All Forum Posts by: Andrew M.

@Terence Hyacinth  agreed:  most transactions in NS will involve more hassle than profit.  i've lived in different parts of CAN & the US and feel like i can say that :)

Terence you were inviting thoughts about why the increase in airbnbs, given all the new construction and relatively low job growth?

Re. airbnb potential in the HRM: i think well-managed airbnbs appeal to a certain set of people more than hotels do, and that many airbnbs are better-situated than many hotels - at a lower price.  Hosts are grossing 2-3x more than they can on annual rentals...

Re.  the increase in housing inventory in Halifax, particularly high-rises:  i believe the bigger developers are (rightly) taking advantage of cheap money (ie. low interest rates) which, as a strategy, 1) is a better investment than anything else in our economic environment, and 2) lowers the the holding costs, thus increasing the arbitrage between interest rates and the sale to individual buyers - who may be buying more than they can afford long-term due to the relatively low interest rates that these individuals are also benefiting from.  There may be a long-term condo/apartment housing glut in the next 5yrs, but i don't think short-term rentals will be affected in quite the same way...

Re. inventory vs. zero job growth:  Yes inventory is increasing, and yes job growth isn't breaking any records.  However much of the new inventory is condominiums, and condo associations generally aren't friendly towards short-term rentals of units, which leaves space for individual airbnb hosts.  Job growth isn't moving the needle much, but still:  HRM is growing by drawing in migration from the rest of Nova Scotia and elsewhere, which means an increased need for housing.  So if we're going to invest anywhere in NS, i suggest we invest in the HRM.

What do you think Terence?  How is the market in GA?  It seems like a lot of folks are investing in S.E. and MidWest USA these days...   would love to hear about deals that you're working on !

@Jeremy Zwicker  after reading up on Cap rates a year or so ago, i was really struck by what Ben Leybovich said on one of the earlier BP podcasts.  can't quote him verbatim, but he was saying that that the capitalisation rate in a given market is essentially what that market is "psychologically prepared" to accept as a rate of return on investment.  

i understand him to be saying that cap rates are more of a local 'consensus' than anything else, and that if we can increase the NOI on a property (eg. through airbnb or by updating and/or adding amenities to a property) we can increase the 'value' of that property even at the same cap rate...

JZ i should probably ask to clarify  what you mean by better capitalisation rates in Antigonish vs. Truro.  In my understanding, higher capitalisation rates represent potentially higher returns but more risk on the cash invested.  So in Antigonish, which does have a university and a hospital but isn't growing, the cap rates are maybe 8-10% while in Halifax, particularly the HRM, which has numerous economic drivers and IS growing, the cap rates are around 4%...

i agree with you Jeremy about the low vacancy and tax rates in Antigonish.  If Mr Arsenault were to buy one of the many run-down student rentals in 'the 'nish' and simply paint, renovate the kitch & bath he could likely command a premium :)  It's actually quite a fun and vibrant town for its size!

@Jeremy Arsenault   you were asking where to invest...   i almost think the question is more 'what to invest in?'  A case study:

i have nine properties in nine NS communities:  some commercial, some residential, all small (4units or less).  So far this year i've purchased a house in Wolfville and a 4plex in Halifax, and two weeks ago said i didn't think Antigonish was an attractive market.  So it's ironic i'm now seriously looking at a property in Antigonish!  

This thing is an off-market, 9720 ft2 mixed-use building that needs a lot of work (say, $300k purchase price and $200k reno, with 10k closing/legal/deed transfer costs).  However it's on a cul-de-sac adjacent to the university, has ten paved + five gravel parking spaces, is two blocks from downtown and 10mins walk to the the grocery/mall/LC.  

My plan is to convert the upper half into four 2BR rental units, rent them furnished/utilities/internet included to students on a 9month lease, then airbnb them to tourists & faculty in Jun, Jul & Aug.  The lower half will be leased year-round to an established local community-culture organisation.  

BiggerPockets' rental calculator indicates it should cashflow $7500 per month after all expenses (including HST on short-term rental income) are input, assuming 3% vacancy; 4% repairs; 5% CapEx; 8% management and assuming appreciation merely keeps pace with inflation.

(i'll be securing the financing of it against my current portfolio with the assistance of a private lending partner.  If anyone's interested to analyse or critique i'd be happy to forward the pro forma.)

At first glance, this place looked like a bland, disused, shell of a dump building in a town i visit but do not like.  But if everything works out, it'll be my best-performing property yet!

Hi Jeremy, Andrew here. My two cents, in case it’s with anything? I’ve recently returned to Halifax and have purchased an number of small commercial and residential properties over the past several years. I’m from Antigonish originally, but I’m not looking at purchasing there. You’re right, the Student Rental potential is great, but in my opinion there’s not that much opportunity in “the ‘nish” right now. I could be quite wrong. Given NS’s demographics (shrinking population everywhere but the HRM) I like Halifax and Wolfville. I’m having great success with AirBNB on my residential units, because you can get 2-3x market rents in these places almost year-round, which goes a long way towards compensating for the high prices. Granted, I’m new to AirBNB but have done a ton of research into short-term rental and can offer some tips on dynamic pricing, calendar and property management, if you’d like :) What I’ve done is watch TONS of BP podcasts multiple times, signed up for a membership so I can use their calculator software, bought some books and done some networking... The small investment in time and money has been worth it!!

Hi there, I've recently relocated to Halifax, NS and would like to discuss larger multi-family properties with anyone familiar with the market here :)

I have a small portfolio, a mix of commercial and residential, and would like to purchase or partner into a larger multi-family complex next.

10 units is realistic for me, but it would be exciting to contemplate 100 units.

Thank you kindly for any replies,

Andrew