renter is no picnic. There is always the risk of having a property sold from under you, and having to endure the consequent inconvenience of a forced move. The following two stories are likely the consequences of smart landlords taking profits by selling.
Now, however, an increasing proportion of landlords are latecomer amateur speculators holding properties for price increase rather than for steady cash flow. Renters who are also prospective buyers may at some point face the bizarre situation of seeing long awaited RE price drops at the same time as being asked to vacate properties that their speculator landlords are hastily liquidating. But we’re not there yet.
Here are two back-to-back stories from vancouvercondo.info of boom market volatility displacing stable renters –
“My landlord (a realtor, btw) is selling the house expecting the prices to go down in 2010. I was thinking of buying at the end of next year, but since Bank of Canada kept the party running with crazy low rates I will have to wait a little longer. So I looked at craigslist and there are plenty of places to rent in my range ($1000 p.m.) right now, not like two years ago. I was playing with the idea of buying a place right now, but I’m not going to do it, I’d rather have a 200K mortgage at 7% than a 400K one at 3.5%. I can put a lot of money down, but it doesn’t make any sense right now.”
“After a lifetime of stable renting, my family and I went through some serious bubble related instability with our rental last year. Now we’re paying just slightly more for more bedrooms and a yard, so it’s turned out for now- but I must admit for the first time getting grumpy about this bubble. The insanity in the housing market is making rental feel insecure, and I’m having trouble feeling settled. That, I don’t like. But I realized there’s your self perpetuating mechanism: newbie specuvesting landlord runs all over his business obligations, makes the renter feel insecure, the renter jumps into a terrifyingly risky but looks-easier-to-live-in purchase situation.”