It’s a good time to be looking at buying an Investment property in Vancouver right now. But how do you ensure you don’t end up with a lemon?

There are a few warnings signs to watch out for when you are on the hunt for an investment property in Vancouver.

The 5 warning signs that an investment property in Vancouver could be a lemon

1. It is in a bad neighbourhood

If the neighbourhood is bad, you are generally going to have a more difficult time reselling your investment property in Vancouver. How do you know the calibre of the neighbourhood though?

First, take a look around. Are there lots of empty storefronts? Are the streets dirty? Do the buildings seem rundown? If so, you are likely looking at an area on the decline.

 

While your eyes can help you a lot here, it can be tough to tell if a neighbourhood is just beginning to have issues, such as increasing unemployment. To be on the safe side, always have any property you are considering appraised and consult with the local chamber of commerce or a Realtor you trust.  

2. It has been on the market for an extended period

When investment properties in Vancouver have been on the market for a long time, there is generally a reason… and a problem. Due to this, the longer a property has been on the market, the more caution you should take with it. This is especially true if it looks like it is a steal.

Remember, if something looks too good to be true in the Vancouver housing market, it most definitely is.

3. It has inspection clauses

Home inspection clauses can be written to protect the buyer, guaranteeing their right to have an inspection done and allowing them to get any deposit back if the results are not satisfactory.

Not every home inspection clause is like that, though. Some limit buyers’ abilities to have inspections done or to get their deposits back on the basis of the results.

If there is a home inspection clause that does limit your rights, that is a good sign that the seller is worried about what an inspection could turn up. That worry is a massive red flag –and should be enough to make you walk away from any Vancouver investment property.

4. Maintenance is required

If a seller is telling you that maintenance is required or if they are telling you the sale is “as is”, that should be a cause for concern.

Why? Because it likely means that the property has a lot of (expensive) work that needs to be done. Often, that work will extend well beyond what the seller is telling you and, perhaps, beyond what they even know about themselves.

The best way to protect yourself? Always have an independent appraisal and inspection done so you know exactly what you are getting yourself into.

5. There is non-compliant work in it

Non-compliant work is the most significant red flag of all. Actually, it goes beyond a red flag. It is essentially a time bomb waiting to go off at any moment.

That’s because if you purchase the property, then you become responsible for the non-compliant work. That means, if the city discovers the work, you could face fines and could be forced to remove all the work – at your cost. Having non-compliant work can also prevent any future renovations from moving forward as you will not be able to acquire permits without alerting the city to your situation.

What you can do to protect yourself when buying an investment property in Vancouver

There are a number of steps you can take to protect yourself if you encounter these red flags while hunting for an investment property in Vancouver.

  • If there is a problematic inspection clause, ask to have it removed. If the owner refuses, walk away.
  • If there is maintenance required or if the property has been on the market for an extended period, make sure to have an independent inspection and appraisal. After that, decide if you want to take on the work that will need to be done. If you do, then negotiate a better price for compensate for the lack of interest or the necessary repairs.
  • If you are looking at a bad neighbourhood or non-compliant work…. Run.

Remember that these are plenty more fish in the sea. You do not need to settle on your investment property in Vancouver.

Now that you know what to watch out for, learn how to choose the investment property in Vancouver that is right for you.