House-Hack in Abbotsford or any other suburbs of Vancouver

Canadian Real Estate
5yFollow

House-Hack in Abbotsford or any other suburbs of Vancouver

Sneha Maun
Member since 2021 · 9 posts · 1 vote

Hi,

I am a newbie in RE investment. I am currently in Vancouver. We moved here recently because of my husband's job. We are young (no kids yet but definitely have them in the future). We will have to settle in and around Vancouver as my husband has a long-term job here for which he needs to travel to the city every day. We are looking for some stability as well. As we were on a move for the last 2-3 years due to each of our careers. We both work. We are starting our journey in RE investing and we do not know which path to go:

1. Buy a house here for 700K to 800K and rent out the basement and extra room on Airbnb and long-term tenancy. The houses are crazy expensive here. The only ones that we can afford are either in Abbotsford, Langley, Maple Ridge, Chilliwack. Chilliwack is the biggest contender for us. Is it a good way to start? Are these areas good investments for renting out and future growth? High initial investment but the potential chance of positive cash flow

2. Or, we could continue living on rent in our current apartment, buy a cheaper property such as a condo for 2-3 bedrooms in Burnaby, New West area for 400k to 500k. Rent the whole apartment out and build equity on that condo. This is less risky in terms of initial investment as capital requirements would be low but I do not think we will have a positive cash flow from it.

3. Or we leave the idea of owning a house in Vancouver or BC. Should look for opportunities for investment in other states such as Alberta and build-out of state rentals. We feel we are new here and hence it will be high risk for us.


Please guide. And Thank you in Advance.

0Reply
89 views

16 Replies

Jump to latestLatest
  • Account Closed
    Rental Property Investor · Port Coquitlam, BC · Member since 2017 · 520 posts · 527 votes
    5y

    @Sneha Maun welcome to BP!

    I'd recommend that you try to commute from Chilliwack to Vancouver before including it in your plans.  You are asking for 4h per day of traffic hell.  I know that some people do it, but what a colossal waste of time and energy. 

    Have you considered Mission?  It's the end of the line for the West Coast Express (commuter rail to downtown Vancouver). Your husband could then commute in relative comfort and use the commute time on the train for podcasts, reading, relaxing.

    The biggest knock on BC for investing is that rent control makes cash flow a challenge.  If I were in your shoes, I would look for a house near transit access that has the potential for a legal rental suite.  You can use this extra income to invest in markets where properties cash flow (hint... it's not going to be in an area where a $500k condo rents for $1500 per month)

    Good luck!

    0Reply
  • Sneha Maun
    OP
    Member since 2021 · 9 posts · 1 vote
    5y

    Thank you for the quick response @Account Closed. You are absolutely right about a $1500 rents for $500k condos is not going to make it. We are so new here that it's just so difficult to understand the market. You are the second person telling me about the commute from Chilliwack to Vancouver and I think its not something my husband would want to do. I have checked Mission prices, single-family home prices are soaring and have gone above a million $. However, What about langley? There is a new sky train station coming over one section there. Is that a good area? Thank you for telling me about rent control. I think I need to spend some time on that to really make a decison first.

    0Reply
  • Account Closed
    Rental Property Investor · Port Coquitlam, BC · Member since 2017 · 520 posts · 527 votes
    5y
    Langley would be considerably more expensive than Mission... there are no single family homes there for $700k 
    0Reply
  • Sneha Maun
    OP
    Member since 2021 · 9 posts · 1 vote
    5y

    ok. I think Chilliwack is definitely out for now. you are right. I am going to be on the lookout in Mission. Regarding Langley, you are right. However, do you think option 1 will work out for us? Or should we refrain from investing in and around Vancouver and focus more on option 2 and Option 3. ?

    0Reply
  • Account Closed
    Rental Property Investor · Port Coquitlam, BC · Member since 2017 · 520 posts · 527 votes
    5y

    You need to live somewhere.... if you can afford a property with rental potential (i.e. option 1), you can get started in home ownership and have your tenant hep you build equity with principal pay down.   Mortgage rates are as low as they'll ever be, and as homeowners, you should be able to qualify for 5% down. Work with a local mortgage broker, not a bank.

    0Reply
  • Sneha Maun
    OP
    Member since 2021 · 9 posts · 1 vote
    5y

    Understood. Yes, exactly, we have to live somewhere then why not build equity while doing that. 100% agree. I have been approached by different brokers to go through their local mortgage brokers. Should I decide on the broker/agent before going through the mortgage broker? As each one of them has its own. I do not want to have inquiries on my credit score. My husband and I have an amazing Credit history in the USA, as that's where we were for the last 4 years. But we are building credit here now. Some brokers say, that some banks here use credit history from the USA and some say they don't. We are planning to buy by December or at least have some offers sent by December.

    0Reply
  • Wendell Fong
    Investor · Vancouver BC · Member since 2020 · 88 posts · 60 votes
    5y

    My advice is to look at the first time home buyer's program and see what the requirements are.  Wait at least until after the Federal Election in a couple of weeks to see if there is a new program or changes to the existing one.  Do either you and/or husband qualify for the program?    

    0Reply
  • Sneha Maun
    OP
    Member since 2021 · 9 posts · 1 vote
    5y

    @Wendell Fong Thank you for your response. That's a good point. We do qualify for the first home buyers program, however, it states that it is only eligible for properties whose Market Values are less than $500K. Am I reading that right? Is that a mandatory requirement? Finding a single-family or even a townhouse under 500K is not possible.

    0Reply
  • Conor Kelly
    Real Estate Agent · Abbotsford, BC · Member since 2017 · 78 posts · 9 votes
    5y

    @Sneha Maun Hi Sneha. Pre sale townhome might be a good option for you. The reason being is, say you put down a 10% deposit for a pre sale townhome. Now you own a brand new townhome (when it gets completed) but you won’t have to start making any mortgage payments until it gets completed. Which could be 1.5-2 years. In those two years, keep saving money and put yourself in a better financial situation for when you eventually have to move in and start paying a mortgage. This way you may be able to buy a 2nd rental by the time you have to move in.

    Other than that, Chilliwack or Abbotsford is probably your best bet. I grew up in Surrey and moved to Abbotsford as well.

    0Reply
  • Sneha Maun
    OP
    Member since 2021 · 9 posts · 1 vote
    5y

    @Connor Kelly That sounds like a good option. But I will have to start paying the interest on the pre-sale mortgage from year 0 right i.e from the day I pay the deposit? I tried googling this but no one is giving a clear answer on the 'Interest part'.

    1Reply
  • Conor Kelly
    Real Estate Agent · Abbotsford, BC · Member since 2017 · 78 posts · 9 votes
    5y

    @Sneha Maun You don’t have to start making payments on anything until you the project is completed as far as I’m aware.

    You may want to consult a mortgage broker (I have a guy if you’d like). If you’re talking about interest rates, I believe some lenders will let you lock in a mortgage at today’s rates if that’s what you were asking.

    0Reply
  • Maksu Ize
    Investor · Vancouver · Member since 2021 · 165 posts · 137 votes
    5y

    Stay near your work, buy pure investments in langley / abbotsford etc.

    Do NOT move out there, you will be spending minimum 2.5hrs driving each day.

    I have a rental in pomo, and vanc, 20% down on both, both cashflow negative. Gvrd is a negative cashflow market, unless you put closer to 30%+ down. The main purpose of buying in GVRD is appreciation.

    Abbotsford, nanaimo, mission, langley all have much higher chance of being cashflow positive.

    Check rents, do the math, buy, call it a day.

    0Reply
  • Sneha Maun
    OP
    Member since 2021 · 9 posts · 1 vote
    5y

    @Conor Kelly Thank you. Yes, I would definitely like to speak with your mortgage broker. Just one last question, When should I have mine and my husband's credit checked by the Mortgage broker for him/her to find out how much the banks are willing to finance the house and how much we would have to put in? (assuming the price of the house is higher than the amount bank wants to finance us). We are new to Canada and extremely worried about having a thin credit file in Canada. So, we want to wait out to at least until December to provide details to the mortgage broker as they will run inquiries and won't find much. Should we wait that long or longer for finding out how much mortgage we will be financed with? 

    0Reply
  • Sneha Maun
    OP
    Member since 2021 · 9 posts · 1 vote
    5y

    @Maksu Ize Thanks for a straightforward and clear-cut answer. It helps with our thought process. And thank you for sharing some of your personal investment stats here. It helps a lot.

    0Reply
  • Conor Kelly
    Real Estate Agent · Abbotsford, BC · Member since 2017 · 78 posts · 9 votes
    5y

    @Sneha Maun Absolutely, I will private message you all his information. That is a great question Sneha and a legit concern. However, I won’t be able to answer that one for ya.

    I will shoot you my mortgage brokers information. Even if you guys aren’t looking to make a move anytime soon he is more than happy to answer these questions. He’s very experienced and very crafty at helping people get into the market. I’ll shoot his info over right now.

    0Reply
  • Sneha Maun
    OP
    Member since 2021 · 9 posts · 1 vote
    5y

    @Conor Kelly Thank you!

    0Reply
Join the conversationCreate a free account to reply, vote on answers and follow this thread.
Log InJoin for Free