The Landlord Dilemma

Jamie:
Selling a tenanted property is challenging even in a strong market, and it’s especially difficult today. I wanted to shed light on what the investor landscape looks like right now, particularly for landlords who are thinking of selling in the next year. I also know several people whose tenants have recently moved out and they’re debating whether to re-rent or sell. So this episode is really about what selling a tenanted property looks like today, how timing affects things, and why early planning is essential.

Let’s call this episode “The Landlord Dilemma” — because it really is a dilemma. When the market is flat or trending downward, there’s nothing exciting about being a landlord. What percentage of landlords over the last three years have been cash-flow negative? A very high percentage. The only landlords who aren’t losing money every month are the ones who bought long ago. For the last decade, you couldn’t buy a rental property in Vancouver that cash-flowed from day one unless it was heavily subdivided.

Denny:
The return just isn’t there. There’s very little incentive to be a landlord today. In the ’90s, 2000s, and early 2010s you had 10% annual appreciation at times. Even if rent didn’t cover all your expenses, the equity growth made it worthwhile. But having a tenant whose rent doesn’t cover the mortgage when your property isn’t appreciating — that’s tough. And the tenancy laws have shifted heavily in favour of tenants, which reduces investor incentive even more.

Jamie:
Exactly. Many landlords tolerated negative cash flow because they believed the appreciation would offset it in five or seven years. But after three straight years of declining values, that upside isn’t there. Add higher interest rates and you have even more negative cash flow than before.

Denny:
And now we have the new three-month notice requirement. That alone eliminates a big percentage of potential buyers because most people don’t want to wait almost four months to move in, especially first-time buyers looking at smaller condos. In the last couple of years, I can’t think of a single buyer who willingly assumed an existing tenancy.

Jamie:
Same here. Even for land-value sales where the tenant is a low-impact factor, buyers still want the property vacant. They just don’t want the burden or the risk. Realistically, if we list a tenanted property today, we assume the buyer will want vacant possession. And that’s where timing becomes tricky.

For example, if it’s late October and the landlord receives an offer, they can’t give notice for November. November doesn’t count toward the three-month notice period. The earliest legal vacant possession date becomes March 1st. That means finding a buyer today who is willing to close in March; and that’s extremely difficult.

Denny:
Right. Buyers usually don’t want long completions, and there’s tons of inventory right now. They’ll just pivot to a vacant option instead. I recently had a buyer request a mid-January completion, and the seller thought that was long. So asking someone to wait until March makes selling even harder.

Jamie:
Exactly. Selling any property today is tough; selling a tenanted one is even harder. And if you are lucky enough to get an offer, expect the buyer to demand vacant possession and a long close. That’s why landlords who want to sell next year should start conversations with their tenants now.

If someone wants to get serious about selling in 2026, planning ahead is essential. Many of the people who weren’t serious about selling in 2025 are still sitting on their listings, and many will still be sitting next year. In most cases, keeping a tenant in place does not help salability.

I can’t think of a single instance where I’d say, “Yes, keep your tenant. That will help your sale.”

Denny:
Agreed. The only real benefit to keeping a tenant is covering part of your monthly expenses while the unit sits vacant waiting for a buyer. But that carries the risk of the tenant complicating showings, or the buyer refusing to accept the tenancy.

Jamie:
Which is why having an early conversation with tenants is so important. Tenants may find a place on their own if they know they’ll eventually have to move anyway. And if the tenant absolutely doesn’t want to move, you’ll find that out early and can explore a negotiated move-out arrangement.

Most tenants understand that if the property sells, the buyer will likely move in. They’ll have to accommodate photography, showings, inspections, and then they’ll be given one free month’s rent. It’s often better for both sides to agree on a predictable date instead of going through the stress of a forced eviction later.

A typical arrangement might be offering the tenant two free months’ rent instead of one in exchange for a mutual agreement to end the tenancy by a specific date, say May or June, so the landlord can sell in the spring with a vacant property.

Denny:
There are investors who pay tenants $5,000 or $10,000 to leave because their rents are far below market. So offering one or two months’ rent to secure a move-out date is not unreasonable. And wrongfully evicting a tenant is extremely risky now; landlords can be on the hook for a full year of rent if they misuse owner-occupancy notices.

Jamie:
Exactly. And that’s why planning matters. The sentiment around investment properties has changed dramatically compared to a few years ago. Being a landlord comes with risk, responsibility, and negative cash flow; and without appreciation, that risk feels much larger.

Denny:
So what would bring investors back? Rents would need to start increasing again. They’ve softened by 5–10% in the last year. Investors also need optimism about future price appreciation, which is missing right now. There’s no clear outlook for meaningful gains in the next one to two years.

Jamie:
If a landlord is worried about a tenant moving out immediately after that conversation, they can wait until February to bring it up. But if that’s unlikely, having the conversation early gives everyone time to plan. Offering a couple of months of free rent is often cheaper and more predictable than dealing with tenant resistance or wrongful eviction claims.

Over the long term, rental supply will fluctuate. Purpose-built rental construction is high today, but those projects may not pencil out in the future. Eventually supply drops, rental rates rise, and the pendulum swings again. But at this moment, the market favours tenants, not landlords.

Denny:
Exactly. And that’s why selling a tenanted property right now is so difficult. It’s a good time to be a renter, but not a great time to be a landlord trying to sell. That’s why starting the conversation early, before listing, is the best approach if you want a successful sale next year.