“This weekend I was hit with a notice to end Tenancy. The owner has claimed they will be moving in. I know that they also own at least 4 other places in Vancouver and that they reside in China.”

“This weekend I was hit with a notice to end Tenancy. The owner has claimed they will be moving in. I know that they also own at least 4 other places in Vancouver and that they reside in China. How many of these other 4 investment properties have also been given notice? Will the owner also be “moving in”?
I knew this was going to happen as I believe fear has hit East Asia. If I do find out the landlord has sold and not moved in as promised I’m privy to some compensation. However, with a owner out of this country will I ever see the money?
Will renters in Vancouver be forced to move as a record number of speculators love their money out of the market?”

– via e-mail to vreaa, from ‘please withhold my name’, 3 Jul 2012

It is highly likely that plunging prices will be disruptive to many renters.
Amateur landlords will be bailing, and that will often involve renter eviction (legal or not).
At the same time, as we approximate prices supported by fundamentals, where good old-fashioned cash-flow makes owning properties good investments, we will increasingly achieve a situation that is good for renters seeking long-term stability.
– vreaa

25 responses to ““This weekend I was hit with a notice to end Tenancy. The owner has claimed they will be moving in. I know that they also own at least 4 other places in Vancouver and that they reside in China.”

  1. Oh well, I guess they don’t need your money 😉

  2. Renters Revenge

    If we crash I expect that the number of rental units available will soar. Especially for higher end SFH in the suburbs. Those trying to sell due to job transfer or other life changing events, and who cannot stomach lower prices will elect to rent instead and hope for a better day. It’s a form of denial – something that runs deep in Vancouver.

  3. So, if a renter has an one-year rental agreement in force, the owner cannot force out the tenant before the end of one year, correct?

    • Situationroom

      Renters have rights, even after a lease is up the owner needs to give 2 months notice and compensate for the last month.

  4. Exile on Main Street

    I can definitely attest to the disruption, though the experience has if anything reinforced our bearishness. We’ve been in a big 100 year old fourplex near Main Street, virtually rent-controlled, for nearly 14 years. Our landlords, who are far from amateurs (a family business that includes an entire apartment building), felt that the market had “plateaued” and listed the house about six weeks ago for $1.4 M. It wasn’t exactly what I wanted to hear but I supported his decision and still do; they’ve been excellent, honest, non-gouging landlords.

    I’ll admit the open houses were extremely unpleasant given how long we’ve been here; our kids have spent their whole lives here. It sold in a couple of weeks to I believe first time buyers, who have evicted us to take over our suite. After a bad couple of weeks, someone responded to one of the signs we put up in the neighbourhood and we’ve put down a deposit on a lovely place (albeit for more rent, but much nicer than we currently have, and still reasonable by Vancouver standards).

    You couldn’t pay me to be in the new owners shoes. They just put down (presumably) $1.4 M for the privilege of living in a suite that rents for $1525 and on top of that have to manage 3 other suites. It’s an old house so the bedrooms broil in summer and freeze in winter, and running the microwave trips the fuse. The wood in the sunroom is rotting. The laundry is down 3 flights of stairs and around the back of the house (no joke in the middle of winter). I’m guessing the value of Vancouver houses over $1 M will drop fairly soon, given F’s new cap. Yet amazingly I’m guessing they’re over the moon at their opportunity to “get into” the market.

    Our new landlords are in the their early 30’s with not particularly high-paying jobs. I’m guessing Bank of Mom and Dad had everything to do with them owning a house. I asked if they’re planning on selling it, and they said they considered it back in the spring, but decided they were likely to end up as “wealthy land owners” if they just hung on. So unless they have a material change of heart, it looks like we have some stability again.

    My husband and I are both born and raised here, and we’re never seen stranger times.

    • interesting story. This forum attracts great anecdotes.

      the early thru mid 30’s in a person’s life is often a time of Depression. There’s a peak after marriage, averaging about age 29, it rises for a few years, then gets slammed pretty good by a New Reality, often a reluctant responsibility. Tiger Woods is the best modern example. New Property owners ‘MortgageVirgins’ (that’s a tv show, right?), are juicy prey as they hover around the 30 year-old + bracket wanting to get into the game. Little do they know they’re being set up by the savvy boomer.. the bully boomer, the bully main-stream media.

      RE is about location, location, location, or is it? Sounds to me it’s more about timing. I wish I could take all of Vancouver’s renters and move them to Van Island. Now wouldn’t THAT be a flush for the bagholders?

  5. Vancouver in the Rearview

    I find it very ironic that the early 30’s crowd (of which I am a member) seems to think that nothing bad is going to ever happen to them. When I look around the world and think of the economic turmoil, I am convinced that few of my age bracket learned to actually apply any of the math skills they learned in school. Governments are broke, ‘obligations’ cannot be fulfilled, jobs are few and far between. Prices will go up, until they don’t. We’re in uncharted territory now…here be dragons!

    • “I find it very ironic that the early 30′s crowd seems to think that nothing bad is going to ever happen to them.”

      Something bad already happened to them: the government subsidized real estate speculators and drove the price of housing to the moon. They also wrecked the financial markets by creating a lawless swamp of moral hazard, but people just seem to want their stocks to go up.

      Our interest rate policy is the deadliest thing. Permanent low rates will bankrupt every pension plan. Meanwhile, the inflation it creates squeezes household income and erodes savings. Only speculators and debt-pigs benefit, and the debt-pigs never stop. It all works wonderfully until the system itself is bankrupt.

      • rp1, I agree completely with your analysis.

        Do you have any thoughts on how best to survive these challenging times? My thought is simply to focus on one’s education and career. University degrees are very cheap. (The opportunity cost is much higher than the tuition.) And a strong resume does not deteriorate with inflation. Also, job mobility may be helpful for resume building; this is not very compatible with homeownership.

      • You nailed it Jeff. In a ZIRP world your best investment is education and learning to be efficient in a new economy. It will take years for people to adapt to a low growth system—being ahead and ready to deal with reality is an intellectual asset central banks can’t devalue.

      • Sorry to rain on this parade but most of the educations being turned out today are utterly worthless. There will never be adequate jobs in sufficient numbers for most of the recipients of all the scholarly efforts.

        Many went deep into debt and wasted their time burning the midnight oil to get a cheap-ass MA or high falootin PHD for absolutely no reward. If you think that keeping up standards and focussing on even more high level degree training will keep you out of the pot then you are in for a big surprise.

        The education mania has only accomplished making fodder for the creation of another bubble. It is a bubble of degrees. The net effect is only to drive down wages in professional vocations and flatten compensation packages. Ever notice how many highly educated people do internships, volunteer gigs, practicums (for no pay whatsoever) etcetera, etcetera?

        A lot. Most actually……and it is getting worse all the time. Professional volunteering is almost a career choice these days. And there are usually no decent job offers when you are done. It is just a big rip-off for most people with hopes for the future and getting into the wrong program just magnifies the problems.

        So, sorry man. But now you got to pay off the cost of all that student debt. Even if you have no work. System slaves are made every day and still the Mantra persists. You all know what it is of course……

        “Get an education. It is the keys to the future. You can get ahead”.

        Blah, Blah, Blah. It is a suckers game though. My friend Don can’t even get out of bed most days. A few years back some damn idiot at the university told him he would be great as a student. Even gave him an aptitude test and proved he would be genius if he majored in……..(should I say it?)………..History.

        So he did it. Got his MA. Of course he is screwed. Owes 60 grand that he can’t pay back. Sleeps till midnight then walks to the store in rotten old shoes and pick butts because he is ashamed of being seen in the daytime. Says he feels like killing himself but in the next breath tells me he could make it big teaching English in Korea of all damn places. He still thinks his edjukation will pay dividends if he can work it out just right.

        You know what I told him?

        I told him to go farming. Lease land if he can’t afford to buy. Learn the trade while he is young. He thinks I am an idiot because everyone knows all the good jobs are found by sitting in front of computers……

        I just nod and smile. Can’t teach the smart ones anything, can you?

      • A buddy of mine who worked the sell-side to Wall Street brats told me that a couple of his buy-side colleagues in NY quit the biz after the GFC to buy farmland in Pennsylvania. One other brat apparently couldn’t stomach the thought and took his life instead. My buddy, working the sell-side, cashed out his winnings and has been buying high-end recreational real estate for his family to enjoy – nothing in BC yet since he said the numbers don’t work there.

      • I think those guys probably had the right idea Airdales. And they would know from inside the biz. I happen to believe that a true financial collapse could presage a social collapse.

        Certainly it would herald a period of disorder that would challenge our basic beliefs in how a system should work. Imagine the day banks don’t spit out cash on command and ATM’s become worthless?

        How long would we all go before a state of emergency might be declared? This is not far-fetched either. We only need to ask ourselves what a collapse of the financial system really means to quickly understand just how dangerous that event would be.

        Most people just assume the government will intervene and everything would be fine but I am not so sure it would be so seamless. It is because of the interconnectedness of all our systems that creates the vulnerability in the first place while it all but guarantees that no single body of regulation could cure it either.

        Cross border and inter-provincial trade would grind to a halt within a week. International trade would cease to function as the basic exchange mechanisms needed for money to change hands stopped working. I am of course referring to a breakdown of the supply chain itself and this leads in so many directions it is impossible to even consider all the variables.

        On that bad day it might suddenly seem very prudent to be living on a farm. In fact, off-grid, you might not even be aware anything unusual has happened until the neighbors lights went out.

        This is an unlikely scenario of course, but it is a possibility. The Wall Street guys could see it in a heartbeat and they knew where to run for cover. Gold would be utterly worthless in such a situation. Food always comes first. Semi-related, the CBC has a new radio show called “The Invisible Hand”. It is a little comedic while hitting some serious topics.

        Anyway, they did a piece on Bullion versus Boullion this week (the merits of holding chicken versus gold during a crisis). I swear they took it right out of my own playbook. I had written a bit on that exact topic a year or so back just for fun as a way to challenge the thinking of the gold camp and now here it was as a radio show. Anyway, check it out if you have time. I thought it was pretty damn good.

        http://www.cbc.ca/theinvisiblehand/episodes/2012/07/04/gold-vs-chickens/
        Radio show runs about 27 minutes.

  6. I plan to lease from a flipper who becomes an accidental landlord.

    Unlike rental, the lease cannot be terminated due to sale/renovation/mother wants to live there. As long as you pay on time and don’t damage it, the lease endures.

    In this way, the flipper a-hole who would have stolen your mother’s life savings given the chance ends up paying you to live… In his house. It’s poetic justice.

  7. Has the author looked into fighting this? I mean, what do you have to lose? Stand up for your rights.

    • @Farmer – why waste so much time trying to get better qualification for a job that may not exist. Better to be licenced as a real estate agent, master the business and work really hard. It costs so little to become a realtor, and the reward is sweet with unlimited earning potential. The catch is learning and mastering the secrets. Unfortunately, far too many in the business fail to do just that.

      • Well that parasite class is long overdue for a correction so no, I don’t think that is a good career choice, James. We are very much out of balance right now where skills are concerned. Everyone wants to be part of the priestly classes. It is funny how so few recognize that a higher education is really a luxury bestowed on citizens by a country with surplus resources. The subsidies are far too generous in my opinion but then so are the commitments made for health care and pensions. All these things will see a contraction in the coming years if revenues falter and don’t recover. Education will take the biggest hit though because it is the easiest target and has the fewest voting constituents. I was not kidding about farming though. There are now fewer than 2% of Canadians that are engaged in this important activity and the number is dropping fast. The average age of farmers is something like 59 and in just a few short years there will not be enough skilled people out there bringing in the crops. So that begs the question of who is going to produce food for export. I don’t know if this is actually a crisis yet but we are going to have to start opening the doors wide to immigrants with a desire to work the land if Canadians continue to shun this activity. What I see happening right now is that huge tracts of land are being bought up by pension funds and various forms of speculators. The land is coming available as retirements proceed in the industry and then the big funds lease it out to guys who actually farm for a living with the hopes it will turn a profit. But nobody gives a shit about land like that and so they don’t make real efforts to conserve it or give it the care it needs. Efficiency may be on the rise but production is actually falling where these guys get involved. Thing is, you just can’t farm by formula from an office in New York City. We will see where it all takes us but I don’t like the looks of it so far. The prairies are being gobbled up by corporate interests. It is a true land grab. Inevitably there will not be people out there with the ability to do the work though and that is where immigrants will fill the need. My point though was that this represents a great opportunity for anyone complaining they can’t find a job as a historian (not picking on historians but you know what I mean). Farming is probably one of the biggest growth areas in the future given how many people are about to leave the business.

  8. pricedoutfornow

    We are also in a situation where the landlord could give us a months’ notice (no more lease, it ended a year ago) and make us move due to potential sale or family wanting to use the property. We’re looking at moving (need more space), but it’s difficult not only to find an appropriate property, but also to find a good landlord! The last place I went to look at for rent turned out also to be on MLS for sale with an open house that very weekend! It’s not easy being a renter in this city, frankly, it sucks with amateur landlords/speculators/accidental landlords. I think I’m going to concentrate my rental search on finding a co-op or a purpose-built rental-anything other just does not provide enough stability. Despite the fact that the landlord tells you “Oh ya, we’ll never sell” you really never know if you will be living in the same place for a long period of time. This housing bubble really sucks…I have over $100k in the bank and just wish I could buy. (sorry for the rant).

    • yltnboomerang

      Pricedout, we’re right there with ya! We’ve been looking for a bigger place for a couple months now, (current place is great, just a bit small), and so many of the places listed are also on MLS for sale. I flat out asked one of the property managers and he said no, not for sale however 5 minutes on MLS and I was quoting him the number to the response “Oh, they never told me they listed” BS!!!

    • It really is awful out there just for these reasons (amateur landlords/specker landlords).

      Renting in a well-kept long-established building is probably safest, but if one needs more space, there aren’t a lot of 3-bedrooms out there.

      If you’re looking to rent SFHs, there are certainly a lot of empty ones around that one hopes will come up for rental as their owners find them hard to sell.

      • The trouble is that those SFHs are unlikely to (ever?) be good stable longterm rentals. High chance of them turning over until they find homeowners who want to use them themselves, or until prices find MUCH lower levels (such that they make sense to investors). SFHs in Vancouver are a long way off the latter situation, as you know; they’d have to drop by 66% or more.
        A falling market will destabilize the rental pool further.
        Many landlords who bought years ago, were happy with cash-flow, and also happy with rising prices will now consider the option of selling as prices make their descent.

  9. Carioca Canuck

    Turn the guy in to the CRA……plain and simple.

  10. Exile on Main, good story. You lasted longer in that rental than most people do in their own homes.

  11. Exile on Main Street

    Interesting discussion on an education bubble and I think many would agree that one exists. One of my favourite books about adapting to a changing world is by Sir Ken Robinson of TED.com fame: http://vpl.bibliocommons.com/item/show/1851833038_the_element The basic premise is that there is a glut of overeducated people at present, but the one commodity that will be in demand in the future, and that school tends to crush out of us, is creativity. Definitely worth a look. In a sense it’s about being a contrarian about life in general.

  12. vancouversdownthedrain

    Perhaps I missed something, but nowhere did the poster say they had a long term lease. A landlord is within his rights to give two months notice.

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