How do you manage out of province properties?
Member since 2023 · 2 posts · 0 votes
Hello,
I am an aspiring real estate investor who is on my path to purchasing my first rental properties. I live in Ontario (GTA), and as you might know, the property values are really inflated. Given the tough situation, I am looking at out-of-pronvince properties, such as houses in New Brunsick or Alberta. My question is how do you purchase and manage out of province properties? I am really noob so any help would be much appreciated.
Thank you very much for all your responses! I find it interesting how everyone who replied either owns a property in AB or NB. If I can ask a follow-up question, how do you go about researching a market out of province? Where do you normally find information?
Hello,
I am an aspiring real estate investor who is on my path to purchasing my first rental properties. I live in Ontario (GTA), and as you might know, the property values are really inflated. Given the tough situation, I am looking at out-of-pronvince properties, such as houses in New Brunsick or Alberta. My question is how do you purchase and manage out of province properties? I am really noob so any help would be much appreciated.
Hire a property manager. I use one in AB and they charge 9% of the rent each month and when there is a vacancy, there is a fee (I should know, but can't remember-$500 plus advertizing) to find a tenant. At turnover, there is usually a 1 month vacancy. The one I use also has a relator's license, so they can help find a home as well. When buying out of province, you will need two notaries/lawyers to handle closing. The one in ON where you are based would simply go through the documents and witness your signature and the one in AB would prepare all of the documents.
Hi @Park Sunghyun,
We manage our properties in NB using a property management company as well. We pay about 6% of rent.
I would recommend reading Long Distance Real Estate Investing by David Greene. The ideas and principles in the book are solid. This should help you decide if out of province investing is a good fit for you.
Kevin
Hire a property manager. I use one in AB and they charge 9% of the rent each month and when there is a vacancy, there is a fee (I should know, but can't remember-$500 plus advertizing) to find a tenant. At turnover, there is usually a 1 month vacancy. The one I use also has a relator's license, so they can help find a home as well. When buying out of province, you will need two notaries/lawyers to handle closing. The one in ON where you are based would simply go through the documents and witness your signature and the one in AB would prepare all of the documents.
As a note, in AB property management is regulated. It's one of the specializations in the real estate licensing program. So typically a property manager will also have a realtor license.
Thank you very much for all your responses! I find it interesting how everyone who replied either owns a property in AB or NB. If I can ask a follow-up question, how do you go about researching a market out of province? Where do you normally find information?
Hey Park,
We chose NB because it's way more landlord friendly than Ontario and we were able to find good cash flowing properties at the time.
For your research question, it's a little bit of a loaded question. I recommend that you have a clear goal for what you're looking to get out of a long-distance investment. Once you have that set, you can starting diving into resources which show you how to analyze a geographic area. After being convinced of an area, you can dive in and look to build relationships with people in the area and so on.
Hope this helps. It's the start of a journey.
Kevin
Hello Park Sunghyun!
Start by understanding local real estate laws and market trends in New Brunswick or Alberta. Consider hiring a local property manager for on-site assistance and use online tools for property tracking. Additionally, build a reliable team of professionals, like real estate agents and maintenance contacts. Don't hesitate to reach out and we can delve deeper into the discussion.
Thank you very much for all your responses! I find it interesting how everyone who replied either owns a property in AB or NB. If I can ask a follow-up question, how do you go about researching a market out of province? Where do you normally find information?
As @Zorya Belanger mentioned, Alberta is definitely the hotspot right now. The demand for real estate purchases and rentals are both very very high and will likely stay that way for the foreseeable future. Red Deer is also another market that has caught the attention of many investors. The price of entry is about $200k less than Calgary, and about $125k less than Edmonton. The rental demands are unusually high so although not on par with either Calgary or Edmonton, they aren't that far behind. With a population of over 100,000 and only an hour drive to either city, you can still find a 1200 sqft bungalow with a suited basement, detached garage, and large yard for around $350k-$375k. Main floor rents for that are around $1600 and basement suites are around $1400. Storage is also a premium with a 22x22 shell of a garage going for $350 a month. That's $3350 gross income on a $350k-$375k property. Keep in mind those rents assumes the landlord pays the utilities (my yearly average is $400 a month across my portfolio).
Reach out if you'd like more info. Really you can't go wrong in Alberta right now. Oh, and the landlord/tenant laws are the most landlord friendly in the country.
Drive safe
Hey Park. We self-manage. 10% fees will eat into your profits quite a bit. The key is to have a good realtor who helps to buy the property. An experienced realtor will have a list of contractors to recommend for any kind of maintenance issues. They can also help find a new tenant when there is a turnover (for a fee of course, but you'd pay that fee to a property manager either way).
The only thing that you may need to do is to take that call-text-email from a tenant once in a few months. Once you understand what they need - just call up a handyman to go fix that problem and pay them. This is exactly what property managers do and believe me its not that much of a deal, especially if you have a handful or properties to manage. It gets busier with 10+ portfolio... which is probably not what you are worried about at this stage.