# Is there a housing bubble in Canada



## johnnysvera (Nov 13, 2015)

I work in the oil patch in Alberta and with the oil slump alot of people cant afford to keep their homes. Things are getting tighter and tighter.
Prices sky rocketed in the past few years so either there will be a correction or a burst?

Thoughts?

Are the canadian banks at risk of this bubble?


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## CPA Candidate (Dec 15, 2013)

Get your popcorn and prepare for a 300 page thread.

Yes, I do think their will be price declines in certain regions of the country. I don't believe it is a reason for panic for bank investors, though.


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## sags (May 15, 2010)

BNN ran a series and the Calgary Sun has been running some articles.

Homes at oil ground zero............in Fort McMurray have collapsed in price. They are down 20% already this year for an average decline of -$120,000.

I checked MLS and see about 1,000 homes for sale in a population of 60,000 to 70,000 full time residents. Home prices there are likely going to continue to fall precipitously.

Calgary prices have declined much less, but downward momentum is building. Same across Alberta.

I don't know about other Provinces, but in my own city in Southwestern Ontario there is layoff after layoff after layoff announcements.

But, I look at new homes for sale................$500,000. I have no idea who is going to buy all these homes. People just don't earn that kind of money around here.

For years people have said that higher interest rates will be the catalyst for a sharp decline, but I am thinking it more likely will be rising unemployment.

As to the banks..........I think they will be fine as they shuffle off their liability to CMHC............unless CMHC shuffles the liability back to them.

Alternative lenders who are holding substandard loans might be a different matter.

The question now isn't if home prices will decline..........but will it spread across Canada to all areas.


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## FI40 (Apr 6, 2015)

CPA Candidate said:


> Get your popcorn and prepare for a 300 page thread.
> 
> Yes, I do think their will be price declines in certain regions of the country. I don't believe it is a reason for panic for bank investors, though.


+1, bang on. But widespread significant price declines are also possible I say - if rates increase relatively quickly or there is a bad recession it will be forced. Seems reasonably unlikely though.


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## HaroldCrump (Jun 10, 2009)

*When even the real estate agents are skipping town, you better leave too*

Remember that during the US real estate crisis, the crash started from the most leveraged, the most over-valued markets in the country - parts of California, Nevada, and Florida.
In most cases, these were relatively smaller towns, not major cities like Los Angles, Boston, Atlanta, etc.
The first cracks appeared where the ratio between incomes and home prices was the most out of whack (such as bartenders & fruit pickers buying $600K mansions in suburban towns).


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## Just a Guy (Mar 27, 2012)

I'm just finishing up some paperwork on my latest acquisition. A 3 bedroom place formerly owned by a Toronto lawyer as an "investment". He picked it up in 2007 for around $215k. He's going through a divorce now and I picked it up for $95k. He literally paid more for me to take it from him than I did to buy it. It was a market listing too, not a private deal.

You can decide if the old price was too high.


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## Taraz (Nov 24, 2013)

johnnysvera said:


> Are the canadian banks at risk of this bubble?


Yes, there's a housing bubble. No, the Canadian banks are not at (significant) risk since the CMHC insures most of the riskier mortgages. The taxpayers will take most of the brunt of the crash.


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## humble_pie (Jun 7, 2009)

Just a Guy said:


> I'm just finishing up some paperwork on my latest acquisition. A 3 bedroom place formerly owned by a Toronto lawyer as an "investment". He picked it up in 2007 for around $215k. He's going through a divorce now and I picked it up for $95k. He literally paid more for me to take it from him than I did to buy it. It was a market listing too, not a private deal.
> 
> You can decide if the old price was too high.



interesting that you - one of the regular & reliable cmf real estate bell-wethers - are buying toronto condos now. Wondering if this might inicate a shallow, quick, now-you-see-it-now-you-don't residential RE bottom?

.


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## andrewf (Mar 1, 2010)

I'm guessing it is not a Toronto condo, but a Torontonian-owned condo in the hinterland.


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## Just a Guy (Mar 27, 2012)

I've never really been picky about location if it makes money for me. I also believe you can find a good deal in any market, just some markets require much more patience. I'd probably buy 100k 3 bedrooms in Toronto...but, even with the glut, they aren't to be found. When people start dumping these vacant places, 100k would still be cheap. 

That being said, it wasn't a downtown Toronto condo.


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## sags (May 15, 2010)

People in our city.........retirees and professionals mostly, want to live in multi-million dollar surroundings.

Swimming pools and hot tubs, gyms, theaters, fireplace lounges, patio rooftop lounges, indoor parking, central air..........sitting on large landscaped properties with sitting areas and walking paths.

A few years ago we didn't have any such places in our city. Now they are building them all over the place and downtown is the most popular area.

A lot of people fancy the European lifestyle of stepping out of a gorgeous apartment, walking through the well appointed lobby and onto the street...........a few paces to a wide choice of eateries.

Not a bad life really. Time and attitudes towards housing are changing. People no longer want a big property they have to maintain. They want someone else to do it.

Point is...........that a lot of people believe only big city real estate prices will fall. Perhaps they will, but demand is always there and rural properties are likely to get hit just as hard or worse.


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## marina628 (Dec 14, 2010)

You can buy condos on Dixon rd for under 100k but I would not recommend it lol.I pay attention to the $300,000+ listings In Durham Region and York Region and these still going 4-10% over asking and generally sell quickly.


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## Eclectic12 (Oct 20, 2010)

sags said:


> Point is...........that a lot of people believe only big city real estate prices will fall. Perhaps they will, but demand is always there and rural properties are likely to get hit just as hard or worse.


Depends on what's driving the markets ... I've seen farmers forced out as developers snapped up the farms for a fortune and I've seen condo owners sell, move to a smaller city, larger house with yard where there was enough profit that the house is mortgage free.

Where the average house price in one location is double or more of the other ... how much room is there to be "hit just as hard or worse"?


Cheers


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## Just a Guy (Mar 27, 2012)

While I generally agree that rural property is much more of an albatross than urban, the one thing I've learned in real estate is that there are ALWAYS exceptions. 

Prices may be high, but you can still find a deal, there are city places that won't sell easily, there are rural ones in demand, no neighbourhoods remain good/bad forever...it doesn't matter what you think generally, there are no rules that hold true in every case. Real estate is not the same as stocks (where the market moves as one), if you assume it works the same, it'll cost you.


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## Eclectic12 (Oct 20, 2010)

+1 ... I've seen people buy a rural property on the expectation that growth will continue, driving up prices. In some cases it happened and in some cases, other areas were developed, leaving the owner with a farm at relatively stable prices for decades.

YMMV ... like so many other things in life/making money ... :biggrin:


Cheers


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## Just a Guy (Mar 27, 2012)

For me, that type of "investing" is gambling. I prefer to buy things that make money today. I may not make as much long term, to me any capital gains are a bonus, but I don't like risk. 

I know a few people who speculate on land. One guy bought a place for $190k, for 90 acres. Wanted to subdivide it and sell a neighbourhood. City/county changed the zoning on him (I think about 4 years ago) and it's stuck being rural. Tried to sell it about 5 years back for $1.5M list price as the cost to develop was more than he expected...still sitting on it.


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## FI40 (Apr 6, 2015)

Just a Guy said:


> For me, that type of "investing" is gambling. I prefer to buy things that make money today. I may not make as much long term, to me any capital gains are a bonus, but I don't like risk.
> 
> I know a few people who speculate on land. One guy bought a place for $190k, for 90 acres. Wanted to subdivide it and sell a neighbourhood. City/county changed the zoning on him (I think about 4 years ago) and it's stuck being rural. Tried to sell it about 5 years back for $1.5M list price as the cost to develop was more than he expected...still sitting on it.


Damn, that sucks. He still has to pay property tax right?

It's amazing that you can find cashflow positive properties in Toronto, at least to me. How do you do it? My rent is roughly on market for a downtown condo, and in my opinion my landlord is subsidizing me.


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## Just a Guy (Mar 27, 2012)

Yes, he has to pay property taxes but remember, since the property is undeveloped, it's not assessed at $1.5M, probably closer to farmland prices. Still, he bought it decades ago. 

As for finding properties, the trick is to be ready as soon as a property hits the market. An all cash, no conditions offer on the first day of listing can often beat an offer with many conditions. The properties I buy are usually cheap for a reason, like a family divorce/death and/or the place was trashed by former tenants and been a bit of a nightmare, maybe there is even a large special assessment on the horizon...all things that would turn off an average buyer. The next trick is not to limit yourself to one area like downtown Toronto. While you may get lucky, you also need to wait a long time. Canada is a big place with lots of properties...


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## FI40 (Apr 6, 2015)

Just a Guy said:


> Yes, he has to pay property taxes but remember, since the property is undeveloped, it's not assessed at $1.5M, probably closer to farmland prices. Still, he bought it decades ago.
> 
> As for finding properties, the trick is to be ready as soon as a property hits the market. An all cash, no conditions offer on the first day of listing can often beat an offer with many conditions. The properties I buy are usually cheap for a reason, like a family divorce/death and/or the place was trashed by former tenants and been a bit of a nightmare, maybe there is even a large special assessment on the horizon...all things that would turn off an average buyer. The next trick is not to limit yourself to one area like downtown Toronto. While you may get lucky, you also need to wait a long time. Canada is a big place with lots of properties...


Huh. Still seems really difficult...like you'd have to make tons of offers just to get one accepted. Then the amount of time/hassle required to get a deal would make it a lot less attractive. As an example, how long did it take you to get that last deal in Toronto you mentioned? Or did it just fall in your lap? In that case it's more knowing the right people or whatever, which is a lot harder to quantify in terms of effort required to get to that point.


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## Rusty O'Toole (Feb 1, 2012)

Canadian house prices - up 37% since 2009

TSX - up 68% since 2009

S&P - up 215% since 2009

Watch out for that housing bubble! (sarkylert)


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## FI40 (Apr 6, 2015)

Rusty O'Toole said:


> Canadian house prices - up 37% since 2009
> 
> TSX - up 68% since 2009
> 
> ...


Inflation: Up 11% since 2009 (according to http://www.bankofcanada.ca/rates/related/inflation-calculator/)

That's the comparison you need to look at with housing. As an investment, the returns SHOULD be coming from cashflow-positive-from-day-1 properties, not speculation on price. At least that's my understanding from experienced real estate investors.


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## Just a Guy (Mar 27, 2012)

FI40 said:


> Huh. Still seems really difficult...like you'd have to make tons of offers just to get one accepted. Then the amount of time/hassle required to get a deal would make it a lot less attractive. As an example, how long did it take you to get that last deal in Toronto you mentioned? Or did it just fall in your lap? In that case it's more knowing the right people or whatever, which is a lot harder to quantify in terms of effort required to get to that point.


If it were easy, everyone would be doing it, that being said, there's a big difference between not easy and hard. 

As for time, most of it is automated, and I like the negotiations. To me, finding the deal is the best part. Nothing in life is free, I work for my investment money the same as I work for other money...the difference is the amount of work I do for the amounts of money. Every month, I'll get a dividend check (rent), a principle payment, and possibly some capital gains, which will probably require some ongoing work to maintain that. However, I'll have none of my own money in on the investment, and I'll eventually get a lot out of it. Works for me, if it doesn't for you, that's great, more places for me (and there aren't a lot out there these days).


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## Just a Guy (Mar 27, 2012)

Rusty O'Toole said:


> Canadian house prices - up 37% since 2009


Canadian house prices didn't correct in 2007/2008 like they did in the states. Go back and look at how much they increased since the 90's, then look at the historical average. When intrest rates dropped, prices went up, up, up...way too much, way too fast. If interest rates start to go up, up, up you can expect housing to correct big time as people won't be able to afford the loans.


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## andrewf (Mar 1, 2010)

But there is reason to expect stocks to return > inflation. Real estate on the other hand has a long run real return of basically zero.


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## Just a Guy (Mar 27, 2012)

That's why you buy it with leverage and use other people's money to pay for it. Real estate isn't stocks, the odds of it going to zero is a lot less than stocks, it's not as liquid, it's a long term investment generally, etc.

This is why I believe diversification should be a blend of real estate, owning businesses, and holding equities. Each has different strengths and weaknesses...unlike people who only buy variations of stocks, claiming they're diversified.


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## FI40 (Apr 6, 2015)

Just a Guy said:


> That's why you buy it with leverage and use other people's money to pay for it. Real estate isn't stocks, the odds of it going to zero is a lot less than stocks, it's not as liquid, it's a long term investment generally, etc.
> 
> This is why I believe diversification should be a blend of real estate, owning businesses, and holding equities. Each has different strengths and weaknesses...unlike people who only buy variations of stocks, claiming they're diversified.


I agree with you on both points.

I'd like to have RE exposure (well, I do have some via REITs in the stock indexes I own) to improve diversification, and I intend to in the future. I feel that it's easiest to start though with a local property you can actually visit (and it's easiest if you own a car to do so), and I've tried to find properties that would work in that sense, and failed because the numbers just don't even come close to working. When I look at other areas, it seems more reasonable, so I'm going to wait until I move elsewhere (and own a car) in ~5-10 years.


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## Just a Guy (Mar 27, 2012)

Personally, I'm not a big fan of Reits. Once you own a few properties, you learn that there is a lot more money or advantages than the average person realizes. There are amazing profits to be made (for example, there are ways to finance a property 100% in some cases, which means you're literally creating infinite ROI, money from nothing), there are amazing ways to lower your taxes on the profits, and it tends to be a long term, steady cash flow which only increase over time. 

That being said, I often wonder where all these benefits go in a REIT. It seems to me one pays a lot of money to avoid the "work" involved. The other aspect I notice about reits is that a lot of major frauds seem to follow these types of structures...especially the private reits. 

All that being said, it's certainly easier to buy a reit these days than find a good property. Of course, I've seen the "acquisition costs" of some reit holdings and I wouldn't have bought the properties they hold at those prices either, so they are probably buying places I wouldn't just to remain in the market.


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## OurBigFatWallet (Jan 20, 2014)

Kevin O'Leary said yesterday you'd be an 'idiot' to buy a house in Canada right now: http://www.bnn.ca/Video/player.aspx?vid=760243


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## Just a Guy (Mar 27, 2012)

Most of what he says it true of ALL homes. It's nearly impossible to ever make money in 5 years on a home, real estate is a long term play almost every time.

The other aspect to remember about what he's saying is he's talking about homes, not investment properties. A home, although often touted as "people's greatest investment", is usually a lousy investment. What you look for in a home, and the amount of money you put into it, often makes it a pretty poor investment in most cases. 

Of course, people tend to fool themselves, only looking at general numbers like "oh, I bought my place for 400k, lived there for 5 years and sold it for $450k, I made a great return!". 

First off, 12.5% over 5 years isn't a good return. Next, you've ignored the interest you paid over those 5 years, the 17.5k in realtor fees to sell the place, the legal fees to buy and sell, the property taxes, the maintenance fees, the improvements, etc. You're lucky if you broke even.

Now, let's look at my latest acquisition, a 1000+ sq. ft. 3 bedroom, purchased for under $100k (but we'll round up for ease of math, but that wil then also include the cost of materials to renovate the place), in 2007 it sold for over $215k, today similar units, in poor condition, have sold in recent months for around $170k, so I got it well below market. Once it's fixed up and repaired, it should appraise, even conservatively at $175-200k. I can get a sub-3% mortgage with an 80% LTV, so the return of capital, and 100% financing is pretty much assured...heck, I only need it to appraise at around $130k to meet my numbers.

Next, I can get $1350/month in rent for the place (at 1% of the mortgage, I know it will cash flow even at higher interest rates). With current rates, I'm probably looking at $350-500 profits each month to cover vacancies, special assessments, unexpected expenses, etc. And that is with a fairly aggressive mortgage pay down (20 years biweekly rapid, so that the place is mortgage free in 17.5 years), I could lower my payments by taking a longer mortgage, but I don't like to. 

So, let's say, my rent only breaks even on me for 17.5 years, I've made nothing, but it's also cost me nothing...0% return, what a waste...except I have a property (no increase) completely paid off worth $100k (I'm not even increasing it to reflect the current market price at the time I bought). Now I get hit with the costs to sell, $7000 realtor, $1000 legal, heck let's round up to $10k. Final, in the pocket number $90k (loss of 10% for tax purposes, no capital gain). 

What was my ROI? Lets's do the math...ROI Is return on investment, so I take the return $90k and divide it by my investment...but I have no money of my own in this, so that is $0. 90k/0 is infinite return. I literally created money for myself out of nothing. Did you also catch the fact that this is tax free, no capital gain in this scenario. Do this 11 times and you've made 1M in 17.5 years in a pretty bad investment climate. 

Is it easy? No. 

Is there work involved? Yes.

Is it "risky"? In my experience, if done this way, at these prices, I can't think of a more conservative investment that makes this kind of money.


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## peterk (May 16, 2010)

You sound like a magician Just A Guy!

You should probably write a book about how to convince people to sell you their houses for 50+% less than FMV! What is your secret? Insider banking or mob boss or divorce lawyer connections to provide you a list dire circumstance candidates for your hostile housing takeover bids?

What specifically is all this "non-easy work" that you are doing?? You staking out the broken marriage homes provided by your secret contacts? Then when the wife storms out of the house screaming "I'll take everything you've got you *******!" you suavely swoop in with a custom suit and a big bag of cash and be all like "You know what would really stick it to him? Taking this 90K bag of money for that *******'s $170k house!" And she is so distraught and simultaneously overwhelmed by your dashing good looks she signs the paperwork on the spot!? :biggrin:

I'm not saying I don't believe you or you are making your numbers up. I'm not trying to insult you, I'm just playfully ribbing here . But would you throw us a friggin bone one of these days? You write long essays detailing your amazing abilities to perform magic in the house-purchasing field, yet when pressed for details or advice your fingers suddenly tire and all you can manage to reply is "It's takes hard work guys" or "Trust me they're out there if you know where to look"

Is this your marketing strategy for an upcoming best-seller? I personally am hooked, and would pay upwards of 30 dollars for your Just A Guy tells-all real estate buying guide!


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## Just a Guy (Mar 27, 2012)

I think you should go back and read my old posts, I don't dodge my techniques at all, I just get tired of repeating myself and others tend to get annoyed and argue "it can't be done". There was one time, I think it was on the other board, where I pulled up an exact example, listing and all. Other people confirmed that my rental rate was actually under value in the same complex, we established that my costs for renovations were true but, at the end, some people were complaining that "I didn't factor in the taxes I'd have to pay on the profits". There's no winning this game.

But, just because you asked...

I work with a realtor, we have automated searches set up for houses that meet my criteria. As soon as a house hits the market in my general ballpark (which varies for each city) I get an email, then I go look at it. I tend to have a number of lists going all the time, X beds under a certain price, apartment buildings, foreclosures, etc. Right now, with the economy so unstable, there are a lot of houses on the market and not a lot of buyers, a few years back I bought mostly foreclosures.

I specifically look for properties which have sound construction, but ugly interiors, better if they are completely trashed...something that the "average home buyer" would be turned off by. I'm going to redo the interior anyway to my standard look, so I don't care what it looks like, uglier the better, as it turns away other buyers.

I've got maximum amounts I'll pay for a place given their size, number of bedrooms, and location. I don't buy slums, but I may buy in an area which had a bad reputation but is on the rise. Neighbourhoods tend to work on a 10/10/10 cycle. When it starts to decline, it takes about 10 years to hit bottom (when crime, prostitution, etc hit their peak). You can usually tell its in decline by the types of businesses that move into the area (pawn shops, money marts, porn shops, etc.). 

Once they've hit bottom, they tend to stay there for about 10 years, until people complain enough to that the police/government feel the need to do something about it. A good indicators is the signs that go up from the police about the area being a "no prostitution", "zero tolerance zone" etc. And a higher police presence, also the pawn shops and such start closing and moving to a different part of the city. This (about year 10) is a good time to get in, people don't want to buy in, prices are low, etc. 

After the city takes notice, it takes about 10 years to recover (more than halfway through your mortgage), after which the area starts to become more "desirable". Many trendy parts of town used to be some of the worst areas. 

So, once a house hits my radar, I go take a look. I've been doing this a long time, so I've got access to plenty of credit to buy the place outright, unconditionally. I tend to use a heloc for this. If you go look at a foreclosure, and put an offer in that requeries financing (remember this property already failed to make payments with a bank), and I go in making an offer of cash, quick and done, which do you think may get a discount? In the past, I've had estates (heirs want their money now), divorces (same), etc. I don't go looking for crisis, but I tend to find out the reason during negotiations. End of the year tends to be a good time to buy too I've found, banks want properties off their books before year end, people want money for the holidays. 

Once I've got the deal closed (I'll admit, I make a lot of offers and don't always get my places), I know it will cost me less than $5000 in materials to renovate the places on average. I use high quality (15mm laminate, name brand paint, a standard, yet trendy colour) products that, since I buy a lot I can get in bulk. 

Renovations tend to take 1-2 months depending on my workers. While that is underway, I call up my bank and start arranging the mortgage details and advertise the rental (it takes a while). If everything works to plan, as the renovations complete I'll have a signed lease to present the bank and the mortgage appraised high enough to cover my costs. 

A little known fact about mortgages, if you buy a place and apply for a mortgage at the same time, the sale price is used to determine it's market price. If you have a clear title however, even if it's the day after you bought the property, the bank has to get an appraisal done. Meaning the price you paid has nothing to do with the determination of "fair market value". Things like comparable sales and rental income have a much larger role.

Now, as for the work...

I have to check my emails all the time, I need time to go look at places, or arrange to send someone I trust to do it. I need to sign offers and negotiate. When you start, you often have to find/train a realtor as well (since most of them don't believe I can buy places like I do either). Need to work with banks, lawyers, etc. Not just at the time of purchase, but ongoing, especially with the banks as lending rules change all the time, not to mention criteria and risk aversion. 

I, or my representatives, tend to be on all the condo boards, which means attending meetings. Many boards and property manager companies often have problems, and don't always do things properly. Often we have to educate the boards and find new property management in the distressed properties, so the first few years can be a lot of work until things get straightend out. Once things have a system, it tends to rune smoothly and you can just oversee to ensure no one does something to derail it. Many owners want to cut costs, short term that may work well for them, long term it runs the place into the ground, plus there are often legal requirements or rules that get ignored out of ignorance (like not being allowed to reside a condo without a special resolution, or contractors who conform to OH&S rules and engineering specifications). 

You have to screen tenants, oversee managers, contractors, etc. I try to see my properties as much as possible, since I don't trust employees 100%. I also try to learn about the areas I invest in so I know where it lies on the 10/10/10 spectrum, what kinds of renters I'd have, what the job prospects are, etc. It's not a lot of work per se, but it does tend to add up over a number of properties.

There is also the accounting, property tax appeals (I like to appeal taxes, as I buy low I usually win), and just keeping up-to-date on the industry as well as investing techniques. I'm constantly reading new books on the subject. Unlike many investors, I don't think I know everything there is to know about the subject, nor have I stopped refining my system. 

As for writing the "just a guy book", I don't really see it in the cards. There is a very good book (Canadian perspective too) for beginners at www.easysafemoney.com which has a very similar philosophy to mine, he still writes in his blog occasionally and answers emails. There was also another book called "big profits from little properties" by Heeney, he was American I believe, but his website is dead, should still be able to find the Ebola. I also just started to listen to "First-Time Landlord: Your Guide to Renting Out a Single-Family Home", it's pretty good so far, I'd recommend it, even if it is American. 

I also tend to answer a lot of PMs from people asking more specific questions.

P.S. I went and found the "example" thread on the other board...

http://www.financialwisdomforum.org/forum/viewtopic.php?f=34&t=116102&p=539728&hilit=Flood#p539728

Must have been a different thread where the guy complained about the "taxes on the profits", I couldn't find it...it may have been on this board.


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## peterk (May 16, 2010)

Wow!! That was amazing. I will be bookmarking this post #31 for many future re-reads. I have lots of questions but can't organize it all in my head just yet.

You are a champ Just A Guy. And even if you don't write it, I'll still buy that book! :biggrin:


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## Woz (Sep 5, 2013)

@JustAGuy Interesting post. Thanks for sharing.


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## sags (May 15, 2010)

A buddy of mine does pretty much the same, but he has a circle of realtors, "friendly" mortgage lenders at a certain bank, and a list of trades who work "under the table for cash".

He does well and last time I heard he owned about 20 properties, including the purchase of a low income housing project where he refinished one unit at a time and kicked out the low income tenant.

But he says.....you have to have thick skin to deal with renters. He has been sworn at, laughed at, taken to court and threatened.....but he isn't worried because he also knows the really "bad" guys in town........LOL.

It is funny though, because in truth he would give someone the shirt off his back to help them out.........but after they insult him he isn't so nice anymore.


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## Just a Guy (Mar 27, 2012)

I tend to avoid those types of investments...I tend to be nice to my tenants, as long as they are good tenants. I aim a bit higher than the bottom. The nice thing about being in the lower middle class range is, when the economy turns south, people the people In Higher end places move down...leaving high end places vacant. In good times, people move up, but the middle class places always seem full.


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## sags (May 15, 2010)

Alberta is already in "crash" mode, with Fort McMurray at the epicenter of the collapse. Prices there are down 20% or $117,000 in a year.

http://business.financialpost.com/n...lost-117000-or-20-of-its-in-value-in-one-year


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## peterk (May 16, 2010)

^ Looking at the raw housing stats, there was a really really bad month for Apartments and condos which dragged down that average number to 20%. There are so few apartment/condo being sold that one months bad data can be skewed by half a dozen low-end 1-beds selling instead of the nice 2-3 beds condos, which I think is what has happened, and I expect the November numbers will actually be much higher than October.

A detached house has lost somewhere around 60-80k in value year over year.

That said, even the actual housing stats is misleading as it's just year over year, so Oct 14 to Oct 15. House prices were already on the decline in early 2014 in Fort Mac even before the price of oil dipped below $100, due to over building. The real price peak was somewhere in 2012/2013.

I know a number of people who bought detached homes here in summer 2013, ouch!

I expect that the Fort Mac crash is just starting and about to happen, and the Calgary crash will come some 6-12 months later. Rents are coming way way down, confidence in the future is falling.


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## Durise (May 16, 2016)

Yes John, I heard it from long since but maybe it's not available right now.


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## BigMonkey (May 31, 2016)

Yes there is a housing bubble. Especially in Vancouver and Toronto. 

When is it going to pop? No idea. I thought it would have popped with the gas prices.

I don't know how long the Canadian government can suppress interest rates. Especially since US is raising interest rates.


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## ThisGuyNelson (Jun 4, 2016)

I live out in Vancouver. It's pretty darn clear there is some kind of bubble here with the foreign investment. Nobody can afford to buy homes here. I know there is a similar issue with housing prices in Toronto. If the bubble bursts here and in Toronto, will there be a general recession, or just a minor setback?


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## CrashTestSnoopy (Jan 21, 2015)

BigMonkey said:


> Yes there is a housing bubble. Especially in Vancouver and Toronto.
> 
> When is it going to pop? No idea. I thought it would have popped with the gas prices.


The reason it didn't pop is because the GVA and GTA function in it's own ecosystem. Those 2 areas don't care if oil plummets, recession, retail chains closing or whatever. 

ThisGuyNelson: Eventually it will just level off. I wouldn't say nobody can afford to buy homes there, just not Canadians. The current RE market in the GVA and GTA are not for the majority of Canadians. If anyone is considering buying but putting it off thinking to wait for it to "crash" or "burst" then you would have noticed you've been gradually priced out of certain communities and pretty soon other communities as well through the principle of progression. Eventually condos are what most Canadians can only afford which is why developers are still building them like crazy. It's ok to live in a condo, just don't be disappointed when you plan to sell it later. 

Best of luck to all of you.


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## dogcom (May 23, 2009)

A crash can happen for a lot of reasons but know one knows if or when. 

What we do know is Toronto and Vancouver are the premium top cities in Canada, just like London, New York and Hong Kong are in their countries. Also Canada is considered a very safe and desirable place to live and isn't overpopulated. As Canadians we may be somewhat blind to these facts.


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