London Ontario Real Estate Growth, Commercial & Residential

 

                 London Ontario’s Real Estate Market Growth & Why

   Income properties London Ontario

There is a huge demand for secondary markets like London and this is where the commercial and industrial investors are going as per this latest financial report.

With that and there being a shortage of decent rental properties, we are seeing rental rates increasing and income property prices increasing as well.

Getting a cap rate of over 6% is a challenge for residential investors, however, the long term investor’s confidence level is quite high and with the average Canadian’s debt load at its peak, the demand for rental units, be they multi-family, townhouses or apartment condos and single family homes is very strong.

We can toss and turn all night long about interest rates until the cows come home, I know from experience that smart investors buy value first and then allow the economy to catch up, even if it takes a year or two.

I, being an advocate of positive cash flow from day 1, the last paragraph was difficult for me to write!

One thing I have learned over the years is to dress to fit the change in climate, Mother Nature can be finicky and act without any warning, so can the economy, the bureaucrats and the rent review board!

Spring is here, London is expanding, interest rates are low and the door is open for those seeking good financial opportunities in real estate.

London Ontario Vacancy Rate And Rent Numbers

Average Rents London Ontario

The London Ontario vacancy rate for apartments, townhouses and houses as of February, 2018 is below 2%.

For Apartments, here is CMHC’s numbers and their 2017 London Ontario vacancy rate:

Type Avg. Rent Vacancy Rate
   
Bachelor $655 3.3%
1 bedroom $840 1.7%
2 bedroom $1041 1.9%
3 bedroom $1190 1.8%

 

Again, remember these are just averages; I have some clients who are getting $1500-$1700 for  two bedrooms and $1650-$1900 for a 3 bedroom.

energy efficient house London Ontario

My experience with townhouses mirrors what I see on MLS, decent 3 bedroom townhouses $1250-$1350 plus utilities and the last 3 we did, all leased out in 4 days! (It took 4 days because of background and credit checks)

For detached houses, the same thing, $1500 to $1800 is a sweet spot, anything over that the house better be nice, good location and in great shape. The last house we did at $2650 plus utilities was vacant for 8 days!

What does this all mean?

Wise investors will buy in any market because they are in it for the long haul, they do not care what the rest of the market is doing, and they invest because they are true investors, not hopers, flippers, dreamers or have a lack of confidence or courage as a real estate investor.

Yes, there is a shortage of quality rental opportunities at the present moment, however, there are still some decent buys and opportunities for those who grasp that vacancy rates will remain low for many, many years to come.

Income Properties in London Ontario, Missing Opportunities

Quite a few  times people looking for income properties in London Ontario miss the boat because by the time they have confirmed all the facts, or,  ‘run their numbers’ (usually erroneously), or, gathered solid information, the opportunity is gone because of other buyers or the property has been sold!

looking for real estate opportunities

I see this daily, the fence sitters, the ‘time is not right’ folks or in 75% of the cases, their analysis of the property and income is faulty, that their illusion or perception of cash flow, appreciation and risk tolerance is inconsistemt with what wise investors do!

The average real estate professional relies on what he or she  hears & perceives, a great real estate professional assimilates all the available facts, sifts out the chaff, and makes the go/no go decision on his/her ability to adhere to what I call the brutal truth.

Great investors never buy because of what the market is doing, they don’t care. It can be up, it can be down, they understand cash flow, they look at the big picture and they think long term.They buy on expectation and sell on results! Period.

As J.P. Getty said “Investors bank on climate, while speculators bet on the weather.” In other words, the real estate market works more like a barometer than a thermometer.

Getting good and accurate information and then being able to act decisively on that information is what really separates the wannabees and the wealthy.

Your boat will come in as an investor

Your boat will never come in if it never goes out.

Ty Lacroix Broker of Record

Ty Lacroix Broker of Record & Owner

 Not All Realtors Are The Same, This Is What We Do When We Work With An Investor Client

  • First Time Client Meeting: We understand that each & every client has different needs, goals and financial and risk tolerance. We spend an immense amount of time discussing, understanding and designing a systematic approach to match or even surpass your criteria. It can be an apartment condo or townhouse to rent, to multifamily to small commercial properties.
  • The Process: We then prepare a list of properties that will match your criteria and goals. We perform our due diligence on each property, verifying expenses, leases, licencing, permits, zoning, public transportation, schools, area rents, vacancies and perform our 44 point check list to ensure we are thorough. If we have a successful acceptance of your purchase agreement, (which has conditions and wording to protect you) we work closely with your lawyer to ensure he/she has all the information required to ensure the closing takes place. We even perform a final walkthrough before closing to ensure that what you purchased is in the same shape or better than when you decided on the property and that all chattels are included and  in good working condition.
  • Leases and Screening Tenants:  If you wish us to be involved in attracting tenants, doing credit checks and verifying employment and references and preparing a lease, we are very good at that. If, however, you wish to do your own tenant attraction, screening and leasing, that is fine with us, we do tenant leases only as an add on to our services. We are not Property Managers.
  • Optimizing Cash Flow & Capital Improvements: We will prepare a spread sheet outlining what you can do to maximize your investment and cash flow in the years going forward.
  • Selling: 99% of our clients are of the buy and hold mentality but weekly we are contacted by other owners asking us to sell their investment property or properties. Our selling process is even more meticulous than our buying process, the reason being, having all documentation and pro formas in place, we eliminate 90% plus of the stress in the closing period, proving that our properties sell for more and in less time!

 Search income properties for sale in London Ontario .

New Rules For Buying a Property in London Ontario With Tenants

If you have a client who is interested in buying a property, but it has a tenant, make sure to extend the closing date because the required notice days in Ontario have now doubled in length. In the past, only 30 days written notice was required to terminate a tenancy. Now it’s 60.

Landlord in London Onatrio

Another glitch: the date the tenancy ends must coincide with the end of term or rent period. This could result in a full year passing before your client can move in.

For example, if the tenant’s lease ends Dec. 1, 2018, your buyer can’t move until Dec. 1, 2018 even if the closing date is Nov. 1, 2017. And if you’re thinking of “fudging the dates” by giving less notice than is required, don’t! If the termination date is so much as a day off, the notice is invalid, and you’ll have to start all over again.

Previously, landlords have not been required to compensate the tenant if the landlord gave proper notice and acted in good faith. That’s no longer so. Section 48.1 of the RTA requires that the landlord compensate the tenant equal to one month’s rent. This amount has to be paid prior to the termination date specified on the N12 notice. This means a tenant can take the money and still refuse to leave!

Some real estate salespeople have encouraged investor buyers to buy a place and evict a tenant under the pretense that the buyer, or her family member, is moving in. Under the new rules, if the buyer gets caught, she can be fined up to $25,000. This fine can also be levied if the buyer decides to move out before 12 months are up following the date of eviction, rent it to her cousin and charge rent or demolish the place.

Given these rules, it’s important that you get a copy of the tenant’s lease. This way, you can gauge when your buyer can move in and how much she’ll have to pay the tenant to move out.  It’s also important that you always use the updated forms found on the Landlord and Tenant Board’s website, because the previous forms are no longer valid.

To avoid extortion by the tenant – a practice whereby tenants demand money in order to move – make sure that your buyer, once she becomes the landlord, files an L2 application and obtains an order terminating the tenancy pursuant to the notice prior to the termination date. Ensure that the order references the payment so that it is documented that you will be providing the tenant with proper compensation. Getting an order in place speeds up the process if the tenant refuses to move following the notice date and prevents the tenant from extorting the landlord by demanding more and more money in order to move out.

While affordability is an issue and the housing reforms attempted to solve this matter, the reforms have disproportionately hurt landlords and those who are scrimping and saving to buy a home. As such, buyer agents, as well as seller agents, must be aware of these financial and practical changes. They can destroy a deal.

The above was written by   Natalka Falcomer  a lawyer in the GTA area

 Another interesting tip about investing in London Ontario

Want To Sell Your Income Property In London Ontario?

Thinking of Selling a Multi-Family Residential Property in London Ontario & Area?

 Over the past few months there has been a shortage of good quality duplexes, triplexes, four-plexes and 6-12 unit properties in London and area.

All the ones I had were sold or are conditional  from 27 units and down and I have 7 registered buyers, (pre-approved for financing and experienced) that are looking to buy, actually more than looking, real serious, no nonsense types who can make a decision within 24 hours.

Do you want to take advantage of my seven or of the Realtors from the GTA area begging me to find their buyers a property?

Now, do not get me wrong, my investors are not wishy washy or unwashed, they want to see value or be able to create value and they are long term investors so they are not interested in drastically overpriced properties, junk or cap rates below 6%.

Stress Test for Mortgages

Come 2018, the stress test for mortgages comes into effect and I am hearing from mortgage providers that there be fewer buyers that will be able to pull the trigger on a purchase.

That is good news for my buyers, the stress test has little effect on them and will actually be better for them, less buyers, less competition.

So, if you have a property you want sold without a song and dance process, contact me, I don’t sing and the only time I dance may be if there is amber liquid around and that is very unlikely as well.

Ontario Landlords Can Increase Rents 1.8% in 2018

1.8% Rent Increase Allowed for Ontario Landlords in 2018

Ontario Landlords

Ontario Minister of Housing Chris Ballard announced that the 2018 provincial rent increase guideline has been set at 1.8%, up .3% over the current year.
The annual rate of increase is based on the Ontario Consumer Price Index, a measure of inflation that reflects current economic conditions affecting the
cost-of-living.
As in previous years, this amount is the maximum that a tenant’s rent can be raised without approval from the provincial Landlord and Tenant Board, and applies to all new rent increases made between January 1 and December 31, 2018; it is also retroactively effective as of April 20, 2017.
Unlike previous years, however, the ministry’s annual rent control guidelines have now been expanded to include all private rental units, including those built as tenant-occupied premises on or before November 1, 1991.
This anticipated change results from the recently-passed Rental Fairness Act, 2017 that was introduced to protect an estimated 250,000 Ontario renters living in pre-1991 units from unreasonable and/or unpredictable rent hikes.
Ballard, who is also the minister responsible for Ontario’s Poverty Reduction Strategy, said the aim of the expanded 2018 rent increase guidelines is to make the housing market fairer for all, “ensuring that everyone in Ontario has the peace of mind they need…”

 

Please visit
to read the entire Government of Ontario announcement.

Take The Slow Path To Real Estate Investing

Turn One Rental Property Into 7 Figure Retirement Fund?

In my various meetings with different families, I hear many express concern over their retirements. Many are worried that they won’t have enough saved to retire.

This is pretty scary considering how many years we work throughout our career.

To help with this challenge, I just finished a new report detailing how you can turn just one rental property into a 7 figure retirement fund.

You can download this new PDF report here:

In this report, you’ll learn how to:

  • How to get someone else to save an extra $412 a month for your retirement!
  • How to setup a compounding money machine designed to accelerate your wealth!
  • How to have an extra million for your retirement!

Needless to say, this IS a powerful report and is definitely worth studying. You can access it now on my site here:

Be sure to study what happens if you follow this plan for 25 to 35  years! You’ll be able to leave a fortune to your family!

Income Property For Sale in Downtown London Ontariuo

Photo Link
London Ontario Income Property

•  multiplex – FOR SALE  1279000 CAD . Income Property
MLS® 605286

A very solid 12-plex in good condition. All 11-2 bedrooms renovated within the last 3 years including new kitchens, fridges & stoves. Bathrooms have new tub surround, fixtures and vanity.

New vinyl flooring throughout. Building has new windows (all but 2).

Bachelor unit not in use.

Separate meters, security cameras & controlled entry .

Tenants pay own hydro, separate meters, Coin-op laundry (owned).

Ample parking and on direct bus route.

Some Numbers: $120,900 income based on 3 units at $825 and 8 units at $950.00 plus utilities
For the last 12 months, $3763 Heating, $3695 insurance, $6,380 water and hydro, taxes $23,864 = $37,702

Property information

Fixer Uppers in London Ontario

I get calls or emails everyday about fixer uppers in London Ontario. It is usually after someone has watched reality shows on TV or read a get rich quick book with no money down or a book about how easy it is.

Really?

What if you bought a fixer upper to live in for a few years and then repeat the process?

What about a couple who are handy or even want to be handy and who do not have to keep up with the Jones’s for appearance sake? Instead of buying that $200,000 or $300,000 home with the finished basement, nice schools, close to work, 2 car garage and then busting your butt to ensure all your monthly bills are paid? And, hoping that your home will increase in value in 5-10 years.

Fixer uppers in London Ontario

What about the couple who buy a small home outside the city for cash or 5-10% down, are prepared to drive a bit to get to work and have a 1-2 year plan to fix the place up and sell it and repeat this 4-5 times in 10 years?

Look at the math. Instead of a $1000 plus going to interest every month, you buy something where that interest goes perhaps $600-$800 goes to fixing your place up. after 1-2 years you sell it, you may earn $10,000 plus but lets say you only net $15,000? That’s low but stay with me here.

You do that 5 times or more? If you compared the couple who has had only one house after 10 years, mortgage poor or to keep up with their friends, go deeper in debt and get a bigger home, or the couple who uses their sweat equity and common sense after 10 years?

I have 14 couples now who followed this plan and let me give you 3 scenarios:

  1. Couple number 1 lives in a $260,000 home, no mortgage and are under 35 years old and have no debt
  2. Couple number 2 live in a condo now, no mortgage and are living off the rental income of their last 7 homes they bought, and instead of selling, they rent out
  3. Couple number 3 are into house 3, it’s worth about $275,000, they owe just under $100,000 on it and their first home they bought, they scraped, borrowed and begged to come up with a $5, 281 down payment!

Are the above 3 different than most? Yes. you see, they are willing to pay the price in time, effort and ego to build their financial stability. Now, at the end of the day, 10 years from now, who is living the good life?

smart home owners London Ontario

Is it easy? Safe? Nope! Is it wise and financially prudent? You bet! So I ask, do you have what it takes or are you going to go through the rest of your life in debt and looking well off or no debt and feeling well?

Turn One London Ontario Rental Property Into a Retirement Fund

 How to Turn One London Ontario  Rental Property Into a 7 Figure Retirement Fund
In my various meetings with different families, I hear many express concern over their retirements. Many are worried that they won’t have enough saved to retire.

This is pretty scary considering how many years we work throughout our career.

London Ontario Rental Property

To help with this challenge, I just finished a new report detailing how you can turn just one rental property into a 7 figure retirement fund.

You can download this new PDF report here:

In this report, you’ll learn how to:

  • How to get someone else to save an extra $412 a month for your retirement!
  • How to setup a compounding money machine designed to accelerate your wealth!
  • How to have an extra million for your retirement!

Needless to say, this IS a powerful report and is definitely worth studying. You can access it now on my site here:

Be sure to study what happens if you follow this plan for 25 to 35  years! You’ll be able to leave a fortune to your family!

To truly change your life, you need an asset that throws off regular, monthly cash. That might mean something like a real estate property paid off in cash.

   If you are renting out a $225,000 property that you own in cash, you could very reasonably have $1,400 coming in per month that you get to use to make stock market investments. Do this for a couple decades, and you are going to benefit from rising rent cheques that give you even more money to invest, and then the investments from years gone by start to throw off meaningful income all of their own, allowing you to spend your life constantly taking incoming cash and making fresh investments.

  At that point, investing is an art form. It’s a lifestyle.

  You’re not playing the lame game of trying to beat the S&P 500 by a point here or a point there each year, but instead, you are laying the bricks of a financial fortress each month as you create a perpetual income machine that lets you build a collection of assets that keep on generating cash.