I'm living in Toronto and considering my first purchase and am looking to hold properties longer term.
I'm attracted to Windsor due to the finances. I wondering about people's opinions and experience owning a property at a 4hr distance like that.
Does this imply the need for a property manager? If so, what kind of cost does that incur? If not, how do you typically work around tenant issues, keep an eye on the property etc.
I was also considering Oshawa due to it's proximity and affordability but haven't yet researched the market. If not Windsor, what other Cities would you recommend (or not as the case may be).
All insights appreciated.
Hi Keith, I own a couple small multi-family units in Windsor along with two others, and we live in Western Canada. We have hired a property manager that takes care of all the day-to-day stuff, as well as tenants moving in/out. The price varies depending on which property manager and what type of unit you have. We go with Marda Management, and I believe their prices range from $150/month for a duplex to $250/month for a fourplex. Personally I like having a property manager rather than self-managing as it not only saves a lot of time, but also helps you keep in the headspace of being an investment rather than it becoming more of a side job. For a couple/few hundred bucks a month, I think it's worth it.
@Keith Smith The 4 hours distance to Windsor will not be an issue if you hire a good property manager. They look after everything for you and you then have a piece of mind investment.
Whitby/Oshawa is a good market and is close to you. Same with Kitchener/Waterloo/Cambridge (my main investment market). And even with it being closer, you should still use property management as it will allow you to want to invest again instead of thinking "if I get another property, I will have more tenant calls that I don't want".
I currently live in Toronto area and have 2 SF rentals in Windsor. Prop man usually charges 8-10% of rent, with fees for finding you new tenants etc.
I'm just starting out myself so figured I'd save the couple hundred bucks a month and remote self manage.
Fpr the most part it's been simple and a fun experience. Just finished with a tenant turn over, had to hire a hvac tech, duct cleaners, junk removers and cleaning company. But got the house tenant ready in under 2 weeks.
Side note : I've literally never seen the houses with my own eyes. Purchased it after seeing pictures and hiring an inspector, and sub out any repair work needed
Hope this helps, enjoy the Windsor cashflow.
@Keith Smith Hi Keith, out of town investors continue to buy in Windsor often times even choosing to forego property management. With today's technology (kijij, Facebook Market Place, Naborly free screening, E-transfer), it is not as difficult to own property out of town. I'd recommend buying quality buildings in B- plus areas which will minimize the difficulties you may face as an out of town investor.
Hi, We live outside of Toronto and use a property manager. They charge approximately 8-10% of rent collected as Salvatore said above. Our property manager collects 75% of first months rent if they find you a tenant and do all the vetting. We don't want to have the hassle of dealing with any issues that arise. We use Home 2 Home Properties for our properties. I would recommend calling a few and seeing which ones responds and emails in a timely matter to any and all questions you may have. You may ask also if they have a waiting list of people looking to rent and if how many units they have vacant and rented. I would definitely say its worth it for us.
Hello Keith. I've been investing In Windsor since 2008/2009. I reside in Oakville area. It has not been difficult in my opinion, but I do have a tenant for years now who helps me manage the various buildings I did own, and do currently own. Prices have increased over the past 2 to 3 years (I.e. properties I purchased in 2009, 2010, 2011 I had sold in 2017/2018 and more than doubled in prices) making it a less attractive investment to buy now.Yes, rents have also increased, but knowing Windsor as I do, these rents and prices will not be sustainable over time. Obviously it will cycle up after it cycles down, but prepare for the down cycle when purchasing and assessing cash flow etc..
In 2011 I purchased a 5 plex in Windsor via a private sale. One of the units (very large 2 bed 2 bath) was rented for 700 . The older gentleman I purchased it from was telling me how 'back in the day' ... late 90's and into 2000's he was able to rent that unit for 1100 to 1200. so now again that unit goes for 1150 to 1250 easily, so do I feel it always will? No, I fully expect on the down cycle it will go for 800 or so. I could provide more stories through real experiences. Definitely invest there, but use real numbers. These 2 bed rentals for 1000 plus will not be viable forever. Plan for decreases in rents, if you can still carry the property with decreases, then buy it. Until the market corrects itself, consider that bonus profit. I have a duplex where the rents are only 765 and 755 plus. Large 2 beds, garage, front and back years, basement and so on. I could easily get more in rents, but they are long term and pay on time..why rock the boat? I'll appreciate them more when rents decline and they stay in their home because their rent will still be at market value (even though now it is below value). They know it, I know it, but i keep my greed in check. It has served me well to do so. Long term equity pay down and cashflow is my goal. Appreciation is a bonus.
All, thank you so much for those very helpful and informative responses. It's amazing the wealth of info that is available in these forums. ...and I'm sure I'll have many more questions to come ;)
Sorry for bumping this old thread.
Based on the above info, property management charges 8% - 10% of the rent.
What if there are issues happening in the house?
For example, AC or heat not working.
Do I have to pay an additional fee to have that fixed?
What does the 8% - 10% usually covers?