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This article is written entirely by a UBCO student as part of the school's Economics and the Media course. It has not been fact-checked by KelownaNow.
Looking for an easy way to supplement your income? Then perhaps you should consider purchasing an investment property in Kelowna’s current housing market. With rental vacancies at an all-time low and demand greatly exceeding supply, finding a reliable tenant to pay monthly rent could be the easiest $1,151/monthly you’ve ever made (Average Kelowna rent is $1151). However, be sure to act quickly as tourist season is just around the corner and there is serious money to be made.
The first step to becoming a real estate entrepreneur is to find a secondary property to purchase. Consider high traffic areas such as the downtown core or lower mission that appeal to young professionals. Areas close to UBCO such as Quail or Academy Hill are also good candidates because they will be subject to a continuous market of students looking to rent. These areas are solid locations for investments because their demand will always be high, given that students always want to live close to school and many young professionals will always want to be near work and entertainment centres. The Canada Mortgage and Housing commission claims that the spike in rental demand is partly because of the growing opportunity for young professionals in the Okanagan. This economic growth means that Kelowna will likely be facing a steady population growth, and young people will be looking for places to live. Kelowna reportedly experienced an 8% increase from 2011-2016, a growth of over 15 thousand people. This is important because it means that there will always be a steady market of people looking for properties to rent.
Why the rush to buy a rental property? With over 2000 reported hours of sunshine, access to Okanagan Lake, close proximity to Big White, 182 licensed wineries nearby, an international airport and a stable economy, Kelowna draws thousands of tourists each summer, many of which will elect to stay in short-term rental properties. A common practice amongst investment property veterans is to lease a centrally located condo to students for eight months during the school year and subsequently lend out the condo to Kelowna summer tourists. This ensures a maximization of return during the busy summer months, as well as supplemental income during the winter. On the website Owner Direct.com condos in the lower mission area as well as the downtown core commonly lease for $200-$300/night. If this sounds like a solid strategy for you, be sure to act fast in order to secure tenants for the upcoming summer and start to reap the rewards.
What if you change your mind and want to sell? Canada Mortgage and Housing Corporation states that “MLS® sales are expected to remain strong, close to 2017 levels, in 2018-19. MLS® average prices are expected to increase significantly in 2017, albeit lower than gains seen in 2016, followed by more modest gains through 2019.” This means that property values are expected to rise until they begin to level off in 2019. This is good news for investment property purchasers because it means that there is little risk of the property depreciating in value should you ever choose to sell.
These findings as well as Kelowna’s rental market stats are summarized in the Canada Mortgage and Housing Corporation listed below.
https://www.cmhc-schl.gc.ca/odpub/esub/64359/64359_2017_B02.pdf?fr=1522965523700
For anyone looking to take charge of their money and gain reasonable return on their investment, then perhaps the buy to rent solution in Kelowna is a viable option.
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