Share you experiences investing and searching the Canadian Market (Canada, Rental)

5 Replies

Hello all I've been going through all the old podcasts and have been getting lots of good info however I'd love to hear how some of the successful Canadians have been locating deals, types of financing, locations. Strategies, buy and hold? Or flipping. 

    I've been hesitant getting into the Canadian market due to the frothiness in my area GTA (ontario) , however I do realize now there are deals to be had if you are willing to expand your search area. 

Hey Joel,

I'd go outside the GTA to surrounding markets like Hamilton, Brantford, K-W, Barrie, Whitby, Oshawa, etc (oh and Waterdown!). Your best bet for positive cashflow is doing a lease option or "Rent to Own" strategy, where you sell the property in advance to a tenant buyer for a fixed amount in the future, then collect an option deposit from them.  You can also offer above market rents in exchange for future credits towards the purchase price.  

If you want more info, PM me and I can help you with more details.  

Chad

I know this is an old post but I thought I'd chime in.

We own a duplex in Brockville ON and a single family in Pembroke. We like the buy and hold but I wouldn't be against looking at a RTO if a tenant wanted to go that route. we do 99% of the repairs/renos ourselves to help save money and because we know the quality of our work, I know it sounds biased.

Pembroke is a very easy market to rent in and I've only ever had to place 1 add or do it word of mouth, sadly our long term tenants are moving because their family is growing and our isn't.....

I love hearing and reading about fellow Canadian investors and areas they like to invest it.

Have a great day,

Tina

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Thanks for sharing @Tina C, are you looking to ad more rentals? I'm still in the hunting stage myself. Rent to Own seems like a popular way some investors are making it work in our tough Canadian market.

@Joel Moore  

There seems to be a surge in Canadian's interested in "rent-to-own" lately - this is the second thread this morning and the third or fourth in the past couple of weeks.  I wonder if it serves as an indicator of just how fully (or over) priced most markets in the country are.

Despite the popular title of Mark Loeffler's "Investing in Rent-To-Own Property", "Rent-to-Own" is a misnomer.    A more accurate description might be "rent while waiting to own".

Finding a buyer/renter and executing a purchase option with them while contemporaneously renting the property to them (using a standard lease at market prices) is a way to turn a marginal rental property into a decent return.

It can also be an investing strategy.  @Doug Pretorious uses this approach as a staple in his portfolio.

I would challenge that you need to vet the tenant/buyer even more carefully than if they were just a renter - not only do you want to ensure they can pay the rent, but that they can pay the option price and will be able to obtain financing to purchase the property before the end of the option period.   This brings you to the chicken-and-egg debate over whether you find the property first and the tenant/buyer second, or vice versa.  

@Roy N.  I still advocate getting the property first. People change their minds all the time so it's good to have some back ups.

I also don't vet for their ability to obtain financing. I give them enough time that anyone who's serious about getting their problems sorted out can do so. I mean honestly...it's NOT difficult or complicated to clean up your credit. You just have to live within your means and pay your debts on time. In a couple of years you're good to go. Of course some people will never do that no matter how well you screen them or try to help them. But most will.

I personally find most people are pretty savvy. I scratch my head when there's talk on this or other forums about taking advantage of tenant/buyers. Everyone I've worked with knew what the house should rent for and what it should sell for and they had already been to their bank and/or a mortgage broker to determine what they can qualify for and/or what they needed to do to.

Maybe my marketing just attracts the smart ones :)