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Originally Posted by Cypherus
I think Central City area will boom in about 10-20 years. Surrey has about 1000 new residents a month so there is demand for affordable housing. With the professional jobs in the city core, including CRA, the hospital, medical buildings, City Hall, SFU, Coast Capital Headquarters, etc. there will be demand for housing around the city core so the value will be there for many. We should also expect to see more money flowing to the South of the Fraser since Metrotown is becoming unaffordable and starting to bear the characteristics of Vancouver in the early 2000s where prices were jumping higher than family incomes, particularly driven by foreign demand. Where Surrey has the advantage right now is that you can catch on to that fever before that happens, whether that be 5-25 years from now. This will have a cascading effect on the 1 bedroom units and in your case, you've already seen some great gains in just the last few years.
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I'd have to agree with you there. Surrey especially the central Surrey area has had a tough go historically in finding a "boom" situation given partially due to geography, and partially do to accurate or perceived reputation. The reputation is improving and as the region is decentralizing (no longer Vancouver centric) Surrey is no longer so far out there.
So the time is good. We're at the mercy of the global economy though as with everyone and hopefully the global and local economies remain good. I don't disagree though in the long term potential and now that buildings are rising into the skyline again, the realization of the area. Still along way to go but as I mentioned, when a lot of construction happens in a given area, you can a spiked increase in available inventory which ultimate leads to individual prices stagnating which is what is happening in the 1 and even 2 bedroom condo space.
You do see that happen everywhere even in areas like Brentwood where assessment values have remained fairly flat because of all the construction. It takes the construction to complete and units to fall off the market for the prices to start to go up.
Like I said it is the short term investors who suffer because they bank on a quick flip.
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A good thing to remember is that many people will achieve some capital appreciation, and they think they made money on their home. However, true economic profit exists when you subtract your mortgage interest, property taxes, and strata fees from capital gain and what results is a net profit. Otherwise, renting would have been financially better with the returns on investments on what would have been your down payment. Since you are renting your one bedroom, you're minimizing your holding costs.
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Absolutely. Too many people that "invest" do so just because they have the money but they don't actually realize what it means to invest to make money. They don't know all the additional costs to them be it interest, property taxes, strata, etc., that you need to fully add up to = a profit when you resell.
Even with my increase in assessed value on my 1 bedroom unit that is to me fairly healthy given the current market and what I paid, if I sold factoring in all the other costs means I wouldn't be much ahead of the game thus why I am holding. And when you hold, as you stated, you want to minimize those costs.
I am more than fine even renting my unit out for less than my total costs as long as those are minimal because rent will increase over the next 5 to 10 years in the area enough to counter balance. I am lucky I can get what I get now without issue (when I advertised my unit for rent within 1 week I have 17 inquiries, 7 of which were serious and 2 of which went to background checks). The unit rented out fully in 8 days from when I advertised to them moving in and the previous tenant moving out. So I will hold for 5-10 years if need be and if that if the market stays that good.
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The current climate right now in Surrey is that 2 bedroom condos are the way to go if you want to sell within 5 years - for small gains. Either way, you're going long with your position if you really want to cash in on one or two bedrooms.
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Absolutely. I do believe it is easier to rent out 1 bedrooms quicker than 2 bedrooms, but you can get more for 2s than 1s right now. 2s have a better resale but 1s are easier to rent even though there are more available.
We're still in a situation where I find the demographic moving into high-rises fit the 1-bedroom mold. Micro-lofts actually help me out with a full 1 bedroom because it now creates a lesser tier of units making even a 1 bedroom a bit more attractive.
When it is just 1 bedrooms they are the bottom of the barrel so people, if 2s are available, tend to go that route even if it is a bit more. You throw in micro-lofts and people suddenly see a flood of those and when a 1 bedroom shows up, they are happy.
Finally, there was discussion earlier about Ultra. The problem with Ultra is it was way way way way overpriced from the developer. Way too much. I looked at them way back when they started selling and they were far too high. Even the "assessment" they came back with I didn't believe at all. They show me an assessment from RBC at the time and it just so happens to be that RBC was their financial institute. I took the numbers with a huge grain of salt.
Then their sales dropped and they ended up taking forever to sell enough to get the project under way. Even after they did a few fire sale drops their prices given the area were still too rich for my blood on an investment front. I think to live in them the prices were OK but as an investment unit I had no way of recouping costs in a reasonable time.
It's nearly impossible to try to rent a unit for $200 more and tell a renter "well it has nicer crown molding!" Renters don't care about that stuff or fit-and-finish. So I kind of exclude Ultra in my gauge of how healthy the market is in Surrey Central aka I don't say because people are losing money on Ultra that reflects on the whole area.
Most other buildings were and are far more affordable from an investment perspective.
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I am after-all a realist by nature.
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