Are you thinking of buying a rental property? Here is a discussion with Property Manager, Garret Wong.
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Bo Kauffmann [00:00:00] So you're thinking of buying rental property? Well, you're going to want to hear this if you're thinking of buying rental property and growing your real estate portfolio, then you're going to love this call Im about to make. I'm going to call a friend of mine. His name is Garrett Wong. Garrett is the president of the Professional Property Managers Association of Manitoba. And he runs a company called Upper Edge Property Management. Now they specialize in helping investors and property owners who have 1, 2, 3, you know, a small amount of rental properties. All in all, Upper Edge has over 600 residences in their portfolio and they're the perfect source of information. If you're looking for help in managing your properties. So let's give them a call right now.
Garret Wong [00:00:55] Hello, Garrett speaking.
Bo Kauffmann [00:00:56] Hey, Garrett, it's Bo, how you doing?
Garret Wong [00:00:59] Good, and you?
Bo Kauffmann [00:01:00] Good. Excellent. Listen, we'll get right into it. I wanted to ask you a couple of things about people wanting to get into owning rental properties. And one of the most common questions I get is, is Winnipeg still a good market? Now, I recall an article a couple of years ago that said that Winnipeg out of 36 markets, Winnipeg was actually the one with the lowest vacancy rate. Now was a couple of years ago. So I'm just wondering to hear your side of this. Is Winnipeg still a good market to own rental properties?
Garret Wong [00:01:28] I believe so, yes. Those stats were a few years ago back in 2012, we actually had almost a zero percent vacancy rate with zero point nine percent. It has risen, but you know, it's it's fairly balanced. Now, I believe the last stats from CMHC last fall said it was about two point nine nine or effectively a three percent vacancy rate. And all that means is a lot of the tenants that are trying to find properties just have a little bit more choice. Right. But it hasn't really affected property values to the point that, you know, tenants can't find a place or there's bidding wars. It just means that you have to provide a decent product if you're going to be an investor.
Bo Kauffmann [00:02:09] Right. You now have a little bit of competition and renters have a little bit of choice. Yeah, and there's nothing wrong with that. Right. Exactly. I mean, I can go out and find a house for one hundred thousand dollars in the core area or I can find a million dollar house in Linden Woods. Where would you say is like the sweet spot for somebody who wants to buy their first rental property? What price range and what neighborhoods?
Garret Wong [00:02:31] So I would probably not concentrate as much on price range of the building. That's kind of obviously that's important because you have to qualify and you have to make sure it cash flows properly to me. I would start with supply and demand. So I would look at what is the most desirable rent for, you know, your demographic, a family of four or whatever you're trying to attract. In my professional experience, I believe that's probably around the thirteen hundred dollar range, maybe 13 to 15 hundred. If you translate that back then into your cash flow projections, you're going to end up with, you know, a set amount that you can afford for your mortgage and that will translate out to a building value. Typically, I find that most neighborhoods that will support, you know, at two hundred and fifty thousand dollar property, two or three bedroom. We can talk about neighborhoods if you want in a minute that normally will translate into a thirteen hundred dollar rent. Fourteen hundred dollar rent, which means that the property will...