Income properties: $65k per bedroom

Wondering how to get rich off real estate? Simple! Just make sure you don’t pay more than $65k per bedroom:

“I’ll even go so far as to determine the value of a property by dividing it up per bedroom, with a limit of $65,000 per bedroom,” he says. “If you can build an addition or add a bedroom for $65,000 or less, over time it will pay for itself. That’s what has made me the most money so far.”

From an article on property investing 101 over at the Financial Post pointed out by realpaul.

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mark
10 years ago

The year 2010 is a promising year. You simply have to find the ideal countrywide property and you can make profits.

oneangryslav2
oneangryslav2
10 years ago

@Simpatico: This well eventually make its way to the Supreme Court and if you think that Mssrs. Roberts, Alito, Scalia and Thomas will let the banks lose…

realpaul
realpaul
10 years ago

#18 P, The government is 'passing along the cost of doing business'onto the back of the citizens. My premise rests on the concept that reducing the number of parasites at the top will reduce the costs to individuals and businesses who in turn have to 'pass the costs along' (in order to support the government demands for ever increasing revenue to support the unsustainable compensation of the civil service)….the solution is simple..reduce the size of government to reduce the cost to all ergo reduce the cost of living to all. Examples of this logic exist in todays European Union and the United States where government wages and the number of employees are being reduced 30 to 50 percent. This idea nor the real time implementation of same is being diseminated by the media in Canada….doesn't mean that others internationally haven't… Read more »

Simpatico
Simpatico
10 years ago

Here's an interesting twist for those of you watching the foreclosures unfold in the U.S. I wonder if there is any parallel here in the Canadian mortgage lending industry? Can anyone shed any light on this? Suggestions from the knowledgeable if you were in my shoes? I'm an American living in Vancouver (and sitting on my money 'cause this real estate market is clearly insane). I'm watching this situation because I still own a beach home in Oregon that is underwater, and my son owns a home in Olympia that is also underwater (though all payments on both home loans are up to date). Now I'm thinking of filing a quiet title action and suing for the return of my mortgage payments since signing loan documents with MERS. Here's the situation: the lenders may have fallen on their own sword,… Read more »

buff_butler
buff_butler
10 years ago

@Anonymous: To prove your point you picked a place whos price is in the 88th percentile of 1 bedroom places?

Anonymous
Anonymous
10 years ago

@Anonymous: "520sqft in London for only $678,000

Maintenance fees a bargain at $5600/year

Best of all, after 2073 your lease expires, so you don’t have to worry about it anymore.

Perhaps Vancouver has further to go."

Vancouver downtown has Microsoft. Time they move their HQs up norh 49th. They can enjoy "N" plates too.
http://www.trulia.com/property/3008058580-16511-N

bubbly
bubbly
10 years ago

@Anonymous: London is the center of world finance and it's metro area has a population of 14 million.

Anonymous
Anonymous
10 years ago

520sqft in London for only $678,000

Maintenance fees a bargain at $5600/year

Best of all, after 2073 your lease expires, so you don't have to worry about it anymore.

Perhaps Vancouver has further to go?

http://www.foxtons.co.uk/search?property_id=66465

House
House
10 years ago

@Alum: Agree the cost is nonlinear but if you're looking to add a bedroom to an existing structure like an SFH, 65k is not necessarily a bad rule of thumb

And yes Lilypad houses are 100% overvalued. I meant prices should fall 40-50%.

chip
chip
10 years ago

@patriotz:

"Where in Canada do you have the highest taxes? The highest cost of living?

Hint: not the same places.

Also the case globally."

Is there a meaningful correlation between high taxes and low cost of living? The most expensive places to live in Europe are Geneva, Zurich, Milan and Oslo – a pretty dramatic mix of high and low tax regimes.

In the US high tax cities like San Francisco are much more expensive than low tax cities like Houston, Knoxville or Austin.

In Mumbai real estate is ridiculously expensive because so little of the land has clear legal title.

A Big Mac cost the equivalent of US$7.20 in Oslo, but only $1.90 in Hong Kong because of relative currency strengths as much as the local cost of lettuce and beef.

Alum
Alum
10 years ago

@bubbly:

That is insane!

With that price, I would buy a house in Burnaby.

bubbly
bubbly
10 years ago

@Alum: $520k for a 3 BR is the norm??? Let's see:

Go to realtylink.org and search for 3BR in DT, FN, CB and WE. Result: Only ONE 3BR condo for under $520k – the asking price is $519,900. Adn that's on Davie above a store, in one of those shitty paperbox commercial buildings.

Second cheapest 3 BR is $638,000 and third is $739,900!

anonymous123
anonymous123
10 years ago

@patriotz:

lol-I was just looking at Trail real estate today as well-my mom called me and told me "wow, you can get a house for under $100k there! check it out!"

Alright…I'm moving to Trail! ;p

Alum
Alum
10 years ago

After doing research on MLS, this is the current norm for downtown condos:

Studio = 340 K (base price)

1 BR = 410 K (add 70 K to studio)

2 BR = 470 K (add 60 K to 1BR)

3 BR = 520 K (add 50 K to 2BR)

As one can see, number of bedrooms and price relationship is not linear.

Price per bedroom decreases as number of bedrooms increase.

Anonymous
Anonymous
10 years ago

So a studio should cost $0?

Fool.

FlipFlop
FlipFlop
10 years ago

Wow.

Buy my 560 s.f. condo for 400K, but I'm keeping the storage locker.

Maybe that's going to be his negotiating leverage when the buyer tries to low-ball him.

Best place on meth
Best place on meth
10 years ago

In Vancouver you can pay $400K for ZERO bedrooms.

http://www.mls.ca/propertyDetails.aspx?propertyId

I take it the HGTV genius is not investing here?

patriotz
10 years ago

@realpaul:

where in fact if we reduced taxation and the carry cost of the civil service we would have a much lower cost of living.

Where in Canada do you have the highest taxes? The highest cost of living?

Hint: not the same places.

Also the case globally.

Alum
Alum
10 years ago

Downtown standard should be about $200 K per bedroom

realpaul
realpaul
10 years ago

What the socialist clowns don't want to admit is that it isn't low wages that are the problem..the increased cost of living comes through excessive taxation and the insane cost of government. The labour pigs are always calling for higher taxes to solve the problem..where in fact if we reduced taxation and the carry cost of the civil service we would have a much lower cost of living. http://www.vancouversun.com/business/labour+group… Maybe we should give the poor more credit cards and let them collect points to travel to Europe. The kid with the 'real estate ' portfolio' is a graduate of the 'Ozzie Jerkoff school of real estate'…..I think Ozzie watched too many Tom VU reruns on late night while hiding from his ex – students. Bottom line…the case is one of leverage..taken to an extreme….the '65k a bedroom' line is too… Read more »

Mark Twain
Mark Twain
10 years ago

must be thinking of Metro Vancouver when he said: "East is east, and west is west; and never the twain shall meet." But the Pope says: "What do you see out there? Tell us." A landlord emigrated here 4yrs ago bought this detached twnhse #2 (ttl 18 units) @7000 blk St Alban St in Richmond last year. Rented out to a woman+kid(s) from Taiwan for 7-8 months. Current tenants, also a woman+kid(s) new immigrants moved in only 2 weeks, when the exterior facade was vandalized. Question – where are the husbands? Oops.. pardon me, say each bedroom is $120k x 5 = $600k, how to price in the rent to make it a cash-flow investment. Oh it won't matters, cause the banks do not require documentary proof of incomes to lend, everyone knows dat house prices will continue to rise,… Read more »

vreaa
10 years ago

A Housing Crash Rescue Cannot Be Legislated Regarding talk of possible government interventions aimed at preventing the housing market bubble from imploding. http://wp.me/pcq1o-1ib Excerpts: "At the very most any policy intervention would only forestall the inevitable crash. To cause an 'orderly unwinding' of a bubble you require an orderly and never-ending supply of buyers willing to take on large amounts of (albeit cheap) debt to buy assets that are falling in value and still grossly overpriced. That isn't going to happen." "Policy change to prop up the market via new buyers would simply delay and magnify the bust, not resolve it. The pool of people facing certain future financial hardships would grow even larger. If a government attempted to engineer this, clear-headed citizens would (1) object to it happening and (2) make sure that any politicians responsible for such foolishness… Read more »

"A-sharp"
"A-sharp"
10 years ago

65k per room and its all good.

Wow, great advice mr investment guru…that is seriously faulty. Thanks for yet another useless hueristic in the world of unsophisticated investing.

You'll make HGTV proud.

I'll stick to ROIC or NPV analysis for real wealth building decision making.

patriotz
10 years ago

@Best place on meth:

$33K per bedroom in the Best Place on Earth. And this town has real jobs too:

http://www.realtor.ca/propertyDetails.aspx?proper

Anon
Anon
10 years ago

condos should be cheaper than $65k per bedroom, especially considering the kind of condos and bedrooms they are building now- tiny closets are called bedrooms, there is no storage space, no room for kitchen table, parking is extra and costs like half a bedroom. Oh, and occasionally they leak then you have to buy couple more bedrooms worth of services just to keep your existing bedrooms from deteriorating beyond repair…

On a well built house with a decent piece of land under it $65 per bedroom sound cheap. A well built house will cost more than that to build, without even taking the price of land into account. And when I say "well built" I don't mean the framed shit that we all live in. More like the houses that people build for themselves in Europe.