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Property Management for KW investment property

A big part of our client base lives outside of Kitchener Waterloo – other parts of Ontario, Canada, and even people living in other countries.  They are able to live   where they love, but invest where the numbers make sense because they employ quality property management companies.

Even a lot of our clients who live in the KW area use property management to take care of their rental properties; it’s just easier, and can be very affordable (depending on who you deal with)

Here’s a bit of info for you:

Contant me “Benjamin AT BenjaminBach.com” for a referral to a great management company

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2009 Kitchener Waterloo Investment Real Estate Market Update

2009 was an interesting year to be buying, selling, and brokering investment real estate.

The turbulence in the global credit markets put a halt on a lot of lending, especially mortgages for student housing.  When CMHC stopped insuring loans on ‘student housing,’ many lending institutions and banks stopped lending against those assets, since without CMHC insurance the loans were harder to sell on the secondary market. 

There were 148 Multi Family & Apartment sales on MLS or $94 million volume in 2009, which is down 21.7% from last year.

While volume was off more than 20% from 2008, the value of Multi Family sales was down just 2% this year, reflecting a number of larger sales.

Specifically, there were nine apartment buildings, student rental towers and townhouse complexes that closed for over $1,000,000 in ‘09 on the KW MLS, including a $28 million dollar tower on King Street in Waterloo that was purchased by investors represented by our firm, Keller Williams in Kitchener.

In addition to a lack of financing, another reason that sales were down last year was that buyer’s were looking for higher cap rates, while sellers still wanted top dollar.  In Canada very few owners of Multi Family properties are ‘distressed’ and need to sell like we sometimes see in the US; that means they have cash flow coming in, rental income from their tenants, and can often afford to wait for a buyer to recognize the value and reach an agreement on price and terms.

There were 398 Multi Family listings processed through the MLS in 09 down 22%

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Vacancy rate in Waterloo falls to 1%

Canada Mortgage and Housing Corporation (CMHC) just released their Rental Market Report for the Kitchener and Guelph CMAs.  This report outlines the vacancy rates, average rents, availability rates etc., and breaks the information down by category – i.e. vacancy rate for 2 bedroom apartment vs 1 bedroom apartments, or comparing rates in new apartment buildings vs older ones.

The vacancy rate in the City of Waterloo fell slightly to 1%, the tightest rental market in the entire region. 

The vacancy rate for Kitchener City went up to 3.4%, and the Cambridge City rate was the highest at 5.6%.  CMHC does not break Cambridge CMA down at all, so we don’t get to see the differences between the older core and the newer areas.

CMHC speculated that the higher rate in Cambridge was caused by “two factors: completion of a 133-unit rental apartment building in July and the movement of renter households to newly completed homes in the City of Cambridge.”

CMHC attributed the increase in the vacancy rates to a number of factors, including young many people becoming home owners (the cost of ownership decreased with mortgage interest rates staying near historic 60 year lows), as well as lower income renters moving home or taking on a roommate to save money on housing due to the downturn in some sectors of the economy.

 

The report reinforced something our investor clients already knew.  Newer properties, those built after 1990, have the lowest vacancy rate, and the highest average rent.  Buildings built prior to 1960 have the highest vacancy rates.  Most of our clients are buying newer properties, for a few reasons including this.

If you have any questions about the real estate market in Kitchener Waterloo, or about buying or selling investment property, you can call me at 519 772 4376 or email me.  You can find me on twitter at www.twitter.com/BenjaminBach

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Kitchener Waterloo Real Estate Market Update: October 2009

Busy busy month! The summer and fall of 2009 has been very busy in Kitchener Waterloo, Ontario.  Real Estate sales are almost at the same level as last year, and volume is up dramatically from the same time last year.  Here is what the press release from the Kitchener Waterloo Real Estate Board says:

A new record for residential sales was set in October as MLS® homes sales to the end of October reached 579 units. That’s a 40.5 percent increase from October 2008 and the second consecutive month that sales set a monthly record.

“October was an especially busy month for local REALTORS®,”  according to Karen Shartun, President of the Kitchener-Waterloo Real Estate Board (KWREB). “Last month’s results represent the largest month over-month increase we’ve seen all year, and now overall residential unit sales have practically caught up to 2008 figures on a year-to-date basis.”

Year-to-date, there have been 5,545 residential units sold, which is just 1% shy of the 5,596 units sold to-date this time last year.
Home sales last month totalled $149,717,233 (up 37.5 percent from October 08) and included 355 detached homes (up 35.5 percent from October 08), 114 condominium units (up 25.3 percent from
October 08), 53 semis (up 165 percent from October 08), and 53 townhouses (up 43.2 percent from October 08).”

We have clients acquiring great property investment opportunities right now in the Waterloo region, ranging from condos and townhouses to land for development, student rental houses and apartment buildings. 

If you have any questions about the market, how you can start investing in real estate, or anything else I can help with, please contact me at Benjamin@BenjaminBach.com or call my office at 519 772 4376