Best areas to invest in buy and hold on Vancouver Island

[John Humphries]

I'm curious to hear from other Vancouver Island investors to see if you have been able to locate any buy and hold opportunities with cash flow? I'm over in Courtenay and not having much luck here lately. My wife and I bought a 1/2 duplex last year that brings in a bit of cash flow @ 20% down with a conventional mortgage, but not enough to get really excited about. I'm still keen to find something here but am starting to look a bit further afield on the island. There seems to be opportunity in Port Alberni, but I wonder about it's population stability. Nanaimo and Parksville seem to be a bit expensive after a good run up, but what about the Cowichan Valley? I'd love to hear from anyone else around who is doing buy and hold and/or BRRR. What are your numbers looking like? Do you have an awesome contractor to recommend? Let's see some Vancouver Island content on the blogs!

[Jason Ridout]

Glad to hear you found something to pull the trigger on John. Even if the half duplex only breaks even, you're still paying off an appreciating asset.

You are right about new loan qualification and interest rates holding prices down, but I also have another theory. 

Houses in the lower mainland are already out of reach for people, and even a 2 bed condo in Langley fetches over $400,000. The higher interest rates and tougher loan qualifications will make those already expensive properties, unreachable. What are people that are priced out of the market going to do? Go where they can buy. The island is still affordable. I think the housing prices are going to settle, and maybe even slide a bit in the lower mainland, but the island seems like more of a bargain now, than ever before.

I just got an 11 year old house under contract in port alberni. 3 bed 2 bath up, and a roughed in 1 bed suite in the basement. It's in town. $255K. When your choice is a condo in the lower mainland for $400-$500K or a nice house for $255, that's an easy choice for me. There is also a rental crisis in Port right now. People are moving there, and there are almost no vacancies. I have also seen inside many rental units there now, and there's a reason people complain about tenants, the suites are disgusting. You have a **** suite, you get **** tenants. I think there are a lot of good tenants, looking for a nice place to live.

I'm only expecting about $1,900/month income once I put another $40k in to finish the basement. $1,900 on a $300k investment, is not ideal, but I'm really banking on appreciation. I can't see a relatively new house, with suite, only being worth $300k in a few years. I don't like to bank on appreciation, because it's obviously speculative, but there aren't many options out there. I have 3 houses in Prince George I bought last year, that just hit the 1% rule, and I can't find those deals anymore up there either. The lower mainland has pushed up so hard, that everywhere else is now playing catch up, and prices are getting pushed up to the point that it's going to be hard to find anything that hits the 1% in BC. 

I'm just banking on Port Alberni being very under valued right now. The house I have under contract would be worth $450k or more in Parksville, which is 30 minutes away from Port. That's a $200k spread in 30 minutes. I know Port has a reputation, but so did north Surrey 10 years ago, and people just saw that it was way cheaper than everything around, and now it's gone through the roof.

Anyhow, I'm rambling. Thanks for reading!