I have previously written on the question of whether retirees should rent or own. Obviously this is a very fact specific and contextual issue. In some cases an important element of Retirement Prep is to own your home and in some cases not so much.
The above tweet references an interesting article by Tess Kalinowski of the Toronto Star.
The long term prognosis for rental real estate continues to be very very good. The article includes:
William Jack woke up in the middle of the night last month as he often does. This time, though, he rolled over and went back to sleep.
That’s when he knew that after more than two years of turmoil, he was finally home. The fact that the roof over his head belongs to someone else only added to his peace of mind.
William and his wife, Mary Taylor, are among a growing number of Toronto area downsizers, who are choosing to rent rather than buy a retirement nest. It is a choice, they say, that can be physically, mentally and financially liberating.
The Toronto Star article referenced in the above tweet is a reminder of the principle that:
“If the landlord doesn’t respect the property then the tenants won’t respect the property”.
This means that if you want your tenants to respect the property, you as the landlord should demonstrate respect for the property. Remember also that the value of a rental property (unless it is also a single family home) is proportional to the amount of the rents. The amount of the rent is proportional to (among other things including accessibility to public transit) the “quality of life” in the building. The key to successful landlording is attracting and retaining good tenants. Tenant turnover is very costly for landlords. All small landlords should review the principles for finding and selecting good residential tenants.
The above tweet references a timely article written by Susan Pigg of the Toronto Star. It appears as though we are coming full circle. You may recall that the Toronto housing market was in a vicious correction from 1990 – 1996. Those were very bad years with the price of housing falling significantly. Those who bought in 1989 were the most hurt. Prices fell so low that for a period in the late 1990s, it actually cost more to rent than to own. In other words the rent to purchase price ratio was very high. Translation – it was very expensive to rent. This was a significant factor in fueling what has been probably the longest real estate boom in Canadian (certainly Toronto) history.
We have now reached 2015. The ratio of rent to purchase price is now very low. Translation – it’s getting very very expensive to buy. Hence, the demand for Toronto rentals is high. The question has now become:
Is it worth buying Toronto real estate at current price levels? It is now longer assumed that residential real estate is a good investment. Renting residential property can be the right choice for many.
The headlines include:
From time to time I have written posts about “Buying and selling rental properties with tenants in them“.
The above tweet references a good article by Toronto Real Estate Agent Josie Stern.
Lots of good “common sense” advice including: