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When will the market recover?

We're on a roller-coaster, in the dark, in thick fog. All anyone can see is a few metres ahead. All I know is that we've been going up a long, long time, and the air is getting very thin. I hear gasps from the front carriages, but the screaming hasn't begun yet.
 
Polkaroo said:
Looks like some condo investors are still stubbornly refusing to lower rent prices. Look at this, a 1 bedroom on harrison garden for $3000/month. What is this guy smoking? http://www.realtor.ca/propertyDetails.aspx?propertyId=9636379
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are they on crack ?!?!?
from the room dimensions, this 1+1 isn't more than 700 SF.

completely out of touch with local market ... 700 SF in that area with parking is probably worth no more than $1700-1800. they must be trying to recover his mortgage, maintenance, insurance costs, etc
 
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cdr108 said:
are they on crack ?!?!?
from the room dimensions, this 1+1 isn't more than 700 SF.

completely out of touch with local market ... 700 SF in that area with parking is probably worth no more than $1700-1800. they must be trying to recover his mortgage, maintenance, insurance costs, etc
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Could be fully furnished, some agents post this info in the broker section of the listing and doesnt show up on MLS .ca
 
Condo George said:
Could be fully furnished, some agents post this info in the broker section of the listing and doesnt show up on MLS .ca
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it could be fully furnished ... however, a furnished premium is usually ~$100-200/m.
if the size is only 700SF, then it should still not command more than $1900-2000/m
 
Honestly, I am quite happy to see some sideways and backward stepping in this condo market. Some time to digest the HST, the true state of job recovery in the core, the larger economic fundamentals, to consolidate extraordinary gains of the recent past.
Looking forward to a stable, balanced market with acceptable return going forward in the LONG TERM. I think people forget that real estate is a long term investment....
 
The Condo Observer said:
I think people forget that real estate is a long term investment....
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I agree that commercial real estate is a long term investment. But residential real estate doesn't qualify as a long term "investment" because it pays no return. The carrying costs offset the small annual appreciations (1% above inflation). However, if buys at the proper point of the cycle, residential RE can be a great short to mid term investment.
 
daveto said:
I agree that commercial real estate is a long term investment. But residential real estate doesn't qualify as a long term "investment" because it pays no return. The carrying costs offset the small annual appreciations (1% above inflation). However, if buys at the proper point of the cycle, residential RE can be a great short to mid term investment.
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Buying at the proper point in the cycle has worked well for the past 12 years from 1996 to 2008. Also during the lull of late 2008 to 2009, OK. However, given that prices are very high now, I assume you are concluding as I have that residential real estate will not be a good short to mid term investment the next 5 years (I am talking mainly condos downtown here). Also, with something that has gone up for 12 years straight, I can't see it being a short to mid term investment for quite a while going forward. However, long term it will appreciate but to do this intelligently, one has to wait for the market to retrace it's past few years gains and then perhaps there will be a buying opportunity.

Some of us do buy residential real estate over commercial since while the returns are not as good, there is less likelihood of prolonged periods of vacancy. With the bad economy, businesses become questionable and carrying costs of commercial real estatecan be considerable (eg. taxes).
 
cdr108 said:
it could be fully furnished ... however, a furnished premium is usually ~$100-200/m.
if the size is only 700SF, then it should still not command more than $1900-2000/m
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I found that on my 1 bedroom plus den, I'd easily get $2000 instead of $1500 when furnished. Still, $3100 is ridiculous!
 
simuls said:
I found that on my 1 bedroom plus den, I'd easily get $2000 instead of $1500 when furnished. Still, $3100 is ridiculous!
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Then furnishing it seems the way to go, if you can recover the cost of the furnishings in a few months.

I think another factor that would determine how much you can get is the length of the lease. A lot of people are looking for short term (1, 2, 3 months, etc) accommodations and they're kinda hard to find because most landlords want a 1 year lease, so you could get considerably more by allowing short leases or month-to-month.
 
Polkaroo said:
Then furnishing it seems the way to go, if you can recover the cost of the furnishings in a few months.

I think another factor that would determine how much you can get is the length of the lease. A lot of people are looking for short term (1, 2, 3 months, etc) accommodations and they're kinda hard to find because most landlords want a 1 year lease, so you could get considerably more by allowing short leases or month-to-month.
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But much more wear and tear on the unit and a pain to have constant changes of tenants. Unless you are into full time condo management, rather get less rent and 1 year leases which often go to 2 years and longer.
 
interested said:
But much more wear and tear on the unit and a pain to have constant changes of tenants. Unless you are into full time condo management, rather get less rent and 1 year leases which often go to 2 years and longer.
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With you on this and that the market for fully furnished is very small compared to a vacant unit
 
Condo George said:
With you on this and that the market for fully furnished is very small compared to a vacant unit
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While the market is indeed smaller, I've always found a) I get better tenants because only people with money and a good job can afford the increased cost, 2) It's phenomenally easy to rent out (never had to wait more than 4 days), 3) If you're smart about the tenants you do take, they can recommend you to others. Tons and tons of people come here to work for 2-8 months but there's nothing except overpriced "business" apartments that completely suck and have no style or taste.

The $500/month premium cost me a grand total of $3600 to furnish (including all furniture, cutlery, mattress, sheets, towels, etc. - and all very nice too...I'm a good bargain hunter) and I rented it for about three years with zero downtime, not one issue, and no repairs that a magic eraser couldn't fix. When I finally sold my condo, I even sold 80% of the interior furnishings to the new owner at my original cost. In the end, that furnishing generated me $18000 in extra income for nothing. I don't think I'd do it any other way considering the extra effort was maybe, in total, 20 hours over the whole year. At $300/hr, I'd do it again.
 
Tough to argue with the logic you posed here.

And $300/hour is about $299 more/hour than I make so maybe I should do this. How do you get your renters. Do you list with MLS and agents or use Craig's list or Kijiji or equivalent?

Out of curiousity, when the Shangrila is ready, if I decide not use it personally, I would furnish this as this would be a luxury rental. What do you think one would get for an 1100 sq. ft. 1 bedroom/den with 1 and 1/2 baths, parking, locker and a 200 sq. ft west facing balcony/terrace? Minimum period would have to be 6 months rental.
 
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