1% rule

[markl]

Darr, I can get much better than 1% if I am adding value to the property by renovating and fixing years of undone maintenance. But I have seen turn key properties sell at the 1% rule in the last 3 months in Hamilton. They are out there you have to be looking that is all and they move quickly when they do come up and most times in multiple offers.

Sorry I forget the mortgage broker from Hamilton's name. Are you purchasing in Hamilton or just seeing your clients deals come across? They might be targeting a different area or they are not quick enough off the mark to get these properties as you have to be fast and aggressive to get the good properties.

 

[Darr]

Markl- If they sell a "Turn-Key" property at the 1% rule, then I would not be surprised at a multiple offer scenario.

The question I always attempt to answer is: Why is the owner selling when his/her real returns are miles ahead of comparable investments in the same risk space? The 1% rule could yield an approximate double digit real spread over Canadian Treasuries. 10 Year Canada Bonds are yielding negative real returns and can be viewed here:

http://www.bloomberg.com/quote/GCDGIN10:IND


The yields are posted in black accompanied with value and percentage changes in red or green depending on the direction of the move.