Re: “Rent increase is a gift to the wealthy,” letter, Sept. 12.
So a writer thinks that landlords are living the high life because of high rents. While I can empathize with the difficulties people on fixed incomes have to endure in Victoria, I find the reporting in the Times Colonist very biased toward renters. It would be good to hear from landlords.
A would-be landlord who buys a modest and dated two-bedroom condominium for $400,000 that was built in the 1980s, and has a $200,000 mortgage amortized over 15 years at 3.75 per cent, would have monthly payments to the bank of about $1,450. Strata fees, a building renovation levy of $40,000, interior renovations of $40,000 and property taxes add about another $1,000 a month if you spread this out over 15 years.
If you add up the monthly expenses for an individual who decides to invest in a condo and make it available for rent, the outgoings for all of this investment add up to $2,400 a month for 15 years. Even if the condo were paid for outright, the base break-even rent needs to be $1,450 to manage these costs.
Hydro has also increased 10.5 per cent over three years and property taxes in Esquimalt, for example, have risen more than 17 per cent over three years, if you include the new sewage tax. Replacing appliances, repairs between tenants, and pet damage are additional costs that rarely match what is paid as a damage deposit. Hence, a 4.5 per cent rent increase is not unreasonable.
Renters who expect to pay rents substantially below the cost of running an apartment are being unrealistic. The cost of maintaining an apartment in B.C. is so expensive, it is almost not worth renting it out because the operational costs exceed any capital appreciation. It makes more sense to sell it to an owner-occupier, which eliminates the apartment from the rental pool.
Victoria is one of the most expensive cities in Canada for renters and landlords. If you can’t afford to live here, you might have to make some tough decisions. I would like to live in Manhattan, but I can’t afford to live there, either.
Rick Ladyshewsky lives in Esquimalt.