Vancouver's Real Estate Market

[rymack]

Originally Posted by Hehe

Not an investment advise, just my $0.02.

First thing to consider, you can't kick out tenants just so that you can increase rent. If you do that, you either have to keep the unit empty for a year before listing it again or you need to work out a compensation with your tenants.

Now regarding what I'd do, I always ask myself about what kind of cashflow or ROI can I get investing in anything. Thus, what kind of cashflow is your condo generating? If it's closed to 0 or even negative, then, sell it and move your money elsewhere.

Canadian bond yields a tad over 3% as of today. That should serve as a guideline. If you can't generate at least 3%, look somewhere else. Because Canadian bond is pretty much the lowest risk product on the market. And if you have to take any risk and do < or = to bond, it makes no sense.

Canadian RE is in its relative peak. Everything else staying equal, there isn't much room to move up. The forecast I am getting from most market observers are predicting a 15-20% correction before whatever policy Carney cooks up would come into effect.

Some have mentioned that the problem is the price, I don't personally agree to that. I still believe it's a question of supply rather than anything else. Remember, real price of anything is usually dictated by supply/demand. Now we have more supply but demand is relatively flat, and therefore price is going to drop.

Stock market, I think we are on the verge of another huge industrial revolution. This time is all about AI and robotics. It's going to propel our economy in scales that even the invention of steam engine and internet pales to come even close. And yes, I do believe it's within the next 2-5yrs time. The question becomes, do you have time to kinda park that money in the stock market and forget about it?

Investment is about giving resources and TIME to allow opportunity to pan out. Conventional metrics such as PE or whatever is really only a good indicator for companies that are in a stable market without much ability to break out of its current form.

With that explained, now I'd suggest 2 things:

1. RE - If you believe in it and makes you sleep better, check your cashflow. If condo is no good, take it out and look for opportunities. During the 2008 RE crash, my family basically went on a shopping spree. We offered 30-50% of asking price (I shit you not) and cash deal. Ended up picking up a few properties at ~40% of market value (in our own estimate). Now, I don't think our RE market is this desperate right now. Thus, just research inside out of any particular area you like. So much so that if I ask you what rent can be had or what's the average price psqf, you can give me the answer without thinking. Then if a good deal comes along, you can grab it before anyone else.

2. Stock - If you like this better and want the inherited benefit of it (it's highly liquid and the sky is the limit), find companies that suit you... I like companies like TSLA, MSFT, NVDA and TSMC. I might be biased as I have position in all of them, but they are companies that I can sleep on without ever checking their stock price. If it's a company that you need to constantly look at, don't do it. It's not good for your brain. And even though many of these don't really pay any significant dividend, you can use things like the wheel strategy to kind squeeze money out of it. I employ them at a very low risk level and only sell options and never buy. I average about 8% yield and that pays for the food to our table and my mortgage.

Again, not an investment advise, but I alway focus on cashflow on whatever opportunity when it comes to money. It makes no sense to hold on to something and wish that it goes up or down. That's speculating, not investing.

The process for me selling this condo started with the fact we had a tenant under market rates ( she's now given me notice to leave at the end of this month). We need some cash to do some projects in our house and we were weighing the idea of refinancing/Heloc vs selling. In my uneducated opinion I didnt see the upside of the Condo market over the next 3-5 years being as high as the equity market.

We will be left with a chunk of money that we could buy property or invest in equities etc. Leaning towards equities as my investor ( i don't do this by myself anymore as I end up watching the damn stocks all day and really don't know what I am doing).

That being said I'd be interested in buying a second house instead of another condo but it feels like the price is out of reach in the Lower mainland. I haven't really spent time looking other places ( other than some vacation rental spots like Osoyoos etc but those arent strictly investments more for family usage plus defer costs by renting out. ). The idea of going out of market to purchase ( Calgary ? Saskatchewan? US? ) seems a bit far fetched for what i am able to manage in my day to day. But maybe its easy , I don't really know. My Advisor suggesting if I want to still be in the real estate market that I look at REITS etc .

Anyway we accepted the offer which was at assessed but subject to financing so we will see if that goes thrrough .

[rymack]

Originally Posted by PeanutButter

@rymack Are you going to take a loss on the condo if you sell? A lot of people are concerned about taking a loss on real estate, but it's just like any investment, sometimes they just don't work out. Taking a loss and moving the capital to another investment is common.

I can't imagine anyone with real estate bought in the last five years is positive cash flow, unless you put a huge down payment, which wouldn't make sense for an investment property. I would say if your real estate is cash flowing $0, I would for sure keep that. At least all your expenses are covered. Even if you're a couple hundred negative a month, I could argue it's still worth keeping.

The important thing is to have a plan for the capital if you sell. If you just sit on cash, I would rather just keep the real estate as long as your cash flow can support the monthly loss. If you don't have real estate then your only real option is the stock market. How comfortable are you with the stock market?

For the majority of equity investors I would suggest ETF's only. Buying individual stocks is a losing battle on average. TSLA for example can swing 40%, not for the faint of heart (even though I'm a long term believer).

Not taking a loss at all. I bought this in 2010 lived in for a few years and then when my wife and I got together we bought our first house around 2013. A bit disappointed the market dropped but it is what it is

Where we really screwed up in hindsight is when we sold our first house and moved to our second in 2015 was that we didn't sell the condo and keep both houses. I considered it but we were about 25k short to make it comfortable.

[Traum]

Originally Posted by Great68

I had to transfer money from some of my accounts into my chequing. Banks must have a flag in their system that notifies them when someone's chequing is over $20k because the next day we got a call from the bank: "We were just wondering if we could talk to you about investment plans?".

I think my stupid bank wouldn't even let me transfer anything more than $20k in a day / a single transaction. The one time when I needed to do that, I needed to call in and talk to an agent, and get the agent to do the transfer for me.

Obviously, they also asked what the transfer was for.

[bcrdukes]

Sounds like you guys are candidates for personal banking.

[zetazeta]

Originally Posted by Eff-1

Bridge financing comes with ridiculously high fees. I'd avoid at all costs if you can.

We had a similar situation last year. Bought our new place before selling our condo. Coincidentially, our condo hit the market in May 2024 with possession of our new house in September, giving us the summer to find a buyer.

My take is this: Figure out what the absolute minimum price you need to sell your condo to make the new purchase agreable. Once you know your bottom line number, take the first offer you get that is above that amount.

You'll always ask yourself later if you could have got more, but you'll never regret taking an offer that is above your minimum. The sooner you get peace of mind that your condo is sold, and you can focus on the excitement of moving into your new place, the better.

The first offer we received was a total lowball and so we didn't entertain it, but the second offer we received was in our acceptable range so we took it. Could we have gotten more if we waited? Maybe, but we don't have any regrets because we avoided the risk of waiting it out.

Originally Posted by westopher

Good advice. Greed and the wouldofs couldofs can really end up putting you in a shitty spot and is the mentality where the "investment" part of homeownership starts to outweigh the fact you need to live somewhere, and it's going to be a hell of a lot more beneficial to your quality of life to enjoy it than it is to squeeze and extra 20-30 or even 100k would. Don't get me wrong, you need to be able to afford it, and afford to live, but you need to have reasonable expectations and not be motivated by the investment side of it. If it's your home, you aren't an investor. Lifestyle needs to be put above profits.
We negotiated to asking price from the first offer, and also negotiated payment date being 2 days before possession date, so we had EVERYTHING in order to move over 2 days and already have the money in our account on the day we needed to pay for the new place. That was where our realtor was invaluable. No dicking around with storage, or bringing mortgage or anything, which was well worth the extra 10k or whatever we maybe could have squeezed.

Yep that's exactly what our plan is. We can afford the new place even if we fire sale our current home for significantly under market value. Got an open house this weekend so fingers crossed we get an offer we can pounce on!

We ran the numbers with our mortgage broker thanks to the suggestion from EvoFire and in the worst case scenario where selling doesn't make sense, we would be able to afford both places if we rent the first place out.

[RabidRat]

Originally Posted by bcrdukes

Sounds like you guys are candidates for personal banking.

Honestly!! I just can't.

[bcrdukes]

Originally Posted by RabidRat

Honestly!! I just can't.

You will regret this the day you need to go to the branch to get $20K moved!

[RabidRat]

No, I meant I can't live any longer without personal banking!

I want to be able to call somebody to type my banking passcode in for me. I get it wrong too many times and then it locks me out

[GS8]

Originally Posted by Fafine

Should take the 1675 offer then rent it out at 2190
https://www.facebook.com/share/1FHGYhu9Ft/

Pocket the difference

I considered that but having no experience with renting below market, I wondered if the lease rules are almost militaristic in their expectations. I'm not worried about my end, more worried about finding the right person who wouldn't narc me out

Originally Posted by SSM_DC5

Link to your condo?

https://rentjinjubyanthem.com/

This is the website for the rentals. If you click on Floor Plans > Midrise, it'll show you the market rental prices.

It also lists the sq/ft but with so many Letters, I have no idea which group I would've been designated to.

Also this is a partnership between Anthem & Hollyburn so take from that what you will. I wonder if below-market rentals are exempt from the 3% rental increase (meaning higher % YOY).

[EvoFire]

Originally Posted by zetazeta

Yep that's exactly what our plan is. We can afford the new place even if we fire sale our current home for significantly under market value. Got an open house this weekend so fingers crossed we get an offer we can pounce on!

We ran the numbers with our mortgage broker thanks to the suggestion from EvoFire and in the worst case scenario where selling doesn't make sense, we would be able to afford both places if we rent the first place out.

To give you a bit more perspective on the whole mortgage thing.

We took the keys at our new house before we closed on the old one. We did have an accepted offer though. Our mortgage broker managed to get a larger than required mortgage for the new house at a few basis points higher than the lowest he can get, but it covered the whole amount we needed. Once we've closed out the old place we refinanced the whole thing and got market rate for the house.

There's quite a few ways to play the game without ending up with a 10% bridge loan over 3 months.

[Gerbs]

Originally Posted by carsncars

Well, purchase offer accepted on a home in Marpole. Despite the talk of the market slump the area has been very competitive for anything decent, so we're relieved.

The slump was only for garbage, less desirable areas.

Detached is hot unless you're asking $2M for a tear-down