QUOTE (Charly @ Sep 21 2008, 01:56 PM) Can anyone tell me if Comox or Nanaimo is better for purchasing property? I am looking in both areas now and cannot remember if Nanaimo was on the top 10 BC list released a few years back. (yes, I am awaiting the release of the revised BC list!). Are they both pretty much the same or are the economic fundamentals better in one spot then the other and why? Just need to know. Also, was I correct in reading the Vancouver condos are not the way to go now for investment property? I thought of buying a condo in Vancouver for renting, (studio) but I hear that market is a bit tricky to buy into now as it is highly speculative?
Your thoughts.?
They are similar.
However, the question is not relevant ! You are not buying "the market". You buy a SPECIFIC house/condo/TH/duplex in a specific neighborhood at a SPECIFIC price. You can lose your shirt paying too much in one market or make a killing in the other if you buy at the right price.
A cash-flowing condo in Vancouver is a great investment .. if you can hold long enough ! Who cares if it drops 10% by this time next year. It will be higher 5 or 15 years from now !
Holding long term is king ! The real estate party is not a "go in and quick flip" game anymore. This used to work in a fast rising market. This is over for the next while !
Why is real estate a great investment - EVEN IN A FLAT MARKET WITH $0 POSITIVE CASH-FLOW ?
If you buy an asset with a 20% down-payment, and no positive cash-flow for 10 years, with:
a ) No appreciation (equity upside) :you have more than DOUBLED your money as the mortgage has been paid down over 20% !)
b ) 20% price increase (less than 4% annually compounded, below Canada`s long term average !!), you would have TRIPLED your money.
c ) 30% price increase (less than 6% annually compounded, about Canada`s long term average as house prices in Canada have doubled every 15 years in a normal economy !!) you would have made 250% on your money.
d ) 40% price increase (slightly higher than Canada`s long term average as house prices in Canada have doubled every 15 years in a normal economy, and AB has a better economy than the rest of Canada !!), you would have made 300% on your money, i.e. quadrupled it!
This latter scenario "d" is very likely in a strong economy like AB or BC with cheap investor condos (or apartment buildings or cheaper townhouses or cheaper homes) - even if higher priced condos or houses are not so great an investment these days due to very high prices and ongoing negative cash-flow with 20-25% down! And yes, there may be better markets like SK or TX right now showing higher growth potential for the next few years due to lower prices .. but AB is OK too ! .. many markets have potential .. some more .. some less ..
HOLD ON TO YOUR (cash-flowing or at least break even) ASSETS .. AND ENJOY THE RIDE !!
Happy investing .. with cash-flow AND (at least inflationary) equity growth (in time ..) !!!!
