Comments on: Not Another Vancouver Real Estate Post! http://financialjungle.com/2007/06/26/housing/not-another-vancouver-real-estate-post/ A Vancouverite's journey to financial freedom. Tue, 06 Jan 2009 22:43:08 +0000 http://wordpress.org/?v=2.1.2 By: The Financial Blogger http://financialjungle.com/2007/06/26/housing/not-another-vancouver-real-estate-post/#comment-364 The Financial Blogger Tue, 26 Jun 2007 09:34:01 +0000 http://financialjungle.com/2007/06/26/housing/not-another-vancouver-real-estate-post/#comment-364 I've been following the real estate market in BC for 3 years and I still don't understand it. According to your post, and I totally agree with you, it makes no sense whatsoever to buy this property. The problem is that this is definitely not the only one like that and it will probably sell within 6 months. What are people thinking when they buy such property? I’ve been following the real estate market in BC for 3 years and I still don’t understand it.
According to your post, and I totally agree with you, it makes no sense whatsoever to buy this property.
The problem is that this is definitely not the only one like that and it will probably sell within 6 months. What are people thinking when they buy such property?

]]> By: Mr. Cheap http://financialjungle.com/2007/06/26/housing/not-another-vancouver-real-estate-post/#comment-365 Mr. Cheap Tue, 26 Jun 2007 14:29:02 +0000 http://financialjungle.com/2007/06/26/housing/not-another-vancouver-real-estate-post/#comment-365 Its even worse then you calculate. According to John Reed, its a well established figure that you'll typically pay 45% of a MARKET VALUE rent for expenses (including the cost of management either in $ if you hire someone or in time if you do it yourself). From this perspective, a property paying $1050 rent / month would have a cashflow of $577.50 after expenses. This would indicate that at an interest rate of 5.79 the most you should pay is $119,689.11 (577.5*12/0.0579). At this price, assuming you could somehow get the 5.79% rate with 0% down you'd be paying the principle portion of the mortgage yourself (the tenant would JUST be covering expenses and mortgage interest). $530K is quite a joke from an investment perspective (and pretty nutty even from a speculator/gambler perspective) Its even worse then you calculate. According to John Reed, its a well established figure that you’ll typically pay 45% of a MARKET VALUE rent for expenses (including the cost of management either in $ if you hire someone or in time if you do it yourself).

From this perspective, a property paying $1050 rent / month would have a cashflow of $577.50 after expenses. This would indicate that at an interest rate of 5.79 the most you should pay is $119,689.11 (577.5*12/0.0579).

At this price, assuming you could somehow get the 5.79% rate with 0% down you’d be paying the principle portion of the mortgage yourself (the tenant would JUST be covering expenses and mortgage interest).

$530K is quite a joke from an investment perspective (and pretty nutty even from a speculator/gambler perspective)

]]> By: moneygardener (AKA investor99) http://financialjungle.com/2007/06/26/housing/not-another-vancouver-real-estate-post/#comment-366 moneygardener (AKA investor99) Tue, 26 Jun 2007 20:37:51 +0000 http://financialjungle.com/2007/06/26/housing/not-another-vancouver-real-estate-post/#comment-366 What a beauty for half a million :) What a beauty for half a million :)

]]> By: ThickenMyWallet http://financialjungle.com/2007/06/26/housing/not-another-vancouver-real-estate-post/#comment-367 ThickenMyWallet Tue, 26 Jun 2007 21:32:50 +0000 http://financialjungle.com/2007/06/26/housing/not-another-vancouver-real-estate-post/#comment-367 When do we hear a pop! in the market? When do we hear a pop! in the market?

]]> By: Sockittome http://financialjungle.com/2007/06/26/housing/not-another-vancouver-real-estate-post/#comment-368 Sockittome Tue, 26 Jun 2007 21:45:11 +0000 http://financialjungle.com/2007/06/26/housing/not-another-vancouver-real-estate-post/#comment-368 I would bet that the $1050/month is for the basement 3bdr. only. You would be hard pressed to find a complete house to rent for less than 1500 in Vancouver or Victoria. I would bet that the $1050/month is for the basement 3bdr. only. You would be hard pressed to find a complete house to rent for less than 1500 in Vancouver or Victoria.

]]> By: Financial Jungle Guy http://financialjungle.com/2007/06/26/housing/not-another-vancouver-real-estate-post/#comment-370 Financial Jungle Guy Wed, 27 Jun 2007 01:01:24 +0000 http://financialjungle.com/2007/06/26/housing/not-another-vancouver-real-estate-post/#comment-370 Thanks for the comments. I find this ad funny since most sellers put their best foot forward. Personally, I wouldn't advertize the rental rate. Thanks for the comments. I find this ad funny since most sellers put their best foot forward. Personally, I wouldn’t advertize the rental rate.

]]> By: Deborah http://financialjungle.com/2007/06/26/housing/not-another-vancouver-real-estate-post/#comment-445 Deborah Sun, 15 Jul 2007 05:39:59 +0000 http://financialjungle.com/2007/06/26/housing/not-another-vancouver-real-estate-post/#comment-445 Heck, they could rent those 6 bedrooms out at $400 each, increase the yield and be a big part of the solution for our need for affordable housing... Seriously, that's what is happening with dumps like that in Britain now as the cost of housing is so expensive. You could get 50-65 pound per week for a room in a house like that, say $55. So that would give the equivalent of $40k of income/year in Britain in a place like Bristol. I paid $65 pound per week, and the tent pays the taxes, which was culture shock, and then there is the TV tax and untilities. By the time utilities and everything else they dinged you for, and a an exchange of 2.3, it worked out to about $900/month for a room only big enough for a single bed... Heck, they could rent those 6 bedrooms out at $400 each, increase the yield and be a big part of the solution for our need for affordable housing…

Seriously, that’s what is happening with dumps like that in Britain now as the cost of housing is so expensive. You could get 50-65 pound per week for a room in a house like that, say $55. So that would give the equivalent of $40k of income/year in Britain in a place like Bristol.

I paid $65 pound per week, and the tent pays the taxes, which was culture shock, and then there is the TV tax and untilities. By the time utilities and everything else they dinged you for, and a an exchange of 2.3, it worked out to about $900/month for a room only big enough for a single bed…

]]> By: Financial Jungle Guy http://financialjungle.com/2007/06/26/housing/not-another-vancouver-real-estate-post/#comment-447 Financial Jungle Guy Sun, 15 Jul 2007 07:15:58 +0000 http://financialjungle.com/2007/06/26/housing/not-another-vancouver-real-estate-post/#comment-447 It's happening in Vancouver. Our lending practice hasn't changed, but affordability index had risen to 70%. How is that possible? Well, people are buying smaller places: townhouses and condos. Some townhouses in Coquitlam are approaching half a million. Great blog, btw, Deborah. I'm shocked that I haven't had the pleasure earlier. It’s happening in Vancouver. Our lending practice hasn’t changed, but affordability index had risen to 70%.

How is that possible? Well, people are buying smaller places: townhouses and condos. Some townhouses in Coquitlam are approaching half a million.

Great blog, btw, Deborah. I’m shocked that I haven’t had the pleasure earlier.

]]> By: FourPillars http://financialjungle.com/2007/06/26/housing/not-another-vancouver-real-estate-post/#comment-475 FourPillars Wed, 25 Jul 2007 02:37:56 +0000 http://financialjungle.com/2007/06/26/housing/not-another-vancouver-real-estate-post/#comment-475 Ok, if I knew how to do one of those "link back" thingys, I'd do it, but instead I'll just tell u that I referenced this post in my post at: http://www.four-pillars.ca/2007/07/24/house-wars/ Mike Ok, if I knew how to do one of those “link back” thingys, I’d do it, but instead I’ll just tell u that I referenced this post in my post at: http://www.four-pillars.ca/2007/07/24/house-wars/

Mike

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]]> By: House Bidding Wars http://financialjungle.com/2007/06/26/housing/not-another-vancouver-real-estate-post/#comment-1295 House Bidding Wars Fri, 11 Apr 2008 02:31:34 +0000 http://financialjungle.com/2007/06/26/housing/not-another-vancouver-real-estate-post/#comment-1295 [...] their boomer parents. I think those house buyers should consider the value of renting according to Financial Jungle. Ok, it’s a different city but the logic still [...] […] their boomer parents. I think those house buyers should consider the value of renting according to Financial Jungle. Ok, it’s a different city but the logic still […]

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