Investing in rental apartments in Canada’s biggest cities may be a smart thing to do right now.
At least that’s what Sun Life Financial’s real estate investment business Bentall Kennedy sees as a good strategy. It plans to increase its multi-residential investments to 15% of its portfolio, from currently less than 10%.
Although there are signs that the economy has peaked, Bentall Kennedy’s head of strategy and research Doug Poutasse told Bloomberg that things are still in a good place right now and there’s another key factor in focus.
“The thing that we’re tracking, that’s the most positive, is the immigration population growth — it’s really accelerating,” Poutasse said.
Immigration is growing fast and Poutasse says that rents are growing well, although maybe a little too well.
“As a landlord, we like strong, but for people, six, seven and eight percent rent increases are very difficult,” he said.
Poutasse added that regulatory and construction cost burdens have impacted the condo sales market and led to cancellations and a shift to building high-end towers.
He believes that there is a growing opportunity in the rental apartment’s space due to the rising cost of condos.
“I too share the opinions of Sun Life and Mr. Poutasse when it comes to rental units. I feel that the mid to long term outlook on rental properties in areas such as the GTA is very promising and will pay strong dividends to people investing in this market. Factors such as immigration and the difficulties of saving for a down payment to get into the residential market will further solidify the demand for rental properties and will pay back long term dividends. Rental properties are long term investments and usually do not have immediate gains but as history has demonstrated, if you are patient you will incur a profitable situation with a rental property.” — Leo Manchisi
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THE 905 REAL ESTATE GUYS
Sean Kavanagh 905.220.9198
Leo Manchisi 905.334.9650