How to invest in Victoria BC real estate market

[SPeever]

Hello:
My question is how to be successful in investing in Victoria BC real estate market.
My husband and I own a waterfront property in Victoria BC that we recently renovated. We bought the property in 2004 for 600,000 and the BC assessed value is now 1.1 million. My question is, because we owe close to the purchase price, but we have over 50% equity in the property, what is the best strategy to continue to invest in real estate in Victoria? Since single family dwellings are an average price of 450K to 500K, it is very challenging to apply flipping or even buy and hold strategies here.

Thank you,
S Peever

 

[Leo]

QUOTE (SPeever @ Mar 29 2008, 01:50 PM) Hello:
My question is how to be successful in investing in Victoria BC real estate market.
My husband and I own a waterfront property in Victoria BC that we recently renovated. We bought the property in 2004 for 600,000 and the BC assessed value is now 1.1 million. My question is, because we owe close to the purchase price, but we have over 50% equity in the property, what is the best strategy to continue to invest in real estate in Victoria? Since single family dwellings are an average price of 450K to 500K, it is very challenging to apply flipping or even buy and hold strategies here.

Thank you,
S Peever

One thought is to refinance - taking the equity you have in your home to put as a down payment on two other properties. If you bought outside of Victoria say in Langford or Sooke and got a home with a 3 bedroom suite up and two bedroom suite down - with a good size down payment you would get a positive cash flow. Or - if you do not want to risk the illegal suite thing - buy on a busy street (e.g., McKenzie) in an area with re-zoning to multi-family around you and you might get a good buy and be able to get good rent and in turn positive cash flow.

Leo

 

[Thomas Beyer]

QUOTE (SPeever @ Mar 29 2008, 02:50 PM) Hello:
My question is how to be successful in investing in Victoria BC real estate market.
My husband and I own a waterfront property in Victoria BC that we recently renovated. We bought the property in 2004 for 600,000 and the BC assessed value is now 1.1 million. My question is, because we owe close to the purchase price, but we have over 50% equity in the property, what is the best strategy to continue to invest in real estate in Victoria? Since single family dwellings are an average price of 450K to 500K, it is very challenging to apply flipping or even buy and hold strategies here.

Thank you,
S Peever

SELL IT !

Victoria, like some US markets, is overpriced and will drop by 20-30% .. while perhaps still gaining a few % points in 2008 / 2009 !

The income base is not there .. and with many speculators buying pre-sales condos, as soon as the value curve flattens and interest rates start to rise the demand will PLUMMET !

Get out while the going is good !

the best comparison is COST: what does it COST to build ? $600 to $1000 / sq ft ? hardly .. maybe $300 to $400 ! so a drop from even $500 / sq ft to $400 is a 20% drop !

SELL IT !

 

[SPeever]

QUOTE (thomasbeyer2000 @ Apr 2 2008, 12:44 AM) SELL IT !

Victoria, like some US markets, is overpriced and will drop by 20-30% .. while perhaps still gaining a few % points in 2008 / 2009 !

The income base is not there .. and with many speculators buying pre-sales condos, as soon as the value curve flattens and interest rates start to rise the demand will PLUMMET !

Get out while the going is good !

the best comparison is COST: what does it COST to build ? $600 to $1000 / sq ft ? hardly .. maybe $300 to $400 ! so a drop from even $500 / sq ft to $400 is a 20% drop !

SELL IT !

http://www.vistaverona.com/articles/What&#...nt%20Prices.pdf

What do you think of these stats? I have read lots to suggest that Victoria`s waterfront is actually undervalued on the global stage and will remain in great demand. We love living on the oceanfront and it would be very challenging to buy something to replace it to live in that we could now afford, because the prices are continually rising. Since the market value of our place has increased by 900,000 in 3.5 years, this would be hard to beat to aquire something similar, plus continue to invest in real estate. So, if we sell, what then?

Shelley

 

[Thomas Beyer]

QUOTE (SPeever @ Apr 2 2008, 09:21 PM)
http://www.vistaverona.com/articles/What&a...nt%20Prices.pdf



What do you think of these stats? I have read lots to suggest that Victoria's waterfront is actually undervalued on the global stage and will remain in great demand. We love living on the oceanfront and it would be very challenging to buy something to replace it to live in that we could now afford, because the prices are continually rising. Since the market value of our place has increased by 900,000 in 3.5 years, this would be hard to beat to aquire something similar, plus continue to invest in real estate. So, if we sell, what then?



Shelley




Unfortunately I can't open the link .. please provide the full long name ..



Is this a HOUSE on the ocean ? or a condo with a view ?



You may be right re a HOUSE as it has LAND on the ocean .. different price point than a condo .. and less abilities to create "more ocean front land" .. whereas it is easy to build more condos ..



Selling tax free is an option you should consider .. BUT: Obviously a HOME WHERE YOU LIVE is not only an investment, in fact it is only "also" an investment .. primarily a place where you live .. so yes, if you like it and wish to stay .. then getting a LOC is the right things to do .. and re-invest that money elsewhere !



check out this post .. and related ones on using your LOC:



http://myreinspace.com/public_forums/Real_Estate_Discussion/62-2302-What_is_better_a_mortgage_or_a_line-of-credit_.html

 

[SPeever]

QUOTE (thomasbeyer2000 @ Apr 3 2008, 12:19 AM)
Unfortunately I can't open the link .. please provide the full long name ..



Is this a HOUSE on the ocean ? or a condo with a view ?



You may be right re a HOUSE as it has LAND on the ocean .. different price point than a condo .. and less abilities to create "more ocean front land" .. whereas it is easy to build more condos ..



Selling tax free is an option you should consider .. BUT: Obviously a HOME WHERE YOU LIVE is not only an investment, in fact it is only "also" an investment .. primarily a place where you live .. so yes, if you like it and wish to stay .. then getting a LOC is the right things to do .. and re-invest that money elsewhere !



check out this post .. and related ones on using your LOC:



http://myreinspace.com/public_forums/Real_Estate_Discussion/62-2302-What_is_better_a_mortgage_or_a_line-of-credit_.html








Hi there -- try searching on vistaverona.com and click on suites for pdf article called What's driving BC's Waterfront Prices



Yes, it is a house on the ocean, deep water moorage, renovated house, 0.8 acre, so it is niche for sure. We would like some ideas regarding how to maximize the equity and because Victoria is difficult to invest in cash flow positive rentals, what to do with the loc is the question.





Thank you!

 

[SPeever]

QUOTE (Leo @ Apr 2 2008, 12:19 AM) One thought is to refinance - taking the equity you have in your home to put as a down payment on two other properties. If you bought outside of Victoria say in Langford or Sooke and got a home with a 3 bedroom suite up and two bedroom suite down - with a good size down payment you would get a positive cash flow. Or - if you do not want to risk the illegal suite thing - buy on a busy street (e.g., McKenzie) in an area with re-zoning to multi-family around you and you might get a good buy and be able to get good rent and in turn positive cash flow.

Leo

Thank you for this suggestion - I like the idea of maximizing the use of the loc to obtain more than one property definitely. Do you think that there is still value available to pursue fixer uppers in the Victoria area?

Shelley