B.C. landlords win ruling to increase rent by 23.5% over two years

[80watts]

To be fair, that is over two years and not one year. And even after the full amount is added, this unit is still substantially below market.

I’m not saying it’s fair or it’s easy for anybody. But I’m not sure that making all the mom and pop landlords go belly up and having the government or big corporations take over is going to create a better situation for tenants.

1. Its in Victoria, rent is a little cheaper, but still outrageous.
2. The only reason there is a market that is so fucken high, is the lack of affordable housing (an city counsel problem that most counsel refuse to deal with). For someone at min wage (17.40) that is 2760/month before taxes. Rent at 1250.00 is over 50% of take home at tax rate of around 15 %.
3. Ma and Pa landlord generally rent a basement suite out of their house, so they are paying on a mortgage with additional money coming from the renters. If they buy a second house they need to have enough rent to cover mortgage, insurance (fridge, stove, washer, dryer anything else they own), condo fees (min 400 or more its the condo insurance that cost the most). But the big cost is repairs, plumbing, and stupid shit renters do to the rental. The big thing here is the mortgage, as prices get bigger in the cities so does a mortgage (which is passed on to the renter). So the only way to really increase the rent is apon buying, kick the renter out; and live in the condo for 6 months/year and then re-rent at higher rate. As I said above its an investment, so the owner should of been watching the mortgages rates.
4. The article is about an investment put into a building that has 3 or more rental suites; therefore its an investment. Thats is 5 to 20 % down (if under 20% you need mortgage insurance). Since this guy bought 3 rental units...you need to do some thinking.....
5. Whoever the guy brought from.... made money.... on the rental suites (cause I don't think he sold them at a loss).
6. Banks for the longest time since 2000 had interest rate at Prime - 0.4 % (approx). This was a open rate and you could lock in the rate at any time. at about 1% over Prime. This went on for 10 ish years and now locking in is Prime + 2-3 % these days for a fixed term. So rising interest rates at the 1-2 % is not bad, but covid came, inflation came and the Prime rate rose (above 5% sept 2022) up to 7% (july 2024) + bank mark up. Banks have changed the way they deal with interest rate from the early 2000s. The last 2 years I would call the gouge time.....

Compare this rent increases
https://www2.gov.bc.ca/gov/content/...tial-tenancies/rent-rtb/rent-increases#lawful

against the inflation rate
https://www150.statcan.gc.ca/n1/pub/71-607-x/2018016/cpilg-ipcgl-eng.htm
use core inflation from year 2000. Its about 2% avg except 3% in 2010, and started to rise in Jan 2021to about 6.5% today ish.

From looking at the graphs rent increases were always over the inflation rate. Alot of this has to do with the housing prices and hence the need for mortgages' holders to increase their rent on rental properties.

 

[Harmony-bc]

I think increasing interest rates on a mortgage that much should be illegal. I think that's the most outrageous part of the story

 

[80watts]

Apparently the way to fight inflation, is to raise interest rates.
https://www.investopedia.com/ask/an...hods-can-government-use-control-inflation.asp

But the mortgage rate only went from 3.5 to 7%, which is not much. The late 70s mortgage rates were , early 80s prime rate went over 20%.

The money comes from the government at prime rate. Banks add on their %.
When you get a mortgage, most people end up getting fixed mortgage rates, due to their budgets (very stable situation). Which increases profits for the Banks. And the Banks never loose on mortgages... Cause they can repo your home and sell it at a price that covers what is owned to them....

I happen to think compound interest for mortgages, should be gone, and just a simple interest charged (less than 20%). For a 20 year mortgage that would be the equivalent of 1% a year and its not compounded. You only pay 120% of the house price. Compared to compound interest you are paying 200-300% of purchase price of the house.

Every year you have a mortgage you pay principle borrowed + interest rate ( whatever it says in the document).

Reason we don't do this is the people of Canada liked being fucked over..... I mean yeah the politicians could make a law on that, but they won't....

 

[LLLurkJ2]

Apparently the way to fight inflation, is to raise interest rates.
https://www.investopedia.com/ask/an...hods-can-government-use-control-inflation.asp

But the mortgage rate only went from 3.5 to 7%, which is not much. The late 70s mortgage rates were , early 80s prime rate went over 20%.

But you understand that a rise from 3.5% to 7% makes it means you now pay $2k for every $1k you previously paid, but a rise of 20% to 23.5% would be $175 more.

 

[80watts]

But you understand that a rise from 3.5% to 7% makes it means you now pay $2k for every $1k you previously paid, but a rise of 20% to 23.5% would be $175 more.

Just because your interest rate doubled, does not mean your payment has doubled. At 3% your pay 3.00/100.00 borrowed; and at 7% you pay 7.00/100.00 borrowed (on a yearly basis). If the mortgage is a fixed rate with monthly payments (the interest per month is 3%/12). That is the amount of interest you have to pay. It depends on the amount your borrowed too. The key is to pay off the principle as much as possible.
https://www.thecalculatorsite.com/finance/calculators/compound-interest-formula

Pls note the principle P in the equation is the amount of your mortgage. The A is how much the bank makes. After all they are investing in your house.

 

[LLLurkJ2]

Were saying the same thing , but im pointing out that the relative amount you pay on an annual *OR* monthly basis doubles when interest goes from 3.5 to 7 but only goes up around 20% if you move from a 20 to 23.5% rate. Yes it occurs when you re-negotiate if your were fixed.

So for someone in the 80's ( who also bought at a much lower principle relative to income), flucuations in intrests were not as catastrophic.

Just because your interest rate doubled, does not mean your payment has doubled. At 3% your pay 3.00/100.00 borrowed; and at 7% you pay 7.00/100.00 borrowed (on a yearly basis). If the mortgage is a fixed rate with monthly payments (the interest per month is 3%/12). That is the amount of interest you have to pay. It depends on the amount your borrowed too. The key is to pay off the principle as much as possible.
https://www.thecalculatorsite.com/finance/calculators/compound-interest-formula

Pls note the principle P in the equation is the amount of your mortgage. The A is how much the bank makes. After all they are investing in your house.