Tag Archives: apartment building

How to Price a Kitchener Waterloo Apartment Building

Value of a Kitchener Waterloo Apartment Building


One of things I find myself talk to real estate investors about these days is how to value a Kitchener Waterloo Apartment Building.  Seems there are lots of people looking to acquire high quality apartment buildings, but there is small supply of these buildings for sale, especially when we start talking about more than 50 units.

Most owners are happy to hold their buildings now  – multi family real estate is a notoriously stable investment during good times and bad (and stable investments are held in higher regard during recessionary times), but buyers are eager to deploy their capital into a stable asset.

This spread between available supply and current demand makes it a great time to sell your Kitchener Waterloo apartment building; case in point, we have recently seen quality multi family investment properties come to market and receive multiple offers in the first few days.

How to Price a Kitchener Waterloo Apartment Building

If you were going to sell your Kitchener Waterloo Apartment Building, how would you price it?

Right now, there is a large difference in ‘per suite’ asking prices for comparable apartment buildings online, with several active multi-family listings being priced considerably higher than comparable recent sales.

(Note: there are some properties, like brand new buildings or luxury apartment buildings, that sell for outside the normal range. For example, see: Two Waterloo Region Apartment Buildings Sell For $45+ million)

Click play to watch this quick video we put together looking at the prices of apartment buildings in Kitchener Waterloo

If you own a Kitchener Waterloo Apartment Building

If you have any questions about the multi-family investment market in Waterloo Region, call me directly at 519-772-4376 or email me at Benjamin@BenjaminBach.com

KW Commercial is your one stop shop for commercial, investment, retail and multi family advice and brokerage in Waterloo Region.  

We have buyers currently looking for a large Kitchener Waterloo Apartment Building – call us to discuss the sale of your property.

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9 Reasons to Invest in Kitchener Waterloo Real Estate, REIN Top 10 Report Edition

KW Tops REIN Top 10 List

Kitchener Waterloo is Ontario’s top Real Estate Investment Destination, again.

Well, it’s that time of year again. Kitchener Waterloo is getting some more much deserved attention from Canadian Real Estate Investors all across the country.

KW has been named the top real estate investment destination in Ontario by the Real Estate Investment Network for a couple years in a row (see: Kitchener Waterloo Real Estate ranked #1 again), and this year the trend continues.

REIN released the REIN Top 10 list that named Kitchener Waterloo the #2 investment destination in Canada, and tops in Ontario again.

From CTV News:


The Record reports:
REIN “refers to Waterloo Region as the “economic Alberta of Ontario.”
That means Waterloo Region is seen not only as the economic engine of the new Ontario economy, but also that it “will outperform all other major regions in eastern Canada,” says REIN president Don Campbell
For indicators, he points to job growth, student growth and a new light rapid-transit system.”

Why are real estate investors focused on our city? Let’s take a look at the reasons why people like buying investment property in Kitchener Waterloo

Top 9 Reasons People Are Investing in Kitchener Waterloo Real Estate Now

1. Top Area to Invest – The Real Estate Investment Network named Kitchener Waterloo & Cambridge (“the Technology Triangle”) the #1 city to invest in Ontario and #2 in Canada, behind Calgary.

2. Low Interest Rates. currently we have very low interest rates – although there is a slight upward trend right now – which makes NOW a great time to invest. Rates will be going up in the future. It’s a matter of how soon, and how much. Smart real estate investors are taking advantage of historically affordable cost of borrowing money.

3. Great prices – Investors love Kitchener Waterloo because it has a booming economy, without big city property prices. Our clients invest in condos ranging from $120,000 on up, and there are opportunities to buy multi-family housing with cap rates of 7%, leaving room for healthy cash flow with today’s low interest rates.

You can buy good quality new construction rental units here (like City Centre, 144 Park, Bauer Lofts and others), for much less than you’d pay for an older condo in Toronto. (That’s what our cilents from Toronto happily do, over and over again).

4. Growth – Kitchener Waterloo is growing at a rapid rate. If you haven’t been here in a few years, just drive down King St! There are mulitple mega million dollar developments that are underway or have been completed recently – The Bauer Lofts, The Barrel Yards, City Centre, 144 Park, the Arrow Lofts, Kaufman Lofts, the new McMaster medical school and University of Waterloo Pharmacy school, the new King St streetscape in downtown, the new Uptown Waterloo, the Kitchener Market, Market lofts; and LOTS of development in the university areas as well.

Also, the University of Waterloo has recently announced plans to double it’s footprint over the next 40 years. See Is Waterloo’s Student Housing Market Being Over Built?
5. Stable, Diverse Economy – Kitchener Waterloo is a market supported by strong fundamentals – world class high tech companies, universities and NGOs; a strong manufacturing sector; proximity to Toronto and the United States; an international airport; continued job growth etc.

In the July 2010 figures released by Stats Canada, the jobless rate of the KW area fell, while national unemployment rose.

6. Access to Property Management – all of our clients have access to world class property management for a very reasonable rate. Contact me for more details !

7. Great Business Community – Major companies and organizations call the Technology Triangle home including RIM (makers of the blackberry), Toyota, OpenText, Manulife, Sunlife, the Perimetere Institute, the Centre for International Governance Innovation, and a host of world class local companies.

8. Awesome, Smart People: Kitchener Waterloo is the MOST INTELLIGENT COMMUNITY IN THE WORLD. Take that Toronto

9. Great Resource – You have found a real estate agent and Wealth Building team that is focused on building your wealth!

What are some of the reasons you like investing in Kitchener Waterloo? Let us know in the comments!

 

Apartment Buildings in Cambridge Ontario Sells for BIG Bucks

(originally posted at Investment Property in Cambridge Ontario sells for $45+ million on June 28th)

Large Apartment Building Sold in Cambridge Ontario

Last week we looked at Two Waterloo Region Apartment Buildings that Sold For $45+ million.

Here is a video with some more information on the sale:

To recap, the investment property in Cambride, Ontario was purchased at a 5.7% cap rate.

Between both apartment buildings there are 225 units, and the average rent is above $1500 per month.

High valuation, but the properties generate premium income, are prestigious assets, and are very recent (6 years and 1 year) construction.

KW is REIN’s #1 Real Estate Investment Spot in Ontario, again

Hot on the heels of last year’s report, REIN, the Real Estate Investment Network, published their report naming Kitchener, Waterloo and Cambridge Ontario the #1 place in Ontario to invest in real estate.

Why does REIN consistently rank Kitchener Waterloo #1 ?

Here are the Top 9 Reasons You Should Invest in Kitchener Waterloo Real Estate

1. Growth – Kitchener Waterloo is growing at a rapid rate. If you haven’t been here in a few years, just drive down King St! There are mulitple mega million dollar developments that are underway or have been completed recently – The Bauer Lofts, The Barrel Yards, the Arrow Lofts, Kaufman Lofts, the new McMaster medical school and University of Waterloo Pharmacy school, the new King St streetscape in downtown, the new Uptown Waterloo, the Kitchener Market, Market lofts; and LOTS of development in the university areas as well.

Also, the University of Waterloo has recently announced plans to double it’s footprint over the next 40 years. See Is Waterloo’s Student Housing Market Being Over Built?

2. Great prices – Investors love Kitchener Waterloo because it has a booming economy, without big city property prices.  Our clients invest in condos ranging from $120,000 on up, and there are opportunities to buy multi-family housing with cap rates of 7%, leaving room for healthy cash flow with today’s low interest rates.You can buy good quality new construction rental units here, for much less than you’d pay for an older condo in Toronto.  (That’s what our cilents from Toronto happily do, over and over again).

3 – Low Interest Rates – It is now more affordable to borrow money, making it a great time to buy investment real estate

For the complete article, click here: Top 9 Reasons You Should Invest in Kitchener Waterloo Real Estate or watch this video:

Related posts:

  1. Local News looks at Why REIN named Kitchener Waterloo #1 place to invest in Ontario Last night CTV ran a story on the recent Real…
  2. Kitchener Waterloo Real Estate ranked #1 again A client sent me a link this morning to the…
  3. Two Waterloo Region Apartment Buildings Sell For $45+ million (…and we have many clients looking to buy big apartment buildings…
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Kitchener Waterloo Apartment Buildings & Multi-Family Investment Property

Apartment Buildings in Kitchener Waterloo

Want to buy an Apartment Building?

Apartment Buildings and Multi-Family Investment Property can be great investments.

Stable cash flow, low vacancy, and the ability to farm out the management and just collect cheques.  These are just a few of the reasons our clients are investing in multi-unit buildings, student housing and townhouse complexes.

There are several apartment buildings available in Kitchener Waterloo between $1 million and $10 million. Due to the nature of the Multi-Family market, we’re unable to provide a full list of available listings on our website.

For a full list of investment property currently available, click here.

Selling an apartment building in KW

KW Commercial specializes in helping investors acquire and dispose of investment property to maximize their return on investment.  We have worked with clients from across the world to profitably buy and sell property.

We have a list of qualified investors waiting for apartment buildings to buy, and we want to connect them to owners like you.

Whether you would like to sell a walk-up apartment building, or need to dispose of a national portfolio of multi-family housing, Benjamin Bach & KW Commercial can serve all your needs.

Interested in what apartment buildings are selling for? Take a look at How much for the apartment building in the window? and Two Waterloo Region Apartment Buildings Sell For $45+ million

Sold Apartment Buildings in Kitchener Waterloo

(New!) Two Waterloo Region Apartment Buildings Sell For $45+ million (225 units at $207,600 per suite)

Here are a few apartment buildings that our firm has helped real estate investors dispose and acquire. For a full list of properties, contact us.

LOCATION: Kitchener,
SIZE: 31 Unit Multi Family Walk-Up Building
SERVICES PROVIDED Benjamin Bach, Director with KW Commercial, consulted with the owners to list & market the investment property across Canada. The goal was to maximize profit in a quick sale. Building was listed for $2,200,000 and had a firm agreement of sale within seven days Keller Williams also represented the buyer to acquire the property and find new management.

LOCATION: Waterloo, very close to Wilfrid Laurier University

SIZE: 20 Students in 4 units. Recently constructed & purpose built, this property is in very good condition.
SERVICES PROVIDED Benjamin Bach represented the investor to acquire the property for $45,000 below list price. Benjamin also connected the buyers to the banking professionals who underwrote the new first mortgage; and helped buyer (a first time real estate investor) arrange for property management

Learn why REIN says Kitchener Waterloo is the #1 Investment Real Estate spot in Ontario

The Real Estate Investment Network, REIN, released a new report this week which named Kitchener, Waterloo and Cambridge Ontario the #1 place in Ontario to invest in real estate.

Why does REIN consistently rank Kitchener Waterloo #1 ?

Here are the Top 9 Reasons You Should Invest in Kitchener Waterloo Real Estate

#1 – consistently ranked as the top spot to invest in real estate in Ontario, and #2 in Canada as per REIN

#2 Low Interest Rates – It is now more affordable to borrow money, making it a great time to buy investment real estate

#3 Great Prices

For the complete article, click here: Top 9 Reasons You Should Invest in Kitchener Waterloo Real Estate or watch this video:  Top 9 Reasons You Should Invest in Kitchener Waterloo Real Estate, or Why REIN loves KW

Related posts:

  1. Local News looks at Why REIN named Kitchener Waterloo #1 place to invest in Ontario Last night CTV ran a story on the recent Real…
  2. Kitchener Waterloo Real Estate ranked #1 again A client sent me a link this morning to the…
  3. Two Waterloo Region Apartment Buildings Sell For $45+ million (…and we have many clients looking to buy big apartment buildings…
  4. Waterloo Chronicle reports 27.4% Increase in Home Sales Great little article from this morning’s Waterloo Chronicle, if you…
  5. Report: Waterloo Vacancy Rate Falls to 1% Canada Mortgage and Housing Corporation (CMHC) just released their Rental…
  6. Investment Real Estate Terms: Cap Rate & Cash on Cash Return One of the questions I get a lot is “whats…
  7. From Greece with Love How the Greek Debt Crisis directly affects Kitchener Waterloo Real…

Understanding Investment Real Estate Terms

One of the questions I get a lot is “whats the cap rate on this one?”  Real Estate Investors looking to gauge their return will often use the cap rate as a rule of thumb, a quick (but very limited) statement of value. 

What is a cap rate?  Is it a good indicator for the return you hope to generate on your return? Is there a better figure to look at?

This video takes a look at these questions, so we can better understand some commercial real estate terms

Watch the video here: Investment Real Estate Terms: Cap Rate & Cash on Cash Return or http://www.youtube.com/watch?v=5VfCIN-SqNI

Cap Rate, or capitalization, expresses the ratio between the net operating income a property produces, and the value.  It shows up, based on income, what a typical investor (or ‘the market’) is willing to pay for the income the property produces. 

Cap rate = Net Operating Income / Price (or value)

When we’re evaluating properties and we want to determine what we’ll pay for a certain apartment building, we will rework the formula to look like this:

Value = Net Operating Income / Market (or desired) Cap Rate

Cap rate does not take into the financing available, so unless you are buying a property in CASH, that is, without a mortgage, you’re going to want to factor in the cost of debt into your return calculations.

That brings us to Cash on Cash return, which is:

Cash Flow Before Taxes / initial investment

We calculate Cash Flow Before Taxes by:

Gross Rent – owner’s operating expenses – mortgage payments = Cash Flow Before Taxes.

Cash on Cash gives you a more precise return, because it accounts for the cost of the debt we use to purchase the property

If you have any questions about commercial and investment real estate in Kitchener Waterloo, Ontario, send me an email to Benjamin AT BenjaminBach.com, call me at 519 772 4376, or @benjaminbach on twitter. I’d love to connect with you!