Welcome!

By registering with us, you'll be able to discuss, share and private message with other members of our community.

SignUp Now!

Investing in Saskatchewan?

Redmoon

New Forum Member
Registered
Joined
Sep 27, 2015
Messages
8
I'm planning my next house purchase in Saskatoon. Is anyone familiar with the market fundamentals in this city?
 

Cory Sperle

0
REIN Member
Joined
Sep 1, 2010
Messages
826
Saskatoon is a great town to invest. I did quite well there and got started in real estate there. It has become a bit speculative in the last few years but right now they have higher vacancies for rentals so I would be a bit more careful. Long term a great city to invest though. Be aware there are some super bad areas of town to avoid however.
 

Redmoon

New Forum Member
Registered
Joined
Sep 27, 2015
Messages
8
Two quick responses, that's great. I guess my biggest question is, is now the right time to buy? The City has expanded quite a bit and more and more new homes are on the market. Some are being sold with basement suites already installed. House prices have decreased over the last year and as Scott indicated, rental vacancies are up. So, how do I ensure I'm buying the right type of property in the right neighborhood when the housing market and the general economy is forecasted to continue to slow?
 

kfort

0
Registered
Joined
Sep 1, 2010
Messages
1,578
Depends on what style property. I wouldn't buy a condo (any style) currently. However I'm 100% comfortable buying suited houses on the appropriately sized lots!

What city area are you targeting?
 

Cory Sperle

0
REIN Member
Joined
Sep 1, 2010
Messages
826
The right time to buy was 10 years ago. The second best time is now. Find a property that cash flows and stress test the mortgage at a higher rate. Manage impeccably and sleep well and wait for the future payday. There really is no perfect time. Many folks regret selling a property, but how may have you ever heard regretted a purchase?
 

Redmoon

New Forum Member
Registered
Joined
Sep 27, 2015
Messages
8
I think there is opportunity in Meadow Green, Mount Royal, King George to name a few. I'm looking at bungalows with basement suite potential.
 

kfort

0
Registered
Joined
Sep 1, 2010
Messages
1,578
Are you local, or do you have an experienced team on the ground? You've listed two of the last places I would currently put money in Saskatoon....
 

Redmoon

New Forum Member
Registered
Joined
Sep 27, 2015
Messages
8
"Stress test the mortgage at a higher rate" - I don't understand. Do you mean take the mortgage out over a longer term, with a higher interest rate compared to a shorter term and lower interest rate ?
 

Redmoon

New Forum Member
Registered
Joined
Sep 27, 2015
Messages
8
I'm local, and apparently looking in the wrong place! I think there are some hidden gems in select areas of those neighborhoods.
 

kfort

0
Registered
Joined
Sep 1, 2010
Messages
1,578
My way isn't necessarily the right way, it's just my way.
 

kfort

0
Registered
Joined
Sep 1, 2010
Messages
1,578
When the riff raff got pushed out of riversdale many went to meadow green. Areas rise and fall similar to cities overall. Short of pleasant hill meadow green is probably the last place I would go unless you've got a very strong stomach & plan for declining value (& higher maint costs overall given the probable tenant demographic).

There are definitely easier places to make better money in Saskatoon. If you outline some details on your strategy & target tenant profile I may be able to point you somewhere.

Again, my way is just my way, not the right way.
 

leedahlg

0
Registered
Joined
Sep 14, 2009
Messages
26
We have never had a problem getting tenants in our duplex on Barber Cr. in Fairhaven. It is a quiet area close to schools with easy access to anywhere in the city on the new bridge. Potash mines west of the city as well.
We purchased this property in March of 2012 and unfortunately one partner needs to sell. If you are interested in investing in this area we have it under properties or contact us. [email protected]
 

kfort

0
Registered
Joined
Sep 1, 2010
Messages
1,578
Check out the Saskatoon police service's crime mapping tool. It's broken down by area and plotted on a google map. It takes more management skill and time input to navigate those areas where crime is a major concern. Because I don't buy in those areas I also always point applicants to the site as well so they can see for sure that they are moving to an exceptional and safe area.
 

Redmoon

New Forum Member
Registered
Joined
Sep 27, 2015
Messages
8
My strategy consists of converting a single dwelling bungalow into a duplex. Those areas are attractive to me b/c they are somewhat affordable and would cash flow, especially with a detached garage rented separately. I hadn't really thought about tenant profile, instead I've been more focused on finding a place that I could afford the down payment and Reno costs.
A good tenant would be a working young (late 20's) single or couple who is saving for their own home purchase for the main floor and an older working person with a secure job for the basement.
 

kfort

0
Registered
Joined
Sep 1, 2010
Messages
1,578
I would never buy a house, cash flow or not, if I wasn't absolutely sure what tenant profile it had (post reno in your case). If I can't accurately describe who is going to be living there I've got no business investing in that property. This rule is emphasized if you self manage but should be followed without fail regardless.

And you need to be comfortable with that profile. Why? Because "A" grade tenants don't live in C grade properties or C grade neighbourhoods. And that last part is important. You can plunk your "A" property in a C/D neighbourhood and who lives there? C/D tenants, that's who. And even if you force $40k appreciation (<- love that strategy by the way) by adding a suite you'll be down $40k in no time when they bring their friends over and live their lifestyle for a few months.
 

Matt Crowley

0
REIN Member
Joined
Dec 14, 2013
Messages
980
Many folks regret selling a property, but how may have you ever heard regretted a purchase?

Regretted purchases off the top of my head (Edmonton):

Corner I Towers
(BCM Developments). Ran into a potential coal mine and halted construction.
Glenora Skyline (Glenora Skyline Development, now bankrupt) achieved 50% presales and went bankrupt. Original owner / developer was kidnapped and his life threatened when he was unable to make payments (Source: http://www.cbc.ca/news/canada/edmonton/2-charged-in-kidnapping-beating-of-edmonton-businessman-1.1388694).
Charles Camsell Old Hospital Site: (DUB Architects & others) purchased with the intention of remediating asbestos and redeveloping. Been sitting vacant since the province shut down the hospital in 1996. Millions of dollars over budget and with no finished product in sight. Catches on fire every few years as well (http://globalnews.ca/news/1309115/fire-crews-douse-insulation-blaze-at-vacant-charles-camsell-hospital/)
Station Pointe Village, Fort Road & 129 street (BCM Developments took it over after Communitas dropped out of 210 unit complex in April 2015) plan for a transit-oriented development along a "regendrifying" area according to the city. Plan was for 292 units in first phase in a mixture of mid rise and high rise. Just because it is close to LRT doesn't mean the project is going to be a success.
Century Park Club and Residences: (Westbank Projects Corp and Procura) 43 acres adjacent to Century LRT station. Amazing transit oriented development location. In 2006, envisioned as a $1 billion project that would take 8 years to complete and ultimately provide 2,900 condo units. Currently a parking lot. Rezoned and rezoned and rezoned.
 
Last edited:

Cory Sperle

0
REIN Member
Joined
Sep 1, 2010
Messages
826
Random. Not sure what that has to do with investing in Saskatchewan, or regretting a purchase. What I see are projects that ran into difficulties for various reasons. You might as well mention all the failed investments in Alberta in 2008 because of the crash as well. From my personal experience and those I have talked to who were contemplating a purchase very few, if any, regretted the decision to buy. Many however regretted not buying or selling too early.
 

Redmoon

New Forum Member
Registered
Joined
Sep 27, 2015
Messages
8
That's good insight kfort. I've been rethinking my approach. Not sure if I've come to any solution though... I'd prefer A or B grade tenants but the corresponding neighbourhoods and properties are expensive. I'd self manage the property and I'm not against C++ tenants with the right property and cash flow.

The overall purchase price of the property is still a driver for me but I don't want to waste my time dealing with low grade tenants either.
 

Matt Crowley

0
REIN Member
Joined
Dec 14, 2013
Messages
980
^^ Investors who regretted buying have dropped out of the picture. Some go bankrupt. It is a selection bias. Only the not-bankrupt firms are advertising. The bankrupt ones have nothing to advertise and are not in the market anymore. There is no rule that buying today is going to be better than tomorrow. There is no reason to think that property values are always going to go up. What happened in Edmonton is happening across North America. Obviously.

It is mostly just naive investors who think that prices will always go up go that there is nothing to learn from past failures and regretted purchases. I'm just saying be cautious of empty-minded aphorisms like "better to buy today than tomorrow". That isn't necessarily true. Prices may have historically trended up but if you buy at the peaks and sell at the valleys you will be a lot better to invest in RRSPs. It is quite possible to earn 5 - 8% with an RRSP. Cash on cash returns for most real estate out there is going to be a lower range of that and requires a lot more work, and quite certainly, significantly more risk.

By focusing your money in real estate near your hometown, you are increasing your risk and decreasing your diversification. You are more exposed to the changes in the local economy. Maybe property values go up. Maybe it goes down. If the local economy suffers, it can potentially put your job at risk at the same time that hiring freezes and vacancy rates increase. Investing near your home has its own inherent disadvantages. It is called a control premium. Because I invest where I live, I have a lot of control over my properties and accept the significantly greater risk of being 100% invested in Edmonton. It comes with many disadvantages.

If you invest for cash flow and cash on cash equity returns you will have a lot better understanding of what you can make....exactly what kfort says above.
 
Top Bottom