Niagara Falls opportunities

[thermobee]

Hi guys

This is my first post and I should explain that I am a young RE investor that is looking to get his feet wet. I have read a couple of RE books and just finished school. On to the questions - I have a job opportunity in the Niagara Falls region, so I decided to look up potential houses that I can buy with some help from my parents, because driving there and back from Toronto every day would be impossible.

My research consisted of looking up the Niagara Falls region through realtor.ca and the Remax website. I was looking for properties in the 150k to 200k range and I stumbled upon a couple of properties that are already rented out for a about 1300
(799 2BD Upper floor + 500 1BD Basement). I found a few of those and according to an Iphone App that I have called Mortgage Repayment Calculator an 150k mortgage @4.5% for 30 years results in a monthly payment of $760. Of course those numbers are what the realtors wrote but there has to be some truth behind it right? The other thing is that most properties looked to be in decent shape and not a lot of work would be required.

Am I missing something here? Is the tenant market in the area really bad? Would it be a bad idea for me to move there and buy a house hoping that I can get a couple of roommates to help with the expenses?

All help is greatly appreciated for this new soon to be RE investor

 

[housingrental]

If I were you:
I`d rent in the area before purchasing
You might not stay there long - maybe new job in 2 years elsewhere...
You might want to sell the property to buy elsewhere at that point - transaction costs are high on real estate
If you end up staying there in the job for a long period of time you a year or two from now the area you`ll want to live in, the type of home, and who you`ll be living with might change.

If purchasing a property with an extra suite to rent out, or renting out bedrooms you can run into issues such as:
Vacancy
Uncollected rent
Damages to the premises
Noise issues
Cleanliness issues
Etc...


You should not solely rely on realtor`s information to determine on going costs. Ideally try to determine this yourself for each item - tax, insurance, cleaning, repairs, vacancy, etc.. - and you`ll find it`ll often be much higher than listed.

 

[Apt_Bldg_Ontario]

I know few triplex properties in Niagra that have totally different numbers. For about $200,000 in Niagra you can find a place where the total rent can go up to $37,000 in a year, thus giving you a cap rate of about 8%.

I think that if you are planning to move into the area, you can lower your expenses significantly by managing the property yourself, and if you are handy-fixing small problems in the house. The more you are able to do yourself, the more you are able to save in your pocket

If you want, you can send me those two properties you were looking at and I`ll check them for you.

 

[thermobee]

QUOTE (lihipr @ Jul 31 2010, 07:46 PM) I know few triplex properties in Niagra that have totally different numbers. For about $200,000 in Niagra you can find a place where the total rent can go up to $37,000 in a year, thus giving you a cap rate of about 8%.

I think that if you are planning to move into the area, you can lower your expenses significantly by managing the property yourself, and if you are handy-fixing small problems in the house. The more you are able to do yourself, the more you are able to save in your pocket

If you want, you can send me those two properties you were looking at and I`ll check them for you.

Thanks man. And yes I am very handy, I actually have a degree in project management. I was planning on managing the property myself while im there and hopefully set up for the future if I decide to move back to the GTA. Ill keep in mind about the properties in the future, the ones I was looking at are no more than just random examples I got during a quick research.