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If you’re considering growing your real estate holdings, you should think small, as in square footage.
Why?
Because the change in the Strata Properties Act in November of 2022 has created a unique opportunity for investors in the North Vancouver condo market. And in my opinion, this opportunity is being overlooked…for now.
So why is this an opportunity for investors? Because under the previous rules of the Strata Act, a strata council had the power to limit the number of units for rent in a building. In some buildings, councils made the decision to restrict all rentals. With the new rules, a strata council can no longer prohibit or limit the number of rentals in a building.
So why am I so excited about this change? It’s because traditionally, the properties with rental restrictions tended to lag the North Vancouver real estate market. This was primarily due to simple supply and demand. With only homeowners bidding on these units, 25% to 35% of potential buyers couldn’t participate.
What this means is there is a “value gap” opportunity. Investors can now purchase a condo that could be 10% to 15% under market valuation. Combine this with the recent run-up in rents of 20% to 30% for a one bedroom, and you have a making of good investment that will provide you with solid income and good equity appreciation. Factor in that the strata will do all the heavy lifting for running the building, and you have the makings of a true passive income investment.
But what if you are getting started and can’t afford a North Shore condo? Excellent question! There are other markets with a much lower price entry point, the Okanagan being a good example.
But won’t the rents be much lower? Surprisingly no! If you look at the Kelowna market, you can rent a one bedroom condo at virtually the same price per square foot as a comparable unit in North Vancouver. And if you are worried about buying and renting a property from a distance, don’t! We have some fantastic professionals on speed dial!
When you compare what a condo unit can generate in rent per square foot or per dollar purchase price to a home on the North Shore, you’ll realize you get more bang for your buck.
If this is your first time investing in real estate or you’ve turned away from the condo market in the past, it’s time to give the condo market a second look. There are some great opportunities to be had, and I would love to help you explore them!
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