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Investing in income properties in Canada is a risky business. In urban centers such as Toronto, Calgary and Vancouver, you are not only getting a weak return which barely covers mortgage payments, but you are investing in a market where the smallest decline in prices could set you back a whole years worth or rental income.
The added expense of investing in a foreign or distant location can be more than compensated for by the increase in return you will gain. home insurance and a yearly maintenance check up are really all you need. While many will contend the Canadian dollar is far too weak for such a proposition, that doesn’t really matter if you’re both buying and getting paid in the same currency – in this instance we are examining properties for their income potential; not necessarily their value appreciation potential .
The below is a list of the top three places in North America I believe would be both the most profitable and lucrative for Canadians and Americans a like to invest in.
I should also note that none of the examples I list were sponsored – they are completely editorially driven.
Gainesville, Florida
The Quick Stats:
Unemployment: 5.1%
Average home cost: $166,000
Annual estimated price growth: 11%
Population: 127 000
When surveying potential locations to invest most home buyers would shy away from a University town as the prospect of having student renters is too much of a gamble. However, this is not the case; the gamble is just the same as any other investment.
Not only do student driven rental markets pay a premium on more common rental properties, but the upkeep on the investment (i.e the home maintenance) can be much less as the accommodation only needs to cover the minimum – by no means do students need to live in luxury; As a student I was more than happy with parquet floors and bedroom with a widow. In addition, University towns tend to be a safe bet on investment appreciation as they rarely if ever go out of business, because a University’s revenue streams are largely independent of economic fluctuations (i.e. when the economy slumps people tend to head back to school). This stands in contrast to tragic case studies like Flint or Detroit, Michigan which were dessemated by economic fluctuations causing real estate investments to literally deteriorate into the ground.
Many reports have suggested that a 10-13% return on investment in this town is more than achievable (and that excluding value appreciation). let me list out the following very current example.
Both of these examples (example A and example B) are already earning a >10% return, and are more than capable of paying for themselves within 15 years. upon further exploration I found plenty of other properties for sale that would be perfectly suitable for renters and also give a fantastic return.
Phoenix and Las Vegas Arizona
The Quick Stats:
Unemployment: 5.8%
Average home cost: $215 000
Annual estimated real estate appreciation: 10%
Population: ~4 000 000
For much of 2014 and 2013 Phoenix was a hot bed of Canadian nationals looking to either set up a vacation home under the sun, or trying to find a property to find a sunny place to park their money so they have something to be excited for in the future. Though, with the economy leveling off housing prices are starting to stabilize and people simply aren’t as attracted to Phoenix as they once were. However, I can assure you that if you’re looking to invest in real estate and would like to stay in North America, Phoenix continues to be one of the best places to do it. In addition a simply astronomical 9%-13% return on rent , appreciation is still at a staggering 7-10%. Stability is also strong – if there is one thing people love no matter where the economy is at, its gambling ang and cheap sunny vacations, and Phoenix just happens to have both.
The two listed properties below are some examples I was able to find in less than a minute.
Atlanta, Georgia
The Quick Stats:
Unemployment: 7.3%
Average home cost: $188 751
Annual estimated real estate appreciation: 10%
Population: ~5 500 000
Atlanta is a truly global city, it encompases a major international airport, connecting it to a plethora of global locations and is home to more than 160 000 private sector firms operating in the metro area. And, with 304 Billion dollars in circulation annually, Atlanta is the eighth largest economy in the United States and the 17th largest in the world. It is also home to a variety of Nationally accredited universities, and boasts a very upwardly mobile population ready to grow the city even further.
Exhibit A ( Exhibit B, Exhibit B comparison )
For further reading I highly suggest visiting the following:
Top 25 Hidden Gem Single Family Rental Markets
Property Prophet 