Own Real Estate? If so, this is a MUST read!

Do you own a condo? Perhaps a one bedroom in Downtown Vancouver or elsewhere on the Westside?

Maybe you don't own anything currently but know someone that does and will benefit from reading this? If so, I hope that you will feel inspired to share this with them.

Imagine a scenario in which your current one-bedroom condo will no longer serve your needs. Say you know for certain that within a few years you’ll out-grow your space. In looking at this forward-thinking scenario, you might have decided against spending well over a million dollars to up-size into a 2 bedroom in your current neighbourhood; perhaps financially it’s not in the cards, or simply a move that you’re not wanting to make.

You’ve also decided against moving to the Valley or beyond to secure a home that will cost much more than a million and will potentially leave you house poor, burdened with an unwelcome commute, and ultimately disrupt the lifestyle you’ve become accustomed to. Not to mention, practically separating you permanently from your current community.

Your current one bedroom (assuming it’s in a good location and quality building), is currently valued at approximately $750,000. It’s presumed that you made this smart purchase a few years back or perhaps a little more, and because of this, you’re sitting on a healthy amount in terms of home equity.

This is where I shift gears slightly and ask an important question … have you explored Brentwood as of late? Have you? Think about that and ask yourself if you understand the changes taking place. Millions of square feet of high-end shops, cool restaurants, cinemas and newly created trails and parks (one of which will be over 13 acres)! The list of what is being developed and what’s yet to come to the neighbourhood is unreal and extremely exciting.

Brentwood is quickly becoming home to some of the most luxurious towers in Metro Vancouver. Some of the future offerings by developers such as Grosvenor will totally blow your mind. Living in Brentwood means that in just a few minutes you can jump on the train and be Downtown in no time at all. Or, you could drive Downtown in about 12 minutes. The Brentwood neighbourhood offers immediate access to the freeway too, and so getting to the ski-hills, lakes and local beaches is a breeze.

Now, consider this.

You own that condo Downtown, and again valued at $750,000. This condo has untapped equity in it that you can borrow against or perhaps you’re just a really good saver and have some cash on hand. Regardless, we’re going to get some of that dormant capital working for you.

Here’s how.

Secure a two bedroom + 2 bathroom in a high-end luxury presale in Brentwood. We can also discuss alternative options such as Metrotown, Burquitlam and Port Moody in a separate conversation. These other neighborhoods are going to see tremendous growth also and offer a lot in the way of upside and community enhancements. Regardless of the postal code that resonates best with you, know that we will only be looking at developments by the city’s best builders and only exploring options within walking distance to skytrain, shops, parks, and town centres.

Stunning presale options available today that match our criteria can be had in Brentwood for well under $800,000. Similar in value to your current one-bedroom Downtown Vancouver. Understandably, you might be wondering just how to proceed in securing one of these presales, thus allowing for the option to upsize to a luxury 2 bedroom a few years down the road.

I’ll explain.

You can borrow on the equity in your current condo, and place a 5% deposit ($40,000 on an $800,000 purchase) to lock-in your future home. Approximately one year later, you’ll be required to put down another 5% and finally after 18 months a final 5% installment for a total of $120,000. That’s it. No more money until you close on the home and pay down the rest or take out a mortgage to fund the balance of the purchase.

The beauty of this scenario is that you continue to live in your one bedroom Downtown for the next few years, while your future home is constructed. Your current and future properties continue to appreciate also – another huge benefit!

Appreciation of condos throughout Metro Vancouver has been well above 6% annually, and there is strong evidence that suggests future returns will prove even higher as population numbers grow beyond anything we’ve ever seen before. Of course, aggressive inflation could also have an impact on pushing prices upwards as well.

Conservatively, it’d make sense that the value of your one-bedroom condo Downtown and your two bedroom home in Brentwood (acquired by way of a presale purchase) could easily climb more than $100,000 respectively over the next 3-4 years. This based on a minimum growth rate of 3% per annum, which arguably is the minimum expected inflation rate for 2021; and so, this is being extremely conservative.

Now, let’s fast forward 4 years into the future. You’ve made more than $200,000 combined profits on your real estate holdings. One you’ve been living in and paying down further and the other you’ve secured via presale purchase. You’ve only put down $120,000 in installments over a year and half to create this opportunity for yourself. If you didn’t use savings but instead used a line of credit for your deposits, the amount of interest paid is so little that your lifestyle is virtually unaffected.

Here in the future, we have some exciting options.

1)      Time to move up to that 2-bedroom home in Brentwood and rent out your one-bedroom condo Downtown. You can be the proud owner of two properties and are now well on your way to building a proper property portfolio.

2)      Not quite ready for Brentwood just yet; and so, you rent out your newly completed condo.

3)      Maybe you decide to sell one of your assets and fund a business venture or maybe you decide to lower your mortgage or perhaps even live mortgage free.

4)      Sell a property and buy the vacation home you’ve been forever dreaming about.

5)      Sell both properties and take all that equity and all those gains and move to the Valley and purchase a way nicer home than you might have been able to afford previously.

Really, the positive scenarios and available options to you are practically endless. Regardless of the path you chose, you’re in a better place than you might have been if you didn’t act at all.

I can help you with this. In fact, I've helped hundreds of families do this over the last 25 years, and it would be my great honor to help you too!

As always, I’m most happy to respond to any comments here or answer your questions through email or phone. I understand that I have a wealth of knowledge in this arena, and I’m happy to share this with anyone and everyone. 

Reach out to me anytime: email rtanzola@rennie.com or call 778-917-6889.

Best,

Reggie Tanzola