Most unaffordable housing market in the world? Vancouver.

[taylor192]

Originally Posted by Carl Johnson

^
It will have a negative effect on consumer confidence. Even thought it might seem like a paper loss of $100,000, but in reality most people will still feel as if it was a real loss just how the psychology works, therefore it is going to affect people's buying behavior. Look up the term - wealth effect - and you will see.

This is why I preach. Myself and others who have been proactive shouldn't have to suffer cause others are speculating - yet we will. This is ontop of being punished currently with low rates not helping those of us who save either.

There's days I wonder why I don't join the dark side and just wait for a bail out.

[Westcoast67]

Originally Posted by taylor192

2. Condo insurance does not cover rental properties usually. You have to buy extra insurance, which is usually double or triple the cost.

Most of what you wrote makes sense and has some merit except this. I recently flipped my condo insurance into a rental condo policy and the difference in pricing between the two policies is negligible.

I haven't read the whole thread, however there needs to be a change in thought pattern if one is going to invest in real estate. Focus needs to be put on yield as opposed to potential capital gain. This basically negates the idea of buying anything in the lower mainland because the revenues plain and simple cannot provide a decent ROI (8-10%).

[taylor192]

Originally Posted by Westcoast67

Most of what you wrote makes sense and has some merit except this. I recently flipped my condo insurance into a rental condo policy and the difference in pricing between the two policies is negligible.

What size was the condo? was there commercial property in the bottom of the building?

I should have been more clear rather than generalizing, yet regardless insurance will cost more, not less.

Originally Posted by Westcoast67

I haven't read the whole thread, however there needs to be a change in thought pattern if one is going to invest in real estate. Focus needs to be put on yield as opposed to potential capital gain.

Originally Posted by taylor192

You need to calculate your cap rate: http://en.wikipedia.org/wiki/Capitalization_rate

Originally Posted by Westcoast67

This basically negates the idea of buying anything in the lower mainland because the revenues plain and simple cannot provide a decent ROI (8-10%).

Cap rates in Vancouver are ~3-4% right now, yet I fear that is even too high as that is only measured by good landlords and good investments. I know a few amateur landlords that are losing money, renting for the cost of the mortgage then covering condo fees and taxes themselves cause they are betting on continued house appreciation.

[Nightwalker]

Thanks for your reply. I took some time and did some research, your response helped me out.

I won't be selling my current place just yet, but I'm no longer interested in going after another soon.

[Noir]

Originally Posted by Westcoast67

Most of what you wrote makes sense and has some merit except this. I recently flipped my condo insurance into a rental condo policy and the difference in pricing between the two policies is negligible.

I haven't read the whole thread, however there needs to be a change in thought pattern if one is going to invest in real estate. Focus needs to be put on yield as opposed to potential capital gain. This basically negates the idea of buying anything in the lower mainland because the revenues plain and simple cannot provide a decent ROI (8-10%).

You have to be careful. The price may be negligible in difference but the coverage difference are so far less on the rented condo form.

So in actuality, it is more expensive. You're paying the same price for just a fraction of your previous coverage.

[Westcoast67]

Originally Posted by taylor192

Cap rates in Vancouver are ~3-4% right now, yet I fear that is even too high as that is only measured by good landlords and good investments. I know a few amateur landlords that are losing money, renting for the cost of the mortgage then covering condo fees and taxes themselves cause they are betting on continued house appreciation.

If the current market has taught us anything, it is to not bet on it. Good luck to them!