very sensible angle on your video today. I have a slightly different way of looking at the West end market. I think the best opportunity is to get into some of the cheaper built 1970 and '80s wood frame low-rise condos in the West end. This view is based on the fact that the actual proportion of the land that you would own would be more in these type of buildings then would be in the newer tower type. Specifically you would own a larger piece of the actual land. As you know or don't know. I do doordash in the West end and actually I've been surprised when I've entered some of these wood frame buildings. From the exterior view I thought that the building quality would be poor however after I entered the buildings I've seen some very well managed and very nice looking interior in terms of the hallways and visible facilities. One building I went to I think on Nelson Street had a beautiful interior garden. The entry price for these buildings would be cheaper and you could either rent them or live in them and then over your lifetime I would think that you would get lift from the redevelopment that would eventually come over the next 20 years.
Hi Owen, you had mentioned that investors may interested in the Yaletown unit you were selling for $725k that could generate $2800/rent. I did some back of the envelope calculations, with 20% down and 5.2% mort. rate, you would need to go into your pocket about $1200/month to carry the property, factoring in strata fees, insurance etc. After 10 years, your net income (equity earned ) would be *negative* $44,000. That is, you paid off $100k in principle but paid $144,000 out of pocket to carry the property. I know there is a lot of variables over those 10 years - interest rates, rental rates etc, but those numbers are probably ball park accurate. The property would need to increase 10% in value to get to a break even point. Personally I would rather stick that $145k down payment in S&P index fund, which historically speaking, would double in value during that 10 year period, no hassles, lower risk. At the current prices and interest rates, downtown condo investments do not really make a ton of sense imo.
in 10 years, that 725k condo might be worth 1.5mill, lets say it is worth 1mill in 10 years, that is like 275k profit, or about 190% return of the original 145k downpayment.
@@brianko5720 yeah got a serious laugh when i read "property would need to increase 10% (in ten years) in value to get to a break even point", this is vancouver wtf
@@brianko5720 It is possible, but personally I think its unlikely that the rate of appreciation in the next 10 years will match the prior 10 years. Also factor in the opportunity cost of that $145k of after tax income you spend to carry the property over the next 10 years. Instead, You dollar cost average that into an S&P index fund, thats another extra $200k cash your going to have at the 10 yr mark, that wouldn't otherwise if you bought the condo. So even if that condo appreciated to $1m, you were still better off just sticking the $145k in s&p index fund and investing your savings.
There is a 60 storey tower that will be Passive House certified called the curve that will be built adjacent to the Butterfly project in the west End at Nelson and Thurlow. I heard that these are currently pre selling at around $3,000 a sq ft. $1500 a sq ft for pre sale sounds cheap while 1100 a sq ft is a bargain in my eyes in comparison. Excellent video Owen as always, keep up the good work.
COV. (City Of Vancouver) has RENTAL INCREASE LIMITS, -- so tenants are safe until they plan to move. --- What can landlords of downtown condos do when they are limited to 2% rent increase that is currently in effect, I believe.
Generally below market is a household income below $110,000. Friends ended up purchasing a new duplex just east of Victoria on 6th avenue. Multiple offers above asking . Good quality stuff below 2 million is still being fought over .
"i believe in capitalism" but " only when it serves me". 🤣😂😂😂. Reduced rent for certain professionals. 🤣 But over all great take. Young people should listen. I wouldn't expect interest rate to drop much in the coming years. I see stagflation coming.
I try every year to increase my credit score, increase my annual salary, increase my down payment and every time I think I’ve done enough, brokers tell me I don’t qualify for a mortgage. The rate I increase my financials is not as quick as the rate of real estate here. It travels to the stratosphere too quickly and I can keep up fast enough
For sure. People who become lifetime renters are there because that's where they want to be. They will complain that rents are too high and that everybody is conspiring against them but never want to put in the work to get out of the situation or take any ownership of their life. Stay tuned on Tuesday for a video on this.
Not sure about the dig at left wing policies as the increase in rent is due to overall inflation set by overdue affects of long Covid. (Not to mention good prices have gone up yet wages mostly haven't at the same level) As a result, I perceive asset owners are forced to increase their own asset value in fear that their existing investments will decline at the expense of renters. I don't see how easing the market interest rate will make all asset owners more generous as those who are in the game late should already be pulling up their bootstraps
very sensible angle on your video today.
I have a slightly different way of looking at the West end market. I think the best opportunity is to get into some of the cheaper built 1970 and '80s wood frame low-rise condos in the West end. This view is based on the fact that the actual proportion of the land that you would own would be more in these type of buildings then would be in the newer tower type. Specifically you would own a larger piece of the actual land.
As you know or don't know. I do doordash in the West end and actually I've been surprised when I've entered some of these wood frame buildings. From the exterior view I thought that the building quality would be poor however after I entered the buildings I've seen some very well managed and very nice looking interior in terms of the hallways
and visible facilities.
One building I went to I think on Nelson Street had a beautiful interior garden.
The entry price for these buildings would be cheaper and you could either rent them or live in them and then over your lifetime I would think that you would get lift from the redevelopment that would eventually come over the next 20 years.
I agree and appreciate your comments. Will have to do another video on areas like the West End and where i see excellent value
Hi Owen, you had mentioned that investors may interested in the Yaletown unit you were selling for $725k that could generate $2800/rent.
I did some back of the envelope calculations, with 20% down and 5.2% mort. rate, you would need to go into your pocket about $1200/month to carry the property, factoring in strata fees, insurance etc.
After 10 years, your net income (equity earned ) would be *negative* $44,000. That is, you paid off $100k in principle but paid $144,000 out of pocket to carry the property.
I know there is a lot of variables over those 10 years - interest rates, rental rates etc, but those numbers are probably ball park accurate.
The property would need to increase 10% in value to get to a break even point.
Personally I would rather stick that $145k down payment in S&P index fund, which historically speaking, would double in value during that 10 year period, no hassles, lower risk. At the current prices and interest rates, downtown condo investments do not really make a ton of sense imo.
My thoughts exactly. The prices only go up because a lack of supply. Many of us can work remote and buy a place in Mexico.
in 10 years, that 725k condo might be worth 1.5mill, lets say it is worth 1mill in 10 years, that is like 275k profit, or about 190% return of the original 145k downpayment.
@@brianko5720 yeah got a serious laugh when i read "property would need to increase 10% (in ten years) in value to get to a break even point", this is vancouver wtf
@@brianko5720 It is possible, but personally I think its unlikely that the rate of appreciation in the next 10 years will match the prior 10 years.
Also factor in the opportunity cost of that $145k of after tax income you spend to carry the property over the next 10 years. Instead, You dollar cost average that into an S&P index fund, thats another extra $200k cash your going to have at the 10 yr mark, that wouldn't otherwise if you bought the condo. So even if that condo appreciated to $1m, you were still better off just sticking the $145k in s&p index fund and investing your savings.
There is a 60 storey tower that will be Passive House certified called the curve that will be built adjacent to the Butterfly project in the west End at Nelson and Thurlow. I heard that these are currently pre selling at around $3,000 a sq ft. $1500 a sq ft for pre sale sounds cheap while 1100 a sq ft is a bargain in my eyes in comparison. Excellent video Owen as always, keep up the good work.
You're right when i say starting at $1500sq ft for 2nd floor facing Alley i'm probably still way low.
Amazing video & excellent discussion!!! Thanks for your analysis!! You’re absolutely right!
Thanks for watching! Reza
COV. (City Of Vancouver) has RENTAL INCREASE LIMITS, -- so tenants are safe until they plan to move. --- What can landlords of downtown condos do when they are limited to 2% rent increase that is currently in effect, I believe.
Generally below market is a household income below $110,000. Friends ended up purchasing a new duplex just east of Victoria on 6th avenue. Multiple offers above asking . Good quality stuff below 2 million is still being fought over .
Agree.. i'm in bidding wars almost every week these days
Beautiful with bums right in front of your property. Homeless everywhere now...dt is disgusting. Tell the truth.😮
Thank you so much Owen for the wealth of information!
My pleasure! Thanks for watching
Come to Alberta!
"i believe in capitalism" but " only when it serves me". 🤣😂😂😂. Reduced rent for certain professionals. 🤣 But over all great take. Young people should listen.
I wouldn't expect interest rate to drop much in the coming years. I see stagflation coming.
Thanks Owen! Dan/Mad Slug.
The large Senakw development south side of Burrard -- did that also switch to all rental?
Totally agree with this, thank you
Thanks for watching
Always another great video Owen!
Thank you
I try every year to increase my credit score, increase my annual salary, increase my down payment and every time I think I’ve done enough, brokers tell me I don’t qualify for a mortgage. The rate I increase my financials is not as quick as the rate of real estate here. It travels to the stratosphere too quickly and I can keep up fast enough
I feel for you. Will address this in a future Saturday video and some suggestions on how some of my young 1st time buying clients have overcome this.
A lot of people are meant to rent. They do zero research, reading, planning & end up as long term renters.
Or they can't afford a 700k apartment lol.
You're forgetting about all the low-income folks who may never afford to buy a house due to many different systemic factors
Priveleged people have no idea about what systemic barriers are unfortunatelly.
For sure. People who become lifetime renters are there because that's where they want to be. They will complain that rents are too high and that everybody is conspiring against them but never want to put in the work to get out of the situation or take any ownership of their life. Stay tuned on Tuesday for a video on this.
@Mitchell McNicol
you can STILL buy an apartment in Richmond, New West for below 450k
Not sure about the dig at left wing policies as the increase in rent is due to overall inflation set by overdue affects of long Covid. (Not to mention good prices have gone up yet wages mostly haven't at the same level) As a result, I perceive asset owners are forced to increase their own asset value in fear that their existing investments will decline at the expense of renters. I don't see how easing the market interest rate will make all asset owners more generous as those who are in the game late should already be pulling up their bootstraps
I think i'm 100% accurate with my dig at left wing policies.