This just goes to emphasize the potential problems in Vancouver’s real estate market even more. At current prices and rents the “investors” (more accurately speculators) are barely making any return at all from rent. The only potential income / gain is from price increases.

I am a believer in purpose built buildings. That means older that the last 10-12 years.

Older buildings can be good too!

The reason why building owners change to condo is pure profit. It has nothing to do with the value of the investment. The investment might be making loads of cash for the owner. Lets say they bought for $100,000 per suite if they make it a condo they can sell for $200 K per suite. Awesome! That’s why building owners decide to brave the morass of regulation and convert.

The appreciation of the property is only a bonus; Sometimes a big bonus if lucky and planned correctly. But after the new rule was put up, I slightly changed my perspective and decided to keep saving more before making D/P.

1 question:
I have always been looking at newer buildings, under 10-12 years old, to buy as rental properties. Is it unwise to narrow down my search to such precise criteria? I know you can still get good cashflow from older properties, even if they are 40 years old, but in the long run they will need more repairs and upkeep and can’t charge as much rent. What do you recommend, and should I keep saving for that magic $80k?
(I also don’t wanna spend more than 75-80% of my savings on a D/P… so maybe I need 100k if I am looking at $350k pricetag.

thanks :)

Cheers.

My wife and I are fortunate to have good jobs and we’re in the ‘burbs b/c we don’t want to be house-poor. I guess many people like it that way? Alas, another post.

Agreed, I think the quality of renters should increase over time with the new mortgage rules now in effect.

An investor needs $80,000 or 20%, the tenant will live there and only needs 5% down or $20,000.

It’s not the flippers or contractors that are the problem. If investors got smart and stopped buying “investment properties” that are huge sinking black holes for their cash the madness would stop.

Don’t be scared! Be smart! You can make money in real estate just like you can make money in the stock market. Does this mean you can buy any penny stock? No way! You need to be careful. That’s all I’m saying. Lots of people will just lie their faces off to separate you from your dough. It’s your job to stay the hell away from these liars and educate yourself before buying. It’s your money and nobody cares about it like you do.

I wrote this post because I see brighter days ahead :)

I think you meant to say that you need to save $80,000 for an average rental property in Toronto, or am I missing something?

The other problem in Toronto is that there are too many flippers / contrators buying potential investment properties which make it so difficult to find a cash flow positive property here.

Buying in other markets seems like the only way to go. I like Guelph, Ontario considering the Go Train is scheduled to provide service there within the next five to 10 years. Guelph seems to have solid properties in good condition at a reasonable price which leads me to believe it will be easier to be in a cash flow positive position. But you still need quality tenants….. are they present in Guelph? I just don’t know.

Your articles seem to scare me away from investing in rental properties…

The economic case is crystal clear. The political side will take leadership.

Have a great day!