Where you looking to buy next in Ontario and why? Is Appreciation or cash flow (or both) your strategy? Looking for where to get highest return on my money.
Ottawa, Ontario · Member since 2016 · 9 posts · 0 votes
7y
Hey @Hamza Qureshi, I live right off of baseline are you buying East or West end? East you'll get more uni students, west is more small families and center is lots of college students.
@Paige M. I was looking into buying near Algonquin to rent to college students. However, now I'm looking into multi-family on the outer edges of Ottawa - the cash flow numbers are making more sense there.
Ottawa, Ontario · Member since 2016 · 9 posts · 0 votes
7y
Absolutely, I live in that exact area and it was one of the first that I looked into purchasing.
So perfect example right now 5 bed 2.5 bath on Iris road, rooms in that area rent for between 600-700 depending on size and amenities like parking laundry they can get as high as 900 fully inclusive. To be reasonable let's say your gross income would come in at around 3200. This particular one would need some love so lets say 15k for reno, paint maybe updating, and misc. Down of 20% if you could get it for 400 would be 80k unless you plan on owner occupying but lets go 20%. For expenses I would go with 12% for vacancy as it is a student rental, 7% on repairs and cap ex. Total expenses with PITI would be about 2800. This leaves you with around 360 cash flow. Keep in mind that that is with no property management.
Without taking into consideration your COC return would be just over 4% for the first year. But if you consider the ARV it could get upwards of 40-50% for the first year and around 12% every year after.
If you went the route of a Property manager to make life easy this would be a bad deal, -60 cash flow with under 1% COC.
This would be something I personally would consider because rates for rooms are rising, just 3 years ago rooms would go for 450-550in the same area.
I do however invest outside of Ottawa and get a very similar return with less worry on vacancies and management.
Sorry if that was a lot of # but I hope it helps, let me know if there's anything else I can help with.
What I forgot to say is for me I would prefer outer area because the ease of management beats the appreciation in ottawa and atm that is what I am currently more interested in.
But like I previously said, appreciation and a few renos can go a long way in this area.
Absolutely, I live in that exact area and it was one of the first that I looked into purchasing.
So perfect example right now 5 bed 2.5 bath on Iris road, rooms in that area rent for between 600-700 depending on size and amenities like parking laundry they can get as high as 900 fully inclusive. To be reasonable let's say your gross income would come in at around 3200. This particular one would need some love so lets say 15k for reno, paint maybe updating, and misc. Down of 20% if you could get it for 400 would be 80k unless you plan on owner occupying but lets go 20%. For expenses I would go with 12% for vacancy as it is a student rental, 7% on repairs and cap ex. Total expenses with PITI would be about 2800. This leaves you with around 360 cash flow. Keep in mind that that is with no property management.
Without taking into consideration your COC return would be just over 4% for the first year. But if you consider the ARV it could get upwards of 40-50% for the first year and around 12% every year after.
If you went the route of a Property manager to make life easy this would be a bad deal, -60 cash flow with under 1% COC.
This would be something I personally would consider because rates for rooms are rising, just 3 years ago rooms would go for 450-550in the same area.
I do however invest outside of Ottawa and get a very similar return with less worry on vacancies and management.
Those are pretty good numbers in the city.. I wish Toronto can come close to that
Ottawa, Ontario · Member since 2016 · 9 posts · 0 votes
7y
If you find a strong enough team that you trust you should consider investing in an area outside of T.O I know the London area is doing great. Check out Matt mckeever on youtube. I hope to have a team like his one day.