It is straightforward for one to conclude that Vancouver real estate market is messed up quickly. Due to this scenario, this market has gotten attention from some quarters. You will hear it being discussed in media reports, the provincial administration is scrutinizing it, and it has also faced some action from the self-regulatory board. One can say that the market is under little review throughout. What is the real cause of this?
Presence of Foreign Buyers
Even though it can be seen as irresponsible or even harsh to discuss immigration issues here, we cannot run away from the fact that foreign money has profoundly impacted the real estate market in Vancouver. More especially the wealthy foreigners. Most rich investors from mainland China have come with their money bags, and they are doing some serious investment in Vancouver real estate industry hence driving the prices of such properties very high.
Recent studies conducted have shown that a few years have gone, the Vancouver metropolis has acquired the same characteristics as those of other Pacific gate away cities like Singapore, Sydney and even Hong Kong. Thus the rise in prices here can be attributed to high immigration rates which have to lead to population growth hence high demand.
Additionally, the rising prices of housing in Vancouver is attributed to immigrants who come in with a lot of wealth and also continue earning considerably high incomes outside Canada. That accumulation, plus the easy access to money for investment here has to lead to increased prices.
But you cannot attribute the crazy prices to the foreign investors alone. The other factor that has to lead to these prices being high is the presence of unscrupulous people, fast money coming in, and a lot of malice and evil practice when enforcing regulations and rules which are supposed to be governing business in this industry.
One thing that has been singled out is that those found to be engaging in unethical practices have been given fines and penalties that one can refer to as being some joke.
The reason why many realtors advocate for quick sale and hastening of the process is that this will allow them to resell the acquired investment to the next party and this is usually done with them making massive profits. This way, an agent will end up earning two commissions within one transaction and within a short time which makes the process even more expensive.
With technology, everything has become very easy. With technology, the distance of what initially was localized economic decisions has been dramatically reduced. Due to this, an investor needs not to set foot in Vancouver Canada to make a purchase instead they can do it online. This has opened this market to more people hence more competition, and with this, the result is high prices.
Some other factors include unethical practices like money laundering, the lack of unbiased information and a host of other contributors.…
One significant advantage of owning rental property is that you are sure of getting a regular from the investment that you have made. This is why you will hear a lot of individuals argue that rental property is one of the most effective ways that one can use to create wealth in the long term.
But most people cannot seem to stop wondering if getting into the rental property market is the right decision to take? And if so what steps is one required to make so that it can be a profitable venture too. Below, we highlight some five tips for investing in rental property. They include:
Having an Understanding of Why You are Purchasing.
When you are making a rental property purchase, it is essential that from the onset, you have and develop a clear understanding of why you are purchasing the rental property. We have three main reasons why people invest in real estate property. These reasons include: owning the property as some form of investment, the second one being the generation of income and others for speculation to have a quick win. So when you are investing in the rental property be sure that your investment is in line with the goal that you want to achieve. If you purchase your property for speculative purposes, then timing is critical. You should always endeavor to buy when the market is low and sell at the peak of it so that you maximize on your profits.
Be Financially Prepared
Do not liken purchase of rental property with purchase of a principal residence. Thus before you get into this investment portfolio, ensure that you have got enough money or financing to invest and stay there. You should always be ready to finance unexpected repair bills which might be huge, increases in interest rates. In a nutshell what am trying to say is that you should have enough finances to enable you to withstand any bumps that may arise. If not so, you may be forced to abandon your investments prematurely.
Ensure Positive Cash Flow
When you have made a decision on what rental property you can invest in, you will now have to calculate and project the income that your rental property will bring. In most instances, the local conditions in which your property is located usually determine the amount of rent that you will charge. But the rule of thumbs when doing this, to make sure that you have projected the expected cash flow.
Level of Involvement
The next step is to determine the percentage of your involvement in your rental investment. Know that as a landlord, you will have to deal with loud tenants, late rent, and some form of paperwork from time to time. If you think that all this will be overwhelming to you, or you are engaged elsewhere, you have an option of hiring a property manager, but this is for a fee.
Conduct Some Research
Whenever you are investing in some sector, you will be required to conduct some background research so that you can make informed decisions. When investing in rental property, you will be required to perform some analysis as this will help you to find and settle for a profitable rental property.…