Vancouver, British Columbia · Member since 2016 · 4 posts · 1 vote
This an investment deal happening in northern Canada. I am trying to verify the cash flow numbers that the property developer has given me. It is an a small city called Fort St. John with a natural gas resource based economy in the middle of a downturn. I am pretty new to real estate and trying to get a second opinion from someone with more experience. How does one confirm 27.8% ROI? as stated by Western Canadian Properties Group.
Be very careful. Buying this unit based on projections is foolhardy and many of these numbers don't pass my "smell" test at all. Ask them how they're going to guarantee that the property can be managed for $50 a month? Then ask them how they can guarantee the property will appreciate by 3%? No experienced landlord is going to budget 1% for repairs and maintenance. This is overall, a very poor return for a Northern BC rental.
Just my 2 cents as a 20+ year rental investor based out of Kamloops. I invest in Northern BC as well.
Any forward looking statements are tough to predict. It could be accurate, a very low estimate, or a very high estimate.
I'd broken down these projections in a previous post, send me a message if you'd like to discuss it.
Sam is a great resource and can probably offer some invaluable insight in investing in general. He runs a website called InvestKamloops.com and is really active and knowledgeable in BC. My investments are in the US right now but when I bring them back to BC, Kamloops is probably somewhere I'll look just because of Sam.
Fort St John has seen awesome growth over the last few years and it just skyrockets a little more with each news announcement with the pipeline approvals. Western Canadian Properties has been there pretty well from the beginning. There's a saying that the best time to have invested in real estate is yesterday. The second best time? Today. Never hurry your decisions about the particular investment, but the decision to invest - you'll be glad you're doing it now than later.
Be very careful. Buying this unit based on projections is foolhardy and many of these numbers don't pass my "smell" test at all. Ask them how they're going to guarantee that the property can be managed for $50 a month? Then ask them how they can guarantee the property will appreciate by 3%? No experienced landlord is going to budget 1% for repairs and maintenance. This is overall, a very poor return for a Northern BC rental.
Just my 2 cents as a 20+ year rental investor based out of Kamloops. I invest in Northern BC as well.
Maintenance and management is low as mentioned budget 5% of rental return minimum. Ask what do they charge each time you change tenants Etc.? these can eat into profit very quickly