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Michele Talks Rental Rates and More!

Posted by Brad Fry on August 24, 2021
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Warning! ;) This is a digitally automated transcript of the show so there will be mistakes throughout - including the spelling of Michele's name!

 

Curtis Pope: 

She Saturday morning it's time for the Cummins Real Estate Group show with Michelle Cummins and myself Curtis Pope. Good morning, Michele.

Michele Cummins - PREC: 

Good morning, Curtis. How are you?

Curtis Pope: 

I am good. I know that was a bit of a bit of a flustering morning for you because your computer crashed, which is never good.

Michele Cummins - PREC: 

Yes. And sort of happened twice on me. So, oh, well, we are up and running right now. And it's a glorious Saturday morning. So very, very happy.

Curtis Pope: 

Well, we just need a better IT department between the two of us. Or just an IT department we help.

Michele Cummins - PREC: 

Oh my gosh, we need these things. These phones in these computers of ours. Like this is mandatory.

Curtis Pope: 

Richard, I thought that was his gig. I thought he was your IT guy.

Michele Cummins - PREC: 

We need breath. We need water. Maybe a little food. And then we need computers. And that's right.

Curtis Pope: 

Okay. And maybe a new guitar for Richard or

Michele Cummins - PREC: 

you know what? You know that blue Paisley? I was telling you about a few weeks ago. Yeah. Yeah, he still has that. So I bought a new one. And a boy. Okay, you encouraged him?

Curtis Pope: 

Well, it's just so happens that next week is Dylan's birthday. And I know he's got a guitar that he's been paying down that he's had on layaway for a while and I guess for his birthday. I'll go in and pay off whatever he has left. And that'll be his birthday present.

Michele Cummins - PREC: 

That is so cool. You are rad dad.

Curtis Pope: 

No, I just you know, annoys my wife that she does understand why he needs six guitars.

Michele Cummins - PREC: 

No, you are a rad dad and in the tic toc world. Your buttons?

Curtis Pope: 

Sure. Oh, let's go with that.

Michele Cummins - PREC: 

So I didn't see you at the car show. In chilliwack. On Thursday at Cal tire. You really got to come out and check it out.

Curtis Pope: 

Yeah, I really should. I mean, I being funny. I have this weird kind of, you know, situation where I grew up around a car guy. My dad's a car guy, my brother's a car guy. But because of that, they barely ever let me help them do anything. So I can barely turn a wrench on a car. But I do appreciate cars and love, you know, like, especially the muscle cars and an old Hot Rods and stuff like that. So I do love cars. I just can't fix them.

Michele Cummins - PREC: 

You know, it is so, so many amazing cars out there. I am so shocked ever. There have been some time to go right into October like last year I'd heard about this, this partial that meets together. But this year, it's been fab. It's been so amazing. And it's become like a mini Motorcycle Show too, because there's like a whole row of motorcycles. So I bring my motorcycle and then but this last week, we were going to bring the night writer and we didn't because there's a little work on the dash left. But literally it was this close to coming out on Thursday. So this Thursday, Curtis this coming Thursday, you got to come out. We're gonna bring the generally and the night writer, all things going well, and there's just so many great cars and they've got a coffee truck and it's such a cool, no hot dog fan and everything. Oh, when they got music. They had Elvis there the week before. And then this week, they had somebody just singing all sorts of different songs. Yeah, well, you

Curtis Pope: 

know, later today, there's it's perfect for you. The mountain lemon winery is having a car show, show and shine. And I thought well, there you go cars and wine. today. Yeah.

Michele Cummins - PREC: 

What time

Curtis Pope: 

you want me to remember the time? I'll have to find I've looked this up. I must have it in front of me. horsepower for hospice is 10am to 4pm.

Michele Cummins - PREC: 

Okay, so we'll have time after the show. My wrist like I have a watch on it. Oh my gosh, that's so old school.

Curtis Pope: 

But I thought of you when I saw this one. I'm like, wow, at a winery and a car show that sounds like something that Michelle would like to indulge

Michele Cummins - PREC: 

in. And you know what they I don't have an open house plan next week. I do because I'm gonna announce that later on the show brand new listing. I have an open house next Saturday. 123 admission but today, nope. So I might have some time to do that.

Curtis Pope: 

Well, there we go. I'm glad that I informed you of it. Now everybody else knows too.

Michele Cummins - PREC: 

And I'm gonna also you might not feel the urge to do this one, but for the first time I'm going to go to something called Taco Tuesday. It is motorcyclists gather at the Langley Harley Davis. Soon and supposedly pretty fun and, and just some neat stuff that they do right there and I've got an organized thing and yeah, I'm looking forward to it. I'm going to ride my bike. My Kawasaki Vulcan s out there on on Tuesday called Taco Tuesday. I wonder if they have tacos? I would hope so.

Curtis Pope: 

Otherwise, it's false advertising. It's flagrant false advertising, and I like tacos and I like burritos and I in any kind of Mexican food.

Michele Cummins - PREC: 

Yeah. Oh my goodness. Oh, am I at the Rosedale. There's the like the five the roundabout, there's this little taco stand and I haven't tried it yet. You know, and there's supposed to be a good Mexican restaurant in in chilliwack.

Curtis Pope: 

I drove by that little taco stand, like just last weekend. I thought to myself, hmm, me. I have to try that one day.

Michele Cummins - PREC: 

Oh, yeah. Oh, yeah. Okay, now I'm thinking about food. And it's so early in the day.

Curtis Pope: 

Why would I get a Southern California girl talking about Mexican food?

Michele Cummins - PREC: 

I know. And you know how we like our breakfast. We love salsa on our breakfast.

Curtis Pope: 

I like eggs. Ranchero. I'm there.

Michele Cummins - PREC: 

Yeah, there you go. So okay, so real estate. Okay, before I have Okay, the first section of our segment here today is going to be why real estate investors shouldn't worry about inflation, a hot topic right now, because people seem to be worried about that. And then our second segment, we're going to go into how there's a news release for the third consecutive months in a row. rental rates have been going up in Canada. So we're gonna talk about that. So we will jump into why real estate investors shouldn't worry about inflation right now. And first off, this is actually from I am a member or I, I get the Canadian Real Estate wealth magazine, I love that magazine, and the reports online and everything. And so this really stood out to me what's happening here, because there's a lot of topics a lot of talk about in the inflation rates, right. So it's a rising and growing concern about real estate investors can be rest assured that their investments are at least for the time being inflation proof. So this article, I want to just skim through it, just to let you know, and it's from Canadian wealth magazine. So real estate has been protected from inflation since the 1970s. And if anybody's had an evaluation by me, they know that one of the statistics I bring in a graph I bring, and I show on this on our video here a lot of times is what the markets done overall for prices since the early 1970s. So you know, it's pretty much been practice protected since then. And if we go back, but if we go back to the 15%, the double digits of interest rates that we still have, that could be a bit of a concern. However, if it's rates somehow surge into the double digits, the value of real estate is mostly tied to the value of land, and the cost of construction, mainly materials and labor, which rise commensurately with inflation. So you have to think, and you know, with with rents, and with everything, as prices go up, things go up, land prices go up. So after the subprime mortgage fiasco that led to the great recession that we all know of, of real estate in the major cities like Miami and, and New York, they quickly returned to their base values. So investors always they they always will pounce on properties in in the immediate aftermath of economic downturn. Nevertheless, under normal economic conditions, inflation increases slowly, and is always matched by rents, offering property investors a measure of protection. So real estate is a great way to invest and really good protected, rents adjust to inflation. And in Quebec, every time you have a rental increase, the government looks at inflation to justify that increase. And if the price of rent goes up, the value of the building obviously goes up, too. The problem with monetary policy in Canada is most decisions are all based on inflation. The biggest concern for the government is always inflation, inflation inflation. So as soon as inflation rises, you see a direct link to real estate. It's not perfect. But if you look at all of the other options, there's almost nothing better than stocks don't even match inflation, the way real estate does unless they're blue chip. So really, the focus of protecting your investment has been focused on real estate and it should still be is highly unlikely that interest rates reach the double digit so at least they are at least anytime soon. But in Japan, they noted in the article for example, interest rates have been near the basement since the 80s. And with Canada flowing following suit with Japan, many advanced economies I've had declining interest rates for over two decades real estate is one of the safest investments today. So not you know, Andrew Carnegie said that 90% of all millionaires become so through owning real estate. So definitely, you know, that's, that's why I like focusing most of my investments in real estate, I'll be it. I like having it in sprinkled a bit. But I do have most of it in real estate, because it's been tried and proven, and especially in our area. So hopefully, that helps investors know that they could be rest assured and just look at all the all the aspects of investing and history. And definitely, it's, it's a good article. Yeah. So that's, that's about protection.

Curtis Pope: 

Very good investment. All right. Well, that pretty much brings us to our commercial break here. So if people want more information about what you do as a realtor, where can they go?

Michele Cummins - PREC: 

Well, they could go to Michelle Comm.

Curtis Pope: 

And that sounds good to me. All right, we'll come back with more right after this. And we're back with Segment Number Two of the Cummins Real Estate Group show with myself, Curtis Pope, and of course, the star of the show. Michelle comments. All right, so now we're in a segment to Michelle and I've already drawn a blank and what we're going to talk about for segment two, that's why you're the star of the show.

Michele Cummins - PREC: 

So we're talking average rents in Canada, and how they've re they've gone up 1.8% that is the third month in a row that it's gone up. So hand in hand with our last segment about why investors shouldn't worry about inflation, but talking about hand in hand, and we were talking before the show, and we were talking about how, you know, rent prices, you know, the market value of rent is like the market value of properties and all all the it tenants and buyers don't like the prices, of course, nobody has probably ever whenever they go to buy something, they wish it was less but the the thing is the cost of purchasing a property and to run an investment is one thing, but also its market value. And and that's just the value and unless somebody is running a charity or hunting something or giving a deal a discount because they friend family, what have you, you know, there there is a today value on on rents, as well with real estate values for purchasing. So that's what we're going to talk about is it's rents. For instance, for two bedroom unit, they've been rising really fast because tenants have been seeking larger units to work from home. So where they were in bachelor suites, or in one bedroom, one bedroom dens are actually moving up. And so the hot topic has been two bedroom units. Actually, Vancouver is the most expensive city for renters. No surprise, but they have an average rent right now for a two bedroom topping 3000. And I don't even think that's furnished because I've been looking and the furnished two bedroom condos in Vancouver have been going anywhere up to 4000, like around there. So you get quite a bit more per month, if you actually have it furnished. The average rent in Canada increased for the third month in a row as mentioned, and it's risen to $1,752 in July. That's up 1.8% month over month. And that is according to rentals.ca and Bolton research and consulting and the latest national rent report. So that is what has been happening for for rents. The average asking rent for all Canadian properties listed on rentals.ca was down 1.1% year over year in July but has trended upward over the last few months. In April average annual rents were down 9%. So I've been keeping a really close eye on rents rents over the last year and of course they had the freeze on rental, you can raise rents and they've had a lot of changes with the residential tenancy act but also with the last year that we've all been through, you know, and it's but it's shifting, it's changing. It's showing that in less The month in May they were down 5.7%. And in June average rents in Canada were down 2.7% annually. So that's why they were they were down, down, down, but now they're trending up up up again. The average asking rents for all Canadian properties listed, or the market sorry, the market peaked in September for average rents at 1954. That was in September of 2009. Teen before falling 14.3% to a low of $1,675. In April of this year. The average rental rate has since increased by 4.6%. erasing some of the pandemic related declines as mentioned before, but average monthly rents are still $200 cheaper than in September of 2019. So again, it peaked September of 2019. And we're just about $200. Cheaper still, today. As the country continues back to normality average rents for two bedroom, condominium and rental apartments are increasing at a faster rate than one bedroom suite. Tenants continue to show a preference for larger units, with many employees expecting to work from home at least part of the time moving forward. So average rent for single family homes now continues to increase as well, in the new work from home era, up 13.8% in July, that's a value of $2,666. So this data is based on a monthly basis due to the wide range of single family home offerings and changing composition of listings on rentals.ca month over month. So there's a few sites you can go to, but this is a major site, and one that's looked out for surveys in section. So in 2021, the average monthly rent for condo rentals has changed from being down 19.2% year over year in January to down 8.1%. At now or in July 2008. So of course we're in August. But these are stats directly from last month. Of course, as all real estate stats go. So much of the increase can be attributed to a rise in activity in downtown Toronto and Vancouver. So again, this is overall in Canada, apartments, which make up the majority of the listings on rentals.ca experienced a year over year increase of 1.3%. And the break it down we are in the Vancouver area. So Vancouver continues to lead the list of the 35 cities for highest average monthly rent for one bedroom homes at 2185. And for two bedroom. Sorry, that was one bedroom two bedrooms at 3041. So again, that average of 3000 that we mentioned earlier, Toronto finish second on the list for average monthly rent in July for one bedrooms at 1855. And a two bedroom at 2600. And then Montreal finished 20th on this list of average monthly rent for one bedroom in July at 1419. And the 14 for average monthly rent for two bedroom 1855. So those are kind of major cities in Canada. And yeah, so there's been some changes in the rental world. And that flows with the values in the market. And in in the market shifts that we've seen in the last month and a half, at least locally here in the Fraser Valley area. We have seen a slight shift in in a seller's market, meaning that instead of 100% of listing going in multiple offers, maybe 50 to 60% have been but there's still we don't have enough supply for the buyer demand still. And that is the case today, as it was in July, as we had on our stats show. And we're now it's the 21st of August. And it's been a hot summer hot hot summer months in many more ways than one. And it's a it's just continues. But I I wanted to talk about something that I've seen a trend lately. I was doing evaluation yesterday for a property and mission and you know, they're they're going to be moving out of the country and the but they're both retiring early. I asked overtime you know retirement early what what made you decide on that and it's just the shift in their lives this last year has showed them that why wait, let's let's just do it now. And talking retirement I have had so many clients and even family members and friends and new clients like this one from yesterday's evaluation. They do the same thing. They're deciding to retire early. In one case a couple of weeks ago, I had someone that said, Oh, I wasn't supposed to retire for a few more years yet. But then I got laid off for a while during, during this last COVID-19 year. And and then I got, I went back to work. And I realized, well, retirement isn't as scary as I thought it would be. And so she's actually loving it, she loved it, she's, and she goes, I can do this. I'm not scared to do it now. And now. And so now they're retiring, and moving to Tibet. So there's a there's a shift that's happened in people's mindset, of quality of life, of how they want to live. And so this I, you know, that I have a quote, I'm going to, I'm going to mention the quote of the week before I even go into my new listing and my coming soon listing because it just had goes hand in hand with that. And it this is a quote, it's a terrible thing, I think in life to wait until you're ready, I have the feeling now that actually no one is ever ready to do anything. There's almost no such thing as ready. There is only now and you may as well do it now, generally speaking, now is as good time as any. And that's Hugh Laurie. But that whole and you you may as well do it now. It's like there's there's only now it's like Star Wars to say just do do or do not there is no try.

Curtis Pope: 

You know, it is very true. Because Yeah, you know that looking back I mean, hindsight is always 2020 you know, I wasn't ready to you know, buy a house so I wasn't ready to have kids I wasn't ready to do this. You know, I can only do and I'm ready but if you always wait till you're ready, you might not ever be ready because who knows what ready means to you it's kind of a subjective German back to your mind. You may never be ready for anything.

Michele Cummins - PREC: 

That's right. I never felt right. You know, like people always say Oh, he never feel ready to have kids. It's funny you said that as one of the things and and when I when I didn't feel ready, you know, and people go Oh, when are you going to have kids? It's I don't I'm not ready yet. Like the quote everyone always said you'll never be ready Well,

Curtis Pope: 

I can tell you I have three teenagers I'm still not ready to be a father.

Michele Cummins - PREC: 

Oh my gosh, it's true and you know all the things that's worth doing that takes that little onset little bit of you know, mind power that decision making it's hard and you know, it's hard we're comfortable we like to are comfortable familiarity like as human beings and but but you don't get to explore you don't get to live life You don't get to be adventurous I mean life was about it's about living and if you if you are able to enjoy and and you know meet all the people you meet when you do things and when you get out there and just do your your life is just it's opened up and and some people may not want that and then that's good for them but just if something's been in your heart if something's been in your mind, I always say explore it more dive into it and live your life because you know we're not guaranteed tomorrow

Curtis Pope: 

No and you always want to you know for me I know what you're saying because you always want to you know, have things a little bit better in some regard if you're willing just to sit sit back with status quo a that's good for you. But you know, I I feel the need to you know, to try to better myself or my surroundings or something every day.

Michele Cummins - PREC: 

Exactly. And I think that maybe somebody might be looking for something more amazing to purchase as far as real estate so I want to share something an opportunity for people here. Brand new listing just hit the market yesterday is in mission it. It's off Myrtle Avenue. And this is a five bedroom, two bathroom home coolly sweetly renovated on almost 4000 square foot lot is it was built in 1990 and it offers so much it's on a back lane. I love back lane access properties and it's private. The yard is so cute and the landscaping is so nice and so you can have access to your backyard private access to the back gate and and use it for extra parking or whatnot. It's a basement entry and it's actually got an unauthorized suites. So great for either renting out for a family member or blended family or whatnot. It's only 130,000 and that is a really good price for renovated place in mission with a suite. It's almost 2300 square feet in space. And it comes it comes with a lot so I actually that's Please, I'm going to have a live Facebook walkthrough of it on Tuesday at 1pm. So if you can't get a private showing or don't want a private showing or don't have time to go on my Facebook business page, and you'll see my live walkthrough that will help you out. And I'm also going to host if it's not sold by them an open house next Saturday between one and 3pm. So that's that one. And then I've got a coming soon, it's coming this week. And it's admission as well. And it's on Hillcrest Avenue. And this one was built in 1972. And it's a basement entry. And it has the potential of a suite in the basement but currently doesn't have it is a walkout basement, though, and it's a good sized lot. It's quite good and it's flat for usable. The price of that one is 825,000. And the thing with that one is it's close to the hospital. And it's it's in pretty much original shape, but very well maintained. But it's duplex in the future, the OCP. The overall Community Plan is future duplex, that's a great up and coming area. So great investment. That one you popped in the suite and mapping and you've got two rental income coming in while you wait for development or just develop it but 825,000 on that one. And that's coming up this week. All right. Well,

Curtis Pope: 

we did things a little out of order because we did the listings before after we did the quote so I don't know how to end the show now.

Michele Cummins - PREC: 

You come up with a way you've confused

Curtis Pope: 

me here. I mean, I know a light switch can confuse me on a bad day. But that's beside the point. All right, Michelle, people want to get more information or find out other listings you have where can they go.

Michele Cummins - PREC: 

Michelle, come in.

Curtis Pope: 

And join us again next week and we will talk real estate in order to unlock your real estate potential on the show real estate is maximized. Thanks for listening

 

If you missed last weeks episode where Michele talks Selling Tips and More, please go back and take a listen - it's well worth it!

 

Click Here to listen to the full Episode & Previous Episodes!