Thinking of selling Townhouse in Vancouver BC, should I?

Question

Lived in Vancouver for over 8 years and we are now in Bay Area, CA. While we were there, we bought a townhouse 3/3 two story in North Burnaby, and hired a property management company when we move down here. One turnover in past 3 and half years so good tenants there. But we are not having positive cash flow but almost breakeven and building up equity, and property has increased about 20% value (I do wish I bought SFR back then, but hindsight is 20/20).

We are in dilemma that whether we should sell and move equity to US and invest here for cash flow properties. Or keep it going as it has been smooth sail so far. CAD to USD exchange rate is pretty bad at this time too.

Any opinion would be appreciated.

We are in dilemma that whether we should sell and move equity to US and invest here for cash flow properties.  Or keep it going as it has been smooth sail so far.  CAD to USD exchange rate is pretty bad at this time too.

Any opinion would be appreciated.

Peter Crisp · Answer

Hi Myo,

I also live in the Vancouver area (Surrey). It's painful making 20% but losing maybe 30% on the CDN dollar drop. Matt makes a very good point and it may be best to focus on a closer market. However, I have another option to suggest, which is to wait a bit or sell and hold in CDN dollars, and buy in another Canadian market when the time is right (or just buy into a REIT). I'm not seeing enough pain in major markets anywhere in Canada, so it's not generally a good time to buy. But I think Vancouver will hold value better than other cities such as Calgary, if oil prices stay low, so you have time on your side to hold or sell.

Pawan J. · Answer

Thomas S. I wouldn't say our market is over inflated at all. In fact it is coming in line with many other great cities/countries around the globe.

I think oil cities and coastal havens are very different. Yes our overall Canadian economy is heavily dependent on oil dollars but markets across Canada vary greatly along with many other factors.

Also Asian investment is getting stronger not weaker and much of this investment is long term meaning even if this slows down the market will simply hold or fluctuate maybe 5% and then climb again. There will always be changes in the market but Vancouver is far from bursting unless major global catastrophe.

reminds me of another post on this topic and my comments there reflect here: https://www.biggerpockets.com/forums/48/topics/287...

Myo Thein · Answer

Thanks all for replying with interesting feedback.  In case you are wondering, I decided to sell due to my concern with house prices in Vancouver became a few multiplier of median income from the families living there.  SF / bay area prices are high but still multiplier from median income is lower than Vancouver.  Who knows I am right or wrong only time will tell.  But at this point, I am okay with moving my investment to a bit more conservative market where I can have cashflow to weather out down run if any.

Thomas S. · Answer

I am a firm believer that anything that goes up will eventually go down. Don't know why, don't know when but I do believe it will happen. Real estate has been on a strong upward climb for far too long for me to be comfortable any longer. Lots of variables say it won't happen but there are far too many unknowns in life to not see the posibilities.

Thomas S. · Answer

Your biggest concern at this point is the overinflated real estate market in Canada. An adjustment is coming partly due to our economy being overly dependant on oil dollars. When the Asian buyers interests move elsewhere combined with an adjustment in the Canada market Vancouver will be the hardest hit.

Picture yourself investing in oil rich central Canada a few years back. There was no possible way the oil bubble could ever possibly burst.

Pawan J. · Answer

Hi @Peter Crisp we are doing flips in Vancouver and doing well.

@Myo Thein suggest depending on value and equity either looking at other areas on BC to invest but by the time you travel, find something etc. it may have costed you thousands already. Other option is to sell and then partner with a firm that does flips here locally to keep your funds making money without taking any exchange loss and move it when ready.

Feel free to connect to learn more..

Lorin K. · Answer

May be smarter to just sell it, then buy more properties in Abbotsford. yes, exchange rate sucks.

Peter Crisp · Answer

Hi Myo,

The duck's in the oven so I have a chance to reply. I'm not up on specific investments in the Lower Mainland to suggest. I could have sworn that there was a firm in Vancouver that was doing flips and they were active on BiggerPockets. You may want to look for a firm that does Executive Rentals. I did a bit of research on this and I liked what I saw because it's one of the few areas that has the potential to generate free cashflow. My wife (who is Chinese background) knows from real estate agents that have done very well for themselves and some friends chasing the hot developments - residential SFR/presales and commercial, for offshore Chinese investors. Not my 'cup of tea' (too risky/no control/no value added), but it's where the fast money is being made. One thing I don't see - it's a crazy market but I don't think it's over-valued either, unlike many markets in Canada. However, I keep thinking that it may go 'cold' where nothing sells and prices are static for a long time (years). Just a gut intuition.

-P

Myo Thein · Answer

Merry Christmas, you all!

Yea it looks like hold or sell and hold Canadian might be best bet it looks like.

@Peter Crisp,  I am a little limited on what type of investment (stocks/ETF) I can buy as I am not currently Canadian resident.  Maybe GIC is good enough for next couple of years til CAD recovers or find better investment opportunity shows up.  I'll be curious to know if there are any viable investment opportunity in the Lower mainland.  Condos in the Vancouver/Richmond area seems tempting, but there are so many of them being built as well.

Samuel Sedore · Answer

Have you considered refinancing and reducing the mortgage payments to force a positive cash flow?

It could be a great way to reduce your debt service, free up some capital, while not losing the benefit of ownerhsip. Then if our dollar picks back up in 2 3 years sell. But I look at selling on a 72 cent dollar when you bought at any more than 80 to be a huge loss.

Also @Peter Crisp, great idea about re investing back in Canada!

Thinking of selling Townhouse in Vancouver BC, should I?

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