All Forum Posts by: Andrew M.

In my opinion an STR would be sustainable year ‘round, yes, especially if it were on the Peninsula... You could always join AirDNA for market data... Managing it yourself would likely net the highest return, but there would be a learning curve. There are a number of YouTube channels I could recommend. If you wanted to avoid that you could hire a PM; I'd be happy to refer you to the team that manages my Halifax units. I could also refer you to some realtors

For the purposes of your projections on a unit as an STR, I’d suggest assuming 2.5X market rents and 20% of gross for management.  The down payment will vary by property type; perhaps 5% if it’s to be owner-occupied, 25% if residential (1-4 units), 30% if commercial...  Don’t forget property and deed transfer taxes...  I’m not sure what you know & what you don’t :)

John if there’s a place and time you’d like to meet you could suggest it on here?  I could meet you at the Starbucks on Spring Garden Road at 11am or 12pm tomorrow.  I’m gearing up for a 12unit commercial purchase next, but would be glad to share experience and perhaps some capital if you’re looking for help. 

Welcome to the community, and congrats on your planned purchases John!

@John Mitchell hi John, I have a fourplex in the Peninsula, a couple of Airbnbs in the Valley and a few commercial properties elsewhere in NS.

Prices seem high right now, vacancy low, and inventory scarce, so in my opinion combining a house-hack with a short-term rental component would be a great way to get into the market, gain equity & experience.

I’d be happy to meet up any time :)

Andrew

@Kevin Robert Hi Kevin, welcome! The PP podcasts are fantastic; it’s been interesting to see how they apply to our local market here. It would be great to chat, if you wanted to bounce some ideas around, any time :)

@Jasmine May

Hi Jasmine,

I’m now Halifax-based, purchased a fourplex on the Peninsula last year. My properties are scattered across the province & are mainly commercial, but I do have a number of Residential units including some Airbnbs in The Valley. I’ve been involved in RE for 3yrs now, have watched all of the BP podcasts —many of them numerous times. Some initial advice/observations would be:

-The cap rates here are on the low side. And don’t bank on much in the way of appreciation any time real soon.

-If you purchase Residential, find something with at least 4units. Hitting the 1 or 2% rule will be difficult; renting short-term will be best but is management-intensive... I can refer you to the property management company I use in the HRM if you like.

-Don’t let analysis-paralysis prevent you from purchasing, but don’t jump in without doing your homework either... I suggest building a bit of a team & getting to know the area before pulling the trigger. I can refer you to my lawyer, accountant, Realtors, banker etc. if you like.

Let me know if there’s anything I can do for you Jasmine. I don’t pretend to be an expert, but my portfolio isn’t insignificant & I do take my RE investments seriously.

Kindly,

Andrew

Ah - thank you Ben.  Your observation about exiting at a lower cap makes a lot more sense to me now.  I’ve been operating on the understanding that appreciation IS a bonus and not, as you say, an absolute necessity.  

Not convinced that your philosophy applies in my city but I’ll certainly look at its outskirts and developing areas (eg. Bedford, Eastern Passage) with this in mind.

Why I buy personally is NOT for major upfront income, but rather for long-term wealth.  Although my net is in the double-digits, I don’t yet see the cap rates changing much anywhere in my Province any time soon.

I’d be grateful to hear anyone’s opposing insights. 

Thanks again Ben!

@Ben Leybovich

Confess I don't get you right away Ben, but after reading again a few times I take it your comment underscores the points that buying property in a stable area that cashflows even at a lower cap rate is the way to invest - vs speculating in a higher cap rate area and hoping for appreciation.

If you're inclined, would you like to spell it out a little more?  If not no worries I'll just watch your episodes again and check out your BP posts!

Thanks man :)

@Terence, thanks for your reply.

Yes the Airbnb platform has really taken off in the past 3yrs, and the market may indeed be saturated in your areas.  That said the two I have are performing fantastically, and I'm in the process of bringing four more online.  Most of my other properties are small commercial.

I've got a decent amount of equity in what I think is a sizeable portfolio for my age & stage, as well as access to some private money, but have been coming to the conclusion that a joint venture(s) would be a great way to accelerate acquisitions.  Don't think I'm up for it this year, but can see how JVs would get the team into medium-sized multifams - say 50-100 units- with the built-in management, economies of scale etc. that we're looking for.

I can't speak to how easy or hard people say it is to find JV partners; I'm not in that sphere at the moment. But if you're interested in sharing info about your inventory I'd be glad to review it. My profession (apart from RE investment) involves much contact with real estate owners & affiliated professionals...

Andrew

Hey Kevin, 

You are spot-on about the challenge of Airbnbs...  Assuming one has the cash to repair and furnish properly, the big challenge is MANAGEMENT.  I've employed a property management company to handle four of my units (most of the others are small commercial) and and am pretty underwhelmed by them after only a few months.  They do OK handling the day-to-day, but I wouldn't trust them with either of my Airbnbs.

I was very lucky to have gotten connected with an amazing, capable, ambitious young person for whom the Airbnb gig is perfect.  She's making the money she wants (admittedly not a lot), getting great experience & some mentorship, and controls her own schedule which suits her just fine.  She brings a lot to the table...  She's even training other young people in her network to fill in for her as needed!

So yeah, the owner needs to find the right person to do turnovers and manage guests to have a successful Airbnb experience, unless they want to do it all themselves.  

As for reviews:  if the place is spotless, well-decorated and -updated, the great reviews will follow.  This has been my experience.  My two cents, In case it helps anyone else out there :)

@Paul Mackay

Re. your reading of City Council notes; nice work!

Re. airbnbs in the Valley...  i have a client who wants to bring in some UK-based partners for a year or two, and they can't find a house to rent.  Checked with my (admittedly small) wolfville/new minas/kentville/centreville network, but it seems there's a lack of long-term housing (detached homes; not apartments) in the Valley...  

Paul you were saying there's been an ~50% increase in HRM airbnb rentals recently and i have to agree.   People are figuring out that it takes more than market rents to maintain the home's expenses & structure and pay down the mortgage - eventually.  In NS, we're in a high-value/low-income environment here...

Re.  Toronto and Vancouver...  i believe those cities are dealing with an influx of out-of-country capital which hasn't hit us.  Perhaps it will?  i hope it does!  However, until then, i don't expect Nova Scotian municipalities will enforce legislation limiting our re-positioning of rental housing - as long as we don't disturb the neighbours and pay the CRA :)

Looking forward to any feedback Paul