New investor - market suggestions? :)

15 Replies

Hi everyone!

I'm a new investor from Vancouver, BC just been listening to a lot of podcasts, read a few books, joined REIN etc to get a bit more educated. 

I'm ready to get started but since I'm not attached to any specific market yet, I'd love to meet some like minded individuals to discuss opportunities that come up.

I have looked into vancouver (of course), kamloops, kelowna, edmonton and calgary.  My interest has been toward Alberta somewhat just due to better cash flows, no property transfer tax and better landlord/rent bylaws.

I run a business here in BC, own my primary home and would love to build a real estate portfolio to create rental income which I plan to live off of eventually. My budget would be about 500k to start and prefer not to do BRRRR as a first property. I'd like to find a simpler first investment and slowly build some relationships before going deeper.

If anyone is interested in meeting up in Vancouver, or just want to shoot some ideas together , feel free to reach out to me :)

Which market would you look at right now if you were getting started again?

Cheers!

Ken

@Ken Steph 500k as you initial capital or is that your budget ? Are you looking for cash flow or appreciation? Or both ?

The lower mainland is a tough market for rentals if your after cash flow and only intend to put 20% down or less. That being said, there are some areas of Langley and Surrey that have some decent apartments that could achieve positive cash flow with current market rents and only 20% down.

If you are comfortable with distance then there are some good communities in the interior and in Alberta. Bi level homes with basement apartments around the 300k mark that would produce positive cash flow after all expenses ( maintenance, management, taxes and so on)

Thank you Jesse And Brock for the replies.

I have about 200k cash to deploy but would prefer to put a higher downpayment ~40% just due to personal risk tolerance.  

I am looking either straight cash flow, or a balance with less cash flow with greater potential for appreciation.  

My hesitation with BC is that I can only afford a condo and don't feel like that may be a good long term investment, but also a 1M+ detached home in greater BC wouldn't be a good cash flow either and would be moreso banking on appreciation only which I wouldn't feel comfortable with.

I have actually looked into edmonton and even flew over to look at some of the bi-levels but the 300k-ish ones tend to be a bit rundown and more work than I may be interested in as a first time investor from afar.  I was looking at the 425-450k one that were renovated but I find the cash flow is minimal using conservative numbers (using 20% down payment numbers).  

Hi Ken, I live in Vancouver and own in Edmonton - I know others that do as well. There are a good group of us that meet every couple months as well, usually downtown. DM me if interested. I also have good contacts in Edmonton if you would like to speak with them - a great property management company and a real estate team focused towards investors. 

@Luc H. approach is the best one.

Sooner or later Interest rates will go up and those buying in cities like Vancouver (GVA) counting on appreciation may be faced with a tough situation. 

Always always buy cash flowing properties and let appreciation become a pleasant surprise over time. 

I would recommend Edmonton, Kamloops or Lake Country 

Good luck 

Edison

Having owned rentals while away in AB I suggest owning within 2 hrs; depends how involved you want to be. 

I manage, fix, etc . . our units and I like them within walking distance preferably.
I own one 20 minutes away and even I feel that is an inconvenience.  

Check out VREP (Vancouver Real Estate Podcast) they have some high hitters on G.P. 
Coming from oil and gas; if my wife would agree with me; I would deploy all my capital there. 

Dog friendly (any size) furnished rentals in a great school area. 

Oil workers can bring the whole fam-jam than and they ll pay for it. 

@Ken Steph

I have a feeling Luc is going to recommend you talk to the guys at Mogul Realty group in Edmonton. If not you should. They specialize in that kind of thing. I’ve met Calvin Hexter there. I would contact him or James Knull. I’m pretty sure James is the owner and guru there, I’ve only ever met Calvin tho and he seemed really knowledgeable.

      Hi, I am an investor from Saskatoon. I travel lots and watch markets across Canada, we have properties in Saskatoon and Montreal. I agree with everyone on here with AB being a great place to invest, I personally don't have any properties there yet but I know lots who do. James Knull is a good guy and has a ton of insight in the Edmonton market.
     Saskatoon also has some great opportunities right now with the market being depressed as it is. We flip houses, have single family rentals and just bought our first 16 Unit apartment complex. Vacancy rates are high and lots of people are looking to sell, but with that comes opportunity. Knowledgeable investors can buy properties at steep discounts while keeping vacancy low by staying on top of management. Hope this helps and if you have any more questions, feel free to reach out!

@Ken Steph Welcome to BP. It seems that you are on the right track...listening to podcasts, reading, etc. With the Lower Mainland red-hot housing market showing obvious signs of slowing down, there are opportunities to invest in our own backyard, from the Fraser Valley to Lake Country. 

FYI. The Bank of Canada Benchmark rate drops to 5.19% on Monday, July 22. 

@Edison Reis   I'll take a look into Lake Country.  Thanks for bringing that to my attention!

@Kris Mcfarlane I hear ya about oil and gas.  I feel the same way and feel there is upside for AB. For the time being I bought a bit more oil and gas stocks as a way to get a bit more exposure to the area without buying a piece of property..yet!

@Fraser Nybo Thanks Fraser for the info on saskatoon. Might be a bit more risk than I'm willing to take as I am very unfamiliar with saskatoon/saskatchewan.  But something to possibly explore in the future!

@Julie Toh Thanks Julie, I did look at Fraser Valley and I do feel the slowdown.  I think there will be a bit longer of a slowdown period.  I've been hearing more and more situations from friends about their aunt/friend/cousin/etc buying pre-sales they couldn't afford (but expected to appreciate and flip) and needing to either assign it at a loss or even sell their own primary home to make sure they can close on it.  There seems to be an inevitable supply of these sales coming onto the market and until that clears up, I expect some downward pressure on the market from this for the next little while but would love to invest in fraser valley at some point.  It would be nice to be able to drive to my investments!   You are the second one to echo in on Lake Country - definitely will look into this. Thanks!

Thanks everyone for the warm and informative welcome!

Welcome to BP! The replies above have already contributed plenty. According to this resource (https://digitalyse.io/is-real-estate-investing-in-canada-a-good-investment/ you can jump towards the end), Abbotsford and Victoria are also among the best cities to invest in, besides Kelowna. The former enjoys low vacancy rates and increased rental prices, while the latter also enjoys low vacancy rates with an increased demand for commercial spaces.

@Ken Steph I'd also look into knowing the tenant laws if you do decide to invest in BC, some of them are bit ridiculous (only allowed half a months rent for DD, etc..), not as landlord friendly as say Saskatchewan.  I don't know how Alberta compares but I'd assume they are more landlord friendly.