New member from Halifax, Nova Scotia
Rental Property Investor · Halifax, Nova Scotia · Member since 2017 · 8 posts · 5 votes
New member from Halifax, Nova Scotia
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Halifax, Nova Scotia · Member since 2016 · 13 posts · 8 votes
8yI'm with Andrew on this one. The Halifax market is healthy and strong, you can see growth and change in the bedroom communities of Fairview and around Dartmouth as well. I live a block from downtown Dartmouth and it's been interesting to see exclusive listings with sold signs pop up out of the blue, as well as homes going over asking.
I grew up outside Wolfville, and i've turned into the "valley guy" for my Halifax brokerage. Not only do you have a university in Wolfville, but you have a large demographic of retirees selling their city homes and moving to the valley. I'm not familiar with the Airbnb market in the valley, but with the strong tourism market in the area, it will be something I will be looking into.
In regards to the Airbnb market in HRM, there has to be 50% more Airbnb rentals in the past year. A lot of these products are spot on, highly stylized rentals. I have one Airbnb, and performs 3x better than if I had it rented with a long term lease.
I read city council notes regularly, and in my opinion there will be new Airbnb rules for the city. Will they be aggressive like Toronto and Vancouver? No. I sense they will want to regulate it lightly and tax it appropriately.
Also on the council notes are discussions on the infamous "centre plan," it sounds like they're gonna promote making our city more dense and to facilitate an aging demographic by allowing in-law suites in R1 zoning. Is this set in stone? Not as far as I can see, but I get a very progressive open vibe to what i've been reading.
For anyone who wants to dig in, I suggest going on Halifax.ca and searching Airbnb and In-law suites.
Paul Mackay
31 Replies
- 8yMichael S.Pro MemberBiggerpockets Support · Las Pinas, Metro Manila · Member since 2015 · 7k+ posts · 1k+ votes
Great to have you Jeremy and best of luck on the next deals
- Dartmouth, Nova Scotia · Member since 2018 · 9 posts · 3 votes8yWelcome Jeremy! Out of curiosity, are you renting the Duplex? Making it a Vacation rental? Flipping? Any idea where you’ll look to buy next?
- Contractor · Truro, Nova Scotia · Member since 2017 · 32 posts · 13 votes8y
It's great to see more people from Nova Scotia on this site!
- Rental Property Investor · Halifax, Nova Scotia · Member since 2017 · 8 posts · 5 votes8y
Thanks guys,
@Jeremy Zwicker : Agreed, it's great to see lots of people from the east coast on here!
@Account Closed : We are renting out the top 3 bedroom flat of the duplex on an annual lease and living in the main floor flat. For the next investment , we are planning to do another multi-unit on the peninsula but also have an eye on Antigonish and Wolfville for student rentals in the future. Dartmouth also seems to have a few deals pop up now and then and is really growing.
- Contractor · Truro, Nova Scotia · Member since 2017 · 32 posts · 13 votes8y
The Antigonish market seems to have a very good return on investment for rental properties. I don't know much about the area or if it's in decline or if it's growing, so I am a bit hesitant to invest in that market. Every property I analyze from there has a much better cap rate than what I can Find in Truro.
- Whitehorse, Yukon · Member since 2017 · 9 posts · 2 votes8y
Hi Folks, just wanted to say hello and follow this discussion. I’m all the way in Whitehorse, Yukon, but am considering investing elsewhere in Canada in buy-and-hold rental properties, and am hoping to check out Nova Scotia this summer on a family cross-Canada road trip. Good luck to you Maritime investors!
- Rental Property Investor · Halifax, Nova Scotia · Member since 2017 · 8 posts · 5 votes8y
@Jeremy Zwicker: I like the Antigonish market as well , most are certainly cashflow plays as there is little to no appreciation there, however, if the property is well situated and you provide a nice living space, you will have very low vacancy due to the high demand for off campus student housing and rents are comparable to the HRM. I lived in Antigonish from 2007-2011 and would love to purchase a property there in the future. Another side benefit is property tax rates are much lower than the HRM.
@Jamella Hagen: Best of luck on your Journey !
- Rental Property Investor · Charlottetown, Prince Edward Island · Member since 2017 · 25 posts · 8 votes8y
I am from PEI... great to see other Maritimers on here! Let me know if you are interested in looking at options in the Charlottetown area, lots of potential here right now. Would love to partner up on a larger building.
- Rental Property Investor · Halifax, Nova Scotia · Member since 2017 · 8 posts · 5 votes8y
@Adam Dow: Right on , I'm actually from PEI myself, though I've been in NS for 10 years or so .
Charlottetown is certainly an interesting market, send me a PM
- Rental Property Investor · Nova Scotia · Member since 2017 · 25 posts · 15 votes8yHi Jeremy, Andrew here. My two cents, in case it’s with anything? I’ve recently returned to Halifax and have purchased an number of small commercial and residential properties over the past several years. I’m from Antigonish originally, but I’m not looking at purchasing there. You’re right, the Student Rental potential is great, but in my opinion there’s not that much opportunity in “the ‘nish” right now. I could be quite wrong. Given NS’s demographics (shrinking population everywhere but the HRM) I like Halifax and Wolfville. I’m having great success with AirBNB on my residential units, because you can get 2-3x market rents in these places almost year-round, which goes a long way towards compensating for the high prices. Granted, I’m new to AirBNB but have done a ton of research into short-term rental and can offer some tips on dynamic pricing, calendar and property management, if you’d like :) What I’ve done is watch TONS of BP podcasts multiple times, signed up for a membership so I can use their calculator software, bought some books and done some networking... The small investment in time and money has been worth it!!
- China, ME · Member since 2014 · 3k+ posts · 4k+ votes8y
@Andrew M. I wish I had something useful to add - I don't. But I'm happy to meet someone from Antigonish!
My Dad's folks came from Inverness, Scotland through Antigonish to Ottawa then to the US. You might have seen the Dr. Hugh MacPherson museum in Antigonish - our clan is all over town. The best part is it's one of a very few places on the planet where I don't have to spell my surname!
I still haven't figured out the whole "cod tongue" thing, but I really love Halifax. It's a great town.
- Real Estate Investor · atlanta, GA · Member since 2013 · 14 posts · 0 votes8y
Wow.. there are maritimers here and active on bp.. I’ve been dancing around this for way to long..
I’ve done some tax deals in Antigonish but it was more of a hassle than being profitable. I would like to learn more about doing Airbnb in the HRM. I agree that the market is much greater in the city than out.
Still surprising to see the increase of inventory with all these developing houses but not seeing much job growth which kind of draws a blank..
Thoughts anyone ....
- Halifax, Nova Scotia · Member since 2016 · 13 posts · 8 votes8y
I'm with Andrew on this one. The Halifax market is healthy and strong, you can see growth and change in the bedroom communities of Fairview and around Dartmouth as well. I live a block from downtown Dartmouth and it's been interesting to see exclusive listings with sold signs pop up out of the blue, as well as homes going over asking.
I grew up outside Wolfville, and i've turned into the "valley guy" for my Halifax brokerage. Not only do you have a university in Wolfville, but you have a large demographic of retirees selling their city homes and moving to the valley. I'm not familiar with the Airbnb market in the valley, but with the strong tourism market in the area, it will be something I will be looking into.
In regards to the Airbnb market in HRM, there has to be 50% more Airbnb rentals in the past year. A lot of these products are spot on, highly stylized rentals. I have one Airbnb, and performs 3x better than if I had it rented with a long term lease.
I read city council notes regularly, and in my opinion there will be new Airbnb rules for the city. Will they be aggressive like Toronto and Vancouver? No. I sense they will want to regulate it lightly and tax it appropriately.
Also on the council notes are discussions on the infamous "centre plan," it sounds like they're gonna promote making our city more dense and to facilitate an aging demographic by allowing in-law suites in R1 zoning. Is this set in stone? Not as far as I can see, but I get a very progressive open vibe to what i've been reading.
For anyone who wants to dig in, I suggest going on Halifax.ca and searching Airbnb and In-law suites.
Paul Mackay
- Dartmouth, Nova Scotia · Member since 2018 · 9 posts · 3 votes8y
@Paul Mackay is right on both points regarding Airbnb. There has been a dramatic increase in listings, but if you keep your rental nice and kind of unique/stylish, it's likely not a bad investment idea.
The city/region has a major issue right now regarding hotel/short-term rental availability. There will definitely be new laws, but so far it looks like they're going to make it slightly easier in areas where it is not currently (rezoning as mentioned), they may even promote the process in some way, and there may actually be a housing regulatory overhaul in general that will affect all rentals (long and short-term (though that is quite a ways off)).
As with long-term rentals, there are plenty of "slumlords" on the Airbnb side. If you're putting in/ hiring someone to put in the work (about 10x the work of a long-term rental) and attention, I think you'll be rewarded by renters and supported by HRM.
- Realtor · Murrieta, CA · Member since 2016 · 373 posts · 203 votes8y
I'm chiming in on the Airbnb talk. Yes, there are many "slumlord" rentals. They just don't put a 10/10 effort into it. I strongly believe, you make it nice, you care about it, you make it beautiful--and as long as the market supports it (there's good travel trends, etc.) you will do better than 80% of them.
- Rental Property Investor · Nova Scotia · Member since 2017 · 25 posts · 15 votes8y
@Jeremy Arsenault you were asking where to invest... i almost think the question is more 'what to invest in?' A case study:
i have nine properties in nine NS communities: some commercial, some residential, all small (4units or less). So far this year i've purchased a house in Wolfville and a 4plex in Halifax, and two weeks ago said i didn't think Antigonish was an attractive market. So it's ironic i'm now seriously looking at a property in Antigonish!
This thing is an off-market, 9720 ft2 mixed-use building that needs a lot of work (say, $300k purchase price and $200k reno, with 10k closing/legal/deed transfer costs). However it's on a cul-de-sac adjacent to the university, has ten paved + five gravel parking spaces, is two blocks from downtown and 10mins walk to the the grocery/mall/LC.
My plan is to convert the upper half into four 2BR rental units, rent them furnished/utilities/internet included to students on a 9month lease, then airbnb them to tourists & faculty in Jun, Jul & Aug. The lower half will be leased year-round to an established local community-culture organisation.
BiggerPockets' rental calculator indicates it should cashflow $7500 per month after all expenses (including HST on short-term rental income) are input, assuming 3% vacancy; 4% repairs; 5% CapEx; 8% management and assuming appreciation merely keeps pace with inflation.
(i'll be securing the financing of it against my current portfolio with the assistance of a private lending partner. If anyone's interested to analyse or critique i'd be happy to forward the pro forma.)
At first glance, this place looked like a bland, disused, shell of a
dumpbuilding in a town i visit but do not like. But if everything works out, it'll be my best-performing property yet! - Rental Property Investor · Nova Scotia · Member since 2017 · 25 posts · 15 votes8y
@Jeremy Zwicker after reading up on Cap rates a year or so ago, i was really struck by what Ben Leybovich said on one of the earlier BP podcasts. can't quote him verbatim, but he was saying that that the capitalisation rate in a given market is essentially what that market is "psychologically prepared" to accept as a rate of return on investment.
i understand him to be saying that cap rates are more of a local 'consensus' than anything else, and that if we can increase the NOI on a property (eg. through airbnb or by updating and/or adding amenities to a property) we can increase the 'value' of that property even at the same cap rate...
JZ i should probably ask to clarify what you mean by better capitalisation rates in Antigonish vs. Truro. In my understanding, higher capitalisation rates represent potentially higher returns but more risk on the cash invested. So in Antigonish, which does have a university and a hospital but isn't growing, the cap rates are maybe 8-10% while in Halifax, particularly the HRM, which has numerous economic drivers and IS growing, the cap rates are around 4%...
i agree with you Jeremy about the low vacancy and tax rates in Antigonish. If Mr Arsenault were to buy one of the many run-down student rentals in 'the 'nish' and simply paint, renovate the kitch & bath he could likely command a premium :) It's actually quite a fun and vibrant town for its size!
- Rental Property Investor · Nova Scotia · Member since 2017 · 25 posts · 15 votes8y
@Terence Hyacinth agreed: most transactions in NS will involve more hassle than profit. i've lived in different parts of CAN & the US and feel like i can say that :)
Terence you were inviting thoughts about why the increase in airbnbs, given all the new construction and relatively low job growth?
Re. airbnb potential in the HRM: i think well-managed airbnbs appeal to a certain set of people more than hotels do, and that many airbnbs are better-situated than many hotels - at a lower price. Hosts are grossing 2-3x more than they can on annual rentals...
Re. the increase in housing inventory in Halifax, particularly high-rises: i believe the bigger developers are (rightly) taking advantage of cheap money (ie. low interest rates) which, as a strategy, 1) is a better investment than anything else in our economic environment, and 2) lowers the the holding costs, thus increasing the arbitrage between interest rates and the sale to individual buyers - who may be buying more than they can afford long-term due to the relatively low interest rates that these individuals are also benefiting from. There may be a long-term condo/apartment housing glut in the next 5yrs, but i don't think short-term rentals will be affected in quite the same way...
Re. inventory vs. zero job growth: Yes inventory is increasing, and yes job growth isn't breaking any records. However much of the new inventory is condominiums, and condo associations generally aren't friendly towards short-term rentals of units, which leaves space for individual airbnb hosts. Job growth isn't moving the needle much, but still: HRM is growing by drawing in migration from the rest of Nova Scotia and elsewhere, which means an increased need for housing. So if we're going to invest anywhere in NS, i suggest we invest in the HRM.
What do you think Terence? How is the market in GA? It seems like a lot of folks are investing in S.E. and MidWest USA these days... would love to hear about deals that you're working on !
- Rental Property Investor · Nova Scotia · Member since 2017 · 25 posts · 15 votes8y
@Paul Mackay
Re. your reading of City Council notes; nice work!
Re. airbnbs in the Valley... i have a client who wants to bring in some UK-based partners for a year or two, and they can't find a house to rent. Checked with my (admittedly small) wolfville/new minas/kentville/centreville network, but it seems there's a lack of long-term housing (detached homes; not apartments) in the Valley...
Paul you were saying there's been an ~50% increase in HRM airbnb rentals recently and i have to agree. People are figuring out that it takes more than market rents to maintain the home's expenses & structure and pay down the mortgage - eventually. In NS, we're in a high-value/low-income environment here...
Re. Toronto and Vancouver... i believe those cities are dealing with an influx of out-of-country capital which hasn't hit us. Perhaps it will? i hope it does! However, until then, i don't expect Nova Scotian municipalities will enforce legislation limiting our re-positioning of rental housing - as long as we don't disturb the neighbours and pay the CRA :)
Looking forward to any feedback Paul
- Rental Property Investor · Phoenix/Lima, Arizona/OH · Member since 2012 · 4k+ posts · 4k+ votes8y
Originally posted by @Andrew M.:
@Jeremy Zwicker after reading up on Cap rates a year or so ago, i was really struck by what Ben Leybovich said on one of the earlier BP podcasts. can't quote him verbatim, but he was saying that that the capitalisation rate in a given market is essentially what that market is "psychologically prepared" to accept as a rate of return on investment.
i understand him to be saying that cap rates are more of a local 'consensus' than anything else, and that if we can increase the NOI on a property (eg. through airbnb or by updating and/or adding amenities to a property) we can increase the 'value' of that property even at the same cap rate...
JZ i should probably ask to clarify what you mean by better capitalisation rates in Antigonish vs. Truro. In my understanding, higher capitalisation rates represent potentially higher returns but more risk on the cash invested. So in Antigonish, which does have a university and a hospital but isn't growing, the cap rates are maybe 8-10% while in Halifax, particularly the HRM, which has numerous economic drivers and IS growing, the cap rates are around 4%...
i agree with you Jeremy about the low vacancy and tax rates in Antigonish. If Mr Arsenault were to buy one of the many run-down student rentals in 'the 'nish' and simply paint, renovate the kitch & bath he could likely command a premium :) It's actually quite a fun and vibrant town for its size!
And in fact, it likely makes sense to projecting exiting at a discounted cap rate to the current market cap rate - you should still be able to make money, otherwise why buy in the first place...?
- Halifax, Nova Scotia · Member since 2016 · 13 posts · 8 votes8y
Thanks for the shout out!
For me, having seen the short term regulations with Vancouver and Toronto, I had a hunch that out-of-country capital would move east, but at a more relaxed pace. My hunch was Montreal and Halifax.
I posted an article on my facebook account that discusses Asian buyers gravitating towards Halifax, it looks like I can't copy the link onto here, but you can find it on CBC "Why Chinese house hunters are increasingly drawn to Halifax." To me it makes sense, with the high concentration of universities, foreign students, and being costal.
In regards to your game plan with Antigonish, I think it's spot on. 9 months of student housing, followed by a summer of Airbnb is on my radar if/when Airbnb becomes too saturated in HRM.
Cheers,
Paul Mackay
- Rental Property Investor · Halifax, Nova Scotia · Member since 2017 · 8 posts · 5 votes8y
@Andrew M.: I love your point that it's not so much where you invest but what you invest in. I think that's especially relevant in the Maritimes.
It sounds like you've found an interesting piece of property in the 'nish. The nine month lease will actually work in your favor with regards to attracting the student market as 80% of the student population leaves town from June-Sept. The strategy is the best of both worlds.
With regards to Airbnb in the HRM , I fully agree with you and @Paul Mackay . Though I haven't converted any of our units into short term rentals as of yet, we tested the waters two years ago by renting out our own unit while travelling abroad and it was fully booked in no time . It's something I'll be looking to move toward in the future.
- Rental Property Investor · Greenwood, NS Canada · Member since 2018 · 3 posts · 2 votes8y
It's great to see activity from Nova Scotia!
I'm in the valley myself. I have been doing some research in the Nova Scotia Air BnB market. Based on the Tourist Accommodation Needs Assessment there were 19,600 short term units (hotel rooms, etc) in 2016. There was also an increase in tourists in NS of 14% from 2011 to 2016.
Tourism in the valley is exploding as well, and there are several distressed properties with a view that would make great Air BnBs with a little lipstick.
Personally, I think the biggest challenge of the short-term rental market is the amount of management required, and you're at the mercy of the reviews. There isn't very much selection for management companies out here either.
- Real Estate Investor · atlanta, GA · Member since 2013 · 14 posts · 0 votes8y@Andrew MacCaull Hi there.. sorry to take so long to respond, had a very active summer with other endeavours and the family. It’s interesting to see now that there are more and more courses popping up on the web with regards to doing Airbnb than before. Makes me think that the wave has passed. Aside from that I have been diving more into incoming properties cross boarder. I’ve looked into multi-units and SFHs. There are pros and cons with both but at the end of the day it come down to what suits you with your current financial situation. Personally I’ve lean more towards turnkey properties. After goIng through a few trenches with realtors, property mangers and lenders, I’ve found another Canadian investor who has the teams in play and these properties are already filled with tenants. I myself have found multi-units with tenants but my challenge was getting PM. Also funding which I’m sure other investors go through.. I also found a lender that would work with international investors however the 30% down is another conversation. Which leads me to outsource another means. What do you think? Is it as simple as some would say to find JV partners? If you’re open to it I can share with you the inventory and perhaps a you may know of some other people who would be interested
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