Long term growth properties in cities between 5-20k people?

[solbergren]

​Hi everyone! I am wondering what people think about investing in smaller city areas. There are basically two kinds in Saskatchewan:






1) Cities that are stand-alone on their own


and


2) those that are rippling out from major centers









I feel if I could find a good deal in one of the ripple out cities it may have a good chance of long term growth potential. However, I am unsure of the "stand-alone" smaller cities/towns, but I am seeing alot better rent/purchase price numbers in these "stand-alone" cities.



Would you recommend:

a) Major Centers?

b) Small ripple out cities/towns?

c) Small stand-alone cities/towns?






I would love to hear the forums thoughts on purchasing in these areas, thx!

 

[Thomas Beyer]

I'd say SK has only two cities, namely Saskatoon and Regina, and then it has various smaller centers with various degrees of risk. We used to own well over 100 apartment units (incl. the former hospital converted to an apartment building) in Yorkton, SK and did some unbelievable triple digit ROIs on the cash invested.



It comes down to fundamentals of that town or region.



Generally, as people age, they prefer to be closer to doctors or a hospital, as opposed to drive 65 km as they used to in their 30's to 50's. Yorkton, for example, has only about 20,000 people but there are actually about 150,000 within a one hour drive as Yorkton has a hospital, movie theatre, Wal-Mart, Canadian Tire, high schools, casino, hotels, restaurants (albeit not that great ones), new sub-division, etc. ... Starbucks and condos even ...



Look for mine/pot ash projects impact on the target city and other positive employment growth. The issue is always: what happens once the mine is built and the construction population leaves ? What is the impact then ?



There is no right or wrong answer, as smaller cities have far higher risk of vacancies or price decline of a major employer shuts down. That is why you pay less per $ of rent, and can have a far higher yield. That is why we sold the Yorkton assets after a major value gain, although perhaps prematurely, but we still own some land free and clear that we will develop or eventually sell as is. [land, the ultimate, indestructable tenant hassle free real estate]