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Hello, and welcome back! Today, we're going to continue answering some of the questions we've been receiving!
Joey asks: What's the difference between an illegal suite and a legal suite?
The first thing you need to know is that an illegal suite is not the opposite of a legal suite. An "illegal suite" is really just an unauthorized accommodation. About 90% of suites in Kelowna are unauthorized accommodations, and Kelowna has a less than 1% vacancy rate. In other words, there's really no indication that they're looking to crack down on these suites. One thing to keep in mind is that you're at the mercy of your neighbors when you own an unauthorized suite - you have to keep your tenants' cars off the road, make sure they're not being loud, and anything else that may affect your neighbors' enjoyment of the property. If there is a problem and the neighbors report it, you could be fined or the suite could be decommissioned, so you have to be careful about that.
Rob asks: If I have $500,000 to invest, where should I put it and why?
Recently, I've been very big on apartment buildings, but lately they've been hard to find. However, you can get a pretty solid return on a regular, single-family home. I wouldn't just take $500,000 and put it down on one home, but I would leverage it 4-to-1 and put together a $2.5 million portfolio, which would bring me a cash-on-cash return of around 20%. I would look for properties that are renting for around $2,500 a month, which would net about $100,000 per year. Once you have $2.5 million in real estate, and after the market gets back to where it was, rising 10% over the next couple years, you'll make another quarter million dollars. In short, find four or five solid investment properties and let the market do its thing!
Scott asks: Where is square footage trending?
The era of McMansions is behind us. People aren't looking for 5,000 square foot homes anymore; they want really nicely appointed smaller homes around 2,000 square feet with nice finishing, fixtures, technology, and some of the new, cutting edge building practices. People who are building homes today are more lifestyle-driven than ego-driven. Additionally, outdoor living spaces go a long way toward adding value to homes, and homeowners love them for their continuity.
I want to thank everyone for sending us their questions - we always love to hear from you. If you have any questions, don't hesitate to give us a call or shoot us an email so we can answer them in a future video!
Thanks, and have a great day!
