Although it may seem counterintuitive, cash flow is not the be
all and end all of investing in real estate.
“Everyone has such a cash flow mindset, and don’t get me wrong,
cash flow is amazing and will help support a different lifestyle
eventually, but making those dollars year-over-year is where the
wealth comes from,” said veteran investor Lee Strauss of Strauss
Investments.“If you have an extra $1,000 in your pocket every year,
the return on investment is dismal and doesn’t even add up.But if
you take $26,000 year-over-year, now we’re talking.”
Strauss is, of course, alluding to tenants paying down a
mortgage’s principal balance for the investor while the latter
rides the property’s appreciation.
“On average for a single-family dwelling, the principal pay down
is going to be about $6,000 a year,” he said.“The other reason is
you have an income-producing asset that is hedged against
inflation, and that income-producing asset appreciates, on average,
“If you purchase a $400,000 property and it goes up by 5% in one
year, that’s $20,000 in the first year.Five percent appreciation
plus mortgage pay down, which you’re not paying and will be about
$6,000, is $26,000 in one year.”
Mind, appreciation is a compounding factor.
“After year three, you’re at about
B.C.’s housing markets continue to be national top performers in
the most important metrics, but December data from Statistics
Canada showed that while the provincial population exceeded 5
million for the first time, the territory also lost about 1,200
people in Q3 2018.
A major contributing factor to the outbound flight is the throng
of young professionals leaving for more affordable housing
elsewhere in the country, according to Finance Minister Carole
Speaking to The Canadian Press, James stressed that “there’s no
question that Vancouver is facing a brain drain.”
“Crisis is not too strong a word to describe the challenges we
are facing, not just in Vancouver, but other urban settings around
Vancouver’s prices bear out these observations:The REBGV’s
December report showed that the average price of a detached home in
the city was at just over $1 million, while attached properties
were at $809,700 and apartments at $664,100.
Read more:Perceived corruption is driving mistrust in the
Andy Yan, director of the City Program at Simon Fraser
University, said that Vancouver is good at enticing those who are
still studying and those who are just starting their careers, but
it could certainly do much better in retaining this pool of
With a diverse selection of selection of older condo units that
can be purchased for less than $350,000, coupled with relatively
high average income, Ontario has proven to be one of the country’s
most active sellers’ markets in 2018.
During the fourth quarter of last year, the aggregate housing
price in the city reached $475,831, representing 9.3% annual
growth.Two-storey homes were at $510,840, enjoying an
11.0% year-over-year increase.
Bungalows went up to $453,698, growing by 6.3% over the previous
12 months.Condos stood at $328,436, with a 3.1% uptick.
Read more:This is
Ontario’s most promising and consistent market
These numbers promise further market dynamism this year,
impelled by strong purchasing power and an avid home-buying
“Homes that come on the market are quickly sold, with multiple
offer situations often present,” according to John Rogan, broker of
record and branch manager of Royal LePage Performance Realty.
“Overall, healthy employment and wages are propelling higher
housing demand in the region.This increasing demand, coupled with
Baby Boomers remaining in their homes longer than previously
expected, is putting pressure on all housing types and fueling
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According to a report from Altus Group, commercial real estate
firms are beginning to adopt property technology platforms in ways
that promise to change the industry in the near future.
The Altus Group CRE Innovation Report surveyed 400 commercial
real estate executives at firms with assets under management
totalling over $2 trillion, 41% of whom are already using automaton
for benchmarking and performance analysis.Thirty-nine percent are
using automation for scenario and sensitivity analysis and 36% are
using it for budgeting and forecasting.
“Sixty-one percent of CRE [commercial real estate] executives
around North America use some online lending platform, and 23% of
them are using them in a pretty significant way,” said Ross
Litkenhous, global head of business development for Altus
“From a crowdfunding perspective, you’re giving a broad, wide
array of investors the opportunity to invest in a piece of real
estate, whereas in traditional commercial real estate, you have
folks that syndicate money or are tied in with a high net worth
individual.Everybody gets a percentage of a deal.From crowdfunding
you’re going out to the masses and asking people to invest in a
deal through some sort of online platform, which is not the way
real estate has been traditionally done.It’s taking evolutionary
Some of the online lending firms are Lending
A combination of a stronger economy and record-low unemployment
numbers propelled Victoria to a robust housing market performance
in Q4 2018, according to the most recent Royal LePage House Price
Victoria’s aggregate home price reached $695,793 in the fourth
quarter, growing by 8.4% year-over-year.Meanwhile, condos enjoyed a
10.3% increase (to $512,024), and two-storey homes had an even more
pronounced 13.2% growth rate (to $966,790).
“We saw strong price appreciation year over year in the third
quarter of 2018 due to an overall lack of supply, coupled with
increased housing demand generated from our healthy local
economy.However, during the last half of 2018, we saw prices
moderate and level out,” Royal LePage Coast Capital Realty
associate broker Bill Ethier noted.
“The shortage of supply is being further shaped by a combination
of federal and provincial regulations that have slowed the real
estate market in the province.As a result, we are seeing a decrease
in new residential construction.”
Read more:Vancouver home price growth not the fastest
Ethier added that Victoria has established a reputation as a
good destination for sound investments and relaxed lifestyles.
“Retirees who choose to buy a condominium are competing against
first-time buyers resulting in a lack of inventory.Retirees who are
unable to find a condominium
CREW has never been shy in its belief that real estate is a
business, and that’s not just because of the dollar signs.Real
estate involves the same levels of planning, strategizing and
execution that undergird every successful business.
But according to Linda and Keith Perrin, co-founders of
All-Ternative Solutions, many investors new to real estate don’t
realize the importance of creating a sound, business plan and
investing footprint.It’s a situation they hope to change as they
welcome a fresh crop of investors into their real estate training
“A lot of the people we come in contact with think ‘I want 1,000
doors in ten years’ is a business plan,” Keith says, “but a phrase
like that is a dream or a goal, not a plan.” Without a proper,
revisable business plan – which allows investors to chart their
progress, tweak strategies and make sounder decisions about their
properties – too many investors are just hunting in the dark,
hoping to get lucky.
But novice investors with no business experience may find
creating a business plan daunting and, ultimately,
discouraging.That is why the Perrins make building a business plan
and footprint central to their teaching.At their upcoming three-day
training event, taking place in North Bay, Ontario, from February
14-16, all attendees will be leaving with
When another day of US-dominated news draws to an end, few
Canadians are lying in bed thinking, “Boy, things sure look good in
America.We should buy some property down there.” But the political
funk hanging over the country obscures some essential truths about
its real estate market.Job growth has been staggering, putting more
Americans in a position to either buy or spend more on improved
rental accommodations.Most critically, though, prices for renovated
properties in solid rental markets are incredibly low, often less
than what the common Ontario or BC investor will put up for a 10%
down payment on a 700-sq ft condo that has no chance of cash
Canadian investors are running themselves ragged for 4%
returns.Keith and Linda Perrin, the husband and wife duo behind
All-Ternative Solutions, want to change that by making property
investment in the United States as attainable for Canadians as it
is for Americans.For them, there has rarely been a better time to
purchase rental properties in the US.
“In 2008, the market dumped,” says Keith.“And that was actually
the best opportunity to start making money in the United States.The
reason why we are in the states that we are in – New Jersey, Ohio,
Kansas – is because they are some of the later ones to be
The acme of real estate activity is spring, but getting in early
could tender gems for investors.
“There’s far less competition from other buyers at this time of
year with the financial hangover from the holiday season,” said
Vicki Schmidt, broker of record and co-founder of JUSTO, a
Toronto-based realty brokerage.“Buyers are typically strapped for
cash and they can’t make big purchases, so buyers who are prepared
financially have an opportunity to get a good price.”
It’s also an opportune time for investors to find bargains,
especially on fixer-uppers.Any seasoned real estate agent will
advise their client to list during spring, but sellers who put
their properties on the market during the frigid winter months are
doing so out of necessity.
“When we talk about the idea of people needing to sell, it’s for
a reason,” said Schmidt.“It could be an Estate sale or a property
for which timing isn’t so important.That property could need fixing
up, and this time of year is usually when properties that need more
work find their way onto the markets, so investors looking to get
in early and close at a good price, but do renovations and update
the property through the spring and summer months.”
December was one of the slowest months in recent
With seniors slated to comprise nearly a quarter of Canada’s
population by 2030, real estate that caters to their needs is being
touted as one of the most investment-friendly sectors this
That’s in spite of a somewhat volatile interest rate environment
that’s expected to carry through 2019, says Montreal-based Fred
Blondeau, an analyst with Echelon Wealth Partners.
“The sector should be able to generate significant growth no
matter how interest rates evolve, so we’re putting more emphasis on
senior living at this point,” he said, referring to a report
Echelon released last month.
The report, The Ultimate All-Weather Investment:Canadian
Senior Living Real Estate, differentiates between long-term
care, which is the purview of governmental agencies, and senior
housing, which requires private funds.
“The appetite from investors for senior living spaces remain
strong,” said Blondeau.“The sector will be subject to strong
inflows from investors wanting to put their money in the
Echelon Wealth Partners reckons that times are turbulent and, in
particular, it is worried about the global macroeconomic
outlook.However, according to Blondeau, irrespective of whether the
economic environment improves, remains stable or becomes more
unstable, senior living spaces will be unaffected.
“Especially in Canada’s strongest markets, like Toronto and
B.C.,” he said.“We also feel like the market will continue
A real estate agent in Ontario recently discovered that two of
her clients used cameras and microphones to listen in on the
conversations of potential homebuyers.
According to CBC News, Hamilton realtor Webster said
she only found out about the surveillance when her clients
mentioned it.Webster told CBC News that neither seller had
installed the surveillance devices specifically to monitor
potential buyers.It's also unclear if they were hidden, or had
simply gone unnoticed.
"You can see how somebody could listen in and get some very
interesting information,” Webster told CBC News.“And then,
when it's in your lap, you don't want to use it, but it could be
tempting for some people.It could be tempting for anybody."
While her clients said that they did not use this information to
their advantage, Webster points out that temptation is
"If your comments and their comments were being recorded
certainly that puts the ball in the other person's court doesn't
it?” she said.
Now Webster is calling for a rule to compel sellers to say if
their homes are under surveillance.According to CBC News,
she also wants listing agreements to say if there's audio or video
surveillance onsite, and for a warning sign to be posted
Yukon Housing Corporation announced the availability of two new
homes in Porter Creek.The duplex includes two two-bedroom units
that are accessible and energy efficient.
Yukon Housing Corporation will own and operate these homes as
part of the rent-geared-to-income program, which houses families
and individuals from the Yukon Housing Corporation wait list.
"This new addition to our social housing rental stock made good
use of our existing property in Whitehorse by replacing a single
family home with a duplex,” said Pauline Frost, minister
responsible for Yukon Housing Corporation.“This energy efficient
duplex will keep two families safely and securely housed for many
years to come."
"The peace of mind that comes with having a secure and stable
home is invaluable,” said Larry Bagnell, MP for Yukon.“This is why
our Government is glad to be involved in the creation of these
brand new homes, which will provide two families in Porter Creek
with high quality, energy efficient and accessible housing.I'm glad
to see we are making progress in tackling housing affordability,
all while supporting the local economy."
Funding for this project came from the Northern Housing Fund
under the National Housing Strategy.
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Temperature-controlled industrial properties are a little-known,
yet superlative, asset class that’s sure to grow in popularity
among institutional investors.
The facilities are designed to maintain temperatures as low as
-29 degrees Celsius, which makes construction expensive and buy-ins
prohibitive for many, but at below 1% of Canada’s overall
industrial sector, it teems with opportunity.
“It’s a great investment, not only for REITs, but institutional
and private investors, as well,” said Victor Cotic, vice president
of national investment services with Colliers International.“All
the growth we’re seeing among industrial companies in real estate
is all related to consumer goods.Manufacturing has really taken a
downturn, so industrial real estate today is predominantly around
consumer goods, retailers, and public consumption.”
Temperature-controlled industrial facilities primarily house
food and pharmaceuticals, and for that reason they’re more or less
“Those are perfect examples of consumer goods because they’re
linked to population, and unlike some other retail sectors, it’s
recession-resistant,” continued Cotic.“Even in a down economy,
people are going to consume food and need pharmaceuticals.They
might buy a cheaper variety, but they’ll still need to put food on
Colliers oversaw a leaseback sale between Congebec Inc.and
Skyline Commercial REIT, with the latter taking ownership of a
nine-property national portfolio of temperature-controlled
warehouses.Two-thirds of the facilities are divided between
Montreal and Quebec
The average condo apartment rental rate in the GTA has grown by
9.3% last year to exceed $2,300, according to Urbanation’s year-end
2018 rental market results released late last week.
This marked the greatest rise ever since Urbanation began
tracking the metric in 2010, the report stated.The 2018 increase
also outstripped the 8.3% pace in 2017, contributing to the 4.1%
overall average growth over the past 8 years.
“Recent housing policy changes, combined with strong demand
fundamentals and supply constraints led to record growth for rents
in the GTA last year.These factors should continue to keep upward
pressure on rents, but to a lesser degree in 2019 as affordability
becomes a bigger issue and more condominium and rental units finish
construction,” Urbanation president Shaun Hildebrand said.
due for double-digit market rent increase in 2019
Inventory stood at 27,426 units as of the end of 2018, but lease
activity declined to 8%, the lowest it has been in 5 years.
“The reduced level of turnover was likely a function of the
expanded rent controls for tenanted units introduced in 2017 and
the increased barriers to homeownership caused by elevated prices,
higher interest rates, and new mortgage qualification rules.Low
turnover limited the amount of supply in the market
While Montreal’s housing market is renowned for its relative
affordability, especially when compared to powerhouses like Toronto
and Vancouver, the city’s luxury segment proved to be no slouch as
it boasted of remarkable sales growth last year.
Transactions involving single-family properties worth more than
$1,000,000 went up by 18% in 2018, while sales of condos worth more
than $500,000 grew by 30%, according to the Quebec Federation of
Real Estate Boards.
This activity impelled the market’s sales to reach a record high
last year, with a total of 46,753 deals across all housing
types.The 2018 figures represented 5% growth over 2017, and marked
the 4th consecutive annual increase in transactions.
leads country’s metro areas in price growth
Condos (overall) experienced 14% growth last year, while plexes
(2 to 5 units) had 3% more sales.Single-family homes went up by a
relatively meek 1%, which still did not dent the region’s new sales
“Generally speaking, 2018 ended with market conditions clearly
in favour of sellers for single-family homes, condominiums, and
plexes.The scarcity of supply of single-family homes as compared to
the demand is undeniable on the Island of Montreal, where the
number of months of inventory is slightly less than five,” the
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The fourth quarter of 2018 bore witness to the most significant
housing correction in Canada in a decade.
That’s according to the Royal LePage House Price Survey, which
also notes there was a 4% year-over-year rise in in the national
home price, averaging $631,223, during Q4 2018.
The Greater Montreal Area, Canada’s second-largest metropolitan
region, led the way in year-over-year price appreciation for Q4,
surging 4.1% to reach $407,230.During this period, two-storey homes
in the Montreal area rose 3.5%, for an aggregate price of
$517,190.The region’s condo market also performed well, with a 4.9%
hike in appreciation to reach $328,254 for the quarter.
Residents of the Greater Toronto Area spent 2018 adjusting to
new mortgage rules, which—coupled with the region’s high price
points—slowed movement in the real estate market.Buyers searched
for affordability and they found it in Toronto’s suburbs, the condo
sector, and other cities in Southern Ontario.The City of Toronto
nevertheless rebounded in the fourth quarter, but that’s more than
can be said for its surrounding areas.Toronto’s aggregate home
price rose 8.8% in the fourth quarter of 2018, but the GTA as a
whole only saw a 3.4% gain.
“The market correction in the suburbs of Toronto has been more
significant than elsewhere in the country, because price increases
in recent years