Has COVID turned the rental property market upside down?
Investing in real estate in Ontario has become more of a difficult financial prospect lately. The prices of homes in the Greater Toronto area went up by 19.9% from June 2020 to June 2021, and average home prices across Ontario went from $680,415 June 2020 to $857,754 in June 2021 (Crea.ca)
As you consider where to purchase an investment property, it is imperative to consider the prices of course, but also to take into consideration the tenants you’ll be attracting. For example, you could pick up an investment property in a smaller area, but will renting in this area be lucrative, will you always be able to find tenants, and could you be looking at tenants that require constant chasing?
Higher-income areas inevitably bring in a higher rent, and usually a higher level of property maintenance, so an area that is stable, with good job prospects, and the types of community enhancements that entice new tenants is perfect.
Let’s take a look at some of the areas that are great places to own a rental property:
Obviously, if you can afford to own an investment property in the nation’s busiest city, it is a solid investment.
Employment went up slightly from 2020 to 2021 in Toronto, regardless of COVID and the rest of the world’s employment rates plummeting. Unfortunately, home prices also went up by 19.9% bringing the average home price to $1,050,300 (crea.ca). Meanwhile, rent went down by 17% in the city.
Conclusion: Toronto is a great prospect with a good forecast for a rental property if you have a lot of money to spend.
Looking for a guide to the different neighbourhoods in Toronto? Click through: https://sunsetmoving.com/toronto-neighborhoods/
Ottawa is a strong prospect, although the home prices are significantly on the rise. The average home price went from 525,000 in 2020 to 671,400 in 2021. That’s a 27.9% increase over the course of one year. Granted, it’s an unusual year, but Ottawa’s employment rate is one of the highest in Canada with a 2.3% increase year over year (Ontario.ca)
Conclusion: Ottawa is also a good prospect and now is a good time to scope out the right neighbourhoods. Don’t wait too long as we predict the prices will continue to rise.
Looking for the best neighbourhood in Ottawa: https://wemovetheworld.com/blog/ottawas-best-neighbourhoods/
Brantford is hot! With one of the highest employment rates in the country, it’s a city that many people are watching. The average price of homes sold in June 2021 was $706,382, up sharply by 33.6% from June 2020. (crea.ca)
In Hamilton, the price moved 23.8 percent to $760,000 in the same period from $613,750. (Globalnews.ca) Unfortunately, jobs are not holding up in the area at the same rate.
“The unemployment rate in Hamilton was 8.1% as of June 2021, up 0.4% from the previous month. The unemployment rate stood 4.1% below the peak from June 2020 but remains above the long-run average. There were 1,200 fewer full-time jobs in June 2021 compared to a month earlier. A loss of 5,400 part-time positions led to a decrease of 6,600 total jobs in June. Full-time employment was still down 9,000 jobs from the peak in October 2019 but stood 24,800 jobs above the recent trough in June 2020.” (crea.ca)
Milton is so much more than “that cute town with the street festival.” Only an hour commute from Downtown Toronto, Milton is a historic city with a small-town feel. Home prices here are more reasonable than neighbouring areas with a strong employment rate. According to Areavibes.com, Milton’s unemployment rate is 41% lower than most cities across the nation, while the household income is 50% higher. If those stats weren’t enough, home prices are lower than most in the Toronto area. (https://www.zolo.ca/milton-real-estate/trends)
In our opinion, Milton is the best place to invest in a rental property right now. And, we’d like to help you make it happen. Schedule a free consultation to get started: