Smart Property Investing

We asked two seasoned B.C. property investors to run down a potential scenario–here’s what two succesful investments, with different motivations and outcomes, might look like.

By Michelle Hopkins

In 1990, Michael Miller purchased his first investment property, a three-bedroom town home in Chilliwack. At the time, the then-19-year-old had a downpayment of $5,000. Nearly three decades later, the 48-year-old owns 15 investment properties in booming B.C. communities like Chilliwack and Prince George.

Though, “location” is considered real estate’s keyword, for investors like Miller “jobs, jobs, jobs,” is the key phrase–when the employment sector is robust, rental demand is strong. “Go where the jobs are: this will ensure a steady flow of renters,” advises Miller.


Now a realtor with Katronis Real Estate Team, Miller helps other investors find potential in B.C.’s smaller cities. “Years after I began investing, I would find out that a little research and a good realtor would have greatly assisted my investment efforts,” Miller says. “With each property I purchased, and the more I spoke to others who had made similar investments, I realized the true Return on Investments (ROIs) were actually way better than I thought.


Michael Miller considers how you could profit from investing in a potentially undervalued Chilliwack town home turned rental property.

  • Purchase price: $300,000
  • Down payment: $60,000
  • Mortgage: $240,000
  • Monthly mortgage payment: $1,135.79*
  • Expenses: $1,473.80/month (includes property tax $130.50, strata payments of $207.51)**
  • Income: $1,700/month rent
  • ROI, cash flow model: 4.5% annually ($226.20/month or $2,714.40/year)
  • ROI principal reduction model: 10.9% annually ($6,583.27 in first year, increasing slightly in each subsequent year depending on financing)
  • Total ROI: 15.4%

*based on a mortgage of 3.0% 5-year fixed term, 25-year amortization

**there are other possible costs included but not limited to: closing costs, conveyancing, lawyer fees and property management (if you choose)


Kamloops: one of B.C.’s great towns for investment property

As with all investments, there is risk. But Miller’s favoured strategy is to find an undervalued, underperforming cash-flow property that can be rented, even in poor market conditions. Knowing the market, finding out the sale history of potential unvalued listings and networking with local experts like property managers are a few of Miller’s strategies for finding buildings that can yield cash flow and generate wealth.


Investor Michael Miller classifies investment properties into four categories of income. The first two are cash flow, in which you net the money from your rental income minus expenses: and principal reduction, where you benefit from the amount of principal paid off on your mortgage by your tenants’ rent payments. The last two are principal appreciation (you build wealth through the amount that properties go up in value year over year) and active appreciation (you increase the value of your asset through improvements or renovations that increase the property value).

“I am pretty conservative in my investments, so I have mostly invested in properties concentrating on the first two buckets,” adds Miller. “This makes it less stressful, as I do not have to time the market and I am never in the position that I have to sell in a down market: the investment is secured by the rent.”


Jason Pender, from real estate development and investment company JVDEV Real Estate Group, agrees that real estate investing is a big commitment, and “it’s important to really understand it before you dive in.” He advises assessing your financial situation and your goals–whether that’s to generate retirement income, build wealth or leave a legacy for your family. “If you look at the simple fundamentals of real estate, you typically own and hold over a period of time,” notes Pender. “If you can hold in good and bad markets, you will make money.”

Pender also believes that smaller-market investing is strategic: “There is less upfront capital cost required, which should be far easier for an investor to acquire when compared to higher density larger markets,” he says. However, the same due diligence is required, no matter the size of investment: rental vacancy and demand numbers, economic growth and new-job stats, ROI and asset appreciation potential are just a few of the indicators he recommends.


Jason Pender looks at the same investment through the lens of creating future retirement income and a legacy, rather than cash flow and profits.

  • The buyer: 40 or 45 years old today
  • Mortgage term: 25-year amortization, to be paid off by target retirement date
  • Income: rental income of $1,700 per month will have increased to as much as $3,000/month* in 25 years
  • Expenses: $750-$1,100/month by end of mortgage term*
  • Retirement income: $1,900-$2,250/month
  • Legacy: estimated $600,000 property value after 25 years

*at estimated 2.25% growth per year (with inflation)

Posted in Fall 2019