Vancouver Apartments: absolute gold mine
Investment in an Apartment building in Vancouver is alluring for its steady cash flow and high appreciation potential. In recent years, a few high profiled apartment deals in Vancouver brought to light that multi-family investment in apartments can be very lucrative.
Compared to other property investments, investing in multi-family apartments offers economy of scale. Like anywhere else, Vancouver’s apartment buildings have just one roof, one boiler system, and one location, etc that allow more efficient management. Investors recognize that their investments on multi-family apartment buildings provide steady cash flow from rental income and land appreciation.
Vancouver Apartment buildings
|Click To View Samples Of Apartment Buildings
For Sale In Vancouver
Apartment building investment is based on the value it brings to the table. The net income commonly referred to as net operating income is measured by the CAP rate on the investment. In large metro centers like Vancouver, Burnaby and the neighboring municipalities, the CAP rate is just 2-3% for most apartment buildings. In interior BC in the Okanagan Valley, apartments can offer CAP rates of 6% o more.
Financing For An Apartment Building
Typically, a Canadian bank looks at the net operating income of an apartment and requires at least 25% down payment from an investor. A buffer of 15% is normally factored into the net rental income to service the principal and interest repayment by the borrower.
A Colliers International study for Vancouver apartment buildings in the Fairview neighbourhood shows that the typical old apartments there have been gaining between 14% and 22% in value annually for the past 10 years. Similar gains are seen in other popular city neighbourhoods near SkyTrain stations where higher-density development is encouraged.
With the expected growth in lower-cost suburban and Fraser Valley markets with transit access, multi-family apartment buildings in places like New Westminster, Coquitlam and Surrey are expected to experience tremendous growth potential for value appreciation.
If you like to have more info on buying or selling your Vancouver apartment building, kindly contact James Wong at 604-721-4817, or send us an email.
Related Vancouver Commercial Property Links: