Jackson & Associates Ltd.

What is a Cap?

Jackson & Associates — Fri, 22 Jan 2010 22:34:47 +0000

The Capitalization Rate or Cap Rate is a ratio used to estimate the value of income producing properties. The cap rate is the net operating income divided by the sales price or value of a property expressed as a percentage. Investors, lenders and appraisers use the cap rate to estimate the purchase price and market value for different types of income producing properties.

The lower the selling price or market value, the higher the cap rate and vice versa (the higher the selling price, the higher the cap rate. Cap rates are affected by many factors which go into the assessment of the risk of the property. This can include the location, age/condition of the building, strength of the tenancies, rental history, etc. An investor would likely expect a higher return when investing in higher risk income properties.

The past few transactions in the Comox Valley for investment properties (that is, sold fully occupied with tenants in place) have suggested overall capitalization rates in the range of 7 to 7.5% for purchases in the $400,000 to $1,000,000.00 range.

2010 is Jackson & Associates 30th year in business!

Jackson & Associates — Fri, 22 Jan 2010 22:31:00 +0000

Jackson & Associates was formed by Bill Jackson in 1980 and has operated continuously in the Comox Valley over the past 30 years. Over that time, we have grown to become one of the largest real estate appraisal and consulting firms on Vancouver Island serving the entire North/Central Vancouver Island Region.

Thank you to all of our valued clients for your continuing support and business.

For perspective, here is a look back at some of the big real estate issues and trends in the Comox Valley in 1980.

Mount Washington opened in the winter of 1979;
Final approvals were granted in 1980 for the construction of the 17th Street Bridge;
Construction on the Comox Marina was underway;
There were 372 single family residential sales in 1980;
The average sale price per sf home was $55,160.00;
The average lot price was $17,348.00 and the average waterfront lot price was $53,940.00;
Average construction cost for a 1100 sf home was $35.85 per square foot or $35,849.00;
Average rental rate for a 2 bedroom apartment was $201.00 per month.

Dan Wilson, Owner Jackson & Associates Ltd.

Assessment Notices

Jackson & Associates — Fri, 22 Jan 2010 22:28:06 +0000

2010 Assessment notices were mailed to property owners the first week of January. The 2010 ‘assessed value’ noted on your assessment notice reflects BC Assessments opinion of the market value of your property as of July 1, 2009.

Last year, for the 2009 roll year, the Provincial Government passed Bill 45 (Economic Incentive and Stabilization Amendment Act, 2008) which meant for most properties, the 2009 Assessment was the same as the 2008 or 2007 assessed value, whichever was lower. This essentially froze the assessed values at a lower level. Bill 45 does not apply for the 2010 Assessment Roll and according to recent press releases, assessments in the Comox Valley area are showing a change in the -5% to +5% range over 2009 levels.

If you disagree with the assessed value shown on your assessment notice, you have until January 31, 2010 to lodge an appeal. Appeals can be made online at www.bcassessment.ca. Or at the local assessment office in Courtenay.

If you would like assistance reviewing your assessment notice, please do not hesitate to contact one of our appraisers.

Dan Wilson