The level of interest in Canadian income producing properties has never been higher. International investors are looking at Canadian real estate as a safe haven. REIT's are continually on the hunt to acquire more properties for their ever expanding portfolios. Investors who have pulled their money from the poorly performing stock market and those not content with low interest investment vehicles are looking to move their money into real estate. Even with the market cap compression taking place, real estate is still one of the few bright lights and as a result competition is intense for a very limited supply.
Realtor.ca & ICX.ca
Many investors have come to rely on the listing services Realtor.ca for residential listings and ICX.ca for commercial listings as their primary, and in many cases ONLY source for leads. If you're looking for an investment property and fall into the later category you have limited your chances for successfully finding and acquiring an investment property. The residential and commercial listing services are easily the most popular online services used to list and locate properties in Canada, and therein lies the problem ... intense competition. I recall just recently coming across a 12 unit multi-plex in Whitby which I found using the ICX.ca website. I contacted the listing agent within 24hrs of the property first appearing and was informed that the property already had 4 offers, 1 of which was accepted. The good deals go very fast and if these listings service are your only source for locating deals, you've put yourself at a great disadvantage.
While Realtor.ca and ICX.ca are both great services, in order to be truly successful as a real estate investor, you need to ensure that you have a network you can rely on to source your deals. Realtors, mortgage brokers, accountants and lawyers are great to have as a part of your network, however, those contacts usually come later in your investing career. As a novice investor you will need to focus on more readily available sources as part of your property locating strategy. Two of the best places to locate properties that are not listed, and thus have more limited competition, are commercial realtor websites and investment property publications.
Realtor Websites
Many investment properties tend to be exclusive listings, meaning that the listing realtor does not share the commission with another realtor if the property is sold. As such, other realtors are not actively trying to sell an exclusive listing as there is no incentive for them to do so. With no other realtors trying to sell the property, competition is severely limited. This is where you as an investor need to do some homework and locate those local commercial realtors with exclusive listings. The good news is that the majority of these realtors have their own websites. In fact, you will find that the amount of information that they supply on their own proprietary websites tends to be far superior to the much more limited information you will find through the public listing services making your due diligence efforts much easier. In addition, you can register to receive the newest listings as they become available which makes your property hunt that much more efficient.
Key Advantages: Limited competition, More Information, Expand Pool of Prospective Properties
Investment Property Publications
Many investors are surprised to learn that investment property publications even exist. I've found some of my best deals using these publications. They tend to be published on a monthly basis and the best part is that they are free. There are currently two magazines that I read cover to cover every month looking for that next deal, The Commercial Investor and the The Business Exchange. Once again, many of the properties listed in these magazines tend to be exclusive listings which means you won't find them on the listing services. The Commercial Investor doesn't have a website so don't bother looking. The Business Exchange on the other hand does have an online presence, but I prefer the magazine. Apart from the listings, you will also find that these publications also offer timely articles and advice.
Key Advantages: Limited Competition, Properties Broken Down by Geographic Region, Relevant Articles
Bottom Line
If you are serious about becoming a real estate investor, you need to expand your network beyond the public listing services. Realtor websites and Investment Property publications will give you a significant competitive advantage over those relying on only one source which is rife with competition.
Author: Paul Kondakos, BA, LL.B, MBA - Professional Real Estate Investor