Why, Where, and How You Should Invest in Port Alberni Real Estate

Should You Invest in Port Alberni Real Estate?

Real estate investing has proven to be a fantastic way to build wealth and security in your portfolio. When you purchase an investment property, you can build your wealth in two ways: the first is through a monthly return on your investment (rent), and the second is when the value of your real estate appreciates over time (capital gain). Whether you're a beginner or a veteran, this article will show you the main reasons why Port Alberni real estate is a great investment.

Port Alberni Market Trends: The Numbers Are on Your Side

Like all real estate markets, Port Alberni has had ups and downs but, over the long term, has demonstrated an incredible propensity to increase in value.

Leverage in real estate can also help magnify the effect of your initial investment. In short, leverage is when you use someone else's money to invest. For example, if you bought a residential property in Port Alberni in 2014 for $180,00 with a 25% down payment, your initial investment would be $45,000. According to the MLS dataset, that property would sell today for $510,000, and in 10 years, that $45,000 would have returned $465,000 in profit.

People Are Migrating to Vancouver Island

People want to live where the weather is good, and Vancouver Island sits atop the list in Canada. Warm summers and mild winters are just the start, though. Vancouver Island also has some of the most beautiful scenery in the country, and its laid-back atmosphere is precisely what people are looking for. It's no wonder that the population of every central town/city on Vancouver Island has increased over the past ten years, and Port Alberni is no exception.

According to the Vancouver Sun, 10,000–12,000 more people are leaving the city of Vancouver than are coming in each year. They're moving to Vancouver Island and the Okanagan area in higher rates than anywhere else.

When there is population growth, as we're seeing across Vancouver Island, there is more demand for real estate. And more demand bodes well for your real estate investment.

Homes Are Affordable in Port Alberni

Port Alberni is perhaps the most affordable city on Vancouver Island. This makes it an attractive option for investors looking to capitalize on the increasing demand for Vancouver Island real estate. Cheaper homes mean smaller down payments and the potential for a larger appreciation of the property's value over time.

This proposition is more interesting because the masses have discovered Port Alberni, and the community is changing. Many large-scale developments have been planned for the City of Port Alberni. The most notable is the massive waterfront development on the Somass Lands in the heart of the city. This development alone will completely reshape Port Alberni. As a result, Port Alberni is beginning to close the long-held real estate value gap with the rest of Vancouver Island, making it even more attractive to real estate investors.

Vacancy Rates Are Low

Rental properties are one of the most common and lucrative investments. Low vacancy rates equate to less risk when purchasing. According to CMHC, Port Alberni has a vacancy rate of only 1.1%. That's incredibly low, which means when it's time to rent your units again, they will be easier to fill and you'll have many quality rental applicants to choose from.

An excellent real estate investment plan involves a lot. Port Alberni has you covered with affordable real estate prices, a plethora of options, sweeping changes to the city's core, and low vacancy rates.

Where Should You Invest in Port Alberni Real Estate? Best Neighbourhoods & Property Types

Where to Invest in Port Alberni, BC

The next question is, where is the best place to invest within Port Alberni? And what's the best type of real estate to invest in? There is no doubt that location matters in real estate. You'll want to know which neighbourhoods are the most sought-after.

Uptown

Uptown in Port Alberni makes for an intriguing long-term investment. Once the commercial hub of Port Alberni, the area began to decline in the 1980s as commerce shifted to the Johnston Road corridor in North Alberni. However, over the past 10+ years, a significant shift has occurred.

The biggest indicator that the Uptown and surrounding areas may be about to change is the City of Port Alberni selling the 43-acre Somass waterfront lands to developer Matthews West. Matthews West is the developer behind the vast Oceanfront Squamish development project. The development will change the waterfront in Port Alberni, so the Harbour Quay will no longer be the only accessible waterfront in the city. Anybody holding land, commercial or residential real estate in the area will benefit from a significant appreciation in its value.

Single Family Homes

Single-family homes have long been a staple of real estate investors in Port Alberni. While single-family homes don't tend to produce significant positive cash flow like multi-family buildings, investors like them for their tendency to appreciate over time. This is an investing strategy called speculation, which has remained a very good bet in the long run over the past 25 years. The keys to success in investing in single-family homes in Port Alberni are choosing great locations and hiring a reputable Property Management company.

Multi-Family Buildings

Multi-family buildings are a great investment strategy in Port Alberni. With low vacancy rates and high rents, multi-family homes can be set up to have a positive monthly cash flow. One of the essential tools when analyzing different multi-family options is capitalization rates. When investing in these buildings, get an accurate financial history and prepare a thorough financial analysis.

Tips for Investing in Port Alberni Real Estate

Many factors combine to make Port Alberni an excellent choice for a growing number of real estate investors. The key to success in anything is knowledge. A few essential tips can make a huge difference in your real estate investment portfolio.

Target Under-Performing Properties

Underperforming properties are abundant in Port Alberni. There are three categories of underperforming properties to think about. The first are properties that are in some level of disrepair. When you buy a house that needs cosmetic or functional upgrades, you typically can purchase it at a discount. Keep an eye out for good deals, hire people to perform the necessary upgrades, and you can end up with a terrific rental unit at a great price.

The second type of underperforming property is properties that must be utilized at their highest and best. Examples are properties that can be rezoned for subdivision or carry zoning that allows for more lucrative uses. This is where working with a knowledgeable local buyer's agent pays off. They can help you sleuth out these types of opportunities.

The third type is multi-family buildings currently being rented under market value. As tenants move out or you upgrade units, the building can become even more significantly cash flow positive.

Neighbourhoods Are Changing

Neighbourhoods are changing in Port Alberni, and location significantly impacts real estate value. As more and more neighbourhoods increase in value, you'll want to be able to purchase a property before prices really take off. The key is learning how areas change through research and conversations with local real estate professionals. Investing in up-and-coming neighbourhoods can result in a long-term payoff.

Be Aware of the Tsunami Zone

Port Alberni is built along the Alberni Inlet's shores, making it susceptible to tsunamis. While these events are exceedingly rare (the only recorded tsunami in modern history was 60 years ago), there remains a risk that can affect resale values. Luckily, Port Alberni is primarily built on a hill, so most of the community is on high ground. As a real estate investor, you want to know which areas are in tsunami zones and flood plains. There are still great investments to be made in these areas, but you want to know how the designation affects value and insurance policies.

Finding a Good Property Manager Unlocks Passive Profit

Finding a good property manager who will take care of placing tenants and handle all details with diligence is key to successful real estate investing. This is especially true in Port Alberni. You'll want to spend approximately 10% of your monthly revenue on property management services. Luckily, our Client Care Coordinators are experts in the Port Alberni real estate market and can help recommend a professional and diligent property manager.

Invest Wisely in the Port Alberni Real Estate Market

If you do your research and put together a great real estate investment team, Port Alberni will be a great place to invest. Our Port Alberni Real Estate Advisors are experts in helping you with research, local area knowledge, and finding great deals that meet your criteria. If you have any questions about investing in the Port Alberni real estate market, don't hesitate to contact us.

Is Port Alberni calling your name? Call The Fenton Group at 250-723-8786 to talk with a local real estate agent who can help you find your dream home in Port Alberni.

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