Real Estate

Where is a good place to buy a rental property near Guelph?

  • Last Updated:
  • Mar 5th, 2021 11:02 am
[OP]
Newbie
May 12, 2020
41 posts
7 upvotes
Guelph

Where is a good place to buy a rental property near Guelph?

Hello all! I am a beginner investor from Guelph looking to purchase a 2nd rental property. I am finding properties in Guelph hard to cash flow with 20% down and am looking for alternatives and maybe a different location that is not too far. I would appreciate any ideas or insights on something that might make sense and of course adds up number wise. Trying to learn more and would appreciate any ideas. Thank you!
Last edited by pters11 on Mar 1st, 2021 8:09 am, edited 2 times in total.
25 replies
Jr. Member
Mar 29, 2016
166 posts
129 upvotes
Toronto
Calgary/Edmonton maybe possible but I’m not sure about future appreciations.
Newbie
Jan 23, 2010
78 posts
13 upvotes
London , ON, still very cheap for nice luxury homes, great community
Deal Addict
Nov 13, 2013
2542 posts
1280 upvotes
Ottawa
User149646 wrote: Hello all! I am a beginner investor from Guelph looking to purchase a 2nd rental property. I am finding properties in Guelph hard to cash flow with 20% down and am looking for alternatives and maybe a different location that is not too far. I would appreciate any ideas or insights on something that might make sense and of course adds up number wise. Trying to learn more and would appreciate any ideas. Thank you!
Cash flow is often inversely related to appreciation potential. Theoretically Real Estate is an investment like any other. It has a value based on its current and projected future income. We know of course this is a very loose correlation. A SFH home in GTA has no relation to its rental value. If you buy one as an investment you are assuming that historical and especially recent increases will continue to outpace inflation and other investments. The easy 5X leverage real estate allows routinely only exaggerates these returns.

I can't imagine anywhere near Guelph will have a pool or stable renters but has not seen such rapid appreciation you can put 20% down and be cash flow positive. London is a student town which traditionally have been good for cashflow but I understand that it has also seen a surge. You might find a deal on a pure student rental given some landlords must have vacancies this year but I looked in Kingston and was surprised this was not the case at all.
[OP]
Newbie
May 12, 2020
41 posts
7 upvotes
Guelph
Thanks everyone. I am near Guelph so was hoping to somewhat close to there :)
Member
Apr 15, 2009
227 posts
236 upvotes
toronto
fogetmylogin wrote: Cash flow is often inversely related to appreciation potential. Theoretically Real Estate is an investment like any other. It has a value based on its current and projected future income. We know of course this is a very loose correlation. A SFH home in GTA has no relation to its rental value. If you buy one as an investment you are assuming that historical and especially recent increases will continue to outpace inflation and other investments. The easy 5X leverage real estate allows routinely only exaggerates these returns.

I can't imagine anywhere near Guelph will have a pool or stable renters but has not seen such rapid appreciation you can put 20% down and be cash flow positive. London is a student town which traditionally have been good for cashflow but I understand that it has also seen a surge. You might find a deal on a pure student rental given some landlords must have vacancies this year but I looked in Kingston and was surprised this was not the case at all.
Problem is that rent is very tightly correlated to income, plus controller in Ontario. Price of the property isn't as we can see these days.
Newbie
Jan 23, 2010
78 posts
13 upvotes
don't buy homes for cashflow.... buy homes for appreciation value in 2..3.. 5 years 10 years even. You will make a lot more money that way. Money is so cheap now so let's say you loose 500$ a month after the taxes deductions all that. You loose 6K a year but if you home appreciaties even 50K a year (very low number, after capital gain taxes etc, just go with that number to be extra,super safe) you see how much cashflow you are positive just from that increase. On top of that add everything that is going into the principal, that's another let's say minimum 12K-15K a year depending on mortage size u have right..

Either way if u try to be on a montly cashflow I think you are loosing on the bigger picture. Just buy , rent and sell in year 2..3 and you`ll make good investment. I go for new builds, 1-2year builds modern looking that way I know my properties are hot no matter what hotter than the rest, even if I keep them empty I make money as long as they are in prestine conditions. People like the "WOW " factor, just like when you go to a fancy dealership, automatically you want that car rather than a used and abused one, and the difference in price is not really a lot between new and amazing vs old and outdated, etc.
Deal Addict
User avatar
Nov 1, 2007
3503 posts
643 upvotes
GTA
a4wagon wrote: don't buy homes for cashflow.... buy homes for appreciation value in 2..3.. 5 years 10 years even. You will make a lot more money that way. Money is so cheap now so let's say you loose 500$ a month after the taxes deductions all that. You loose 6K a year but if you home appreciaties even 50K a year (very low number, after capital gain taxes etc, just go with that number to be extra,super safe) you see how much cashflow you are positive just from that increase. On top of that add everything that is going into the principal, that's another let's say minimum 12K-15K a year depending on mortage size u have right..

Either way if u try to be on a montly cashflow I think you are loosing on the bigger picture. Just buy , rent and sell in year 2..3 and you`ll make good investment. I go for new builds, 1-2year builds modern looking that way I know my properties are hot no matter what hotter than the rest, even if I keep them empty I make money as long as they are in prestine conditions. People like the "WOW " factor, just like when you go to a fancy dealership, automatically you want that car rather than a used and abused one, and the difference in price is not really a lot between new and amazing vs old and outdated, etc.
This isn't investing, it's gambling. The average person in Ontario has this exact same mindset. Past performance is not an indicator of future performance. Just because we've had a run up in the real estate market in SW Ontario, doesn't mean it'll continue indefinitely. Remember 2017 with the new mortgage qualifying rules? People like you lost money selling when prices went down.

The goal should be to find a property that cash flows. Appreciation is the cherry on top. If you're doing it right, you make money with both, during the hold period with rent, and when selling with appreciation.
Deal Addict
Nov 23, 2003
2053 posts
526 upvotes
flamez1000 wrote: This isn't investing, it's gambling. The average person in Ontario has this exact same mindset. Past performance is not an indicator of future performance. Just because we've had a run up in the real estate market in SW Ontario, doesn't mean it'll continue indefinitely. Remember 2017 with the new mortgage qualifying rules? People like you lost money selling when prices went down.

The goal should be to find a property that cash flows. Appreciation is the cherry on top. If you're doing it right, you make money with both, during the hold period with rent, and when selling with appreciation.
Finally some sane and rational words on this real estate forum currently taken over by speculators with total disregard for cash flow. When the going gets tough, they will be the first to cry.
Deal Addict
User avatar
Nov 26, 2003
1244 posts
237 upvotes
I would think anything near the university where you can rent by the room to students should be cash flow positive. Have you looked into this avenue?
Deal Addict
Jul 29, 2006
4140 posts
964 upvotes
OP - you can't go wrong buying for cash flow and it's not hard even around Guelph or in Ontario. Depending on your strategy, there are cash flowing properties still in London, Brantford, Hamilton, Niagara region (St. Catharines, Welland, Thorold), Woodstock, or even Grand Bend (if you want to consider short term rentals as a strategy, don't write this strategy off. 2020 vs 2019 I experienced a +33% in revenue for my cottage rental even with COVID).

If all you're thinking about is a SFH rental, then all you can hope for is appreciation unfortunately.
Newbie
Oct 28, 2018
45 posts
88 upvotes
a4wagon wrote: don't buy homes for cashflow.... buy homes for appreciation value in 2..3.. 5 years 10 years even. You will make a lot more money that way. Money is so cheap now so let's say you loose 500$ a month after the taxes deductions all that. You loose 6K a year but if you home appreciaties even 50K a year (very low number, after capital gain taxes etc, just go with that number to be extra,super safe) you see how much cashflow you are positive just from that increase. On top of that add everything that is going into the principal, that's another let's say minimum 12K-15K a year depending on mortage size u have right..
Holy crap do people actually think like this?
Deal Fanatic
Apr 5, 2013
5810 posts
2956 upvotes
keenland
Jdezmons wrote: Holy crap do people actually think like this?
in the last 20 years (in RE) in the GTA..a monkey could make out like a genius....

servicing an asset?...gambling is right...I was NEVER taught to invest in negative cash flow...that isnt an investment...its like buying an expensive car..

put same number in equities and less risk, more liquid and zero servicing
Deal Guru
Feb 9, 2009
10997 posts
9475 upvotes
a4wagon wrote: don't buy homes for cashflow.... buy homes for appreciation value in 2..3.. 5 years 10 years even. You will make a lot more money that way. Money is so cheap now so let's say you loose 500$ a month after the taxes deductions all that. You loose 6K a year but if you home appreciaties even 50K a year (very low number, after capital gain taxes etc, just go with that number to be extra,super safe) you see how much cashflow you are positive just from that increase. On top of that add everything that is going into the principal, that's another let's say minimum 12K-15K a year depending on mortage size u have right..

Either way if u try to be on a montly cashflow I think you are loosing on the bigger picture. Just buy , rent and sell in year 2..3 and you`ll make good investment. I go for new builds, 1-2year builds modern looking that way I know my properties are hot no matter what hotter than the rest, even if I keep them empty I make money as long as they are in prestine conditions. People like the "WOW " factor, just like when you go to a fancy dealership, automatically you want that car rather than a used and abused one, and the difference in price is not really a lot between new and amazing vs old and outdated, etc.
We are at record low rates... unless you think wages keep up in the next decade...have you seen the bond market lately ;)

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