Vancouver's Real Estate Market

[Euro7r]

I personally don't see big net positive cash flow each month with new condo builds these days. The high cost of everything eats into the rent, unless you bought in early when things were still cheaper. You'll be lucky to break even with mortgage and overhead.

I bought a pre-sale a few years back $600k. 25% down, my mortgage was $1800 a month @ 1.20% for 1 bed 1 bath. This isn't even including property tax/insurance factored in to the $1,800. Assume I can rent it out $2,000 a month conservatively at today market rate, I'd be losing money/break even. I didn't rent it out because I ended up finding a gf and we ended up using the space for a year and sold it to buy a house. Even then it was a pain in the ass to sell because condos are dime a dozen everywhere.

[JDMDreams]

Yea + the no air BNB bs, and rent caps, not worth it to buy to rent right now. Just lock your money in a 5% gic for two years risk free. From the numbers I've seen, apartments haven't appreciated at all in the last few years and I've seen some that's actually dropped like 10% in the last 3 years. Unless you've bought something presale few years ago it hasn't appreciated any at all. And even then you're completing the unit at higher rates if you have to borrow. Rates will still be way higher than average this year.

[JDMDreams]

Only way that I see it viable is if you live at home for free, then you can buy to rent out and get someone to help with the mortgage, but I'm sure you will be under water at this time. And move in down the road and take over the payments. So at least you locked in a price and you own something. If you are relying on this to make money and you have to pay to live somewhere else it's a no right now.

[Hondaracer]

Originally Posted by 68style

Vancouver market is dead for renting if you want to make money being a landlord not a speculator... I know all the people renting are whining about how much it costs to rent, but they should do the math on owning and they'll see it's twice as expensive as renting, so rent actually isn't that bad lol

Everyone bozo on Reddit has no clue how much shit actually costs.

If there was a baseline rent and tenants were responsible for hydro, cable, gas, etc people would be paying substantially more than an all-inclusive arrangement thay most landlords have. I know I’ve absorbed between 15-20% increase in costs while only being able to raise the rent the 3% or whatever.

Let alone having to actively renegotiate shit like TV, Internet; etc. on my own time

[JDMDreams]

^ don't forgot MANDATORY 10% property tax hikes and no discount since it's being rented out.

[Euro7r]

Originally Posted by Hondaracer

Everyone bozo on Reddit has no clue how much shit actually costs.

If there was a baseline rent and tenants were responsible for hydro, cable, gas, etc people would be paying substantially more than an all-inclusive arrangement thay most landlords have. I know I’ve absorbed between 15-20% increase in costs while only being able to raise the rent the 3% or whatever.

Let alone having to actively renegotiate shit like TV, Internet; etc. on my own time

The ones that make me go "WTF" are those that have been paying $1,000 rent for the past 10-20 years, then they get evicted now, then complain the government needs to provide affordable housing (aka give them handouts). Like who in the fucking right mind believes government will care about your well-being, there are millions of people, what makes you think government will specifically take care of you even then. People are naïve or straight just have no common sense? Do these people just blow every dollar they earn thinking my rent is cheap as fuck now, going to spend it all and I'm still good because my rent is cheap? Every week seems to be a news article of some clown complaining about expensive rent is and can't afford.

[Hondaracer]

Yea that’s without ever factoring property taxes

I’ve never considered taxes in my decision to raise rent etc. but it’s probably the biggest driver of costs

[68style]

It's not just low income people that have this mindset... I worked with many bitter old ladies in the government who, albeit worked the lowest positions in the government... like CR-04 Admin... but still it's been anywhere from $40-60k salary range in the last 20 years and the entire time they've just rented instead of buying because "prices were too high" and now they're full of bitter regret because that 2 bedroom condo they could have bought in 2004 for $250k is $750k now, they think they got "fucked" by the "system" and greedy landlords, etc.

I have lost count how many people I have seen at work muttering about how they can't even retire now because of how fucked they are. A couple times I tried to point out that they should have bought a place and all I get is "EASY FOR YOU TO SAY" attitude back lolol

[PeanutButter]

Would this be the correct train of thought?

https://www.redfin.ca/bc/surrey/9689...home/176782076
1br in surrey central

$400,000 purchase price
$80,000 down = 20% down

$320,000 mortgage @5.3%
=$1,916 per month mortgage

+ per month costs:
$157 Property Tax
$317 Strata
= $2390 per month (Mortgage + property tax+ strata)

Rent = $1,863 per month (from Zumper) or $22,356 revenue per year

-$527 per month cash flow.
-$6,324 per year cash flow (edit)

The only way this scenario would work is if you thought the price of the condo itself would go up dramatically. Otherwise, you're losing money every year for 25 years (until the mortgage is paid off).

Is this pretty much the consensus?

[Hondaracer]

Originally Posted by 68style

It's not just low income people that have this mindset... I worked with many bitter old ladies in the government who, albeit worked the lowest positions in the government... like CR-04 Admin... but still it's been anywhere from $40-60k salary range in the last 20 years and the entire time they've just rented instead of buying because "prices were too high" and now they're full of bitter regret because that 2 bedroom condo they could have bought in 2004 for $250k is $750k now, they think they got "fucked" by the "system" and greedy landlords, etc.

I have lost count how many people I have seen at work muttering about how they can't even retire now because of how fucked they are. A couple times I tried to point out that they should have bought a place and all I get is "EASY FOR YOU TO SAY" attitude back lolol

I’ve probably mentioned this before but I have a friend who’s dad thinks he’s smarter than everyone (although has no experience or education in any field)

Back in 2012 he thought he was outsmarting everyone and he said so, that he was selling their family home where 5 of them lived in Surrey because the “market was going to crash” and they legitimately thought they were going to cash out and buy “multiple” homes afterward.

They sold their Fraser heights home for under asking at $630,000 and have been renting ever since, the home changed hands again 2 years ago for 1.85

And yea of course the entire family is extremely bitter now and they are all anti-govt, anti Trudeau they ducked us over etc.

The funny thing is all the kids are kinda bums as well so not only did they fuck over their own retirement, but they also destroyed any generational wealth they could have provided. And they’ve been renting for 12 years now lol

[68style]

Originally Posted by PeanutButter

Would this be the correct train of thought?

https://www.redfin.ca/bc/surrey/9689...home/176782076
1br in surrey central

$400,000 purchase price
$80,000 down = 20% down

$320,000 mortgage @5.3%
=$1,916 per month mortgage

+ per month costs:
$157 Property Tax
$317 Strata
= $2390 per month (Mortgage + property tax+ strata)

Rent = $1,863 per month (from Zumper) or $22,356 revenue per year

-$527 per month cash flow.
-$19,996 per year cash flow

The only way this scenario would work is if you thought the price of the condo itself would go up dramatically. Otherwise, you're losing money every year for 25 years (until the mortgage is paid off).

Is this pretty much the consensus?

I think your per year cash flow is -$6,324 not -$20k... 5.3% mortgage rate seems pretty optimistic right now too?

There's also the intangibles of losing the opportuntiy to make money elsewhere with the downpayment, etc.

Originally Posted by Hondaracer

I’ve probably mentioned this before but I have a friend who’s dad thinks he’s smarter than everyone (although has no experience or education in any field)

Back in 2012 he thought he was outsmarting everyone and he said so, that he was selling their family home where 5 of them lived in Surrey because the “market was going to crash” and they legitimately thought they were going to cash out and buy “multiple” homes afterward.

They sold their Fraser heights home for under asking at $630,000 and have been renting ever since, the home changed hands again 2 years ago for 1.85

And yea of course the entire family is extremely bitter now and they are all anti-govt, anti Trudeau they ducked us over etc.

The funny thing is all the kids are kinda bums as well so not only did they fuck over their own retirement, but they also destroyed any generational wealth they could have provided. And they’ve been renting for 12 years now lol

Fuck I haven't personally seen you say this before, that's amazing... imagine living every day with the knowledge that you fucked yourself out of $1.2 million over the course of 12 years... average of $100k loss a year. Amazing. I bet he didn't invest that $630,000 either? That's the only way you come out of this with any semblance of anything... even then you're only making $30-50k a year at a steady 5% return with compound interest lol... what a loser

[JDMDreams]

Those were like $295 3 years ago. And yes you're gonna lose money. 5.3% is still a pretty aggressive rate today, most people can't get that rate unless you get like a good 5 year fixed. But then you will be over paying on % in the next 4 years.

Even if rates drop to 4.3% your mtg monthly is still $1743, so you're still not breaking even. And those strata, property tax, insurance, special levies will go up every year too, more than your 2% rent increase.

[PeanutButter]

^ Damn, that's extremely sad.

What ethnicity were they?

[PeanutButter]

Originally Posted by 68style

I think your per year cash flow is -$6,324 not -$20k... 5.3% mortgage rate seems pretty optimistic right now too?

There's also the intangibles of losing the opportuntiy to make money elsewhere with the downpayment, etc.

thanks. not sure how I did that math wrong.

For the mortgage I just saw RBC advertising that rate with a quick search. I assumed they would be on the higher end. maybe that's too low then.

[PeanutButter]

Originally Posted by 68style

I think your per year cash flow is -$6,324 not -$20k... 5.3% mortgage rate seems pretty optimistic right now too?

There's also the intangibles of losing the opportuntiy to make money elsewhere with the downpayment, etc.

Considering my stupid mistake.

$6,324 x 25 years = $158,100

So you're paying $158k to own a $400k condo in 25 years.

Is that so much of a bad deal?

[68style]

You'd do a lot better if you invested the $80k and contributed $6500 a year to your investment I think.

Also not need to deal with fucktard renters, repairs, rising costs, special levies, tripling of strata fees or more in that time, etc. etc.

Your only hope in that scenario is the the apartment appreciates... which is possible... I'm not so sure how much more prices can possibly appreciate here though.

[PeanutButter]

Never mind.. It's a horrible deal.

So I took the $80,000 down payment
and then added $527 per month (which is the negative cash flow I would be putting in) put it into a compound interest calculator

@5% interest compounded over 25 years = $592,336

@6% interest compounded over 25 years = $722,405
@7% interest compounded over 25 years = $884,941
@8% interest compounded over 25 years = $1,088,404
@9% interest compounded over 25 years = $1,343,504
@10% interest compounded over 25 years = $1,663,796 (Average S&P 500 return)

[PeanutButter]

On another note, looking at the views on this thread, it shows that 13 members and 517 guests are viewing this thread...

Damn, that seems like a lot of freaking people on this thread. For whatever reason in my mind I feel like RS is like 50 guys max.

[68style]

Even for myself, my mortgage is now paid off and my condo is worth about $630,000 at the moment... I'm looking at buying a new place and was thinking to keep my condo... but there is no scenario I can think of where it's worthwhile to keep my condo and rent it out, rent is $2,500 a month in my building but strata fee is $390, property tax is $120-ish, insurance for a renter I don't even know what that costs, and the building is now 13 years old... for sure appliances are going to start to fail (my fridge died once, but I fixed it myself) and I was given a heads up by a friend on strata that there's a special levy coming this spring for anywhere from $5,000-$10,000 per unit to re-seal concrete exterior surfaces......... combine that with questionable drainage and being a first floor unit? Why would I keep the place for all the possible liability risks and future costs to take in a measly $1,500 net a month when I could just sell it and invest $600,000 cash somewhere lol

[Hondaracer]

Originally Posted by 68style

I think your per year cash flow is -$6,324 not -$20k... 5.3% mortgage rate seems pretty optimistic right now too?

There's also the intangibles of losing the opportuntiy to make money elsewhere with the downpayment, etc.



Fuck I haven't personally seen you say this before, that's amazing... imagine living every day with the knowledge that you fucked yourself out of $1.2 million over the course of 12 years... average of $100k loss a year. Amazing. I bet he didn't invest that $630,000 either? That's the only way you come out of this with any semblance of anything... even then you're only making $30-50k a year at a steady 5% return with compound interest lol... what a loser

Of course they didn’t invest it lol

If you had invested every single dollar of the sale, they would have come out way ahead but I guarantee you very little of it was put into investments because both the parents also have public service pensions, so they are anti-investment as well because “peNsION is ReTIreMeNT!!”

I’m almost certain they’ve burned through a good portion of the sale money renting full houses since they moved out. Not only that but they’ve been forced to move 4/5 times in that 10 year span because they’ve been renovicted out of the homes

Honestly I don’t feel bad for them, the dad is a knob and has always been this type of person as long as I’ve known the family

[Badhobz]

real estate is generally safer than the market but renting it out is a different set of headaches that not a lot of people want to deal with.

Especially if you aren't making any money and instead is just covering a mortgage. Even when we had our slum lord apartment downtown (it was free and clear), it was an extra 2500 bucks a month but dealing with those idiots wasnt worth the 2500 a month to us. Minus the 500 dollar maintenance fee, you're at 2k and then property tax, levies, and other trash made the income marginal for the amount of work required.

Plus we had to pay capital gains on the piece of shit when we sold it. Man it would have been better for us to throw money into her stocks

[underscore]

Originally Posted by 68style

Your only hope in that scenario is the the apartment appreciates... which is possible... I'm not so sure how much more prices can possibly appreciate here though.

I tend to think that too, but at the same time it's felt that way for a long time now and things keep going up.

[Tapioca]

The financial analysis that people are doing here is not typically done by people who purchase investment condos.

The mentality is often rooted in the stock market = bad and real estate = safe. The typical real estate investor in this market is willing to take a loss because the equity makes up for it in their minds. And that real estate is far easier to leverage for more real estate and assets than stocks are.

[Hondaracer]

Originally Posted by Tapioca

The financial analysis that people are doing here is not typically done by people who purchase investment condos.

The mentality is often rooted in the stock market = bad and real estate = safe. The typical real estate investor in this market is willing to take a loss because the equity makes up for it in their minds. And that real estate is far easier to leverage for more real estate and assets than stocks are.

100p

I grew up with a bunch of viet people, almost all first gen Canadians with their parents coming here. The parents unanimously see the stock market as a fools game and want tangible assets

Many ended up buying condos in Calgary and Edmonton and took huge losses on them lol, but at least it’s an actual thing! Lol

[JDMDreams]

^^ is Calgary still worth thinking of? You can buy brand new houses for $600000. and rents are like $3500. You can't get that with a $600k unit in Van. Eventually rent out everything here to take advantage of the rents + lower mainland appreciation and move there down the road to retire? Big house, big yard, big women?