Quote:
Originally Posted by Slava
I might be missing something and I don't rent or rent out a property, but why would I rent out a place flr $1700/mo if its costing me $2500+/mo ? I don't think the rental market is that bad in Calgary.
There's another factor here as well though. Lets say you can save $500 a month by renting instead of buying. (I'm not convinced that is the case, but just bear with me). If you're like most people that money is wasted and not actually saved anywhere. I know that there are exceptions, but seriously it can't be a huge number percentage wise who are that disciplined. So when/if the market rises this is where the renter's are caught. The guy who has been putting money into a property now has a smaller debt against a rising asset, whereas the renter had a few years of hookers and blow. Sure, if the market tanks then the renter comes out ahead, but that doesn't appear imminent either.
|
Maybe they bought in 2008 for 500k? Selling sets them back 100k immediately. Renting out with negative cash flow eases the pain and there is a chance of a turnaround.
There are tons of people in that situation. Got caught with their pants down when realized that RE doesn't always go up.