Vancouver - Good Investment possible?

Question

Considering the absurd housing prices in Vancouver, are there still "good" investments here? After much readings and previous forum discussions, 1% rule (even though it's just a yard stick) is definitely impossible to meet. Positive cashflow is considered very difficult. But I would still like to believe that there cannot be ABSOLUTELY nothing available. Before looking long distance, I wanted to make sure I cover all aspects of my hometown for opportunities.

Is anyone able to share any successful investments or any other insights?

Theresa Harris · Answer

@Paul Yun  It will be hard.  There are a few people from Vancouver, BC on BP.  Others who are in on BC seem to be looking at places on Vancouver Island (a few towns are workable, many others are similar to Vancouver), the interior in places like Prince George and the Lakes District around the Okanagan.

Phil Shearcroft · Answer

@Paul Yun there is plenty of opportunities but you need to be creative. Repurposing the asset is the simplest way to create value but that being said it’s not easy. My current BC Investsments are in south LANGLEY and Chilliwack. Chilliwack still produces decent numbers but it’s quickly slipping away. Rent to Value will never achieve the 1% rule unless you tackle Airbnb but that’s a whole other issue. I’ve started investing in the US and Alberta. Much better numbers and sustainable cash flow.

Try looking at Prince George. I haven’t invested there but really like the fundamentals. There is lots of opportunity to repurpose single family into duplex and duplex into fourplex. Jack your rents and you have a great investment. If you do look at PG try to stay more south near Lower College or North of bowl in the “Heart”. Don’t go anywhere near the VLA (triangle of death) lol.

Message me if you wanna meet up and we can chat about RE.

-Phillip

Matt Belzile · Answer

Vancouver is tough. I know people who run successful Airbnb’s in downtown. But I’m wouldn’t want to rely on Airbnb with out a back up plan.

I have found deals that made sense in Vancouver’s outskirts. The detached market has soften quite a bit and there’s opportunities in finding properties that need work and that you can add value and cashflow by adding a rental suite or carriage home     But it’s not easy to find...

- Matt

Aaron Saarela · Answer

@Paul Yun

Hi Paul. I live in white rock and invest heavily in Prince George, where there is still cashflow. Although this market is drying up as far as cashflow goes, there are still some available. And the market is healthy for appreciation. But in a perfect world I wouldn’t have to drive 9 hours to tend my investments lol.

Jason Ridout · Answer

The 1% rule is a quick guide and I'm finding that it is not applicable to more expensive properties. A two million dollar apartment complex might only hit a 0.5% rule, but will probably cashflow a lot better than a $100,000 that is at the 1% rule. Obviously you need more capital to buy the apartment complex, but just don't rule things out that don't make the 1% rule.

That being said, a 1.3% cap rate sounds about right for Vancouver which is very difficult to make cashflow without well over 20% down.

Kris Bucci · Answer

Hey Paul, we invest in areas around Victoria and it is absolutely possible to Cash Flow around here.  The only caveat is you have to be quick because the area has been found by investors, but if you can acquire the right property your looking at Cash Flowing around $1000 per month for a $600k home. We currently have and manage 3 homes that fit this model.

Paul Yun · Answer

@Aaron Saarela White rock my hometown! Yeah but Prince George is better than investing in PEI or something like that on the East. Better something than nothing always!

Thanks for the lead on Prince George. Will definitely give this town a look.

Paul Yun · Answer

@Theresa Harris that is super disappointing to hear.. but Vancouver situation is what it is I guess.

I am analyzing a property right now (BRRRR 4plex) that makes sense in terms of cashflow and ROI, but the cap rate is very low at 1.3%. Is this possible or am I making an error in calculation (newbie here)? If it wasn't a calc error, is meeting the cap rate an absolute necessity before going for a deal?

Vancouver - Good Investment possible?

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