Investing in Kitchener-Waterloo Real Estate

billkeay

New Forum Member
REIN Member
Dear REIN members,

I would like to start a thread about Investing in Kitchener-Waterloo Real Estate.

I would like to request that REIN members share information about the area.

If you can add news articles related to Real Estate please share them with us.

Also, if you have an investment property could you describe the property and let us know what the rents you are getting with that property.

As an investor, I am really interested to know what other investors are getting for rent of single family homes as well as multifamily.

To start things off, here is an article about the "Sportsworld Crossing". Can you believe a developer is bucking the trend of putting in big box stores and opting to go with smaller retail stores? Construction is expected to be completed in 12 to 14 months and will add 1000 jobs to the local area. The project is expected to cost in the area of $100 million dollars and will include: retail stores, restaurants, green space, office space, 6 storey office space, potential LRT transit site, Rink, Hotel.

http://news.therecord.com/News/CanadaWorld/article/251916 This article is in today`s Record.

Enjoy! Happy Thanksgiving!

Regards,
Bill
 

billkeay

New Forum Member
REIN Member
Hi REIN members,

The Airport in Waterloo Region has just been approved for a $3 million dollar renovation by the Waterloo Region Council.

Here is an article that I found in today`s record that relates to this article.

http://news.therecord.com/printArticle/251956

Has anyone ever flown out of KW Terminal yet? I have been in the building and it seemed a little small, so I imagine that it will be money well spent.

Regards,

Bill
 

BMironov

New Forum Member
Registered
Waterloo Chronicle:Challenges continue for manufacturers (Oct 3, 2007)
http://www.waterloochronicle.ca/wat/news/news_893101.html

Very good introduction to regional manufacturing sector.

QUOTE For Waterloo Region manufacturers, the proverbial term of "what next?" has dominated business over the past month.
...
For local manufacturers in automotive-related industries -- estimated at 450 companies employing over 10,000 people -- another crisis loomed when the United Auto Workers recently commenced strike action at General Motors facilities throughout the U.S. Layoffs were planned at a number of our local manufacturers.
...
The issues facing manufacturers are certainly prominent in Waterloo Region, given the level of employment and wealth generated by the sector. According to Canada`s Technology Triangle Inc., approximately 25 per cent of the Waterloo Region workforce is employed in manufacturing, the second highest percentage in Canada after Windsor. The local sector is highly diversified, with significant activity in computers, electronics, fabricated metals, machinery, furniture and food processing.

The Canadian Manufacturers and Exporters, a prominent industry association, estimates that manufacturers directly account for 20 per cent of all economic activity in Ontario. Every dollar of manufacturing output generates $3.19 in additional resources. Weekly wages in the sector are 25 per cent higher than the provincial average.

Plenty of information about Canada Technology`s Triangle:
http://www.techtriangle.com/realestate.cfm
http://www.techtriangle.com/Publications/ResearchReports.cfm

Follow links on left-side menu to open much more!
 

StevenRoorda

New Forum Member
Registered
Dear REIN Members,

The Region of Waterloo has been busy trying to collate a lot of information in relation to the health of the Region. This report has broad based reviews of work, safety, health, housing, rich vs. poor gap, unemployment and a host of other issues. The report includes the main graphs and information and the website includes some additional graphs and details that the main report omits.

The Vital Signs Report promises to have yearly updates. We can hope that the Region continues to provide this information to all of us.

Check it out:

http://www.wrvitalsigns.ca/index.php


Enjoy,

Steve
 

MacG

New Forum Member
Registered
Dear Bill,
I`m Glad that you have opened discussions regarding the Waterloo Region. My wife and I recently moved to Kitchener from Toronto to take advantage of the booming local economy. We are both constantly researching properties. The problems we are finding is this. As someone who has been living in Toronto, K-W looks ridiculously cheap, and a great place to start investing, but when you start crunching the numbers you can see that most multi-family properties in the region are terrible deals. The main reason for this is the rents. While property value continues to appreciate in the Region by about 5% a year rents are not increasing. This I believe is due to the fact that there are so many rentals available.
The point I`m trying to make is this, a Triplex in Kithcener for $300,000 sounds like a great deal to someone in GTA, but when you look closer, the Gross Rent is only 28K-31K. It`s pretty hard to make a property cashflow with those numbers. To make matters worse, the provincial gov`t has determined that rents can only be increased by 1.4% this year.
For the record, most 4plexes, 5plexes and 6plexes fall into this category as well.
In the last two months my wife and I have only found 1 property which has met our investing criteria and that building is a fourplex in the Hespeler section of Cambridge.
I hope that this post provides some interesting topics for discussion and in the meantime, i will continue hunting for properties in the region. If I find anything I will be sure to post it.

Regards,

Mac Graham

DG Property Investments.
 

billkeay

New Forum Member
REIN Member
Hi Mac,

Thanks for your post and I am glad you brought up the issue about cash flow in KW and Waterloo Region.

Don Campbell often states that KW is a great market for appreciation and not so much for cash flowing properties and he is absolutely correct! So I am not surprised by your findings.

In order to find cash flowing properties you will need to put in offers and find vendors that are motivated. You will also need to put down 20 to 25 percent down as well, manage the property extremely well, have a good track record of rental properties to show your mortgage broker so that you can get a good interest rate.

Tonight I attended the monthly Waterloo Region Apartment Management Association seminar and I listened to two excellent presenters. First, John Dickie from CFAA Canadian Federation of Apartment Associations spoke and he spoke about the CFAA and what they are doing for landlords across the country. go to Dear Bill,
I`m Glad that you have opened discussions regarding the Waterloo Region. My wife and I recently moved to Kitchener from Toronto to take advantage of the booming local economy. We are both constantly researching properties. The problems we are finding is this. As someone who has been living in Toronto, K-W looks ridiculously cheap, and a great place to start investing, but when you start crunching the numbers you can see that most multi-family properties in the region are terrible deals. The main reason for this is the rents. While property value continues to appreciate in the Region by about 5% a year rents are not increasing. This I believe is due to the fact that there are so many rentals available.
The point I`m trying to make is this, a Triplex in Kithcener for $300,000 sounds like a great deal to someone in GTA, but when you look closer, the Gross Rent is only 28K-31K. It`s pretty hard to make a property cashflow with those numbers. To make matters worse, the provincial gov`t has determined that rents can only be increased by 1.4% this year.
For the record, most 4plexes, 5plexes and 6plexes fall into this category as well.
In the last two months my wife and I have only found 1 property which has met our investing criteria and that building is a fourplex in the Hespeler section of Cambridge.
I hope that this post provides some interesting topics for discussion and in the meantime, i will continue hunting for properties in the region. If I find anything I will be sure to post it.

Regards,

Mac Graham

DG Property Investments.
 

billkeay

New Forum Member
REIN Member
HI Mac:

CONTINUED:

APPRECIATION!!!!!!!!! So if you are going to buy a property and have to pay $75K a door in KW don`t be too surprised.

Now you may wonder who would buy this property with only a 6% cap rate. They start making money from day one because they got a mortage at slightly less than prime, so they will make a slight profit right from the start.

There were 72 vacancies too, so the new management came on board and turned it all around in a few months. They increased rents and filled the building. The vacancy rate was 2% so there should have been 8 vacancies, but it wasn`t being managed properly.

When you invest in KW you should be expecting to buy and hold and achieve Massive appreciation like the owner of 300 Regina Street did. I think making $25 Million in 11 years is pretty good. He made way more money investing in Real Estate that he could have made in almost anything else don`t you think so?

Regards,

Bill



QUOTE (billkeay @ Oct 11 2007, 01:11 AM) Hi Mac,

Thanks for your post and I am glad you brought up the issue about cash flow in KW and Waterloo Region.

Don Campbell often states that KW is a great market for appreciation and not so much for cash flowing properties and he is absolutely correct! So I am not surprised by your findings.

In order to find cash flowing properties you will need to put in offers and find vendors that are motivated. You will also need to put down 20 to 25 percent down as well, manage the property extremely well, have a good track record of rental properties to show your mortgage broker so that you can get a good interest rate.

Tonight I attended the monthly Waterloo Region Apartment Management Association seminar and I listened to two excellent presenters. First, John Dickie from CFAA Canadian Federation of Apartment Associations spoke and he spoke about the CFAA and what they are doing for landlords across the country. go to www.cfaa-fcapi.org to find out more.

Then, Chris Coupal from JJ Barnicke spoke about some large multifamily/commercial properties that he sold recently so listen to this!!!!

He sold 300 Regina Street in Waterloo for $40 Million dollars. The client purchased the property in 1996 for $15 Million dollars. There are 412 suites in the two towers and they sold for close to $100K per door and the cap rate is only 6%. The common elements in the building are in really good shape and they have a swimming pool and squash courts. The seller had a $15 Million dollar first mortgage and only paid it down to $11.8 Million. So he made most of his money from MASSIVE
 

housingrental

Frequent Forum Member
Registered
Hi Mac,

Have you looked at any student housing investments in Waterloo? I specialize in student housing property management and you can find cash flow positive properties. There`s also the occasional deal to be found in poorly managed, vacant properties that you can add value to through minor repairs and aesthetic improvements.


QUOTE (MacG @ Oct 10 2007, 12:41 PM) Dear Bill,
I`m Glad that you have opened discussions regarding the Waterloo Region. My wife and I recently moved to Kitchener from Toronto to take advantage of the booming local economy. We are both constantly researching properties. The problems we are finding is this. As someone who has been living in Toronto, K-W looks ridiculously cheap, and a great place to start investing, but when you start crunching the numbers you can see that most multi-family properties in the region are terrible deals. The main reason for this is the rents. While property value continues to appreciate in the Region by about 5% a year rents are not increasing. This I believe is due to the fact that there are so many rentals available.
The point I`m trying to make is this, a Triplex in Kithcener for $300,000 sounds like a great deal to someone in GTA, but when you look closer, the Gross Rent is only 28K-31K. It`s pretty hard to make a property cashflow with those numbers. To make matters worse, the provincial gov`t has determined that rents can only be increased by 1.4% this year.
For the record, most 4plexes, 5plexes and 6plexes fall into this category as well.
In the last two months my wife and I have only found 1 property which has met our investing criteria and that building is a fourplex in the Hespeler section of Cambridge.
I hope that this post provides some interesting topics for discussion and in the meantime, i will continue hunting for properties in the region. If I find anything I will be sure to post it.

Regards,

Mac Graham

DG Property Investments.
 

EdRenkema

New Forum Member
Registered
QUOTE (housingrental @ Oct 10 2007, 11:08 PM) Hi Mac,

Have you looked at any student housing investments in Waterloo? I specialize in student housing property management and you can find cash flow positive properties. There`s also the occasional deal to be found in poorly managed, vacant properties that you can add value to through minor repairs and aesthetic improvements.

If you specialize in student rental prp. mgmt. please contact me at rdortr@yahoo.ca I have an accepted offer on a fully rented student condo, working on securing financing. Once the deal closes I will need a prp mgr ASAP.
Thanks,
Ed R
 

housingrental

Frequent Forum Member
Registered
Yes, I do specialize in student rentals - I`ll be sending you an email momentarily.

Does anyone else here have any involvement in Waterloo? Does anyone have any links to either Waterloo or Student housing articles in a Canadian context?


QUOTE (roadortrail @ Oct 11 2007, 01:38 PM) If you specialize in student rental prp. mgmt. please contact me at rdortr@yahoo.ca I have an accepted offer on a fully rented student condo, working on securing financing. Once the deal closes I will need a prp mgr ASAP.
Thanks,
Ed R
 

timk519

New Forum Member
Registered
QUOTE (housingrental @ Oct 11 2007, 08:26 PM) Does anyone else here have any involvement in Waterloo? I live in Kitchener, but haven`t made a move in real estate yet as I`m still working on figuring out which direction I want to go.
 

billkeay

New Forum Member
REIN Member
Hi there,

On July 4th the was an article in the Record that was called Triple No Trouble. The article is about squeezing 3 students into a unit that was meant for 2 at the University of Waterloo.

Hope this helps.

Bill



QUOTE (housingrental @ Oct 11 2007, 08:26 PM) Yes, I do specialize in student rentals - I`ll be sending you an email momentarily.

Does anyone else here have any involvement in Waterloo? Does anyone have any links to either Waterloo or Student housing articles in a Canadian context?
 

billkeay

New Forum Member
REIN Member
Hi Ethan,

Could you move this back? It is meant to be a discussion and not just economic research. Look at Mr.Campbell`s post on Oil and Gas industry to compare with mine in the Members only discussion.

I`d appreciate it if you could move it back.

Thanks,

Bill

QUOTE (Ethan @ Oct 5 2007, 10:02 PM) Moved this to economic fundamentals/news discussion.
 

housingrental

Frequent Forum Member
Registered
Thanks Bill - Do you have any thoughts on the current or future state of student housing market in Waterloo from either a sales or rental prospective?

QUOTE (billkeay @ Oct 12 2007, 09:22 AM) Hi there,

On July 4th the was an article in the Record that was called Triple No Trouble. The article is about squeezing 3 students into a unit that was meant for 2 at the University of Waterloo.

Hope this helps.

Bill
 

NassirNathoo

Inspired Forum Member
Registered
Hi Bill,
Can you also comment for Kitchener, i hear that Connestoga near Don area is a potential due to students and increased expension of the college.

Thank you HousingRental for the question to Bill.

Thank you

QUOTE (housingrental @ Oct 12 2007, 05:30 PM) Thanks Bill - Do you have any thoughts on the current or future state of student housing market in Waterloo from either a sales or rental prospective?
 

CarlaJohnson

New Forum Member
Registered
QUOTE (mambo @ Oct 14 2007, 02:25 AM) Hi Bill,
Can you also comment for Kitchener, i hear that Connestoga near Don area is a potential due to students and increased expension of the college.

Thank you HousingRental for the question to Bill.

Thank you


Hello,

My husband and I have 2 student rental properties near Conestoga College. The key is to purchase at the right time and screen, screen, screen. Our property manager is Shari Guinta 519-746-3033. She owns Benchmark Property Management and has an excellent system for students.

We purchased our 3rd property in that area this summer, but the closing date was moved from mid August to mid September, so we missed the student rush and are now looking for a family. The cashflow won`t be the same, but a family rental can be steady and solid.

Pictures of our units and rental prices are on our ad website at www.ttri.ca.

Also, check out www.conestogastudenthousing.ca. It`s run by a group of investors.

Cheers!

Carla
 

JKF

Inspired Forum Member
REIN Member
Hello!

I am also planning to buy real estate in KWC. Every property is different but what is the average negative cashflow on a single family home (around 200k) in the area if you have a property manager and put 25% down? Thanks for your help.

Thanks,

Francis
 

mike55

New Forum Member
Registered
QUOTE (JKF @ Oct 15 2007, 07:36 AM) Hello!

I am also planning to buy real estate in KWC. Every property is different but what is the average negative cashflow on a single family home (around 200k) in the area if you have a property manager and put 25% down? Thanks for your help.

Thanks,

Francis

It`s tough to give an average, all the scorecards I have completed have completely varied depending on the type and area the property is located in. I can give you the rough numbers for my JV, which is a student rental townhouse condo, located between both major universities.

(note this is with only 10% down upon closing, purchase price $155,000)

mortgage/month $920 - with 20% down mortgage payment would be $777/month (add and extra $143/month cash flow!)
condo fees $280
Tax/insurance $200
Vacancy fund $40
"oh darn" fund $40

Total expenses $1480

Rent collected/month $1500
parking stall rented out $25/month

Positive cash flow $45/month


I manage it myself, I haven`t inquired regarding property managers, so I can`t give an estimate for that. I`m sure with 25% down if you find the right property you will have no cashflow problems even with property managers hired.


Mike
 

housingrental

Frequent Forum Member
Registered
From what I`ve seen Student housing is the way to go in Waterloo as its very hard to find non-student rental properties that are cash flow positive. You should be able to get 5%-10% ROI in first year of operations if you do a good job finding the right:
Purchase
Financing
Property Management
Insurance

I also generally recommend avoiding condo`s - no upside in land values - and the condo`s fee`s often take a large chunk of cash out your pocket each month.



QUOTE (JKF @ Oct 15 2007, 07:36 AM) Hello!

I am also planning to buy real estate in KWC. Every property is different but what is the average negative cashflow on a single family home (around 200k) in the area if you have a property manager and put 25% down? Thanks for your help.

Thanks,

Francis
 
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