Time to raise the rent – even in a slowing market?

With hot housing markets in and around Greater Vancouver showing no sign of slowing down, landlords who are lucky enough to own a piece of the action should be paying close attention to rental rates as property prices rise.

“A lot of rents are on the low side, in my opinion,” says Randy Dyck, president of Eximus Real Estate Team. “Even in multi-family units, a lot of investors get stuck in a pattern of not increasing their rents.”

The latest figures from the Real Estate Board of Greater Vancouver show that average house prices continue to rise, with the benchmark MLS price at $736,000 in October 2015, up 15.3% year-over-year.

According to the latest CMHC figures, the average rent for a two-bedroom apartment in Vancouver was $1,360 in October 2015.

The province of BC does have rent increase restrictions in place, at around 2.5% per year, which is basically the rate of inflation, but landlords get stuck in a pattern, according to Dyck. “Rent is what it is and it’s not changing,” he said. “I find that a lot of investors have under-rented or are under-renting their units right now.”

Based primarily in the Fraser Valley, Dyck owns a multi-family building with 100 units and he actually wants vacancies. “If we don’t have vacancies, we can never increase our rents,” he said. “Well, we can increase rent 2.5% a year, which is what we do, but in a lot of cases you’re being left behind the premium rents.

“A lot of landlords are stuck in the past and are not looking forward. They are stuck in a lease they feel comfortable with and they don’t even know the difference. They are not in tune with what’s happening in the rental market.”

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