Analyzing the financials on a Fourplex in Sandy Hill that sold in December 2018

This building sold for $1,495,000, $54,000 less than the listed price. There were 3 x 3 bedroom apartments and 1 x 4 bedroom apartment. All of the units in this building pay for their own Gas, Heat and Hydro.

This building was Fire Retrofit, had 4 parking spots, was renovated and was just blocks to the river and parks as well as the University of Ottawa. It sold in 83 days.

This income property actually sees a positive cash flow, 3.3 return on investment and a 5.1 Cap Rate. All of these numbers look great compared to other buildings we have analyzed recently, which had low or even negative numbers.

If you are considering buying an income property, have a look at some other Multi-Family's for sale

If you want to sell your building, let us give you a professional assessment of what it might be worth.

Predictions for the Ottawa Real Estate Market in 2019

Here is where we try and predict where the real estate market will trend in 2019, we give you our opinion, followed by predictions from other trusted sources such as CMHC, Remax, CREA as well as Royal LePage. See where the market is right now by viewing this months Market Update here

Patrick’s Predictions for 2019: Strong sales and more listings

2018 should finish the year with unit sales up 3.2 %. The average sold price will be about $408,000 for an increase of 3.8 % over last year.

I see 2019 being similar to this year with units up about 4% and prices will increase 4% to 5%. I believe inventory levels will increase slightly over 2018, freeing up more homes for the pent up buying demand.

We are looking at some additional employment in the east end with Amazon adding about 600 albeit lower paying jobs. Ford has announced about 300 new jobs to the Kanata tech sector which are primarily going to be higher paying engineering positions.

Federal government employment looks solid for 2019 as we will be in an election year and the Liberals will not cut federal jobs in vote rich urban Ottawa. Also, the feds have shown no desire to cut reckless spending, tackle the deficit and national debt, so cutting federal employee positions is not on the table.

The wild card begins to show it’s face toward the end of 2019 or early 2020. Will the recession start then? Yes, it is coming. Trump has unnecessarily thrown gasoline onto an already hot USA economy. Reduced income (taxes) and record setting debt will bring an ugly end to their party. It will burn out and the ashes will leave lost jobs and less demand for Canadian products and resources.

With Canadian low interest rates, high debt, increasing deficits, we will have a reduced number of tools to fight the recession, as we did in 2009. Remember, that to was triggered by the American subprime mortgage fiasco. Otherwise Ottawa should see its traditional slow steady increase for 2019.

Canadian Real Estate Association Predictions

CREA Says that Home prices in Eastern Ontario, Quebec, New Brunswick, Nova Scotia and Prince Edward Island are expected to continue rising with market balance steadily becoming firmer.

ReMax & Royal LePage Predictions

In their annual home sale price reports, Royal LePage is forecasting the capital will see a 2.5 per cent increase to the median home sale prices while Re/Max is predicting a 4 per cent jump in sale prices.

Canadian Mortgage & Housing Corporation CMHC Predictions

Ottawa-Gatineau is one of the few markets in Canada in which housing resale volumes and prices have risen continuously over the past three years, the agency is predicting that trend to continue into 2020.

Resales are expected to end up between 17,500 and 19,200 units. Prices are anticipated to range between $417,000 and $433,000.

For 2020, CMHC is predicting resales in the range of 17,900 and 20,000 units. The resale price range for 2020 is expected to be between $431,000 and $453,000.

Citing Ottawa-Gatineau’s decades-low unemployment rate and its high average income bolstered by an abundance of federal government and tech workers, CMHC says the region’s residential real estate market is primed for healthy growth for the next few years.

“Ottawa has outperformed because of a healthy economy and the city’s relative affordability,” the report says. “Employment, especially full-time job creation, as well as earnings growth, have been robust since 2016 and have supported home ownership demand despite rising prices.

The agency also says a significant price gap between new and resold homes makes the region’s resale market attractive, especially to first-time buyers, with more affordable options such as row homes and condos experiencing the strongest sales growth.

But CMHC also warns that rising interest rates and government cutbacks in light of rising federal deficits could dampen its robust growth forecasts.

This Triplex sold in November, was in a very good location and it will be owner-occupied.

This building sold pretty quick, and for $19,900 less than the asking price. It was fire retrofit and it had Two 1 bedrooms and One 1 bedroom apartment.

This property is a bit different from others we have looked at recently, as the buyer will be living in One of the apartments, usually we look at buildings that are purely as an income investment.

So, when we see that this building has a negative cash-flow as well as the ROI of -1%, it might not be as bad as it first appears. This smart buyer will be living in a very nice apartment, in a great neighbourhood and near the new LRT line.

If you are considering buying an income property, get in touch after browsing through all of the Multi-Family's we have for sale

If you want to sell your building, let us give you a professional assessment of what it might be worth.

Usually we profile One multi-Family building that sold, this month we are taking a look at 4 properties, all from Vanier

The table below gives you all of the financial information from a couple of 6-Plex's as well as a 9 unit and a 10 unit Multi-Family building. We recently used these to do a CMA for a client, so we may as well show you how well these performed.

We always use a 35% downpayment, and for the examples below we are using a commercial mortgage rate of 5.6% as all were more that 5 apartments.

From the examples above, you can see that only one building provided a positive cash-flow and two of the properties returned negative returns-on-investment.

Two buildings sold for under their asking price, one sold for full asking price and the final one sold for over $20,000 more than it was listed for. CAP Rates for all of them were above 4%.

Have a look at our listings of Multi-Family Properties

This article covers a couple of recent changes that will affect owners and purchasers of income properties.

As you are probably aware, the province of Ontario has recently mandated the use of their leases for all landlords and tenants. Failure to provide the lease, if requested by a tenant, will result in you having to provide one month free rent. You can access the lease in the link below.

Additionally, I have been asked if the lease specifically addresses cannabis. The Ontario Real Estate Association has just provided us with clauses that a landlord can add to a lease, regarding the growing and use of weed in your building.

• New Ontario lease
• New tenant eviction rules

See the 2 New Clauses below:

The first is in regards to dealing/harvesting:

"The Tenant and any occupants of the premises and, including without limitation, any visitors, guests and business invitees shall not sell, distribute, cultivate, propagate or harvest any cannabis plants within the meaning of the Cannabis Act, S.C. 2018 c. 16 and the Cannabis Act, 2017, S.O. 2017, c. 26 as amended from time to time, anywhere in or upon the premises rented by the Tenant, the building where Tenant's premises are located or in any of the common areas or adjoining grounds of such building."

The second is regarding smoking:

"The Tenant and any occupants of the premises and, including without limitation, any visitors, guests and business invitees shall not smoke anywhere in or upon the premises rented by the Tenant, the building where Tenant's premises are located or in any of the common areas or adjoining grounds of such building, except for the designated smoking area(s) noted below:

For purposes of this provision, the term "smoke" or "smoking" means to inhale, exhale, burn or have control over a lighted cigarette, lighted cannabis cigarette, cigar, pipe, hookah pipe or other lighted smoking implement designed to burn tobacco or any other substance, including without limitation, cannabis as defined in the Cannabis Act, SC 2018 c16 as amended from time to time for the purpose of inhaling or tasting of its emission. Contravention of this provision shall be deemed to be a material breach of the lease. "

If you're looking to buy any type if Investment Property in the area, work with an Agent who knows all the rules!

Have a look at our inventory of Income Properties for sale

Tri-Plex Property sold in September, in Overbrook

This property is a Triplex that was sold in September, it was listed at $769,900 and sold for $760,000 in just 26 days. This building was made up of a 1 bedroom apartment and Two 2 Bedroom Apartments, both of the 2 bedrooms were vacant at the time of sale. This property was Fire Retrofitted.

Below is the table where you can see all of the numbers, and at the bottom we give you the Return on Investment that the buyer will get based on a 35% down-payment.

This income property had some updates etc. in 2018, including: Updated Windows,Kitchen, Bathrooms, Electrical, Fresh Paint, Stainless Steel Appliances and Hardwood Floors.

When we look at the numbers, this building actually had a positive cash flow with 35% down, using a mortgage rate of 3.5%. At the end of the day, this buyer saw a Cap Rate of 4.6%, a cash flow of $5,497 and a Return On Investment of 2%.

Each tenant paid for their own Hydro and Hot Water Tank Rental cost

Browse our selection of Multi-Family Listings currently for sale.

This Six Unit Income Property sold in August, in Centretown

Have a look at the table below for all of the financial info on this 6-Plex from Centretown or watch the video where Pat will go through all of the numbers and let you know if they are good or bad.

Below is the table where you can see all of the numbers, and at the bottom we give you this buildings Return on Investment as well as the cash flow based on Two different mortgage rates.

Looking at the numbers based on a rate of 5.5%, which is common for larger income properties, this buyer would be taking a loss of $3500 per year, which is a -0.8% return on his initial investment of $434,000.

If this buyer could shop around and find a mortgage at 3,5%, which you can get on smaller buildings and some lenders will do this on larger buildings, this would change the whole scenario. The return on investment goes up to 1.7% and the buyer makes $7200 per year.

Check out some of the Multi-Family Listings we currently have for sale.

Fourplex sold in July, it was located in the Westboro Neighbourhood

We have seen a number of multi unit residential buildings sell in 2018 with negative cash flows. This is based on a 35% down-payment.

In the early to mid 2000's an astute investor could purchase a building with a 20% down-payment and realize a positive cash flow. That changed almost overnight in 2008/09 when the equities market took a dive. Investors who previously never touched real estate now flocked to it in droves. That factor combined with historically low interest rates caused the price of multi unit buildings to jump in value as investors snapped them up.

How much would you be willing to pay for a multi unit building to achieve a positive cash flow?...

… 35%? 45%? Or is cash flow secondary in your criteria. This month take a look at the financials for another negative cash flow property.

Below is the table showing you all of the numbers on this sale, and it looks like the buyer is taking a loss and there could be a reason for that, like the buyer actually moved into One of the units as a live-in owner.

Have a look at all of the Multi-Family Listings on our site, or get in touch if you want to buy or sell your building.

1 bedroom condominium with great views for sale at 1081 Ambleside Drive, price is $199,900

In recent years this apartment has been updated with windows and hardwood throughout the foyer, living & dining areas & bedroom. Dining room light fixture with ceiling fan. Ceramic floor in the kitchen with clean white cabinetry and large opening to the living room, allows natural light to flood into it from the balcony.

Balcony access via sliding glass door from living room. Perhaps one of the best views in Ottawa. NOTE condo fees ($625/mo) pay for all utilities + cable!! Building has indoor pool, guest suites, workout room, sauna & more. This one bed, one bath apartment faces northwest with spectacular views of the Ottawa River & Gatineau Hills. View the Britannia Yacht Club, Mud Lake in Britannia Conservation area & famous Deschenes Rapids.

Directions: Richmond Rd to New Orchard or McEwen to Ambleside. Lots of visitors parking beside building.

Condo Fee Includes: Building Insurance, Amenities, Cable TV, Caretaker, Heat, Hydro, Management Fee, Recreation Facilities, Water/Sewer

Condo Amenities: Cable TV, Exercise Centre, Guest Suite, Indoor Pool, Party Room, Sauna, Workshop

Site Influences: Adult Oriented, Balcony, Exercise Room, Indoor Pool, Lakeview, Mountainview, River views

Neighbourhood Influences: Public Transit Nearby, Recreation Nearby, Shopping Nearby, Water Nearby

Taxes/Year: $2,185.00/2018

Want to schedule a viewing at 1081 Ambleside, Apartment 2009?

Patrick at 613-788-2590 or Patrick@AgentInOttawa.com

View the surrounding area using this interactive Google Map

Related Page: Check out more condos currently available at 1081 Ambleside

We found a 7 Unit apartment building that sold in June and below are the financials on it.

There was a mix of bachelor apartments as well as 1, 2 and 3 bedroom apartments. It took 65 days to sell and it sold for $44,000 under the asking price.

This building had One Apartment that was said to suitable as an Owner Occupant Apartment, and maybe that is why this buyer bought the building, to live-in. The Return on Investment here is negative.

At first glance in the table above, you can see that this buyer would be having an $8000 loss in the first year if they had a 35% downpayment. This property did have a 4.2% Cap Rate.

Looking to buy, have a look at all our Income Properties for sale