Deanna Steele says she has never seen as many condo and vacation homes for sale in Kelowna, B.C. as she has this month.
The founder of Keys to Kelowna Properties Inc., a luxury vacation rental management agency, said the lake-front city’s real estate market is "saturated’’ by properties zoned for short-term rental use. Some of the sellers are people who bought not that long ago and are already trying to get out.
I mean, all they have to do is get long term tenants.
The problem is many of these people paid such highly inflated prices for these places that the only way its profitable is to do short term vacation rentals on them. People won’t pay that much for rent.
The property values are then going to drop as they can’t be used this way anymore and the owners will need to sell at a loss.
Someone will buy that, but because the price is lower, rent will be better and it’ll now be rentable.
These people made a bad investment and will have to suffer the consequences, but it’s not as easy as just rent it now.
Yeah its probably not going to be profitable to have a long term tenant, but you could still have someone else build equity for you and then sell a few years down the road rather than panic sell and take a bath in loss.
These people probably didn’t think ahead and don’t have the cash flow to handle the difference. Especially if they over extended on multiple properties.