In search of cash flow for small-scale rental investors, a pair of Vancouver realtors are suggesting buyers shift their gaze from the coast and mountains to the desert of the American south-west.
“B.C. and Vancouver real estate does really well over time appreciating – you look at it as a long-term investment. But if you’re doing a 20 per cent down payment, it’s very hard to find something that cash-flows in Greater Vancouver. That’s what I see myself through working with clients,” said Johanna Williams, a client of Ms. Leong and Ms. Ballam and a mortgage specialist with Royal Bank of Canada.
John Burns’ data suggests the portfolio of single-family homes owned by institutional capital is about 3 per cent in the United States, but Arizona is ground zero for the market where it’s closer to 10 per cent. A big driver of that activity is a region with a pleasant climate that remains undervalued relative to other major centres.
There are demographic factors that may keep Phoenix rents rising: 36 per cent of households in the area are rented and the median population age is 34 . According to Arizona State University’s Morrison Institute for Public Policy, rents for some one-bedroom apartments in the Phoenix area have more than doubled since 2020.
Single family rents are up about 12.5 per cent year over year, according to the most recent data from March, said Mr. Perlman. “If you look at home ownership, payments on an entry-level home are up 40 per cent [largely due to rising interest rates]. What that means is, it costs 25 per cent more to own an entry-level home than to rent.”
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