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New to Investing - Market Research Question

Dumiso Mpofu

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Jul 22, 2016
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Hi, my name is Dumiso. I am a student about to graduate from the University of Saskatchewan this December 2016. I have recently just started learning about real estate investing, and am reading "Real Estate Investing in Canada." I haven't bought any property yet; I am currently saving money and trying to learn as much as possible before I do so. This may come across as a silly question, but I have just come across a part of the book that talks about factors that affect real estate values in an area. The first two factors mentioned are mortgage interest rates and average incomes. I would like to know 1) Where is the best and most efficient place to find accurate mortgage interest rates? and 2) Where do I find recent data on average or median income across the country? I have found some stats on stats Canada, but the last year that data was collected in terms of average income was 2014. If anyone can point me in the right direction, that would be greatly appreciated.
 

Thomas Beyer

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Aug 30, 2007
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Banks like RBC BMO or TD, most cities, CMHC and stats Canada have loads of stats on cities, regions and wages.

Interest rates are online for example on banks sites or various mortgage broker websites. 2 year money is around 2.1 to 2.3% and 5 year money 2.3 to 2.7%. Since mortgages are based on the underlying bond rate, those rates are critical. Canada of Canada 5 year bond is around 0.5% and for ten years around 1%, so they will not go anywhere, in fact I expect them to go lower.

Generally speaking it is good to learn & save money to get started, but you also need an environment of more structured education, nurture and encouragement of like minded people. That is where a real estate club like REIN comes in. Attend a few REIN sessions, read, read, read, network, learn, listen,get cash ready for acquisition, get prequalified for mortgage, research potential target markets and then become an expert in your target area. Don't rush.

A few posts to get you going: http://myreinspace.com/threads/educational-rein-posts-by-thomas-beyer.10663/
 

Matt Crowley

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Dec 14, 2013
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Hey Dumiso,

It is good that you have starting your real estate education.

RE is a very localized. Canadian data is just about useless. Why group into Canada? Why not western North America? The useful Canada wide data is on interest rates and upcoming equity requirements.

If you really want average income data, check out Alberta Economic Indicators http://economicdashboard.alberta.ca/
Go to average weekly earnings / by province / then sort by table

For some historical macro-trends on interest rates, FRED is a great data source: https://fred.stlouisfed.org/series/IRLTLT01CAM156N
They also have a free plugin to Excel for data manipulation. It is pretty awesome.

For current interest rates, any Canadian bank website is fine.

Keep in mind that real estate yields about 4.5 - 6%. (Total revenue / total operating expenses). If you want to make more than 4.5% - 6% then you need to buy a property where the price is going to rapidly increase. If you buy into a long term flat or declining market, you will make 4.5% to 6%. Don't let anyone fool you with "but you end up with a house at the end"

Take that $80,000 down payment today and invest it at 4.5% for 25 years say in an RRSP = $240,434. That is the same house for no work at all.

Take that $80,000 down payment today and invest at 6.0% for 25 years say in an RRSP = $343,350. Set it and forget it.

If you want to make real money, you need to be a great speculator.
 
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