If you want to be a residential vancouver property manager you have to understand many things. Energy is used in buildings for heating and for lighting. However, energy consumption is not the only issue effecting sustainable home ownership, as a residential property manager must know.
Canadians have a natural interest in sustainable home ownership. They have taken the initiative in making homes more sustainable in terms of lighting and heating. Rising energy costs have been the motivation for this. This has likewise motivated more efficient electrical lighting usage.
Homes built in the last half century have become more and more energy efficient. They use less energy than older homes. This occurs even though the homes are bigger as a rule.
Sustainable home ownership includes more than energy costs, however. Real estate must be financially sustainable. The term often used is “affordable housing”.
The return on a real estate investment and it’s value are, depending on your calculation, inversely related. As house values rise returns on them drop. This is because rent can’t be financed by mortgages, while purchases can be.
The result is a conflict between what the tenant thinks is affordable in cash flow terms and what the owner thinks is a good return. Real estate can command more than it’s rental income justifies. Rents rise more slowly than purchase prices, and the cash flow on an expensive property therefore becomes out of whack and unrealistic.
Property owners, especially ones who have been in the market a while, accept these poor returns because the value of the property rises by enough to justify it. 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. Rents should rise more or prices should drop. Either rents should increase or property values should drop. Real estate remains attractive enough, despite low returns, because of drawbacks with competing investments.
The result is an apparently unsustainable situation where tenants pay high rents. At the same time tenants pay huge rents. Still, tenants get a great deal when compared with what it would cost them to own.
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