Condo as Investment Property


Condo as a Good Investment  

I will show you the 6 reasons you should consider condos as an investment here in Metro Vancouver in 2018.  

#1. Historical Prices ( See Chart) - Looking here at the graph, prices year over year across the over the last 10 years we have seen increases, impressive increases.  Prices have almost doubled in 10 years.    This is across the entire Greater vancouver.  I don’t have a Chrystal ball but affordability is a major issue here, and I feel that prices in condos will continue to go up the long run.  You will have your stagnant growth years but thats understandable, as every asset class you would need to have a longer holding period to reap the rewards.  Timing the market as you see in this graph is difficult from years 2009 - 2015, then it took off.  

#2 Rental Rates are constantly rising.  For this year, a new three-bedroom rental on the West Side of the city with a starting rate of $3,702 per month is considered affordable.

Also regarded as affordable rental rates in the same part of the city are $2,756 for a two-bedroom unit; $1,903, one bedroom; and $1,646, studio.

For 2018, a new rental in East Vancouver with three bedrooms with a starting rate of $3,365 is deemed affordable by the city.Also for the same part of the city, the following rates will be considered affordable: $2,505 for a two-bedroom rental; $1,730, one bedroom; and $1,496, studio.

#3 Supply and Demand - show active to sales ratio.  The supply can’t keep up with the demand.  Condos are perfect for first time homebuyers, downsizes, other investors, and new immigrants.  In Vancouver our estimated population growth per year is about 100k.

#4 Lower Money Down - in general condos are more affordable than houses.  The price gap between a detached house and a condo is about $750,000.  That means your downpayment would be much much less.  You would need a minimum of 5-10% down to purchase a condo.

#5 Pre-sale Condos -  with this type of purchase, you would buy a property directly from a developer in exchange for a deposit.  It takes about 3 years to build, and you don’t have any carrying costs except if you borrowed your deposit money from a line of credit.  The bonus of this type of investment is that you can assign the contract to another buyer before the building completes if the value has increased. 

#6 Its Trendy:  The trend now is to live in brand new smaller condos close to rapid transit.  Some young folks have given up on the idea of buying that big detached home because of its affordability.  This trendy ness will further contribute to the demand for condos.      

There you have it the 6 reasons your should consider a condo purchase now as an investment.  If you have any questions please reach out to me.  If you are thinking of buying a condo, please watch my video here as I explain the 20 questions I would ask if I were to purchase a condo.

Question of the day, would you consider investing in a condo now?  Yes or No  Please leave it in the comments below. I will try my best to personally answer all comments myself.     

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