Travel And Subletting Woes
If you've never taken a holiday trip to Ontario, Canada, summer is the perfect time. Early autumn is fine, too; but unless you enjoy the cold, you might hold back on coming during the winter. Still, for many northern enthusiasts, this is an ideal period in which to travel. It all depends on your proclivities.
If you do travel north for the holidays, you're going to want to do a little research to avoid getting caught in the throes of holiday complication-this link provides some tips to that effect. You might even find an Airbnb to crash at-but be careful about that.
The economy has been questionable over the last several years, and that has predicated supplemental income strategies which aren't always "above the board", as the saying goes. One of these involves tenants of landlords leasing out their rented properties through online listing agencies like Airbnb.
This is dangerous for the landlord, and can be dangerous for the tenant as well.
Furthermore, it's an example of illegal subletting. One solution to this problem comes from SubletAlert.com, which can help identify tenants abusing Airbnb by notifying property owners; according to the site, you can: "Get notified when tenants sublet on Airbnb and other sites."
Part of the reason this has become such an issue in Ontario presently has to do with the housing boom, which has facilitated a bit of an artificial bubble.
The Housing Boom, And Consequences
Ontario is one of the most sought provinces of Canada for foreigners. It's also home to Toronto and Ottawa, several of Canada's most well-known cities. Montreal is just a few kilometers east of Ontario, and so it's easy to see why this is a destination for both Canadian locals and explorative tourists.
Over the last several years Canada has begun to see a housing bubble. It's not a unique country in this, bubbles have been expanding and popping across the US for decades; right now there's a notable one expanding in San Francisco. What is a bubble, you ask? Well, this is when property values expand due to sometimes synthetic market conditions.
In Canada's case, one of the reasons bubbles have begun expanding around the country is that foreign interests have begun buying up expensive properties and sitting on them, facilitating a false expansion in the marketplace. But here's the thing about bubbles: they burst.
So a property you purchased toward the end of a bubble could start dropping dramatically in value, and this could have a very negative effect on your finances. Imagine buying a home at an artificially high $500,000 only to see the bubble burst and the home's value drop to $400,000. That's a 20% loss; and almost instantaneously.
Digging Out Of A Hole
If you've found yourself in this kind of situation, it's possible you might end up renting out property in order to maximize its value. If you've got a four-bedroom house, you might find a way to get four tenants renting it at $1k a month per. That would come to $48k in a year. After two and a month, you've reclaimed the losses due to the market.
If you purchased a home in a good neighborhood, then it should retain its value with greater reliability. Still, you've got to watch out for your own tenants trying to rent the property from beneath you-this is illegal subletting. It can have legal consequences if you're found to be culpable in the allowance of such a thing, depending on the part of Ontario you're in.
Additionally, this is risky for you and your tenants, and it will definitely erode property value eventually if left unchecked. If you're going to get your money back on a property that had its value impacted when a housing bubble burst, then you're going to have to be proactive about it.
If you're not from Ontario, but have been recently considering a move, you may keep an eye on this housing market. The Ontario bubble can't remain in constant expansion. So long as you keep your finger on its pulse, you can tell when it's about to burst. At that time, property values will drop sequentially via metropolitan area population density-in all likelihood.
Population density is a key indicator here because trends tend to be more visible in such areas. Though it's possible a smaller city may see a housing bubble burst quicker than a large city, given the right scenario.
Regardless, if you wait until the time is right, you can get a top-tier property for a fraction of the cost. If it's a little out of your price range, you can even rent out a room in it to recoup assets-just ensure your tenant isn't himself subletting! With booms and busts come opportunities and resolution strategies no matter where you happen to be in the house-buying cycle.