Login / RegisterGoodman Report reveals the rents, revenue, and profitability of one Vancouver apartment building
For years, I've been receiving newsletters from the father-and-son team of David and Mark Goodman, who sell apartment buildings in the Lower Mainland.
Their Goodman Report should be required reading for anyone interested in what's going on in this segment of the real-estate market, including tenants.
The most recent newsletter lists the asking prices of seven buildings: 1929 West 3rd Avenue (53 suites, $16.9 million), 531 Lonsdale Avenue (15 suites, $6.52 million), 1715 West 11th Avenue (65 suites, $18.5 million), 2250 York Avenue (14 suites, $5.6 million), a new 82-suite building in the Cambie Corridor ($25.95 million), a 135-suite tower on a high-density development site in New Westminster ($26 million), and 15088 Thrift Avenue in White Rock (nine suites strata-titled, $2.3 million).
There's an extensive description of Sharmerob Manor—the 40-year-old building at 1929 West 3rd Avenue—including the rents paid in each unit.
Of the 53 suites, 47 are one-bedroom apartments. Rents range from a low of $974 in unit 112 to a high of $1,695 in unit 205.
The laundry room will spit out $10,800 in annual revenue, based on an estimate of $900 per month.
The newsletter states that the effective gross annual income is $808,921 as of September 2012, which will be offset by expenses of $256,644. This leaves an annual operating profit of $552,277.
The asking sales price per unit is $318,868 and the assessed value of the land and improvements is $11.36 million.
The owner paid $41,261.66 in property tax in 2011.
Earlier this week, I interviewed the UN's former special rapporteur on adequate housing, Miloon Kothari, about Vancouver's housing crisis.
He said that if the city were serious about promoting affordability, it would start by conducting a detailed assessment of where low- and middle-income people live, as well as their housing conditions.
Imagine how much easier it would be to compile this information if the data in the recent Goodman Report was publicly available for all multifamily rental-apartment buildings across the city.
Then it would become fairly easy to determine which landlords were gouging tenants and which ones were being more reasonable in how they price their suites.
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After expenses and maintenance, the landlord at Sharmerob Manor is making $0.5m per year. This means that if the building was run by a non-profit or self-managed by tenants, rents would be almost $900 less per month per tenant. Recently the Vancouver Renters Union has formed on the premise that in the midst of the housing crisis, tenants should enter collective bargaining with their landlords, in possession of the same rights as workers in negotiations with bosses. Obtaining this kind of information is a crucial first step in fighting for fair rents against landlords.
-Nate, VRU
You left out of your equation the fact that you have to BUY the building the first place. The article states Sharmerob Manor costs 17 million dollars, which means at $500,000 a year profit it would take 34 years of ownership to actually make a profit.
The fact that you can leave such an obvious cost out of your "$900 less per month per tenant" calculation says a lot about your knowledge of economics (and reality for that matter) and about the chances your VRU has of succeeding.
Good luck.
In fact, the owner has probably been making another million in capital gains over the past ten years, as prices in Vancouver have doubled. A million and a half a year for a property that probably cost less than $10M ten years ago. Pretty good return for someone who probably doesn't even have a job!
Now all of you people begrudging your landlords should go out and buy them a beer.
These building may also be purchased by off shore investors who don't care about the condition the building falls into or the needs of the tennants.
The buildings may also be torn apart & sold as condos. These old style apartments are huge by today's standards.
People will charge what they can get away with. The Tennants act needs to be strengthened to protect tennants from huge rent increases & to protect landlords from tennants who trash the units.
The problem is that more people want to live in Vancouver then is possible to accommodate them. It is an awesome place to live, and you are and your friends are not the only people who have noticed that. The city is also very limited by its geography, mountains to the north, farmland to the east , U.S to the south. Citizens groups and existing property owners don’t want new towers going up - blocking their view, or ruining their neighborhoods character - which limits supply.
There is no solution for cheap housing in Vancouver. This is just the reality of the situation. Move to somewhere like Hamilton, Ontario. It’s not as nice as Vancouver but it is not terrible either. It is much more affordable, you and your friends could afford to buy houses there.
No I'm not saying that at all. I'm saying that Nathan left the cost of the building out of his "$900 a month less" equation, which is both hilarious and revealing. I'm not saying the owner is not or will not expecting to make a profit.
He made them public.
And in a cadre of apologists, either the clueless politically correct or those from the real estate industry who seek to minimize this issue, and you have a great recipe for unaffordability. Notice that our esteemed Mayor's task force, (handpicked from only the best developers) didn't even touch on the problem!
Yes it is Chinese Nationals at fault for Vancouver being one of the most beautiful cities in the world in one of the best countries in the world.
The reason they are coming here is the same reason people move from all over Canada to come here, because it is awesome. If it weren't Chinese nationals driving up the real estate prices it would be people from other parts of Canada like myself.
Scapegoating immigrants, and in particular immigrants who are not white is just lame. Elevate your analytical skills.
PS. @hopeless minimum wage in NYC is $7.25/Hour and avg rent for a 1 bdrm is $2,747. If you want to live in an amazing place its going to cost you a large portion on your pay cheque no matter where you are!