Thoughts on investing on Vancouver Island?

14 Replies

I'm not sure of the next hot spot, but I've invested on the island and I'm in search of our next move there. I'd say Nanaimo is a good spot right now. We bought in Courtenay last year and I can't seem to find anything with the same investment value there anymore. I've heard good things about Campbell River, but I haven't seen anything enticing yet. 

Yes we are in Courtenay and prices have skyrocketed. The same has happened in Campbell River but they are still building and building mostly $600000 "family" homes. Property taxes in Campbell river are almost double that of Courtenay. Rentals are still tough to find but rents are so high people just cant afford them...so time to look elsewhere. Other considerations are Nanaimo - slightly better, or Port Alberni although I dont see much growth there. Duncan?

I have a few places in Parksville and Qualicum that I bought just before prices went up.  There are a few others who have places on the island.  The tagging function isn't working for me, but there is @Jason Ridout who has places in Port Alberni and Parksville, @Kris Bucci on the south end of the island,  @Jason D Lewis up in Courtenay and @Randy Molland who is either in Nanaimo or Victoria.  

There aren't a lot of places where the prices haven't gone up a lot.  Nanaimo has affordable houses.  Ladysmith is also really nice.

Port Alberni is still one place where you can find a cash positive house with a traditional 80% mortgage, but even in Port it is getting hard. If you are looking for growth over cashflow, Nanaimo and Duncan are doing well. 

Gold River could be a hot spot, but it's a gamble. It's a small community with very low vacancy rates and low property prices. I could turn into a great community, or it could just stay the quaint little place it is. It has no cell phone coverage or currently a grocery store, but if those two things change, the market will take a big jump up. That might be in 3 months or 5 years.

Overall, the whole island is a hot spot. The lower mainland and even the rest of BC have taken a bit of a down turn in the last year. The lower mainland is overinflated, and the rest of BC gets cold in the winter. The island is seeing a huge migration from the rest of Canada. Baby boomers looking to retire somewhere with mild winters, but can't afford the mainland. I'd estimate 40% of my clients that are looking to buy houses are not from the island. Lots from Alberta, Ontario, Kamloops, Kelowna etc. Prices all over the island are continuing to climb and I can't see it stopping with the number of people moving from the rest of Canada.

Interesting. You are right there doesn't seem to be much of a slowdown - although I am seeing house prices that were way overinflated start to reduce. (as per my daily realty updates.) However, Im not sure that rental prices can keep climbing as there just arent jobs to support $1100/ bedroom, $14-$1600 for a 2 and $1800 for a three-bedroom

I think there are more high paying jobs on the island than the stats lead us to believe.

I moved from the mainland 3 years ago and both me and my wife had increases to our incomes upon moving to the island. I worked in automotive repair and my wife is a commercial insurance broker. The demand for dependable skilled people on the island is very high. Many islanders are either use to the low cost of living and therefore don't apply themselves, or are of retirement age. There is a major demand for skilled trades which pay on par with the lower mainland. 

I think the only area where the island might not pay as high as Vancouver is the higher paying white collar jobs. The low median income that the stats show on the island is in large part to the fact that there are a lot of lazy people over here on "island time" and choose to work as little as possible which makes the stats look like jobs pay less. If you are a hard worker and show up every day, there are limitless opportunities here.

I have owned a house in Port Alberni for about two years now and receive $900 for the one bedroom basement and $1,300 for the two bedroom upper, plus tenants pay the utilities. I have had a 0% vacancy so far with not a single month of rent missed. That's not as high as the $1,100 and $1,500 you mentioned, but I'm into the house for about $290,000 so the rent pays a 75% mortgage and still cash flows after all expenses which is very hard to do in other markets right now.

Hi @Jason Ridout , I'm looking at Port Alberni as well right now. What did you mean that it "pays a 75% mortgage..."?

Also curious what part(s) of town you'd stay away from. Seems like (as with any market), there are a few bad places.

Hi @Curtis H.

Sorry, I worded that poorly. I have a mortgage on the property for 75% of the purchase price (I put 25% down) and the rent covers the mortgage payments in full.

Almost anything will cashflow with enough money down. A million dollar house rented for $2,000 will cash flow after all expenses such as property tax, insurance etc but if you add the $3,500 mortgage payment that would go with a $800,000 mortgage on a million dollar house, you won't cash flow. It's very hard to find properties in BC that will cashflow with a 75-80% mortgage, but I find it can still be done in areas like Port Alberni and Prince George.

3rd ave near the base of Redford is a not very good area in Port.

Originally posted by @Nora Redden :

Interesting. You are right there doesn't seem to be much of a slowdown - although I am seeing house prices that were way overinflated start to reduce. (as per my daily realty updates.) However, Im not sure that rental prices can keep climbing as there just arent jobs to support $1100/ bedroom, $14-$1600 for a 2 and $1800 for a three-bedroom

 Look at rent prices on kijiji and usedXXXX (insert area, eg usednanaimo, used pqb).  For some of those on kijiji for Parksville and Qualicum, I find it hard to believe that some are real as they are so high, but those that are $1400-$2500 are probably right.

Greeting folks ! 

We have investment properties in the Okanagan and recently bought one in Langford (our first exposure to the Island)

Considering that prices in the GVA are so high even for foreign buyers (manly Hongkongers) these two locations become the next two logical options.

I expect the prices at the GVA to soften in the near future while the Okanagan and Island will see a steady increase. 

Just my 5 cents 

Happy investing 

Edison Reis 

Hey Nora, See my response to this post:

Nora Redden

replied 20 days ago

In BC, whats more realistic in regards to the 1% rule?

About 2 years ago we made our own % rule based on what we had in our portfolio. We came to the conclusion that at .65% we would cashflow around $500/month. This was in Victoria, with 3% interest rates and 20% downpayments. We only use this to allow us to decide if a property is worth pursuing and is not a "Golden key" number. but really helps you see what the gross rents are going to need to be on a purchase price.

Hope that gives you something to go on! 
 

Originally posted by @Theresa Harris :

I have a few places in Parksville and Qualicum that I bought just before prices went up.  There are a few others who have places on the island.  The tagging function isn't working for me, but there is @Jason Ridout who has places in Port Alberni and Parksville, @Kris Bucci on the south end of the island,  @Jason D Lewis up in Courtenay and @Randy Molland who is either in Nanaimo or Victoria.  

There aren't a lot of places where the prices haven't gone up a lot.  Nanaimo has affordable houses.  Ladysmith is also really nice.


Thanks for the shout out Theresa,
I am down in the south end of the island but spend a lot of time researching all areas of Vancouver Island to understand where we should make the next move. 

We are seeing a lot of growth in areas which has made investing challenging, but also eliminated a lot of "toe dippers". We are getting very creative with our deals and how we are able to find them, but I will say just in our local meet up group alone we have had 15 deals close in 4 months... so there are deals out there, you just have to be creative and think a little different ;) 

Happy to hop on a call with anybody that is looking to explore the island! 
Best place to reach me is on facebook with a DM at Randy Molland. 

Create Lasting Wealth Through Real Estate

Join the millions of people achieving financial freedom through the power of real estate investing

Start here