I work with a lot of real estate investors. What’s interesting is two things – that they tend to be young (in their 20’s) and they tend to be from out of town. The “out of town” thing I understand. Toronto and area is so expensive, the BIG T.O. investors look to the “near Toronto”. And, real estate investment coaches, investment publications and seminars tell them Kitchener-Waterloo, Hamilton and Barrie are good markets to invest in. I tend to agree.
The age thing is interesting though. When I was in my near 30’s, everyone was investing in mutual funds, the gateway to silver mines and broken friendships. We were the stock market generation. The generation of fake wealth of the 80’s and 90’s, the dot com bubble, Barings Bank, Enron, Worldcom and Sarbanes-Oxley. I lost money in the giant pyramid scheme a couple of times before I decided property was a better long term investment.
Who cares about cash flow?
I’ve been a real estate investor longer than I’ve been a real estate agent. In fact the reason I’m a realtor is because I wanted to see all the back office stuff on listings. After buying a couple of properties with and without agents, I wanted to be an insider. I wanted to see the history of properties. I wanted instant access to demographics and sale price histories and all that data.
For the record, I’m not a typical investor. I don’t particularly care about cash flow and return on investment. I care more about the long term appreciation of my investment. I also don’t want to do too much work. Ain’t nobody got time for that. I’ve had four properties that I’ve rented out over the past fourteen years and it does not seem to matter if my initial investment was $140,000 or $300,000, the income generated after I pay my mortgage and taxes is always about $400/month. To the serious investor, he would say, “you should have bought more low priced properties, buy two $150,000 properties instead of one $300,000 property as you will make $800/month instead of $400”. But the long-term investor knows that the property (a four bedroom, four bathroom home in a good area) has better appreciation over the next ten years than the two condo townhouses in a so-so part of town. It has fewer headaches too.
Yesterday I was meeting a young couple who are thinking to invest in their first Kitchener Waterloo property. We sat down over my big map and coffee and talked about what kind of property they might want to invest in. We talked about the region’s employers, the LRT, GoTrain, 401 and the Conestoga Parkway and about schools, neighbourhoods, trends and demographics. We talked too about what they are hoping to achieve.
As they are out-of-towners, they want something new. They had already invested in an older investment property in Toronto that had been through years of tenants and previous landlords. They had spent a lot of time and money on maintenance and did not want to do that again. They wanted a new home in an appreciating area.
No problem. We talked and talked and identified three areas that would be perfect for them. They include small family homes in certain new areas and new condos with current condo fees of less than $100/month. Sure the fees will go up, but this will take ten years. What’s important to appreciating property is desirability: transportation (LRT, 401, Fairway Road bridge) and good schools – even if you don’t have kids.
Where are the best 9 places to invest in Kitchener Waterloo?
It depends on what kind of investor you are. There are many options but here are some things to consider:
1) The LRT:
Properties within two kilometres will be positively impacted. Properties within 800 meters of a stop or station will see the greatest impact. Some areas that the LRT will run through, like Uptown Waterloo are already pricey, but there are neighbourhoods like Northfield, The Mary/Allen neighbourhood and the neighbourhood near the Fairview Park Mall that will see some real appreciation.
2) The GoTrain:
The neighbourhoods within a kilometre to the GoTrain are currently getting a lot of attention. There are a lot of people who work Toronto who ride this train everyday. With the number of trains doubling next year, this area will only continue to appreciate.
3) The Tannery.
The so-called “Innovation District” has attracted lots and lots of people to the region. Google is growing. Desire to Learn has a strong desire to grow. Electronic Arts, the gaming guys are quickly out-growing their office in downtown K-town. People like to live near where they work. Invest in downtown Kitchener!
4) Fairway Road Bridge.
The first bridge over the Grand River since 1964 providing easy access to Cambridge and the 401. The area near Old Zeller and Upper Mercer is a good one. It has good schools too.
5) Doon and Brigadoon.
Near Conestoga College but on the west side of Homer-Watson there in a new neighbourhood with a great school and nice big houses. Easy access to the 401 is important to those who live here.
6) Columbia Forest and Clair Hills.
Laurelwood is too expensive for what you get (a great school), but go a little further west and you’re still within easy reach of the universities and the research park. You still have good schools and frankly a more interesting topography.
7) Near the universities.
Students like to be close to school. Two kilometres is good. Within one kilometre is better. Options here are for the serious investor who is not new to the game.
8) UpTown condos.
Lots of people want to live here. Uptown has it all: nightlife, activities in Waterloo Town Square, the Library, a movie theatre, grocery store, coffee shops, restaurants… Buildings like the Bauer building, and 144 Park are just what the young urban professionals are looking for.
9) Invest in older neighbourhoods:
It is wonderful to walk into a house that has not been updated since the 1970’s or 80’s. If that house is priced right and in a neighbourhood like Westmount or Beechwood or Kitchener’s East Ward, and if you are looking for a project as your investment, then you have found it.
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I’m interested in real estate investment in Waterloo area
I’m from Brampton
Thanks for you note.
I have sent you an email requesting more information.
This is Vijay living in Kitchener for almost a decade now.
Great blog. Often I have gone through articles on your blog and I find great information on real estate.
I would greatly appreciate if you could give me some advice.
Cook homes is coming up with new community near kiwanis park (woolwich/wismer street, behind Piller’s factory). What is your take on that neighborhood for a longer term living?
I don’t know anything about Cook Homes but I like the neighbourhood, except for the school.
The school is coming under the area of Lexington school which is one of the best school? No?
The Fraser Institute rates schools in Canada every year.
Hi Keith, I am from Toronto looking for a ]n investment property (student housing). Please advise
I advise against it at this time. Here are my reasons.
Keith, my husband and I live in Doon South and work in Cambridge and Guelph. We want to buy an investment house in Kitchener. You wrote about the top 9 places to invest in KW 3 years ago. Where are the top 9 places in 2017?
The three things to look for in good real estate are:
1) neighbourhoods and schools
2) transit and transportation
3) shopping and amenities.
The best places to buy real estate do not change very much in a short time.
Looking for a property to invest with my son, would like to buy a house with a full rental unit or potential unit, would love walk out basement.
My son work right near Cambidge Toyota plant, so in an area of less than a twenty minute drive would be good.
A lot of investors are rushing into our market (before it is too late). We have what you are looking for. It will likely cost near $400k.
I am a first time home buyer and moving from Mississauga to Kitchener with my Wife and Son.
I have seen some good listings in Huron Road area, Kitchener and planning to buy my first property in that area.
What’s your views about this area ? I have seen lot of constructions going on in Huron’s rd area. So, can I expect good return after 2-3 years. Thanks!
With real estate fees, lawyer costs, moving costs, taxes… in Waterloo Region (except for recently) you will likely break even after four years and make a small profit after five.
Me and my Husband are planning to move to waterloo with our 2 kids(9yrs and 3 yrs) from Edmonton. we are first time home buyers and new to the place. what options do you suggest keeping all the aspects in mind.
Buying a great home always comes down to the same 3 things
1) school and neighbourhood
2) transit and transportation
3) shopping and amenities
If your home in in an area with those influencers, you are on the right track.
I am an young investor looking for opportunity in Waterloo area, possibly in pre-construction house for few reasons,
-generally house appreciate more than condo.
-I can gradually pay the down payment over 2 year period
-sell before it actually build (exit plan)
Do you think I am on a right track? if so what areas you would suggest or who should i contact to get this started?
Thanks a ton
Yes, you are on the right track.
Doon in south Kitchener near the 401 sounds like the best match for what you are looking for.
Hi Keith, interesting article. I just bought a condo off Laurelwood (right behind the schools). Do you think this area will see much appreciation in the value of condos?
Yes. That is a popular neighbourhood. I’m certain that your appreciation will be in line with other condos in KW.
Hi Keith ,
How about area around Keewatin at lackner ( newer side of Keewatin ) ?
The three best neighbourhood indicators of a great home or investment are:
1) nearby schools and public amenities (like parks and trails)
2) access to transit (LRT, bus, rail) and transportation (roads)
3) nearby shops, restaurants and other amenities
I am selling my semi-detach house in Brampton as I am leaving the Country for 2-3 years and dont want the hassle of leasing. I am thinking about investing in a pre-construction project in the Kitchener downtown area that i could sell prior to be built completely or worse case scenario rent out the whole unit. What are your recommendations on this ?
I’m a fan of Victoria Commons. Clients of mine who purchased the townhouses have been very happy. The apartment units look like good value.
There is a new project DTK Condos that you could consider. Great location.