hi everyone, I have been looking at Windsor rental properties and wondering what your thoughts are on the NAFTA negotiations and possible effects on the local economy?
NAFTA could hit Windsor if things go unfavourably, and no doubt this would have an effect on the local economy, as did the closing of the GM plant and related factories in 2009. The good news is that since 2009 our workforce has become more diversified since jobs were diverted from auto to other industries. The way I see it, we always buy our properties for cash flow, and make sure to renovate to above average standards. This way, if vacancy rates were to rise due to a dip in the economy, our units would not sit vacant. Also consider, there are the 2 new bridge projects getting underway now which is going to bring many jobs to the area over the next 10 years. Construction companies working on the bridge are already tying up 3 year leases for their employees. With vacancy rates already extremely low, there is going to be a shortage of rental properties and strong rental demand.
However, if you find a property where the numbers make sense go for it. Windsor has a fairly diversified economy. If you're looking at Windsor you're probably not too concerned about growth anyways as it's more of a cashflow play.
@ Cody Weiss I am not quite sure to be honest, that is why I wanted to ask the question and see what the more experienced think :) In my mind, if we're out of nafta, this will put a strain on the auto industry in the region more than anything else, resulting in job cuts -> less ppl that can afford to rent in the city. Exports will suffer a blow as well as less investors will look at this area in terms of growing their business. I hope I am wrong though :)
However, if you find a property where the numbers make sense go for it. Windsor has a fairly diversified economy. If you're looking at Windsor you're probably not too concerned about growth anyways as it's more of a cashflow play.
Thank you Eric. Honestly, I am looking at cash flow and appreciation as well, I think the RE prices there are very low compared to anywhere else in Southern Ontario and there is a fair amount of room for appreciation.
NAFTA could hit Windsor if things go unfavourably, and no doubt this would have an effect on the local economy, as did the closing of the GM plant and related factories in 2009. The good news is that since 2009 our workforce has become more diversified since jobs were diverted from auto to other industries. The way I see it, we always buy our properties for cash flow, and make sure to renovate to above average standards. This way, if vacancy rates were to rise due to a dip in the economy, our units would not sit vacant. Also consider, there are the 2 new bridge projects getting underway now which is going to bring many jobs to the area over the next 10 years. Construction companies working on the bridge are already tying up 3 year leases for their employees. With vacancy rates already extremely low, there is going to be a shortage of rental properties and strong rental demand.
I agree, Cassidy. I believe we have a long runway of rental shortages in Windsor. Keep in mind that the minimum wage in Ontario will increase to $15/hour January 1, 2019 which should also put pressure on lower-end rental rates (which often have the best ROI).