Real Estate Investing In Kelowna
What is luring people to Kelowna?
According to recent data from Statistics Canada, Kelowna and Central Okanagan recorded the fastest growing population in the country, rising by a whopping 14% between 2016 and 2021. Without a doubt, Canadians are becoming increasingly lured to the attractions of Kelowna.
Let’s take a look at some of the reasons why thousands of Canadians are moving to Kelowna every year, and how this is impacting the real estate market.
Strong and growing economy
Kelowna is the economic powerhouse of the Okanagan region, with many surrounding towns and communities relying on the amenities and infrastructure of the city, including the hospital, airport and the university.
Kelowna has a very strong jobs market, with one of the lowest unemployment rates in the country, and a job shortage in many sectors. For workers looking to relocate to Kelowna, there are a wide variety of opportunities, in sectors ranging from healthcare, tourism, technology and manufacturing.
2022 saw Kelowna benefit from significant investments for its future development. According to kelownanow.com, the city issued a record breaking $1.2billion in building permits.
Quality of life
Kelowna enjoys one of the best climates in the country. With warm summers and low humidity, and relatively mild winters, residents can enjoy the outdoors every month of the year. Kelowna summers make it an excellent region for growing vegetables, with vineyards producing some of Canada’s best wines, whilst local orchards produce a wide variety of fruit, including apples, pears, cherries, peaches and apricots.
One of the biggest attractions of Kelowna is Okanagan Lake, one of the largest freshwater lakes in BC. In the summer, residents and tourists alike can enjoy boating, swimming, paddleboarding, and fishing. For more leisurely activities, Okanagan Lake has a variety of beaches, from wide sandy beaches with volleyball courts, to small, secluded coves. For pet owners, Kelowna also has a number of dog friendly beaches where dogs can play off-leash.
For winter sports enthusiasts, Kelowna is home to some of the most highly rated and most popular ski resorts in the country. The Big White Resort is just a 45-minute drive from central Kelowna, and offers hundreds of runs for all abilities of skier or snowboarder, whilst SilverStar and Revelstoke Mountain Resort are also within driving distance. In the summer months, these resorts offer residents an abundance of hiking and mountain biking trails.
As a result of these factors, Kelowna has a flourishing tourism economy, which is bringing further, jobs, growth and economic prosperity to the city.
Who is buying real estate in Kelowna?
One of the key drivers for the growth of the real estate market in Kelowna is that the new residents come from a diversified demographic. They include the follows:
- Vancouverites – Vancouver house prices are astronomical, and beyond the budget of most people, and especially first-time buyers. As a result, many Vancouver residents are moving to Kelowna for more affordable housing options.
- Albertans – an increasing number of Alberta residents have been moving to Kelowna to escape the harsh winters, and the economic challenges have been accelerating this trend in recent years.
- Foreign buyers – the last decade has seen an influx of foreign buyers throughout Canada, and Kelowna has also benefited from this phenomenon. In fact, the provincial government in British Columbia introduced a property tax on foreign buyers in 2018 in an attempt to ease the demand for real estate in the province.
- Retirees – Kelowna is also seeing an increasing number of retirees relocating from other areas of the country. The warmer winters, more relaxed way of life and high quality of life is attracting more and more retirees from other parts of the country, and this trend shows no signs of slowing down.
- Rental investors – the past decade has seen a significant uptick in the number of investors in the Kelowna real estate market. Long term investors are attracted to potential capital growth and cash flow, given the strength of the Kelowna economy, and the prospects for its long-term future.
For short term vacation rental investors, Kelowna is the perfect location for holiday homes and vacation rental properties. The growth of this sector has surged exponentially in recent years with the rise of online rental platforms such as Airbnb.
As a result of these factors, Kelowna is certainly no longer Canada’s best kept secret, and based on these fundamentals, Kelowna’s population growth look set to continue apace for the foreseeable future, making the city an attractive real estate opportunity.
Kelowna – a leading destination for real estate investors
Kelowna is rapidly emerging as one of the top growing real estate markets in Canada. In a recent report prepared by the online real estate investment platform Fundscraper. Kelowna was named as one of the top 3 emerging markets for real estate investing.
Several key performance indicators were analyzed, including gross domestic product (GDP) per capita, employment, income, and housing prices in order to determine which Canadian cities offered the best opportunities for investment growth.
In particular, the rental market is particularly strong in Kalowna, and remains largely unaffected by wider economic challenges facing the country as a whole. The demand for rental housing is high, with vacancy rates near to zero, and rental rates on a par with major cities such as Vancouver.
Invest in Kelowna real estate through a Limited Partnership with the 1440 Group
One of the best ways to gain exposure to the growth story of the real estate market in Kelowna is by investing through a limited partnership with the 1440 Group. Limited Partnership investments offer several advantages for investors.
The return on a multi-family syndication investment can be considerably higher than a traditional real estate investment. Whilst each investment is different, projected annual returns for investors are in the region of between 10% and 14% per annum, and can be much higher. This compares favourably with traditional stock market investments, as well as other real estate based investments, such as REITs, where the expected return is in the range of 6% and 9% per annum.
One of the biggest advantages of multi-family syndications is the tax benefits available to investors. Because the investor is investing directly in a property, they are eligible for a variety of tax deductions, including depreciation, which can reduce the amount of taxes payable.
In contrast, any income derived from a REIT is treated as ordinary dividend income, and is taxed accordingly, meaning that you could pay a higher rate of income tax on that income.
Why Invest with 1440 Group?
1440 Group have an enviable track record in providing investors with successful multi-family real estate opportunities in Kelowna through the limited partnership investment model. We acquire, develop, and manage cash flow positive multi-family properties and are one of the leading sponsor companies in the Kelowna real estate market. Our management team have decades of experience in the Canadian real estate industry and can partner with you to realize a successful investment in Kelowna real estate.