Vancouver condos listed as low as $299,900 provide affordable homeownership on leasehold terms
What’s a good deal in today’s market?
Vancouver realtor David Hutchinson asks this question as many probably see headlines proclaiming the five best deals or top 10 cheapest listings.
The Sutton Group-West Coast Realty agent notes that often, there is a catch, hence the need to look at the details.
“What constitutes a good deal? Certainly price, but price isn't everything,” Hutchinson told the Straight.
Citing a hypothetical example, the realtor explained that if one gets a $380,000 condo unit that is going to cost another $70,000 in maintenance and repairs over the next few years, that’s not a good deal compared to a $420,000 property that's in better condition.
“What’s a good deal?” Hutchinson asked. “It all goes into doing your due diligence, and finding the right fit for you and your budget, and how much you'd like to take on.”
Now, Vancouver may be one of the most expensive cities to buy real estate, but it doesn’t mean that there no cheaper options.
One is leasehold properties, and Hutchinson stressed that this can work out if the buyer is comfortable with the terms of leasehold ownership.
To illustrate, the Vancouver realtor provides a long listing of leasehold properties currently on the market, and many of these are below $400,000.
The lowest priced property is at 1906 1251 Cardero Street in the West End neighbourhood of Vancouver.
The 443-square-foot condo has an asking price of $299,900.
The lease for the property has been prepaid until December 31, 2073.
A leasehold unit is different from a freehold property.
In freehold, a person owns the unit and the land.
Applied to a freehold condo, the individual owns the unit, and shares with others ownership of the common spaces and land on which the development was built.
It’s not the same in leasehold, wherein an individual owns the home but not the land.
The lease can either be pre-paid or not. In addition, the development can either be strata or managed by a company.
At the end of the lease, the landowner can purchase the building at fair market value, which means leaseholds get something back.
The value of a leasehold property generally goes down as the end of the lease approaches.
A listing provided by Hutchinson suggests that some purchase leasehold properties and rent it out.
That may make some sense because leasehold is generally cheaper than freehold, so these can be investment properties.
The owner of 108 1250 Burnaby Street is willing to part with the one-bedroom West End condo unit for $305,000.
The 430-square-foot property is currently tenanted. The renter pays $1,600 a month.
Another leasehold property that is under $400,000 is 307 1720 Barclay Street.
The lease has been prepaid to the 625-square-foot condo unit, which means the future owner does not have to worry about lease payments to the land owner.
The one-bedroom West End property has an asking price of $362,800.
Hutchinson noted that “Vancouver's best deals” is always an attention grabber.
“It all depends what you're looking for, and to be fully educated into what you're buying,” Hutchinson said. “That may actually be the deal for you, or you may have to keep looking. Either way, happy hunting.”