Comment on A conundrum
npcknapsack@lemmy.ca 1 day agoMy old house went up over 400k between 2019-2025. So, if I’d sold it in 2019, they could absolutely afford to rent to me at a lower price than if I tried buying it again.
Comment on A conundrum
npcknapsack@lemmy.ca 1 day agoMy old house went up over 400k between 2019-2025. So, if I’d sold it in 2019, they could absolutely afford to rent to me at a lower price than if I tried buying it again.
grrgyle@slrpnk.net 1 day ago
Yeah that’s the vagaries of the housing market and valuation, which is why I said equivalent property.
There’s also no reason you couldn’t sell that house for 400k less. The value is just the value. It’s going to be the same whether you’re renting or paying the bank for the same property.
I also won big by buying prepan, but who’s up or down in the Canadian housing lotto doesn’t change the physics of paying a lord’s mortgage costing more than if you were paying the bank’s mortgage directly.
Nevermind that whoever gets to be lord keeps the equity.
jj4211@lemmy.world 1 day ago
I think the point is that properties on market are, as a rule, not very recently purchased with a 30-year mortgage. So the monthly cost now required to cover the owners costs may be based on financial conditions from 6 years ago. If the rental market has a lot of properties that have been held a while but house values have rocketed, then you have a critical mass of owners willing and ready to out-compete brand new mortgage rates even if they ignore their equity advantage.
In my area, that’s what we see, real estate prices are dramatically up as are interest rates, so mortgage cost to acquire is a fair amount above the going rate to rent comparable properties. Someone getting a 30 year mortgage to rent out a property would be underwater for very many years in the current market conditions around my area, as they have to compete with more aggressive owners that have had their properties for many years.