Is Ottawa a good place to invest in Real Estate?

Yes, Ottawa a good place to invest in real estate! The information below is geared toward investors and those who would owner occupy a multi-unit building.

Affordability of Property

Multi unit buildings are much less expensive in Ottawa compared to Toronto which is a four hour drive to the west. In other words, you get more building for your investment dollar. In the past few years, we have been attracting investors from Toronto to Vancouver. The secret is getting out that this major metropolitan, well-educated city is a great place to invest.

How is the Ottawa Economy?

In a word, stable. The federal government employs approximately 25% of the Ottawa workforce. These stable employees are both owners and tenants. The high technology businesses are located in the west end and central Ottawa. The Amazon fulfillment center is in the east end of the city. Need for tenant housing is across the city.

Tenant Types in Ottawa

Ottawa has three major educational institutions. University of Ottawa (go Gee Gees) Carleton University, and Algonquin College. Many investors look upon students as “cash cows” and rent exclusively to these students. Other investors shy away from them due to frequently higher maintenance costs. So, there’s the typical government or technology employee to rent to. Still others have short term furnished rentals for three to six months for contract workers, visiting professors, etc. The point is, there are various tenant mixes to suit the criteria of most investors.

No population contractions

We do not have the exodus of population that other cities may have. We know for example that towns in Alberta can have population fluctuations as the price of oil rises and falls. Our population continues to grow and has recently been at the top of net immigration into the city. The new Ottawan’s need someplace to rent and call home. Our primary industries are stable creating long term stable population growth. Cost per unit When buying buildings of 5 or more units, they can be purchased for $240,000 to $270,000 per unit. Higher end properties can cost $325,000 to $375,000 per unit.

What ROI can I get in Ottawa?

About 1 to 2.5% with a 35% down payment. You will have a positive cash flow with this down payment.

What Cap Rates can I expect?

An approximation is 4.5%. In blue chip neighbourhoods they can be as low as 2.5%. In areas with an abundance of rental competitors and lower socio-economic conditions it can be 5% to 5.5%

Multiple Employment Centers

Years ago, all of the rental action was down town. Now with large strong employers across the city, investors can consider multiple locations dependent on the criteria of price and tenants desired.

Are SDU’s legal?

Secondary Dwelling Units are legal apartments created in a single-family home. They are now legal in every neighbourhood except one, which is Rockcliffe. Many investors purchase bungalows with side door access and build basement apartments with one to three bedrooms. You can owner occupy the main floor and rent the basement. Conversely others choose to rent both units.

What is a Coach House?

These are legal “tiny houses” permitted to be constructed in one’s back yard providing there’s enough space to do so allowing for legal setbacks. Investors live in their main home and rent out the one or two bedroom coach house, providing both parties with some privacy and distance.