Seattle, WA · Member since 2017 · 1 post · 0 votes
I'm looking at the feasibility of buying my first property in Canada. In recent years, cities like Toronto and Vancouver have seen a rapid rise in property prices, and they're near the top of UBS' Global Real Estate Bubble Index.
In this case, if I can find a property with positive monthly cash flow, but anticipate a decline some time in the future (not sure when), is the right move to take the deal or to wait? Both options seem to be justified logically
Investor · Cleveland, OH · Member since 2015 · 6k+ posts · 2k+ votes
8y
@John Yeung, sceptics among us may question whether any Toronto/Vancouver property, at the height of their property boom, WILL give "good cash flow", if all expenses are accounted for properly, and it's leveraged at the "normal" 70% LTV.
My guess is: you'll only get it to cash flow by putting down a MASSIVE cash deposit (ie. more than 30%). Right?
In which case, I/we will argue - what's the point of that?
ie. What'll be your percentage return on your outlay? Please quote figures. (Remember, appreciation = unlikely!)
Welcome to BP. Thanks for asking. You've got us curious now...
Investor · Cleveland, OH · Member since 2015 · 6k+ posts · 2k+ votes
8y
@John Yeung, sceptics among us may question whether any Toronto/Vancouver property, at the height of their property boom, WILL give "good cash flow", if all expenses are accounted for properly, and it's leveraged at the "normal" 70% LTV.
My guess is: you'll only get it to cash flow by putting down a MASSIVE cash deposit (ie. more than 30%). Right?
In which case, I/we will argue - what's the point of that?
ie. What'll be your percentage return on your outlay? Please quote figures. (Remember, appreciation = unlikely!)
Welcome to BP. Thanks for asking. You've got us curious now...
Investor · Toronto, Ontario · Member since 2016 · 33 posts · 12 votes
8y
Hi John,
The conversation here so far is VERY general. Canada is comprised of many many different real estate markets. It would be like saying, I want to invest in California but I hear LA is really expensive. There's cash flow to be had in any Canadian city, but depends on the property type. SFHs in Toronto will not cash flow, but the right triplex will. I'm by no means an expert, but here are a few people who are that have info available out there. For Ontario, I would listen to Erwin Szeto's podcast (The Truth About Real Estate Investing for Canadians), for Toronto condos - Andrew Lafleur's The True Condos Podcast (great all around info about the GTA markets too), and find anything you can from Don R Campbell (he is interviewed on Erwin Szeto's podcast and those episodes are fantastic). Good places to start anyway, and once you identify a market you like, seek out local area experts. Best of luck!
I would advise against investing in T.O. or Vancouver, any large city in Canada for that matter. I would also strongly advise against investing in Ontario. As a investor you do not want to go where the government is as pro tenant as Ontario. Think about the CA codes and in many ways Ontario is worse.
I would suggest you invest in mid size cities and would favour the west if you have a choice.
Real Estate Coach · Venice Beach, CA · Member since 2012 · 6k+ posts · 3k+ votes
8y
I think your trick, long before worrying about the fate of the market, is going to be finding cash flow in either of those cities. As far as I know, there isn't any.