Executive Rentals

[rickbc]

I would appreciate some help from any exeprienced investor out there!

I live in Kelowna and have been considering the idea of purchasing an executive rental unit. I have looked at all the following aspects:

1) location I know very well and should be suitable ( 1 block from hospital and one block from the beach and close to down town)
2) beautiful Condo and neighbourhood which should attract any executive.
3) Zoning allows for minimum rentals of 1 month at a time.
4) I will cashflow $500/m if I rent for $2000/ month (fully, executively furnished).

My main concern is the fact that I do not know if there is a market for executive rentals in our city. My theory is that I could rent this out to locum physicians that work in the hospital or for patients or family members visiting the cancer clinic that need treatment for a couple of weeks or more at a time.

For what property in this city costs nowadays, other kinds of rentals do not make financial sense unless one puts down more than 20% which I do not want to do. I have had property in Regina and Chilliwack but after multiple issues with property managers I do not want to purchase out of town again ( just my experience).

I am however firstly not sure if there is a market for such a rental, and secondly am not sure how to determine this.

I would appreciate any feedback that may be helpful!

Rick

 

[RedlineBrett]

Everything is for sale in Kelowna, that market hasn't been healthy for years. It is a vacation town and I suspect it will only turn around after the major centers (Calgary, Edmonton, Vancouver) have a couple years of strong performance giving people enough money to get back into the second home market again.



I would be very apprehensive about purchasing rental property there given there are so many people that want out. I don't know much about BC but I would be surprised if it made REIN's top 10 towns report.



I would only consider it if you know you have a tenant pool lined up already. IE if you know a bunch of doctors or executives that need space for the foreseeable future then it might be worth looking at.

 

[Sherilynn]

Agreed.



Also, I wouldn't count on any rental of less than a 1 month term. You may find that you quickly tire of constant turnover and finding a property manager that would work with such an arrangement would be difficult. Plus, scheduling would be a challenge and you could find that you have much more vacancy than you had planned.



We have a fully-equipped suite, and I normally won't accept a tenant for less than a 2 month term. That, plus the fact that most of them rent sight-unseen because they are from out of town, makes for easy management.



Location is huge though. In our case, we are blocks away from an apprenticeship college so apprentices come from across the country to train there for 2 months. For this reason we have had no vacancy in 2.5 years.



Before I bought a place intending on it being a short-term rental, I would do some serious research because the vacancy could be disastrous.

 

[rickbc]

I appreciate the advice.



Will think about it again......



Rick