I’m located in Toronto currently invested in a condo downtown that I purchased 2 years ago. Own a commercial building in the Greater Toronto Area where I operate my business out of and renting out the other half (freehold building split into two) I also own 2 condos in Calgary that aren’t doing so well.
I’m looking for opportunities to invest across Canada to buy and hold for rental income. The GTA seems overvalued and hard to bring in a good cap rate. Searching for other opportunities. Considering more in Calgary since property took a hit with the oil dive. Not sure where to start or if other fellow Canadians have targeted areas. Would love to get into multi family homes.
I use property management firms in Alberta and manage the commercial unit and Toronto condo myself.
I’d love to get involved in the US market but not sure on the tax implications and if it will be worth my time.
Updated 10 months ago
Please ignore the typo. Was typing on mobile!
I know nothing about your taxes, but I can tell you that a lot of Canadian investors are flocking to my town of Pittsburgh. We have some of the best cash flow in America. You might want to get your accountant on the phone to figure out the tax bit. We have much better deals than anything I have see from Canada.
If you are OK with investing from a distance I would definatly be looking to the US. It is the first place Canadians should be sending their money. Taxes are irrelevant if you can make a profit.
The biggest concern/advantage is with the American banking system. They did not learn much from the 2008 crash and are beginning to swing back into a dangerous zone. Too many unqualified home owners. Allowing forces personnel to get in for virtually nothing. I see a repeat of 2008 and a opportunity for Canadians to profit in the future due to our more stable financial positioning. I would be waiting for the shoe to drop but it may take a while.
For now you may want to look to the east coast rather than to the west to invest. Stay away from condos the market is flooded.
Originally posted by @Eric Delcol :
If you're interested in investing in the US, come to the meet up on April 9th hosted by Larry Smet
Thanks for the mention @Eric Delcol . Tushar contacted me and I'm hopeful that he'll make it out to the next meetup. Always a good spot to learn more about investing in the US for us Canadians! More details here:
@Tushar Sharma - Welcome to BP, Tushar!
Not to downplay investing outside of Toronto, but I think you can make money in any market. It really comes down to being an expert in that particular market and your ability to execute as an investor. My partners and I started in smaller cities and towns (Waterloo, Edmonton, Hamilton), but we've been consolidating our efforts in Toronto over the past 5-7 years.
There is a trade-off between cash flow returns and equity growth and when I started investing in the early 2000's, I was solely focused on cash flow and cap rates. Cash flow, really, is just there to help you hold for the long term. If my units get $200-500 more per month, that won't affect my day-to-day finances. Cap rates are a function of risk; just like any other investment as the returns increase, so does the associated risk. That maybe market risk, tenant risk, property risk, regulatory risk, etc. As investors, we're always looking for an asymmetric risk profile, and we can often get caught in looking at the upside without evaluating the downside.
Hopefully, that helps to expand your thinking beyond cash flow and cap rates!
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