Cash flow Buy and Holds in Canada

[Account Closed]

I am curious to know where their is a market in Canada for cash flow properties close to the 2% rule. I'm interested in Buy and hold properties with little or no repairs needed and prefer using Turnkey Companies. Anyone hear of any areas offering these kind of deals and services?

[Roy N.]

@Account Closed 

The short answer, nowhere: at least not anywhere where you will likely wish to invest.

The only places, of which I am aware, where you may find properties priced to meet the guideline that rent is 2% of purchase price are smaller, declining, coastal communities in the Maritimes or evaporating small, former train stop / grain elevator, towns across the prairies. 

Of course, in these areas you are going to have higher vacancy and declining tenant quality as folks move away in search of better opportunities.

That said, if find/follow a smaller market where there is about to be an economic shift - oil in communities in Saskatchewan and Manitoba, mining or power projects in northern Québec or Labrador, etc. - you may be able to purchase a rental before the demand curve accelerates and prices rise.  However this would be speculating and if you are wrong in your assumptions, you are left with a cheap property in a rural, perhaps declining, community.

Most of the "deals" we have been purchasing in the past 2-3 years have a rental yield of 1-1.5% of acquisition costs and the curve has been moving closer to the 1% lately.   There are urban areas (GTA, Vancouver, Calgary) where you will hard pressed to find a deal where rent would be 0.5% - 1% of acquisition costs.