Flipping the bird and the house

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Take the corrupted business out of house owning

By Elliot Chan, Opinions Editor
Formerly published in The Other Press. February 17, 2016

I moved many times when I was growing up. It has always been a bittersweet memory. Those experiences of packing all my belongings, changing schools, and saying goodbye to old friends still make me reflect, wondering what life I could have had if I stayed in that neighbourhood. I never blamed my parents for moving, because I can be certain that moving wasn’t their first option either. They were doing it for financial reasons, not to punk me.

My family, like many, took their financial wellbeing seriously, and there are few investments more impactful than real estate. But above all else, a house should be a home. However, there are many—especially in Vancouver—who are trading real estate like Pokémon cards, another bittersweet childhood memory. But I digress. House flipping, the act of buying a house and re-selling it over a short period for profit, is a worrisome obstacle for young people entering the housing market.

For me, I see the place I live as a space where I spend my days relaxing, entertaining friends, and living my life. I don’t think of it as a denomination of a fluctuating market. Perhaps I should, but I don’t, because I never want to derail my life just to make money. Many people think differently. Many people would consider me a schmuck for living in an affordable neighbourhood.

In a recent announcement from BC Assessment, since 2014, 368 single-family (detached) homes have swapped owners twice or more. These houses, not surprisingly, are set in high-profile neighbourhoods: Dunbar, Heights, Point Grey, etc. But let’s be honest: every neighbourhood in Vancouver now is high profile, since nearly all single-family homes are valued in the millions.

Not only are these homes worth a lot, they are also in high demand. People are willing to pay more to live in Vancouver. So savvy—and rather despicable—people are willing to take advantage of that for a profit. That is the prime reason for house flipping, rich people trying to get richer.

Greed fuels the market in Vancouver and the people nourishing this corrupted form of business are the realtors, who are knowingly selling the properties for more than they were previously sold for. This way, the realtor and the brief owner make a profit. Here’s the kicker—it’s all completely legal in BC. While the asking price is visible, the sale price remains private, hidden from the public. This is one reason why it is a corrupted market. If there is no transparency, there cannot be any trust.

The province of BC is now intending to tax the house flippers not just through property tax but also a capital gains tax, but that does not solve the problem, it just makes house flipping a legitimate business. Yes, you can blame it on those who don’t flip houses, saying that they have zero business acumen, but just because you can do it doesn’t mean it is ethical or good practice.

A house is a home, and many people of my generation will go through most of their lives without having owned one. This is a tragedy. This is especially true when we see millionaires making easy money while overvaluing the market, and creating an unstable place for all of us to live.

Canadian Startup Manaya Wants to Change the Way We Find a Place to Live

 

The “aha!” moment came to Manaya’s founder, David Polisi, in 2010 when he was searching for a new place to live.

He stood outside houses with “for sale” signs, jotted down the information and waited for real estate agents and property managers to call him back. Polisi was frustrated with the process. Why should looking for a new home be a game of cat and mouse? That was the spark leading to the concept of Manaya Mobile Marketing, an easy and convenient way to get rental information through text messaging.

Since launching in 2012, Manaya has connected renters with property managers by making key renting details accessible. Anyone with a cellphone can text for information by simply punching in the numbers supplied on the vacancy or “for rent” signs. Potential renters will instantly receive all they need to know about the space including price, square feet and general description. Property managers may also choose to upload pictures and videos to assist in the renting process.

“It is tough to peel it back and see what the world was like before this,” said Polisi, “But one thing I can say is that we see 35% of our inquiries taking place while offices are closed and 55% of inquiries taking place over the weekends. We can show people who are texting in the after hours and say that those would have once been voice mails that somebody either should have or could have followed up with—but now they get the information instantly.”

Although house hunting through a neighbourhood you wish to live in has not changed, the way we can spontaneously access information through our mobile devices have. The 24/7 convenience has garnered property manager’s approval. The ability to track usage and analytics has been a key attribute in the service, especially for the busy realtors and property managers.

“We actually see quite a bit of sharing,” said Polisi. “They [potential renters] will send a text message, they’ll come onto our mobile platform and they’ll discover the property; the building, the pictures, the amenities. And what we start to see are people sharing the buildings with friends. So that is a good indicator to us that the consumer is enjoying it so much that they are sharing it with other people through email or Facebook or Twitter.”

Discovery is Manaya’s main focus. The first step to accomplishment is initiating the first step, and Manaya is hoping to make that leap of faith a little less of a daunting plunge and more of a treat for curiosity. The service draws people, assist with scheduling a booking and from there it will always come down to the client’s preference, whether they choose to live there or continue their hunt.

Manaya has also introduced a web to text feature that allows people who are searching for properties in front of their computer to send a text message to their mobile device, which has the coined term “virtual scratchpad.”

“Our goal is to increase the quality and convenience of getting information,” said Polisi. “So the quality is really pictures. And we see, as consumers 84% of the people said that photography was the most important aspect of searching for a place to live. We are supplying a service that brings in professional photographers and virtual tours, so people can really see themselves in the room.”