Choosing to buy a condo for rental investment purposes can be a confusing process, as the considerations differ from buying a primary residence.
To that end, a Vancouverbased development firm, The Hungerford Group, is hosting a free public forum on condominium investment at UniverCity on Sept. 22.
The forum will focus on the UniverCity neighbourhood on Burnaby Mountain in comparison with other neighbourhoods in the region. The Hungerford Group is the developer of the Altitude condo development at UniverCity.
Jason Dolker, director of sales, marketing and service, set up the forum to help buyers figure out what they should look for in an investment condo, he said.
"It was really to get out there and educate people on how to subjectively look at properties from an investment standpoint," he added.
Potential buyers often make quick comparisons with other developments, Dolker said, but those comparisons don't always include the rate of return on a property.
"People don't correlate price per square foot on what they pay to the actual rental price per square foot that they get on a monthly basis," he explained.
He compared condo properties at the University of British Columbia and UniverCity.
At UBC, a condo property might cost $850 to $900 per square foot and bring in $2.50 per square foot per month in rent.
At UniverCity, a condo could cost about half that - $450 per square foot - but rent per square foot is around $2 per square foot per month, he said.
Investors should also consider location, and what the neighbourhood might look like in five to 10 years, as well as future potential demand, Dolker added.
"There are lots of different things to consider," he said. "Am I going to have to repair this stove within a year of closing?"
Dolker invited Michael Ferreira, a managing principal at Urban Analytics, to the forum to explain the data to be considered when investing in a condo property.
Ferreira said he agreed to come when he affirmed that what Hungerford was presenting about UniverCity was correct.
"We have to be very careful not to seem very partial to a particular project or neighbourhood, even," he said. "Before we agreed to do it we did some preliminary research to see whether the results or research we came back with was going to support what they would obviously like the data to show."
He also said he would not be advising anyone to buy property in the neighbourhood adjacent to Simon Fraser University.
"I'm just going to be presenting the facts," Ferreira said.
He plans to provide an overall view of investing in Burnaby, he said, and how UniverCity stacks up to other neighbourhoods.
"The bottom line is, the rest of Burnaby tends to be more expensive in terms of what new condominiums cost than SFU does," he said. "But in some ways SFU garners a higher rent than other areas of Burnaby for newer condominiums."
Purchasing prices in the neighbourhood are lower than other areas of the city for a variety of reasons, particularly the location, he said.
"I think there's a perception about living on top of a mountain," Ferreira said. "Its not something you drive by or drive through on a regular basis, not as top-of-mind as other neighbourhoods in Burnaby, such as Metrotown or Brentwood."
However, rents are higher or at least comparable with new condos in other parts of the city, he added, possibly because there isn't a lot of supply.
The two most important factors to consider when investing are location - what are the local amenities, how easy is the property to access, and what are the aesthetics of the neighbourhood - and timing, such as what's happening in the market place and the current interest rates, he said.
Gordon Harris, president and CEO of SFU's Community Trust, which oversees the development of UniverCity, and Michael Hungerford, a partner with The Hungerford Group, will be speaking at the forum, as well.
Kevin Liu, a Mandarin-speaking investor, is speaking specifically about why the area is so popular with Chinese investors and the impact of the rapid growth of the Chinese student population.
The forum takes place from noon to 1 p.m. on Saturday, Sept. 22 at 8955 University High St.
For more, call 604-456-8883.
