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Condominium investors have an historic opportunity to make money right now in the Metro Vancouver market, with either a buy-rent-and-hold strategy or even as a flipper.
In 2015 the total dollar volume of residential sales in the Fraser Valley increased a stunning 47 per cent from a year earlier. In Greater Vancouver, it soared 41 per cent to $38.6 billion.
Sales of just strata homes in Greater Vancouver were worth $13 billion last year: more than the 2014 combined net income of the B.C. forestry, liquefied natural gas and mining industries.
But unlike the resource industry, average citizens can get a lucrative stake in the Metro condo market with relatively low cash, historically low lending rates and a near slam dunk potential of rental income or appreciative profits.
The rental vacancy rate for condominiums is around 0.7 per cent and the average price of a condominium has increased 14 per cent since 2014. A flipper could have grossed nearly $61,000 just buying and selling a single Metro condominium apartment in the last year.
Little wonder that sales are through the roof and investors are piling in from all corners of the world. In November more than 50 condo apartments sold every day in Greater Vancouver.
To compete as an investor in this nimble market, you must have your financing in place – including at least $60,000 for a down payment – and draw an A team together to back your play.
Your Team Roster
- A real estate agent: You need a top producing agent who is experienced in the investor condominium market in the specific area you are hunting in. They must be Internet savvy and experienced in multiple-offer situations.
- An accountant: You’ll need a certified public account (CPA). When hiring a CPA, be sure any candidate is familiar with the details of real estate investment regarding quick sales, capital gains taxation, and be able to provide advice on your business structure, from both a legal and tax perspective.
- A real estate lawyer: Hire only an attorney who specializes in real estate transactions. Your real estate lawyer should be able to handle innovative financing packages.
- A mortgage broker:This is particularly important today because rules continue to change. A good broker should be able to find the lowest possible financing, provide advice on mortgage insurance, and advise on whether the deal will work before you put down the money.
- A general contractor: This should be someone who works quickly and knows the difference between a lipstick improvement and a renovation and can provide accurate estimates of each. A relatively inexpensive upgrade to a condominium can pay off quickly in both rental income and the eventual sale.