Where would you buy?

[itchycow]

If you were going to buy a property in Canada and live in it for one year and then plan to rent it out after that, where would you buy the property? The property type is flexible but looking at 3 bedrooms. Please tell me why you would choose that area and what type of property, i.e. condo, townhouse, apt., single famiy, in your choice, thanks!



I'm considering:

Maple Ridge - Townhouse

Calgary - Suited Duplex or Triplex

Edmonton - Suited Duplex

Ottawa - Single Family home



Thanks for your answers!



Walter

 

[Sherilynn]

Alberta rocks! The economy, the diversity, the stability, and - most importantly - the landlord-friendly tenancy laws!



Personally, I would choose Edmonton over Calgary. Here are three of the many reasons: 1) Edmonton is a bit cheaper but ROI is similar; 2) Edmonton has normally followed Calgary by 6 - 18 months, so what happens in Calgary may foreshadow what is to come in Edmonton; and 3) Edmonton allows and promotes secondary suites.

 

[Thomas Beyer]

[quote user=itchycow]Edmonton - Suited Duplex
I'd invest in Edmonton, AB. Plus perhaps a second home in the US where it is warm in the winter, say a select city that is both pleasant to visit, say in AZ or FL or TX or GA or SC .. with economic upside and in-migration (or NV if you must) !



Prices in Edmonton are still very reasonable and cash-flow is still doable with 20% which is essentially impossible in Calgary. Rents in Calgary are about 15-20% higher but prices are 25-30% higher for comparable properties/locations, but that gap will narrow by next year to the usual 15-20%, i.e. prices and rents will rise in Edmonton more so than in Calgary.



BC is too union friendly, has high taxes, low CAP rates, rent control and lower wages. Maple Ridge might benefit from ever increasing Vancouver gridlock, but prices are elevated compared to rent. Falling wages, relative to Canadian averages, too in BC: www.vancouversun.com/business/bc2035/wages+drop+further+behind+rest+Canada/8845020/story.html



ON, too is too union friendly, has high taxes, rent control and lower wages compared to AB but at least it has higher CAP rates if your are looking for cash-flow multis. Ottawa will experience some federal wage constraint and some layoffs, although of course Mr. Trudeau if he wins in 2 years will be able to reverse that and siphon excess W-Canada cash to union coffers, incl. the bloated public sector purses to buy votes and continue his father's anti-western sentiment.

 

[ElizabethBain]

Absolutely Alberta, no questions asked. Sherilynn and Thomas are bang on with their advice and I like Edmonton for the same reasons. With regards to type of property, there are a few questions that you should ask yourself



1) what is your ideal tenant profile? (age, income etc)

2) where and in what type of property is that tenant going to want to live (ask around if you are not sure the answer)

3) what is your involvement level going to be like after you move out of it (are you going to manage it yourself, do repairs yourself or are you going to be moving to a new city)

4) what is your exit strategy? (is this a property you are going to hold for 5 years, or long term?)



It may be difficult to answer these right now, but it would be important to consider them before purchasing.

 

[RedlineBrett]

I guess someone needs to pump Calgary's tires... heh..



REIN (you know, the guys that run this forum and do all the research for the books, ACRE events etc) still ranks Calgary #1!



And that's just strictly investment speak.



Since you are actually going to *live* in this property Calgary should be a slam dunk. Low crime, good mayor, access to mountains, nice and warm etc.

 

[itchycow]

Thanks very much for the input, much appreciated



Walter

 

[housingrental]

Waterloo, Ontario

I can make money if you purchase in that area

 

[Thomas Beyer]

[quote user=RedlineBrett]nice and warm
sometimes at least ...

 

[Sherilynn]

[quote user=RedlineBrett]Since you are actually going to *live* in this property Calgary should be a slam dunk. Low crime, good mayor, access to mountains, nice and warm etc.


...windy as hell, huge flood plain, too many Flames & Stampeders fans...need I say more?

 

[invst4profit]

I would only advise not investing in Ontario due to the pro tenant/anti landlord policies of the RTA/LTB.

 

[sstorrie]

[quote user=ElizabethBain]Absolutely Alberta, no questions asked. Sherilynn and Thomas are bang on with their advice and I like Edmonton for the same reasons. With regards to type of property, there are a few questions that you should ask yourself



1) what is your ideal tenant profile? (age, income etc)

2) where and in what type of property is that tenant going to want to live (ask around if you are not sure the answer)

3) what is your involvement level going to be like after you move out of it (are you going to manage it yourself, do repairs yourself or are you going to be moving to a new city)

4) what is your exit strategy? (is this a property you are going to hold for 5 years, or long term?)



It may be difficult to answer these right now, but it would be important to consider them before purchasing.





Hi Elizabeth,



I am another person fairly new to this area. Can you elaborate a little on why these are important considerations for selecting the type of property, particularly questions 3 & 4 (1&2 are logical to me)?



Thanks!

Stan

 

[ElizabethBain]

Hi Stan,



sure...



3) If you are going to be managing it yourself it would be important to think about how often you would like to receive calls from tenants (older properties can have a lot more repair requests and larger ticket items than newer ones, houses and duplexes do not have a condo or strata board that takes care of the common areas and items). If you are going to do the repairs yourself, are you looking for something that will require a lot of work (such as a home reno or adding a suite), or minimal maintenance (re caulking the bathroom sink). If you are moving away to a new city, it may also be helpful to think about what kind of team you have in place to handle tenants and their requests (some owners that do not live in the city that they invest prefer to have relatively low maintenance, or newer properties, with more of an executive style tenant so that they can sleep well at night)



4) If you are planning on holding it in the short term, who will be looking to buy around the time that you are selling? Will it be 1st time home owners, families with high incomes, another investor etc? What kind of property will they be looking to buy? Especially in the shorter term, it is important to know this before you buy as you may have a difficult time selling when the time comes if it is not what a good portion of buyers are looking for.