Shannon Murree is an agent with RE/MAX Chay Realty Inc. in Barrie, Ont. She also provides property management solutions for real estate investors, and was the winner of Canadian Real Estate Wealth’s Real Estate Agent of the Year award in 2013.
Why should people consider investing in Barrie?
Barrie has the existing fundamentals that drive the appeal and real estate investing in general: economy, the infrastructure, in-migration and job growth. The affordability of being able to live in Barrie and commute elsewhere if need be. There are many projects on the go and continuously being implemented that make the City of Barrie a desirable place to live, work, play and invest.
How has Barrie’s market performed over the past year?
According to the Barrie & District Association of Realtors stats, Barrie sales activity was up 22 per cent from the previous year. Though inventory can be low at the moment, be patient as we should see it pick up again. There are also new developments up and coming.
What are some of the key elements of Barrie’s market that would attract investors?
In addition to transportation, in September, 2013 the unemployment rate was 5.5 per cent in October 2013, which was considerably lower than the 6.9 per cent jobless rate as reported by Statistics Canada for Canada as a whole.
What kind of property is Barrie’s best buy?
Drawing on my own personal experiences and what I do every day – not only as an investor but for clients – everyone has his or her own personal agendas, financial position and risk tolerance. Where one may be happy with a single-family home, another could be starting out or adding duplexes, triplexes, multi-family or apartment buildings to their portfolio. It’s also about experience level. How hands on (or off) do you want to be? Will you be self-managing or hiring a property manager? Will the utilities be included in rents or tenants responsible for own? Do you want a condo or freehold – single or multi-family? Write your vision down and ideal property or tenant type. Know that this plan may change a bit as you do more research. Real estate investing is a multi-faceted business.
Are there any neighbourhoods within Barrie that investors should consider?
It all depends on your investment tolerance. There is no “bad” place in Barrie really to buy as everything seems close. Highway 400 makes everything seem extremely accessible. It really depends on what kind of tenant profile you want to consider.
Why did you personally choose to focus on Barrie?
An opportunity came along and like others, had the dream of taking a home and converting it into a duplex. The home prices of Barrie was really appealing to me compared to a more metropolitan area, and it’s fairly easy to commute to Toronto, if need be. The first property I purchased was just about to go power of sale and at that time was a very good price. Before I was able to start renovating I was introduced to a family who said it’d be perfect for them, with no need to renovate. It was just perfect timing. I was making approximately $900 positive cash flow per month, and the tenants were responsible for their own utilities. After that, I was hooked.
How do you think Barrie will perform in the future?
I think there will be continuous upswing. The market gaining momentum, and there has been a lot of development everywhere. Appreciation values will also continue to increase.
What tips would you give to first-time investors?
Don’t jump in without getting the information on the neighbourhood and choose one city or area to be knowledgeable on. Jumping around isn’t productive for you, especially when you’re just starting to learn about real estate investing. Also, before you spend any of your hard earned money, have your team in place A well-balanced team should include a real estate lawyer, a mortgage broker, a home inspector, an accountants, a property manager, an insurance broker and a real estate representative or broker.
If $1 million were to magically appear for your investment purposes, what would you do with it?
Finding a way to turn that into $2 million or more would be the plan. I love the options available. I could divvy that up and buy a few detached homes – I like the flexibility of those in terms of cash flow and long term capital gain later on – or an apartment building. Perhaps a joint venture on that would be great to do. I’ve learned over the years I’m not a reno-type person, and for me, turnkey properties are ideal.
Cash flow or capital growth?
I believe that both strategies should be used. It’s limiting to only focus on one and believe potential is lost. Focusing only on capital growth rather than cash flow can be more risky because you’re counting on the appreciation. If you look at real estate investing as a “slow and steady” strategy, you should focus on positive cash flow and hold onto the property, which would give you a long-term gain. As you pay down the mortgage, you’ll have fewer expenses to pay and you’ll also be increasing your cash flow.