# Apartment REITs



## seh (Nov 10, 2014)

Any idea why all the apartment reits (car.un, kmp.un, iip.un, mi.un) are being hammered today? All down 3-5% today alone. Unusual to move this much in one day.


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## Beaver101 (Nov 14, 2011)

^ No idea so taking a guess here ... students are not going back to Uni? Anyhow, 5% is hardly alarming.


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## MrBlackhill (Jun 10, 2020)

Almost everything is down today.









A few are up. Venture has been thriving since March.


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## seh (Nov 10, 2014)

Since the government enacted laws that it's OK for residential tenants not to pay their rent (no evictions being processed, and/or once started, a 1 year backlog to evict a non-payer), maybe investors are realizing this will affect the landlord's bottom line and/or dividend payouts?


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## OptsyEagle (Nov 29, 2009)

Ford is going to enact a rent freeze for Ontario for 2021.









Ford government says it will bring forward legislation to freeze rent in 2021


The Ford government says that it will bring forward rent control legislation so that the “vast majority” of tenants do not face increases in 2021.




 www.cp24.com


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## seh (Nov 10, 2014)

OptsyEagle said:


> Ford is going to enact a rent freeze for Ontario for 2021.
> 
> 
> 
> ...


A "rent freeze" is one thing. It's the "free rent" (made possible by the inability to enforce payment) that scares landlords and investors.


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## MrMatt (Dec 21, 2011)

seh said:


> A "rent freeze" is one thing. It's the "free rent" (made possible by the inability to enforce payment) that scares landlords and investors.


The point is that the level of political risk in rental housing has made being a landlord far too risky.
It could take months to evict before, now there are tenants who have been living, rent free, causing damage to property for months or even a year.

It's clear that the government wants those Toronto renter votes. The sad thing is all this interference only reduces housing supply, and raises costs to cover the risk premium.


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## doctrine (Sep 30, 2011)

Arguably conditions could never be more perfect for these companies and apartment REITs are trading at high valuations. I would say even nosebleed. If conditions ever become less than perfect, all of these stocks will suffer. I am avoiding this space - I don't see the upside.


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## seh (Nov 10, 2014)

MrMatt said:


> The point is that the level of political risk in rental housing has made being a landlord far too risky.
> It could take months to evict before, now there are tenants who have been living, rent free, causing damage to property for months or even a year.
> 
> It's clear that the government wants those Toronto renter votes. The sad thing is all this interference only reduces housing supply, and raises costs to cover the risk premium.


Very true, but the government wants all votes from those suffering in these difficult times, so what's next? Maybe they'll decide that utilities also should share the burden, so no more cutting service to those who "can't pay"? That would surely be worth some votes. In the end, how is this any different than telling the supermarkets not to bother calling the police when people walk out with carts full groceries without paying? 

The investor has to try to guess which laws the government is going to change/no longer enforce (i.e. which winners and losers the government is going to choose), and go from there.


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## MrMatt (Dec 21, 2011)

seh said:


> Very true, but the government wants all votes from those suffering in these difficult times, so what's next? Maybe they'll decide that utilities also should share the burden, so no more cutting service to those who "can't pay"? That would surely be worth some votes. In the end, how is this any different than telling the supermarkets not to bother calling the police when people walk out with carts full groceries without paying?
> 
> The investor has to try to guess which laws the government is going to change/no longer enforce (i.e. which winners and losers the government is going to choose), and go from there.


The thing is I think the risk of anti-rental government policy is dramatically increasing. 

I think there is an extremely high risk that residential rent won't need to be paid.
I hope that theft will continue to be prosecuted, but prop 47 in California is a thing, so who knows.


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## Ponderling (Mar 1, 2013)

sat on CAR, KMP positions through covid's stock price nose dive. Now back to within 5% of purchase price pre covid. So not out of the woods yet. 
HR got hammered. We were in at about $20, watched down 50% at one point, and poured an equal amount in to more when they were about $10.25. Now close to even; again still a way still to go.
Bought SRU at near bottom of depth of sell off, and am up 24% so far

Sitting through 1998-2001 when every thing sunk or went sideways for three year when we had a lot less to invest was excellent emotional training wheels for riding this more pronounced bump out.


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