Lincoln Farrell

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Guelph Real Estate Is An Investment Hot Spot!

By Lincoln Farrell


Recently I was interviewed by the Canadian Real Estate Wealth magazine to discuss the Guelph real estate market and reasoning why it’s been, and continues to be, a great place to invest. Here are the questions and answers from the interview:

Why is Guelph a great place to invest in right now?

Guelph is just plain consistent across the board with all the metrics that make for a reliable investment. Vacancy rates are currently 1.9% and have remained below 2% for the past 3 years. Single detach dwellings last recorded year of negative return on property value was in 1996 at a measly -1.9%. Since then, the past 17 years have enjoyed an average appreciation of 5.9% per year. Property values continue to increase which is great for people already holding investments here, and for those just starting out or looking to come to Guelph the acquisition cost is still very low compared to major markets like Toronto, Calgary, or Vancouver.

How did Guelph’s market perform in 2013?

In a nut shell, fantastic! It was the best year on record for resale volume with an increase of 8% over 2012. Values were all on the rise as well with single detach homes up 5.9%, semi-detach homes up 11%, and freehold townhomes up 6.7%. It’s a relatively strong Seller’s market, but there are still a lot of great deals here for investors. With such a strong student population, there is a consistent turnover of rental housing. Parents are buying and selling homes all the time for their kids to live in while they attend University. Now more than ever I am fielding questions from clients about accessory apartments and multi unit dwellings. It seems to me that as I tour the inventory of homes on a weekly basis, there are more and more houses coming up for sale with some type of rental accommodation.

What is the average home price in Guelph?

For 2013 a single detach home ended up at $377,103; a semi-detach would have cost you around $295,090; and a freehold townhouse $308,141.

What are the average rents in Guelph?

According to CMHC, the average rent in Guelph for a 2 bedroom apartment is $957 and a 3 bedroom apartment is $1099. When it comes to students, you can expect anywhere from $400 – $600 per room with shared accommodations. My experience with any type of tenant is that they will gladly pay a premium for a location with walk able amenities and easy access to transit.

What kind of property is the best buy in Guelph?

My recommendation to many of my clients is to stick with single or semi-detach. Current zoning by-laws only allow for these 2 types of dwellings to have an accessory apartment. I’m also not a big fan of condo fees, and many of the condo corporations further restrict an investors options with regards to tenant selection. That being said, a condo townhouse or apartment may suit a specific need. I’ve sold plenty of condos to parents that want to be completely hands off while their kids attend school. Condos have seen the some great results with regards to appreciation too, but the versatility of a freehold single and semi-detach provide the most flexibility to investors and that’s the main reason why it’s my first choice.

Why are more investors looking to buy properties in Guelph?

The market indicators are an easy draw for investors, but I really stress to my clients the importance of the diverse tenant profile Guelph has. We have a world renownd University with 20,000+ students, approximately 60% of which seek off-campus accommodations. Sitting on the East edge of the Tech Triangle that is Kitchener/Waterloo, Cambridge, and Guelph, and being only 100 km to Downtown Toronto with GO Train and bus service to the GTA, Guelph’s location makes it a prime commuter community as well.

What is your outlook for the Guelph market’s performance in 2014?

I see no reason at all for Guelph’s values not to keep climbing. With mortgage rules forcing first time buyers to come up with higher down payments, the need for rental accommodations are growing and good tenants are renting longer. Our population is expected to grow another 40+ thousand over the next 15-20 years. That coupled with a stable employment rate and aggressive business initiative from the city, I see Guelph continuing its strong and steady climb as a prime real estate investment hot bed going well beyond 2014.

Want to receive email updates of new listing the instant they hit the market? Click here: Homes for sale in Guelph

So, what’s your take on all this? Would you invest in the Guelph real estate market? Have you already, or are you planing too? Please post your thoughts and comments below and let me know what you think…

Filed Under: Investing In Real Estate Tagged With: Guelph Real Estate, Investing In Real Estate

Investing In Real Estate Should Not Be Taken Lightly

By Lincoln Farrell

You don’t want to rush into a major decision too quickly as it could end up not being a wise investment. If you are thinking about Investing in Real Estate, then it is wise for you to look deeper and ask lots of questions. There are a number of variables that should be considered when purchasing real estate, from location to the property type.

Investment in Real Estate Means Budgeting

You are going to have to take a very close look at your budget before you do anything. What type of mortgage can you afford? If you are planning on purchasing a house, you need to make sure that you are not stretching your household budget to its maximum. You still want to be able to live without stressing about how you are going to afford your next mortgage payment.

Next you need to look at how you can reduce your daily costs. If you can reduce your costs you will be able to free up some extra cash. Once you get this right, you will be able to put the extra money towards your mortgage payments. This will greatly reduce your level of stress that you may have at the end of each month.

You will then need to reach out to a mortgage agent to get a very low interest rate. Never just accept what the bank is offering you as they are not always looking out for your best interest. You need to find out what you would be happy to pay monthly and aim for that.

A Big Opportunity to Make Money, is on the Purchase

When you purchase property, you need to learn the art of negotiating. When you view the property for the first time, you want to determine whether or not it’s a good deal. Then once you see the problem areas, you can negotiate the price of the property.  Hopefully you can get it for a little lower than what they were initially asking.

Location Will Play a Bigger Role Than You Think

The next question you need to ask yourself is how rentable is this property? Some properties have an accessory apartment in the house that you could use for extra income that can be put towards your mortgage payments. Some people purchase properties with the sole purpose to rent the entire dwelling out and secure some additional monthly income.

You will also need to consider whether your plan is to purchase a commercial property or if you are looking for a private residential property. If you decide to get a commercial property, you will need to make sure that you have chosen one that is in a really good location. Location is vitally important not just to earn good money, but also for attracting good tenants, and for when you decide to eventually sell it or refinance

Continue Learning About Investing In Real Estate

Now that you have an idea of the questions that you need to look at, you may realize that you haven’t really thought this through clearly. As you can see, there is a lot to consider before you take the plunge and commit to such a great responsibility. Investing in real estate is always a gamble. You need to first work out all your calculations to determine whether or not it is viable, and then you can go ahead with it.

Filed Under: Investing In Real Estate Tagged With: Investing In Real Estate

Defining Cash Flow to a 6 Year Old? Better Bring a Cookie.

By Lincoln Farrell

I was asked the other day to define Cash flow… by my 6 year old daughter.  Seriously, she asked what I was doing and I told her I was writing about something called cash flow.  I think the word of the day at her school must have been “define” because for the rest of the weekend that’s all I did – define everything imaginable.

I gave her a very short blurb about cash flow in relation to real estate investing, but that didn’t satisfy the inquiring mind of my “student”.  Not at all!  Instead, she insisted that I was wrong and that I should try again. Well then! I shook my head in disbelief and decided to entertain the challenge. I gave her as many answers as it took to try and get her approval.  The way it’s written below is definitely cleaner than how it sounded, but essentially here’s how it went…

Me: Well honey how about this…

Cash flow is an economic measure that represents net income generated from operations as well as cash equivalents during a given period. This measure allows assessment (cash flow analysis) in regards to the financial health of an income property – how it generates the necessary revenue for maintaining the assets in its balance sheet and to make expansion investments.

My daughter: Hmmm…  I don’t know dad. Try again.

Me: Okay then. How about this…

It’s defined as a positive cash surplus of economic activity. The surplus or balance relates to income and expenses. Financial flow on the balance sheet is adjusted for non-cash factors. It is considered an important indicator of ability to pay and the internal financing potential of an income property. This financial aspect is a measure of liquidity and says something about a investments well being.

My daughter: That sounds boring dad.

Me: Oh but it isn’t honey…

(I stand up and start with the exaggerated hand gestures) A positive cash flow enables an investor to be in a position to wipe out loans or to make new capital investments. The study of financial flows within a company can be used to determine liquidity issues. An income property can actually have cash flow problems, and still be profitable. To examine the practicality of projects, the financial flows are the cornerstone for computing the net present value as well as internal rate of return (that line caused her to give me the big ol’ stinky face look!) To evaluate the viability of a rental, accounting rules may not necessarily reflect the economic reality.

My daughter:  I didn’t like that one at all.  I’m leaving.

Me: Wait there honey. I know I can get this. I’ll give you a cookie if you stay.

(Yes I bribed her to stay. I wanted to win – I’m very competitive… I decided to change it up and throw in more visuals)  Okay honey, usually cash flow is calculated using a matrix with columns and rows (lot’s more hand gestures.) Free cash flow shows how much money is left for dividend payouts and/or debt financing. For financial institutions, these funds are an indicator of the ability to repay mortgage or loan and are therefore often used as the basis for calculating the financing capacity of an investment property.

My daughter:  I’m not done my cookie yet so you can keep going.

Me:  Okay dear, I will…

Analysis of an income property enables the generation of financial resources and their use in a given period of time. In accounting, projected cash flows show all payments expected in a given period of time. Cash flow is a great tool to help management in decision making. The year end results are the quintessential standard of profitability (she tried repeating “quintessential” and to my surprise she did quite well.) Results for the year depend on several components including valuation of inventories, amortization and depreciation.

My daughter:  Okay I’m done now.

Me: Wait! Wait!  One more try.

(my daughter is grunting at me now)  The advantage of cash flow relative to earnings is that it’s an objective concept, that is unequivocally undeniable! (okay, that was a bit much – but I’m going for the big finish here and I’m loosing horribly!) Financial flows can be divided into three main cycles: the investment cycle, operating cycle and the financial transactions which consists of capital transactions and…

My daughter:  Where’s the tablet?  I’m going to play Angry Birds.

Me:  Okay honey.  Thanks for listening…  🙂

And that my friends is a basic overview of cash flow analysis.  You tell me, did I win the challenge?

Filed Under: Investing In Real Estate Tagged With: cash flow analysis, Investing In Real Estate

Investing In Real Estate for Better Returns

By Lincoln Farrell

Investing in real estate can allow you to build the robust portfolio you need to ensure greater financial success and security. Novice investors and those who lack experience in finding and selecting the right properties and opportunities can quickly find themselves feeling overwhelmed. Learning more about this market can be an important step towards making smarter and more effective investment decisions.

Stocks and bonds can often prove to be a far more volatile investment than you might expect. Properties that provide a more concrete investment can allow you to add a great deal of security to your other holdings and portfolios. Leasing a property to the right tenant or electing to sell your property during the right market conditions provides you with the chance to enjoy greater profitability on your investment capital.

Investing in the right property.

Seeking out a property that will be more likely to provide you with the superior return you are interested in is never a consideration that should be taken lightly. Targeting cities and markets where property values have suffered less impact from tough economic times would be a smart move. Even the best properties could be a poor investment should they be found in the wrong locations.

Investing in the right property can allow you to generate a great deal of income, either through a leasing agreement or a well timed sale. Creating the investment portfolio that will provide you with superior performance and greater security may require you to take advantage of more than just stocks and bonds. Selecting a property that will provide you with greater opportunity can provide you with many benefits.

Investing in the right location.

Location is perhaps the single most important concern when it comes to acquiring a property. Maintenance issues can be addressed and even higher sale prices can be dealt with, but investing in the wrong location could be nothing short of a disaster. Targeting regions and markets that will provide you with superior opportunities and the chance to enjoy a greater return on your investment can really pay off.

Navigating a market that you may know little about can be a daunting proposition for any investor. Learning more about locations and regional markets is an important concern for anyone who may be considering adding a property to their other investments. Choosing the right opportunity and targeting locations and markets that may have more to offer are both essential concerns when it comes to making the right decisions.

Investing in the right help.

Professional assistance may be needed in order to navigate a local market and find the property that offers the best investment opportunities. Services that can provide you with access to greater experience, guidance and the resources needed to find the best locations are an essential asset. Finding the residential or commercial property that will allow you to benefit from a better investment may be easier than you might think.

Online research offers a quick and easy way to find the answers to your basic questions. Even a quick search may be all you need in order to outline different markets and discover the locations that have what you want. Investors who make use of the tools and resources that a professional real estate agent will provide them with, stand to gain greater insight than their own efforts are able to provide them with. Get help investing in real estate to achieve the level of success you are seeking.

Filed Under: Investing In Real Estate Tagged With: Investing In Real Estate

Why You Should Consider Investing In Real Estate

By Lincoln Farrell

Investing in real estate is a wise decision. There are certainly profits to be made if you have the right approach. Here are some tips to help you implement realistic investment techniques that will result in a successful outcome.

To make a profit in the income property market, it is important to buy when things are looking up. If you find a location that is appropriate and there have been significant growth in that area, then purchasing a property will be a good idea. However, if prices go down, or the locality is on a downward spiral, it will not be the best area to invest in.

To make a decision on whether you should buy or not, you must first decide what kind of people you want the property for. If you are looking to rent it out to families with children, or students, then you should think carefully about the location. It is best to buy the property according to the needs of your target occupants.

Prior to purchasing the property, make sure there is potential for growth. This is based on a number of factors such as the social and economic observations. The location though, is the winning factor.

For investment purposes, it is best to think about the profit margin. You should take into account the price you wish to sell it for later on. Take all the renovation expenses into account, and make sure you don’t pay more than you need to.

If you see a deal that sounds too good to be true, then it probably is. Stick with a Realtor that has a good reputation, because getting ripped off in this business will cost you a lot of money. Look for credible agents online and review their customer testimonials first.

Even before deciding to buy a property, you should do your research in terms of land value and how desirable the location is. These factors will give you a better understanding of what to expect and how much income you are likely to receive by renting the property out. Note down all the necessary details before buying the house or apartment. This is an asset that will stay with you for many years to come, so be wise and invest it in the right place.

When looking to buy an investment property, ensure the rental income actually covers your monthly mortgage payments. Most lenders ask for this information from the valuation expert. There is nothing worse than having to cover the mortgage payment out of your own pocket just because the rental income is not sufficient.

Once you have proceeded with buying the property, find a builder who can help you renovate the house within your budget. You should get a few quotes before proceeding and compare it with several other contractors’ estimates. You will save yourself a lot of stress and frustration when you hire someone who knows what he is doing.

Filed Under: Investing In Real Estate Tagged With: Investing In Real Estate

Tips For Investing In Real Estate

By Lincoln Farrell

Ontario offers a vast range of properties from traditional residencies to apartments and lavish condominiums. Investing in real estate in this market however requires adherence to a number of guidelines to ensure that you are making the best possible financial decision for the long term. It is important to make sure that your money works for you with sound purchases and positive returns.

Most people invest in property to serve as a nest egg for future retirement, holiday homes, and with the option to rent real estate to cover the mortgage. Many also make the choice to renovate their house for a return on the estate. While such alternatives can provide numerous benefits in terms of wealth creation, there are a number of rules that should be followed.

Create a budget and check your line of credit before getting into additional debts that could spell financial disaster. If you take out a mortgage, a good credit history can provide lower interest rates with the option to secure it against the home further lowering these rates. Pre-approval from a financial institution such as a bank can offer a number of benefits as it allows one to determine the loan amount that you are eligible to receive.

If you possess too much debt, it is important to work towards settling the outstanding amount before the decision is made to purchase a property and add to your credit. This process should include an elimination of credit cards and strict financial organization that will allow one to pay off the interest and the outstanding sums in a responsible fashion. Building credit can be achieved and if you are not able to manage on your own, a financial consultant can aid in settling debts faster.

Not only will you need to develop a budget for the cost of the property, but also for the rates, insurance, and overall maintenance of the estate. Time should be taken to make considerations for such expenses to prevent against the possibility of running into excess debt and facing the possibility of losing your investment. Make the necessary calculations for the long term and whether you are able to cover the ongoing costs.

Choose your investment property very carefully, which means making considerations for the area and potential growth of a particular neighborhood. Consider locations where there is a high rental demand if you are going to lease the home as it allows for higher rates and increases the likelihood of getting reliable lessees. Renters are also more attracted to properties that are close to schools, shops, universities, and similar services.

Always be realistic about your investment. Considerations should be made for a fast return on capital or slower growth over a period of time that will offer long term benefits. Such factors will be influenced by changing market and economic conditions.

Do not live above your means and remember that a luxurious property with great views will have higher rates. Estates should prove homely and offer the potential for renovation if so desired down the line. Ensure that debts are settled and a positive credit history maintained before proceeding with a final purchase choice.

Filed Under: Investing In Real Estate Tagged With: Investing In Real Estate

Cash Flow Analysis & Buying Investment Properties

By Lincoln Farrell

Positive cash flow analysis plays a central role in determining whether a particular property will generate enough profit for it to be a worthwhile investment. A simple formula is used to accurately calculate this amount; the annual debts must be subtracted from the net operating income and the resulting figure represents the cash flow. This tool is useful for both assessing properties currently owned and those which one is contemplating buying.

Questions for Cash Flow Analysis

There are some very important questions that need to be answered regarding real estate investments, and more specifically cash flow analysis, to create a clear picture of the whether or not it will yield enough cash flow to suit your investment objectives:

  • how much money needs to be invested
  • when does it need to be invested
  • how much money does it produce
  • when will this money come out

There are also some key terms any investor must have an understanding of when involved in real estate investment. One such term is the “holding period”, this refers to the amount of time which has passed since the owner acquired the investment, in the case of property it begins when the contract of sale is drawn up. Profit is typically assumed to be gained at the end of each year of ownership.

Annual cash flow of the property can either be positive or negative and are calculated by deducting the amount of debt and expenses from the gross income it generates before taxes are deducted. Every investor wants this to be positive, as this indicates a profit, whereas if it is negative this means that it is more of a liability than an asset and is costing more than it brings in.

Calculating Cash Flow

The basic process used to calculate an investment property’s cash flow is carried out as follows. The actual monthly rental rate of the building or in the case where it is not rented, a going market-rate for such a property can suffice, needs to be multiplied by twelve which is the annual rental income. The amount of money lost due to vacancies must then be subtracted, which results in the EGI or “effective gross income”.

Now sum up all operating expenses incurred to run the building, such as management, repairs and maintenance, insurance, and property taxes, and any other recurring expenses but not the financing. This number must then be subtracted from the EGI and the result is called the NOI or “net operating income”.

Next, the amount of the loan payment must be multiplied by twelve to give the figure for the ADS or “annual debt service”, if only in prospecting stage, an estimated amount can also be used in this respect. The ADS must then be subtracted from the NOI which will produce either a positive or negative figure representing the flow of cash.

Creating a projection model of this type is referred to as a “real estate proforma”. Investors often rely on this forecast to help them make wise decisions when it comes to choosing properties to purchase, and also it can help indicate to them when selling a previously acquired property is the best choice.

Filed Under: Investing In Real Estate Tagged With: cash flow analysis, Guelph Real Estate, Investing In Real Estate

Lincoln Farrell - REALTOR
Reviewed from Google

5 out of 5 stars

Della Goetz
Della Goetz

5 out of 5 stars

posted 1 year ago

Lincoln' Farrell's expertise as a realtor was absolutely commendable! His overall market knowledge was delivered professionally.

Sometimes it's difficult to find trustworthy and honest people in the dynamics of our business world. I totally felt assured that I was in good hands with Lincoln!

He proactively sought out potential buyers for my modular home.
Not every realtor has the knowledge of condominium modular home sales but Lincoln sure does.

If he can sell my place so quickly, imagine what he can do for you!

Sandra Olschewski
Sandra Olschewski

5 out of 5 stars

posted 2 years ago

It was a pleasure to work with Lincoln to find our home in Fergus. We were new to the area and looking for a very specific property. Finding just the right house isn't easy, but Lincoln's knowledge of the real estate market quickly became evident. His honest approach was refreshing. When the search for our new home began to feel hopeless, his sincerity prevented us from rushing into the wrong decision. He encouraged us to be patient. When we found the right property he skillfully negotiated the deal. If you're looking for a realtor with integrity, I strongly recommend Lincoln Farrell. He truly cares about finding the right property for his client, not just closing a deal.

Anita Macfarlane
Anita Macfarlane

5 out of 5 stars

posted 2 years ago

After our mother passed away, Lincoln was an amazing help through the sale of her property. His analysis of the market and suggestions for the sale of the home struck a great balance between getting the best price while ensuring the timely sale of the home. He was always prompt, honest and sincere when answering our questions and clear in his communications. When there were disagreements amongst our family, Lincoln was always patient and understanding as he helped us through these adverse situations.

When we discovered repairs were needed, he offered his recommendations and assistance with arranging for the repairs and meeting with the repairmen. He was courteous and always made his appointment times. He kept us promptly informed of viewings and offers, and provided us with solid advice regarding our options. Once the sale was made, the paperwork was handled efficiently and expertly, always in a convenient and pleasant manner. When the buyers raised an issue before closing, Lincoln dealt with the issue quickly and effectively.

Lincoln turned what could have been a difficult situation for us into a pleasant experience. His excellent knowledge of the market helped us to realize the best value for the property and a timely sale. We always felt confident in his abilities, and reassured by his honesty and integrity. His sincere support, service and attention to our needs far exceeded our expectations. We would unreservedly recommend his services to anyone wanting to sell their property.

Judy Norman
Judy Norman

5 out of 5 stars

posted 2 years ago

I entered the market quite unexpectedly, and Lincoln was spot-on from the start. As a direct result of his outstanding knowledge, efficiency, sincere willingness to work in my best interests, and honest/open style, I was able to sell at a fair price in a record amount of time. There were some complicated issues that he navigated with great expertise, in a way that was fair to both myself and my buyer. I knew I could trust him to ensure my transition was smooth, and I am very pleased in my new home.
I would highly recommend Lincoln Farrell to any prospective buyer or seller, and if I was to move again, Lincoln would be the one to call !!

Jay Durfey
Jay Durfey

5 out of 5 stars

posted 2 years ago

We met Lincoln a few years ago as we were looking at a farm property he was selling. Right off the bat, he was very friendly and knowledgeable. If there was a question he couldn't answer on the spot, he went above and beyond to get us as much information as fast as possible. We felt so comfortable working with Lincoln with the purchase, that we then had him list two properties for us to sell. He did not disappoint. Once again, with his finger firmly on the pulse of the market, he was able to work confidently and quickly sell both properties for us. We were able to put all of our trust into Lincoln and his considerable skill set. Taking what can be a very stressful situation and consistently easing us through it. I can't think of another agent I would rather take my business, and such a major life decision to. With the head of a great and ethical salesman, and the heart of a homeowner, Lincoln Farrell is an easy referral in my books.

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Recent Posts

  • VIDEO Market Update and a $1 listing
  • A Few Essential Tips For Selling A Home
  • Guelph Real Estate Is An Investment Hot Spot!
  • Investing In Real Estate Should Not Be Taken Lightly
  • Defining Cash Flow to a 6 Year Old? Better Bring a Cookie.

Lincoln Farrell

Professional, reliable, easy going, first rate Realtor and Mortgage Agent. Crazy about family. Personality shines a really big smile... Read what his clients are saying.

My Service Area

Located in Guelph Ontario, I service the municipalities surrounding communities of Wellington County and Waterloo Region.

Office: 238 Speevale Ave West, Guelph ON, N1H 1C4

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I would love to hear about your upcoming projects. Your wants. Your needs. Tell me, what has you thinking about Real Estate? Drop me an email. I can help.

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Lincoln Farrell · Sales Representative · REMAX Real Estate Centre Inc Brokerage · 238 Speedvale Ave. W, Guelph ON N1H 1C4