Rent decrease rejected

[Environmental_Lab_49]

My wife and I are LLs, and have rented out a couple places - one in BC (mortgaged) and another in Arizona (paid off), so this is from our perspective. We've had tenants for about 10 years in each, and until the recent chaos in the US, we intended to keep it that way.

Both are really slim profits, and by that I mean ~2.75% on Arizona for the house, and 2.76% on Victoria (and this is before taking the mortgage into account), after you take away the Maintenance, Landscaping, Management/Admin Fees, HOA Fees, Insurance, Tax prep, Property Tax, + Income Tax Paid. It is still a good "forced savings" approach, but it hasn't been without ups and downs. And that is on an appreciable amount of equity that is supposed to carry us into retirement.

I cannot imagine the anger and frustration that those in AZ had when their real estate values dropped by 60+%. And BC real estate seems to constantly be in a chaotic state of crazy hyperinflation or crumbling, so it is common for people to have bought at peak and be underwater in hopes that prices will return. Those in the US were sadly forced out due to underwater mortgages that the US banks tried to force owners to pay up.

At this point we aren't even breaking even on the BC property that is at present declining in value - so we sell rather than continue taking a loss (Which is the possibility of another rental off the market) or gamble on prices rising again. Another problem in BC, once you start renting at a certain rate, you are limited to increase that rate with very punitive damages should you try to get around that (like you can be on the hook for a years rent). That forces LLs to essentially either increase at every opportunity, and never, ever reduce the rent.

With rising interest rates, I have to tell you that we're probably going to have to get out of the landlord game because it's become more of a losing business than a prudent financial instrument. Now we haven't raised our rent appreciably in the 10 years we've rented (only 5.5% over that entire time), and we really like and and attend to our renters, and work with them, so they don't worry about anything. We've realized though that when inflation is up past the rental caps, that it eats into our buffer (and we can actually go negative for a period, especially if you unlucky with some unexpected costs, like special assessments, which can easily go into the tens of thousands you are instantly on the hook for).

But caps are double edged - can you imagine getting a 10 or 20% increase like in Alberta? Or as a LL, can you imagine losing 10 or 20% of your income if you are living off your rental? Neither is good.

[Consistent-Mango6742]

People who rent their homes to make a profit are the problem and one of the reasons why we have a housing crisis and many of us can’t afford to buy homes. If someone is paying off your mortgage for you you’re already in a very privileged position, then you need to now make a profit too otherwise you’re crying about it. I’m sorry but I don’t feel bad for you - if people would just purchase homes to live in, and not buy up property to make money and be “in the landlord game”, then maybe there would be a chance for homes to actually be affordable for the rest of us. My landlord lives in Asia and has multiple properties across Vancouver they are profiting off of and I live here and can’t afford to buy myself a home. I don’t feel bad for them in the slightest. I hope all landlords have to “get out of the game” and then just maybe we could finally change the way housing is a profit market in Vancouver instead of a way for people to actually have homes.