Kelowna Realtors thoughts on Condo Rentals

Former president of the Okanagan Mainline Real Estate Board and Managing Broker of Premier Canadian Properties Bert Chapman (Toll Free 1-866-765-0579 - bert@pcrealty.ca) writes - responding to a recent article by Ozzie Jurock in which was a report on rental condos at 169,000 and up in the Kelowna Market.

In Kelowna there are indeed $169,000 two-bedroom condos in rentable buildings - BUT. Said Bert (who is also a multi year subscriber):

"I did the research and there are only 2 such units, both in the same 27 year old building in North Kelowna. There are 2 more units in the same building at $179,000 and $195,000, also rentable. There are 6 rentable units in Kelowna South listed between $179,900 and $195,000 and 6 rentable units in Rutland in 30 year old building listed from $159,900 to $189,900.That's it! Everything else is age restricted over 55, on lease land or priced over $200,000."

He adds: "In fact - it is difficult to find rentable units because of the high percentage of owner occupied units. These owners tend to vote for strata rules that limit the number of rentals. The buyers need to be aware that just because you buy a unit that is occupied by a tenant, this does not necessarily mean you can continue to rent it. The original buyer is governed by the Developers Disclosure Statement as to whether they can rent or not. Subsequent buyers are governed by the Strata rules which can be, and frequently are, changed by the Strata Council to limit rentals. There are also a few projects with resort zoning which permits short term rentals 3 nights or more. These are typically on the lakeshore or on golf courses. This cannot be changed by a Strata Council."

Indeed.

Major Point: This applies of course to many areas in BC. Even though local markets are often depressed, because of tight rental rules (strata council imposed) investors can't step in to 'lighten the load'. Buyers should always retain an experienced Realtor in an area that they are not familiar with - particularly when buying rental units.

-
Bert Chapman
Office: 6-3185 Via Centrale,
Kelowna, B.C, V1V 2A7
Phone: (250) 765-0570
TollFree: 1-866-765-0579
Fax: (250) 765-0577
Email: bert@pcrealty.ca
Website: http://www.premiercanadianproperties.ca/

A Goodbye to the Good Buys!

In a recession all the talk is about when will we reach the bottom.
The truth is we won't know until after it happens.
But... does it really matter?
If you buy a rental property then your tenant is paying for it.
Why should you care how much he is paying?

In a recession all the talk is about when will we reach the bottom.
The truth is we won't know until after it happens.
But... does it really matter?
If you buy a rental property then your tenant is paying for it.
Why should you care how much he is paying?

We know that:
Prices are down from the peak reached last year.
Interest rates are the lowest in 50 years.
There is an abundance of properties available.

This creates the illusion tht there is no hurry to buy.
Fear of the future is everywhere: recession, global warming, unemployment and swine flu.

But fear is: False Expectations Appearing Real

Reality is: This is a perfect buying opportunity.

Find a distressed owner. There are no distressed properties only distressed owners. Make an offer that solves their temporary problem and results in a good buy for you. Now the property is no longer diressed.

It is an opportunity for you.

In the Okanagan-
48% of real estate buyers are local
28% of real estate buyers are from Alberta
20% of real estate buyers are from Vancouver

The Alberta and Vancouver buyers are rubber tire traffic. They are affected by things like high gas prices and snow on the mountain passes.

Spring is in the air. The Rogers Pass and Coquihalla are snow free. Gas prices are relatively low.
The Alberta and Vancouver buyers will be back.

The Okanagan still has:

* Canada's best climate
* Large warm lakes
* Championship golf courses
* World Class wineries
* Big White and Silver Star ski resorts
* Kelowna International Airport
* UBC Okanagan
* Afordable real estate
* Low interest rates

Its time for you to make a good buy before its Goodbye to the Good Buys!

Some Stats to Ponder: (courtesy of OMREB)

Year to Year Comparison

Property type:

----------------Avg Sale Price --------Avg Sale Price ---------Avg Sale Price
------------------April 2007 ------------April 2008 ------------April 2009
Single Family ------455,641 ---------------552,526 --------------451,109
Condo Apt ---------259,147 ---------------287,819 --------------248,642
Condo Twnhouse-- 333,891--------------- 409,021 --------------344,261

Month to Month Comparison 2009

Property type:

----------------Avg Sale Price ---------Avg Sale Price---------- Avg Sale Price
------------------Feb 2009 -------------March 2009 ------------April 2009
Single Family -----447,819 --------------- 438,493 ----------------451,109
Condo Apt --------233,268 ---------------244,433 ----------------248,642
Condo Twnhse ----328,546 ---------------328,611 ----------------344,261


It would appear that the market peaked in April/May 2008 and has bottomed in February/March 2009 at approximately the 2007 levels and is gaining strength.

Is this the end to the Good Buys?

Bert Chapman
Office: 6-3185 Via Centrale,
Kelowna, B.C, V1V 2A7
Phone: (250) 765-0570
TollFree: 1-866-765-0579
Fax: (250) 765-0577
Email: bert@pcrealty.ca
Website: http://www.premiercanadianproperties.ca/

Bert Chapman - IF YOU PRICE IT RIGHT THEY WILL BUY!!

It struck me while showing properties to potential buyers – Properties priced right are selling quickly.

Potential Buyers Group 1
My clients are looking for a home on acreage. They looked at 15 properties listed from mid $600,000’s to mid $800,000’s. One had just been reduced from mid $800,000’s to low $700,000’s. It had 9 showings in 2 days and sold in the high $600,000’s.
Priced right and sold quickly! My buyers are still looking.

Potential Buyers Group 2
My clients are looking for a 2 bedroom condo on the golf course. They saw 12 properties and offered on the best priced one only to find competing offers. The condo sold for full asking price in 15 days. Priced right and sold quickly! My buyers are still looking.

Potential Buyers Group 3

My clients are looking for a 3 bedroom home with a workshop and an in-law suite if possible under $400,000. Found a suitable one originally listed at $440,000 then adjusted to high $380,000’s and it sold in 2 days for mid $380,000’s.
Priced right and sold quickly!

My buyers have purchased a property originally listed in the low $400,000’s reduced in 5 stages to $350,000, then sold the next day at $340,000.
Priced right and sold quickly!

A look at the stats
I analyzed 97 single family home sales and 52 condo sales reported to the Okanagan Mainland Real Estate Board during October 2008 and found:

1. Properties listed at market value sold within 60 days.
2. Properties listed too high then adjusted to market value sold within 60 days of that adjustment.
3. Properties listed too high and not adjusted are making up the unsold inventory.

Check our website: for a complete list of properties Sold in October.

Why is price so important?

There are approximately 700 Realtors in the Central Okanagan, 20% of them do 80% of the business. There are 140 realtors working with potential buyers right now. They know the existing inventory and watch every day for new listings priced right or significant adjustments to existing listings.

Properties priced right get all the action! My Advice:

1. Sellers - If you need to sell now, price it right! Then buy again in the same market conditions.
2. Investors - Look for properties in good locations that create cash flow, example: properties near UBC Okanagan or on the bus line. Check our web site for a list of properties which can cash flow.
3. Renters – It’s time to buy! Look for a property with a suite to help pay the mortgage.
Work from home if you can and save office rent and gas.

Take advantage of the high inventory of properties and the low mortgage rates. Lock in your mortgage rate.

I have a client who says: “Real Estate deals are like trains….there will be another one tomorrow.”

I say: “The train is at the station, get on now while prices are competitive, interest rates are low and selection is abundant. Don’t wait to board the next run away train.”

Remember: Don’t wait to buy Real Estate…Buy Real Estate and wait!!
-
Bert Chapman
Office: 6-3185 Via Centrale, Kelowna, B.C, V1V 2A7
Phone: (250) 765-0570
Toll Free: 1-866-765-0579
Fax: (250) 765-0577
Email: bert@pcrealty.ca
Website: http://www.premiercanadianproperties.ca/

Bert Chapman - So How Is Your Real Estate Now?

In these difficult economic times,

When stocks drop 20% in value overnight, then rebound, only to drop again…

When the price of oil drops precipitously but the price of gasoline doesn't…

When the value of gold is measured in US dollars, so its rise in value only indicates an erosion in the value of the troubled dollar….When governments bail out financial institutions….

What should you do?

Real Estate

You can still live in it, rent it out, borrow against it at reasonable rates, and grow veggies on it. You can still sell it if you are satisfied with a modest appreciation of 50% if you bought in the Okanagan in 2005. Or 30% if you bought in 2006.If you bought in 2007, you can get your capital back plus 5-10%.

That's if you paid cash.

Since most of us didn't, we gained even more through leverage. Eg: If we invested $60,000 as a down payment in 2005 in an average home valued at $300,000, it has gained 50% in value to $450,000 for a profit of $150,000. Since we only invested $60,000 to gain $150,000, our return on investment is 250% in 4 years.

So….what does the future hold?

I don't know for sure, but using 10 years of history as a guide in the Central Okanagan…any losses in value occurred slowly, were not of catastrophic proportions, and were followed by orderly increases to considerably higher values. The cycle since 1997 resulted in a 300% increase in average house values from $164,500 in 1997 to $500,000 in 2008. See graph 1 on our website: http://www.pcrealty.ca/

In Vancouver, where stats go further back, the cycle has occurred 3x from an average price of $90,000 in 1977 to $808,000 in 2008 for a 900% increase. See graph 2 on our website: http://www.pcrealty.ca/

Real Estate

In good times it sets the pace for investment appreciation in slow times it retains its value and can be rented so others can help you buy it.

Take advantage of today's financial turmoil. Invest in some solid Okanagan Real Estate.

Remember …Location, location, location.

In the words of Wayne Gretzky…"Don't go to where the puck IS.... go to where it will be!

"That's great hockey sense and intuitive investment advice! People want to live in the Okanagan. You should get there first and buy real estate.

More information on the web:

Premier Canadian Properties http://www.pcrealty.ca/
Okanagan Mainline Real Estate Board http://www.omreb.com/
City of Kelowna http://www.kelowna.ca/
District of Lake Country http://www.lakecountry.careal/
Estate Board of Greater Vancouver http://www.rebgv.org/

-
Bert Chapman
Office: 6-3185 Via Centrale, Kelowna, B.C, V1V 2A7
Phone: (250) 765-0570
Toll Free: 1-866-765-0579
Fax: (250) 765-0577
Email: bert@pcrealty.ca
Website: http://www.premiercanadianproperties.ca/

Bert Chapman - Kelowna Real Estate -What's Luck got to do with it?

CENTRAL OKANAGAN STATISTICS – OMREB

Residential - Average Price $512,811 - Last year $479,714 - Increase 6.9%
Apartment - Average Price $315,707 - Last Year $278,559 -Incrreas 13.34%
Townhouse- Average Price $396,086 -Last Year $353,708 -Increase 11.98%

Listing Inventory Up 42.6% Units Sold Down 39.6%

The market is healthy but price sensitive. Some say, “You have to be lucky to sell”.

Luck is... “Where preparation meets opportunity!”

I was at a car show in Keremeos British Columbia recently and overheard a conversation between a Realtor and another person. “How is the Real Estate market these days?” Realtor...”It’s terrible!” No one is buying, everyone wants to sell and everything is for sale. No one can buy anymore because prices are too high.”

I thought to myself...I guess that person won’t be buying or selling through that REALTOR anytime soon.

I also thought...you should focus on what you want, not what you don’t want. You will attract what you focus on.

So...How is the Market?

Well, I am personally working with several groups of buyers.

• Repeat clients from 6 years ago. They are unfortunately splitting up. She has a good job in healthcare and can afford to buy their existing house. He is a welder and is pre-qualified for $400,000 - $450,000. Good jobs.
• Another repeat client – they have a private sale for their existing out of town property to a neighbor. They want a home in Lake Country with a lake view, approximately $600,000 - $700,000. He works for a door company and she works for Canada Post. Good jobs.
• Parents of a university student looking for an apartment near UBC Okanagan, price range $250,000 - $300,000. Parents are accountants. Good jobs.
• I recently completed a sale of a townhouse to a young couple expecting twins. They wanted to move close to their parents. He works for a warehouse company and she works for an insurance company. Price range $300,000 - $320,000. Both have Good jobs.
  

But, how can this be?The Realtor at the car show said “no one is buying”. I can hear you thinking, you’re just lucky! What is luck? … “Where preparation meets opportunity”
So…who can buy? People with good jobs. Let’s look at the Yellow Pages for good jobs. Accountants, bankers, airport employees, auto body, casinos, cell phones, chiropractors, city workers, doctors, dentists, environmental consultants, funeral homes, health care, lawyers, waste management, plus retirees and seniors, etc. etc. etc.
Life goes on. Peoples’ housing needs change. Houses will be bought and sold.
There are plenty of opportunities for those who are prepared. They will be lucky!Don’t wait to buy Real Estate - Buy Real Estate and wait!

Agent: Bert Chapman
Office: 6-3185 Via Centrale, Kelowna, B.C, V1V 2A7
Phone: (250) 765-0570Toll Free: 1-866-765-0579
Fax: (250) 765-0577
Email: bert@pcrealty.ca
Website: http://www.premiercanadianproperties.ca/

Bert Chapman - REAL ESATE INVESTMENT BLOWS AWAY STOCKS!

A recent article on July 12th 2008, in the business section of the Kelowna Daily Courier by Joseph Roberge, Investment Advisor, purported that over the last 30 years the S & P TSX Index outperformed Real Estate Investment. He claimed that the stock index averaged 10.8% per year while Real Estate was 7.7% average gain over the same period.

He conveniently omitted that:

1. The equity increase in your principal residence is tax free while stock gains are taxable. Advantage Real Estate!

2. You can live in your Real Estate Investment but not in your stocks. Advantage Real Estate!

3. You can buy Real Estate with a low down payment effectively increasing your yield. You need cash to buy stocks. Advantage Real Estate!

4. You can rent out all or part of your Real Estate and let your tenant buy it for you. Stocks you have to pay for yourself. Advantage Real Estate!

Bert Chapman is the Managing Broker/Owner of Premier Canadian Properties and past President of the Okanagan Mainland Real Estate Board