# ROI crazy?



## none (Jan 15, 2013)

So the place I'm renting just sold. It's a 3 apartment (2 one bedroom; 1- two bedroom) house for a bit over a 1.1 million dollars. I've estimated the rent for the place to be around 40K.

How does that make any sense? Isn't that a terrible ROI? 

I'm guessing the owners must have other plans but I'm having a hard time imagining what they could be.


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## kcowan (Jul 1, 2010)

This is another one of our buy vs rent threads where renters always win in this market.


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## Rusty O'Toole (Feb 1, 2012)

In this day of low interest rates the old rules don't hold as much water as they used to. But yes, that is a ridiculous price and the chance of making any money off the rent is nil. Either the buyer is depending on the 'greater fool' theory of selling for an even more ridiculous price in a few years, or doesn't understand the concept of investment returns. In duplexes and triplexes this is not unusual. They usually sell to amateur investors who don't know how to figure their returns or don't care. They see themselves living in one unit and getting cheap rent by using the rent from the other units to pay the mortgage.


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## none (Jan 15, 2013)

Turns out I think the new owners are going to convert the 3-unit BACK into a single family home. It's weird, the house is in a good location for apartment housing (on a main road with a bus stop out in front) but as a single family for a million + renovations it's an odd choice to say the least.

I've completely given up trying to understand the motivations of people when it comes to housing. Truly bizarre.


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## lonewolf :) (Sep 13, 2016)

Typical behavior near a market peak not any different then people buying some of the tech stocks going into the tech bubble in 2000 that had no earnings & paid no dividends

Interest rates on GICs will probably be paying close to 4% in next few years with out all the work


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## none (Jan 15, 2013)

Got my eviction notice this week. Renting ain't all that. 2nd time this has happened to me in the last 4 years. I guess that happens when houses are being traded back and forth.

I don't understand why someone would spend over a million bucks on this place and move into a $1300 a month apartment with 3 square feet of usable counter space.

Super weird. Time to find a new place to live!


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## twa2w (Mar 5, 2016)

Perhaps the new owners gave eviction notices to all the tenants. Perhaps the day after you move out a renovator will be tearing out walls etc and the new owners will move into a newly renovated single family dwelling in 3-4 months.

Or maybe living in a small portion of the house with two tenants to help with the mortgage is the only way they can achieve the home ownership dream. Maybe they hope the market will keep soaring and they can sell in 5 years for 2 million and be able to get a place to themselves.

Yeah I don't understand it either but markets like this make people do crazy things.


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## none (Jan 15, 2013)

Nope it was just me with a heads up to the tenants down stairs that they may boot them out in a few months for one of their adult children.

Yeah, I've given up trying to understand people's motivation when it comes to housing. Really, if you believe that housing is going to go up faster than your mortgage rate then BUY BUY BUY


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