Best areas to invest in buy and hold on Vancouver Island

61 Replies

I'm curious to hear from other Vancouver Island investors to see if you have been able to locate any buy and hold opportunities with cash flow? I'm over in Courtenay and not having much luck here lately. My wife and I bought a 1/2 duplex last year that brings in a bit of cash flow @ 20% down with a conventional mortgage, but not enough to get really excited about. I'm still keen to find something here but am starting to look a bit further afield on the island. There seems to be opportunity in Port Alberni, but I wonder about it's population stability. Nanaimo and Parksville seem to be a bit expensive after a good run up, but what about the Cowichan Valley? I'd love to hear from anyone else around who is doing buy and hold and/or BRRR. What are your numbers looking like? Do you have an awesome contractor to recommend? Let's see some Vancouver Island content on the blogs!

Hi John,

How are things going up there in Courtenay?

You're right the run up in prices this past year (21%!) applied some pressure to the cap rates however the rents have increased markedly as well. There has been some compression but not nearly as much as expected.

One strategy to develop a return greater than the market cap is to develop properties that are suitable for coach houses / laneway houses. With a construction cost of approximately $80,000 to $100,000 (this is hands off) and rents ranging from 800 to 1300, a tidy boost to the return can be had.

It's interesting to think if, should the recent influx of people to the island continues, whether Port Alberni may end up being a good risk / return play as it appears they have not seen the crazy appreciation happening elsewhere.

Here in Nanaimo, the inventory has been low since March and continues to be. This makes it double tough to not only located properties but also purchase them as many have multiple bidders.

Jan & Tom

Hey @Tom Stromar

I love the idea of adding the coach house to properties, especially in Courtenay where there are quite a few areas zoned R2 that could accommodate them. I think Cumberland has this option as well.  I just need to find some good local contractors and hopefully get a bit more inventory here locally to choose from.  Most properties within that zoning have been built in a way on the lot so that the coach house option does not exist (you could add a suite or duplex though).  Just a matter of being patient and finding the right property. As far as buy and hold here in the Comox Valley, that seems to be the best strategy that I've seen. Rents have really started to move up in the last few months so that should bring about a few more possibilities. Also, vacancy rate here is crazy low.  Craigslist has almost as many people begging for rentals than rentals being advertised.

There are some interesting multi-family units in Port Alberni that an agent pointed out to me. I'd like to have a look as they seem to support a much easier cash flow than what is currently on the market here. My worry there is local employment but so far the population there has remained fairly consistent according to a coworker who has lived there all of his life.

I'm keen to meet some other local investors to see how they are doing things.  Are you actively investing in Nanaimo at the moment? If so how are you finding success?

Yes, obviously it was easier to find a deal in 2012 then now, but that being said, depending on what someone wants to take on, I've seen more than a few this year. My wife and I were joking around the other night before leaving the office if it was too late to just go out and buy a house that night given how low the inventory is (the joke being the prices will continue to raise)

Here, the coach house allowance is not restricted by zoning. Only lot configuration, so any SF zoning that is a corner, large or on a lane will work

That's interesting about the Nanaimo zoning for coach houses. That really opens up some possibilities there.  Just one more area to keep an eye on then! Thanks for chiming in. 

We are finding the same experience here in Victoria with low inventory and bidding wars. The benefit to victoria is rent has increased about $200+ a bedroom this year as well. We have been lucky to find a few buy and holds this year that cash flow and also have room for further development. If you'd like to chat further about victoria investing please feel free to contact me, i love gabbing about it!

Hey @Randy Molland , good to hear Victoria represented on BP. I think Victoria may be a bit out of my price range but I'm always interested in any possibility to see return on my dollars. I'm curious to know what kind of numbers you are seeing with buy and holds that cash flow there. Are you finding these through mls or off market?

Hi all Islanders. Myself and my girlfriend are gearing up to purchase our first rental on the island in Spring. My girlfriend has family in Nanaimo so that has been where we have been focusing our attention for buy and hold properties. Although the advertised inventory seems low, recent drives to familiarize ourselves with the landscape (we live in Vancouver) show promise for potential unlisted properties. 

Is there an active Investors group on the island? Always keen to meet people and form a community locally as this site is at this stage essentially all American. 

T

@Tristan Kovero There is a meet up group in Nanaimo, although I don't much about it myself. I'd like to get something together here in the Comox Valley, so stay tuned...

@Jay Hinrichs Campbell River is a bit cheaper although I just had a co-worker buy a residence there and he was in bidding wars for every property that he looked at.  He ended up offering above list price in order to get his new place. Rents there seem to be climbing lately as well but certainly no mls inventory that meets the 1% rule.  Definitely have to be a bit more creative to make it work around here. 

Between Courtenay and Campbell River there definitely are quite a few places that are on the market that could use updating. Lots of appliances and fashions from the late 80's/early 90's. I'm wondering if there is a market for updating as many of these places just need cosmetic work to bring them up to today's design standards. I'd love to talk to anyone who might be doing BRRR or fix and flip strategies successfully on this part of the island.

@Jay Hinrichs I think you may be right as an appreciating market like that can protect you a bit against mistakes or bad estimates. I've not had much experience in that arena and am not confident enough in my ability to estimate ARV or repair costs. Need to find some local investors or contractors to help me out a bit there to better understand that process.

By the way, really appreciate your website (Turnkey Reviews).  I've used it quite a bit to help research providers down in the US. Nice work there!

@John Humphries   your welcome John.. I think its a great community service and @Brie Schmidt has done a wonderful job running it.. what I like is you can go shopping without having to log into multiple companies squeeze pages.

I go to BC one to  two times a year to fish.  and I used to own a home on the golf course at the Okanogan club.. right up from the Kelowna airport.  And we fly a bunch up in the sound for 100.00 hamburger runs..

great part of the world I have driven to the tip of Vancouver Island and over mtn range from Campbell to the pacific its simply spectacular there.. no other way to describe it.

@Jay Hinrichs You are definitely right about this part of the world being spectacular.  I've lived in many places in the US and Canada and can't imagine calling anywhere else home. My wife and I have been expedition sea kayak guides around the island as well as commercial bear viewing guides along BC's central coast.  I work as a wildlife biologist now with a bunch of fisheries guys who still do some fishing charters in their spare time at some of the major fishing resorts.  A few even have their own boats and do some local charters. Drop us a line if you are ever out this way. We love showing people around in this part of the world!

@John Humphries   yes and so many folks from out in the fly over states have no clue as to how close Van island is and how remote and wild it can be.. one need not go all the way to Alaska to get the same feel ...

I like the summer run for humpy's in the Campbell river... also snorkeling down the river and seeing all the different fish that's fun too  ( tad cold )

@Jay Hinrichs Hah! That's what I do for work now! I had to snorkel the Campbell a few times this fall and winter to monitor the salmon run in the canyon. Sometimes the job is pretty cool.  Not so fun when the air temps dip below freezing though!  As for the bear watching, Great Bear Nature Tours offers a world class experience.  I'd highly recommend anyone coming out this way to check it out.  Float plane from Port Hardy to a remote floating lodge on the central coast for a few days of delicious food and drink, amazing scenery, and some pretty awesome bear viewing. It was an awesome place to spend a few seasons with the bears.

Sorry to revive an old thread, but was wondering if you found anything worth buying on the island John? I live in Parksville and am looking to buy more property. I was hoping to keep my investing on the island for the convenience, but the numbers don't seem to work well here. Lots of places that do 0.5% but nothing close to the golden 1%. 

I was looking in Port Alberni as well. Both at multi-family and houses with suites. I talked to a property manager, and she just said no. Not a lot of employment. Lots of people on welfare. She said as with anywhere, you can get good renters, but she says she dealt with lots of damaged suites, and people skipping on rent. It might be more worth while looking at it as a place that might turn around, so a holding property might have a better result.

Sadly, I'm not happy with any of the numbers on the island. I can be done, especially holding properties, as the island is going up fast, and will continue to, but as far as cash flow, it's hard to beat a place like Prince George, where you can find the golden 1% if you look hard enough.

@Jason Ridout I'm still looking. There hasn't been anything to speak of in the Comox Valley and funny you should mention Port Alberni as I was just putting together a list off of MLS to go check out sometime soon with my real estate agent. I haven't researched that market enough to comment on potential renters, but I think I would tend to agree with your property manager based on what I have heard. I'm still curious to check it out myself, so we'll see...

I did see that someone (looks to be the same person who purchased both properties on the same day) in P.A. managed to get two duplexes recently that did satisfy the 1% rule. From the listing pics, they did not seem like the nicest places, but I guess it goes to show that there are some deals out there.

I'll post an update in a few weeks after I've had a chance to see Port Alberni for myself.

@Jason Ridout @John Humphries @Tristan Kovero @Randy Molland @Tom Stromar

Hello Islanders :D 

I am in Nanoose Bay and a complete beginner when it comes to Real Estate. I have been renting and saving for a long time (waiting for the real estate market to correct... and still waiting...). I don't know if any of you have a regular meet and greet or wouldn't mind educating someone--i.e. me!

To be candid, I have not purchased a rental property before--or any property for that matter but have been reading about the topic for a number of years.

Personally, I have found it very challenging to find information that is based around the Canadian market--let alone Vancouver Island.

Hi @Elliott Russell , welcome to the forum.  I've heard of a meet up in Nanaimo, but nothing out this way in the Valley yet.  There have been a few folks that I have spoken with that are interested in a meet up out this way, but thus far, we've not gotten anything together.

It's definitely challenging to find relevant Canadian content, but there is enough that transfers over from the US that I've found this forum to be quite helpful and informative.  Also, there are quite a few intelligent Canadians that post and answer questions here so fire away.

Good luck with your investing!

@Elliott Russell ,

Welcome to the forums bud. I haven't come across a meet-up on the island yet. I myself am based in Vancouver but spend a lot of time in Nanaimo as the gf's family live there. We are heading over to Victoria next Saturday for an REI expo. If you're around, hmu

@John Humphries I wanted to revive this thread and see if there has been any updates? I've personally looked at some multi-family properties in Port-Alberni as the numbers seemed to work. But I also got deterred by talking to some locals saying that it's hard to find good tenants... 

Thanks

Matt

Hi @Matt Belzile , I'm still on the hunt.  Have not seen anything that really makes sense in the Comox Valley since this thread started as prices have really taken off.  Seems like there might be some room for some fix and flips but even the houses that need work are going pretty high these days.

I went to Port Alberni and viewed a few small multis, duplexes, and SFRs with suites and came away pretty depressed at the quality of properties and tenants that I met.  Having said that, the investors out there with good tenants and decent properties probably are not having to sell.  I'm sure there are some good tenants in PA, but you would definitely want to screen and put them in yourself.  Have not heard much positive about local property managers there.

I'm still looking at Alberni and have reached out to an agent in Powell River as well to see if numbers might work better there. Lots of people from Squamish and Cumberland headed that way right now as prices have gotten out of hand.