Buying a rental home in Chilliwack

[James Ohms]

Hi,

I currently own a home in Cloverdale and have built up quite a bit of equity in it and would like to buy a 2nd rental house. I am leaning towards Chilliwack and undecided on getting a large lot/older house or newer/smaller lot. My price range is 600-950k. I know vacancy rates are low and rent prices fairly high. I can see lots of development happening there in the next few years. That being said part of me is leaning towards Vancouver Island which has lots of potential. To say I'm a little  nervous would be an understatement. The market is at an all time high, covid etc... But I just see more and more people coming here and this won't end anytime soon. Any input is beyond appreciated. I'll be sure to update once I make a purchase.

[Jason Ridout]

Hi @James Ohms 

I think both Chilliwack and Vancouver Island are strong investment choices right now. There are lots of people migrating to the lower mainland and Vancouver Island from elsewhere in Canada. Baby boomers don't want to deal with cold winters and only the place in Canada that stays at least somewhat warm in the winters is Southwest BC.

There are also a lot of people moving out of the downtown Vancouver area right now. The ability to work from home that Covid has created, has allowed people to go into the office a few times a month, or not at all, which means they don't have to worry about a commute. On top of that, being shut in your home with Covid is a lot easier in a house, with an office and a yard, than it is in a condo. People want more space and Vancouver isn't the place for more space. Many rental applicants on the island are people that can now work from home and always wanted to leave Vancouver and come to the island.

I think both the Fraser Valley and Vancouver Island will do very well in the coming years and will weather any looming recession far better than most areas in Canada. That being said, I'd choose Vancouver Island over the Fraser Valley for one reason. Cashflow. Chilliwack is too expensive and finding a property that will cashflow with a large mortgage is very difficult. Both areas are going to see a lot of growth and development, but your money will buy you a lot more land and a lot more house on VI. 

It's possible we are set for a downturn in housing prices, but if you don't plan to sell in the next 2 or 3 years, it doesn't matter. I bought my first house in Abbotsford in 2008, right at the beginning of the last recession. I sold it 8 years later for a $218,000 profit. The fact that it dropped in 2009 and 2010 doesn't matter. Don't try to time the market. That's what a lot of people did at the beginning of Covid, waiting for the prices to drop. Not only did they not drop, they went up, drastically. Trying to time the market is how the stock market is played, not real estate. "It's time in the market, not timing the market". 

Feel free to PM me if you have any other questions!