# Where would you buy a rental property in Canada today?



## Letran

I'm thinking of buying another property to rent.

I do have a couple in US (Las Vegas & Florida), my cap rates are good in these properties. So I am leaning towards another US property (maybe California)

BUT

I'm thinking, why not stay within Canada. Calgary maybe, NF? 

Cap rate is a big factor of course.
City/location for my personal interest is also a factor, meaning. Would I mind owning and staying in that Province/City long term or vacation in the future, hence Vegas and Florida, I do have a student rental that is doing well in Kingston, ON (Queen's University) but frankly the age of the house scares me (105 years) I might also replace that and buy somewhere else. I also do have a couple of Downtown Toronto condos which are convenient and stable. Toronto being home.
But Downtown prices I think have become expensive to the point of zero to negative cash flow.

So I thought why not ask the brilliant minds of CMF'ers and pick their brains.

Where? What? Why? would you buy?


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## kcowan

How about a resort property that rents for $4000/week in season. Extra revenue from May 24th, Thanksgiving and Christmas. $50k/yr on asking $629k
http://www.pictonhomes.com/viewlisting.php?id=540284
and personal use when not rented.


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## Letran

kcowan said:


> How about a resort property that rents for $4000/week in season. Extra revenue from May 24th, Thanksgiving and Christmas. $50k/yr on asking $629k
> http://www.pictonhomes.com/viewlisting.php?id=540284
> and personal use when not rented.


Great idea, I have always liked the furnished rental property but shied away from the high maintenance (finding, scheduling renters. cleaning staff etc) but really something to consider. Thanks

My wife been watching those beachfront properties but never really paid much attention for investment because the chances of us going there regularly will be slim to none.


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## Just a Guy

May be a good time to sell high (ontario) and buy lower (Calgary). But, despite the headlines, calgary is still highly overpriced. Buy where the deals are...which can be in any city. Don't buy based on the hype (I.e. Calgary is imploding!).

Also avoid recreation properties...in a bad economy, no one rents them, no one buys them, but the costs remain an albatross.


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## 299889

Wow, I saw this topic Right away and thought of Kingston, my girlfriend goes to school at Queens and the rent they she and her roommates have to pay is ridiculous! 

My brothers girlfriend also goes to Queens and rents a place, its expensive and could be a huge profit to anyone looking to buy a rental there


My brothers girlfriends rent is $600 a month + utilities
she has three other roommates all paying the same price

4x600= 2,400 a month + utilities


The house itself is divided into 4 sections each with the same agreements and with the people living in the house 

2,400 x 4 = 9600 to the land lord a month

Utilities are also paid for by the tenants

All contacts are locked in for a 12 (1 year) Agreement. 

So over a year the landlord is making , 115.2k and doesn't even have to pay for utilities! Its a pretty good gig if you have a bunch there..


Ever considered having a big rental property enterprise out in Kingston? People will always need a place to stay while they go to school.


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## atrp2biz

I recall Thunder Bay having very good cap rates a few years ago.


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## Letran

eeehitscody said:


> 4x600= 2,400 a month + utilities
> 
> 
> The house itself is divided into 4 sections each with the same agreements and with the people living in the house
> 
> 2,400 x 4 = 9600 to the land lord a month


Thanks cody, yes that's correct except that you multiplied the numbers twice (4x600=2400 then 2,400x4 again, gross is about a quarter of that). There is money, but here's the down low. Properties in the 7-9 minute walk (also known as the ghetto) of the university is also ridiculously priced also, a decent house will fetch you between 500k to 1 million, and these are not big houses. Kingston being the first capital of Canada most houses in that area are between 80-100 years old (you would not believe the draft that gets though the windows and walls). Foundation and major repairs are a constant worry. Queen's University themselves are continuously buying property/land themselves and turning them into housing which of course then will eventually flood the market (maybe). And let's not forget who you are renting to no credit students that may or may not respect your property. As an absentee landlord at the end of the year if you did manage to get your rent cheques you just do not know what you'll be going home to. As blin10 wrote there is no free lunch. But yes I'm not disagreeing it is and could be worthwhile venture.


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## gt_23

I've been in the student market for a while and think there's a trend towards luxury condo style living (purpose built), basically off campus rez. They're expensive for investors and barely cash flow. They've been in London and Waterloo for a while and are moving to Hamilton and Guelph as well. Not sure what this means for student house demand long-term, but maybe a segment will still prefer them over luxury condos.

Take a look at Hamilton non-student areas. The returns are good on paper and the tenants will make your life so interesting...


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## 299889

Letran said:


> Thanks cody, yes that's correct except that you multiplied the numbers twice (4x600=2400 then 2,400x4 again, gross is about a quarter of that). There is money, but here's the down low. Properties in the 7-9 minute walk (also known as the ghetto) of the university is also ridiculously priced also, a decent house will fetch you between 500k to 1 million, and these are not big houses. Kingston being the first capital of Canada most houses in that area are between 80-100 years old (you would not believe the draft that gets though the windows and walls). Foundation and major repairs are a constant worry. Queen's University themselves are continuously buying property/land themselves and turning them into housing which of course then will eventually flood the market (maybe). And let's not forget who you are renting to no credit students that may or may not respect your property. As an absentee landlord at the end of the year if you did manage to get your rent cheques you just do not know what you'll be going home to. As blin10 wrote there is no free lunch. But yes I'm not disagreeing it is and could be worthwhile venture.


I may not of been clear, I meant the house was a quadplex... If thats a word and there is a total of 16 people living in the house, hence the second multiply of 4 for each group of section of the complex.


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## CharlesF.Donahue

Contact with Canadian Residential Rentals. Canadian Residential Rentals showcases quality rental properties across Canada. They will help you for it.


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## kcowan

eeehitscody said:


> Wow, I saw this topic Right away and thought of Kingston, my girlfriend goes to school at Queens and the rent they she and her roommates have to pay is ridiculous!
> 
> My brothers girlfriend also goes to Queens and rents a place, its expensive and could be a huge profit to anyone looking to buy a rental there
> 
> 
> My brothers girlfriends rent is $600 a month + utilities
> she has three other roommates all paying the same price
> 
> 4x600= 2,400 a month + utilities
> 
> 
> The house itself is divided into 4 sections each with the same agreements and with the people living in the house
> 
> 2,400 x 4 = 9600 to the land lord a month
> 
> Utilities are also paid for by the tenants
> 
> All contacts are locked in for a 12 (1 year) Agreement.
> 
> So over a year the landlord is making , 115.2k and doesn't even have to pay for utilities! Its a pretty good gig if you have a bunch there..
> 
> 
> Ever considered having a big rental property enterprise out in Kingston? People will always need a place to stay while they go to school.


It has already been discovered. Anyone is residence is kicked out after one year. So there are lots of landlords already.


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## kcowan

Letran said:


> My wife been watching those beachfront properties but never really paid much attention for investment because the chances of us going there regularly will be slim to none.


PEC has the benefit of appeal to people from the US and Quebec as well as Ontario. Larger places appeal to family reunions. And retirees who don't want to be tied down with another property.


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## Letran

kcowan said:


> PEC has the benefit of appeal to people from the US and Quebec as well as Ontario. Larger places appeal to family reunions. And retirees who don't want to be tied down with another property.


Thanks kcown, if you could please clarify, for the people that does not know what PEC mean (including me)


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## Letran

eeehitscody said:


> I may not of been clear, I meant the house was a quadplex... If thats a word and there is a total of 16 people living in the house, hence the second multiply of 4 for each group of section of the complex.


I c, thanks for the clarification cody.


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## Letran

CharlesF.Donahue said:


> Contact with Canadian Residential Rentals. Canadian Residential Rentals showcases quality rental properties across Canada. They will help you for it.


Thanks Charles, i'll look them up


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## Spudd

Letran said:


> Thanks kcown, if you could please clarify, for the people that does not know what PEC mean (including me)


Prince Edward County.


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## Addy

I purchase in markets I'm familiar with. Our latest purchase was in our hometown, a small Ontario town with a large military base. The CAP rate is the highest of all our rentals, and excellent tenants. Our second last purchase was in Hamilton, just off Ottawa St North (an area my brother is familiar with). We paid cash for an inexpensive, small detached home within 1 block of this up and coming/climbing trendy area and it's been an excellent cash cow for us. Normally we wouldn't pay cash, but circumstances made it convenient.

Highly recommend finding where there's strong employment/industry/pool of good tenants and going from there. Make yourself familiar with the area as well - we considered Kingston, near Queens but would only do this if we were to live in the house and rent rooms out, not as a stand-alone rental.


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## t.dot

What are people's thoughts on Windsor, ON? A property close to UWindsor would have steady student demand, be relatively cheap, and have a great cash flow.


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## summer

t.dot said:


> What are people's thoughts on Windsor, ON? A property close to UWindsor would have steady student demand, be relatively cheap, and have a great cash flow.


Who would manage the property?


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## gt_23

t.dot said:


> What are people's thoughts on Windsor, ON? A property close to UWindsor would have steady student demand, be relatively cheap, and have a great cash flow.


Windsor is probably the cheapest going, you can get 12-plexs for <$500k.

There's two issues I have with Windsor: 1) highest vacancy rate going and 2) low quality tenants (a bit like Hamilton in that respect), although #2 might no be relevant if you rent to students.

It's better to pay more $ and get lower cap rates on high demand real estate than buy crappy real estate simply because it's cheap.


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## sevenpoint

I'd love to continue this conversation.

Thunder bay seems pretty tapped out, can't seem to find anything multifamily there. Windsor continues to look attractive to me. However, managing a property from afar sounds like a major headache.

Love your thoughts, where you own, where you might look next, etc.


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## jaybee

^ I wouldn't. Canadian Real Estate is is in a bubble. But, I'll play along. Moncton NB, Windsor ON. If you're looking in your Province, how about Lethbridge?


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## sevenpoint

jaybee said:


> ^ I wouldn't. Canadian Real Estate is is in a bubble. But, I'll play along. Moncton NB, Windsor ON. If you're looking in your Province, how about Lethbridge?


Looked at Lethbridge earlier, 900k for a 4plex. YIKES! I feel like I could probably find that in calgary if I looked hard enough.


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## Getafix

Interested in this topic as i'm also looking to get my first income property soon. What do you guys think about Waterloo / Kitchener region? Prices are reasonable, not far from G.T.A, lots of students & it's growing fast.


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## tygrus

Buy where there is resilient economy and lots of employment opportunities. Don't buy in student towns - students have no cash, don't buy in a resort town like Kelowna, thats seasonal.


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## Spudd

sevenpoint said:


> Looked at Lethbridge earlier, 900k for a 4plex. YIKES! I feel like I could probably find that in calgary if I looked hard enough.


I took a quick peek out of curiosity and found 2 4-plexes for 400k each. Here's one: http://www.icx.ca/propertyDetails.aspx?propertyId=15725345&PidKey=-1193556831


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## Hawkdog

Spudd said:


> I took a quick peek out of curiosity and found 2 4-plexes for 400k each. Here's one: http://www.icx.ca/propertyDetails.aspx?propertyId=15725345&PidKey=-1193556831


From my limited knowledge of renting multiplexs - the 2-4 are the better bet - when you get to larger numbers you have to supply more infrastructure and you have more regulations. 

I just purchased a small house on 140 acres I am renting out for 900/month in Smithers BC. Looking for a yurt/tiny home to use for short term rentals.


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## Mechanic

I would not buy another rental property in BC. Govt operated Landlord tenant branch there has no consideration for landlords, they are all about tenants. Tenants can break initial agreements once they are in and the landlord is at the mercy of of the arbitrator and from what I have heard and experienced the arbitrators usually side with the tenants..


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## Hawkdog

Mechanic said:


> I would not buy another rental property in BC. Govt operated Landlord tenant branch there has no consideration for landlords, they are all about tenants. Tenants can break initial agreements once they are in and the landlord is at the mercy of of the arbitrator and from what I have heard and experienced the arbitrators usually side with the tenants..


It is a risk for sure, but so is crossing the street or driving to work.
I have never had an issue in 4 years renting in BC. There is such a shortage of rentals in this region that you can be very selective and rent through word of mouth.
I hope to switch to nightly rentals next year.


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## jaybee

@sevenpoint Ahh, ok. I haven't looked at Lethbridge in awhile. When I invested in RE, Lethbridge looked good *compared to other markets at the time.*


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## jaicolebe

Toronto is not the best place in Canada to buy for rental returns, but it has been a great investment! For medium and large apartments in Canada, i.e., apartments of 120 square metres (sq. m.) and 200 sq. m., there has been a drastic increase in average prices per sq. m.. Visit here if you need to know the real Property Agents.


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## marytres

I'm personally looking into a 55 plus Christian Community Condo in Toronto right now called Trinity Ravine Towers. Well, its in Markham (north of Toronto) which has a history of excellent tenants. Anyone else have any history in buying property in Markham or York region in general? I'm aware its a bit more on the pricier side.


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## Melicoy

Mechanic said:


> I would not buy another rental property in BC. Govt operated Landlord tenant branch there has no consideration for landlords, they are all about tenants. Tenants can break initial agreements once they are in and the landlord is at the mercy of of the arbitrator and from what I have heard and experienced the arbitrators usually side with the tenants..


 INTERESTING !!!

Im new to this site and love it.

I have 12 properties in BC (lower mainland) ranging from low fixed income to high end. I also have properties in Edmonton, Regina, PG, FSJ, Timmins and TB. 
I have chosen to stay out of Manitoba due to fixed rental income on property - not fixed to tenant. (i.e can only increase once a year at a fixed price with or without a tenant) Communists. 

ANYWAYs...

There are rules to protect landlords and tenants in every province. IF and a big IF you know how to play the game in each province you will win as a landlord.
For example. I charge a key deposit, pet damage deposit, traditional deposit, and I do an inspection after 1 month of them moving in. In Ont I charge $50/mo extra per dog.

The key - I AM CONSISTENT AND ALWAYS FOLLOW UP.
Bad Landlord dont follow up, dont collect rent on the 1st, Don't serve the proper paperwork / notices on the correct date etc. and or let emotions determine their actions. 

Long story short - a landlord can and will win in BC if they follow the rules and show proof and evidence to support their case.

I have now chosen to stay AWAY from fixed income people unless they are over 60 years old. All my low income are seniors that have a respectful attitude.

To answer the original post. Where to invest.

I am on HOLD till this housing situation gets sorted out. Housing is a proved BELL CURVE and we are close to the top of the bell. History always repeats itself so I follow history.
Well there is one city I am investing in and making a good return but I have done my due diligence and hard work and not about to give it away. It will come out soon and then everyone will flock there like usual. Then I pull out. I work on getting in before D.R.C.

If you want to buy and live in and rent a 2-3-4 plex then just make sure it cash flows with the current rent. Cash is King.

If the numbers dont work then walk away, there is always a better deal.

If you DONT want to use the profit centre of leverage then put 100% cash down and cashflow your own money. (not advised)

Items I have learned on gauging where to invest.

1. Inward migration of people (jobs, school,...)
2. City is spending money on infrastructure.
3. Companies are opening franchises there
4. New commercial buildings being built
5. Low vacancy rate (check cmhc)
6. You get the pic. 

Good luck.


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## Rusty O'Toole

I like some of your ideas but in Ontario key deposits, pet damage deposit, traditional deposit are illegal.

Would also like to know how you handle the management of such far flung properties. You must employ managers or live on airplanes. I don't know what those initials mean.


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## Melicoy

When I said traditional deposit i meant last month's rent, sorry.
It might be illegal to ask for a key or pet but I do anyways. If they question it I scratch it out. Also lost or misplaced keys are $125.
I KNOW for a fact that asking for a higher rent amount for any animal is LEGAL.
Also One other thing I employee is a rental discount if the rent is paid on time every time. An example is the current rent is advertised at $900/month when they sign the lease I explain that the rent is $1000 but because you ALWAYS pay the rent on time I give you a discount of $100. The first time you are late it goes to the original $1000. No excuses or second chances. I have taking that to the board and it was upheld. (p.s. never go to arbitration especially if you have all the evidence that will win you the case)

Management is easy when you get the "RIGHT" person. 1st you need to always always follow up for the first 2 months with any new manager. Make sure they do what they say. Check on the 2nd of the month for all rents and follow up as necessary. 
As long as you manage the manager properly everything should go well. I ALWAYS view all applicants before they are approved in UNDER 24 hours. If I dont then that 5% of professional tenants might get in. 
I do inspections once a year. One year I even rented an RV (never buy one sheesh) for about $80 a day and drove it to all the cities and did inspections and a family trip all together. The wife and my little girl loved it  (gas was about $800 for the trip)
Next time maybe I will take a Harley... Anyone have one to rent?

PG Prince George bc
FSJ Fort St John bc
TB Thunder bay
DRC Don R Campbell
stby - sucks to be you.


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## Xoron

Melicoy said:


> Also One other thing I employee is a rental discount if the rent is paid on time every time. An example is the current rent is advertised at $900/month when they sign the lease I explain that the rent is $1000 but because you ALWAYS pay the rent on time I give you a discount of $100. The first time you are late it goes to the original $1000. No excuses or second chances. I have taking that to the board and it was upheld. (p.s. never go to arbitration especially if you have all the evidence that will win you the case)


That wouldn't hold up in Ontario at the LTB. If a tenant pays $x for an extended period of time, that is the rent. You can't increase it by more than the prescribed amount without approval from the board. 

Two caveats. This only applies if 
- The tenant makes an application against you. 
- The building was built after 1991.


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## Just a Guy

Melicoy said:


> I have 12 properties in BC (lower mainland) ranging from low fixed income to high end. I also have properties in Edmonton, Regina, PG, FSJ, Timmins and TB.
> 
> There are rules to protect landlords and tenants in every province.
> 
> I am on HOLD till this housing situation gets sorted out. Housing is a proved BELL CURVE and we are close to the top of the bell. History always repeats itself so I follow history.
> 
> Well there is one city I am investing in and making a good return but I have done my due diligence and hard work and not about to give it away. It will come out soon and then everyone will flock there like usual. Then I pull out. I work on getting in before D.R.C.


I'm still trying to figure out what you are actually thinking.

12 places in 6 different locations...are you talking doors or buildings? Only $800 in gas, in a Winnebago, to drive from BC to Ontario...must get some good momentum coming down out of the mountains...

$900 rent, cash flowing...I wonder what your numbers actually look like.

There ARE rules in every province, but some provinces are stacked in favour of the tenants (specifically BC, Manitoba and Ontario). Doesn't mean they are bad places to own, but there are places where the rules are more favourable...

Do you know what a bell curve is, and what the top of the curve actually represents? A pendulum may be a better metaphor. 

One of your strategies is it beat REIN to the market? I suppose out guessing fools would work...


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## Melicoy

Xoron said:


> That wouldn't hold up in Ontario at the LTB. If a tenant pays $x for an extended period of time, that is the rent. You can't increase it by more than the prescribed amount without approval from the board.
> 
> Two caveats. This only applies if
> - The tenant makes an application against you.
> - The building was built after 1991.


I dont raise the rent. It could be looked at this way.
The tenant pays me $1000 every month. I give them back $100 if they pay on or before the first. It has gone to LTB once in TB and I won.


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## gibor365

> That wouldn't hold up in Ontario at the LTB. If a tenant pays $x for an extended period of time, that is the rent. You can't increase it by more than the prescribed amount without approval from the board.
> 
> Two caveats. This only applies if
> - The tenant makes an application against you.
> - The building was built after 1991.


Holy  so many different rules..... this is why i prefer just to invest into big REIT and get 5-8% dividends 

noob in real estate, but I think he's right.... if contract says $1,000 , Melicoy can always give $100 discount


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## Melicoy

Just a Guy said:


> I'm still trying to figure out what you are actually thinking.
> 
> 12 places in 6 different locations...are you talking doors or buildings? Only $800 in gas, in a Winnebago, to drive from BC to Ontario...must get some good momentum coming down out of the mountains...
> 
> $900 rent, cash flowing...I wonder what your numbers actually look like.
> 
> There ARE rules in every province, but some provinces are stacked in favour of the tenants (specifically BC, Manitoba and Ontario). Doesn't mean they are bad places to own, but there are places where the rules are more favourable...
> 
> Do you know what a bell curve is, and what the top of the curve actually represents? A pendulum may be a better metaphor.
> 
> One of your strategies is it beat REIN to the market? I suppose out guessing fools would work...


1. The 12 properties are ONLY the lower mainland. Properties not doors.

2. Sure let's take an example in Regina (high vac right now too) I bought a house there in 2012 on Wallace for 95k. It is a 2br 1 bath. Current rent is $900. 20% down, Tenant pays heat and hydro. Insurance is $49/mo contingency reserve fund $100/mo mortgage $395 vac 5% at $45/mo Tax $54/mo = $654 So that is $257CF Did I leave anything out?
Timmins I have a 3 plex there $1250/mo $975/mo and $940/mo. Bought for $160k and 20% down... etc... 

4. I was taught by my mentor that it was a bell curve. When I watch different reports it seems to point to that. Such as in 2009 Vancouver market was much the same as it is today. People said it was a bubble and City of Vancouver house prices shot up. People said it would pop but it just lowered a little bit and remained steadily increasing.

3. Actually REIN did do a segment on this city but I ALSO notice a trend where people flocked to a certain city every time REIN, Aussie Jurock, etc etc mentioned they city. For some reason peoples nature is not to perform due diligence before investing. 

Anyways I am seeing two trends with this new site I have joined.
1. People are helpful and happy to talk about issues
2. People think you are trying to fool them or pull the "wool" over their eyes and need to scrutinise you. 

I will stick it out a bit more and explain what I can and ignore people like humble_pie


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## gibor365

Just curious what is your total "yield" on all investments .... ?


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## Melicoy

gibor said:


> Just curious what is your total "yield" on all investments .... ?


Hi gibor.

If I understand what you are asking it is difficult for me to give you my total yield because I don't have a number for the current market value of my Real Estate Assets but I can work that off my face value or even purchase value but that would be skewed.

As for Stocks, bond, gic, RRSP etc. I liquidated all of them for Leverage, Appreciation, Cash Flow, Smith Manoeuvre, Equity day one, principal reduction, tax deductions. cash flow... 

If you are asking for my current yearly cash flow from 2014 I can PM that to you. ROI, Cap rate, NIO etc I can ask my Accountant and get back to you. 

All my properties cash flow except 1 that is in Regina slated for demo for new build duplex (but going to re-rent due to current market conditions).

I hope that answered your question.


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## gibor365

> current market value of my Real Estate Assets


 my point wasn't about "current market value".
I meant your net income ($$ you get from renters minus mortgage, maitanence, fees you pay to accountant and all other expenses) divide by how much you invested in total?


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## Just a Guy

Melicoy said:


> Anyways I am seeing two trends with this new site I have joined.
> 1. People are helpful and happy to talk about issues
> 2. People think you are trying to fool them or pull the "wool" over their eyes and need to scrutinise you.


I think you are misunderstanding people here. Since you seem to be self taught, you sometimes seem to not understand "commonly accepted" terms, see gibor's question as an example. This doesn't mean you aren't knowledgeable, but we need to figure out a "translation" for what you are saying.

Some of your wording seems confusing (you say you have 12 properties, all in the lower mainland, but then talk about Regina), it may just be the medium as we aren't talking, we miss out on the "give and take" of conversation which would make things naturally clearer. To get things clarified takes a few messages back and forth. 

It's not that people are judging you, it's just problems with communication (what you think you are saying isn't the same as what people interpret you saying). With time, people will start to understand your intentions better.


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## gibor365

> Some of your wording seems confusing (you say you have 12 properties, all in the lower mainland, but then talk about Regina)


 To tell the truth, I don't have any idea what is "lower mainland" in Canada  ... I'm much better with World geography...


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## daledegagne

I skipped ahead, but did anyone mention Victoria?

Cap rates won't be as good as some places, but you have steady money from government jobs, a military base and a University. Vacancy rate is currently 0.6%. If and there is a plethora of single family homes with legal suites in them. 

However, I would think the real gem is if you can find something beat up and fix it, possibly turning it into a duplex while you're at it. 

If you're looking for bigger than 4 units I would look elsewhere though...


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## daledegagne

gibor said:


> To tell the truth, I don't have any idea what is "lower mainland" in Canada  ... I'm much better with World geography...



Lower mainland typically refers to Vancouver and surrounding areas (due to it being the mainland, and Victoria & surrounding areas being "The Island")


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## TomB19

Melicoy said:


> 2. Sure let's take an example in Regina (high vac right now too) I bought a house there in 2012 on Wallace for 95k. It is a 2br 1 bath. Current rent is $900. 20% down, Tenant pays heat and hydro. Insurance is $49/mo contingency reserve fund $100/mo mortgage $395 vac 5% at $45/mo Tax $54/mo = $654 So that is $257CF Did I leave anything out?
> Timmins I have a 3 plex there $1250/mo $975/mo and $940/mo. Bought for $160k and 20% down... etc...


That property is obviously north of College Ave (house number less than 2400). A tear down on a 25' lot was worth $140K south of College in 2012.

The area north of College and south of Victoria was a ghetto, not long ago. Now it has turned over nicely.

Hopefully, you're in the 23~21 block area where proximity to the hospital has driven your property values way, way up.

By the way, vacancy is cited at 5% but that's an aggregate number. House vacancy is still down in the low 1% range but rent is definitely soft.

By the way, you're paying too much for your insurance. I know 99% of brokers will cite $600/yr for insurance on the lowest end house but that insurance can be had for $425/yr without even sacrificing coverage. Also, I wouldn't let them sell me $6M of liability. They always want to max that. I take $2M of liability. This is a communist province. If a drunk driver with no driver's license hits you with his car and paralyzes you, you can't even sue for damages. $2M is plenty of liability.

By the way, my mortgage broker at Monster Mortgage could have set that up with a $305/mo payment. When rented, you should be cash flowing $450 per month based on a $23,000 investment. Returns go up from there, too.

I don't know anything that cash flows like a good real estate project. Sure, there are bad real estate projects. Lots of them. ... but real estate is a game of skill. It's not difficult to pick the best properties for investment.

It has been written that a stock could produce just as well as an investment property but I've never seen anyone attempt to share the numbers or provide any credible explanation of how to do it. As best I can tell, the only way to make that kind of money on stock is to take considerable risk.

The grumpy folks in here who poo-poo real estate are obviously not doing it right. Instead of learning how to equitably invest in real estate, the outspoken ones proclaim it a bad way to invest money, sometimes in bold face type... perhaps so they can feel more correct.

Show me an investment, leveraged or not, that can take a $23,000 outlay and turn it into $450 per month plus healthy equity appreciation. I'm all ears.


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## FI40

TomB19 said:


> Show me an investment, leveraged or not, that can take a $23,000 outlay and turn it into $450 per month plus healthy equity appreciation. I'm all ears.


Ok, I get that RE investing can be great for those with experience and know-how, but there's time and skill involved in finding deals like that. Count up all your time at $50/hr or whatever that you've spent learning about RE investing plus the time spent actually finding properties.

As for an example to compare against, if you are putting 20% down on a property, then imagine leveraging up 5x on a bank stock. It yields around 5%, which would get you a similar monthly cashflow (23,000*5*.05/12 = $479/mo) and equity appreciation on top of that. Of course you have to pay (tax deductible) interest on the loan but with say Interactive Brokers that's ~2%, effectively closer to 1% after tax that you're paying on the loan part. That's pretty close with no thinking at all and no effort involved. I mean, if we're totally ignoring risk in both cases then sure you can make comparisons like this.

I think it's more reasonable to say that there are good ways to invest in both RE and equities, and returns can be similar for similarly experienced/knowledgeable practitioners. Risk is also present in ANY leveraged investment, RE or not.

Finally, not that I agree with everything in this article, but here's a different perspective for you: http://jlcollinsnh.com/2013/05/29/why-your-house-is-a-terrible-investment/


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## Xoron

gibor said:


> Holy  so many different rules..... this is why i prefer just to invest into big REIT and get 5-8% dividends


!00%

It is NOT a landlords game in Ontario. 
- LTB Board that is impossible to get any sort of swift decision from
- Can't collect get a damage deposit
- Different rules based on age of the building (which is so arbitrary IMHO and sets up second class landlords)
- Have to get the sheriff (at a cost to the Landlord) to evict
- You can't enforce certain stipulations, even it they are against the condo policies (For example if the condo has a no pet policy, you can put it in the lease, but it's unenforceable)
- Cap rates are very low on the GTA for any landlord looking to buy because RE prices have soared of the past 10 years. Rent rates haven't kept up with the capital outlay of buying a property.


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## Just a Guy

FI40 said:


> Ok, I get that RE investing can be great for those with experience and know-how, but there's time and skill involved in finding deals like that. Count up all your time at $50/hr or whatever that you've spent learning about RE investing plus the time spent actually finding properties.
> 
> As for an example to compare against, if you are putting 20% down on a property, then imagine leveraging up 5x on a bank stock. It yields around 5%, which would get you a similar monthly cashflow (23,000*5*.05/12 = $479/mo) and equity appreciation on top of that. Of course you have to pay (tax deductible) interest on the loan but with say Interactive Brokers that's ~2%, effectively closer to 1% after tax that you're paying on the loan part. That's pretty close with no thinking at all and no effort involved. I mean, if we're totally ignoring risk in both cases then sure you can make comparisons like this.
> 
> I think it's more reasonable to say that there are good ways to invest in both RE and equities, and returns can be similar for similarly experienced/knowledgeable practitioners. Risk is also present in ANY leveraged investment, RE or not.
> 
> Finally, not that I agree with everything in this article, but here's a different perspective for you: http://jlcollinsnh.com/2013/05/29/why-your-house-is-a-terrible-investment/


While I agree with your premise that there are good investments in both real estate and stocks, I find your arguement a bit twisted.

As someone who invests in both, I can tell you it does take time to find deals in both areas. It's not like you have to search for a long time to find a property (you do), but can just go out and buy a winning stock (unless your lucky, but that's gambling, not investing). It takes time to find the stock that is priced right, the same as real estate. There are going to be times when it's easy to find a good deal in either area, and there are times, like now, when it's hard to find a good investment in any area.

With real estate, you need to be an expert in one area (at least one town/city's real estate market) with stocks, you need to be an expert in each of those markets, as you shouldn't just invest in one stock. If you don't understand the company/property you are investing in, you are gambling, not investing.

With real estate, it is automatically designed for leveraged investing, with stocks, it's more difficult.

Real estate tends to move slower, and the moves are smaller. Stocks can, and often do, move significantly overnight. Of course, they can also correct faster. If you look at the number and severity of the stock market crashes 2007, 2000, 1987, etc, vs. Real estate 2007 in the USA, 1980, etc.

Real estate tends to be more secure as people need a place to live, stocks often reflect wants of people, so are in less demand, thus more volatile. 

As for the article you mention, true real estate investors know that there is a big difference between a "home" and an "investment property". Just because you own something and call it an "investment" doesn't make it one. I can pick up a rock, tell people it's worth a fortune, but that doesn't make it so...unless you're DeBours of course...

If you know what you are doing in real estate, it's very difficult to lose money. One thing is, the market isn't all under "one price". You always have a chance to find a place undervalued, no matter what the market is doing. With stocks, I find it's not quite the same as there are many more outside influences which I have no control over, and there is a lot of manipulation that goes on. 

I'm not here to say that real estate is good and stocks are I like, and have made a lot of money in both. That being said, you need to know what you are doing in both, as you said, and you have to work at both to continue to make money in both. If you "buy and forget" in either it will probably cost you.


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## FI40

Your points are well taken, but I think Jack Bogle disagrees with you about this one:



Just a Guy said:


> If you "buy and forget" in either it will probably cost you.


I think his opinion is "Don't do something, just stand there!".

In all likelihood, buying the S&P 500 via a low cost ETF and forgetting about it will probably be a good move. It certainly has been in the past.


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## Just a Guy

I'm a "buy and hold" investor, but that's different from "buy and ignore".


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## cm2u

299889 said:


> Wow, I saw this topic Right away and thought of Kingston, my girlfriend goes to school at Queens and the rent they she and her roommates have to pay is ridiculous!
> 
> My brothers girlfriend also goes to Queens and rents a place, its expensive and could be a huge profit to anyone looking to buy a rental there
> 
> 
> My brothers girlfriends rent is $600 a month + utilities
> she has three other roommates all paying the same price
> 
> 4x600= 2,400 a month + utilities
> 
> 
> The house itself is divided into 4 sections each with the same agreements and with the people living in the house
> 
> 2,400 x 4 = 9600 to the land lord a month
> 
> Utilities are also paid for by the tenants
> 
> All contacts are locked in for a 12 (1 year) Agreement.
> 
> So over a year the landlord is making , 115.2k and doesn't even have to pay for utilities! Its a pretty good gig if you have a bunch there..
> 
> 
> Ever considered having a big rental property enterprise out in Kingston? People will always need a place to stay while they go to school.


That was rather interesting! So its a 4plex with 4 completely independent living layouts. 4 kitchens, etc. 16 bedrooms equates to a massive house. Sounds like it would cost over 2 mil. About 4000 sq ft?


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