Finding Canadian Growth Cities

[Jack]

When analyzing an area to invest, do you all do much of the legwork yourselves, or do most simply follow REIN`s recommendations (Top-10 Towns, etc.)?

If much is done yourself, what are the filters that you use? And what kind of sources do you use? Where do you get your most valuable information on said town(s)?

 

[TodorYordanov]

I rely heavily on the research that the REIN team does and provides. It is all done and based on fundamentals that will provide for steady growth into the future. That`s what I am looking for.
Once that town or city is identified, a local team member is incredibly important. In my case that is my real estate agent, who provides me with knowledge of neighborhoods down to which side of the street to invest on.
I can`t do it on my own! I depend heavily on other people, professionals and friends from the REIN community. What I do is analyze all that information from different sources and make sure it flows in one direction and it fits my long term plans and goals. Then act on it.
It`s all going back to "the system". I have to always remind myself: "Follow the system, keep it simple and boring. Look for excitement somewhere else. It is a long process". And it works.
I hope this helps with your questions.

 

[Jack]

QUOTE I rely heavily on the research that the REIN team does and provides. It is all done and based on fundamentals that will provide for steady growth into the future. That`s what I am looking for.

Any reason why REIN only focuses on Alberta & Ontario? They`re probably the two most business-friendly provinces from a tax perspective, although Ontario`s quite left-wing.

For me, I`m wanting population growth, I`m wanting job growth. But I`m also wanting to know what`s driving the population growth. If it`s job growth, are the jobs durable (oilsands) or are they only for a set period of time (construction for Vancouver 2010). To find these out, do you speak with local/provincial EDO`s?

What are other filters/sources used?

 

[rymac]

Up until recently I think Ontario was the number 2 in the list of best provinces to do business. So I beileve thats one of the main reasons for REIN`s focus on AB and ON although I think they`re doing a top ten towns for BC. I have to say if you`re looking for more reason to buy in AB read QB landlord and tenancy act. Its brutally unfair for landlords.

I found the property goldmine score card is the best way of accessing any town/ neighborhood. It gives a good check list of details to look into.

Some info on it is difficult to find but for a small town, the town`s website generally has alot of good quality information on it. Stats Can does community profiles which are helpful. One tricky item is determining the average rent in smaller centres. Since most local landlords advertise in the community paper and thats only archived locally or electronic archives don`t bother keeping the classifieds.

 

[seanverret]

QUOTE (Jack @ Dec 23 2008, 07:47 AM)
What are other filters/sources used?




Use the gold mine scorecard.



Use the ACRE System to complete your due diligence:

http://myreinspace.com/downloads/critical_forms/m/due_diligence_forms/default.aspx



Talk to the Economic Development offices of the areas you're interested in



Research statistics on the local real estate board web sites, CMHC, and stats canada



Focus on areas with Economic Development, People and Demand, Infrastructure and always have an exit strategy

But at the end of the day - this is what the Cutting Edge Research staff specialize in doing and a large part of where our membership fee goes, so if they're promoting specific areas and have been doing so for 15+ years and have an excellent track record, why wouldn't you use their valuable research on the areas that they have researched for you, rather than reinventing the wheel somewhere else. You do live in Calgary don't you? Why not actually look to find something in your backyard?

 

[Thomas Beyer]

QUOTE (Jack @ Dec 22 2008, 10:20 PM) When analyzing an area to invest, do you all do much of the legwork yourselves, or do most simply follow REIN`s recommendations (Top-10 Towns, etc.)?

If much is done yourself, what are the filters that you use? And what kind of sources do you use? Where do you get your most valuable information on said town(s)?
we look at many many print and online sources and look for: in-migration, wage growth, rent growth, price/door, CAP rates, price/door over time .. and once a city is identified we use ZIP code specific data in the US and local experts to weed the class C areas from the class B neighborhoods. We have a ton of data on our website, plus more proprietary (often paid for) data. There is more data in the US than Canada available by ZIP code, say, as opposed to Postal Code driven data on wages, race %, minorities, age, ...

in the micro-location we look for: schools, parks, transportation, shopping malls, grocery stores, universities/colleges .. both existing and coming in the next 2-3 years

Often I have a certain price/door target that I am willing to pay, say 75/door in Edmonton .. that today does not yield much fruit so we wait patiently or buy in another city like Yorkton, SK where we bought serveral assets for 30`s and 40`s/door over the last 2 years .. so price in apartment assets is a key issue, and harder to come by than in single-family as the inventory of apartment buildings for sale is so much smaller than 1000`s of single family homes say in Calgary or Regina or Edmonton !

sample data here: http://www.prestprop.com/tx.html or http://www.prestprop.com/ab.html

 

[housingrental]

I`m of the opinion that for most small investors the best route to go is invest in your local area
Become an expert in one area and one market segment

 

[Dan_Eisenhauer]

That is excellent advice, Adam.

For my first two years of getting re-established in the West, I was going all over BC (Vancouver Island, Prince George, Ft. St. John, Dawson Creek, Merritt, Kamloops, Grand Forks, Vancouver, and some other forgotten towns) and even Calgary. I began to feel very scattered, and never did get to understand a given area, let alone a town, the way I should have before making a buying decision.

It was joining REIN that made me recognize that we should become specialists in an area, and not generalists. That is especially true if we are small investors, as most of us are. I now know my way around the town I picked. I know most of its advantages, some of its disadvantages. I know my contractors, etc. etc. The ROI on my time has increased substantially.

For those with staff who can handle the extra workload of expanding horizons, then going to and learning other areas becomes a reasonable choice. Thomas is an example of one who makes that strategy work well. I know of other REIN members who are doing the same thing.

 

[TodorYordanov]

QUOTE (Jack @ Dec 23 2008, 09:47 AM) Any reason why REIN only focuses on Alberta & Ontario? They`re probably the two most business-friendly provinces from a tax perspective, although Ontario`s quite left-wing.
For me, I`m wanting population growth, I`m wanting job growth. But I`m also wanting to know what`s driving the population growth. If it`s job growth, are the jobs durable (oilsands) or are they only for a set period of time (construction for Vancouver 2010). To find these out, do you speak with local/provincial EDO`s?

What are other filters/sources used?


I think you are on the right track. Towns and Cities in ON and AB have the right mix of fundamentals. I hear some talk about Maritime provinces, but they seem to be a little speculative at this time. A friend of mine just bought a small apartment building downtown Montreal and I think he will do great with it. There are many places in all of Canada where if you position yourself properly today you will look and feel like a million bucks 10 years from now. If I can offer an advice is to pick one or two areas and work with local RE agent. Trying to find the best of the best is an impossible goal. Let time do it`s magic. Correct me if I am wrong, but the stock investing mentality as practiced by the masses is not helpful in RE investing.

 

[Thomas Beyer]

QUOTE (housingrental @ Dec 23 2008, 12:30 PM) I`m of the opinion that for most small investors the best route to go is invest in your local area
Become an expert in one area and one market segment
perhaps .. but ONLY if the area you live in is promising .. otherwise pick ONE other area that you can get to easily but that is promising .. more here on how to get started:
http://myreinspace.com/public_forums/General_Discussion/61-4391-How_to_get_started_.html

 

[Jack]

QUOTE I`m of the opinion that for most small investors the best route to go is invest in your local area
Become an expert in one area and one market segment

I live in Calgary and grew up in Vancouver, so those are two areas that I`m very familiar with. That said, I don`t necessarily want to invest in either. Both are very expensive, and both will probably have very limited growth (if any) over the next 1 - 2 years. Value declines are also likely. Layoffs in Calgary are very likely, as the city is extremely tied to the oil sector. Unless and until the price rebounds, this city`s at risk for wage declines, job losses, out-migration, etc.

I`m certainly not limiting myself to a single area. Especially in today`s internet age, access to information is simple. Point of this thread is to analyze which pieces of information may be more valuable and relevant to real estate investing than others.

Some good discussion here, thanks for all the responses.

 

[housingrental]

Dan - Thanks. For sure there`s benefit to focusing on one area.

Thomas - This is true. I likely would have worded my post differently if I lived in Windsor.

Jack - Fair enough let me know when you need some help in Ontario

 

[JeffSmith]

QUOTE (housingrental @ Dec 23 2008, 06:34 PM) Dan - Thanks. For sure there`s benefit to focusing on one area.

Thomas - This is true. I likely would have worded my post differently if I lived in Windsor.

Jack - Fair enough let me know when you need some help in Ontario

Hey Jack,
When and where was your last real estate investment? What was your reason for investing in that area?

 

[Jack]

QUOTE Hey Jack,
When and where was your last real estate investment? What was your reason for investing in that area?

January 2007. Calgary. It hasn`t done well.

Reason for investing? Had some money, always liked real estate, probably over-confident from a similar purchase in Calgary in August of 2005 which did very well (as did everything).

Adam - what`s your take on Kingston? You say "Ontario", are you talking Waterloo only?

 

[TodorYordanov]

There a people doing well in Cornwall, KWC, Hamilton, Waterloo, Brampton, Barry, Orilia, Durham region and many more. I`ve picked Hamilton because it`s the closest to where I live. Not the best reason, but an important one at this time of learning.

 

[Thomas Beyer]

QUOTE (Jack @ Dec 23 2008, 04:25 PM) I live in Calgary and grew up in Vancouver, so those are two areas that I`m very familiar with. That said, I don`t necessarily want to invest in either. Both are very expensive, and both will probably have very limited growth (if any) over the next 1 - 2 years. Value declines are also likely. Layoffs in Calgary are very likely, as the city is extremely tied to the oil sector. Unless and until the price rebounds, this city`s at risk for wage declines, job losses, out-migration, etc.

and a better city is ???

QUOTE (Jack @ Dec 23 2008, 04:25 PM) I`m certainly not limiting myself to a single area. Especially in today`s internet age, access to information is simple. Point of this thread is to analyze which pieces of information may be more valuable and relevant to real estate investing than others.

Some good discussion here, thanks for all the responses.
access to information is easy .. evaluating information with local "on the street" knowledge is harder, and then implementing the information remotely in a number of cities is VERY VERY difficult !

you have to become a specialist in ONE area with ONE type of house type (say 3BRs with ocean view, or duplexes with basements, or townhouses with 3 bedrooms ..) .. pick a type and area that works .. and then fine tune it .. if it doesn`t work .. check systems or area or timing ..

What is the mother of success ? Repetition !

 

[JeffSmith]

QUOTE (Jack @ Dec 23 2008, 07:19 PM) January 2007. Calgary. It hasn`t done well.

Reason for investing? Had some money, always liked real estate, probably over-confident from a similar purchase in Calgary in August of 2005 which did very well (as did everything).

Adam - what`s your take on Kingston? You say "Ontario", are you talking Waterloo only?
Do you plan on investing in real estate ever again?

 

[Jack]

QUOTE and a better city is ???

Not sure, yet, but I`m sure that there`s a city out there that will give me a better return over 5 years than Calgary. That`s what I`m trying to find. Do you not agree that with it`s deep ties to the oil sector, Calgary`s at a pretty significant risk for job losses and wage declines? And, if these do, indeed, happen, the next effect is probably more properties being listed, and people migrating outwards looking for work/life elsewhere. Certainly not everybody is predicting another run-up in the oil price to $100. And it`s only about 12 - 18 months until the Chevrolet Volt comes out - no gas needed for the first 45 KM`s of charging it (or something like that). Think that`ll at all be a growing trend in the next few years? Um, yes.

Politically, Obama`s also not a fan of the "dirty" oil of Alberta, certainly nor is the Energy Minister that he appointed, who`s really anti-oilsands.

These are all real risks that you need to consider when considering Calgary. And is the upside worth it?

 

[JeffSmith]

QUOTE (Jack @ Dec 24 2008, 07:53 AM) Not sure, yet, but I`m sure that there`s a city out there that will give me a better return over 5 years than Calgary. That`s what I`m trying to find. Do you not agree that with it`s deep ties to the oil sector, Calgary`s at a pretty significant risk for job losses and wage declines? And, if these do, indeed, happen, the next effect is probably more properties being listed, and people migrating outwards looking for work/life elsewhere. Certainly not everybody is predicting another run-up in the oil price to $100. And it`s only about 12 - 18 months until the Chevrolet Volt comes out - no gas needed for the first 45 KM`s of charging it (or something like that). Think that`ll at all be a growing trend in the next few years? Um, yes.

Politically, Obama`s also not a fan of the "dirty" oil of Alberta, certainly nor is the Energy Minister that he appointed, who`s really anti-oilsands.

These are all real risks that you need to consider when considering Calgary. And is the upside worth it?
Are there cities in Canada that you have done research on and look positive for future growth and have good economic fundamentals? What areas are you considering?

 

[terri]

QUOTE (JeffSmith @ Dec 24 2008, 08:26 AM) Are there cities in Canada that you have done research on and look positive for future growth and have good economic fundamentals? What areas are you considering?

there was a article on here not so long ago, can`t remember who posted it, perhaps one of Joe`s, thank you Joe for always keeping us informed. Anyway, wish I could remember and find that article again, but I think it said that ecomonically Regina was the top performer followed by Toronto.

Hmm, I will try and look for it, because I think it was based on current data not future prediction so doesn`t mean that that will continue into 2009 or be true 5 yrs from now.

T.