Investing out of Ontario Canada?

Question

Hi all,

I'm a Canadian rental property investor based in Ontario. As we know, over the past few years prices have gotten pretty high leading to very low cash flow. Ontario is also one of the most tenant-friendly provinces from their Residential Tenancies Act - it can easily take over a year to evict tenants for whatever reason. Rent controls have also led to a large disparity of prices between highly desired vacant properties versus those that are under-rented.

I know there's several parts of Ontario with more affordable prices, but they are all at least a few hours' drive away from GTA. If I'm using a property manager remotely anyway, I might as well also look at other parts of Canada. As far as my research goes, many other provinces have much more balanced regulations for landlords vs tenants, as well as very affordable prices.

For any Canadian investors (whether in or outside Ontario), what is your experience in investing in other provinces? Are there any areas that you would recommend? I've been looking at AB, SK and NB. Halifax NS also has "affordable" prices (compared to GTA) but I've found recently enacted regulations to be much more tenant-friendly.

I would love to connect and hear your thoughts and experiences! Cheers!

Steve De Jaham · Answer

@Nigel Liao I currently only invest and live in Lethbridge and like Theresa, I have seen very little appreciation in the Alberta market over the last 8 years.  Also as far as Lethbridge goes rents have been very stagnant for a long time as there a lot of people here with just one rental or they are renting single rooms in they're personal property causing the market to be super competitive.  That being said I have noticed a small increase in SF rents this summer but definitely not enough to make it worth while for someone out of the area to start investing here.  From talking with other investors in Alberta it seems as though Edmonton is the most progressive as far as letting investors put a suited house on a single lot with an ADU over the garage; they are also approving suited townhouses in groups of 3 but with the builders increasing they're build costs this year they are no longer cashflowing enough to make it worth while.  I've herd from other podcasts and the little bit that I personally researched about Calgary's market is that they are not letting any ADU's or suited houses in new construction areas or mature neighborhoods.  If you'd like more insite into the Alberta or SE BC market feel free to reach out, it would also be nice to talk to you about the southern Ontario market as I grew up there.

Roy Cleeves · Answer

Nova Scotia continues to be a strong place for my investment dollars.  Appreciation is huge and rents are close to Ontario. For example. There is a new build project of a 3 bed 2 bath bungalow semi with attached garage for under $400,000 that comes with a rent guaranteed of $2000 per month plus utilities for 2 years. This is geared to seniors which to me make the best tenants.  And Deposit is only $10,000. Build date is expected to be finished by February or March of 2022.

Jeremy Heaman · Answer

@Nigel Liao

In Alberta, I have found the laws to be relatively favorable to the landlord, compared to many other provinces. It doesn't take a year to evict, I am not aware of regions with rent control laws, and you can set your own late fees as they are deemed "reasonable" and agreed upon in the lease.

I have been looking in the satellites around major cities in Alberta as the rents are usually very close, and the house price is noticeably less. I also find it has a higher quality tenant.

Theresa Harris · Answer

I have places in BC and AB.  Prices in BC have gone up, but so has the rent in the area of Vancouver Island where I have rentals.  In AB, I have places in southern Alberta and Lethbridge is quite affordable.  Rent prices are okay, but don't count on much appreciation as far as the house goes as prices have been pretty flat. There are a few houses being built as rentals with a detached garage and a legal basement suite that are quite nice.  BC has a transfer tax, so it adds to the cost of buying and is also tenant friendly.

Roy Cleeves · Answer

@Nigel Liao It is hard to find that 1% rule without it being very old and needing a lot of work.  What we have available now is Cashflow positive properties and price appreciation.   I still live in Kitchener-Waterloo and I agree, the rents in the Halifax area are a little lower than KW yet very close and prices are still hundreds of thousands less which makes it possible for the positive cash flow.  And appreciation is similar and in some cases higher than Halifax.

Theresa Harris · Answer

In Alberta Lethbridge doesn't do the boom and bust that other cities do.  Calgary and Edmonton have seen prices go up and down.  Lethbridge keeps building and does have houses with legal basement suites. I also know a few people with STR that do really well-not as easy if you are a remote investor.  You can find properties that cash flow even with a PM.

Allen L. · Answer

I own a few properties in St. Catharines. I don't recommend investing there any more as the appreciation in the past 12 months has been insane. However I recommend investing in college towns as student rentals are one of the best ways to extra higher rent. I've also found student renters to be less messy and almost always pays on time. I would not recommend trying to rent to locals in those towns, they can't afford 2-2.5K rent a month obviously and a lot of career renters simply jump from house to house in the same community over their lifetime faking income and references.

Steve De Jaham · Answer

@Varun Batra  Yeah forsure private message me your cell

Varun Batra · Answer

@Nigel Liao Hey, I'm a fresh investor in Lethbridge, Alberta. As other investors from the town mentioned it's very stable and low appreciating market. It's a cashflowing market for sure. As what I'm seeing here in Alberta, Lethbridge economy depend on agriculture than oil so it doesn't go crazy with oil market crash. There's a huge demand for rentals as more immigrants, students (~15k-20k/yr) are coming, say 40% only stays here for long term. House prices will appreciate for sure.

Calgary has alot of activities going on. Good for flips but need connections and right system with team. So many foreclosures. Get almost 200 leads from a partner. Undervalued as compare to other big markets but here economy runs on different aspects also.

Edmonton, is a very good market to stay in for long term. There's so much startups coming out, coaches, private money access, big game for sure.

There's opportunity in small towns as well. Have seen 10% cap rate deal happend in small town.

Let's connect and talk more about our goals.

Varun Batra · Answer

@Steve De Jaham hey Steve, it's your fellow Lethbridge resident and investor. I appreciate your time and thanks for insight info. Let's connect or meet for coffee sometime this coming week.

Investing out of Ontario Canada?

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