Fully Explained video or source :- Here
How in the world do I invest in realestate in Canada? Stick around to find out. Hey, friends Stephen Michael Millerhere 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 beenasking, how do I get started in real estate here in my own backyard or maybehow do I do real estate not in my own backyard? So I want to kind of addressthis run real quick right now. I've got my laptop right Here. I'm not aCanadian real estate expert as you all well know. Kris and I have both done thevast majority of all of our real estate or all of our real estate in the US andso I want to be careful here just a little bit. But I do havesomething that you all have access to here as well which is a lot of greatinformation. So I want to take you with me as I dive in and do some of theresearch that I would do as I'm looking to either do real estate inCanada or figure out why it may not want to. So come and follow me right now.
I'mhere on the good old website of google.com. If you've never been on therebefore then you need to find a way out from underneath that rock, okay? So you'vegot 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 canyou 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 differentthings that are coming up here. You've got something from actually just a weekor so ago. Canadian real estate prices see biggest drop worldwide. So that'sa big thing. It looks like the Canadian housing market is you know hasbeen seeing some some drops as of late which by the way oftentimes when you seea massive drop, that could be a good time to get in possibly. You see here middleclass gets priced out of housing market. That's a really big deal that's beenhappening for a long time. I'm going to go into someof that here. You see a lot of different articles here. You seethis down here emerging trends in Canadian real estate that that you couldclick on. I want to pull up something that I found over here and this is on awebsite MoneySense. This is Canada's top cities to buy real estate in 2018 andas I was scrolling through this article, and kind of reading through I saw thischart that they created and I wanted to spend the majority at the timeof this video here on this chart just to help you see some of the differentthings that you may want to be looking at when in it when choosing to eitherinvest or not to invest in a specific area. And this has thetop 35 cities that you could invest in I guess in Canada. I'm going to sayright up front. Please don't make fun of me for any of my pronunciations. I don'tspeak French nor do I speak Canadian. No I'm just kidding. Okay I do speak Englishand I will try to do my best here but I want to take some of these and just pullapart the number one city here that they've ranked as number 1. I don'tknow exactly what they're ranking on but they are considering average homeprice in 2017, average five year rent increase, average income to home priceratio and then your five year annual ROI or return on investment. And as I justtake a glance right now as I'm looking at these different pricepoints and these different these different data points. If I look over atthe five year annual ROI, I'm seeing some pretty similar trends.
Now this is overfive years and so you can see here, you've got 4.48%,,you've got 4.62%, you've got up to 13% is thehighest one that I'm seeing right now as you continue to scroll down, it goes from8% down to 4% back up to 7% and these are all the differentmarkets of course. We got as low as 1% and this is an annual increaseright 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 surethat is the highest one. 13%.... 13 yep that's the highest one here onthis page. So I just want to pull up if you were going to go invest in Vancouverbecause this showing the highest annual return oninvestment, what would that look like? Well, let me scroll down here a littlebit 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 toput that much of of an asset, right? $2.2 million into just one propertythat's only producing 13%. Now, I will say 13% is not bad likeit'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'sbetter than you'll probably do in the stock market in a lot of other places. Soit's not necessarily a bad return on investment but one problem here that I'mseeing 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 evennecessary get a loan for $2.2 million. So I'm just looking at this andseeing the feasibility right? if I want to get the best return, then I would haveto 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'vegot the five year rent increase of 23.63% that is awonderful rent increase over five years. And it's one of the largest rentincreases as well which is why it's doing so well on the overallannual 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 isyour 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 theaverage 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 mostplaces you know, most people can't afford that type of a gap and so you just wantto be aware of those things you just want to take a look at this. Let's lookat one of the lower ones. Just to kind of see what we've got here the lowest valuein the homes, average home value, you see here is a$185,000. That's in Saguenay? I think, in Quebec. So if you look atthat $185,000 for the home, okay you can seeright here, the average five-year rent increase is 9.11%. So that's not a great rent increase over five years. You divide thatby five, that's less than 2% a year of increase, right? It's not thatgreat. You see here, you're actually ROI, you're at a -.08% return on investment, right? So you're going negativeevery year which is something that I wouldn't recommend. So even at the pricepoint 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 alot of information here. But I think really the take-home for all of this isI'm looking at this information is for me, Canada may not be the best place toinvest for you.
Canada may not be the best place toinvest. I will say this if you can find a home with a 20, 30, 40, 50% equityposition, it may be a really great place to invest if you can find that kind of adeal. But if you're not finding that kind of a deal, then there's a big reason thatI'm seeing now why people, why Canadians are looking to America. Arelooking to USA to invest their money in. The reality is, we're finding homes herein America for you know anywhere between $100,000 to $200,000 right in that rangethat 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 youknow, again is drawing people from all across the world to come to the US, tocome to the US, to invest their hard-earned capital because in their ownbackyard, it can be extremely difficult. They maybe priced out, but even if they can afford the properties, being able to rentthose out at the proper rental rates to be able to earn a decent return on theirinvestment, is just slim to none. And I mean as I'm looking over this, I haven'treally pulled averages but I'm looking through all these cities the top 35cities, my guess is I'm looking through this asthe average annual return is probably 5%. Maybe 5 or 6%. Somewhere rightaround there. I have done the math, you can probably do the math and you'll be alot more accurate than I am right now but it's probably 5 or 6% isthe average annual ROI. At a 5 or 6% average annual ROI, that'sjust not enough for me anyway to get my money to really work for me. I'm lookingfor 15 to 25%, right? Year-over-year over and over and overagain.