Thoughts on investing on Vancouver Island?

Question

Any communities on Vancouver Island that people may think might be the next "hot spot"?

Jason Ridout · Answer

I think there are more high paying jobs on the island than the stats lead us to believe.

I moved from the mainland 3 years ago and both me and my wife had increases to our incomes upon moving to the island. I worked in automotive repair and my wife is a commercial insurance broker. The demand for dependable skilled people on the island is very high. Many islanders are either use to the low cost of living and therefore don't apply themselves, or are of retirement age. There is a major demand for skilled trades which pay on par with the lower mainland.

I think the only area where the island might not pay as high as Vancouver is the higher paying white collar jobs. The low median income that the stats show on the island is in large part to the fact that there are a lot of lazy people over here on "island time" and choose to work as little as possible which makes the stats look like jobs pay less. If you are a hard worker and show up every day, there are limitless opportunities here.

I have owned a house in Port Alberni for about two years now and receive $900 for the one bedroom basement and $1,300 for the two bedroom upper, plus tenants pay the utilities. I have had a 0% vacancy so far with not a single month of rent missed. That's not as high as the $1,100 and $1,500 you mentioned, but I'm into the house for about $290,000 so the rent pays a 75% mortgage and still cash flows after all expenses which is very hard to do in other markets right now.

Jason Ridout · Answer

Port Alberni is still one place where you can find a cash positive house with a traditional 80% mortgage, but even in Port it is getting hard. If you are looking for growth over cashflow, Nanaimo and Duncan are doing well.

Gold River could be a hot spot, but it's a gamble. It's a small community with very low vacancy rates and low property prices. I could turn into a great community, or it could just stay the quaint little place it is. It has no cell phone coverage or currently a grocery store, but if those two things change, the market will take a big jump up. That might be in 3 months or 5 years.

Overall, the whole island is a hot spot. The lower mainland and even the rest of BC have taken a bit of a down turn in the last year. The lower mainland is overinflated, and the rest of BC gets cold in the winter. The island is seeing a huge migration from the rest of Canada. Baby boomers looking to retire somewhere with mild winters, but can't afford the mainland. I'd estimate 40% of my clients that are looking to buy houses are not from the island. Lots from Alberta, Ontario, Kamloops, Kelowna etc. Prices all over the island are continuing to climb and I can't see it stopping with the number of people moving from the rest of Canada.

Edison Reis · Answer

Greeting folks !

We have investment properties in the Okanagan and recently bought one in Langford (our first exposure to the Island)

Considering that prices in the GVA are so high even for foreign buyers (manly Hongkongers) these two locations become the next two logical options.

I expect the prices at the GVA to soften in the near future while the Okanagan and Island will see a steady increase.

Just my 5 cents

Happy investing

Edison Reis

Jason Ridout · Answer

Hi @Sheila Griffiths

Different strategies work for different people depending on your goals. If there is potential for sub division/development, some investors will buy a property that doesn't cashflow. For myself, I won't buy anything that doesn't cover all expenses including a 80% mortgage, property tax, insurance, maintenance, vacancy rate and property management if I plan to use it.

There are lots of properties available that will cashflow, so unless there is a big future gain to the property in the form or development, why settle for something that doesn't cashflow? Future value and debt pay down are great wealth generators but cashflow allows you to carry the property indefinitely, regardless where the market goes.

I help clients find investment properties all over the island including PA. Let me know if I can help you find something.

Theresa Harris · Answer

I have a few places in Parksville and Qualicum that I bought just before prices went up.  There are a few others who have places on the island.  The tagging function isn't working for me, but there is @Jason Ridout who has places in Port Alberni and Parksville, @Kris Bucci on the south end of the island,  @Jason D Lewis up in Courtenay and @Randy Molland who is either in Nanaimo or Victoria.

There aren't a lot of places where the prices haven't gone up a lot.  Nanaimo has affordable houses.  Ladysmith is also really nice.

Nora Redden · Answer

Yes we are in Courtenay and prices have skyrocketed. The same has happened in Campbell River but they are still building and building mostly $600000 "family" homes. Property taxes in Campbell river are almost double that of Courtenay. Rentals are still tough to find but rents are so high people just cant afford them...so time to look elsewhere. Other considerations are Nanaimo - slightly better, or Port Alberni although I dont see much growth there. Duncan?

Justin Crawford · Answer

I'm not sure of the next hot spot, but I've invested on the island and I'm in search of our next move there. I'd say Nanaimo is a good spot right now. We bought in Courtenay last year and I can't seem to find anything with the same investment value there anymore. I've heard good things about Campbell River, but I haven't seen anything enticing yet.

Sheila Griffiths · Answer

Hi I am a first time investor looking at Port Alberni. Property is 230,000.00 with tenant who has lived there a long time.  He would just cover the mortgage with what he is paying now including utilities.   In your opinion is this a good investment?

Thank you,

any info helps

Randy Molland · Answer

Thanks for the shout out Theresa,I am down in the south end of the island but spend a lot of time researching all areas of Vancouver Island to understand where we should make the next move. We are seeing a lot of growth in areas which has made investing challenging, but also eliminated a lot of "toe dippers". We are getting very creative with our deals and how we are able to find them, but I will say just in our local meet up group alone we have had 15 deals close in 4 months... so there are deals out there, you just have to be creative and think a little different ;) Happy to hop on a call with anybody that is looking to explore the island! Best place to reach me is on facebook with a DM at Randy Molland.

Randy Molland · Answer

Hey Nora, See my response to this post:

Nora Redden

replied 20 days ago

In BC, whats more realistic in regards to the 1% rule? About 2 years ago we made our own % rule based on what we had in our portfolio. We came to the conclusion that at .65% we would cashflow around $500/month. This was in Victoria, with 3% interest rates and 20% downpayments. We only use this to allow us to decide if a property is worth pursuing and is not a "Golden key" number. but really helps you see what the gross rents are going to need to be on a purchase price.Hope that gives you something to go on!

Thoughts on investing on Vancouver Island?

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