Real Estate Investing with Rent Controls

Latest Real Estate Investing Article written for Early to Rise

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Many real estate investors in North America don’t have to worry about rent controls. The majority of areas in Canada and the U.S. are not restricted with rent controls, but somehow we have managed to buy all of our properties in rent controlled areas.

Most of the time, it’s not really an issue for us. But, it is something to be aware of when you’re shopping for real estate. If you find a good property with tenants that are paying rent that is significantly beneath the market rates, you may think you’ve found a great deal. It’s easy to get excited thinking about how much more rent you can generate from that property, but the reality is a bit different if it’s rent controlled. You can’t just raise their rent or even just kick them out to rent it for a higher rate. And, if the tenants are paying quite a bit below market, you can be assured that they know it and aren’t going to move unless they have to.

As I said, rent controls don’t impact all of the areas. In Canada there are only a couple of provinces that have rent controls and in the U.S. there are only a few cities and states with rent controls, but it’s important to know what you’re dealing with, and get a few pointers about dealing with what we call the Landlord’s Arch Nemesis: Rent Control. In the article I wrote for Early to Rise, I’ve given 4 tips for dealing with rent controls as a real estate investor.

I’d love to hear from you if you’ve been an investor in an area with rent controls. Did it impact you? How’d you deal with it?


Filed under Blogs, real estate, Recommended

2 responses to “Real Estate Investing with Rent Controls

  1. melmetts

    Rent control just seems un-American. I invest in northern Illinois and don’t have to deal with controls. It’s amazing how savvy investors seem to make money in any economic environment.

    Our problem locally is landlord licensing and occupancy inspections. Mostly appears to be intended to harass immigrants.

    Thanks for your article.

    Mel Metts

  2. @melmetts – Toronto, Canada was talking about landlord licensing in late ’08. Dave even wrote a blog post about it:

    It’s frustrating when government tries to solve a symptom instead of a problem.

    Thank you for reading and for commenting!

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