... if on the island you can get 6 plus caps ?
You get 7%+ Caps in weak North Vancouver Island locations, north of Campbell River.
Why do you think their is no upside on the island ?
Vancouver Island is very very weak economically and driven primarily by folks leaving AB and Lower Mainland to retire. V Island is scenic and busy in the summer with tourists and all sorts of seasonal jobs. Very few year round jobs except those by overpaying government agencies: BC government, local governments, BC Ferries and the odd mining job.
If you cater to these job groups AND/OR SENIORS - many of whom own and do not rent - you might be OK.
We used to own in Campbell River close to the hospital and did OK. Not wow. But OK.
The ONLY thing I would do in V Island is build houses for retirees and/or build or own seniors' residences. Owning an apartment buildings at 5% CAP rate with little upside makes no sense to me, although you will do OK with 6% cap rates in Nanaimo, Comox or Campbell River. There is a 53 suiter for sale, for example, in Campbell River for $4.5M at an alleged 5.2% cap, but with real expenses used for underwriting it is a 4.25% cap rate. You can buy that and sit on that for 10 years and get 2-3% rent increases a year with little turnover and you make 6-8% on you money with 50% down. Not great, but OK.
7%+ cap rate exist on paper in rough isolated part of V Island with high vacancy potential. I'd stay away from those.