Ottawa Market Update
Rachelle Shea
Rachelle: I think there's a good chance that there are some deals to be had in Ottawa. There haven't been many deals to be had in the last 18 to 24 months.
Daniel: This is really good information, Rachelle. Thank you very much for sharing that with us. It's much better news than last week and then last time.
Rachelle: You know what? It's good that you brought that point up because the real estate market in Ottawa is changing week to week. What happened two weeks ago is not happening this week. And I had another listing where I was holding offers and the property sold for significantly less than I had anticipated. Okay. And these buyers got a good deal on this house. You gotta be on the ball and take this opportunity to go shopping and look for the deals while everybody else is sidetracked by Christmas and family.
Francois: That's what Sarah Larbi, one of the co-founders says, I think she gets her properties in December. In December and January I heard on her podcast that it was the same with me and my wife. Oftentimes it's a good time December, January, normally. This year, Exceptional, but it's usually a good time because it's quieter and you don't get those emotional buyers as much. As an investor, there's no emotion, it's a business transaction.
Rachelle: For sure and the other thing is who wants to load up a moving van in minus 30 in January.
Francois: That's a good point.
Rachelle: That works to your advantage as investors as well, but there are opportunities to be had. I'm a lot more positive than I was four weeks ago from the investment point of view.
Francois: Wonderful. Thank you so much. Rachelle will be on to answer questions.
Daniel: We have our REITE club national event coming in 10 days. I'm trying to think here, how we should let everybody in our network know about the situation. What Rachelle, Francois and I, and the marketing guy we're going to talk to in the next couple of days, because to me, what you just shared with us is sensational news.
We need to let everybody, I know we have 81 people on the call right now and on this event, but we have, 3000 people in our database. We should let them know. And they should contact you and other realtors in Ottawa who are really doing a good job with investors and see what they can scope over the next four to six weeks.
Francois: We have a good question from the audience, Betty B, I think she's new as well as she's asking you, if the 1% rule still applies in Ottawa? It's been more like the 0.7, 0.5 rule, but anyway.
Rachelle: It's tough when you're getting into multiple offer situations and you're competing with non investor clients, we're talking about people who want to make this home there is to live in. It becomes an emotional purchase, which drives up that sale price. You can't get that 1% rule. You can't compete. And at the end of the day, this is not an emotional purchase for investors.
It's all about the bottom dollar, but yes, there are still some opportunities, more so on the outskirts. And plus, while we have been trying to look outside of the city there, its own set of challenges that way. But if you go a little bit out to the outskirts, that 1% rule becomes a little bit easier. Not saying that it's not possible in Ottawa. I think that you need to keep a pulse on the market in the next six weeks.
Daniel: Guys we had a question there. Could one of you explain the 1% rule?
Francois: 1% rule, let's say we'll take it easy numbers. You pay for the property a hundred thousand dollars. It should bring in a thousand dollars of income per month. And that covers all your expenses. Usually like the mortgage, property taxes and insurance, and any other expense you may have. Of course, a hundred thousand dollars property would be a parking space.
Daniel: How old exactly is that rule, because I can tell you that in Mississauga where a townhouse is 700,000 bucks, you're not going to rent it for 7,000 bucks. That rule will not apply to pretty much anywhere in the GTA.
Francois: Same here, it's tough. As an example, I have a duplex, I paid close to 400K to 500K and I'm not getting 5,000 in rent, but 4,000 something, it's closed. My wife and I call it the 0.7% rule. And for Ottawa, that seems to be good. They have Montreal Dora saying 1% doesn't apply. We're going to have Jared on, in a few seconds to talk about Montreal. Yeah, rent control. Ontario is the same. It's not exactly the Quebec laws, but if attendance is there forever, like I said, and I know we've toured a lot of places, price is perfect, but there's tenants. You can't kick them out. Can't increase France, especially now. It's not worth it for an investor. It could be, but that's not always worth it.
Rachelle: The best investments are always, and I have a great duplex coming up in January that you and I need to talk about that we'll have vacant possession. And it's on Cooper street downtown. When you're looking at those investment properties, the best thing that you want is, no tenants in place so that you can set the rent and get as close to that 1% rule as you can.
Montreal Market Update
Francois: That's amazing. Thank you so much for that status. We're going to hear it from Jared now about Montreal and see how things are going out there. Then stick around. Thank you so much.
Rachelle: My pleasure.
Francois: I'm hosting and doing this. There you go. I'll become better at it. There you go. We've got Jared coming on. Jared to talk about Montreal. I'm very excited to hear about what's going on. And there you go, Jared, you will be the star. Here we go.
Daniel: And for everybody, by the way, this is Jared Anderson. What's the name of that actor who did the movie, the ghost?
Francois: Patrick Swayze. He does.
Daniel: You look like a young Patrick Swayze.
Jared: How do I follow that? Daniel? My goodness. You want to talk about the 1% rule? I think Dora got it right where that doesn't apply here in Montreal. That doesn't exist. I was just thinking, it could exist. You buy a property. Now you wait 10 years for market rent to go up and double. And that's how you hit your 1%. Other than that, now, we have that struggle here. Montreal is obviously a hot mess. And I'm really privileged to represent Montreal today in the REITE club, as we expand east as we're over in Ottawa, Cornwall and Montreal.
This is fantastic. And what I'd like to ask is for everyone here outside of the Montreal market, let's be honest, everyone outside Montreal has an idea about our real estate market here. But who wants to buy an income property in Montreal? Because it's a beautiful city. And you want to write off all the hotels, smoked meat, poutine, and games tickets. And there you go in the chats there that alone is reason for investing here. But just lame jokes aside. You will need to write off those expenses just like many others.
Finding cash flow deals is becoming increasingly challenging. Rents have definitely increased, but they always lag appreciation rights. We've seen crazy oppression. Yes. In every market. We're sick of saying it. But the rents haven't caught up yet and with increased appreciation you'll have that Delta that really makes it difficult for us to hit that 1%.
But that's not a reason to not invest as long as you find the deal. That makes sense. The good news, Saturday investors like us can take advantage of the transportation development of the REM. For those in Toronto, think of it like the Gautrain expansion. It's an automated light rail network and it's the largest public transport project undertaken in Quebec in the last 50 years. As investors, we all understand, or we should understand how these transportation developments affect appreciation. You can pretty much pinpoint where these stations are going to be built by rent within, what is it? Rain is 800 meters within walking distance and you'll benefit from a higher than average appreciation in that neighborhood due to the convenience.
Furthermore, in terms of details, the first trains are expected to start running in 2022 from the South shore to Bonaventure Central Station. And then other branches of the network will be gradually put into service in 2022, 2023 to 2024. It'll include 26 stations and spend the greeter Montreal with 67 kilometers of tracks. We'll provide strong grant access to the downtown core and the airport, which is exceptionally convenient from the South shore, North shore and the West island. And the project also provides 36,000 jobs. It's a game changer for Montreal that's for sure.
And for those who know Montreal, we're no strangers to traffic. The development that's aimed to be completed in 2023 is a big attraction for investors in some October, 2020 stats to share with you versus October, 2019 here in Montreal. Sales were 37% higher this October in Montreal. Okay. And I'm going to just break it down in a few areas. Just think North and West off island versus on the island. Significant sales increases in many periphery markets, including in the West end is up 63%. I've heard a lot about super hot areas. The North shore was up 52% and the Val up 38% and equally remarkable for the social 31% and the island of Montreal was up 29%.
We had 15% less listings this October, then last October. And this really obviously pushes prices upward. Active listings increased for the condominiums. It was up 12%. And plexes, so duplex triplex beyond 3%, which has not been seen since 2014 for a month of October. And in contrast to single family homes, which continue to decline sharply. -35%, that's a clear lack of supply of the single-family home, which just like Ontario is the most sought after product.
And finally, the medium price of a single house rose 21% in Montreal year over year. So, these are significant jumps. Needless to say, it is still a hot market, even in these cold temperatures. We experienced a record number of visits also to centris.ca. For those who don't know, Centris, it's basically a hub, a realtor plus all the rental market as well. I know that in Ontario, we use realtors pretty much to find properties to purchase, but Centris is a big hub for everyone to use here in Quebec. And what people don't know about our island is that it's about 60% of our city actually rents. It's a cultural thing. We enjoy flexibility and a change of scenery. And it's just something different compared to most markets.
Francois: July 1st you move, especially living in Ottawa if you want to move late June, early July. It's the same. All the trucks in Ontario are going to Quebec to help Quebecers move.
Jared: And just one thing that's weird. And this just popped into my head. What's weird about Quebec is that we often have many listings for rentals, don't come with appliances. That's why you'll see the guy, take out the haul with the fridges and stoves. And you say, what is going on? A lot of the rentals don't supply appliances. These are big moves. Yeah. Another thing I've noticed is that in comparison with Ontario second suite conversion, it's not as popular here in Quebec as it is in Ontario.
Maybe this is just because I'm more involved in Ontario and every year peripheral is buying a bungalow, doing a second suite refinancing and buying the next one. I don't see so much of that happening here. If anyone here in the audience has more information in certain municipalities where it's becoming popular. I don't know if it makes sense to do it and refinance your funds. You can extract that hard money that you put in. That's the motivation for us doing it in Ontario at times, because we have the comparable next door, but without those comparables, how are we going to make that investment? If we can't extract our hard-earned money ready?
Daniel: Can I interrupt you for a second? You stated as one possibility of why that situation is, could it also be because of more speed bumps and complication from the city to give the permits or whatever, or could it be administrative, a nightmare, or is it because of your explanation that you think this is? This is not happening as much.
Jared: I think it might be administrative and it would depend on the municipality, but I know there are several municipalities that have these raised bungalows that would provide a perfect opportunity for it. It's a good point, Daniel. It could be zoning. It could be the municipality. It could just be the red tape there that's serving an obstacle to these investors. It was also gonna say that sort of limits our ability to provide new housing, right? Because we're not building a lot.
And in other markets, when you see us adding bedrooms is one thing, but, adding a second suite is being able to provide another home for a family. It's less popular. Love to get more information. If anyone here from Montreal knows about hotspots where that's happening, I don't claim to know all of it.
There's too much going on. Just want to speak on one basic statistic. I could go on forever. What is Montreal. Yes, our population increased just like Toronto. It's not as fast. It's a little over 1% a year. But incomes are increasing. In 2015, the average household income was $79,000. And today it is $95,000. It might not seem incredibly big, but I did the numbers and it's in between four and a half percent, more or less year over year. It's significant. That's a strong driver in two other stats that go in line with these 2015 and 2020 stats.
In 2015 the amount of people in Quebec making over $300,000 was 34,000. And this year it's almost doubled to 63,000. I don't want to get into median and average and all these stats, but it's saying, hey, there's big money coming to Montreal. And this is popping. All different types of properties, values, right?
I think traditionally in Montreal, we've had definitely lower incomes than Toronto, but now we've got new sources of employment. AI is a strong sector here. Manufacturing is strong. We've got a diverse economy. We've got several universities and colleges. There's a lot going on here and we're getting paid more. That's definitely been a strong driver.
Francois: We got two interesting comments. Jared, there's Rob Blake that wrote the limit to bachelor's suite. I think the secondary suite. I've heard that before some municipalities, they don't want a full fledged apartment, one bedroom, two bedroom, three bedroom apartment. Like we see here, it's just a bachelor almost like in a law suite. And then there's Paul, who also said Ontario and Alberta mandated secondary suites. That's true. Like the city of Ottawa has very favorable Cornwall and other places and the whole province wants densification.
I don't think that was as big of a thing in Quebec, especially, I think you put the finger on it. Quebecers were tenants for the most part. It wasn't as big, like there was a big move for Quebecersto get properties and start owning more. I think that's something, that's changed.
Jared: It's not quite the same, I actually got out of St. Catherine's because I have difficulty with the city to create two bedrooms and maximize the square footage that I had in the basement. If it's a bachelor's better than nothing, but it really does restrict you in terms of what kind of rent are you charging for a bachelor? What kind of tenant are you getting as a bachelor? What kind of turnover are you going to be getting as a bachelor? Although, it would definitely impact your decision on what to buy. I just wanted to note a few other small differences that I've noticed in the purchasing process because I'm closing on a duplex with my girlfriend next month. That's exciting.
Thanks. Look, I got to dive into this market. I noticed the cost of entry is slightly higher. I'm seeing higher notary fees, higher insurance. Okay. In Quebec possibly higher property tax that does depend on the municipality. But I have noticed overall Quebec does have higher property taxes than Ontario and others. I can't speak for other markets, but sorry for the consistent comparison to Toronto. People from Toronto think that Toronto is the center of the universe. I'm sure they don't mind higher inspection costs. That's for sure.
Francois: Electricity is cheaper though if you do provide Hydro-Quebec, it's really way cheaper. I've paid on both sides of the bridge and wow. It's a lot less.
Jared: And to get on a positive side. There is low vacancy. There's also stronger buyer protection. There's a very litigious process in the inspection. Inspections are more comprehensive. Sellers must provide full disclosure of deferred maintenance improvements, repairs, including a log of receipts and no detailed work orders. The buyers on the buyer end, we're protected and we have stronger legal recourse. If there's any issues with the property and the seller doesn't disclose any, I believe long-term Montreal remains a more affordable city, wherein compared to other North American major cities.
And we can expect an increased population of over 1% per year. For the next few years, I tried to keep this high level. I'd love to connect with you guys after. If you have any questions and you're interested in learning more specific information on any market in Montreal as we have many. It's four plus million here. Please reach out to me in the chat and be happy to answer any of your questions.
Francois: Thank you very much, Jared. That's great. I love learning about Montreal. I've only visited, like you mentioned, and jot that on a few things, but as an investor, that's really interesting. And there's some questions in the chat. Stick around and maybe answer some questions in the chat. Also the networking at the end, we'll be able to ask some questions to Jared's. Thank you very much. We're going to change beats.
Cornwall Market Update
Lena Guirguis
Francois: We're going to go on property management in Cornwall. Thank you, Jared. We'll see you soon. Lena, we're going to bring you on. Here we go. I'm just going to change the videos there and I am very excited to hear your Cornwall stories.
Lena: Cornwall is great. Just a little bit of background. My husband and I purchased our very first triplex in Cornwall in 2003. We've been purchasing. The most recent purchase was closed in September of 2020. We've been there quite a while. We own a property management firm as well, and the management company actually manages Cornwall all of the Ottawa Valley and then Oshawa all the way to. When I talk to you about tenants in Cornwall, I have a very colorful picture of what's happening across the majority of the province.
What we're seeing, let's say in Cornwall compared to Hamilton which is probably the closest comparison I would give you if you can believe it or not.
Francois: I believe that I've lived in Hamilton downtown and I haven't lived in Cornwall, but I own places and I agree there's a big parallel industrial city.
Lena: I grew up in Toronto, and I moved to Ottawa. And when I moved there, people referred to Cornwall as like the armpit of Ontario. In Toronto, they referred to Hamilton as the armpit of Ontario. You've got the left and the right. And it was very interesting to go into Cornwall.
17 years ago when we were buying distressed properties, everything that we were purchasing was being purchased from owners who were going bankrupt. And there were only two property management companies in the entire city, and both of them were managing. I have any of the properties that we were purchasing. For us, it was like, okay, something's not right. And what we very quickly realized was that back then, Cornwall had a very big gap between what was considered safe, clean, affordable housing, and what everybody else was willing to provide.
Up until I would say about 2012, the market was very forgiving for an investor in what type of product you could put out there to yield maximum runs and get quality tenants today, not even close, like the stuff that I was renting, fully renovated types of things, where it was coming in lipstick type situations. If I were to try and put that on the market today, the type of tenant that I would get are the tenants that 10 years ago were living down by the water type situation. The market from the demands of a tenant have changed substantially, but so has the income ratio.
We're in the process of finishing off a two bedroom apartment right now at Brookdale and second. Right where the new bridge is not far from the water. And when that unit is done, we're mentoring at 1025, plus the utilities and us, as a management company. I think we're the only people right now who are doing it. We actually build back the water to the tenants as well, even though it's attacked.
Francois: Because it's a fixed rate in Cornwall. That's smart, I need to do that.
Lena: But it helps, it's $50 a month, right? Regardless of how much they're consuming, it's still $50, less a month out of my pocket. At 1025, when you're picking up a property for 135,000 and you're spending $30,000, it's a no-brainer and the $30,000 that I'm spending because I need to have super nice four inch baseboards with super chic shaker style, window and door casings, shake a cabinetry we're putting in. Number one rule in Cornwall, if you don't have a washer and dryer, forget it. Like the tenant that you're going to attract is just, you don't have to supply the appliances, but you need to have the hookups.
Francois: Because it's similar to Quebec in that way, you don't supply the appliances, very rarely.
Lena: A lot of the bigger companies that used to be known and notorious for running down properties are now redoing their units. They're putting granted in there, they're putting stainless steel appliances and they're pushing up their prices. The competition is becoming much more stringent. From an investor perspective, never buy a bachelor apartment in Cornwall ever.
Francois: The tenant base is limited.
Lena: Don't do it. Don't do it and don't do it. If you can get three bedrooms or two bedrooms, and the reason I say that is because the cutoff at where you don't want to be collecting rent, or let me clarify the cutoff in terms of rent that you want to be charging before you start to get into trouble is about $850.
If you have tenants applying for less than that, generally speaking, those tenants are going to be slightly more work. I'm not going to say that they're problems, but they are more work. How much work do you want to do? And do you have people who you can trust, who aren't going to bankrupt you to help you if you don't have that time?
Lena: Those are very important things to know. School zones are very important to note like you could have the nicest house, but if you're not in the right school zone, parents are not coming to you. And in Cornwall, if you invest in your property and you have the right type of property. If you've got a nice clean two bedroom and you're in a good place where you're close to.
Let's say right now, Cornwall has a lot of distribution centers, right? Lots and lots. We purchased it before Domtar shut down. We had purchased our third and our fourth property, like just before Domtar shut down. And when they did, I thought we were gonna go bankrupt. Like, for sure, because everybody tells you, they hammer on your head employment, nothing happened.
Francois: A lot of people were prepared. Unemployment was already higher and people had plans.
Lena: Renters we're renters. It was such a narrow entry point that either you were a lifetime renter or you weren't, it's not like that anymore. Now, people who usually would have been purchasing at this point in their lives can't because property values have gone up. Financing has become more challenging. You are getting somewhat higher quality tenants who can no longer afford or are currently unable to purchase.
The 25 year olds, 10 years ago, were buying a hundred thousand dollars. Because they had good jobs as teachers or early childhood educators, or even back then. And they had opened up their distribution center and were paying $18 an hour to start.
Francois: That's big in Cornwall, especially with the cost of life back then.
Lena: It got to a point where Walmart and home depot actually had to up their prices to keep their employees. Yeah. And then Target shut down and Walmart took over, Shoppers, Drug Mart, loblaws are there. Target took over sellers and then Walmart took over target. The Amazon distribution center is only about a 45 minute drive at Cornwall is the biggest of those tiny little cities. They have a Starbucks. They have a second cap. They do, the first time I went into Home Depot in 2003, and I asked them if there was a Starbucks nearby, they laughed at me after they opened, I showed up and the same guys are still working.
The protests told me that, driving down the street, Starbucks just opened. It may have a super Walmart. They have all of those things that indicate that there is quite a bit of life and activity going on in the city. But Lowe's didn't survive.
Francois: That's a local culture. It's a small town, like a small city. I find people like more local businesses as well. The isn't it Ronan home hardware I think is doing well out there. And then, or local chains as well.
Lena: Home Depot is doing great too. But I think it's partially because of the team there. The contractor does get a home depot and Cornwall is bar none compared to anybody else in this province that I've personally dealt with, period. Like they've been there. The pro desk has been there. All three of them have been there for 20, some odd years.
Francois: I ordered a material for Ottawa in Cornwall because you get better service. That's a tip. You can call them up, even call you when they have sales on and stuff. Hey, I know you were waiting for this.
Lena: And when you have those relationships. Right now there's a lot of material shortages. I don't know if anybody else has noticed, but getting flooring, kitchen cabinets, lumber, anything that you need to do? Construction is almost impossible in the Ottawa Valley. Toronto, we have no problems, but I don't want to drive four hours every couple of weeks to drop off materials, which is basically all I did in August, September and October. But when you have those relationships they'll do the work for you.
Francois: It's so true. We have some questions coming up for you. Betty D is asking what's the vacancy rate in Cornwall and unemployment.
Lena: Honestly, I have no idea what unemployment in this life they can see. I think it sits at 3% maybe.
Francois: It's very low in my experience, I get 40 people per door, at least applying.
Lena: Vacancy is not a problem in Cornwall, period. In my opinion, if you have the right product, if you're trying to rent out like what you purchased five years ago, and you don't want to spend any kind of money, they're not going to take like they'll drive by it and they'll keep going. They're very particular about what it is. And they're long-term tenants, right? You can expect your tenants to stay for 3, 4, 5 years. So, be prepared for that. And good tenants are worth it in my opinion. I don't want them turning over.
Francois: Which is very different because I'm in Toronto. You want turnover because you want to increase rents. Ottawa, same thing two years. I want them out because I want to increase my rent and that's it because you're not allowed with the landlord and tenant board. It's so minimal. And now we're not allowing any increases. But Cornwall has a different culture and good tenants. Like you mentioned something else.
They refer to their friends and family, usually they're like-minded and similar people. It's a good way of getting more good tenants and more properties. Thank you so much for your insight in Cornwall and some good.
Lena: Stories, we didn't get into those, but yeah.
Francois: It'd be just one little short one. You had a good tip earlier.
Lena: Tips in any region that you are, so property management 101. How do you get the property? When you have so many restrictions on you as an individual, when it comes to the residential tenancies act and the human rights charter. We're not allowed to decline based on income. We're not allowed to decline based on obviously all of the standard kind of human rights things. But it doesn't mean that you can't screen applications and put weight on. What it is that you see.
I'm not declining you because, let's say you have five cats, but because you have five cats in that particular checkbox of my screening process, you got a score of zero and the guy next to you who only had two cats, a lot of score five. There are ways to ensure that you are compliant. And the key is that you have a very clear paper trail showing that every single human being who has ever submitted an application to you has been screened in exactly the same manner and that the reasons one was selected versus the other has nothing to do with anything that could violate any type of human rights or residential tenancies act.
But it was just a matter of these. You can't decline somebody because their income doesn't come through, but you can decline somebody because the references didn't come through. The references don't come through. They don't come through. And I unfortunately can't wait another three days because I have five other applications. That would be my one little tidbit. If you're trying to find good tenants, whether you're in Cornwall, Ottawa anyway. Make sure you have a paper trail. You need to have a paper trail.
Daniel: Thank you. I really like that idea of having, like you say, a sheet with all kinds of questions and boxes and you keep score on everything and then at the end, that's brilliant. Is that your idea or what, did you steal?
Lena: No, that was me. We created that and it came from my wedding because my husband's an engineer. He was like, if we're going to check out banquet halls, I need a weighted score chart. And that score chart is gonna give a weight to each thing that's on there. I'm like, no, we're going to go there. And I'm just gonna know.
We did it. And then, I said to him, can't we just do this with our freaking tenants, like put in credit score pets. I don't know, like all these non-discriminatory things and let's just give them scores. Every single application for us has a score chart or score sheet attached to it. What's a score out of 50 and the highest score wins. Take me to court.
Daniel: Thank you, That's really brilliant.
Lena: Thank you. We'll give the credit to my husband.
Francois: Great. Thank you so much. If anybody has more questions for Lena, she'll stick around. If you want to answer. I saw a few questions for you, if you have a moment. And then during the networking and on thereiteclub.com, also on our Facebook page, Facebook group as well. If anybody wants to participate in the conversation further, I will be on the Facebook group. And thank you very much Lena. Now, we have a little segment from Daniel.
Daniel: It's going to be very short because when we were planning on doing that segment, we thought our new website was going to be up and live. And it's still a couple of three days away from being released. I don't really want to spend too much time here telling people about what they can do on our website. And then they go to a website and the website is not live. However, I just want to inform you that one particular entity about our community that we're building online is that the membership at the bronze level will be free for everybody and will always remain free.
Now, in January, we're going to introduce a silver level, but you'll find out about that in January, however I'm addressing here, the professionals or anybody who has a product, a program, or a service that you want to promote to the community. What they will have to do is do what to buy, what we call a pro add-on.
When you go on our website, you'll see that you can complete a personal profile and the keyword here is personal profile. I can talk about his kids, his wife, where he lives, what he likes, the wine and everything else. But if Francois was the real estate realtor for example, he cannot use the profile to talk about his brokerage, what he specializes in, blah, blah, blah, blah, blah, anything to do with the details of his business.
If he wants to do that. He has to buy what we call a pro add-on, which simply means professional addition onto your personal profile. When you buy that, all the details will be on the website. When it comes up, then you'll be able to fill a business profile. And what are you a realtor? What are you a printer? What are you a stager, whether you're a mover, whether you're a home inspector, you will be able to now promote your business. In that business profile, you'll be listed in the directory.
You'll be able to promote or do things in the marketplace, but in order to do all of that, you'll need to buy a pro add-on. When the website goes up and you start hearing us talk about the pro add-on during our webinars or in our emails and stuff, that's what we're talking about. That's it Francois.
Gatineau Market Update
Francois: That's great. I brought Robert on. And Robert's going to give us an update on Gatineau. Robert.
Robert: I'm there. I don't know. I think I saw that I had the same problems as Jared. I don't know if he's with video turned on as well with his internet connection, but I've lost a connection a few times, but we'll do our best. We are great panelists tonight and I'd say that Rachelle and Jared, mentioned all the important information and it's the same for, I'm a specialist for Gatineau, I'm a realtor in that. For those of you who don't know, we weren't there at the last representation.
But I don't want to say or reproduce what Rachelle told. Gatineau is like the little sister or brother of Ottawa. Everything she mentioned before, applies to Gatineau with some adjustments as everybody knows the markets started in Vancouver and then traveled to Calgary and Toronto.
It's not a one gap. No it's the market that's really hot and I agree with Rachelle in what she said about the outskirts as an investor. We need to look for places where others don't go and try to do things differently to really find the deals that will put us on a map or those of you who are starting in the investment.
I haven't been asked to mention. What are the three positive aspects of investing in Gatineau and three negatives? I'll start with the positive because I'm a positive guy. The last presentation I was asked about the cap rate and we mentioned that the cap rate in Gatineau would be around 4.5, but there's two types of investors in Gatineau. There are the professionals investors and they are the people with money that invest in real estate, which are government employers or doctors. And they don't look at the cap rate the same way as we do as professionals.
When we set the cap rate, 4.5 is for the common buyer. But for professional investors, I just did the deal today where the cap rate was at 8.5 and there's still some, those deals are still available in Gatineau. We just need to look for them and to work for them. And those categories, those side cap rates are still existing in that. Even with that kind of cap rate, the rent is really low here in Gatineau. I know it could be a negative point for investors, but on the contrary because the lease or the rent. Or not at the same level as the one in Ottawa, we see a lot of movement from Ottawa to Gatineau and that's causing the rent to go up and I'll go down.
I'll talk more about the rent situation in the concept. Point later on, but rent is really something that a rent prices, you is something that as an investor, we need to focus on because there are ways to increase the rent and to make better out of this situation. And for those of you who are starting as investors, what's nice about Gatineau. The prices are not the same as in Ottawa. We're not close to Toronto. If you have that down payment that you think is not big enough to get you to the game. Think twice because in Gatineau, the properties are lesser.
The prices are lower, so you don't need that huge amount of money. Even if you have those creative ways, you might end up buying two properties instead of one in Gatineau, because the prices are not at their ceiling yet. And the ceiling for the moment that I know Rachelle mentioned that the market was slowing down in Ottawa. It's not the case here. I just bought, one of my clients has bought a property today, a nine plex and we add multiple in one day, multiple offers. We put more than the asked price. And even with that, the cap rate was at nine. There's a lot of good opportunities. We just need to look for them.
Francois: Nine caps. Wow. That's crazy. Are lenders responding to that? Because sometimes when the cap rate is higher or sometimes they're not as favorable. Is that something you're privy to?
Robert: It depends like it's the more you just repeat your information. I missed the last part.
Francois: Sometimes when the cap rate is very high, some lenders are more feeler.
Robert: Not mine. Now what we do is that's something that we can discuss later on, but we do all our financing through Montreal and not Gatineau because it's too small. We're too far, 250,000 people. But I think that the lenders, the loan lenders are not up to date, as far as a multi, a plexus financial, we can go to Ottawa, but the rules, the regulations are different than that then Quebec. We went to Montreal to find. We don't have it. The thing that you will ask when you see a high cap rate is the quality of the property. And, but that's your realtor to do the job.
That's up to your realtor. You don't buy a property just for the county. You buy the property because either you pay it cheap and you're going to renovate it and make it good. Or you just buy the right property, which is the job of your real realtor. Does that answer your question?
Francois: That's perfect. That's what I wanted to hear because I've heard, like we mentioned Cornwall quite a bit. Sometimes there were like 10 caps and stuff and then lenders were like 10% cap rate. This is crazy. We're not good. Then on that, here's the lending. I was just interested. Thank you.
Robert: Not at all, we're good here in Quebec, no problem with that. One con would be that in Ottawa you have those IT companies, you have some manufacturers. That could sustain the employment level, which we don't have in Gatineau. Most of the good salary comes from the government. We don't have any big companies. We don't have any high-tech companies. If we see a change in the government's previous debt when cutting government jobs, it might affect the market. But we know that we will receive what we've not received, but they're going to have an increase of 1.3 million immigrants in the next two years. We're not thinking that the government will sustain cuts but that's a big point to look out for.
When you purchase and get no, because there's nothing else than the government here. Second downside of buying in Gatineau, would be the same, in all of Quebec, which you don't have in Ontario, I think, or the rest of Canada. Basically, the rent is fixed by a government court, but it's now a court and that makes it difficult to increase rent where we need to increase. But at the same time, if you know how to use it. It could help you to do the opposite and that's where you need to be creative and where we can be creative.
If investors associate with a good team, there's ways to increase the lease and make it worth it. The terminology, some people could look at it as a big barrier. It's like everything else. If you use it in a good way, you can turn it into your favor. And I saw a question before with regards to this Kashi. I think it's Paul who asked this question. I can't answer it on this panel because it would take too much time.
As you probably know, I used to be a lawyer 20 years ago and this is the same thing as there are less men. It could work in the investors favor because what could it go back? If the rent is not paid on the first, you can go to the court and on the second day, you're going to be heard very fairly quickly and the lessee will need to pay you right away. There's good and bad. And you cope with it will really make it Oh, you see it good or bad. And the third one, I would say it's on the construction level in Ottawa, in Ontario at each stage of the construction, you have an inspector that comes and looks at the different completion status in Quebec.
It's not that way. It's not like that. It's the constructor, who's registered and will have a right to build. And the quality of the construction is based on this, which doesn't mean that it will apply on the construction itself. For the past 20 years, it's been much better, but we see on older buildings that electricity could often be a problem and a big expense.
And that, again, your realtor needs to be with you along the way. There's a way again to cope with it. And no, it's. It's a blooming market here in Gatineau and I heard Jared talk about the morale there. I saw that it's very nice in Montreal, but they're building something small, similar to Gatineau in Ottawa.
There's going to be an L a tramway going from the parliament and going through all the government offices in Quebec and all the way to, for those of, the. The area all the way while they're thinking about going all the way to the Elmer bridge. That will bring up more people in that new one downtown. Guys feel good. Jared, I agree with you. I grew up and I used to live in the countryside, but now it's just another economy. Powerhouses are a very blooming place. Any more questions?
Francois: Thank you. That's great. Gives us some insight in Gatineau. I don't know Daniel, if you had some questions,
Daniel: It's not a question. It's more like a comment. What I heard here being quiet and silent and listening, and my conclusion is, okay, if I'm going to buy in Quebec, I need to team up with a realtor who works a lot in Quebec who has done a lot of business in Quebec. This is not the place to order or the place where you can just go with somebody who just got his license two weeks ago. Go with people with experience, go with people like our buyer and because they'll know that, yeah, that's what I'm getting from this. You need an expert.
Robert: It's a good place to start because of the price. But I remember the last panel, and I think it's Rachelle who mentioned that you don't have to always go through a real estate agent, and I agree, I totally agree with that. But for your first one you need to get a lot of information because the common law is not that civilized, very different. Not more or not better, or not worse than one of each other, but you need to know what you're doing. Yeah.
Daniel: Okay. Thank you.
Francois: We're going to move on now in a few seconds to network. We had some changes to our schedule as we went along and some of our speakers got more time. This is great. Daniel, I was supposed to give some good reasons to join our Facebook group.
Daniel: Why should people join our Facebook group?
Francois: Join our Facebook group. I saw some deals for sale and there is some great information. I saw her, but I just joined the Facebook group. If you have some questions about Gatineau and you can continue the conversation on the Facebook group and as well, when our website is back up very shortly, then you'll be able to continue that conversation in our forums and meet with other fellow investors. Those are some reasons to join our group.
Daniel: Good. Okay.
Francois: Daniel, can you give some tips for us?
Daniel: It's short. It's going to take two minutes. If people have a pen and paper, I'm going to tell them right here, right now for free, the three words that are the absolute key, core of how you raise funds for all of your real estate deals. There's a lot of books out there. There's a lot of programs out there. There's a lot of people who teach it and their material is very valuable. But what I'm going to do here in two minutes is give you three words and a little, I don't know if it's a trick or a tip, but anyway, three words that I've used in the last or it's a concept.
And I've used that in the last couple of weeks, actually. Last two weeks, I raised $630,000 for a project. And this week it's Tuesday afternoon and I'm up to $320,000 short from a million bucks in the last three weeks for some project using these three. Tip here it is. Get ready to write it. It's pretty darn simple, but you have to apply that.
First word, "don't". Second word, "ask", last word "offered". Here's what you have to remember when you approach people you never ever asked for money. You don't ask for money. You're offering an opportunity to make money, and unfortunately tend to partner. And unfortunately, whatever the opportunity is you have to get in your head.
The head of the person you're talking to says that you are offering them something. They will either like it, or they don't like it. If they start negotiating, you pull off, you pull back the offer view, stay in control. When you are offering, you are in control. If I go to Francois and I'm asking him for money and Francois, please. I need some money. Okay. That puts us immediately in the driver's seat. What I've done for the longest time, because we've raised 25 million over the last 10 years, but just in the last three weeks for those pre-construction projects, like I said, I've disposed of a million bucks from people that I've called over the last few weeks.
And it's always the same. If I send you my email, you will see that I am not asking them for anything. I'm offering an opportunity. And that seems simple. Play on words. It's a concept. It's a position. It's when you pick up the phone, you will sound way different. When you're calling Bob to offer him a way for him to use and make money versus calling Bob to say, hey, please, I need 60,000 bucks to close this deal. Would you help me out? It's a completely different scenario and it will completely change your results. Don't ask often. That's my tip for today.
Francois: True. And I can really vouch for that. It works, I've offered some people to partner with me and I've found some private lenders using those three words. Just change your mindset then it's a great tip.
Daniel: All right.
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