Real Estate Investing in Windsor, Ontario

It’s never happened to us before! But, it was bound to happen eventually… Dave and I have three e-mail addresses for our Real Estate Investing website Rev N You with Real Estate. One is a general account that we both check, and the other two are our own where the other one doesn’t access it. We get most of our reader mail to the general account, and unless we feel the other person is better suited to respond, we reply to the reader right then and there.

So what happened? We both responded to the same e-mail at the same time! This poor reader was probably wondering what was going on as “Rev N You” appeared in her inbox twice in five minutes with two totally different emails!! I thought it was worth sharing our reader’s email and what we wrote to her… and maybe you have other ideas to help her?? Or maybe you can just laugh at how different Dave and I think sometimes!

So first, here is our reader’s email about Real Estate Investing in Windsor, Ontario:

Hello,

I really enjoy your informative articles!

You’ve written about affordable and expenses places in a previous article, and I was wondering if you have any information about the Windsor area.

View of Detroit Skyline from Windsor, Ontario, Canada

View of Detroit Skyline from Windsor, Ontario, Canada

I live in Vancouver (expensive) and I’ve noticed that prices for multifamily residential buildings in Windsor are quite attractive (inexpensive). I’ve been investigating the east Windsor area near the university, near the river (east of the Abassador bridge the river side area has been cleaned up and fixed nicely) to buy a multifamily building, but finding a competent realtor to work with me is proving difficult as the ones I have contacted seem unwilling to work through the process of due diligence as are property managers. I think apathy has gripped this city.

Have you written about this area, or siimilar ones, in the past (I couldn’t find it in the archives) or do you know anything about the area improving or will you be addressing these types of cities in a future article?

Any information you can provide is much appreciated.

Thank you,

****

———————————————————————-

Dave’s Response to our reader about Real Estate Investing in Windsor:

Thanks so much ****! We are always happy to hear from our readers.

We too live in Vancouver and are very aware of the expensive nature of this city. I am always on the lookout for inexpensive places to buy, but usually inexpensive is that way for a reason. It could be high vacancy rates, high unemployment, small town, no reliable property management, etc. So, of late, we have avoided most of those areas.

Regarding Windsor, we have some good friends that did just what you are thinking. They bought a multi-family near the university and, at the time, thought they had a competent manager. Unfortunately, the manager was really just a realtor who said she also did property management. Well, to make a long story longer, they started to have higher vacancy and the manager wasn’t keeping close tabs on the property. They eventually sold at a loss just to get rid of the headache. Now, this doesn’t mean it will happen to you, but it is a common challenge in places such as Windsor. If you aren’t going to be there to make sure things are going well, it’s IMPERATIVE that you have a professional property manager lined up BEFORE you buy the property.

Regardless of management, Windsor is in a huge downspin. With the auto and manufacturing industries getting hit so hard (and they make-up a huge portion of the labour force there), the city has taken a huge turn for the worse. This, plus the close proximity to Detroit (which shares similar industries), would put it near the bottom of “places to invest in” in my opinion. It will likely take many years before it re-cooperates. But, it comes down to your objectives. It could turn out to be a good place to buy now and hang onto. But, there is huge risk involved with it. In my opinion, you’re better off focusing in a city that is still moving along nicely or could get even better such as Saskatoon, St. John’s, NFLD, or Regina. Again, as long as you get professional property management in place before you buy and continue to do your research on the area (but that’s a whole different topic), you would likely be better off.

We will try to address “picking a city” in an upcoming newsletter.

I hope the above has answered some questions.

Regards and keep on reading Rev N You with Real Estate!

Thanks,

Dave

——————————————————————

Ok, my turn, here’s what I wrote at the same time as Dave was writing our reader, unbeknown to me!

Hi ****,
Thank you for your email. We appreciate the feedback!
We haven’t done any investing in Windsor. I will be honest in saying that it’s because it’s heavy

When I think of Windsor, Ontario I think of the Auto Industry

When I think of Windsor, Ontario I think of the Auto Industry

reliance on the auto sector and exports made me nervous. I always kept Dave from looking too hard there. Your timing could be pretty good though – it’s been a hurting city for awhile with the high dollar and high gas prices. There probably are some good deals to be found there, and if you stick to areas like the University that don’t rely on people in the auto industry to fill your rooms it does sound like a good plan (of course, assuming it cashflows positively from day 1).

As for finding a good realtor – we’ve always found it tough from across the country. I am not sure if people are too lazy or think you aren’t as serious because you’re far away. It’s not impossible, but it’s tough. Referrals work best so I will see if I can get you one! I will check with our property manager in Toronto who is from Windsor. He may have some suggestions or contacts to offer. I also have a couple of other ideas that I want to look into but I need to know how many units are in this building (is it more than 4 – because that will change who I suggest you contact)? Finally, what’s your investing experience level?
I know this isn’t too helpful yet, but let me chat with Dave and our property manager in Toronto and get back to you. I’m off to Toronto next week so you will probably hear from Dave sometime next week with whatever we can dig up for you.
Have a great long weekend.
Julie
———————————————————————————
All right – so there you go! It’s never happened before, but there’s the two totally different mindsets Dave and I work with!! 🙂 Neither of us are convinced real estate investing in Windsor is a great idea right now, but if you have other advice for our reader please share it! As we both noted, we haven’t ventured into Windsor with our investments so we don’t really have the contacts or the experience to really help. If you do, we’d love to hear from you.
And, as you may have seen in my e-mail to our reader, I’m off to Toronto for the week, and Dave will be joining me at the end of the week so this is probably all you’ll hear from us this week! I hope you have a good one.

35 Comments

Filed under investing, real estate

35 responses to “Real Estate Investing in Windsor, Ontario

  1. Judy Gould

    Hi!
    Just thought I might be able to offer some insight. I live in Windsor and have been here for 50+ years.
    Vacancy rates are high, as are houses for sale. Biggest problem is not the lack of cash but the lack of people!
    “Moving to Calgary” is the local most-common-said-phrase.

    However, I don’t expect it to stay this way for long. Not only do you see RE as cheap here, but so do the industrial buyers. There are loads of empty buildings and still hundreds of laid-off workers available, who , for one reason or another, aren’t leaving (at least not yet!)
    So, buying now, while the prices are low, if you can afford to tough it out for a bit, is not a bad idea. (And yes, I myself have been house-hunting, since the pickins’ are pretty good on a dollar/value basis!)

    There are some areas of Windsor that a definite I-don’t-care-how-cheap-it-is, no-no’s. But the areas your writer has mentioned are generally okay.
    The university area, unfortunately for the building owners, also has a glut of rooming houses, which generally undercut the apartment rates, so most owners in that area also have to rent inclusive of utilities in order to compete. Even so, there is still a higher vacancy rate than I have ever seen before. (And then, the students are only there for 8 months).
    As for RE agents,- good luck. It’s hard to catch one around here-I think they’ve all given up. They have tons of homes on the books and no buyers. With the gov’t cutting off the “zero-down” “100% financing” program on October 15th, real estate sales is not the place to be in Windsor.

    Hope this helps?

    • Just a comment on the above comments there is a GREAT Realtor in the Windsor area I have know for years. I live in BC and have been looking at Windsor for a bit now and with the car sector coming back some auto manufactures are back to 3 shifts a day. That is always good news and I believe it is a city on the mend, perhaps not quickly, but on the mend. Issac Verge’s website is http://www.isaacverge.com he is relatively new but has a successful sales and marketing background. (and is not your “typical” sales/Realtor)

    • Hi Everyone,

      Investing in Windsor is not all doom and gloom. That is a media perception which has unfortunately kept too many people away from the deals and steals available to you.

      The economy has undergone a MASSIVE diversification process over the last 20 years (economists say we have 10 years to go), and is much more than cars now. Add to this that the Conference Board of Canada projects Windsor will have the highest economic gains of any major Canadian city in 2011, upwards of 4%. We are also a top 7 finalist for the smartest city globally for 2011, as awarded by one of the most respected international think tanks.

      I am a real estate agent in Windsor within a team that focuses primarily on income property sales, and we are proud to have the highest market share of income property sales in the Windsor area. Feel free to visit us at http://www.ontariorci.com.

      For full details, including why vacancy rates are still 0-5% on the better third of buildings for sale (which are the ones we would be selling you), and why the overall vacancy rate is dropping like a stone, feel free to contact us.

  2. @Judy – thank you so much for taking the time to write us! I’ve sent an email to our subscriber who asked the question so that she can have a read of your thoughts. It is very interesting to get a local person’s perspective on Windsor!

  3. Now here is something interesting for Windsor:
    http://www.canada.com/windsorstar/news/story.html?id=aeb1347c-a392-4a13-a9d5-cbf4b0ba5c9f

    “When the first electric cars reach showrooms in 2011, Windsor intends to be the first municipality in Canada to have public charging stations available to keep them rolling down city streets.

    The day after General Motors unveiled the production version of the Chevrolet Volt plug-in electric car, Enwin Utilities and the City of Windsor announced they are laying the groundwork to create the infrastructure for the Volt and its competitors.” – Chris Vander Doelen, The Windsor Star
    Published: Wednesday, September 17, 2008

  4. Destachew

    Availability of job is the most key to real estate sector and to the attraction of more people to windsor, thus as long as the job market declining here in windsor the housing market-quality and price also will contenue to decline. Which in this case, declining of population to the city windsor means less activities/less cash flow and less tax to the city and less quality to the city institutions and civic public services.

  5. @Destachew, thanks for stopping in! Job creation and employment are definitely critical parts to any real estate investment decision. Even when it involves a retirement area… you still have to ensure that there is a vibrant economy in an area.

  6. Martin

    Judy, Thanks for the insight. Would you like to share with us which area is the “I-don’t-care-how-cheap-it-is No-No’s”? Is Sanwichwest one of these areas?

    Martin

  7. lefty

    Dear Dave and Julie
    I am small an investor in Windsor. I have several properties and I am finding it very hard to fill my vacancies. This is a common problem currently in Windsor. You have to learn many skills to survive in this economy crisis. I have learned that when things get tough so does the competition for tenants. One month free, half off, no lmd, free, free, free. This creates a huge problem and a rent reduction war. with all this said, I still have confidence, as would any investor who does his homework. Unfortunately, one can find a duplex, triplex or fourplexes for very cheap (landlords are bailing due to all the complexity) and a lot of the mentality of new landlords seemed to be “rent it no matter what”. This pays the bills, but creates a divot in what the rents should actually be set at. It is easy to lower the rent, but it will take years to get back to a realistic price. If the mortgage rates were to turn for the worse, it could be devastating for a lot of investors. I looked today on a website, here in Windsor and found 467 1 bedrooms for rent. Some were as low as 475.00per month. Mine was one of them and I might have to compete with all these low prices. It is a renters and buyers market, so if you do have the extra cash to buy, it could be a wise move. I know I sound contradictive, but it all depends on how you play it. I can’t comment on the management companies, since I don’t use them. There are a lot of them around and there are lots of agents that would be happy to get a sale. There is nothing for sure in this stagnant economy and nothing for sure in rental investment. I would still bet on Windsor to come back and when it does…those who played should have a good hand to cash in.

    small time

    • @lefty – Thank you for the fascinating perspective of someone who is on the ground in Windsor investing in real estate. There is a lot of interest in Windsor – it’s one of the biggest search terms driving traffic to our blog. It’s also one of the markets in Canada that we get a lot of questions about, so your thoughts are very appreciated. We’d love to hear from you in the future – let us know what happens with your 1 bedroom and the rental market over all! Best of luck.

  8. Dhawal

    Hi,

    myself n my wife, we were thinking actually to buy couple of places and move to Windsor. This way we can buy houses for low prices as well a half running business for low price. But when I actually went on line to check about business for sale in Windsor…..none or hardly. Hows that.

    could any one say which area in windsor is considered good school district. as I have two kids…would like invest in that area only.

    I will be visitin Windsor couple of times to understand the City.

  9. J

    I’m buying a house in Windsor right now. It is definitely cheap for a reason. I have a home business that I can do from anywhere or I wouldnt set foot in Windsor. I currently live in Toronto and previously was in Vancouver for 15 years.

    There are TONS of properties for sale in Windsor. Last count I made was 9000. One can buy a nice newer house for 200,000. Of that inventory, there is lots of subdivisions. Way to many raised ranch subs in Windsor. Its a very lunchbox/Walmart/raised ranch place. There are some cool old houses in Riverside but they are over 200, taxes are nearing 5k a year for them and what I saw need work. For me, if I was going to spend 300+ and pay those taxes than I could do that in many other locations (Kitchener for instance) negating Windsor as a choice.

    The good side is – it really isnt a bad place. The Riverfront area is very nice. You get that Detroit view that makes you feel like its your own skyline. Personally I think Toronto is heading into the toilet faster than Windsor and you cannot buy a liveable house for 200k in Toronto. Although I am seeing houses come into view in the low 200’s again. Of course in the worst area that most people would shutter at. Seriously – I do not understand Toronto. Its looking more like Tijuana every day.

    The 80k houses you hear people talk about in Windsor truly are dumps. Everybody talks about it but when you see these areas and properties its clear. Sure you can actually buy a place for 50k. However, even your pet rat would rather sleep outside. The downtown area around the Casino is a disaster. We are talking bring in the bulldozer because there is no hope. The rot and decay is that bad. So – there is where your “deals” are.

    I will be looking harder at rental properties after I move. I have noticed you can pick up decent condos in the cheap 50 – 100k range. Not luxury but decent accomodations for a student. Of course condo fees in Ontario will shock anyone from BC. a 700 sf condo will be at least 200/month and not shocking to see $400 in condo fees.

    Industrial is indeed cheap. I looked at shop space etc and it truly is what I could term cheap. However taxes on any commercial prop in very expensive in Windsor. As for the labour pool – I wouldn twant them. Lots of union guys with big bellys, no brains and a “can’t do” attitude.

  10. This is a fabulous account of your experiences @J – thanks for your comments!!

    There really are some lovely areas in Windsor. I think it’s economic situation has a long way to go before it’s strong but many people may move there simply because it’s very affordable for Ontario living.

    I am not sure I agree with your thoughts on Toronto, but I also haven’t been there very much in the past 12 months. We still have a few properties there and they continue to be strong for us. There are many areas in Toronto that are really emerging and becoming so appealing. Much of the Eastern area south of Bloor used to be so awful and it’s really cleaning up and looking better and better. More of my old colleagues are moving into areas all East of the DVP and South of Bloor for the simple reason that it’s affordable yet easy to access downtown and the Gardiner Expressway.

  11. Hi,
    Windsor Ontario is an excellent place to invest in property right now! Where can you find a market that has hit rock bottom that we all know will increase significantly in the next several years… Prices are at an all time low.

    It really depends how much you invest and what you are looking for.
    Do you want cash flow at the end of the month?
    OR
    Are you looking for long term?

    I deal directly with many investors throughout Canada who specifically purchase property in Windsor. Its easy to find distressed property in dire need of a makeover!

    I am a property manager, project manager for Rent4All.ca Property Management and would be happy to answer any questions and concerns……

    Paul Rouillard
    rent4all.ca
    investwindsor.ca

  12. Thanks for stopping in @Paul Rouillard. I am curious though – why do you think prices will increase in the next few years in Windsor? Are there new jobs coming into Windsor? Is the government investing in the City to improve? Is there population growth? Are people making more money in Windsor this year than they were last year? Just because prices have dropped a lot doesn’t mean it’s a good time to invest.

    I haven’t heard much good news from the auto sector these days … improvements but not really anything that sounds good. The strengthening Canadian dollar doesn’t seem like a good thing for Windsor. Detroit is still hurting …

    If something positive is happening down there then it would be a brilliant time to invest in Windsor. I don’t follow the market very closely so I am wondering what has changed other than home prices to make it a good time to buy.

    • Hi Julie,

      Been a long time since I replied. Sorry. Been caught up working and I wasn’t notified of a reply from the site.

      Windsor, Ontario is looking better and better for investors who are looking to buy. Although our mayor sold our spitfires to Tecumseh Spitfires our downtown/ west is looking good!

      St Clair college and University are both investing in Downtown Windsor Ontario. That’s excellent news! The bridge will be creating 12,000 + jobs.
      Yes Windsor, Ontario looks bad on paper, but that’s what investors look for. Where can I buy and maximize profits in the long run.

      GO Tecumseh Spitfires GO!

      Paul

      http://www.InvestWindsor.com
      http://www.Rent4all.ca

  13. Pingback: Posts on real estate investment in Windsor, ON « A Beginner Investor's Journal

  14. Scott

    I’ll chime in here with some background.

    I am a late 30’s professional who grew up in Windsor, and has lived in Vancouver, Calgary, and a few places in mid-to-Northern Ontario.

    The mis-information Canada wide about Windsor is something that needs to be addressed. A previous poster (@J) stated the city was full of Beer-Bellied union people.

    Wow – talk about a negative stereotype. I’ve lived in beautiful Vancouver and Calgary and ‘white collar’ Toronto. Honestly, I’ll take Windsor hands down. The people are friendly, caring (donate more per person to charities than any other city in Canada), and resourceful. The people make Windsor – and I’ve found more close-minded, rude people in places further up the 401 than you’d believe.

    You need to know that Windsor is a major destination for most immigrants coming into Canada. The city is the 3rd most multi-cultural city in Canada.

    Windsor has a high proportion of educated professionals. In fact Windsor/Essex has per capita one of the higher rates of higer incomes brackets in Canada – and a few of Canada’s leading public schools (Massey in S. Windsor).

    If you’re investing South Windsor & LaSalle are a good bet, as is the Riverside areas and those East (towns of Tecumseh and Lakeshore). The areas in West Windsor (Sandwich) are bargain for a reason – the owner of the bridge is buying up most houses, and has been for years – to build his private 2nd span.

    • Thanks Scott. Please visit us at our new blog location:
      http://www.lifeasrealestateinvestors.com

    • Well said Scott, well said. People don’t realize that — even at the height of the recession — Windsor still had the 5th highest family incomes in Canada, and the HIGHEST net disposable incomes in Canada. The latter means, after all your essentials are paid for (food, home, car etc.), we have the most money left over to enjoy. And that, to me and to many economists, is true wealth.

      For anyone still reading this blog (wish I found it ages ago), Windsor is in the midst of a massive turnaround. And although automotive is a factor, it is hardly the only factor: R&D, tourism, construction, biomedical, medical, green manufacturing have all become major factors to our economic well being.

      If you have to invest outside your home area owing to awful rates of return, then I don’t see how any rational and analytical human being cannot consider Windsor at this juncture.

      It’s funny, the clients I have to do the least amount of convincing to invest here are my wealthiest clients.

      http://www.ontariorci.com/blog is our resource of articles and information that further expand upon the Windsor opportunity, hope that helps.

  15. Pingback: Top 8 Real Estate Articles of 2008 «

  16. (laughing) I’m getting clients still reading this blog entry even though it’s from 2008(!) so I just want to add some updates for people considering Windsor:

    1) Conference Board of Canada now predicts Windsor will have the highest GDP growth of any major Canadian city in 2011, to the tune of 4.1% GDP.

    2) We are a Top 7 finalist for the much lauded international “Smartest City” award.

    3) We have been ranked #7 by the Financial Times (a British publication, international in scope and read by the World’s 15,000 largest CEOs) as large cities of the future (population 200,000 – 750,000). Seattle and a couple others barely beat us.

    So yes, invest now or wait and pay more. It’s not rocket science; property values follow GDP growth, typically at an 18 month lag. So if we’re booming at 4.1% GDP growth right now…

    • 🙂 Nice to know the traffic live on even though we don’t update this website. The same post now exists on lifeasrealestateinvestors.com so you may want to post the same update to that blog as well …

  17. wes_coast

    I’ve been checking out Windsor and I am finding sellers are still not willing to price according to rents. The prices may seem cheap relative to other areas but rents are lower and vacancy is high. Problem is sellers . They cant accept a proper valuation for their building assuming they will get a price reflective of the best case scenario of Windsor’s recovery. That recovery is full of risk and the price should reflect that – but it doesn’t. As interest rates climb so too will cap rate expectation further depressing prices unless there is an uptick in rents which seems unlikely in the mid term outlook. Rates will likely climb before rents making it a dangerous squeeze on cash flow. Add to this the projected 40 percent increase in hydro rates in the next 5 years in Ontario (most Windsor rentals include utilities) and you have a risky outlook. All fine at the right price which you won’t find in Windsor today.

  18. While Windsor is on the recovery and dealing with overly high pricing for the area, Toronto housing prices are higher than ever and only growing. It seems as if someone doesn’t wants to raise the price of living for middle class and the ones who can’t hang can live on the streets.

  19. Rob

    Actually JUST FOUND this thread because I am taking Julie and Dave’s course in July! Real estate investing is all about the numbers. There are very few cities in Canada where you can buy a multi-family building, finance it 100% and have it cashflow positive. Windsor is one of those places. The prices have dropped more than the decrease in rents. Like buying a house, think “location, location, location” when looking at multi-family, and think of your target market. Renters like to live near where they work. Many don’t have cars. If you target lower-middle income working people as your tenant market, you can do very well. Look for buildings for that demographic, with more 2 bedroom units that one bedroom or bachelors. You get more rent from a two bedroom unit, and they turn over less frequently. And when you do the numbers, base your final purchase price on a cap rate of 10. Do your due diligence: I have never seen people lie like multi-family owners trying to sell. Their numbers can look like they come out of a fairy tale. I bought a 15-unit building in a nice area of Windsor in September of 2010 for $545,000. The monthly total rent is $10,100 and I have averaged 1.5% dollar cost vacancy in that time. I have a full-time property manager because I live in Ottawa. In Ottawa, I would be lucky to buy a triplex in a not so nice neighbourhood for that, and the rent would likely be less than $1,200/month per unit. There are those deals out there, but it can take a while to find them. When you think commercial multi-family, you have to think long term because these buildings are difficult to turn over, and such buildings can take years to sell. That said, find a good building, and let it pay for itself over time. That NOI can be a nice income! Is Windsor a good market for real estate? It really depends on what your goals are for real estate investing. If it is to flip properties because values are increasing rapidly: no. If you want long term passive income: definitely!

  20. At this time it looks like Movable Type is the best blogging platform available right now.
    (from what I’ve read) Is that what you’re using on your blog?

  21. If you are going for finest contents like I do, just go to see this web site every day for the
    reason that it provides quality contents, thanks

  22. When I originally commented I clicked the “Notify me when new comments are added” checkbox and now
    each time a comment is added I get three emails with the same comment.
    Is there any way you can remove me from that service? Appreciate it!

  23. Is there an easy way to find these private investors without brokers?

  24. Good answer back in return of this question with solid arguments and explaining everything on the topic of that.

  25. It’s hard to find well-informed people for this subject, but you seem like you knoow what you’re talking about!
    Thanks

  26. Louise M.

    Here’s what I have observed:

    Windsor/Essex is a flat real estate market, both literally and figuratively.

    The landscape is flat and surrounded by water on 3 sides. All properties in this region are vulnerable to flooding. The properties closest to water are extremely vulnerable.

    The storm and sanitation sewer infrastructure in many parts of Windsor, LaSalle and Tecumseh are inadequate. This results in back-flow flooding on a regular basis.

    Market value escalation is less than 5% per year according to MPAC and municipal property tax rates are above 1%. Both of these factors suggest Windsor/Essex real estate is not going to provide a positive return on investment.

    There is a ‘price wall’ in Windsor-Essex. Most buyers are looking for real estate costing less than 350,000. Less than 10% of buyers are spending over 350,000. Expect a diminishing return on anything above the 350,000 ‘price wall’.

  27. Do you follow any SEO agencies? I can’t seem to
    get useful help in anything which can be actioned
    Added this to Facebook, very good

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s