Resources for investing in Canada

Investor · Calgary, AB · Member since 2020 · 35 posts · 18 votes

6y

Hello Shrey,

I think it would be helpful to know what information you are after, and what kind of investing you want to do. It seems like you are looking for buy and holds, but do you want to do those locally or are you open to doing long distance rentals? I know there are places in Canada where you can buy properties sub 100k and they will cashflow, but I have never seen those in major cities. I am in Calgary and looking to invest locally. I am targeting properties with two or more units and ideally a garage when I look for rentals, and there are many of these within the city that will cashflow. As far as 20% down, I am not sure but I believe this is more or less consistent with the US because I don't believe banks will normally lend on rental properties for less than 20% down unless they are owner occupied. If you are open to house hacking you can get into a rental for 5% down even here. I hope this is helpful, as a note I am by no means an expert I am also relatively new, but please let me know a bit more about your investing criteria and hopefully I can help you out!

4 Reply

Account Closed

Member since 2019 · 1k+ posts · 1k+ votes

6y

@Shrey A.

Stats can has fabulous info, sign up for their email list.

Cmhc also has great info, again, sign up.

Read Don Campbell. His 2.0 book as well as 96 tips are priceless.

Avoid keyspire.

Edmonton Calgary Saskatoon Regina all at nearly ideal cycle position.

Avoid ANYTHING condo in western Canada (excluding lower mainland) for the next decade. Drastically overbuilt the downward pressure will remain strong well into late 2020’s.

Investigate insurance early. Real early. And read closely. Most of Alberta now has a minimum $5k deductible for hail... and hail is roughly an annual occurrence for most everything near Calgary (especially Airdrie). Billions of claims each year, underwriters will likely stop covering hail in the next decade or so. Likely through economics, as in massive deductibles.

Don’t be scared to reach out, I’d be approaching 2 decades invested in western Canada and am happy to chat. Satellite centres have much higher cap rates, not without risk though as you would expect.

6 Reply

Shrey A.

OP

Member since 2020 · 21 posts · 12 votes

6y

Originally posted by @Harrison Montgomery:

Hello Shrey,

I think it would be helpful to know what information you are after, and what kind of investing you want to do. It seems like you are looking for buy and holds, but do you want to do those locally or are you open to doing long distance rentals? I know there are places in Canada where you can buy properties sub 100k and they will cashflow, but I have never seen those in major cities. I am in Calgary and looking to invest locally. I am targeting properties with two or more units and ideally a garage when I look for rentals, and there are many of these within the city that will cashflow. As far as 20% down, I am not sure but I believe this is more or less consistent with the US because I don't believe banks will normally lend on rental properties for less than 20% down unless they are owner occupied. If you are open to house hacking you can get into a rental for 5% down even here. I hope this is helpful, as a note I am by no means an expert I am also relatively new, but please let me know a bit more about your investing criteria and hopefully I can help you out!

I am literally open to anything. I've been looking at distance investing, as well as locally (obviously nothing in Vancouver). I want to cap the property value around 400k. And I am fine with both long term and short term rentals. I also don't have a preference in condo/single family homes/multiplexes. Essentially whatever cash flows after keeping aside money for repairs/etc. Where are you able to find such properties? Especially the ones under 100k ? I am unable to find such markets, and if you could give some pointers, that'll be awesome!

0 Reply

Vincent A.

Real Estate Broker · Calgary, Alberta · Member since 2017 · 66 posts · 41 votes

6y

You seem to focus a lot on the "I'm not able to because.."

How about switching your mindset to "How can I overcome this obstacle.."

14 Reply

Ben Williams

Saskatoon, SK · Member since 2019 · 3 posts · 2 votes

6y

@Shrey A.

I am also new and just getting started in Canada. I am seeing a lot of of 1% properties in Saskatchewan just on the MLS before any negotiation. Regina specifically has a lot of properties under 100k right now.

1 Reply

Paul H.

Developer · Ottawa, Ontario · Member since 2019 · 105 posts · 58 votes

6y

@Shrey A.

Shrey if you're up for it lets do a zoom call and go over your points one by one. I can help you out and guide you, you're doing a lot of the right things and I think I can help you get some clarity and move in a good direction.

calendly.com/paulhanchard

5 Reply

Theresa HarrisPro Member

Member since 2019 · 15k+ posts · 11k+ votes

6y

I don't know where you are looking, but there are lots of cities where the price of a home/condo is far below $400K...look at some of those (ie get out of Vancouver or Toronto area). Most of the places you listed are high price areas. Someone already mentioned Saskatchewan, there are places in Alberta (Lethbridge, Red Deer, Medicine Hat) which are a decent size. Are you looking for short term rentals or long term rentals? I know someone who does short term rentals and does really well in one of the towns I listed, in part because they allow dogs. You can find decent houses in those areas in the mid 200 or lower. If you go up to mid300s, you can find nice homes under 10 years old. If you want an apartment or townhouse style condo, prices are lower.

3 Reply

Account Closed

Member since 2019 · 1k+ posts · 1k+ votes

6y

@Ben Williams

Regina properties below $100k are going to be one of two things: North central (D class absolute disaster area) or else condo. You can actually find 2 bedroom condos below $100k now fairly routinely. And they’re still a garbage investment as 10 years from now they’ll be worth a few grand less than what you’re paying today. You’ll never get rich on cashflow. And you’ll darn sure never get wealthy on it. I would avoid these.

1 Reply

Zorya Belanger

Rental Property Investor · Edmonton, Alberta · Member since 2015 · 307 posts · 200 votes

6y

Hi @Shrey A. One thing that comes to mind, which Don Campbell always says, is that there is no "Canadian real estate Market". If you try to analyze the whole country as a whole, its impossible and not accurate. Prices, laws, short-term bylaws, etc, are all so different in every city. There are even differences between neighborhoods. Become an expert in one location.

There are thousands and thousands of real estate investors in Canada, profiting from their rentals. It "works" in Canada, and once you pick a market and learn more about it, you will find solutions and be successful too! You don't have to do short term rentals. I agree with @Vincent A., it has a lot to do with mindset.

9 Reply

Ben Williams

Saskatoon, SK · Member since 2019 · 3 posts · 2 votes

6y

@Kris H.

I agree with you %100. I would stay far away from condos on the prairies period. I would be interested to hear more of your opinions of the C and D class areas of Regina, I am from Saskatoon and am looking for opportunities anywhere in the province. I am leaning towards houses with basement suites in C/B neighborhoods in the larger cities here.

0 Reply

Kathy Van Dokkumburg

Abbotsford, BC · Member since 2020 · 5 posts · 2 votes

6y

@Kris H.

Hi Kris,

Great response to Shrey. I’m curious, why avoid Keyspire? And what about REIN, REAG, etc?

Secondly, unfortunately, I’m at a ‘start over’ point in my life and am also looking to start with lower priced properties. What are your thoughts on Vegreville, Lavoy and that area of Alberta? What are your thoughts on the smaller towns within about an hour of Edmonton?

Thanks,

Kathy

0 Reply

Shrey A.

OP

Member since 2020 · 21 posts · 12 votes

6y

Thanks for all the responses guys. I'll definitely dig in more to some of the areas you mentioned. Please keep in mind that I'm looking to make a substantial cash on cash return when going into REI. Something upward of 10% to justify investing. Else, it doesn't help me a lot since my other investments in stocks, etc are doing pretty well.

0 Reply

Account Closed

Member since 2019 · 1k+ posts · 1k+ votes

6y

@Kathy Van Dokkumburg

The keyspire business model of pump the guru for a chance to loan money to said guru then call yourself guru’s “partner” isn’t my cup of tea. When Don Campbell left REIN they continued the slide into a similar format. I was a member there for almost 13 years. They updated their forum app 2x in seven years at one point... just could no longer glean value from a group that wasn’t even remotely tech savvy, it took away from some solid content . Now they’re on to maybe a 3rd or 4th partner in JG Francoure and Patrick Francey now that even Richard Dolan left to be instafamous.

Wrt vegreville (I’m quite familiar) and other satellites around Edmonton you’ll find higher risk and higher reward. Lots of folks got burned badly in about 2013 and were underwater at renewal. Target areas with additional economic drivers other than oil. A place like Camrose and Wetaskiwin would be a little safer than Vegreville. Vegreville has a noticeable drug problem (meth) as do many smaller towns along the yellow head. I’d choose a town of 50,000 over a town of 15,000 any day.

3 Reply

Wendell Fong

Investor · Vancouver BC · Member since 2020 · 88 posts · 60 votes

6y

Thanks Shrey for your list and review of Canadian Real Estate resources. BP is still a bit short in this area as it is really geared to the US market.

0 Reply

Drew Bursey

New to Real Estate · Tasmania · Member since 2020 · 29 posts · 10 votes

6y

@Shrey A.

Hey Shrey,

Thanks for the resources on your original post. I knew about realtor.ca but not the other sites.

I'm very knew to investing (about a month). I don't have very much money so the big cities that you mentioned are out of question for.

I'm looking in smaller cities/towns to invest in where the housing market isn't crazy expensive.

Gatineau, Quebec for example has way cheaper houses than Ottawa. I know many people that live in Quebec and work in Ottawa as it is much cheaper. I would recommend looking for places outside the major cities (at least Ottawa as right now it is crazy expensive, I'm not sure about the other cities you mentioned) and look for cities that are still growing but the demand is not super high.

If you're set on one of those cities perhaps brrrr investing is the way to go. But that also complicate things as you wouldn't be able to get a conventional loan.

It seems like you'll be investing long-distance.

If you haven't read "Long-Distance Real Estate Investing" by David Greene, I would highly recommend it.

He talks about how to find a great team (real estate agent, property manager, lender and contractor). He goes into detail on how to properly screen potential team members to find the best ones.

All the best!

1 Reply

Harrison Montgomery

Investor · Calgary, AB · Member since 2020 · 35 posts · 18 votes

6y

@Shrey A.

Check out Kirkland Lake. I will regurgitate for you what I have heard: there is a major player in that market offloading their inventory so deals right now may be especially easy to find. The area is a mining community outside of Ontario (so there is risk there because without the mine there is no industry), however there should be 16 more years of mining. The area has seen above inflation rates of appreciation for the last three years, and there is significantly more demand for housing than there is supply, leading some companies to create their own housing for their employees. I have never invested here or even looked at it. The only reason I know about the area is from hearing another investor talk about it-they have had properties there for 2 years. This is one example of a 1-2% area, I am sure there are others, keep an eye out for satellite areas if this is the cashflow you target.

1 Reply

Jesse Fragale

Investor · Toronto, Ontario · Member since 2016 · 50 posts · 15 votes

5y

@Shrey A. first of all hello fellow canuck! Secondly, depending on where you live on Canada, I would be happy to put you on an mls distribution list. If it is commercial real estate, I would look at the reports put out by the major brokerages. In terms of the markets that have decent returns..I would stick to periphery markets. For Ontario IMHO that means Windsor, Pickering, Brantford, Hamilton, KW, Guelph etc.

4 Reply

Andrew Cox

Investor · Toronto, ON · Member since 2017 · 35 posts · 14 votes

5y

@Shrey A.

There has been a lot covered here already. I would offer that you should look outside of major city centers. I'm in Toronto and here you generally need to go about 2 hours out to start to find deals.

Also although I have learned all the foundations of REI here on BP it is a US focused site. I'd check out Cashflow tribe. It's 100% Canadian and great content to get you unstuck.

3 Reply

Kathy Van Dokkumburg

Abbotsford, BC · Member since 2020 · 5 posts · 2 votes

5y

@Kris H. Thanks for the reply. Very helpful especially in terms of AB towns.

0 Reply

Hai Loc

Specialist · Toronto, Ontario · Member since 2012 · 2k+ posts · 891 votes

5y

Originally posted by @Shrey A.:

I have been trying to get started in investing in RE in Canada. I want to go over all the info I have and see if people have suggestions on what else might be available or what I can do to make better decisions. There are multiple issues -

1. The price to rent ratio is super high almost across the country. Makes the 1-2% rule almost useless.
2. The price point is much higher if you want to get in as a new investor into just rental property investment.
3. The law forces investors to put 20% down. So a 400k property means I have to tie down 80k minimum. Which reduces Cap rate.
4. Communities have very tight short term rental restrictions, making it very difficult to find properties, and then if tomorrow the zoning changes, you might go from positive cashflow to nothing, since the laws on short-term rentals are so volatile and different across the country.
5. In bigger cities, almost all investors have a negative cap rate.
6. The resources/websites/services are not mature enough to get information as easily as in the States.

I couldn't find a section on BP that is dedicated to Canada and a lot of resources and discussions are specific to the States. Here is what I've found up until now -

1. Realtor.ca is the only website that lets me calculate numbers along with the listing. So I prefer that.
2. Rentometer.com works only in limited ways for giving info on rents. RentFaster.ca is a better resource, unless you want to scour through craigslist.
3. AirDNA gives good data in Canada as well for short term rentals, so that's good.
4. Each city has a different zoning for short-term rentals.
5. Short term rentals seem to be the only way to have a positive cashflow after keeping aside money for repairs, CapEx, vacancy, etc. and still have a decent CoC return.

What do people here think? What can I do to get more information on the Canadian markets? Or what should be my next step? I've mostly looked at all the major places - Victoria, Kelowna, Banff, Calgary, Edmonton, Ottawa, Toronto (and nearby areas), Halifax even. Anyone with experience investing in Canada who can share stories/tips?

I wouldn't even bother with major cities given the ratios but you likely will get better rental stability pending on asset class but in general deep pocket investors like larger cities for its demand and stability in order to wealth preserve vs cash flow..

Investors who want cash flow seek 2nd tier markets..

To clarify 5) you meant negative cash flow and not negative cap rate correct?

1 Reply

Christopher H.

Lender · Okanagan, BC · Member since 2017 · 105 posts · 77 votes

5y

@Shrey A.

I really appreciate your detail. Your obviously focused and working diligently.

There has been a lot of great responses so far so I'm just going to leave one thing you can consider.

I might be off track but it seems like you might be looking at the numbers and not the deal. They are different things! Numbers are a part of the deal. An important one, but just one part.

What you're looking for is opportunity. You need to find a way to create the numbers you want!

An example would be adding a suite to an unfinished basement or adding another bedroom to an already finished suite. Maybe it's a rezone to grab quick equity or a brrrr to keep your capital.

There is a lot of ways to do it. Not to say it's easy, but if you don't know what I'm talking about then take a step back and consider.

Whatever you do - do not stop. Your going down the right path. Just like with stocks though you need to be strategic and patient. The deals are there you just haven't figured out how to spot them.

It's all my opinion so do with it what you will :)

Happy investing!

4 Reply

Kathy Van Dokkumburg

Abbotsford, BC · Member since 2020 · 5 posts · 2 votes

5y

@Kris H. What’re your thoughts on investing in Lacombe, Sylvan Lake and Red Deer, AB?

0 Reply

Kevan Baum

New to Real Estate · High River, AB CANADA · Member since 2021 · 27 posts · 23 votes

4y

I invest exclusively here in Canada. I find most metro and suburban areas require some creativity to be good investments. An example is we bought a duplex here in High River for $277K per side. We put about 35K into the rehab but both have walkout basements and attached 2 car garages. We rent the top half of each along with the garage for $1400 and the basements for $1050 per side. It cash flows, but wouldn't have if we didn't do the suites and rented out them as just 2 units.

Regina and Saskatoon have SFHs that cash flow. Especially Regina. The whole North Central (not the best area) cash flows tremendously. If we had looked at Regina before we invested in suburban Calgary we never would have invested here.

1 Reply

Samuel Huberdeau

Member since 2021 · 1 post · 0 votes

4y

If only Someone with tech intelligence to start a platform just for real estate investing that would include templates to build anilized data for a property to bring to investors

0 Reply

Fiorella Armoa

Investor · BC · Member since 2022 · 7 posts · 2 votes

4y

You are doing all the right things! It seems you just need that first investment to get into the game.

Please do not get frustrated, there are plenty of opportunities out there, I promise!

I am located in BC - crazy market as you know - and I have invested in Moncton, New Brunswick and Windsor. All purchased for less than 400$, cash flow positive.

I am missing your criteria, so I can not be of much help. But if you are willing to move away from central major cities, you could find the ROI or CoC you are looking for.

1 Reply

Resources for investing in Canada

Resources for investing in Canada

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