Quote from @Jemima Twist:
Hello friends
New hopeful investor here. I live in BC, Canada but I think, after researching and reading lots that I am going to try and find a SFH in Alberta or Saskatchewan (looking at Edmonton and Saskatoon currently) - those look potentially promising. (although after reading through the forums and diving deep in the google machine it is hard not to consider every market, suffering from newbie shiny object syndrome for sure!) Thank you all for the insightful posts and feedback from the real world, super grateful to learn from your experiences. I'm starting to crunch numbers and take action..my question:
Are there any metrics that are an absolute must for you?
-cashflow - min. $100 per door (positive cashflow seems to be most inportant to me)
CAP rate - min. 4%
50% rule expenses - i was using the 50% rule but have seen others only using 40% which obviously has improved some of my analysis
1% rule - this has been extremely challenging to find in BC, Canada for me currently but i will keep looking.
Cash on Cash - 10%
minimum ROI - 12%
Would i feel safe living there/in that area?
would i be willing to live there?
bonus revenue generating feature (suite potential, large lot, garage etc)
I have only found 1 property that appeared to hit all these numbers so far, so just wondering if i can maybe look to be a bit leniant on any of the metrics. Please let me know if you have any feedback
I don't own any properties yet - but i did design and build (with help! :) a tiny house i have been living in off grid for 3 years in beautiful BC, a major house hack especially in our hot rental markets! if anyone is looking to build one, curious or looking for motivation to pull the trigger on building one, feel free to message me, I'd be happy to share my learnings.
enjoy the holidays and happy deal hunting :)
Many major population centers, you will find it difficult to reach the 1 percent rule. You may be able to in small towns, but there is often a high vacancy cost, or the risk of it.
With the interest rate increasing, it may be more difficult to find the cashflow goals currently as well, but hopefully that changes relatively soon. (Naturally depending how much you're putting down) suited properties are likely the best opportunity for cashflow here in Edmonton.
if you're looking for potential developments, Edmonton has undergone some large zoning changes as it aims to drastically increase density to achieve its population goals. There is also a small satellite city clled Beaumont that has opened itself up drastically for future development, including winning an award from CMHC for doing so.
the 50 percent rule for expenses is also a very rough rule of thumb. I would advise figuring out how much maintenance is required of a 10, 20 or 30 year term, and assign a monthly cost to in instead. Appliances, flooring, windows and roofs all have an expected life so you should be able to get an approximate number for your replacement costs.
I currently invest in the greater Edmonton area, as I like the market fundamentals, fair tenant laws, and find it often meets much of my criteria. If you'd like, I can get you in contact with an invest focused realtor here, and see if there's a more specific property that might meet your criteria. If not, I hear wonderful things about Saskatoon as well. (Including their berries)
