This blog is primarily a backlinking and SEO blog. If you are looking for off grid or offgrid information about BC go to www.offgridbc.com. If you're looking for Cariboo or Chilcotin property, or other information about those regions, please go to Chilcotin Property.com or Bushpilotproperties.com If you're looking for my company home page please visit Coronet Realty Ltd., especially for information about vancouver property management, non-resident taxation, and rent collection.
A residential vancouver property manager must know about energy use. Energy use and sustainability is one of them. However, energy consumption is not the only issue effecting sustainable home ownership, as a residential property manager must know.
Canadian homeowners know about sustainability. They have taken the initiative in making homes more sustainable in terms of lighting and heating. High energy prices have prompted them to save money on heat through higher efficiency and insulation. This saves oil, gas, and electricity.
Homes built in the last half century have become more and more energy efficient. They use less energy than older homes. This is the case even as houses have grown in size.
However, sustainable home ownership isn't just about energy, just as the energy issue isn't only about energy. Real estate has to be financially sustainable as well. The term often used is "affordable housing".
Affordable housing is a tricky challenge. As the value of housing rises the return on it tends to drop. This is because rent can't be financed by mortgages, while purchases can be.
This creates a conflict between the cash flow generated by tenant paid rent and the purchase price of the underlying asset. Real estate purchase prices can be much higher than their underlying cash flow justifies. Rents rise, and become burdensome, but they don't rise enough to make the cash flow on rental properties realistic.
Owners of real estate accept lower returns because the real estate has performed well in terms of capital appreciation. They also hold because they like the asset class. Last, they hold because transaction costs and taxes are high.
In theory this is not sustainable. If rents don't support high purchase prices something should give. Either rents should increase or property values should drop. Prices don't fall.
The result is an apparently unsustainable situation where tenants pay high rents. Owners get low returns. Yet, tenants get, as can be shown from math, great value for what they pay in rent.
No comments:
Post a Comment