All Forum Posts by: Stevo Sun

Hey everyone,

Tons of updates but I'll cut to the point; my fiancée and I just got engaged, and one of our favorite places in the world is Old Quebec City. 

We decided that our 5-year investing goal/dream is to purchase an apartment/condo in Old Quebec for personal and family use.

We would use it as an STR when we are not there, and Quebec city is booming with beautiful Airbnb's. It's busy with tourists there year-round.

I found that on the market right now, our desired location and style is hovering right around $250k USD.

My real questions pertain to the Canadian market though. 

What is the market and investing atmosphere like in Canada? And specifically Quebec?

How do down payments, mortgages, and STRs work in Canada?

If anybody has experience in the Canada/Quebec city market, please let me know! I'm just trying to learn to be able to accomplish this goal to the fullest!

Thanks!

@Stevo Sun i would also be interested in the link! 

I am a rookie and have been debating whether to take the Bootcamp course for this reasons... I am sure I will learn a lot of base knowledge but will not likely be applicable for Canada... 

I sold my house unconditionally for over 1 million dollars in Mississauga but the buyer did not close or show any intention to close until the closing date. The deposit is $30,000. 4 weeks after the closing date, the buyer was able to sell his house and then sent me an amendment for closing date extension via my agent. I told my agent to tell the buyer to contact my closing lawyer which he never did.

I relisted my house right away but very little showings during holiday season and very low ball offers.

Its getting hard for me to pay for the bridge loan and mortgages and I want the deposit back first. Lawyers demanding around $5000 just to get my deposit back which is held in my agent's trust account. I want to go to small claims court myself. 

I believe I have to fill this form and attach APS https://ontariocourtforms.on.ca/static/media/uploads/courtfo...

Any tips and experiences on filing this claim please.

I will include a request in the application to allow me to sue the seller later on when my house is sold and all damages are known.

I am seeking a second opinion on whether I am doing this right. If I am looking for properties that pass the 1% rule, say for example the property is going to cost a hypothetical figure of $1M, it means I should be able to charge a monthly rent of $10k for it to pass the 1% rule.

In this case the annual gross revenue would be $10 * 12 months = $120K

Then it means the cap rate for it would be 12%? (i.e. $120K divided by$1M * 100 = 12%).

This being said I have been scrubbing the (Canadian) MLS for a while now and haven't yet seen any multifamily property advertised with such a cap rate. The average I see is around 6%. I have also read that high cap rates are red flags for high risk investments. Is it then even realistic to look for such a cap rate (i.e. 12%) when shopping? 

Some properties would meet the math if they were bought, renovated and re-rented at up-to-date market rents however after reading online I am realizing that landlords can be in trouble for "renovicting" tenants of the previous owner with the sole intention to increase rent afterwards. 

All the above being said; how are people in Canada actually buying positively cashflowing properties were you can put "real" money into your pocket every month, starting from day 1?

Hello All,

A heads up, I'm new to BiggerPockets and have just begun my real estate journey (invested in 1 property as well as this current project with my dad and acquiring my real estate agent license). 

3 months ago, while visiting my dad, we decided on the idea to turn his house into a B&B and to build a variety of short term rentals on his property, located on the island of Newfoundland, Canada. We have just begun renovating the house to better suit guests and will begin building 5 stand alone huts once the winter is over. We will scatter them throughout the 8 acres of land he owns.

As both of us are new to this form of renting, we have no clue what to expect, or how we should maximize space to provide the essentials for guests in our huts. From those who have done this, what would you recommend we have within these huts so we do not overdo it (what have you learned from guests in the past and personal experience)? We are located in the recreational hub of the island with a lot of tourists throughout the year. Short term rentals and B&B's are in high demand. As well as with the B&B, what should we expect in terms of....everything? 

Our plan for 3/5 huts is to be roughly 13'x17', slanted rough, bed in loft and below loft (2 bed total). 2/5 huts to be roughly 500sqft, 2 bedrooms. The house has 4 bedrooms at 4800 sqft and we decided to turn 2 rooms into ensuits (what we are doing now). 

Also, I'm wondering if there are any 'best' ways to finance this project except from out of pocket cash? As well as all expenses I may have over looked, cash reserves for repairs, what policies to put in place, etc.

My apologies if I am being vague, as this is a first for me.

Many thanks,
James

I would argue that while you can receive 5.5% on a GIC today - that is very short-term thinking.
If the value is there in a property - this is a great opportunity to lock the property in before rates continue downward & drive prices higher

Once it makes "sense" to purchase the 6-plex or rental home when compared to a GIC - it will also will also make "sense" for all the other investors to purchase the same properties - driving up prices and fewer properties to choose from

Date the rate - marry the property

 Hi Austin,

Thanks for your feedback and thoughts. Yes, I reached the same conclusion with regards to Edmonton. It just does not make sense if a goal is cap appreciation. The inner city overall is not that attractive, and the suburbs are close enough, cheap enough, and new enough that infills hardly make sense. If only rental income is the goal, then yes, I saw some great returns on some row homes with no strata fees. But in that case I'd rather keep it in the markets as it's still just 7% ish and comes with extra work and distance. If local to me, could be more attractive.

Calgary left a better impression on me as an investment center, but as you mentioned, seems construction costs are what are setting the prices at this stage. 

There is still lots of red tape at the municipal level.  Parking is going to be one of the biggest issues.  Where I am (city of 100K), even with only a few basement suites, the residential homes often have 2-4 cars for each.  A fair number don't park in their garages because it is full of crap or in their driveways and they park on the roads making it harder to drive down them-especially when kids are out. Cities also add alley access (and no one parks in the back) making the streets even narrower.  Some areas, you can only get one lane of traffic through due to the narrow roads and cars parked on both sides.  Lots of smaller, older home were likely to be torn down in big cities so buyers can build larger infills.

With Trudeau and his government allowing 5 million+ immigrants in over the last 5-7 years (which is not sustainable), our population has grown too quickly and it has created problems.  A countries population can't grow by 10% in 5 years and not experience problems, especially a country that has a smaller population size like we do.

Hi @Damikaz Tormen. This is not financial advice but consider starting a corporation and investing through that corporation without paying yourself out of it. Your corporate tax is significantly lower than personal income tax. If you want to pull money out of the corp then the tax is similar to income tax.

The Canadian system is not really setup to avoid paying taxes completely. You can defer taxes and use other strategies to maximize investments, but you won't be able to get out of paying taxes. I recommend consulting a CPA with experience to see if you can better optimize your investments to minimize future taxes.