# Buying a second condo to rent out for income?



## gentlepuppies (Jan 17, 2016)

I was helping my boyfriend hunt around for studio apartments within 10min walking distance to ANY Line 1 subway station in Toronto and was shocked by how high the rents are for shitty old apartments in the burbs (they seem to be within 10% of the price of new downtown condos that cost twice as much).

Theoretically, I can buy a 3 bedroom apartment in a commie block somewhere for about $350k with 5% down, pay $1600/month in mortgage, plus $900 maintenance+property tax, but get back at least $2500 in rent. Not counting price appreciation, my net gain in equity would be about 10k a year. I'd be more than happy to pay a property manager 10% to handle it all, but do they really handle it all? How is DASH for example? Will they guarantee an annual cash flow or cover repairs for a fixed price?

Background info in case it's relevant: currently own a $600k condo in Toronto with $250k mortgage left, $55k in RRSP, and another $30k in cash sitting around. My stocks haven't been doing great (My RRSP has a book value of $65k :apologetic, so I don't plan to invest until after the next recession.


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## Just a Guy (Mar 27, 2012)

I wouldn’t do it at those prices. You’ll probably wind up losing your shirt.


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## Tinman (Feb 17, 2014)

For *myself* too risky, and too much work (upkeep, property manager) not to mention having all my eggs in one market. I was looking at buying a rental property but invested in Canada's largest apartment REIT instead. You get to spread your $$ across the country while earning dividend rent..which I happen to have on a DRIP.


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## Just a Guy (Mar 27, 2012)

Wanting to get into real estate is a great idea, buying anything just to get into the market is a stupid idea. This is a business, you can’t just grab any piece of property and make money with it. You can’t say well I want to invest in Toronto and that suddenly makes properties there profitable. 

I buy properties for a fraction of the prices you want to buy at and only make a couple hundred dollars in profits each month with half the rents. So, a 50k property that rents for $1000/month only makes a couple hundred. However 7 properties at 50k, renting for $1000 (to total your $350k for one property which would rent for $2500) would make a couple thousand dollars in profit whereas your property would lose money. 

Yes, you can’t buy properties in GTA for $50k...that’s why you can’t be a starting landlord by buying in GTA even though that’s what you want to do. The world doesn’t care what you want, you need to deal with the realities. If you want to be successful in real estate, you need to go where you can be successful in it, or stay out. Leverage is a two sided sword, it can make you a fortune or kill you if you don’t know what you are doing. 

Oh, and there are many ways you can fudge the numbers to make your 350k property look like it’s making a “profit” for you. As someone in the industry let me tell you not to lie to yourself. I’ve found that the 1% rule (meaning your monthly rent is 1% of the purchase price, so you’d need $3500 in rent for a $350k property), in reality, barely breaks even in real world situations when you factor in all costs and vacancy.


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## Longtimeago (Aug 8, 2018)

Well said Just a Guy. I don't know why it is that so many people seem to think that things they know nothing about are 'easy to do'.

Gentlepuppies, let me give you some other examples to consider. At one point in my life, I owned half a bar in a busy tourist destination. When I went into it, I knew nothing about owning and running a bar but I had a partner with 20 years experience in the business, so he knew what we had to do to make the bar successful. At the same time, I saw quite a few people like myself who moved to the location and *attempted* to open a small business whether it was a bar, a restaurant, a hotel or B&B, etc. Most failed and were out of business within a year or two. Mine was successful but not because of me, it was all because of my partner and his knowledge.

There's a story I like about 2 guys, strangers to each other, who get into conversation in a vacation destination bar (could have been mine). After some chit chat, one asks the other, 'so what do you do for a living' and the second guy replies, 'I'm a travel writer.' The first guy says, 'oh really, you know I've always thought I would like to write a book after I retire.' The second guy then says, 'so what do you do for a living now' and the first guy replies, 'I'm a brain surgeon.' The second guy then says, 'oh really, you know I've always thought I would like to do a little brain surgery after I retire.'

The point being that every business has its own set of knowledge that is needed to be successful and the idea that if you have lived in a few houses, then you know how to successfully rent houses or having had a drink in several dozen bars you know how to run a successful bar is not a very smart way to think. 

Generally speaking, to go into a business that will require you to think and make decisions is not the same as buying some stocks or sticking money in a GIC or RRSP, knowledge is required and therefore a way of having access to that knowledge unless you are willing to lose your shirt several times while you go through the process of learning that knowledge the hard way.

Rental property is a business like any other business. Try asking yourself how you think you would do as a brain surgeon. The only difference between the two is is how we tend to think of one vs. the other. We acknowledge that brain surgery requires specific knowledge but we *think* owning a rental condo doesn't.

I'm not saying don't invest in real estate, but I am saying you need to do a lot more homework and get advice from as many experienced people as you can before starting. It looks to me like you looked at some rentals with your boyfriend, had a 'eureka' moment and then did some quick math to tell yourself, 'hey, I could make some money doing this.' My guess is that even Just a Guy's mentioning of the 1% rule comes as a complete surprise to you.

I disagree somewhat with Just a Guy's thoughts about making money on property in Toronto. You can make money there but how you do so is different than how Just a Guy operates that's all. For Toronto, you need to be in a position where you see $350k in the way Just a Guy sees his $50k properties. Can't make much on one but hey, just buy 7 and the picture changes.

At one time I was heavily into commercial and industrial properties which were mostly in the GTA. But I was into around 10-12 properties at a time with book values of at least several million per property. A very small percentage ROI was still a significant number of dollars in income.

But I do agree with Just a Guy in saying that with one $350k condo, you can't expect to get rich anytime soon and may well lose money quite easily. But with 7 $50k properties or 7 $350k properties, you have a very different picture. If you cant afford the latter however then maybe you should be looking at the former and of course if you do either, you can expect to find you have a full time job doing it. Then you are committed to a 'business', not just owning one property that someone else is going to take care of all the headaches for you.

If you want a passive investment, real estate is not nearly as passive as some people seem to think. Tinman has given you one way to invest in real estate (REITs) in a fairly passive way but of course the returns will not be as good as if you actually go into the real estate business yourself. Always a trade off isn't there.


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## Fisherman30 (Dec 5, 2018)

I think Real Estate can be a good business to get into if you know what you're doing, and you have the experience of someone like JAG.

I can tell you from my personal experience that I wish I had known more before I got into it. I've been renting my condo out for 4 years that I paid $169k for. Thank goodness I've had amazing tenants for the entire time who have never been so much as a day late with rent. I'm losing a couple hundred $$ monthly on the place, and if the place went vacant, my cash would be quite tight. I can't imagine being in the same position with a condo that costs $360k. What if interest rates go up some more, the place is vacant for several months, condo fees go up, any special assessments, housing prices drop etc. 

My problem was that the condo I bought was my "home" for a while, and I decided to hang on to it when we bought our house. I should have sold it right away when we were looking to buy a house. If I specifically wanted to be into real estate, I should have sold my condo "home", and purchased something way cheaper, where I could make money every month.


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## gardner (Feb 13, 2014)

gentlepuppies said:


> pay a property manager 10% to handle it all, but do they really handle it all? [...] Will they guarantee an annual cash flow or cover repairs for a fixed price?


No, not at all. They are experienced professionals and will find good tenants and know what they are doing, but they will not take ANY risk on the deal. They do not guarantee that the property will be rented, or at what rate. You will pay the cost of advertising the place and will pay all the expenses (insurance, taxes fees and maintenance) while it stands empty. They will arrange repairs at a reasonable cost, but they will bill it straight to you. They will "handle it all" in the sense that the tenants will call them, not you.


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## Spudd (Oct 11, 2011)

Nobody's mentioned this yet, but I think you would be hard pressed to find a $350k condo that's a 10-minute walk from the subway. I looked on realtor.ca and there are none that I can see. The closest seems to be Lotherton Ptwy which is a 30 minute walk from Lawrence West station. Or there's one in Massey Sq which is 20 min walk from Main Street station on the Danforth, for $369k.


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## Mukhang pera (Feb 26, 2016)

gentlepuppies said:


> Theoretically, I can buy a 3 bedroom apartment in a commie block


Should we take it you are looking at condos in the former Soviet Union? Probably some there cheaper than Toronto, sure enough.



gentlepuppies said:


> Theoretically, I can buy a 3 bedroom apartment in a commie block somewhere for about $350k with 5% down, pay $1600/month in mortgage, plus $900 maintenance+property tax, but get back at least $2500 in rent. Not counting price appreciation, my net gain in equity would be about 10k a year. I'd be more than happy to pay a property manager 10% to handle it all, but do they really handle it all? How is DASH for example? Will they guarantee an annual cash flow or cover repairs for a fixed price?


If the mortgage cost is $1,600 and strata fees and property tax are another $900, that comes to $2,500, which you say is probably the rental amount. How then do you pay 10% ($250/mo.) to a property manager and still end up with with a net equity gain of $10k/yr. Looks to me like a net loss of $3k/yr. Maybe I missed something.



gentlepuppies said:


> I'd be more than happy to pay a property manager 10% to handle it all, but do they really handle it all? How is DASH for example? Will they guarantee an annual cash flow or cover repairs for a fixed price?


Gardner is right on that score. No property manager will guarantee an annual cash flow, or cover repairs for a fixed price. How could they and stay in business? If you could think that possible, do more research before investing.


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## *PetePerfectMan* (Jan 24, 2019)

gentlepuppies said:


> I was helping my boyfriend hunt around for studio apartments within 10min walking distance to ANY Line 1 subway station in Toronto and was shocked by how high the rents are for shitty old apartments in the burbs (they seem to be within 10% of the price of new downtown condos that cost twice as much).


Tell your boyfriend to get a realtor instead and buy a house. It is much cheaper than buying a condo.


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## Just a Guy (Mar 27, 2012)

*PetePerfectMan* said:


> Tell your boyfriend to get a realtor instead and buy a house. It is much cheaper than buying a condo.


That’s probably unlikely if you budget to maintain the house. Many people think condo fees are an “extra” charge but, if used properly, it’s the maintenance fund to fix things like the roof, doors, balconies, heating system, plumbing, electrical and things you’d have to pay for in a house as well. The difference is, when you own a house, you generally don’t make monthly contributions to a savings account to cover these items and you then have a large bill to pay for (condos who don’t budget correctly have the same issue, it’s called a special assessment). 

Sure there are some extra expenses like a property manager, but there are also saving like buying windows and doors in bulk, so it generally balances out. 

Personally I haven’t found one type of building to be more expensive than another when you do the actual math.


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## lonewolf :) (Sep 13, 2016)

Longtimeago;2004046
Generally speaking said:


> If you want to make money investing should always be treated as a business except where Canada revenue is concerned. If you want to lose money treat playing the market as a hobby


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## Longtimeago (Aug 8, 2018)

lonewolf :) said:


> If you want to make money investing should always be treated as a business except where Canada revenue is concerned. If you want to lose money treat playing the market as a hobby


Yes, I was not trying to say there is no knowledge required to 'actively' invest in the stock market lonewolf . I was talking about 'passive' investing vs. 'active' investing. Most people putting money into GICs or RRSP funds do NOT actively look at where their money is being invested by fund managers.


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## nobleea (Oct 11, 2013)

Mukhang pera said:


> If the mortgage cost is $1,600 and strata fees and property tax are another $900, that comes to $2,500, which you say is probably the rental amount. How then do you pay 10% ($250/mo.) to a property manager and still end up with with a net equity gain of $10k/yr. Looks to me like a net loss of $3k/yr. Maybe I missed something..


She mentioned net gain of 10K a year in equity. I assume the 1600/mo in mortgage payments has some portion of it for principal repayments. That would be equity growth, even if it was not cash flowing on a monthly basis, as you point out. And negating any changes in market value, interest rate rises at renewal time, and vacancies.


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## Just a Guy (Mar 27, 2012)

Yes, but she also ignores the fact that the market prices are never know what a place is worth until someone writes you a cheque. Counting on capital gains and price increases is foolish. That’s hope and pray investing. You should only count the profits you know (cash flow) not paper profits.


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## Just a Guy (Mar 27, 2012)

Yes, but she also ignores the fact that the market prices are never know what a place is worth until someone writes you a cheque. Counting on capital gains and price increases is foolish. That’s hope and pray investing. You should only count the profits you know (cash flow) not paper profits.


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## Longtimeago (Aug 8, 2018)

nobleea said:


> She mentioned net gain of 10K a year in equity. I assume the 1600/mo in mortgage payments has some portion of it for principal repayments. That would be equity growth, even if it was not cash flowing on a monthly basis, as you point out. And negating any changes in market value, interest rate rises at renewal time, and vacancies.


Given a $35k down payment then best case, $54k invested over the course of the year minus $30k income equals what? Here's a clue, it's called a loss. Here is what I think the OP is referring to in her simple calculation of gaining $10k in equity for a year. Pay $19.2k in mortgage, receive $30k in rent and voila you have an apparent gain of $10.8k in a year. Of course that totally ignores the fact you put a down payment of $35k (or however much) in to start with doesn't it.

As for any 'equity growth' based on principal repayment, what, you are saying is that if perhaps $1000 of the $1600 per month mortgage payment is 'equity repayment', that that is somehow a growth of equity? Really? It didn't come out of your pocket? someone else paid it for you? Because if it came out of your pocket, nothing 'grew', you just moved existing equity from your pocket onto the property. 

People talk about growing their 'equity' as you are nobleea when in fact all they are really talking about is taking money out of their pocket and putting it 'into' something else, like a property. That's not 'growth'. Equity growth happens when you 'buy low, sell high', not by 'adding' to the equity you have invested in something. The only way to reasonably say your 'equity grew' is if the amount you put into your pocket after selling something is more than the amount you took out of your pocket to buy.


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## Longtimeago (Aug 8, 2018)

Deleted as double posted. Site is acting up.


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## cm2u (Feb 6, 2019)

Just a Guy said:


> Wanting to get into real estate is a great idea, buying anything just to get into the market is a stupid idea. This is a business, you can’t just grab any piece of property and make money with it. You can’t say well I want to invest in Toronto and that suddenly makes properties there profitable.
> 
> I buy properties for a fraction of the prices you want to buy at and only make a couple hundred dollars in profits each month with half the rents. So, a 50k property that rents for $1000/month only makes a couple hundred. However 7 properties at 50k, renting for $1000 (to total your $350k for one property which would rent for $2500) would make a couple thousand dollars in profit whereas your property would lose money.
> 
> ...


Where in the world can one hope to buy a 50k house and rent it at $1000 a month? Maybe the Maritimes in a depressed area? 
I've seen some areas of Quebec that also seem to be very cheap. 
You mention 7 x 50k properties making on average of $200/month equals a "couple thousand". Isn't it $1400? And how does she come out ahead when she has a $900/mo condo fee/taxes to pay? Maybe that's the problem you saw in her numbers.


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## Just a Guy (Mar 27, 2012)

Contact a realtor and look at properties across Canada, you’ll see there are places in many major cities where such properties exist. I also didn’t say house...I’m looking for revenue properties that’s different. The west is particularly low in prices right now. As for making a couple thousand with 7 properties, I wasn’t using exact numbers, each property has different fees with them, I aim to make at least a couple hundred, but often make more so the profits are higher. Of course, costs change yearly, so I generalized the statement. I was also comparing 7k total rent vs 2.5k. The profits would be substantially higher.

ive been doing this a long time and, just hearing a few numbers and knowing the area involved I can probably make a fairly good educated guess as to what other peoples numbers would really be.


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## cm2u (Feb 6, 2019)

Just a Guy said:


> Contact a realtor and look at properties across Canada, you’ll see there are places in many major cities where such properties exist. I also didn’t say house...I’m looking for revenue properties that’s different. The west is particularly low in prices right now. As for making a couple thousand with 7 properties, I wasn’t using exact numbers, each property has different fees with them, I aim to make at least a couple hundred, but often make more so the profits are higher. Of course, costs change yearly, so I generalized the statement. I was also comparing 7k total rent vs 2.5k. The profits would be substantially higher.
> 
> ive been doing this a long time and, just hearing a few numbers and knowing the area involved I can probably make a fairly good educated guess as to what other peoples numbers would really be.


The west? Does that mean rural Alberta or the BC interior? 
Ah I see, 50k per unit. Right. That makes sense.


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## Just a Guy (Mar 27, 2012)

Caught me, they don’t exist. Just Like the world outside of gta. I’m really a drunken bum with internet access who posts things for you to disbelieve.

I’ll keep buying my imaginary properties and you can keep believing they don’t exist. I’ll keep banking my imaginary profits and you can keep not depositIng yours.


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## cm2u (Feb 6, 2019)

Just a Guy said:


> Caught me, they don’t exist. Just Like the world outside of gta. I’m really a drunken bum with internet access who posts things for you to disbelieve.
> 
> I’ll keep buying my imaginary properties and you can keep believing they don’t exist. I’ll keep banking my imaginary profits and you can keep not depositIng yours.


Huh? I simply asked you a question. Then I mentioned that what you said makes sense. Why the attitude? I'm just curious if you're buying in the Maritimes as it seems to have the cheapest real estate in the country right now. Other than 1 horse towns in the middle of nowhere of course but its pretty hard to rent rooms in places like that. To me the Maritimes is the place to go. Plus its a lot warmer in the winter there than the Prairies or Quebec. And little French for us linguisticly deprived English only speakers. Some places even have decent surfing and diving with the appropriate wetsuit. And its relatively close to New York where the best flight deals are.


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## Earl (Apr 5, 2016)

Just a Guy said:


> Caught me, they don’t exist. Just Like the world outside of gta. I’m really a drunken bum with internet access who posts things for you to disbelieve.
> 
> I’ll keep buying my imaginary properties and you can keep believing they don’t exist. I’ll keep banking my imaginary profits and you can keep not depositIng yours.


Perhaps you could point out one of those properties instead of simply insisting they exist? Provide a link to a house/condo/whatever that is selling for 50k that would rent for 1000/month. LOL


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## Just a Guy (Mar 27, 2012)

Perhaps you’ve heard of a site called realtor.ca? Too lazy to use it, want others to do the work for you. Quite pathetic. Probably use audiobooks because you can’t be bothered to read yourself. Of course someone would have to press the button to start it for you...

as I said before, I’ll continue to deposit my imaginary profits and you can continue to disbelieve me And deposit yours.


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## cm2u (Feb 6, 2019)

Earl said:


> Perhaps you could point out one of those properties instead of simply insisting they exist? Provide a link to a house/condo/whatever that is selling for 50k that would rent for 1000/month. LOL


He did say that he was aiming for 50k per unit so it probably rarely involves houses. Go to a realtor website that uses a map. Then you can put in your price limit and see where the lower prices are. I find maps so useful for looking at stuff like this. So much better than searching numerically or alphnumerically. It allows you to see patterns by area which can tell you much if you're familiar with that area. Also it shows reasonably priced properties close to desirable areas which is always nice when those desirable areas expand and gobble you up! Real Estate | Homes for Sale & Rent by Point2 has a pretty good map system. Looking at realtor.ca it also has a good map with useful filters. The main problem with searching low priced properties is prick/careless realtors that list their land or mobile home with its $800/month pad rent to pay the owner $100/hr to shovel snow, as a house. Wastes so much of the buyer's time when sellers couldn't care less.

What would be REALLY great is to see a rent graph for the area you're looking to buy in. Never seen that before! Just a rough approximation of certain rental parameters. Like the cost of a 120 sq ft bedroom in a middle class suburb in a 50 year old but well kept house or median bedroom for rent for one person.

The challenge is finding a multitude of employers in that area. Many areas plummet in value when the main employer shuts down. This is where you can really lose your shirt and why, at least for me, stuff away from cities can be very risky. But, if its in area that is nice in terms of nature, it might be rented out for getaways on a daily basis. Better than nothing. If all else fails you can always move there yourself, dragging the screaming, protesting kids every step of the way with you mumbling about how Zoom and Facetime is still "connecting" us just fine. Then imagine if your kids are teenagers. That would be a meltdown moving to Hooterville. 

You wanted an URL. Here's an URL. $50,000 max for a house, showing all of Canada. Interestingly the main pocket of properties is in SK. This map is nice in that you can scroll down the left column to make sure its not empty lots or mobile homes.



https://www.realtor.ca/map#ZoomLevel=4&Center=47.280780%2C-89.262974&LatitudeMax=59.22210&LongitudeMax=-47.72001&LatitudeMin=31.87950&LongitudeMin=-130.80594&Sort=6-D&PropertyTypeGroupID=1&PropertySearchTypeId=1&TransactionTypeId=2&PriceMax=50000&BuildingTypeId=1&Currency=CAD



Granted almost every one needs some work. Hard to tell how much by such low res photos. It seems like for most of them people started renovating and just gave up. 

$1694 taxes with a selling price of $28,500??? Is this normal for out of the way property? That's about 6%! Frobisher is truly in the sticks. While its on a large lot its not huge. What is going on here??? I thought land tax is much less away from the urban sprawl and is one of the reasons that people move there.








Check out this listing


421 4th ST, Frobisher, Saskatchewan S0C0Y0




www.realtor.ca


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## cm2u (Feb 6, 2019)

Another one with high taxes. But its in Regina. Or close. $1411 for a $39,500 property. 2 bedrooms and a finished basement but the photos of the place are sadly lacking. Look at the bottom of the page for others in this price bracket. Regina looks very cheap though the city taxes are very high for the cost of the property. 








Check out this listing


1250 CAMERON ST, Regina, Saskatchewan S4T2T1




www.realtor.ca


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## cm2u (Feb 6, 2019)

$300 living room that is 14' x 16' in Regina. Pretty cheap!




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Otherwise rents look quite normal. Its difficult really appraising things without knowing the areas. The cheap places are probably in veritable war zones. Regina has a lot of crime. What's interesting in Regina is the huge difference in prices. Its like the land has much less value than in most cities and its just whatever is on it that matters. Or maybe its just the areas that are causing vast differences in pricing. Nobody wants to be around public housing.


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## Earl (Apr 5, 2016)

cm2u said:


> Another one with high taxes. But its in Regina. Or close. $1411 for a $39,500 property. 2 bedrooms and a finished basement but the photos of the place are sadly lacking. Look at the bottom of the page for others in this price bracket. Regina looks very cheap though the city taxes are very high for the cost of the property.
> 
> 
> 
> ...


What would possibly make you think that dump would rent for $1000/month?

I did a quick search on kijiji and found multiple houses and apartments for rent in Regina for around $500/month:








Kijiji - Buy, Sell & Save with Canada's #1 Local Classifieds


Visit Kijiji Classifieds to buy, sell, or trade almost anything! New and used items, cars, real estate, jobs, services, vacation rentals and more virtually anywhere.




www.kijiji.ca












Kijiji - Buy, Sell & Save with Canada's #1 Local Classifieds


Visit Kijiji Classifieds to buy, sell, or trade almost anything! New and used items, cars, real estate, jobs, services, vacation rentals and more virtually anywhere.




www.kijiji.ca












Kijiji - Buy, Sell & Save with Canada's #1 Local Classifieds


Visit Kijiji Classifieds to buy, sell, or trade almost anything! New and used items, cars, real estate, jobs, services, vacation rentals and more virtually anywhere.




www.kijiji.ca












Kijiji - Buy, Sell & Save with Canada's #1 Local Classifieds


Visit Kijiji Classifieds to buy, sell, or trade almost anything! New and used items, cars, real estate, jobs, services, vacation rentals and more virtually anywhere.




www.kijiji.ca












Kijiji - Buy, Sell & Save with Canada's #1 Local Classifieds


Visit Kijiji Classifieds to buy, sell, or trade almost anything! New and used items, cars, real estate, jobs, services, vacation rentals and more virtually anywhere.




www.kijiji.ca





I am not disputing that you can buy a house for under $50,000 in Canada, I am disputing JAG's ridiculous assertion that such a property would rent for $1000/month.

Second of all, are you located anywhere near Regina? If not, how do you plan to take care of these properties? Travelling there woudl cost a small fortune in gas and motels. Alternatively you could hire a local company to take care of them but that would eat up a significant portion of profits.


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## Earl (Apr 5, 2016)

Just a Guy said:


> Perhaps you’ve heard of a site called realtor.ca? Too lazy to use it, want others to do the work for you. Quite pathetic. Probably use audiobooks because you can’t be bothered to read yourself. Of course someone would have to press the button to start it for you...
> 
> as I said before, I’ll continue to deposit my imaginary profits and you can continue to disbelieve me And deposit yours.


In other words, you are unable to provide a single example to prove your ridiculous claim. I rest my case


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## Earl (Apr 5, 2016)

Also, what kind of tenants do you think would rent some dumpy little house in a bad neighborhood? People on welfare, people with no credit, people with criminal records, etc. Good luck trying to collect your rent. It's one thing to rent a nice apartment to working professionals in a city, completely different renting the types of properties you are considering. My advice: forget about the whole thing and put your money in index funds. Earn yourself the stock market average without having to worry about being stabbed by some pissed off tenant or being woken at 3am to fix a toilet.


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## Just a Guy (Mar 27, 2012)

In other words, I’ve done it in the past and people still disbelieve it. I’m also tired of doing the work for others. It’s a matter of public record. You, as usual, have no ”case”, just a stupid opinion with no backing. Why not produce a list of all sales from Canada to “prove” nothing sold for less than 50k which could rent for $1000, then you’d have a “case” and not an unfounded opinion.

p.s. I never said they were houses, I said they were rentals, there is a difference. Oh, and I have no problem collecting my rents, my places are all renovated and look quite modern, how much income do you collect? Oh wait, Aesop’s fox in sour grapes, we all know what he got...


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## Earl (Apr 5, 2016)

Just a Guy said:


> In other words, I’ve done it in the past and people still disbelieve it. I’m also tired of doing the work for others. It’s a matter of public record. You, as usual, have no ”case”, just a stupid opinion with no backing. Why not produce a list of all sales from Canada to “prove” nothing sold for less than 50k which could rent for $1000, then you’d have a “case” and not an unfounded opinion.
> 
> p.s. I never said they were houses, I said they were rentals, there is a difference. Oh, and I have no problem collecting my rents, my places are all renovated and look quite modern, how much income do you collect? Oh wait, Aesop’s fox in sour grapes, we all know what he got...


All you have to do is provide one, just ONE example of a house/apartment/condo/townhome/whatever that sells for 50k and would have a market rent rate of $1000/month to back up your luducrous claims. This is one of those put up or shut up moments, kindly choose the appropriate action.


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## Just a Guy (Mar 27, 2012)

Unfortunately nothing shuts up people like you. Youre too lazy to do the work yourself, so you’ll always find some excuse as to why others can do it and you can’t.

I mean really, how hard is it to go to realtor.ca, right along the top is a search that you can put in max price 50k and see hundreds of listings, if not thousand, across Canada...but you can’t be bothered. True, not all these listings are rentals, some are barren land, or trailers, but not all of them are though. I’m willing to look and you’d rather be broke. You’re right the grapes are sour, stick with mutual funds where others do the work for you and take the money.


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## cm2u (Feb 6, 2019)

> > Another one with high taxes. But its in Regina. Or close. $1411 for a $39,500 property. 2 bedrooms and a finished basement but the photos of the place are sadly lacking.





> What would possibly make you think that dump would rent for $1000/month?


Well if you rent like most owners, to one family, its much harder. But still possible in this area I think due to my reasons below with your low priced examples (they were out of town or in terrible condition and probably in very poor areas). 

The way to do it is to rent it by the room. Would this work for a small house? That's dicey. Because the owner is occupying a much greater percentage of the total area. The owner could always get a big trailer and park it on the property and live there of course but then they wouldn't be aware of problems as they arise inside. Better to buy a trailer (or 2) for the property and rent them out. Actually I wonder how many locales would allow that, or a shipping container that is painted to blend in with the surroundings. What an interesting way it would be to expand your rentable area. You'd probably have to be in an area with very relaxed zoning restrictions. I do see them quite often used for storage in poorer areas of my city. And if they're there for storage maybe they could be used for accommodation. 

Remember that this conversation was about the poster who was claiming 50k/unit. For a multi-unit building. So small houses are really not relevant plus its just so much harder to extract a lot of rent when you have so little rentable space. And the owner is occupying a hefty percentage of that. 

I looked up room rentals and was surprised at how costly they were for a place like Regina. Beware of places outside of the urban area. These always go for much less. Several are $600+! Examples:








Kijiji Canada


Find sublets, rooms for rent, and roommates in Regina. Connect with others locally and save money on rent with Kijiji Real Estate.




www.kijiji.ca





So coming back to our house with some cleanup and renovations to make it look normal, we see we could probably get $450 for each bedroom and probably $550 for the living room as its usually larger. With the owner not living there of course. Still that's $1450/mo. Pretty good, right? Especially if one was aiming to just flip it in a few years and get a typical long mortgage of 20-30 years. 



> I did a quick search on Kijiji and found multiple houses and apartments for rent in Regina for around $500/month


Not so fast! 2 of them were way outside of the city! And the 3rd was probably a wreck owned by a slumlord. Note no pics. And multiple properties. Typical slumlord. In this situation when we don't know an area I find just checking Street View in Google Maps so useful. You can tell a lot by poking around in that area with Street View. A LOT! You listed a $500 studio apartment which seems very inexpensive at 2620 12th Ave., Regina. Here it is in Street View and while not a wreck, its right in a commercial area so probably very noisy during rush hour and the building is very old. Have a peek. Street View rocks. 





__





2620 12 Ave · 2620 12 Ave, Regina, SK S4T 1H9, Canada


2620 12 Ave, Regina, SK S4T 1H9, Canada




www.google.com







> I am not disputing that you can buy a house for under $50,000 in Canada, I am disputing JAG's ridiculous assertion that such a property would rent for $1000/month.


Well though you can definitely buy older apartments for 50k a unit in cheap areas renting them for $1000 seems like quite a stretch if you're not renting to separate people AND renting out the living room which I doubt he is doing. The living room, in most situations, if the layout cooperates, will bring in about 40% more. 40% can make quite a difference to your bottom line! Remember living rooms are much bigger so they rent for much more. Some would say that as the living room is no longer available the bedrooms would go for much less and that would seem to be true. However in real life, in shared accommodation, with everyone on their devices, they prefer to be in their own cubby hole for privacy. The living room is just not used much anymore. So maybe 5-10% less for the bedrooms without use of the living room. But for many renters it doesn't make any difference at all as they crave their own space when they get home. 



> Second of all, are you located anywhere near Regina? If not, how do you plan to take care of these properties?


I would only advise someone to do this in a place they live in. If you buy in Regina you move to Regina. Its the only way to manage. We've all read the horror stories of owners that see the destruction and neglect of their property after having rented it for months or years to someone in a different city or area who bolted unexpectedly giving no notice so they wouldn't have to account for their actions. 



> Alternatively you could hire a local company to take care of them but that would eat up a significant portion of profits.


Management companies are a terrible way to handle things because they are so lazy and rarely try to get you a good deal. Why? Simply because its not their money. Its not worth their time to hunt around for deals but it would be if it was their money. An owner will often get to know the people that work for them whereas a management company couldn't care less. They can't afford to - they're too busy with other contractors and repair people. I've never, ever seen a management operation do things efficiently. There's always so much waste. Maybe if you get a steal of a deal in a place far away its worth it but only if you go there for a while to set it up which many people would do. Then hand it off to them once its running smoothly. But for someone starting out they need to be involved in the little things so they learn. It also teaches them if they want to do this more later on a bigger scale when they are able. I see so many people investing in real estate even though they don't even like the concept of housing people. To them its distasteful and best done through a company so they don't "get their hands dirty". A slumlord is really someone just into it for the money - if they were interested in the concept they would be more involved.


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## cm2u (Feb 6, 2019)

Just wanted to add that as an owner you have the option to pay in cash. This is very enticing for some workers. Its not so much about evading taxes which would be stupid as I get them to sign for the money which I would submit to CRA for expenses. Its often so it doesn't get garnished like it may be if they deposited it into their bank account and had a court order for a percentage of that. Some people like the idea of privacy as well. They don't want the entire online world to know what they're doing. Or even people in their family, like wives that are plotting their exit. The point is they have their reasons and by offering this option it gives you a distinct advantage. When I was getting work done I always used to pay with cash by the day for small jobs. This got them to work every day more reliably I found. Also there were no big disputes over wages of weeks of work later. Sure it takes a bit of time but during that time of filling things out they're in a good mood because the day is over and they're getting paid and it helps the relationship between employer and employee which often seems strained. You can also often get jobs done for quite a bit less if you pay with cash. Once the word gets around that you never welch on your word they will work for less. Now you have trust. Management companies rarely have this kind of relationship with their workers. To the worker they are usually a faceless entity that hopefully will pay them, nothing more. And if there is a dispute they have little hope of satisfaction knowing there is a long line of people ever willing to replace them. How many workers have heard the term, "If you don't like it, there's the door"? I didn't even need to "fire" anyone. If their work wasn't good enough, which was very rare because I was always around so they couldn't slack off easily, I just didn't hire them the next day or the day after. I would say if I need you I'll call you. That way if I'm in a bind and am desperate I can call them without the stigma of "job termination" hanging over us. It just gives the owner so much more freedom if the work is sporadic which is so often is in this business. Now with text messaging you can send the word out to 50 people and await their responses and pick and choose the best and cheapest for the job.


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## Earl (Apr 5, 2016)

Just a Guy said:


> Unfortunately nothing shuts up people like you. Youre too lazy to do the work yourself, so you’ll always find some excuse as to why others can do it and you can’t.
> 
> I mean really, how hard is it to go to realtor.ca, right along the top is a search that you can put in max price 50k and see hundreds of listings, if not thousand, across Canada...but you can’t be bothered. True, not all these listings are rentals, some are barren land, or trailers, but not all of them are though. I’m willing to look and you’d rather be broke. You’re right the grapes are sour, stick with mutual funds where others do the work for you and take the money.


Just one example. I'm still waiting.


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## Earl (Apr 5, 2016)

Well "cm2u" you seem to have all the answers so why not go ahead and do it? Buy some dilapidated old house in some distant town and rent it out. I wish you all the best.


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## Just a Guy (Mar 27, 2012)

I told you how to find them, and can honestly say there are at least two examples there...you just have to do the work yourself...but we all know you won’t do the work required...it goes against your dna. say “hi” to your mom the next tim she comes down to the basement.

here, let me prechew and spoon feed you..,major city, centrally located, around the 50k mark, some have tenants in place already. Just a few key strokes...don’t give up, you can do it. Think of the feeling of accomplishment you’ll get...


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## the_apprentice (Jan 31, 2013)

I've been on this forum for 8 years, observing, listening, and growing. I didn't understand Just a Guy then, but as I got into the industry and grew, I understand it now. It's not for everybody and there is a lot of work required that the typical novice investor wouldn't go through. He has a niche that works well for him and I definitely wouldn't recommend that option for everyone.

I know I am generalizing, however I generally believe that any investment in real estate is a great way to hedge against inflation and make money in the long run.


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## cm2u (Feb 6, 2019)

Just a Guy said:


> I mean really, how hard is it to go to realtor.ca, right along the top is a search that you can put in max price 50k and see hundreds of listings, if not thousand, across Canada...but you can’t be bothered. True, not all these listings are rentals, some are barren land, or trailers, but not all of them are though.


He's right. Realtor.ca has a very good map system and almost all the listings are in the correct category, unlike other sites. You just click Filter and select House, min/max price and search with the map. Its really very good for giving us an idea of where the cheaper land is. Its important to be able to differentiate (very approximately!) serious damage/wear and cosmetic. Clearly there are some very lazy sellers out there that can't be bothered doing even a few minutes of cleanup before snapping photos on their horrible phone having zero control over the photographic process. But this is to our advantage as smarter buyers: We can look through the mess and visualize what it could be like with some sensible reno work. We all know that staging of homes is for absolutely idiotic and total suckers, easily swayed by a skilled decorator, someone who is most definitely NOT included with the purchase price!


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## Just a Guy (Mar 27, 2012)

The next step is to get a realtor to automate the search for you. You give them a set of criteria, say all one beds in a given area and price range, and have them email you all the listings as they hit mls and match that criteria.


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