Seeking Insights/Opinions on Rent vs Buy Scenario
Re: Seeking Insights/Opinions on Rent vs Buy Scenario
So our landlord emailed us today with the rent increase form.
Rent is set to go up by a maximum of 4% in 2018 in BC.
Our landlord gave us a sob story of how the 4% increase will not cover for the increased property taxes in 2018 due to the increased assessment value of the property in 2017, conveniently not mentioning that this unit is worth at least a $100,000 more than 2016's assessed value. If we were to price the unit on market price, based on similar units that are for sale and have sold in the 2017, this unit could be sold for up to an additional $100,000 on top of the latest assessed value.
This also doesn't take into account that the total property taxes for this unit has actually decreased over the past 3 years since 2015 from $1700 to $1600 to $1400 - numbers I got from city hall. I can't go back another 2 years to get the total property taxes for 2013 and 2014, but I can estimate it based on the residential rate and the assessed value (which I both have): it looks like it was roughly $1400 in both 2013 and 2014.
Based on this, total property taxes over the past 5 years have actually, on average, remained relatively flat.
I can understand that strata fees have gone up, as it does every year. However, I'm sure the increased assessed AND market value of the unit makes the potential increase in 2018 property taxes a rounding error
Anyways, our landlord wants us to "consider" paying $35 more per month on top of what our rent would be with the 4% increase.
As my wife and I strategize our reply over the next week, I feel like there are 2 paths available to take and consequences for each of those paths:
1) We can tell him to shove it (nicely) and tell him (nicely) that we would agree to another 1 year lease (since we do plan on staying here for another year) based on only the 4% increase. The risk with this option is that he gets annoyed that we don't take him up on his offer of $35 more per month, but I imagine he'd grudgingly accept.
2) We can tell him to shove it (nicely) and tell him (nicely) that we are going to let our lease expire and then go month-to-month. The risk with this option is that he probably wouldn't be happy at all with this option and could evict us with 2 months' notice, either by having a family member move in or claim renovations.
I think those are the only 2 paths we can think of taking. I don't think we are hell bent on going month-to-month, and if we think it would lower the risk/probability of legal eviction, we wouldn't mind signing another 1 year lease, since the move-out-clause is no longer valid and can't be used on any future tenancy agreement forms (except in specific circumstances, which I do not think apply to us).
Anyways, if anyone has feedback or suggestions, or criticisms, I would love to hear them. Thanks!
(edits for grammar)
Rent is set to go up by a maximum of 4% in 2018 in BC.
Our landlord gave us a sob story of how the 4% increase will not cover for the increased property taxes in 2018 due to the increased assessment value of the property in 2017, conveniently not mentioning that this unit is worth at least a $100,000 more than 2016's assessed value. If we were to price the unit on market price, based on similar units that are for sale and have sold in the 2017, this unit could be sold for up to an additional $100,000 on top of the latest assessed value.
This also doesn't take into account that the total property taxes for this unit has actually decreased over the past 3 years since 2015 from $1700 to $1600 to $1400 - numbers I got from city hall. I can't go back another 2 years to get the total property taxes for 2013 and 2014, but I can estimate it based on the residential rate and the assessed value (which I both have): it looks like it was roughly $1400 in both 2013 and 2014.
Based on this, total property taxes over the past 5 years have actually, on average, remained relatively flat.
I can understand that strata fees have gone up, as it does every year. However, I'm sure the increased assessed AND market value of the unit makes the potential increase in 2018 property taxes a rounding error
Anyways, our landlord wants us to "consider" paying $35 more per month on top of what our rent would be with the 4% increase.
As my wife and I strategize our reply over the next week, I feel like there are 2 paths available to take and consequences for each of those paths:
1) We can tell him to shove it (nicely) and tell him (nicely) that we would agree to another 1 year lease (since we do plan on staying here for another year) based on only the 4% increase. The risk with this option is that he gets annoyed that we don't take him up on his offer of $35 more per month, but I imagine he'd grudgingly accept.
2) We can tell him to shove it (nicely) and tell him (nicely) that we are going to let our lease expire and then go month-to-month. The risk with this option is that he probably wouldn't be happy at all with this option and could evict us with 2 months' notice, either by having a family member move in or claim renovations.
I think those are the only 2 paths we can think of taking. I don't think we are hell bent on going month-to-month, and if we think it would lower the risk/probability of legal eviction, we wouldn't mind signing another 1 year lease, since the move-out-clause is no longer valid and can't be used on any future tenancy agreement forms (except in specific circumstances, which I do not think apply to us).
Anyways, if anyone has feedback or suggestions, or criticisms, I would love to hear them. Thanks!
(edits for grammar)
Last edited by SkaSka on 03 Jan 2018 18:28, edited 1 time in total.
Re: Seeking Insights/Opinions on Rent vs Buy Scenario
I'm not familiar with BC renting laws, and I'm just curious - does he have to offer you a 1 year lease or can he refuse and make you go month to month? If he's dead-set on his $35/mo increase (on top of the 4%) and wants you gone because you're paying below market, I feel like he could refuse the lease, offer you month to month, and then proceed with his family member or renovations eviction plan.
Do you think he'll be happier with the lease because then he knows at least he has a full year of rent coming? I guess that makes sense.
Do you think he'll be happier with the lease because then he knows at least he has a full year of rent coming? I guess that makes sense.
Re: Seeking Insights/Opinions on Rent vs Buy Scenario
I would tell him that the 4% will compensate for those years when he was making out like a bandit on lower taxes. Remind him that a tenant that makes no trouble and always pays on time should get a discount.
I have watched my landlord evict tenants. It is a costly process.
I have watched my landlord evict tenants. It is a costly process.
For the fun of it...Keith
Re: Seeking Insights/Opinions on Rent vs Buy Scenario
Same boat as you. Just so you know, the NDP has changed the Tenancy act and the lease end vacate clause is null and void. You will be able to go month to month.
They also have to have cause to enact the two month end of tenancy, with permits issued by the city.
https://www.ctvnews.ca/business/b-c-mov ... -1.3651101
https://www2.gov.bc.ca/gov/content/hous ... ncies/news
https://www2.gov.bc.ca/gov/content/hous ... nth-notice
They also have to have cause to enact the two month end of tenancy, with permits issued by the city.
https://www.ctvnews.ca/business/b-c-mov ... -1.3651101
https://www2.gov.bc.ca/gov/content/hous ... ncies/news
https://www2.gov.bc.ca/gov/content/hous ... nth-notice
Re: Seeking Insights/Opinions on Rent vs Buy Scenario
Keep in mind that in BC, if the landlord forces the tenant to move out, the landlord is required to compensate the tenant with one month's rent. So your rent would have to be quite a bit below market to make it worthwhile for the landlord to kick you out and find another good long-term tenant willing to pay higher rent.
Re: Seeking Insights/Opinions on Rent vs Buy Scenario
My wife suggested that we reply to the landlord's email by simply stating that we are in agreement with the the rent amount that includes only the 4% increase and ignore the request about the $35 additional per month.
We believe this way, it's still a small win-win for everyone without getting confrontational.
If our landlord, in the reply to this email, brings up the additional amount above the maximum allowable again, then we will slowly start playing our cards: the data on property taxes over the past 5 years, the data on increasing assessment value of the property, the data on increasing market value of the property, etc.
We believe this way, it's still a small win-win for everyone without getting confrontational.
If our landlord, in the reply to this email, brings up the additional amount above the maximum allowable again, then we will slowly start playing our cards: the data on property taxes over the past 5 years, the data on increasing assessment value of the property, the data on increasing market value of the property, etc.
Re: Seeking Insights/Opinions on Rent vs Buy Scenario
I agree with your wife. The request for the $35/month is bogus and does not deserve a response of any kind. However, I would be clear that you simply are agreeing to the rent increase as permitted by law.
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Re: Seeking Insights/Opinions on Rent vs Buy Scenario
Yes, we will specifically spell out the dollar amount per month that includes only the 4% increase!
Re: Seeking Insights/Opinions on Rent vs Buy Scenario
Thanks to SkaSka and other forum members for a detailed discussion on the 'fixed term tenancy agreement' and the new law. I am a tenant in a similar situation and this thread is really helpful.
Re: Seeking Insights/Opinions on Rent vs Buy Scenario
Hi everyone, I am in Ontario and have a very similar issue. My landlord has just emailed me this morning saying he wants to increase our rent from 2250 to 2500, beginning April 2019. That amounts to 11%. The guideline for Ontario for 2019 appears to be 1.8%.
We initially signed a 1 year lease over 2.5 years ago, then we just kept it going so I guess we are month-to-month now. If we refuse the increase, I suppose he could try to get us out of here by using a family member or renovation reason.
Am I reading this situation correctly? Just wanted to make sure before I email the landlord back.
We initially signed a 1 year lease over 2.5 years ago, then we just kept it going so I guess we are month-to-month now. If we refuse the increase, I suppose he could try to get us out of here by using a family member or renovation reason.
Am I reading this situation correctly? Just wanted to make sure before I email the landlord back.
Re: Seeking Insights/Opinions on Rent vs Buy Scenario
Adding to this: just spoke to the landlord tenant board, it appears I have read the situation correctly.
I think what I'll do is just wait for now, not commit either way. I don't know why I've been notified so early - does he plan to try to kick us out right away if I balk?
So in February or March I think I'll email him to say I will pay the guideline increase but not more. Then if he wants to do a small renovation to get us out of there or whatever (I guess that's the strategy? That or a relative moving in for a short time?), at least we'll have a bit more time at the lower rent before moving to another place (we want to move in 2019 anyway).
I think what I'll do is just wait for now, not commit either way. I don't know why I've been notified so early - does he plan to try to kick us out right away if I balk?
So in February or March I think I'll email him to say I will pay the guideline increase but not more. Then if he wants to do a small renovation to get us out of there or whatever (I guess that's the strategy? That or a relative moving in for a short time?), at least we'll have a bit more time at the lower rent before moving to another place (we want to move in 2019 anyway).
Re: Seeking Insights/Opinions on Rent vs Buy Scenario
New year, same story with the landlord.
He wants an increase greater than the 2.5% maximum for 2019.
He proposed a 10% increase as our rent is "far below market rate" and that even with a 10% increase, it is still many hundreds of dollars below the current market rate. He also threw in the now typical sob story of how his costs have gone up.
We've been emailing back and forth for weeks now and we have communicated kindly but firmly that we won't be paying more than the 2.5% regulated maximum. We have also advised that if he wants more than 2.5%, he has the right as a landlord to seek "Additional Rent Increases" by filling in a form and going through the Residential Tenancy Branch. By today's latest reply, this is his third time repeating that essentially he doesn't want to go through the hassle of that process and wants us to give him an amount we think is a reasonable increase
The comedic gold in today's email is the paragraph where he advises us that we should buy our own condo in order to build equity so that we can make tons of money, because I kid you not, he says word-for-word in the email "real estate never goes down". He also throws in the renting is a waste of money bit. It's a hilarious and strange piece of advice that he has casually thrown in the email to "wink wink, nudge nudge" us out of the rental unit, which is absolutely not going to work.
Anyways, we'll see where this goes.
He wants an increase greater than the 2.5% maximum for 2019.
He proposed a 10% increase as our rent is "far below market rate" and that even with a 10% increase, it is still many hundreds of dollars below the current market rate. He also threw in the now typical sob story of how his costs have gone up.
We've been emailing back and forth for weeks now and we have communicated kindly but firmly that we won't be paying more than the 2.5% regulated maximum. We have also advised that if he wants more than 2.5%, he has the right as a landlord to seek "Additional Rent Increases" by filling in a form and going through the Residential Tenancy Branch. By today's latest reply, this is his third time repeating that essentially he doesn't want to go through the hassle of that process and wants us to give him an amount we think is a reasonable increase
The comedic gold in today's email is the paragraph where he advises us that we should buy our own condo in order to build equity so that we can make tons of money, because I kid you not, he says word-for-word in the email "real estate never goes down". He also throws in the renting is a waste of money bit. It's a hilarious and strange piece of advice that he has casually thrown in the email to "wink wink, nudge nudge" us out of the rental unit, which is absolutely not going to work.
Anyways, we'll see where this goes.
Re: Seeking Insights/Opinions on Rent vs Buy Scenario
Unbelievable!! It's almost insulting that he thinks such an argument is worth making to you. He must believe there's a chance this line of reasoning will sway your decision.SkaSka wrote: ↑15 Jan 2019 11:03 The comedic gold in today's email is the paragraph where he advises us that we should buy our own condo in order to build equity so that we can make tons of money, because I kid you not, he says word-for-word in the email "real estate never goes down". He also throws in the renting is a waste of money bit. It's a hilarious and strange piece of advice that he has casually thrown in the email to "wink wink, nudge nudge" us out of the rental unit, which is absolutely not going to work.
Re: Seeking Insights/Opinions on Rent vs Buy Scenario
Having to deal with this hassle is actually one reason to buy vs rent. Perhaps not a major one but nevertheless....
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Re: Seeking Insights/Opinions on Rent vs Buy Scenario
If the decision is apartment vs. condo, there is still the condo board/association to deal with. That can be just as bad as a landlord - likely worse if your landlord is an institutional owner or REIT.
The extra mile is never crowded.
Re: Seeking Insights/Opinions on Rent vs Buy Scenario
Is your rent actually "far below market rate"? If so you may want to negotiate a little rather than find yourself looking for a new place.SkaSka wrote: ↑15 Jan 2019 11:03 New year, same story with the landlord.
He wants an increase greater than the 2.5% maximum for 2019.
He proposed a 10% increase as our rent is "far below market rate" and that even with a 10% increase, it is still many hundreds of dollars below the current market rate. He also threw in the now typical sob story of how his costs have gone up.
"And the days that I keep my gratitude higher than my expectations, well, I have really good days" RW Hubbard
Re: Seeking Insights/Opinions on Rent vs Buy Scenario
It is around $300 below current market rent for a similarly sized unit.deaddog wrote: ↑15 Jan 2019 13:56Is your rent actually "far below market rate"? If so you may want to negotiate a little rather than find yourself looking for a new place.SkaSka wrote: ↑15 Jan 2019 11:03 New year, same story with the landlord.
He wants an increase greater than the 2.5% maximum for 2019.
He proposed a 10% increase as our rent is "far below market rate" and that even with a 10% increase, it is still many hundreds of dollars below the current market rate. He also threw in the now typical sob story of how his costs have gone up.
We are mulling whether we actually want to negotiate with him.
He is proposing around a 10% increase, maximum for 2019 is 2.5%, we might consider ~4% increase but landlord does not know that as we are keeping our cards close to our chest.
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Re: Seeking Insights/Opinions on Rent vs Buy Scenario
If my rent was below market, and if my landlord was generally taking good care of repairs when needed, I would try to keep relations on a good term and agree to negotiate for a reasonable increase, even if it's higher than 2.5%.
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Re: Seeking Insights/Opinions on Rent vs Buy Scenario
I guess it depends on your relationship with the landlord.
My experience as a landlord taught me that good tenants are priceless.
"And the days that I keep my gratitude higher than my expectations, well, I have really good days" RW Hubbard
Re: Seeking Insights/Opinions on Rent vs Buy Scenario
We've been tenants for 5 years, never missed a rent payment, never late on a rent payment, take good care of the unit, and contact the landlord maybe twice a year.
I believe we have been excellent and model tenants.
However, our landlord doesn't seem to really care much about that!
Re: Seeking Insights/Opinions on Rent vs Buy Scenario
Agree. Condo boards can be bad news. More aggravating if you get inv9lved. I just ignore ours.skinnyinvestor wrote: ↑15 Jan 2019 12:53If the decision is apartment vs. condo, there is still the condo board/association to deal with. That can be just as bad as a landlord - likely worse if your landlord is an institutional owner or REIT.
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Re: Seeking Insights/Opinions on Rent vs Buy Scenario
I agree with DeadDog. You are a valuable commodity as good tenants.
Too bad your landlord can't see that.
I like the plan of being reasonable - kudos!
Re: Seeking Insights/Opinions on Rent vs Buy Scenario
I think what we're having trouble figuring out is how much goodwill we would actually gain if we were to negotiate an increase above the 2.5%.
In the first email, our landlord raised the spectre of potentially having to sell the unit if the rent wasn't higher than the 2.5% increase.
What we're thinking is, though, what stops the landlord from selling the unit even if we gave him a higher than 2.5% increase?
He says he wants $100 more than what the 2.5% increase would bring the rent to. That is an extra $1,200 in a year. Does the decision to sell this rental unit really hinge on $1,200?
In the first email, our landlord raised the spectre of potentially having to sell the unit if the rent wasn't higher than the 2.5% increase.
What we're thinking is, though, what stops the landlord from selling the unit even if we gave him a higher than 2.5% increase?
He says he wants $100 more than what the 2.5% increase would bring the rent to. That is an extra $1,200 in a year. Does the decision to sell this rental unit really hinge on $1,200?
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Re: Seeking Insights/Opinions on Rent vs Buy Scenario
He can sell whenever he wants. Are you going to sign a fixed term lease? If you do (after you reach a rent agreement), no one, not even the new owner, can kick you out during the fixed term. If you stay as month-to-month, the new owner can't kick you out either, unless the new owner/family plan to move in themselves (that could happen with your current landlord, too).SkaSka wrote: ↑15 Jan 2019 21:18 I think what we're having trouble figuring out is how much goodwill we would actually gain if we were to negotiate an increase above the 2.5%.
In the first email, our landlord raised the spectre of potentially having to sell the unit if the rent wasn't higher than the 2.5% increase.
What we're thinking is, though, what stops the landlord from selling the unit even if we gave him a higher than 2.5% increase?
He says he wants $100 more than what the 2.5% increase would bring the rent to. That is an extra $1,200 in a year. Does the decision to sell this rental unit really hinge on $1,200?
“Life is 10% what happens to you and 90% how you react.” — Charles R. Swindoll
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Re: Seeking Insights/Opinions on Rent vs Buy Scenario
It’s a bluffing game. The landlord can’t legally force you to pay more than the legislated rate, but if you volunteer to pay more, you can’t complain...
Would he sell, kick you out, renovate, etc? Probably not. The 1-2 months of vacancy will eat up any increased rent amounts for the next year. It’s more profitable to have you stay at a lower rate than lose a couple months of rent.
Sounds to me like your landlord is getting a little tired of being a landlord. Been letting things slide for a few years, now may just want to get out (hence the offer to sell you the place). He may decide to sell, but this market isn’t great and the resale value will make it unprofitable to the new buyer to keep it as a rental. Most homeowners don’t want to buy a former rental unit. So he’s pretty much boxed in without a lot of options.
Would he sell, kick you out, renovate, etc? Probably not. The 1-2 months of vacancy will eat up any increased rent amounts for the next year. It’s more profitable to have you stay at a lower rate than lose a couple months of rent.
Sounds to me like your landlord is getting a little tired of being a landlord. Been letting things slide for a few years, now may just want to get out (hence the offer to sell you the place). He may decide to sell, but this market isn’t great and the resale value will make it unprofitable to the new buyer to keep it as a rental. Most homeowners don’t want to buy a former rental unit. So he’s pretty much boxed in without a lot of options.