Is it time to sell your rental property? Or time to buy another?
By Jason Heath
According to Statistics Canada, 69 per cent of Canadians own homes, so most of us have reason to worry about the fate of the housing market. Landlords, in particular, make a conscious choice to invest in real estate that goes beyond just a place for their families to live. As a result, landlords should be paying close attention to the conflicting views and data on Canadian real estate.
One in 20 Canadians own rental real estate according to the Financial Industry Research Monitor. An Altus Group study shows that for households earning more than $100,000 per year, rental real estate ownership is twice that of the general population – about 10 per cent.
So the question is: buy or sell?
Buy
Donald Trump may very well be the next President of the United States. And the man knows a thing or two about real estate. So it may be of interest to aspiring Canadian real estate moguls to consider the opinion of Trump’s right hand-man, executive vice-president and senior counsel of The Trump Organization, George H. Ross: “I don’t agree it’s overvalued. I think it’s undervalued . . . and there is plenty of room for improvement.”
The supply and demand dynamics appear good on the surface for Canadian rental properties. Vacancy rates are below two per cent for cities like Toronto and Vancouver, according to CMHC. Rising real estate prices have likely helped to buoy demand for rentals, with price increases well in excess of the salary increases for average families in recent years. Some of those average families are now opting to rent instead of buy and that bodes well for landlords given that vacancies are often the biggest risk with a rental property.
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