Real Estate Investing in Canada
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Real Estate Investing in Canada


How in the world do I invest in real
estate in Canada? Stick around to find out. Hey, friends Stephen Michael Miller
here and today, I’m going to talk about Canadian real estate. As a matter of fact,
I’m going to talk about why you may or may not want to do real estate in Canada.
Now, I know there are a lot of our Canadian friends out there who have been
asking, how do I get started in real estate here in my own backyard or maybe
how do I do real estate not in my own backyard? So I want to kind of address
this run real quick right now. I’ve got my laptop right here. I’m not a
Canadian real estate expert as you all well know. Kris and I have both done the
vast majority of all of our real estate or all of our real estate in the US and
so I want to be careful here just a little bit. But I do have
something that you all have access to here as well which is a lot of great
information. So I want to take you with me as I dive in and do some of the
research that I would do as I’m looking to either do real estate in
Canada or figure out why it may not want to. So come and follow me right now. I’m
here on the good old website of google.com. If you’ve never been on there
before then you need to find a way out from underneath that rock, okay? So you’ve
got google.com. Just go on right now and I typed in Canadian real estate market.
You can do Canadian real estate 2018. You can do lots of different things. You can
you know do different variations there to get different types of information.
But I type that in as you scroll down and look, you’ve got a lot of different
things that are coming up here. You’ve got something from actually just a week
or so ago. Canadian real estate prices see biggest drop worldwide. So that’s
a big thing. It looks like the Canadian housing market is you know has
been seeing some some drops as of late which by the way oftentimes when you see
a massive drop, that could be a good time to get in possibly. You see here middle
class gets priced out of housing market. That’s a really big deal that’s been
happening for a long time. I’m going to go into some
of that here. You see a lot of different articles here. You see
this down here emerging trends in Canadian real estate that that you could
click on. I want to pull up something that I found over here and this is on a
website MoneySense. This is Canada’s top cities to buy real estate in 2018 and
as I was scrolling through this article, and kind of reading through I saw this
chart that they created and I wanted to spend the majority at the time
of this video here on this chart just to help you see some of the different
things that you may want to be looking at when in it when choosing to either
invest or not to invest in a specific area. And this has the
top 35 cities that you could invest in I guess in Canada. I’m going to say
right up front. Please don’t make fun of me for any of my pronunciations. I don’t
speak French nor do I speak Canadian. No I’m just kidding. Okay I do speak English
and I will try to do my best here but I want to take some of these and just pull
apart the number one city here that they’ve ranked as number 1. I don’t
know exactly what they’re ranking on but they are considering average home
price in 2017, average five year rent increase, average income to home price
ratio and then your five year annual ROI or return on investment. And as I just
take a glance right now as I’m looking at these different price
points and these different these different data points. If I look over at
the five year annual ROI, I’m seeing some pretty similar trends. Now this is over
five years and so you can see here, you’ve got 4.48%,,
you’ve got 4.62%, you’ve got up to 13% is the
highest one that I’m seeing right now as you continue to scroll down, it goes from
8% down to 4% back up to 7% and these are all the different
markets of course. We got as low as 1% and this is an annual increase
right and so the highest thing that I’m seeing right now is 13% in Vancouver.
Let’s just let’s just pull that up. Actually let me scroll down to make sure
that is the highest one. 13%…. 13 yep that’s the highest one here on
this page. So I just want to pull up if you were going to go invest in Vancouver
because this showing the highest annual return on
investment, what would that look like? Well, let me scroll down here a little
bit and open this up. In Vancouver, the average home price is $2.2 million.
Now, I don’t know if you’re like me but I’m not necessarily looking to
put that much of of an asset, right? $2.2 million into just one property
that’s only producing 13%. Now, I will say 13% is not bad like
it’s not a bad return. It’s better than all any bank will ever give you. It’s
better than any money market account will ever offer you. You know it’s
better than you’ll probably do in the stock market in a lot of other places. So
it’s not necessarily a bad return on investment but one problem here that I’m
seeing is there’s a massive barrier to entry. For most people, they don’t have
$2.2 million to throw around on a property or the ability even
necessary get a loan for $2.2 million. So I’m just looking at this and
seeing the feasibility right? if I want to get the best return, then I would have
to I would have to invest in Canada, in Vancouver according to this chart here.
The other big problem here is or I guess one good thing that I’m seeing, is you’ve
got the five year rent increase of 23.63% that is a
wonderful rent increase over five years. And it’s one of the largest rent
increases as well which is why it’s doing so well on the overall
annual return. You see a few other rent increases here. You’ve got a 24%
at 23%. A couple other 23%’s. So but it’s one of the highest, right? So,
you’ve got some good things going for you. The one bad thing in Vancouver is
your average income to home price ratio is really, really high. In other words,
the average income in Vancouver is a little over $100,000 a year. But the
average home value, it says here the home price is $2.2 million. That’s said,
22 times higher value of home than then income. That’s a massive gap and most
places you know, most people can’t afford that type of a gap and so you just want
to be aware of those things you just want to take a look at this. Let’s look
at one of the lower ones. Just to kind of see what we’ve got here the lowest value
in the homes, average home value, you see here is a$185,000. That’s in Saguenay? I think, in Quebec. So if you look at
that $185,000 for the home, okay you can see
right here, the average five-year rent increase is 9.11%. So that’s not a great rent increase over five years. You divide that
by five, that’s less than 2% a year of increase, right? It’s not that
great. You see here, you’re actually ROI, you’re at a -.08% return on investment, right? So you’re going negative
every year which is something that I wouldn’t recommend. So even at the price
point that may make sense for some people, you’re not getting a return,
you’re actually going negative on that return and you can go here you can look at all everything in between because there’s a
lot of information here. But I think really the take-home for all of this is
I’m looking at this information is for me, Canada may not be the best place to
invest for you. Canada may not be the best place to
invest. I will say this if you can find a home with a 20, 30, 40, 50% equity
position, it may be a really great place to invest if you can find that kind of a
deal. But if you’re not finding that kind of a deal, then there’s a big reason that
I’m seeing now why people, why Canadians are looking to America. Are
looking to USA to invest their money in. The reality is, we’re finding homes here
in America for you know anywhere between $100,000 to $200,000 right in that range
that produce a a 10 to 15 to even 20 maybe even 25% annualized ROI.
We’ve been doing this for the last decade and we’re continuing to do this.
So it’s something that that you want to be aware of and it’s something that you
know, again is drawing people from all across the world to come to the US, to
come to the US, to invest their hard-earned capital because in their own
backyard, it can be extremely difficult. They may
be priced out, but even if they can afford the properties, being able to rent
those out at the proper rental rates to be able to earn a decent return on their
investment, is just slim to none. And I mean as I’m looking over this, I haven’t
really pulled averages but I’m looking through all these cities the top 35
cities, my guess is I’m looking through this as
the average annual return is probably 5%. Maybe 5 or 6%. Somewhere right
around there. I have done the math, you can probably do the math and you’ll be a
lot more accurate than I am right now but it’s probably 5 or 6% is
the average annual ROI. At a 5 or 6% average annual ROI, that’s
just not enough for me anyway to get my money to really work for me. I’m looking
for 15 to 25%, right? Year-over-year over and over and over
again. If you’re able to earn 15 to 25% on your money, your money’s doing
some pretty good things for you. If you’re able to do that and then compound
that and then maximize that and have exponential growth over time, taking
taking growth in one property and then put that into another because you’re
able to find cheaper homes, you’re able to find better deals, you’re able to find
deals that are cash flowing better for you, then all of a sudden that increases
your rate of return. It increases your your turnover rate, it increases your
velocity of money which is something I think that everyone in Canada as well as
around the world is looking to do with their with their hard-earned dollars. So
my recommendation for you in Canada is if you can find a really good deal again
with 10, 20, 30%, maybe even 50% equity in the home you may want
to buy in Canada. If you’re not finding those types of deals, the best thing that
you could probably do would be to find an area where you can put your money to
use in the very best way and America may be a good option for you. So if you’re
looking for…. So one of the biggest things that I would say that as you’re looking
to move forward in your real estate ventures, as you’re looking to do more in
real estate then look at opportunities inside of your own country but I would
also say look for opportunities outside of your own country. Look for programs
and individuals or people that could partner with you possibly to bring some
real estate… Some other real estate opportunities to you. If you’re
interested in more of that, then stick around and we’ll give you some
information to find out more of what you can do. Hey, friends thanks for watching.
If you’ve got any comments, you’ve got some more questions, please put them in
the comments below. If you’d like to meet with one of our team and figure out how
we can help you, then click on the link in the description below. We’d love to
help you out in your investment journey.

30 Comments

  • Ruen

    I live in the city at the rank 1 spot on the money sense list. the family home just sold for 380k while the house down the street with the same template is up for 500k. every house in this area is up for like 5 6 700k lmfao im no expert but im pretty sure we got FUCKED.

  • Juan Montano

    Nice video man, we've been selling tons of chatbots in Austin, Tx for Real Estate agents. How do you feel about this for Realtors? Too much automation for what needs to be a personal interaction?

  • Davis .Carniello

    But Steven those annual returns aren't taking Rental Properties into consideration, thats just the market increasing. Also, The Canadian Dollar is under the American, which means an American can actually purchase a home cheaper. Its all about the cashflow at the end of the day, and there are real markets all over Canada, just have to go out there and find them

  • Uniquely Joti

    What investment options would you recommend for someone living in the Caribbean mainly Tobago (Trinidad and Tobago)?

  • Lewis Mcparland

    is it a good idea to invest in real estate in uk because i read somewhere that home ownership is decreasing in uk with most people renting properties

  • Iesa Khan

    Hi kris, I’m 18 and in the uk, being a Muslim we don’t deal in interest. For instance, the Islamic banks will conduct mortgages in a “rent to own” format, purchasing the real estate for you and charging you rent to gain more ownership on the property over time. Considering this circumstance, can I also do real estate myself under these conditions and also make good profit. This is a very pertinent issue amongst Muslims, and I would appreciate your expertise on judging whether this type of banking is compatible with real estate business. Many thanks, Iesa Khan.

  • Leelen Samuelson

    Hi Steven. I live BC, Canada. I noticed that nothing in the province of Saskatchewan made the top places to invest. Saskatchewan does have some of the lowest average cost to buy a house in Canada, some for under $50,000. There has to be good opportunity for ROI if the purchase price is so low (assuming your not using someone else's money right)?

  • Jeff Wybo

    Canada is an amazing place to invest. Obviously you still have to know the market and know the economic fundamentals in the area you invest in.

  • District Records

    How would a canadian invest in american real estate? I would assume there would also be some barriers not being a citizen?

  • VNQ F

    THE MORTGAGE STRESS TEST IS THE RECESSION. THE GOVERNMENT FORCE CANADIANS TO PARTNER WITH THEM TO PURCHASE REAL ESTATE.

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