Buying Property in Vancouver Proper

[florenceyi]

Hey ya'll.. I'm about to embark on my journey of purchasing a home in Toronto in 2020 - however the thought crossed my mind to eventually buy in Vancouver as well in the future, maybe even on a pre-construction basis so I can spread my resources. I wanted to ask locals' opinions and thoughts on the real estate market currently.. primarily for Vancouver proper area for condos.

My experience from airbnb rentals in Vancouver has led me to discover that *centralized* air conditioning is not popular in most condos.. is this true for a high percentage of condos there?
What about the theft situation with parking garages, as I constantly hear about this issue from local residents?
Is neighbourhood important for the above 2 items? Are certain neighbourhoods more desirable as a local? I only consider as a visitor that I like to stay in hustling and bustling areas where hotels are and where you can see people out and about, with lower homeless sightings.

Now that Uber has arrived, I can consider Van as a potential second future home!

 

[wintersurfer]

Deep Cove (North Van), you can buy a house with a suite, close to Quarry Rock and Honeys Doughnuts for $1.8+, the suite can earn $250-$300 on Airbnb from May-Oct (every day) and $150-$250 the rest of the year (70% booked)...

 

[scooner]

If you have any thoughts about purchasing a condo in Vancouver you might want to ask the seller or real estate agent about the recent sky rocketing insurance premiums that have or will be assessed upon the majority of all condo buildings in the Vancouver area, current replacement costs have sharply increased, the strata’s deductible for water and fire damage in many cases are now minimum $250k. This in turn has increased the insurance premiums substantially and in many cases condo owners will or have been subject to a one time assessment and will also see their strata or condo fees potentially almost double from where they were. Ownership has become more costly and I suspect also for those who are currently renting they will see huge increases in their rent when the landlords are allowed to increase the rent. Depending on where the condo is built within the greater Vancouver area insurance premiums can be even more expensive vs other areas due to the risk of overland flooding and or earthquake. Best to do some due diligence before you decide to purchase or invest

 

[Gardener]

If you have any thoughts about purchasing a condo in Vancouver you might want to ask the seller or real estate agent about the recent sky rocketing insurance premiums that have or will be assessed upon the majority of all condo buildings in the Vancouver area, current replacement costs have sharply increased, the strata’s deductible for water and fire damage in many cases are now minimum $250k. This in turn has increased the insurance premiums substantially and in many cases condo owners will or have been subject to a one time assessment and will also see their strata or condo fees potentially almost double from where they were. Ownership has become more costly and I suspect also for those who are currently renting they will see huge increases in their rent when the landlords are allowed to increase the rent. Depending on where the condo is built within the greater Vancouver area insurance premiums can be even more expensive vs other areas due to the risk of overland flooding and or earthquake. Best to do some due diligence before you decide to purchase or invest

The recent news surrounding insurance premium increases isn’t just relevant for Vancouver, it’s relevant for all cities. That said, I wouldn’t take media reports as 100% accurate, as they only ever focus on the craziest examples. Best to talk to a informer insurance broker for the real scoop.

 

[604jbear]

The recent news surrounding insurance premium increases isn’t just relevant for Vancouver, it’s relevant for all cities. That said, I wouldn’t take media reports as 100% accurate, as they only ever focus on the craziest examples. Best to talk to a informer insurance broker for the real scoop.

A few of my relatives who live in condos have confirmed there was a sharp increase in their building's insurance rates.

 

[gaul]

The only right area to buy would be DT for your needs. There are homeless nearby. Break-in can happen. Some buildings are having issues, some are not.

You will need a realtor.

Preconstruction I would not consider. For anything good you would need to sleep in a lineup..
Market is unpredictable, so project may be delayed.
Downtown is always hot market.

Centralized air conditioning is not required as there are only few hot days. Most people live without a/c, its better to have if you live in a house due to roof getting hot.

 

[CanineCowboy]

In my opinion, Yaletown has long lost its cool factor, Coal Harbour up to Alberni is a bit of a ghost town and South Vancouver is like living in the suburbs

I would say the best areas right now are: Olympic Village, if you want sterility and to pay a higher pricetag; Main Street, if you want cool and bustling; and Chinatown, more like the original Yaletown, but which requires contact with poverty, which you explicitly stated you don't want.

Valuations on condos have slipped over the last 18 months, even if some sellers haven't accepted that reality, and it is hard to predict whether the slide will continue over the short term or firm up like in the modest (under $2 million) detached housing market.

As new condo projects, especially in the luxury market, are no longer selling very well, some developers have switched to building purpose built rental accommodation, especially now that the city has incentivized rental construction.

AC definitely isn't a standard in Vancouver and cars get broken into virtually everywhere.

 

[scooner]

https://www.msn.com/en-ca/news/cana...unable-to-buy-insurance/ar-BBZYOpE?li=AAggXBV

I’m in a building in Yaletown that is sought after by both renters and potential owners, the strata’s insurance premiums were hiked significantly recently and condo fees will almost double as well because of this, yes condo insurance premiums are rising across Canada but they have increased much higher in Vancouver than elsewhere in Canada.

 

[Foggy]

You will need a realtor.

Preconstruction I would not consider. For anything good you would need to sleep in a lineup..
Market is unpredictable, so project may be delayed.
Downtown is always hot market.
.

It’s not true that you need to sleep in a line-up to get the good units. That’s for chumps. Get a GOOD realtor who specializes in pre-sales, especially one that is linked to the developer. Those realtors can get you in before the general public as they have units set aside for their clients. There are some buildings that sell out before being offered to the general public due to these special arrangements.

I’m not a realtor myself, but I’ve bought some downtown inventory myself as a nest egg. It’s a good time to buy now as the market is getting ready for another up-tick.

 

[Equity Market investor]

The recent news surrounding insurance premium increases isn’t just relevant for Vancouver, it’s relevant for all cities. That said, I wouldn’t take media reports as 100% accurate, as they only ever focus on the craziest examples. Best to talk to a informer insurance broker for the real scoop.

True.

A few of my relatives who live in condos have confirmed there was a sharp increase in their building's insurance rates.

Correct, as the above poster stated. However, the increase amount may depend on the condition of the building, what kind of building it is, how many claims the building has occurred, how much is in the contingency fund etc etc

It’s not true that you need to sleep in a line-up to get the good units. That’s for chumps. Get a GOOD realtor who specializes in pre-sales, especially one that is linked to the developer. Those realtors can get you in before the general public as they have units set aside for their clients. There are some buildings that sell out before being offered to the general public due to these special arrangements.

I’m not a realtor myself, but I’ve bought some downtown inventory myself as a nest egg. It’s a good time to buy now as the market is getting ready for another up-tick.

The upcoming premium insurance/ strata hike does not fear you with the amount you own? Or do you feel the media is reporting the extreme side of things and that this will be resolved in a affordable manner? Assuming you own newer type of condos.

 

[storm rider]

In any market if buying a condo if it is not newly built within the last 10 years make sure it does not have a special assessment levied against it and also check out the strata stability fund.

SR

 

[Foggy]

The upcoming premium insurance/ strata hike does not fear you with the amount you own? Or do you feel the media is reporting the extreme side of things and that this will be resolved in a affordable manner? Assuming you own newer type of condos.

I’m not worried at all. I have made sound choices in good neighbourhoods where the rent I can charge easily covers my mortgage, strata, insurance, etc. You have to do your homework and crunch some numbers. If it doesn’t add up, just let it go. Some condos are better suited for you to live in instead of rent out. If you have worked the numbers well, you can absorb little hits such as insurance bumps or rises in strata fees. Treat it like a business and try not to get emotionally invested in a property and you’ll be in a better spot.

I’ve only bought pre-sales and they are <5 years old now. As the inventory ages I may decide to sell and buy new again to reduce the chance of getting hit with a special levy, or encounter the need to reno the unit to keep it profitable. I’ll have some decisions to make, but not for some time yet.

 

[LM987]

Vancouver also has the Speculation Tax on "vacant" homes. If you don't live in it, and you don't have long term renters ( AirBnB doesn't count), then you may have to pay this empty homes tax as well.

 

[EuroSZabina]

If it is for investment I would not look into Vancouver but outside of the country, you are investing a lot smaller amount and make a lot more monthly, minus of your property tax etc... Some countries don't even have property tax, so you save there and the maintenance fee is not outrageous like in here.
Anyways, I'm doing it for a long time and it's been working out amazingly.

 

[storm rider]

If it is for investment I would not look into Vancouver but outside of the country, you are investing a lot smaller amount and make a lot more monthly, minus of your property tax etc... Some countries don't even have property tax, so you save there and the maintenance fee is not outrageous like in here.
Anyways, I'm doing it for a long time and it's been working out amazingly.

I totally agree with this.If you had say $500,000 you could easily buy 10 condos in Thailand free and clear at $50,000 per.You would be surprised how much $50,000 gets you in Thailand whereas in Vancouver that wont even buy you a parking space.

SR

 

[Beasting]

I totally agree with this.If you had say $500,000 you could easily buy 10 condos in Thailand free and clear at $50,000 per.You would be surprised how much $50,000 gets you in Thailand whereas in Vancouver that wont even buy you a parking space.

SR

I thought non Thais can't own property?

 

[jamasianman]

You can buy the condo or the house via lease, but you can't own the property itself or land if you are a foreigner. Same for investment purposes. Or you can co-own with a thai person but you have to do some paperwork.

Its the same in Vietnam as well. Foreigners cannot own property or land, but they can lease or rent condos/houses.

 

[florenceyi]

Vancouver also has the Speculation Tax on "vacant" homes. If you don't live in it, and you don't have long term renters ( AirBnB doesn't count), then you may have to pay this empty homes tax as well.

Interesting, and ouch for investors.

If it is for investment I would not look into Vancouver but outside of the country, you are investing a lot smaller amount and make a lot more monthly, minus of your property tax etc... Some countries don't even have property tax, so you save there and the maintenance fee is not outrageous like in here.
Anyways, I'm doing it for a long time and it's been working out amazingly.

Where have you invested? I have been following Nomadic Capitalist on Youtube for a while, only to get lost and confused at what he says half the time.. but looking abroad, especially somewhere warm has been an interest of mine.

I’m not worried at all. I have made sound choices in good neighbourhoods where the rent I can charge easily covers my mortgage, strata, insurance, etc. You have to do your homework and crunch some numbers. If it doesn’t add up, just let it go. Some condos are better suited for you to live in instead of rent out. If you have worked the numbers well, you can absorb little hits such as insurance bumps or rises in strata fees. Treat it like a business and try not to get emotionally invested in a property and you’ll be in a better spot.

I’ve only bought pre-sales and they are <5 years old now. As the inventory ages I may decide to sell and buy new again to reduce the chance of getting hit with a special levy, or encounter the need to reno the unit to keep it profitable. I’ll have some decisions to make, but not for some time yet.

I agree, but those platinum agents are hard to find!

 

[johnnydepth]

What would be a good example of the cost of a condo in Vancouver proper versus the rental income it would potentially generate?

 

[LM987]

If one could find a condo for $500,000 ( or at least this is the amount of your mortgage), then at 3% interest over 25 years, your monthly payments are $2,371/month. Then you add strata fees, insurance, maintenance and you need to charge over $2,500/month in rent just to possibly pay the monthly expenses.
Then as your mortgage goes down, more of your payment goes towards principal repayment, which is not a tax expense, so at some point you do have to pay tax on the "profit" that may not reflect your cash flow. ie break even cash flow but you may have to pay taxes. Over the course of paying down your mortgage, you will have to report (in this case) the $500,000 as taxable income, and if your in the lower/middle tax bracket of say 31%, so you would have to come up with $155,000 of your own funds over the course of the mortgage paydown.
The assumption here is simple in that it assumes your rent only covers your payments.
So, can you rent out a $500,000 condo for at least $2,500/month?