I have noticed a trend lately, with lower interest rates combined with media attention focused on the so-called "recession", that potential investors are calling, looking for a property that they can do a "flip" on- that is, buy a property in poor condition, perhaps a bank repossession, fix it up, and sell it for a quick profit. The challenge that I am finding is that, many of these people have no idea what they are looking to get into, and often don't have the funds or necessary skills to be able to pull it off. They have watched a few episodes of "Flip That House" on TV, and, through the miracle of editing and production, it really does look easy. But is it really that easy?
Sure it is, if you have 20% to put down as a downpayment to avoid CMHC fees, and lots of cash on hand to fund the required renovations, along with a trusted contractor that is available to do those renovations quickly to enable immediate turnover. You also need the money in the bank for the carrying costs, the closing costs such as legal fees and land transfer taxes, as well as factoring in the real estate fees when it comes time to put it back on the market. The other reality is; we're in Ottawa- we really aren't dealing with a recessionary situation in this city. We also don't tend to have dilapitaded crack houses on the market in prime neighbourhoods; that just doesn't happen in our back yard in quiet Ottawa. That being said, there are always opportunities for those who are patient enough to wait for the right one, and plan their resources accordingly. The other great news for investors in Ottawa is that our stable, consistent economy means that there are fantastic options for investors who are willing to buy a property and hold it, renting it out while the resale values climb, which typically requires less capital up front than a flip scenario. There is also a steady stream of potential high quality renters constantly moving to Ottawa, for jobs with various government departments, to work with the RCMP or National Defence, to attend Ottawa University, Carleton University, Algonquin College or Cite Collegiale. There are also great income property opportunities in some of the lower income areas in Ottawa, particularly in Vanier, where the property values have not enjoyed the same level of appreciation in resale values, but the number of potential tenants remains healthy.
It's a great time to be an investor in Ottawa, regardless of what investment strategy you wish to employ.
