IF YOU CAN’T ASSIGN IT, RENT IT!

Are Vancouver’s presale condos coming up for rent?

Many real estate investors who purchased contracts to buy some of Vancouver’s beautiful new condos in the previously booming presales market had planned to sell their contracts before completion. In doing so they would have been able to “assign” them to another investor and enjoy big gains. Today, investors who purchased a presale contract four to two years ago are revisiting their strategies. As completion of these new condo buildings is now approaching, many investors find themselves facing a slightly lackluster market, as evidenced by the number of Assignments for sale.

Today, investors who purchased a presale contract are revisiting their strategies.

New Presale Condo Strategies

Real estate investors in the presales market are now considering a different strategy by holding on to their investments and renting them out. Historically this has proven to be a smart long-term investment strategy while immediately providing passive and hassle-free income

Investors may be in a better position than they realize as a typical deposit on a presale condo is 20% of the original selling price with the balance due upon completion. Obtaining mortgages for the balance of the investment property may be a smart and viable option.

Mortgages for investment properties do require larger down payments than those obtained for primary residences. However, due to the deposit requirements, investors will be more attractive to lenders as they will have pre-paid 20% of the original price. For example, a presale condo valued today at $1,200,000 that was purchased for $1,000,000 would mean the investor would only owe $800,000. A mortgage will then be required for approximately 66% of the value of the property making it easier to secure financing.

Banks and other lenders have strict requirements but are there to help.

Mortgage brokers are often the best option as they know which banks and lenders give the best deals, and which will lend based on your specific circumstances. Lenders are most importantly looking at a borrower’s ability to meet their monthly payments and take care of their investment.

Smart real estate investors looking to rent their investment properties to meet these monthly payments are well-advised to approach potential lenders with their plan for securing qualified and well-vetted tenants that are ideally under contract.

Donald Mackenzie, President of Bodewell explains “we help investors find the right tenants, carry out credit checks, ensure contracts and all details are compliant with ever-changing BC Landlord Tenancy Act while enjoying the right rental income. Going forward we also manage tenant rental payments, repairs and requests as well as general tenant relations. We take all the hassle out of renting out investment properties. This allows investors to enjoy hassle-free passive income while securing and protecting their investments. More and more clients are telling us; “if we can’t assign it at the right price, we will rent it”.

Real estate investments and rental properties are proved to be an inflation proof long-term investment strategy enjoyed by some of the most famous and successful families of multi-generational wealth.