Are we in a buyer’s market? Why more landlords are converting units into short-term rental. CHMC is making apartment building buy, renovate, rent, refinance, repeat, aka the BRRRR strategy much harder, and lessons from managing 30 Airbnbs.
All this and more on the Truth About Real Estate Investing for Canadians!
I’m your host, Erwin Szeto of the #81 ranked Business Podcast on all of iTUNES globally. Somehow we cracked the algorithm and achieved a top 1% status. This show is for open minded individuals who love to learn and open to questioning norms and authorities including what’s been sold by influencers in the investment community.
I see emails or Facebook ads about courses on cottage rental investing or short-mid term rentals with promises of easy six figure cash, I put in a call to my clients who are full-time in the same space to ask their experience in my search for the Truth About Real Estate Investing hence we have my long-time friends Johnathan and Mai who manage 30 AirBnbs on today’s show.
Before we get to Mai and Jonathan, there’s a lot going on in the real estate market. The City of Toronto has a $1.5 billion dollar short-fall and they’re not the only municipality with financial trouble, I’m seeing cities across the country with above inflation property tax increases with more on the way. The Town of Markham’s staff 2023 Budget Overview proposed a tax increase of 93.3% starting next year to 2026, a three year period and blaming Bill 23, the More Homes Build Faster Act.
The City of Hamilton is already considering a 14% property tax increase for next year which translates to around $500 per house that my clients and I own.
With cash flow already tight, many are negative with rates high and rent control… this is a tough business to be in.
Hence “More Landlords Converting Units Into Short-Term Rentals” is one of the latest articles on Bloomberg Canada and the reason our AirBnb expert guests are here today.
What’s a real estate entrepreneur to do with rising costs and long-term rents capped? Naturally they pivot towards AirBnb for usually higher income and avoidance of the Landlord Tenant Board which takes 7 months for hearings whom they don’t feel do enough to protect landlords.
In the same article, a McGill University Professor and chair in urban governance has research that shows short-term rentals increase housing costs and recommends cities with housing shortages ban short-term rentals except for the landlord’s own primary residence.
What’s not mentioned by the University Professor is the effect of the 500,000 or so international visa students that came to Canada last year, many of which attend post secondary schools like McGill U on their affect on housing costs.
In my experience, I have a couple international students in my houses and they’re from India, all working in the restaurant industry, mainly as cooks. Similar story to what’s in the media the tenant crisis is legit.
I’ve linked to the article in the show notes: https://www.bnnbloomberg.ca/more-landlords-converting-units-into-short-term-rentals-1.1978075
CMHC is making the BRRRR apartment strategy much more difficult. I can’t find anything online or in the news but I’ve spoken to three investor friends, each with millions upon millions invested in real estate. Basically CMHC on refinance wants to see the funds going into buying more rental stock or improving existing buildings. They don’t allow just equity take out to repay shareholders. Add to that one must already be with an approved lender in order to refinance so private lending or vendor take back mortgages will need an approved bridge lender.
More hoops, more cost. This is a big deal to many small investors since cash flow is more limited than ever with low cap rates and high interest rates, many depend on the refinance monies for their daily expenses.
Apartment building investors, keep an eye on this space. It sounds like CMHC wants to focus more on developments that create more housing supply.
On a personal investing front, my flight to Atlanta is booked to tour some properties, meet with property managers, one of them manages 800 doors which is unheard of here in Ontario unless it’s an inhouse REIT PM. When the laws favour the landlord, more and more mom and pop investors own rental properties hence the need for large property management firms.
My due diligence on investing in the USA continues. I have printed off REIN Property Goldmine Scorecards to make sure I’m doing my diligence on investing in the best areas in the United States of America. There’s no doubt in my mind that prices in the golden horseshoe of Ontario will increase in price when interest rates are cut but the same will happen in the US too so Cherry and I are selling some of our houses here and I’ll reallocate some capital pay off debts AND buy some houses that cash flow in landlord friendly states, easy commercial style mortgages so qualification is way easier, institutional grade property management with no rent control.
I haven’t been this excited about real estate investing in a long-time. We’re going to #makerealestateinvestinggreatagain and I’ll bring you the listener along for the ride.
If you would like to learn more on how other Canadians are diversifying their portfolios, our next online only, iWIN Meeting Tuesday, Oct 17th. We have US investing expert Andrew Kim back to share how to invest in sunbelt states like Florida, Texas, Georgia, etc… and my old friend Tim Collins who will be detailing how he cash flows over $10,000 per month with the proceeds of his real estate portfolio after he took profits in 2021 and how he earns passive income as a Realtor of the newest, tech based real estate brokerage.
That’s on Tuesday night, then the following Saturday morning Oct 21st, we are hosting our first ever investing in US real estate workshop! Our guest speakers from Share (https://iwin.sharesfr.com/) are all Canadian who have experience managing 20,000 units in the sunbelt states, one is a veteran Chartered Professional Accountant in both Canada and US, is Canadian but resides in the US, and good friend Scott Dillingham of LendCity who is dual citizen and can get us Canadians commercial style mortgages on income properties in the US. FYI it’s a lot easier for a Canadian Investor to get a mortgage in the US than in Canada. It’s all about who you know!
This workshop costs less than $40 as my friends from Share and Lendcity are donating their time to educate us all on how to make real estate great again, without rent control, without the Landlord Tenant Board.
Iwin Meeting link to register: https://www.infinitywealth.ca/iwin-meeting-mail
US Investing Workshop: https://iwinworkshop.eventbrite.ca/?aff=mail
You don’t want to miss it!
30 AirBnbs: Lessons as Full Time Managers With Mai and Jonathan
On to this week’s show we have my old friends Mai Nguyen and Jonathan Lim who’s travel agency business was hit hard by Covid but thanks to their experience as early adopter AirBnb hosts were able to successfully pivot into short term rentals, specifically AirBnb and now own a couple and manage a total of 30 Airbnb properties.
From Muskoka Cottages two hours north of Toronto, to downtown condominiums, to recreational properties in Niagara Falls they have quite a bit of experience on what works, what doesn’t work, the good, bad and the ugly. The truth about short term rentals is they are a hospitality business: that means lots of customer service, cleaners are critical to the business, location and amenities mean the difference between success and failure. It’s totally doable and comes down to education and execution.
Mai and Jonathan tell it like it is, including the mistakes they made when they first listed their home on AirBnb, to how it funded their travel, what types of properties to buy, red flags for potential guests, scams, and if you should be buying a property today to AirBnb.
Before buying a recreational property or course, I highly recommend giving this episode a listen
Please enjoy the show!
This episode is brought to you by me! We don’t have sponsors for this show. I only share with you services owned by my wife Cherry and me. Real estate investing is a staple in my life and allowed me to build wealth and, more importantly, achieve financial peace about the future, knowing our retirement is taken care of and my kids will be able to afford a home when they grow up. If you, too, are interested in my systematic strategy to implement the #1 investment strategy, the same one pretty much all my guests are doing themselves, then go visit www.infinitywealth.ca/events and register for our next FREE Online Training Class. We will be back in person once legally allowed to do so, but for now, we are 100% virtual.
No need for you to reinvent the wheel; we have our system down pat. Again that’s www.infinitywealth.ca/events and register for the FREE Online Training Class.
To connect/follow Mai and Jonathan
Direct business line: 416-521-3141
Airbnb host referral link: www.airbnb.ca/r/main8
HELP US OUT!
BEFORE YOU GO…
If you’re interested in being a successful real estate investor like those who have been featured on this podcast and our hundreds of successful clients please let us know.
It is our honour to give back and educate others on how we build cash flowing real estate portfolios using all the best practices shared on this podcast, from the lessons of our hundreds of clients and of course our own experience in owning investment real estate.
If you didn’t know already, we pride ourselves on being the best of the best real estate coaches, having the best property managers, contractors, handy people, cleaners, lawyers, accountants, everyone you need on your power team and we’re happy to share them with our clients to ensure your success.
New investor or seasoned veteran investor, we can help anyone by providing our award winning coaching services and this isn’t all talk.
We have been awarded Realtor of the Year to Investors in 2015 by the Real Estate Investment Network, 2016 by the Canadian Real Estate Wealth Magazine and again in 2017 because no one told the judges no one is supposed to win the award twice but on merit, our peers deemed us as the best. In 2018, we again won the same award by the Real Estate Investment Network.
Hopefully being the most decorated team of Realtors in Ontario will make you consider us for your first or next real estate investment. Even if you don’t invest in our areas, there’s a good chance I know who would be ideal for you.
I’ve been around for a while, some Realtors are talented at servicing investors there are many with great ethics. The intersection of the two, talent and ethics is limited to a handful in each city or town.
Only work with the best is what my father always taught me. If you’re interested, drop us an email at firstname.lastname@example.org.
I hope to meet you at one of our meetups soon.
Again that’s email@example.com
Infinity Wealth Investment Network – would you like to know how our investors returned 341.8% on positive cash flowing real estate over the last five years? On average, that was 68.4% per year.
Just imagine what winning in real estate could do for you.
If you would like to know how we did it, ask us how by calling 289-288-5019 or email us at firstname.lastname@example.org.
Don’t delay, the top markets we focus in are trending upward in price, so you can pay today’s price or tomorrow’s price.
Till next time, just do it because I believe in you.
Hamilton, St. Catharines and Toronto Land Development, Real Estate Investor, and soon to be builder.