All Forum Posts by: Scott Innocente

Rents in London grew at the fastest pace in the country over the past year, according to the latest snapshot of the rental market across Canada. The same thing is happening in Windsor and other major Canadian cities. Higher borrowing costs are causing thousands of future units to be canceled when we are already short millions of homes over the next decade.This coupled with mass immigration (target of 500,000 newcomers per year by the Canadian government) and there simply is no better asset class to invest in than cash flowing real estate.

https://lfpress.com/news/local-news/london-hit-by-biggest-average-rent-increase-in-canada-33-in-one-year

Cost of ownership is skyrocketing, which is pushing rents up. With cap rates rising, Blackrock is focusing on cash flow with multifamily acquisitions.

https://www.multifamilydive.com/news/blackstone-sees-for-sale-cost-increases-driving-rental-demand-investment-capital-housing/635265/

Rents are up 15% nationwide.  Real estate prices may be dropping because of higher interest rates, but the housing crisis in this country has not been fixed.  This makes long-term cash flowing real estate a fantastic investment option.

• Data is backing up what many multifamily buyers and sellers already know — cap rates are rising for apartments around the country.
• A new report from CBRE says that going-in cap rates rose 33 basis points to 4.09% in the third quarter. In the second quarter, they jumped 39 bps (their biggest increase in a quarter ever) — marking a 72 bps increase over six months. Still, they are below their fourth-quarter 2019 level of 4.16%.
• Exit cap rates, or the rate used to estimate a property’s value at the end of the holding period, increased 21 bps in the third quarter versus 30 in the second quarter. However, the current 4.63% exit cap rate sits below pre-pandemic levels. Internal rate of return targets passed the pre-pandemic average, rising 35 basis points to 6.39%.

https://www.multifamilydive.co...

Rates go up, investors don't buy as many rental properties. Rates go up, less people can qualify for a mortgage meaning more renters.More renters + less supply of rentals = higher rents

Some analysts predict that the rental market may get even hotter throughout Canada.Ben Myers, president of Bullpen Research & Consulting, a real estate advisory firm, says higher interest rates are pushing potential homebuyers to the sidelines, putting more strain on the rental market."These two factors will keep renters in their properties, further reducing rental supply," Myers said.

https://www.cbc.ca/news/business/rising-rent-housing-market-canada-1.6525075

With construction of NextStar Energy’s battery plant in Windsor well underway, the company is turning its attention to hiring its first employees in November. Rising interest rates are really the only thing stopping Windsor's real estate market.

Long term, Windsor has the catalysts to offer above-average appreciation to local home owners and investors including the Gordie Howe Bridge, LG Battery Plant, Amazon Distribution Center, while also being the most affordable city in Ontario with the lowest rents.

https://windsorstar.com/news/local-news/nextstar-energy-battery-plant-to-begin-hiring-in-november

Anticipation builds as APMA conference offers peak at first all-Canadian electric vehicleOnlookers at the Automotive Parts and Manufacturers Association (APMA) conference caught a glimpse of the first all-Canadian electric vehicle, on Wednesday, in Windsor, Ont.

The fundamentals of multi-family investments are as strong as ever. Rents are rising rapidly and helping to offset higher borrowing costs which is allowing multi-family business owners to ride out the wave of rising rates.

Even if rates rise much higher than expected in the fight to beat inflation, apartment investments would probably survive, says Borsos. Investors are likely to hunker down and wait for the capital markets to get back to normal, he says.

https://www.wealthmanagement.c...

Inflation continues to slow which is good news for interest rates. That being said, the Bank of Canada is still likely to raise 1-2 more times prior to year end.

Interest rates, like all markets, operate in cycles. Right now, we are in a rising rate cycle as the feds try to battle inflation. Once inflation comes into check, we can expect the cycle to shift back to falling rates. It's important to note that no one has ever been able to consistently and accurately predict interest rates, so don't think that you can either!

We love investing in states that have low taxes.  Over long periods of time, these states increase their competitiveness and are more likely to attract businesses and employees fleeing high-tax states.