Today I wanna talk about how to find investment properties, cash flowing investment properties in Canada. So we’re looking for cash flow in Canada. Now, here’s the thing about Canada, US, anywhere, with finding properties, is that there’s two types of market, there’s your value markets, and there’s your vanity markets. Now, I’m somebody, I prefer to invest in value markets.
You might say, “What’s a value market?” A value market is a market where people live and work, in the same market. So, I’m in Winnipeg, we’re here in my condo in Winnipeg. Winnipeg’s a cool place because people who live here also work here. You’ve got Bob and Mary, Bob’s a contractor, Mary works at the meatpacking plant as a secretary, whatever it is. That’s a value market, Bob and Mary can afford a home. Now, Winnipeg, where I live, average home is about 300 grand. Most Canadians household income, 70 grand, in Winnipeg, this is like a 4X multiplier of household income. So this is a affordable value market, this is Winnipeg, okay?
Now, if you take a market, you go out to, let’s say Toronto, let’s say you go out to Vancouver, let’s say you we go out to one of those markets where the average home is a million dollars, let’s just say. Million dollars for that home, and let’s say the income is not that much higher, let’s say somebody in Toronto or Vancouver, they’re making 120 grand household income. Incomes aren’t that high. This is an 8X to 10X multiplier, and this is a less, I’m gonna put TO, Toronto, the center of the universe. Toronto is less affordable, making it a vanity market. What that means is people in vanity markets don’t necessarily live there. It’s interesting, this condo I had on the market last year, I was selling it. I had an offer from a lady, she had a condo in Paris, a condo in Toronto, and she was getting a condo in Winnipeg. So that lady has money, that’s a vanity person. So, the vanity markets are your Toronto, your Vancouver, all these places that are vanity typically do not cash flow. So I’m just gonna write that here, they do not cash flow.
Now, if you want cash flow in Canada, if you wanna find those income properties, you gotta look for value markets. I recommend going outside your area. You can look in a one hour radius of where you live, you will probably find some cash flow somewhere. You need to find cash flow because here’s the thing, owning property is expensive, and if that property’s not cash flowing, it will eventually sink you. So you need to have the cash flow in Canada, in your value market, to be able to weather the storm. Even when a property cash flows in a single family duplex, triplex, fourplex, they don’t cash flow very well because they have a small amount of units, and when they go vacant, it really hurts you badly.
So, I’m somebody, if I’m looking for cash flow in Canada, I want a value market. I wanna find the next market, where’s the next market for growth? I don’t wanna go into the vanity markets ’cause the vanities just don’t cash flow as much. I think there’s better opportunity, there’s better things to buy, there’s more exciting things, so I say stay on the side of value instead of vanity. I’m Stefan Aarnio, put your comments in the comments below, would love to know what you’re buying. And do you agree with value versus vanity? Are you someone who’d rather invest in value or vanity? I’ll see you guys on the next video.