Where are the Canadians of BP?

72 Replies

Hey Everyone,

It seems like BP is dominated by US investors, which is great, but I'm wondering where are all of my Canadian friends? The concepts of investing in real estate are the same, but mortgage and tax laws can be quite different between the two countries. It would be nice to connect with Canadians and see how they are succeeding in the Canadian marketplace. 

It would be a good opportunity to share information about preferred markets and discuss market fundamentals in those areas.

I'll start.

I have 2 rental condos in Ottawa, Ontario. I have lived there for 10 years and know the area quite well. Some pretty big things are happening in Ottawa right now. I'm also looking at the East Coast of Canada where I grew up. The cost of homes are much more reasonable there and can lead to good ROIs.

Your turn!

I'm a Canadian citizen currently investing in the US. However, I am curious to hear about the opportunities in REI back home in Montreal especially in the flipping niche. I would love to also invest in Canada but I feel like there aren't as much opportunities. Would love to hear some success stories and opportunities from investors currently in the Canadian market.

Regards,
Francis

I live in Montreal area and from my research the REI opportunities are not great here. Properties are overpriced and for the most part rents are not enough to give you any positive cash flow. I wouldn't count on appreciation because from the chatter around we might already be at peak and due for correction.

Rajeev

Hello everyone, 

I'm based out of Calgary Alberta. I'm in the information gathering phase and I'm looking for opportunities. I would love to keep in touch with some Canadian investors so we can talk shop about our little piece of paradise up here, and wonder if we couldn't get some partnerships going.

@Mark Perry: What kind of stuff is going on in Ottawa?

@Francis-Cedric Martel: Very cool, how did you get started in the US? 

@Rajeev Gandhi: Have you been able to find any substantiation for the chatter? I've been working my way through some stuff here: RBC Economics Research.

Here are a few areas in Alberta and Saskatchewan that have potential, have a look!

I have an aunt that bought some properties in Saskatchewan in the Watrous and North Battleford areas. North Battleford has a diversified economy and a growing population. Watrous has some agricultural services, potash mines, and some beaches/tourism. My aunt actually had a potash company sign a five year lease on some property to fill with employees, can't argue with that!

Overall Saskatchewan is interesting to me because I see industry growing and it's close to home (Calgary Alberta). I'm currently working for an intergrated oil and gas company and they're really picking up drilling in Saskatchewan. Overall, the province had Production and Drilling seeing historic highs in 2012, and again in 2013. Real estate prices are still low compared to Alberta. 

Another area that interests me is Bonnyville/Cold Lake Alberta. Rent is high, very high. The economy is supported by military, oil and gas, and aerospace/defense.

Queue high pitched voice: Quick Tip! 

Something that has really helped me out in the past was getting in touch with Statistics Canada. They have analysts that can dig up all kinds of treasure from past Censuses. It's all free and they're happy to help in my experience. For example I used to have a landscaping construction and maintenance company, and they gave me about a dozen different data points for each neighbourhood in Calgary, things like income, number of homes, rental vs home owners, that type of thing. This was huge for targeting where to advertise. They don't put everything they have on their website. 

I'd love to hear what you guys have dug up, and how you're going about it. Keep at it!

Take care.

I live in Edmonton and started my investing career here a couple years ago. The economic fundamentals here are ridiculously strong and people are moving here in droves! Well over half of my rental applicants are people that moved here in the last 12 months. I'm interested in exploring other markets but right now I don't see a need to look outside Edmonton as it's a strong market and I know it really well. 

My long term strategy is buy and hold with the latest project being a buy, reno and hold. I'm interested in starting to wholesale properties and I have an infill project being planned as well. 

@Alexander Lafreniere  that's a great tip about getting extra data from Stats Can, I'll definitely have to explore that further. 

Cheers!

@Francis-Cedric Martel and @Rajeev Gandhi - you are both right to an extent in my opinion. I recently saw an info graphic that illustrated Canada's overpriced housing cost relative to rent. The full article, including the mentioned chart, is an interesting read: https://econjournals.wordpress.com/category/am-cla... So, yes, there is an argument that prices are inflated in Canada and it's difficult to make money, but good real estate investors can make money in any market during any stage of the economic cycle. Average investors will get burnt, but there are good opportunities to be MADE (not necessarily found) in any market. If you play into market hype, you'll go crazy. One article says Montreal is a bad market, the next will say it's profitable. I don't pay too much attention to those type of articles. I do my own research in a particular market and make my own decision if this particular property or that one can produce a profit for me.

@Alexander Lafreniere - Ottawa, historically, has a very low average vacancy rate. Part of this is because the city has one of, it not the largest, Government employee demographics in Canada. A lot of professionals reside in the city. Ottawa recently acquired its CFL team again and its renovated stadium is near the city centre. There is also a new professional MLS soccer team and I have had inquiries from their team for my rental properties. Ottawa has a fairly large public transit system, which means lower priced housing outside of downtown can still demand good rents if it's near a bus stop. Many cities have this, no big deal, but Ottawa is also currently building a light rail system, which will be above ground outside the city and underground downtown. Property values have already started to increase around the light rail routes, but rents will do the same. Ottawa is also close to Toronto and Montreal, which are popular weekend getaway destinations. Thanks for sharing the StatsCan tip!

@Ash Badry  - my uneducated opinion on the Edmonton and Calgary markets is that the housing prices are so high that it would be hard to make positive cash flow unless significant amounts of capital were invested up front. Without getting too personal, can you maybe share some average or typical numbers? For example, in Ottawa, a condo that sells for $200,000-250,000 can demand $1300-1500/month in rent. With a standard 20% down payment, even with condo fees, the property will still cash flow positively. What would be the comparison in Edmonton in your markets?

@Mark Perry  - You're right, prices in Edmonton are quite high and Calgary's prices are even higher. I don't buy condos or townhouses so I can't comment on the numbers for those products, although I do know investors that are buying them and making them cashflow. Personally I'm buying single family homes that either have existing basement suites or they are set up for me to easily put in a suite. I can be close to $400,000 by the time I buy and renovate but I'm still able to cashflow $700+ per month on a single property with 20% down. There are no shortages of renters in Edmonton with more arriving every day and the rents have been climbing at a steady, healthy rate for the last couple years that I've been in the business. 

Great discussion going on here guys! This is may be one of the better go-to forums for Canadian BPrs.

I have heard a lot of positive about the AB RE. Thanks for sharing your stories and areas in the west you guys have seen opportunities in @Alexander Lafreniere  and @Ash Badry   Some of these towns are very remote and I think you have to be more local to consider investing there. Any suggestions for someone like me living out of province and wanting to invest in AB or SK?

@Mark Perry  props to you for starting this discussion. Tons of information on BP for US and I look for more relevant forums to the Canadian market every day. Nice to hear what’s happening in Ottawa. Whenever I talk to a novice investors or non-RE investor their opinion is always negative on public transportation expansion and developments by the city. But as an investor I want to see that growth in infrastructure and by doing my due diligence I can use this my advantage. Too many people have told me that the O-train will be running empty.

As for myself. I have two condos in Guelph and a bungalow in St. Catharines. All student rentals and great CF. GTA has seen great appreciation and also increase in population. This is also driving the market up for the Greater Golden Horseshoe. St. Catharines just opened the largest Canadian outlet mall. Some small town in ON are also great for student rentals (Guelph, Kitchener, Kingston, St. Catharines, etc.). Feel free to ask any questions if you want to know more.

@Alexander Lafreniere Great tip on Stats Canada. Thank you for that. Do you simply just call them and have your questions ready? Or is it better to book an appointment or have a face to face discussion?

Cheers!

Thanks for the post, @Ajay Kahlon

I agree with you about connecting with Canadian investors. If you find other forums or resources for us, please let us know. Although I currently don't live in Canada, it would be nice if BP Meet Ups could be coordinated in Canadian cities.

@Ash Badry   may be able to help you out with investing in AB. He's doing very well in Edmonton as he mentions, but I don't believe that would be considered a remote town? If you're going to invest in the West, I've heard nothing but great things about Edmonton and Calgary. Some have ventured into Fort Mac and are making a lot of money, but I'd be concerned about my exit strategy - if I had one! That rental market (in my opinion) is relying on only one industry sector. Although arguably stable for the foreseeable future, one change in that industry and Fort Mac becomes a ghost town. I would be more likely to put my money into Edmonton or Calgary where people are renting for many different reasons.

As for Ottawa, the new light rail plan is more of an East to West project. The O-train services residents traveling North/South. It's the most efficient way to commute from South Ottawa (airport area) all the way to the Ottawa River border and downtown where most of the Government offices are located. I don't see how the train will end up empty. If anything, it will end up busier. I think the city anticipates this as well, which is why they have already begun (nearly finished) expanding the tracks to accommodate an additional train (3 in total) to run the same North/South route. I'm curious why novice investors believe public transport is bad? I believe that's one of the main pillars when deciding how easy it will be to rent out a unit, and whether or not it's a good investment or not. It only makes sense?

Re: your investment portfolio - do you self manage these properties? I have always thought about the regions you are investing in, but I feel the market is saturated with investors (for good reasons) and finding anything decent for 20% down is very difficult to cash flow. Good deals are created, not found, I understand that. It just feels as though investors like myself now entering those markets would be late to the party.

Looking forward to hearing @Alexander Lafreniere 's answers to your questions.

Thanks again for the post!

I would say ROI in general in major Canadian cities like Toronto, Montreal, Vancouver are next to crap. Sorry for leaving out Edmonton and Calgary because they may have more cash flow then the above mentioned. Prices are too high here and the rents don't reflect.

I see value in smaller cities like Hamilton, Waterloo, Kitchener London in Ontario. Sorry I don't know much of the rest of Canada as I am from Toronto.

Gross rental multiplier in major US cities can be as high as 100% than Toronto and likely more.

You can buy a $350,000 1+1 condo in Toronto and get only $2000 a month rent and 0 cash flow with the maintenance fees eating up all the cash flow.

Take that $350,000 150 km south to Buffalo and you can buy 4-5 duplexes that yield at least $4000 a month and cash flow at least $800 a month even with management fee, vacancy rates, maintenance costs already incorporated. This is being very conservative.

I hope this opens up on how much $$$ there is to be made down south. Don't let those double tax crap fool you as long as you have a good accountant on your side. 

I can go on and on about the advantages 

I honestly don't look at a deal unless it is a minimum 20% cash on cash (not including equity)

I spent months on research so this is not something you learn overnight..

Good luck guys 

  

@Michael Sherwood  

I do.. Especially when we can leverage the reverse way. Buy all cash then refinance.. 

We will talk soon. Give me some time to pool investors..

I second Hai's comments.  

I've been slowly liquidating my investments in Canada over the past few years.  For instance, I sold a townhome in Burlington for $370K which was getting $1650 in rent. I now have properties in Ohio selling for $50-$60K collecting $800+ rent!  Granted, they are in slightly rougher neighborhoods, but are well managed and spit out great cashflow for Caps at 10%+.  

@Chad Urbshott  

Wow $1650 rent on a $370 townhome.. That's real ugly.. 0 cash flow there I will bet and probably negative cash flow if its a condo townhouse with maintenance fees. Something like that to only be relying on equity and appreciation will drive me bananas..

Good for you taking that $$ to Columbus.. And don't tell me those properties are in Linden or Hilltop.. Consider yourself lucky with it working out because I know a few others that have a ton of duplexes in Linden where their PMs are screwing them.. Rougher neighborhoods are good when you demand section 8 tenants. 

I tried the Sheriff Sales in Columbus and the courthouse was packed with investors.. Never going back there again.. Those are for local local people where out of towners cannot compete.

Good stuff Chad..

Luckily I bought those towns in the $200's many years ago, so was making decent cashflow.  The Ohio properties are Cleveland/Akron areas in C+/B neighborhoods and are now property managed in-house so much better control.  

Florida auctions are much easier to compete, as are all online, so there aren't as many shenanigans such as running up prices for non-local people.  

Hi all,

We live south of Ottawa and have a  single family home in Pembroke and a duplex in Brockville. We would love to connect with experienced investors that we can bounce ideas off of every once in a while.

We've owned our properties for 8+ yrs and love taking care of them (most of the time) It's one of my favorite jobs.

Currently have 1 very problematic tenant moving out this weekend, our others are long term renters and we couldn't ask for better people to look after our properties (while living there) 

We are going to be doing some reno work when our 'problem' moves.

Nice to see some canucks here also.

Originally posted by @Chad Urbshott:

Luckily I bought those towns in the $200's many years ago, so was making decent cashflow.  The Ohio properties are Cleveland/Akron areas in C+/B neighborhoods and are now property managed in-house so much better control.  

Florida auctions are much easier to compete, as are all online, so there aren't as many shenanigans such as running up prices for non-local people.  

 Chad

Good to hear you got some nice green with those town homes. Oakville and Burlington prices are incredibly ridiculous as like all of the GTA.. I was even considering moving to Fort Erie to cut my commute times by 90 mins. But its a retirement town from what I see.

In house management is the way to go as long as you have full to some control over them. I talk to one of my in house managers daily and the other probably weekly. I am only paying these guys a reduced rent and they do miracles for me. On the flip side I am switching to potentially my 3rd property management company in 18 months in Michigan. I learnt my lesson here and should have interviewed 5 PMs vs only 2. 

Ironically I was just talking to my wife about online auctions or tax sales, sheriffs or whatever where you are buying direct and don't have to deal with BS wholesalers or middle people who are out there to make a quick buck. Then again I will never turn out a great deal no matter where the source is.  

Excellent post,

I am looking at downtown Ottawa vs downtown Guelph and it seems the market for both are similar in terms of demographics but Guelph seems to have a higher rent with similar or a bit lower pricing than Ottawa. What are the downsides of a townhouse vs condos (both having HOAs, of course). Freehold townhouses are more expensive. What exactly are you guys looking for when purchasing a property. Do you see positive cash flow as the main item vs zero cash flow and appreciation?

Still monitoring Buffalo, NY as a potential but not enough knowledge and research to jump in....

@Ash Badry  , @Mark Perry  

I was in Calgary at the beginning of August - family vacation, but you know how it is, always have to check out the local real estate market.  It had been five years since I last spent time in the Calgary, but two things jumped out at me immediately:

- the City has grown like a bad virus; and

- vacancies (at least commercial) are everywhere.

Yet, there still appears to be lots of construction taking place.  

Admittedly, I was only able to nose around for a few days, but it looks like the economic engine may be slowing a little and supply has started to exceed demand. 

@Roy N.   I can't speak for Calgary but in Edmonton it is much the same as your description except for the commercial vacancies. Edmonton is growing like gang busters, new neighbourhoods seem to be popping up almost monthly and older areas have seen a lot of redevelopment. I don't believe at this point that Edmonton is being overbuilt, everything that is new and coming on line is being gobbled up with the demand. The amount of population in-migration is ridiculous, but not really all that surprising considering that Alberta has the highest average wages, lowest taxes and lowest unemployment in the country.

The Edmonton real estate market has a history of lagging behind Calgary anywhere from 12 to 18 months but I currently don't see any signs of things slowing down as new projects are being announced all the time. Just look at the $2.5 billion dollar development downtown including the new hockey arena, it's being dubbed as the quietest $2 billion project of all time and is progressing much faster than the comparable L.A. Live district. Read about it Here.  Edmonton is definitely a hot area to be in right now with no sign of things slowing in the foreseeable future. 

Definitely check out and connect with Julie Broad here who used to write for the BP blog. She's an authority and expert when it comes to Canadian real estate investing. 

Hope that helps! 

It's a lot harder to find a great deal in Canada than it is in the states. I've purchased 2 properties in Montreal @ great prices that cash-flow well, but it took a while to find those deals. Seem to find deals like that everywhere in the US. Definitely planning my next moves in the midwest somewhere!

Originally posted by @Chad Urbshott :

I second Hai's comments.  

I've been slowly liquidating my investments in Canada over the past few years.  For instance, I sold a townhome in Burlington for $370K which was getting $1650 in rent. I now have properties in Ohio selling for $50-$60K collecting $800+ rent!  Granted, they are in slightly rougher neighborhoods, but are well managed and spit out great cashflow for Caps at 10%+.  

 Chad, I didn't know you had property in Ohio

I invest in 6 different cities while living in Ottawa. I even have property in Ottawa.

Canadians are one of the top foreign investors in US real estate. We also have a vibrant local investment community. For those of you in Ottawa, come and check out OREIO. It won the award as best real estate investors organization in Canada.

Full disclosure. I'm president of OREIO in addition to my day job as a developer.

So much opportunity, so little time.

Cheers,

Victor.

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