“THREE SINGLE HOUSE READY MOVE IN (VANCOUVER WEST)” – “Still lots of speculation going on out there.”

“vancouver, BC craigslist > vancouver > housing > apts/housing for rent
Date: 2012-06-01, 3:21PM PDT
Reply to: xxxxxx@gmail.com [Errors when replying to ads?]
2.836 W 31 AVE. 7BR 6BA 4000 SQF,VERY WELL MAINTAINED,4000SQFT, $4800
PostingID: 3051764634″

craigslist ad 1 June 2012. [Spotted by Patsan at VCI 1 Jun 2012 4:35pm]

“This Gary guy has at least 12 West Side and Richmond properties advertised for rent. They are all vacant and available now and if you goggle the address all were recently purchased. Most of the properties on the West Side sold for close to 3 million and the Richmond ones are in the 1.5 million range. The guy must be a rental agent or ring leader behind investors who have recently dropped at least 20 to 30 million on houses to rent. The ads all state minimum 1 year lease so they are not looking for quick flips. None of the ads have photos or much details. The guy doesn’t have any houses advertised that appear to have been previously rented so he must be a newby to the game.
When you look at the yields they will get if they do get their asking rents they are below 2% after property taxes. Still lots of speculation going on out there. Actually considering the poor sales on the West Side and Richmond of late maybe speculators are the only ones buying.”

Anonymous at VCI 2 Jun 2012 7:25am

A point of interest for those watching Vancouver RE is whether momentum-style speculators who have bought Vancouver SFHs will attempt to sell if price trajectories start to suggest we’re joining other failing housing markets around the world. We are of the opinion that many will.
– vreaa

11 responses to ““THREE SINGLE HOUSE READY MOVE IN (VANCOUVER WEST)” – “Still lots of speculation going on out there.”

  1. displaced_13

    Just experienced this with RDG properties (property manager) while looking for a new place to rent for my family.

    Not kidding……when I called there was no hello, before I had a chance to utter a greeting the first few words in a hurried, heavily accented voice were “you want house or condo?”. They had multiple properties available throughout Vancouver.

  2. I just took a look at 2 rentals last night. Both are new houses knocked up by some bob the builder type with new owners looking like rookie slumlords. Obviously mortgage payments must be high otherwise they would not have that look of desperation. Pretty boring basement suites.

    The first guy was ready to sign the papers after 5 minutes. The second couple wanted to throw in some furniture and were holding out for the “right people” …I think I’ll pass on both and hold out for an apartment.

  3. Renter in Van

    We are a family of 4 renting and watching. Minimum 1 year rental is a total lie. When we tried to sign agreements last summer they completely balked at the 1 year and also when we asked to have it written into the contract that they couldn’t list during our tenancy. We saw many homes including Gary’s and many of his ilk.

    • Yes, my experience was that “minimum 1 year rental” meant in many cases (whether this was made clear or not) that the owner wanted a guarantee from the tenant for one year, without in return being able or willing to guarantee that the rental would not be listed/sold within that year, much less beyond.

      • This is a significant constraint you are putting on them. In investment terms you are asking for a closed term agreement on a short-duration asset. If you want such a term in the contract you will need to pay. A lot. It certainly provides some indication that business cases involving capital appreciation to make up for poor cash flows must be callable.

  4. I think what we are learning is that renters are in very high demand. So-called quality renters (married couples and those with high paying secure jobs and no pets) are the most sought after. I think the true level of speculation will make itself known over the next year or two as those owners stuck with homes that are falling in value and sitting empty begin to pressure the market rates lower in the search for whatever revenues are available. Right now the newbie landlords seems to have stars in their eyes and high hopes of controlling tenancy terms, length of lease etcetera but the restrictive attitudes should relax over time as they discover ample alternative space is available for those who have chosen not to buy. Vancouver is going to be a renters market and that fact will take a further toll on home prices as most cannot justify themselves based on revenue models anymore.

    • I see bigger variance in applicants for properties in “not-so-nice” areas where high quality tenants stand out from others; in that case there is room to move because LLs here will be expecting more tenant risk and can handle discounts. On higher Q areas I’m not convinced; rather from what I’ve seen there are many viable applicants, and negotiating better terms will be more difficult. With no direct credit history with the landlord there is little reason to give one applicant rank over another. In these situations, if you want better lease terms you’ll need to pay, and hope that when it comes time to renew you’ve proven your value-add to the landlord.

      This may be part of the reason we hear about housing recessions creeping from the outside in. Getting in bad tenants is a great way of blowing the bank. From the times I’ve interviewed applicants for properties for rent, I always shudder to think the ones I flat out reject need to end up living somewhere. All’s I know is that more than a few amateur landlords are going to get the shaft.

      The most common words I hear from seasoned investors/businesspeople regarding a certain market segment becoming too competitive: it’s only a matter of time before people start exiting.

  5. I disagree with the OP with his conclusion when he sees that there are new multiple properties on a rental market that “Still lots of speculation going on out there”. I am not convinced that they were recently purchased, they were listed – that’s correct, but…IMHO most of them are not the recently bought properties but otherwise – the properties that could not be sold and now are re-listed for a rent instead while flippers are trying to keep paying their mortgages and wait out for the better market conditions. I see it everyday in Richmond – the same properties that were on a sell list for a long, long time and their listing expired – they come to a Craig list for a rent listed by the new mostly Chinese rental management companies – some of the RE outfits started to provide the rental management as well due to a lack of sales and oversupply of staff.

    • Used to be that property management services were a realtor’s bread and butter when sales were really slow. They would spend their days showing rental houses and collecting a commission from the proceeds paid by the absentee owners. I imagine if the market falls hard enough we will see that the surviving realtor’s are again lurking in the Property business awaiting the return of a busy sales season.

      And speaking of a dying market….those last stats for May were a shocker. I expected bad but not THAT bad. So now I am going to hold my breath and await Junes results but it does look like a hard fall may be the outcome for Vancouver.

      Keeping in mind that the US housing market saw its heaviest declines over a mere 18 month stretch we should not be too surprised by a similar outcome here. A bust is a bust after all and it really makes no difference what brought it on. Only the size of it really matters and this one is a Doozy.

      So we don’t really need to rationalize all the various probabilities. Only know that once a price deflation begins it is pretty much certain to keep going until the air is exhausted from the bubble. And there is no question whatsoever that Vancouver has been in a bubble. I do not care for a moment what Tsur Sommerville and his media-types keep saying to suggest otherwise.

      Hobos have more perspective than those learned bunch.

      Meanwhile, some people who write here (and mostly elsewhere) have been repeating a popular refrain that is really starting to get on my nerves. They will say for example “Who cares if houses drop 35%. Mine is worth a million and that only means I am back to 650k…..which is more than I originally paid…so no big deal….bring it on”

      I am paraphrasing of course.

      I don’t think those fools have any idea what is really coming nor how bad it is going to be. We should pray for a 35% drop in Vancouver and thank our lucky bloody stars if that is all we get. I just don’t see it happening though. It will be much worse than that. Even 50% declines seem modest in the big picture when we consider incomes and rent versus buy or when we examine personal indebtedness against total assets.

      There is hardly a positive metric to go to for support. Even the ideas that inlaws flush with cash, rich boomer parents, tax advantages and government gifts or even the prospects of renting to offset losses do not improve the picture for most people going deeply underwater.

      We know it from the numbers. No point kidding ourselves. This is going to be a GD disaster so best get prepared for the worst. And to those who are keeping up the heroics by saying the coming crash is going to be nothing but a flesh wound then all I can suggest is you keep your health insurance up to date….

      And keep lots of clean bandages on hand!

  6. Craiglist listed the following addresses:-
    1936 W 35 AVE, $4500
    836 W 31 AVE, $4800
    3847 W 24 AVE, $4,800
    Besides the above 3 SFHs, 604-660-2228 Gary aka Mr Sung also put up rental ads for the following addresses:

    SFH (next to PW secondary school), $3100
    posted 2012-05-30
    urgent rent
    [^^ ahem ^^ – MLS® ID: V948089 – listed price: $2,998,000
    2011 April: sold for $2.7M]

    half way down the page –
    SFH (opposite Killarney secondary school), $2500

    Whistler, Ski Area holiday homes

  7. Momentum speculators – great term, vreaa. Yes, they will be the first to fall. My belief is that many of them operate on a run-way with a set amount of cash flow to do the buy & flip. Enough of them will carefully monitor wanted vs. needed sell prices, and move fast if the going gets rough. If they’ve been able to structure themselves to limit liability, they’ll be set to fold their holding company and walk easier than others as well.


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s