Have you ever thought about buying an investment property? It can be a great move for just about anyone with the means. It can add to your income right now and shore it up in retirement too. Investing outside of Toronto could be very beneficial.
The problem, of course, is that Toronto is so pricey now. It can be hard enough to buy a first property—let alone a second or third. So here’s an idea: Look beyond Toronto.
I recently teamed up with two friends to purchase an investment property in Prince Edward County, an island near Sandbanks Provincial Park, about 2.5 hours from Toronto. With a population of some 25,000, its three biggest towns are Picton, Wellington and Bloomfield.
Situated along the shores of Lake Ontario, the County (as locals call it) is increasingly known as a wine region. But it has something for everyone: cideries, breweries, galleries, shops, studios, beaches, restaurants and a farmer’s market in season.
All of this spells opportunity. As tourists flock to the County, more and more rental properties are being converted from long-term to short-term (vacation) rentals. There are now shortages of both kinds. With all of this in mind, I started taking trips to Prince Edward Country with a view to owning a piece of it myself.
But budgets are budgets—so I teamed up with two other friends who were interested in investing with me. We started going through listings and visiting properties. There was a commercial property we liked early on, but it didn’t work out.
Eventually, I met another real estate agent in Prince Edward County who had an exclusive listing. The vendor was ready to sell, but the property wasn’t on the MLS market yet. The agent gave us the address, and I took a walk by there with Kathy, one of my investing partners. The building, with four two-bedroom, two-story apartments, was on Main Street in Picton.
It had such tremendous curb appeal—red brick, black doors, huge character—that we immediately knew we’d want to find out more about the numbers and take a look inside.
Getting inside was trickier because there were tenants—it took a few weeks. Kathy wasn’t able to come that weekend, so I walked through with a video camera and took photos to share. I also chatted with the tenants. Each of the four apartments was about 900 square feet with access to a backyard and parking. The building was a gem for the price.
Before this experience, I always assumed I would never buy a property that wasn’t in Toronto. But I’ve changed my thinking. You can own an affordable investment property outside the city, and looking after it isn’t much trouble if you hire a property manager.
If you’ve ever considered doing something similar, I would definitely encourage you to look into it further. If you have any questions, I’d be happy to chat with you. Drop me a line any time!
Property Shopping with Davelle
Kathy Mauchner, one of two women who partnered with Davelle Morrison to buy an investment property in Prince Edward Country, was familiar with the County when the idea arose, and immediately recognized that it represented an interesting investment opportunity.
“The idea of partnering with Davelle held considerable appeal for several reasons,” says Mauchner, who works in sales for a digital media company. On a personal level, she’s known Davelle since they first became friends at university. “I liked her as soon as I met her. I knew there would be a friendship and trust.”
Business-wise, Kathy knew she was in good hands: this was Davelle’s area of expertise. “She was able to provide insight as to whether a given property would be worth it. She had worked out the cash flow, expenses and other details. That kind of knowledge is priceless—and she’s super detail-oriented.”
On both levels, what Kathy appreciates most about Davelle is her ability to get straight to the point. “Her approach is, ‘Here is the reality, now let’s talk about it,’” says Mauchner. “I trusted her implicitly, and her direct approach made the process feel easy.”
Closing the deal was not without its challenges, of course. Working in the County is not like negotiating in Toronto, says Mauchner, so it was necessary to read people and respond accordingly. Davelle “worked like an amoeba,” adds Mauchner, easily adapting to different working styles and personalities to get the job done.
Overall, what Kathy remembers most about the experience was how easy it was.
“I signed the papers digitally while I was having breakfast in Mexico. All the details were exact,” she says. “I would recommend Davelle to anyone, without question.”
Thinking of buying an investment property? Here are some tips:
- Choose an attractive location where rental demand is high.
- Research the accommodation needs of the location.
- Calculate your cash flow after your mortgage, property taxes, insurance and utility costs are paid.
- Consider hiring a property manager if the location is far from your home.
- Create a spreadsheet with different pricing scenarios for rental income to determine the ideal rent to charge.
- Back in Toronto, we made an offer conditional on inspection. The home inspector found a few issues, but nothing we couldn’t live with. We went ahead and closed the deal. We were beyond excited!
- The location is great—walking distance to everything, plenty of coffee shops and a park nearby. We don’t plan to use the place ourselves, but features like these are attractive to tenants.
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