Hello Hamilton Real Estate Investors!!
450 New Jobs are already pouring in to the downtown of Hamilton. One investor even messaged me how ecstatic he was to rent to an A+ tenant in his property on Locke St who is starting a job at McMaster University’s downtown health campus. Hundreds of students are expected to use this facility for educational purposes and another 50,000 medical patient visits will conducted at this location. This all points to higher income, more traffic and a boom for all local business and real estate.
On the real estate investment side, with the number of condos being built in the vicinity, I think the rental demand will easily be absorbed and no, I generally am not a proponent of holding real estate with condo fees. Freehold is always my first choice.
This morning, a colleague of mine at Rock Star Real Estate Brokerage, Inc. informed me of her new listing in Burlington. A not-too-old starter home, 3 bed, 2.5 bath, finished basement townhouse near a Go Station. Freehold too! Asking $419,000. This is a text book property we would buy in Hamilton and surrounding area that is worth around $300,000 in Hamilton so I asked Sarah what it would rent for.
Sarah replied “the owner used to rent the property for $1,800 plus utilities.”
My first thought was how good is Hamilton where the same house would rent for $1,650 on a $300,000 purchase price. Annualized rent to price ratio is 6.4% (a very common, quick calculation investors use to analyse investment property). The Burlington town house is 5.1% SO the rent to price ratio of the Hamilton house is 24% better. That is the difference between two adjacent communities and guess what, Hamilton looks even better when compared to towns closer to Toronto: Oakville, Mississauga, Etobicoke, Milton, Brampton, Markham, etc…
This is the sign of a market in the boom phase (thank you “Secrets of the Real Estate Cycle“) as affordability is eroded in Burlington but the same house in Hamilton sure looks attractive for someone with a smaller budget.
Food for thought!
Till next time – Happy Hamilton Investing Everyone!
Erwin | MrHamilton.ca
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