Living in Kelowna, BC: Spotlight on Upper Mission

If you're in the market for Kelowna real estate, you'll want to take a closer look at the Upper Mission neighborhood.

Located in the southeast corner of Kelowna, Upper Mission is a popular choice for families and professionals alike, thanks to its close proximity to great schools, shopping, and recreational facilities.

One of the key features of Upper Mission is its stunning natural setting. Surrounded by rolling hills and stunning views of Okanagan Lake, this neighborhood is a paradise for outdoor enthusiasts.

The area is home to several parks and hiking trails, making it easy to get out and enjoy the beautiful surroundings.

Another draw of Upper Mission is its close proximity to some of Kelowna's top schools. The neighborhood is home to a number of excellent elementary like Chute Lake Elementary School, middle school at Canyon Falls Middle School and secondary school at Okanagan Mission, making it a great choice for families with children.

In terms of real estate, Upper Mission offers a range of housing options to suit a variety of budgets and lifestyles. You'll find everything from cozy starter homes to luxurious estates in this neighborhood, with prices ranging from around $700,000 to over $1 million.

Where is Upper Mission Located?

One of the great things about Upper Mission is its location which is in the south east part of Kelowna, straight up Gordon Drive.

It's just a short drive from the downtown core, making it easy to access all of the amenities and attractions that Kelowna has to offer. It's also relatively close to the airport and major transportation routes, making it a convenient choice for commuters.

If you're in the market for Kelowna real estate, be sure to check out the Upper Mission neighborhood. With its stunning natural setting, great schools, and range of housing options, it's a great place to call home.

To Rescind or Not Rescind, That is the Question!

In January of 2023 a new rule will take effect and it will affect both buyer’s a sellers of real estate here in Kelowna BC.

It’s called the Home Buyer Recission Period.

Under the new regulation, some buyers for some residential properties will have three business days to change their mind, for any reason, and walk away from an accepted Contract of Purchase and Sale.

There is a cost to enacting this, more on that in a minute.

So let’s walk through a hypothetical example…you find the home of your dreams, you write an offer, negotiate and get that offer accepted which is of course in writing.

You go home and are all excited, but there is something that is eating away at you and you just can’t place it.

In the morning you wake up to something we call buyer’s remorse and have decided that you don’t want to follow through with the purchase after all and you decide to exercise your option to rescind the contract.

You would have three days to make that decision, but that decision would come with a price to it, it would cost you .25% of the purchase price of the home.

And you would owe that money to the seller. If you had a deposit that was delivered after acceptance of the contract by the seller, then that .25% would come out of your deposit.

If there was no deposit, you would owe the seller that money, so to keep the math simple, on a $1 Million dollar purchase, you would owe $2500.

How is This Different Than Just Walking Away From Conditions?

So you might be thinking how this is different if you had conditions in the offer and wound up walking away from the house on inspection or financing?

In those instances, you would have acted in good faith and worked hard to get the purchase of your dream home to go through by paying for a home inspection and working with your bank or mortgage broker to get your financing approved.

Once you exercise this option, there is no going back, so not only do you need to be absolutely sure about the home that you are purchasing but you must be rock solid on whether you are going to kill the deal using this out because it could cost you.

Now, I think that the government is about 2 years too late with this piece of legislation. This idea was brought about when the market was hot and when there was a lot of emotion in the decision making process. 

This legislation would have provided an out for that buyer that wound up feeling remorseful.

There are some exemptions in this legislation, here's a link to the BCREA website that will give you all the detail that you will need moving into 2023. 

As always, if you are looking for a guide to help you find that perfect Okanagan home, or an experienced marketer to help you with the sale of your existing Kelowna property, then we should talk.

You can always email me at kelley@kelleyskar.com or give me a call at 778-716-7527.

Are You Thinking of Making a Move to Lake Country?

I know over the course of my last 18 videos I’ve covered off various topics about Kelowna. In today’s video I want to introduce you to an area just 15-20 minutes north of Kelowna called Lake Country.

Lake Country is a small community that is situated between Lake Okanagan to the west and Lake Kalmalka and Wood Lake to the east.

Now I have been writing and rewriting what I wanted to say about Lake Country but finally found that Tourism Kelowna captured it perfectly in their description which you can find on their website which I have linked up below:

“Home to three major lakes - Okanagan, Wood, and Kalamalka - below the lush valley hills, Lake Country has unparalleled natural beauty. Lake Country offers something for every member of the family. Fish or wakeboard on Wood Lake, hike Spion Kop, cycle the Okanagan Rail Trail, tour wineries along Lake Country's Scenic Sip Wine Route, explore working farms and orchards, visit a working artist, or zipline above the lakes and forest. Be sure to save some time to swim or simply relax on the beach and enjoy our warm Okanagan sun.”

Is Lake Country Part of Kelowna?

Lake Country is split up into three major areas that we refer to in our MLS, we have Lake Country Northwest, Lake Country Southwest and Lake Country Oyama. Lake Country North is located north of Okanagan Centre Road and ecompasses subdivisions west of Highway 97 all the way over to Okanagan Lake. 

Lake Country South are the subdivisions south of Okanagan Centre Road East and is on the west side of Highway 9, again, taking you all the over to Lake Okanagan.

Now Lake Country Oyama subdivisions are east of Highway 97 at the south end of Wood Lake, they also move up the east side of wood lake all the way up to the south end of Lake Kalmalka.

I think it’s fair to say that Lake Country is kind of spread out. It is a beautiful area, there is no question and there are a lot of things to do, like I mentioned before.

What Schools are in Lake Country BC?

Lake country has all three levels of schools with Davidson Road and Peter Greer Elementary Schools, HS Grenda Middle and George Elliot High School.

If you’ve got kids that play sports, I can tell you that you will be driving…a lot. 

From volleyball and basketball tournaments to baseball games and football games, a lot of those events and team sports take place in Kelowna.

Now you don’t always have to be on the highway as you can take Glenmore Road into the city which will spit you out close to UBCO and essentially along the northwest side of Kelowna (not to be confused with West Kelowna).

Overall I love Lake Country, in fact, when we were trying to decide which areas we wanted to move to in and around Kelowna, Lake Country was number 2 on our list.

If you like a quiet, slower paced, family friendly community, Lake Country ticks all the boxes.

If you are thinking of making a move to Lake Country, I would be happy to be your guide. You can give me a call at 778-716-7527 or send me an email to kelley@kelleyskar.com to get the ball rolling.

What are the Changes to the Strata Property Act?

On November 21 Bill 44 was introduced into the BC legislature which proposed changes to the Strata Property Act regarding rental and age restriction bylaws, electronic meetings, and more.

Today I am going to go over the changes that were proposed through the bill and what the implications are for strata corps, owners and also for buyers.

Here are the main points with respect to the Rental Restrictions:

• No rental restriction bylaws would be allowed in any strata corporations in BC.

• A developer would no longer be required to issue Rental Disclosure Statements and a strata would no longer be required to keep those records.

• (Existing wording unchanged) The strata corporation would not be able to screen tenants, establish screening criteria, require the approval of tenants, require the insertion of terms in tenancy agreements or otherwise restrict the rental of a strata lot.

Ok so what does that all mean?

Basically there will no longer be any rental restrictions in strata buildings in BC. There are buildings here in Kelowna that restrict the number of units that can be used as rental units. That all goes away with this amendment to the act.

There was some concern that there would have been changes to how AirBnB’s are allowed to operate in the province, but so far there have been no changes to that. AirBnB’s will remain at the discretion of the strata corp and its owners.

In terms of the rental disclosure, right now it is required to disclose how many rental units exist in the building or development you are looking to purchase in.

That also goes away.

Why is it important as a buyer?

Well if you are buying into a development that you plan on living in, you may want to know how many units are owner occupied. 

This is why the left the provision in for strat corps to be required to track all of this information, for example a list of names of owners, tenants and landlords needs to be kept and available upon request.

Now that said, just because they aren’t required to disclose it doesn’t mean that they don’t have to, you can ask for the disclosure at which point they will have to give you that information.

The last point there I think is pretty self explanatory…strata corps won’t be able to screen tenants.

Big Changes to Age Restrictions in Condos in BC

Ok the other big changes have to do with age restrictions and they are as follows:

• Age restriction bylaws would be allowed for any ages 55 or greater.

• No other age restriction bylaws would be allowed.

• The age restriction would not apply to a caregiver who resides in the strata lot for the purpose of providing care to another person who resides in the strata lot and is dependent on caregivers for continuing assistance or direction because of disability, illness, or frailty.

Right now there are developments in Kelowna that have restrictions on age of 19 years or older, strata corps will no longer be allowed to put up this restriction or any other age restriction with the exception of 55+.

The last point there has to do with say a person that is a caregiver and is younger than 55+ but is caring for someone that is 55 years or older.

All of that said, this pertains to occupancy and NOT ownership.

Meaning, if you are 29 and want to purchase a condo unit in a building that is 55+ and then rent that unit out to someone that is 55 years of age or older, that is within the rules.

The last rule changes are much less headline grabbing but important all the same and they are:

• All strata corps would be able to hold annual and special general meetings by telephone or other electronic means without a bylaw

• Issues with voting cards and secret ballots at electronic general meetings would be resolved by:

• The electronic means must enable the chair of the meeting to identify whether a person attending by electronic means is an eligible voter.

• There would be no requirement to issue a voting card to an eligible voter attending an annual or special general meeting by electronic means.

• An eligible voter attending an annual or special general meeting by electronic means would not be entitled or required to vote by secret ballot.

So like I said, not sexy but important, as of today if you wanted to hold an AGM or special meeting over Zoom it would have to be in the bylaws of the corporation, which would mean quorum of 75% and a vote to take place at the AGM to change the bylaw if it isn’t already in there. 

This can take years to accomplish so the BC government has removed that requirement.

Some big changes are on the horizon.

 I think the changes to the rental restrictions and the age restrictions are pretty self explanatory when it comes to the why.

Will This do Anything to Solve the Housing Shortage in BC?

The BC government claims it wants to open up more units that would be available for housing.

The estimation is that there are some 300,000 units in the province that have some kind of rental restriction on them.

In another example of why the government does what it does, the lifting of these restrictions are only on buildings that were built 2010 or prior.

So I guess the big question is this, with 300,000 new units now available for rent, will this be enough to push the price of rentals down and make it a little more affordable for renters?

Or will this change in the legislation open the door for investors to increase their portfolios, further increasing the competition for these units and potentially driving prices up.

My feeling is if there were over double the amount of units under current restrictions, the supply just might outpace the demand.

I’m not 100% certain that this is going to have the desired effect that the new premier of BC is looking for.

If you are looking to purchase a condo in the Kelowna area, then we should talk. I have over 15 years of selling condos and have taken courses to increase my knowledge base that only benefits my clients. 

If you are interested in the conversation, then give me a call at 778-716-7527 or send me an email to kelley@kelleyskar.com.

The REAL Statisitics for Kelowna Real Estate Values

In today's Kelowna Real Estate blog we are going to review where the real estate market is for Kelowna, it is now November of 2022 and the sky isn’t falling!

It may be 'correcting', but it certainly isn't falling.

Now that said, are we seeing a trend in the marketplace with respect to sales and now to prices?

Yes and we will certainly get to that in just a minute.

First I am going to go over just a few generic numbers that don’t really paint a picture without context so here we go: 

Right now there are 2352 listings in the MLS for the Central Okanagan which also includes Big White as well as West Kelowna, Peachland, Ellison, Fintry and Lake Country.

The average days on market is quite a bit higher than last year, but also within what we would call a normal market at 42.

Kelowna's Benchmark Price which in the graphic above is an average of the three different property types, Single Family, Apartment Condo and Townhouses, it is sitting at $757,000.

The total number of sales year to date is sitting at 4561.

What is Pricing Like in Kelowna this November?

I will tie this data in as we go along, for right now though let’s look at some pricing in these different property types:

The Kelowna Single Family Home Benchmark Price is sitting at $981,800 for the 3rd Quarter of 2022.

Now if we look back 12 months ago the Benchmark pricing is sitting pretty close to where it is today.

It was only slightly higher at $982,400

The Townhouse Benchmark price is sitting at $771,000 where one year ago it was $709,000 which is an increase of about 8% year over year.

For a market that is supposed to be tanking, this property type seems to be pretty resilient.

Alright, the apartment strata Benchmark price this last quarter was $519,000 where last year it was $478,100 which is an increase of again, about 8%.

The numbers are just so easy to manipulate, I could just leave it there and you’d think to yourself,

“Man…it doesn’t seem like there is any kind of a pattern here, what is he even talking about. It seems like the market is going up and up and up.”

In October the benchmark price for apartment style strata was down to $490,600 which is a drop of about 5.5% from where things were at the end of the 3rd quarter.

The second quarter had the benchmark price at $522,000 and the end of the first quarter  it was at $552,900. If we look at this quarter by quarter you can see the pattern, that as sales continue to slide so do the price points.

From Q1 to Q2 there was a 6% slide in prices. From Q1 to Q3 there has been about a 6.6% slide, sales in this segment are down as we can see in this slide, 38%.

What is the Kelowna Townhouse Market Doing?

Let’s look at Townhouses and then round it out with single family in the Central Okanagan.

The townhouse benchmark price at the end of Q1 was $801,300, at the end of the second quarter it was $783,500 which was a difference of 2.3%. The benchmark price at the end of Q3 as mentioned earlier was $770,100 which is a drop of 4% overall.

It looks a little different when we actually start to compare real numbers versus just the year over year statistics, doesn’t it?

This is why I feel the average days on market is continuing to increase, it’s simply because seller’s have yet to get to a realistic point of view of the market. I see a lot of listings expire right now because the pricing strategy they are using is based on data that is upwards of 6 months old.

We have to look at numbers in the here and now and price where we know the market is going to be, not where it was.

Is the Single Family Housing Market in Kelowna Tanking?

Ok, last segment which is the single family style home.

The benchmark price in Q1 was $1.152M, in the second quarter it was $1.060M and in the Q3 report which was just released the benchmark price for Single Family homes in the Central Okanagan came in at $981,800. This is a difference over the course of a year of about 17.4%.

Now, the year isn’t over yet, October’s numbers are about 1.5% higher than the end of Q3 so we are down a total of 15.9% overall.

If I were sitting in your kitchen going over stats and I told you the market is actually up from 12 months ago, would I be wrong? 

No. But would I have given you all of the data in order for us to make a decision on your pricing?

No.

The trend is that the market is correcting, I don’t believe we are going to see any more large drops before the end of the year. Sales are going to continue to drop off as they always do at this time of year, but prices likely won’t follow.

We have probably seen the bottom of the real estate market for 2022 here in November, what happens in 2023 will really be determined by jobs numbers, interest rates, inflation, geo-political goings on and of course our own political happenings here domestically, like will there be a provincial and/or federal election in the new year?

I realize the first 15 videos on this channel have been about highlighting our community and talking about what to expect here in Kelowna when people make the move here. 

It’s always been my plan to create blog posts and videos like this one to speak to residents of Kelowna, plainly and realistically about property values. These kinds of videos will paint a picture for both buyers and sellers alike to ensure you are educated on what is happening in our local real estate market.

If you are thinking of buying your next home or selling your current one and want to chat about how we can help, then feel free to send me an email to kelley@kelleyskar.com or give me a call at 778-716-7527. 

What are the Winter's Like in Kelowna, BC?

To be honest with you, winter of 2022 is only our second winter here, so this blog post won't excatly make me look like an expert.

But what I can tell you is the differences between 2021 and 2022 are astounding.

Below you'll see a photo of November 29th, 2021 and below that you will see a photo of November 18th, 2022.

What a difference a year makes, right?

In 2021 Kelowna didn't see it's first snow fall until December 4th, it was wet and it was heavy but really fun to have snowball fights with!

That snow lasted until about the beginning of March when the temperature really started to kick up and everything started to melt away.

This year we are hoping for a Spring that will be very similar even though our winter got started quite a bit earlier than we had liked.

Is it Cloudy in Kelowna in the Winter?

This year it certainly has been and I can tell you it is hard to get used to the darkness kicking in around 4:30pm in the afternoon when it is cloudy.

The clouds sit low in the valley and don't typically move or break open in the winters that we have experienced here.

It is well known here in Kelowna that if it is Vitamin D that you seek, take the 45 minute ride out to Big White and you will get all the sunshine you need.

We have experienced that and can unequivocally state that it's true.

So be prepared, the summers are amazing, it is hot and tons of sunshine for hours and hours throughout the day. The Spring is somewhat wet and from what we saw last year, Kelowna CAN have a gorgeous fall.

Winter is the one season here that has a serious downside, that said though, it only lasts 3-4 months and it is relatively mild compared to other parts of Canada.

Does it get Cold in Kelowna in the Winter?

Last winter we saw about a weeks worth of colder temperatures where it was in the -20 celsius range.

It is nothing like what you would see in Calgary or Edmonton or Prince George where temperatures could drop down to -30 or -40 for seemingly weeks on end.

Because we are close to the water here in Kelowna and Lake Okanagan doesn't freeze, that minus 2 or minus 5 just feels different here.

It is a 'wetter' cold, more damp like Vancouver and not at all like a dry cold like what you would experience in Calgary or in Edmonton for that matter.

You can expect very consistent weather patterns in all of the seasons, in the winter you can expect a range of between minus 5 and plus 5 celsius.

Does Winter Suck in Kelowna?

I think getting snow this early certainly sucks, but if you're a teenager with a strong back, I can tell you there is plenty of opportunity to make some money before Christmas!

The amount of residents here looking to have their driveways shoveled is crazy!

Ultimately you should watch the video below and make the determination for yourself if the winter sucks here in Kelowna.

If you have any questions about the real estate market and whether it sucks, you can always email me kelley@kelleyskar.com or give me a call at 778-716-7527.

Would You Rather Live in Calgary or in Kelowna BC?

In today’s video and livelovekelowna blog I am talking about living in Kelowna Versus Calgary.

I lived in Alberta for 23 years before moving back to BC in 2021, the last 18 of those 23 were spent in Calgary.

We lived mostly in the Northwest and the West side of Calgary, although I did live kind of inner-city Northwest for a short amount of time.

I could probably go on and on about the differences between living in Calgary and living in Kelowna, but I am going to focus on just four different areas to try and keep this video a little shorter than some of my other ones on the channel.

Let’sTalk About the Weather

One of my favourite topics is the weather. It is almost the end of October and Calgary already had 10 centimeters of snow.

I could probably just stop right there. Kelowna still has green grass, leaves on the trees and the average temperature here the last week has been around 10 or 12 degrees celsius.

The winter’s here in Kelowna are pretty mild, that said, last year was a little colder and had a little more snow than what the area is used to. So there are years that are anomalies, however, most winter’s it is above zero and when it does dip below freezing it averages around -4. 

Calgary on the other hand seems to skip fall and move right into the winter months right around now, the end of October.

It is not unusual to see snow in Calgary from October straight through until April.

That being said, Calgary is one of the sunniest areas in the country with over 330 days of sunshine and around 2400 hours compared to Kelowna’s 2200.

As for Spring and Summer…Kelowna seems to actually have a spring with the snow melt starting in February, it’s not crazy to think you’ll be golfing by mid to end of March.

The average temperature in the spring is around 15 degrees. Most golf courses in Calgary open around May long weekend, there are some that open earlier if there is opportunity, but those seem to be few and far between these days.

Kelowna doesn’t typically get a lot of rain in the Spring, hence the reason for ‘forest fire’ season as the 5th unofficial season in the Okanagan.

This year we did though which definitely cut down on the amount of forest fires we saw all summer.

I have to pick between Calgary and Kelowna for better overall, year round weather.

I'm going Kelowna, 100 times out of 100.

What are the Differences in Cost of Living?

This topic will definitely make it into one of my next videos around what we didn’t know about moving here to Kelowna, the cost of living.

I’m going to just come right out and say it at the beginning of this section, Calgary and Alberta overall have this hands down.

Let’s start with the price of gas, there is a good 50 cent per litre gap between what you pay in Kelowna and what you pay in Calgary.

This works out, at least for me, to around an extra $30 to $40 per tank of gas, this can be significant if you drive for a living.

Next is groceries, now I know the cost of EVERYTHING is up right now, but even when it wasn’t back in June of 2021 we saw a significant difference in what you would get in a, quote unquote, bag of groceries. Believe it or not, fruit is more expensive here.

That’s like the gas prices being reversed, it would be like Calgary’s average is $1.90 per litre and Kelowna is $1.30! 

There is a lot more to cover, but I am going to end this segment off by talking about taxes. 

Yes, BC has a provincial sales tax of 7% which means in total you are going to pay 12% on EVERYTHING. Alberta doesn’t have a PST. Land Transfer Tax.

When you purchase a home in BC you have to pay a land transfer tax of 1% on the first $200k and 2% on the balance between $200k and $2 Million and then 3% up to $3 Million aaaaaaand an additional 2% over and above 3 Million dollars. So, on a $4 Million dollar purchase your total tax amount would be $118,000.

Like my ole pappy used to say, if you can afford the Mercedes you can afford the oil changes. 

The Health Care System.

Yes it’s 2022 and the health care system in Canada seems to be really messed up right now, but I will say that coming from what we knew in Alberta to what we are seeing here in BC, the differences are staggering.

Ok first, we had a family doctor for over 20 years when we lived in Calgary, when we moved to Kelowna, we were without a family doctor for the first 6 months.

We added ourselves to wait lists and then finally found a clinic that was taking new patients all the way out in West Kelowna.

We are happy now to drive that distance, simply because we have a family doctor that we really like. Beyond that, it is access to things like getting X-Rays and MRI’s and getting into a physiotherapist, Calgary slash Alberta has BC beat in these areas all day long.

Also, if you are an entrepreneur coming from Alberta and need extended benefits, I would definitely suggest shopping around. We had Blue Cross in Alberta and we had a hard time finding anything that compared to the plans that they had.

Are the Outdoor Activities Better in Calgary or Kelowna

I have done a few videos now on things to do in and around Kelowna. We love to get outside, it is a large part of the reason that we moved here.

We can be at a trailhead in about 15 minutes if we walk there.

We can be at the beach on Okanagan lake in about 7 minutes from our home.

We can head out mountain biking, right out our front door to Okanagan Mountain.

If we want to hike some more we can head over to Knox Mountain or do Pauls Tomb and be at the trailhead in about 20 minutes.

I can hit a golf course in about 9 minutes from where I live.

Of course there are pickleball courts, tennis courts, basketball and beach volleyball courts all very close to where we live. If we want to ski in the winter time, Big White is 45 minutes away.

Contrast that with Calgary and the vast majority of these activities are done outside of town with the exception of pickleball, golf and some in the city hiking in areas like Nose Hill or the Douglas Fir Trail.

Most of these things are a drive away from wherever you live in Calgary, you would be packing up the bikes or packing for an afternoon to head out to a lake outside the city, unless of course you live IN a lake community like Arbour Lake or Lake Bonavista.

Overall, it seems we have come to a draw, two for Calgary and two for Kelowna.

Don't let the negatives in this post and video above scare you off, transferring from one province to another isn't as easy as you may think.

It's almost like going from one country to another, there are a lot of things that you need to get used to especially when the political climates are so vastly different.

That said, if the great didn’t far outweigh the good, we never would have made the move.

Calgary is a great city and an awesome place to raise a family, if you are looking for a slower pace and a climate where you can be outdoors pretty much all year round and not be locked inside sheltering from the freezing cold, then the Okanagan is calling.

If you have any questions about making a move to Kelowna….especially from Calgary, then give me a call or send me a text to 403-827-7527 or shoot me an email to kelley@kelleyskar.com

What to Expect When Investing in Short Term Rentals in Kelowna, BC

So you’re thinking of investing in the Kelowna Real Estate Market? Well you’ve come to the website! 

In today’s blog and video (scroll down) we are going to be talking about investing in Short Term Rentals or STR’s here in the Kelowna and Okanagan market.

Here's what we will be covering in this video and blog post:

1. The cost of purchasing for those of you investing from outside of BC

2. Home Prices and what to expect

3. The cost of carrying the property

4. The buildings that allow for STRs in the Kelowna Market

5. How to set up your STR for massive positive cash flow

The Cost's of Investing in Kelowna, BC

Ok let’s jump into the cost of purchasing a property here in Kelowna and BC, now if you are an investor from Saskatchewan or Alberta you likely aren’t familiar with a land transfer tax.

If you are purchasing an investment property or simply making a move to BC you will have to pay a tax out of pocket at closing time of 1% on the first $200,000 and 2% on the balance up to $2 million dollars.

Now, on top of that tax, because you are an investor, the BC government has seen fit to penalize you even further. If you are investing in Kelowna or in West Kelowna you will also be subject to a ‘sunshine’ or speculation tax of .5% of the assessed value of the home.

This is applied if you plan to have renters in the property or if you spend less than 6 months in the home in total.

This can be a shock to the system so make sure you are prepared and that you have enough cash to close on top of your regular disbursements as well as legal fees which can run between $1500 and $2500 dollars.

Because this is an investment property you will need at least 20% of the purchase price as a downpayment. Your deposit (which here in BC is held by the buyer’s agent’s brokerage) should be around 1.5 to 3% of the purchase price depending on the price point of the home.

Ok last point about cost’s…GST. Yes, there is a VERY good chance that GST will be applicable in the purchase of an investment property for the use as an STR.

The best thing you can do is to consult with your accountant PRIOR to making an investment like this so that you can get your financial situation set up properly prior to making an offer.

Kelowna's Home Prices

Ok now that’s out of the way let’s look at point number 2 which is home prices here in the Kelowna area. If you are not wanting to put down a large downpayment then it is important to keep your purchase price lower. 

That means you are likely looking at apartment style condos as an option or half duplexes as opposed to a single family home. 

With the benchmark sale price of single family homes here in the central okanagan in October of 2022 running around $980,000, your downpayment amount would have to be $196,000.

Some of the condo options that are seeing right now in buildings that allow for STRs are in the mid $500k range so your downpayment would be about half which would allow you to look at multiple properties as opposed to just one.

The Cost to Carry Your Short Term Rental in Kelowna

Your cost’s to carry are going to be similar to what you would have in your current province, you’ll have property taxes and likely condo fees and of course you will likely need a property manager to ensure your investment is being looked after.

Expect your condo fees to be somewhere between $400 and $800 per month, again, depending on the building, the size and location. 

Your property taxes can range but likely won’t be less than $2000 per year, always factor in the high side and if you need some help with determining taxes a lot of times it is right on Realtor dot ca.

If you are purchasing a single family property you will have all utilities that you’ll be responsible for and in condos typically you’ll be on the hook for just electricity. 

That being said, some buildings include all of the utilities into the condo fees so make sure to inquire about that up front.

You will need to buck up for Netflix, cable and possibly an alarm of some kind if you are in the single family market. 

Lastly, your property management fees for STRs will run you anywhere from 20% to 40% of the gross revenue.

I know, I know, it sounds high but think about it for a second, the PM is turning over your property every 3.5 to 5 nights. They are refreshing towels and toiletries, replacing dishes and cutlery, making sure the coffee is stocked and that the property is spotless and ready for the next guest.

What Buildings Allow Short Term Rentals in Kelowna?

If we are investing in condos in the Kelowna market then you will need to know which buildings allow for STRs.

Recently Kelowna city council decided that any new building that is built will not be allowed to offer short term rentals, so there are a set number of buildings in Kelowna that allow for them.

Here’s the list:

1. Brooklyn

2. Barnoa Beach

3. Copper Sky

4. Discovery Bay

5. Playa del Sol

6. St Paul

7. Sole Downtown

8. Sunset Waterfront

9. The Cove

If you are looking for listings in any of these buildings then make sure to reach out and send me an email at kelley@kelleyskar.com and I’ll send them over to you right away.

If you are looking at a single family, make sure it isn’t a bareland strata, most of these will not allow for STRs. Also, if there is an HOA or Home Owner Association, make sure to check in the bylaws to ensure that they allow for STRs. 

How to Set up Your Kelowna Short Term Rental for Maximum Positive Cash Flow

The last point, point #5 is how to set your STR up for maximum positive cashflow.

So let’s use an example of a property in Playa del Sol listed by Century21. A 2 bedroom 2 bath top floor unit that is currently asking $580,000.

So let’s say you put down your 20%, you’ve paid your sunshine tax, your land transfer tax and you’ve employed a property manager to help you get this investment of yours rented out.

What you’ll be looking to do is make this unit available between May 1st and September 30th for nightly occupancy.

These are your PRIME months to maximize.

You could be looking at anywhere from $200-$500 per night in this building during those months. So let’s take the median at $350 per night.

What we know is that most Air BnB property management companies can get you rented for 21 days out of the month, so let’s just go based off of that. You may be full up for those months, but again, let’s make sure we err on the side of caution.

Your gross monthly revenue would be $7350. Now, you’d take off of the PM fees of 20% and you’re left with $5880. Condo fees on this property are $730 so now you’re down to $5150.

Your mortgage payment based on a 5 year fixed of 5.7% would be around $2600 which would leave you with $2550 and property taxes at $180 per month would bring you to a grand net total of $2370. 

Now, that doesn’t sound like a lot but remember that we were conservative on the occupancy, if you added another 9 days to that number you could be a lot close to $5k per month.

Once October 1st rolls around you are going to want to find a short term tenant for this property, October 1st to April 30th would be ideal. Expect your monthly rent on a property similar to this to be around the $2400 to $3000 per month mark.

If you want to get deeper into the economics of how the monthly and the STR can work together then let’s schedule a call. 

When you’re looking to invest in the Kelowna real estate market, it’s important you have a full time guide with multiple years of experience to help you along the way.

If you are interested in booking a call with me you can call or text 403-827-7527 or send me an email to kelley@kelleyskar.com.

Where is Kelowna's Housing Market Headed

WIth the perceived recent correction in pricing in the Okanagan Valley, I seem to be getting this question a lot lately, my answer my shock some that are expecting a massive shift in the market.

Those that know this area and understand economics will not be shocked, they know what the ebbs and flows are like in the Kelowna Real Estate Market.

Here are some stats for the market as a whole for the month of September:

• Benchmark Pricing for Single Family: UP 1.6%
• Benchamark Pricing for Townhomes: UP 7.9%
• Benchmark Pricing for Condos: UP 8.9%
• Sales for SF: DOWN 36%
• Sales for TH: DOWN 37%
• Sales for Condos: DOWN 37%

If we compare Q1 of 2022 to the same time in 2021 we saw an increase in prices for single family homes in Kelowna of 34%.

If we look at Q2 of 2022 and compare to the same time in 2021, we saw an increase of 15% of single family home pricing in the Kelowna market.

The Q3 numbers are going to be pretty close to the second quarter with an increase of 14.6% in the single family home market.

Is There a Trend Forming in the Kelowna Real Estate Market?

We we can certainly see something starting to form, what I can tell you is that sales in every housing category for every quarter of this year are down in some cases well over 30%.

Q1 prices saw an increase in the benchmark and Q3 is less than half of that increase, there is a very good case to be made that prices will continue to increase but at a much slower rate than what we have been witness to.

Inflation, interest rates and a pending recession will all have an affect on the housing market in 2023 here in the Okanagan Valley.

Is it better to wait to buy a home in Kelowna?

Is it better to wait and sell your current Kelowna home?

Well the answer to the first question can be found in the video that is embedded below. In this video I interview Clayton Blaney of Blaney Mortgage, we talk about housing affordability and compare March of 2022 to September of this year.

His graphic may surprise you, I know it did me.

The answer to the second question is this, if you are looking to sell and take advantage of your Kelowna equity lottery win, now is the time to do that.

Thing is you HAVE to have some patience, as mentioned earlier in this post, sales are down and so is demand. The average days on market is far higher than it was last year, so not only do we have to be realistic about pricing but we also have to be realistic about your time to sell.

If you want more information on what your home is worth in the Kelowna market, you can either click here to contact me or simple give me a call at 778-716-7527.

Investing in the Kelowna Real Estate Market: What to Look Out For

By now you've probably read all the headlines about the real estate market getting ready to tank with prices set to drop upwards of 25%!

If you're reading this in 2023 and prices haven't dropped like 'they' said they would then, whew, we dodged an economic collapse the likes of which we have never seen in this country. Even when the world was imploding back in 2008!

You're not here for prognostications though, you clicked on the link because you want to learn about investing in real estate here in Kelowna.

Let's get after it then.

First Things First: Set Your Budget

This is always the first rule in investing in real estate, whether you are buying in Kelowna for a personal property or if it's for an investment.

Set the budget and know what you are comfortable spending.

Now, look at that number and figure out if it lines up with what is currently listed for sale. I see this from investors a lot, especially ones coming in from Alberta, where their budget doesn't line up with the current state of the market.

It is very rare if not impossible to find a condo with more than 1 bedroom, that allows for STRs (Short Term Rentals, more on that later in the post), that is close to the beach and shopping for less than $450,000.

Start your condo or townhome search and do some digging prior to coming all the way out to Kelowna, get to know the market a little bit so you know what you will have to spend versus what you want to spend.

What is an STR (Short Term Rental)?

Short Term Rentals are what you would stay in if you booked an apartment, house or townhome through VRBO or AirBnB.

The advantage to STRs over a traditional style rental is going to be the revenue that can be generated. The traditional rental is going to get you somewhere between $1800-$3000 per month, depending of course of the size of the property, location and what's included.

Some short term rentals that I have seen here in Kelowna will generate around $300-$500/night so if you take the median and look at 21 days rented out of the month as a conservative estimate you could be around $8000 per month in the peak months of the year being June, July and August. 

So here's what I would do if it were me...look for a property that is going to have a good opportunity for STR cash flow, rent it out between May 1st and September 30th with the STR through AirBnB or VRBO and then do a short term agreement between Ocotber 1 and April 30th.

If you take the average of $400 per night with 21 nights rented you are looking at $24k in revenue in the peak months and figure about $5k in May and about the same in September giving you around $34k in revenue in 5 months. 

That 2 bedroom and 2 bathroom condo is likely to rent out for $2400 per month (I've seen as low as $1800 and as high as $3k but let's be conservative), if you add that revenue to the STR you are just over $50k in revenue for the year.

Measure that against a property yielding $3000/month and you are way ahead with the short term rental option.

Which Buildings in Kelowna Allow Short Term Rentals?

The caveat here is that this could be subject to change at any time depending upon how the condo boards of these buildings feel about the STRs.

The buildings that currently allow short term rentals in Kelowna and West Kelowna are:

1. Brooklyn
2. Barnoa Beach
3. Copper Sky
4. Discovery Bay
5. Playa del Sol
6. St Paul
7. Sole Downtown
8. Sunset Waterfront
9. The Cove

In these buildings you will find 1 bedroom and 2 or 3 bedroom options ranging in price (September of 2022) between $415,000 - over $800,000.

What are the Costs Associated With Investing in Kelowna?

Having moved back to BC from Alberta last year I can tell you that the land transfer tax was a shock to the system.

This is money that the provincial government collects and puts into the general coffers, it's maddening that it is done this way, the only option is to pay it and that is done at your closing with the lawyer or notary.

The land transfer tax is 1% on the first $200,000 and 2% on the balance up to $2M dollars. So, if you are purchasing a property of $600,000 your land transfer tax bill will wind up being $10,000.

If you are purchasing in Kelowna or in West Kelowna (this does NOT include Lake Country) you will also be subject to a speculation tax of .5% of the assessed value of the property so long as the home is not occupied by you for more than 6 months.

Property management for AirBnB is a must in my opinion, that's why we have partnered up with InfiniteBnB and their team to help manage your investment property. Your costs around the PM could be around 20% just as a management fee, please keep in mind that InfiniteBnB would be turning over your property once every 4 days so it's a little different than a property manager looking after a long term tenant.

Of course you will have strata fees and property taxes, I can tell you the strate fees really vary here in Kelowna. I've seen some as high as $700/month but they include all utilities and some as low as $200/month. 

Alright the last piece is the GST, I would recommend consulting an accountant on this but having a GST # could save you a headache when going to purchase a property like this as the GST could wind up being a pass through and could save you thousands of up front costs.

What You Need to Invest in Kelowna

Your downpayment is going to have to be 20%. You will likely have to apply for a business license with the city to operate your AirBnB.

You should consult an accountant, a lawyer or notary, get acquainted with a local Kelowna Mortgage Broker and of course hire us as your guide to expanding your real estate portfolio in BC.

If you want to book a Zoom consultation you can do that right here: Book a Meeting with Kelley

You can always give me a call at 778-716-7527 as well.

The Bank of Canada has Done it Again

Here we are on September 6th of 2022 staring yet another interest rate hike in the face, yes the Bank of Canada has increased rates again by 75 basis points.

In the event you've been living under a rock the last 8 months, this is being done to try and get inflation back to their bench market rate of around 3%. 

We are currently at just over 7% down from a 40 year high of over 8%.

Now before you go and lock in that mortgage (the banks are pushing you towards this) at 5.14% or 5.49%, think about where we are and where we are headed.

Below is a graph of historical interest rates compared to the Bank of Canada overnight lending rate, have a look and see what's happened over the last 15 years.

It's Almost 2007 all Over Again

If you look at the peak between 2000 and 2010 you will notice that rates peaked at just over 6%.

We haven't hit that mark yet but there's a good chance that we will.

Here's why.

Look at the drop in rates right around 2008 and all the way to 2021, why did rates drop to almost nothing?

One word, recession. The 2007-2009 housing/financial crisis in the US had a massive impact globally, Canada did not escape this at all. 

Housing and our economy were affected and we did wind up in recession. So what do central banks do when there's a recession?

They drop interest rates.

Why? To get you, as a consumer, to get out and buy things like cars and houses and boats. You know, the things that you finance.

We didn't see an increase in rates until this year because inflation was way up.

With a recession looming in 2023, and hopefully inflation falling back to manageable levels, there's a good chance that we see rates begin to ease off and likely start to go back to 'recessionary' levels.

All of that said, we are likely to see this as the peak of higher rates with the 'bottom of the market' in terms of pricing (in British Columbia as a whole) peaking in the Spring of 2023.

Where are Prices Right Now?

Believe it or not but prices in the Central Okanagan are up for all property categories including townhomes, single family and apartment style condos.

When you listen to the media, they always talk about SALES when they talk declines and yes, sales are most certainly down but compared to what?

Compared to 2021?

Of course sales are going to be down compared to 2021! Last year set records in the Central Okanagan in terms of sales and price increases for every sector of the market.

The Canadian average is about 400,000 moved per year and that is where we are trending towards right now, so yes, sales ARE down to the tune of about 30% but we are getting back to some sense of normalcy.

Where is the Kelowna Real Estate Market Headed?

My crystal ball has never really worked, but let me put it to you like this...we in a balanced market right now and I do see us moving to a bit of a buyer's market into the Spring of 2023 if interest rates don't correct.

The average days on market right now is sitting firmly at 46 (average of all segments).

Inventory levels are up over 100% in all segments and demand has been tapered due to rising interest rates. 

There is still a serious lack of inventory in this part of BC and that will continue as they just aren't 'making' anymore land. Where are builders able to build? there are only a couple of communites (Wilden, Black Mountain to name two) that have new construction opportunites.

Will those two communities continue to feed the demand?

Likely not. 

This is why I am still very bullish on the Central Oakangan market, because we have a shorted of land that can be developed and not everyone wants to live in a condo.

It's time to stop listening to the sexy numbers put out by the media and to start talking to your Kelowna Real Estate Professional about what is taking place in the market.