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WhipMaster
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Re: why condos aren't good investments

Sun Apr 19, 2015 9:53 pm

The land..the land...the land
....it's certainly not the cash flow. :lol:
Hoo~Cudda~Not~Nod~ed????? :-)
 
eyesthebye2
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Re: why condos aren't good investments

Mon Apr 20, 2015 9:23 am

The land..the land...the land
....it's certainly not the cash flow. :lol:
that's why Vancouver has one of the worst cap rates in the world...investors are buying the land, not the condos above it.

All you need to do is look at Jim Pattison and the Aquilini group.
They buy businesses that have land they can develop. The business itself is only mildly important
 
Geyser
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Re: why condos aren't good investments

Mon Apr 20, 2015 10:34 am

"Geyser"

My uncle lives in Hamilton living in one of his building’s unit and now saves $10,000 a month from his remaining 9 rental units.

It is now paid off completely after 18 years and a 30% down payment. The building is worth double now.

The $10,000 goes in REIT’s, preferred shares, foreign bonds and stocks, zero coupon bonds and various other ETF’s etc.

In about 10 years doing this, starting at $7,000 a month and increasing that yearly, he now has about $1,500,000.
So please explain why this was also a poor financial investment.
1. five years ago I was calling for a buy on Hamilton
2. the building is worth double likely because the land is worth double under it - the owner has 100% stake in the land. The land..the land...the land
(did I say it enough times for you?) LOL[/quote]

If you want to quote me, please don't edit out the important bits. Those were not my words, I specifically pointed out that it was a quote taken from Ray Vasquez on the Greater fool blog. Here it is again, as originally posted:
#36 Ray Vasquez on 04.19.15 at 4:11 pm
To Ralph Cramdown #31

My uncle lives in Hamilton living in one of his building’s unit and now saves $10,000 a month from his remaining 9 rental units.

It is now paid off completely after 18 years and a 30% down payment. The building is worth double now.

The $10,000 goes in REIT’s, preferred shares, foreign bonds and stocks, zero coupon bonds and various other ETF’s etc.

In about 10 years doing this, starting at $7,000 a month and increasing that yearly, he now has about $1,500,000.
Now, with regard to your inability to understand land values. Yes, of course it was the land underneath the condos and the rental apartments which appreciated. Structures don't appreciate, they depreciate. I've tried to explain this to you before but you keep insisting that a condo purchaser only owns part of the structure and "no land". Then the debate degenerates into who owns them land and/or how the structures are supported, your bet seems to be sky hooks.

Your statement above seems to indicate that you think 10 rental apartment units should be worth more than 10 identical condo units because there is only one owner of all ten rental apartments. The market has proven otherwise, purpose built rental apartment buildings routinely sell at much less per unit than similar units in a condo.

I am aware of two deals where condo owners were each offered double market value in order to avoid holdouts and get the deal done. Go figure! :D

Go figure. :D
In fond memory of Taipan, a model of modesty, decency, dignity and tolerance. Long may we all prosper from the tremendous legacy of worldly wisdom and specialized real estate knowledge which he left in the "Arguments" thread.
 
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Warren12
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Re: why condos aren't good investments

Wed Apr 22, 2015 7:31 am

great, thanks for the details...we now know it's clearly a poor financial investment.
If you like rentals so much why not take 50% equity out and buy another rental? If I loved being a landlord I'd
be wanting more of the same.
I assume you declare this rental income with CRA :wink: and you'll be forking over 50% of your capital gains to the Feds too :wink: :wink:

not comparing SFH to condo rentals. Neither cover the mortgage so it's just a matter of looking at the value gains.
1. I have enough invested in real estate right now. I'm diversifying, you should look up the concept.

2. Of course I declare this income. Capital gains imply that I would sell, now maybe you're catching on to what I'm doing, which is collecting money.

3. I've explained why I've invested in condos. You've given no reasons for investing in a SFH. What's your property tax bill like? Mortgage interest? Valuation is nothing more than numbers on paper, and doesn't mean anything until you sign a contract to sell.
 
tapioca
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Re: why condos aren't good investments

Wed Apr 22, 2015 9:12 am

FWIW we're thinking of buying a condo as a rental.
 
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WhipMaster
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Re: why condos aren't good investments

Wed Apr 22, 2015 9:17 am

FWIW we're thinking of buying a condo as a rental.
...great! If you don't mind us asking....
what are the rough numbers that you are working with, ie price, rents, expenses? :D
Hoo~Cudda~Not~Nod~ed????? :-)
 
tapioca
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Re: why condos aren't good investments

Wed Apr 22, 2015 10:17 am

we're thinking of a studio DT ish

haven't really run the numbers yet - don't need positive cashflow at this stage but would like mortgage/fees to be paid by rental income.

thinking to rent around 1000-1100

mortage payment around $1,000
 
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WhipMaster
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Re: why condos aren't good investments

Thu Apr 23, 2015 6:53 am

Yes, I hear those downtown studios are real easty to rent. What do you need down then? Around $200 K? or 50%?

Well, when they are talking about the population increasing in Vancouver by 1 million people by 2030, if that eventually comes true, I think that will turn out well. :D
Hoo~Cudda~Not~Nod~ed????? :-)
 
tapioca
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Re: why condos aren't good investments

Thu Apr 23, 2015 7:18 am

that's what I think too. Plus maybe one day, we can downsize into it... :lol:

We need to do some more homework on what we need to put down etc. I'll keep you posted :mrgreen:
 
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WhipMaster
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Re: why condos aren't good investments

Thu Apr 23, 2015 8:29 am

Plus maybe one day, we can downsize into it.
...hahahaha, there is no way in hell that you are gonna downsize to it.
If anything, you will sell your house and buy a new apt....or, you will let the kids live in the house and sell the rental apt and buy a new apt.
May I make a suggestion,? I am telling you this so that you don't go out looking with the two objectives in mind because they are incongruent and will only confuse you.
When you go out looking, just look for an investment. Do not look for your investment with the idea of moving into it one day cuz that aint gonna happen and it will just confuse the issue uneccesarily. :D

But consider this, there are still some bargains around in the east side and BBy. I heard a 2 bedroom apt just sold for $265K, 2nd floor, older but well kept bldg., would rent for $1,100 easy. Those numbers aren't too bad. With $100k down I am guessing that it will cover the mortgage and the strata fees.

Anyhow, hope it works out! :D
Hoo~Cudda~Not~Nod~ed????? :-)
 
tapioca
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Re: why condos aren't good investments

Thu Apr 23, 2015 8:58 am

thanks Whip, that's good advice.
 
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Warren12
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Re: why condos aren't good investments

Thu Apr 23, 2015 11:51 am

we're thinking of a studio DT ish

haven't really run the numbers yet - don't need positive cashflow at this stage but would like mortgage/fees to be paid by rental income.

thinking to rent around 1000-1100

mortage payment around $1,000
If it's in a new-ish building, you can easily get $1200+ rental, not including parking (would be $100 more).
 
rMBA13
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Re: why condos aren't good investments

Thu Apr 23, 2015 5:05 pm

Might not be a good investment, but the rental yield is still better than GIC.
 
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WhipMaster
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Re: why condos aren't good investments

Sun May 31, 2015 5:00 am

The new "green" rules have flies and other buggy things flying around the food waste compost like crazy now that the warmer weather is here. It has turned condos into a stinky, bug infested shit pile. Fawk. :lol:
Hoo~Cudda~Not~Nod~ed????? :-)
 
rMBA13
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Re: why condos aren't good investments

Sun May 31, 2015 8:40 am

Sure.. Condos' performances are nothing compared to detached homes. But pre-sale condos in Metro Vancouver have far outperformed asset classes such as gold, GICs, bonds and savings acct!
Last edited by rMBA13 on Sun May 31, 2015 8:52 am, edited 1 time in total.
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