Edmonton Real Estate Investor: 2016 Alberta economic outlook

Alberta Oil Sands Investment Real Estate News®
Glenn Simon Inc., Suite 1217, 5328 Calgary Trail NW, Edmonton, Alberta, Canada. Tel 1-888-780-5940 Fax 1-888-276-4517
www.glennsimoninc.com email: info@glennsimoninc.com

July 15th., 2016
Volume 21, Issue 2

Dear Friends and Partners,

The tea leaves show a continued gloomy outlook for Alberta. For my two cents worth, I’d say Q3 of 2017 should be the turn around point unless oil goes up and gets us out faster. No real surprise there. We’ll most likely see the period of Q4, Q1and Q2 to be toughest for renters and job seekers. My mantra of 'prepare for the worst…’ should be taken to heart concerning tenanting and managing rents for the winter ahead.

And for those looking to buy…? The industrial/commercial sector is pretty beat up. If you are good at vetting tenants or have a good agent to do so, you can find a deal in the Nisku area with over 80 vacant properties there alone. You need the tenant (or the ability to find a tenant) if you plan on going out for financing. A strategy is to buy (or offer) at a reduced price now and vet your own tenant, then go for financing to extract capital after lease is in place. This is definitely not for the novice, but can be lucrative nonetheless.

For residential and commercial multifamily in Edmonton, the deals are around but you still have to hunt for them and keep a realistic expectation of rents. An upside remains; low mortgage rates.
Stony Plain: Legal 4-Unit

Turbo charge your portfolio. For those wanting to explore a little bit outside of Edmonton, visit Stony Plain - 30 minutes away. Great area, 4-unit, across from the park and near the centre of town.

This is property is in great shape and boasts 4 X 3bedroom units all with in-suite laundry. 1978 built, newer roof, some windows, kitchen and laundry. Terrific access to local amenities in sought after Forest Green.

This property has a massive lot and room for RV parking. Purchase price to include reserve fund and light renovation budget to make it standout - rolled into mortgage. This property shines! This is a turn-key deal. Excellent access downtown and in the highly rentable and desirable neighbourhood of Forest Green.

Comes complete with great tenants making this a totally turn-key property for you. Forest Green is a mature neighbourhood that is convenient for tenants working in Stony Plain or Edmonton. HUGE upside potential due to the great purchase price, strong economic fundamentals and the proximity of this property in relation to Stony Plain's growing status of a ‘bedroom community’ to Edmonton.

Purchase price: $635,000
Total Investment: $151,840.
Your Estimated 5 Year Profit: $91,074.
Your pre-tax Total ROI is 60% or 12% per year

These 4 suites rent for top dollar and have everything arranged, including financing structure and incredible tenants. Your investment includes: impeccable tenant selection, financial analysis, professional inspection, insurance, financing set-up, legal fees, basic accounting, reserve fund, CMA, bi-annual statements, strategic market planning to ensure successful entry and exit, plus much more!

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New economic forecast suggest gloomy times to continue in Alberta

By Keith Gerein, Edmonton Journal, July 13th., 2016

The second half of 2016 will fail to bring much relief to a sour provincial economy, new economic forecasts revealed Tuesday, while noting the energy and housing markets show mild signs of recovery.
The latest quarterly outlook from ATB Financial offered another gloomy prognosis for the province, warning of continued job losses in the oil sector this summer that will push the unemployment rate above eight per cent. READ MORE HERE

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House prices post biggest monthly rise in a decade

By House Price Data Centre, Globe and Mail, July 13th, 2016

June showed the largest monthly rise in home prices in Canada in a decade, rising 2.3 per cent over the previous month, according to the latest Teranet-National Bank House Price Index. Year over year, prices are up 10 per cent. All markets except for Calgary and Edmonton tallied gains above the historical norm.
"What is even more striking is that this surge occurred after strong gains in the previous months. As a result, on a year-to-date basis, home prices are already up a whopping 6.8 per cent, well above the historical average of 4 per cent for the first six months of the year," said National Bank senior economist Matthieu Arseneau. — D'Arcy McGovern GRAB THIS ARTICLE

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Bank of Canada’s Poloz delivers cautiously optimistic update on Canadian economy

By Andy Blatchford, The Canadian Press, June 16th, 2016

OTTAWA - Bank of Canada governor Stephen Poloz says the country's economy is finally making progress after hobbling through the effects of the slow U.S. recovery, feeble exports and a stubborn commodity-price slump.

In a speech Wednesday, Poloz said while the economic situation remained complicated and uncertain, he was confident Canada was emerging from its stretch of slow growth.

Poloz pointed to signs that Canada is benefiting from a stronger U.S. economy, a robust level of household spending and a rebound in many non-energy export categories. FOLLOW THIS STORY

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I appreciate all your calls and emails. I'm looking forward to helping you with your next step towards building real wealth.
Your success continues EVERYDAY, let me help you build for tomorrow.

“I’d rather attempt to do something great and fail than to attempt to do nothing and succeed.” -Robert H. Schuller

Warm Regards,

Todd and Danielle Millar

===SPECIAL NOTICE: NO CASH, BUT GOOD CREDIT? CALL US TODAY TO LEARN HOW YOU CAN OWN INVESTMENT PROPERTY===

P.S. Stay ahead by checking out Danielle's daily blog at Edmonton Real Estate Investor for all your cutting edge market news and information.

Alberta Oil Sands Investment Real Estate News®
Glenn Simon Inc., Suite 1217, 5328 Calgary Trail NW, Edmonton, Alberta, Canada. Tel 1-888-780-5940 Fax 1-888-276-4517
www.glennsimoninc.com email: info@glennsimoninc.com

April 15th., 2016
Volume 20, Issue 7

Dear Friends and Partners,

Q: What are Mcdonald's employees now asking customers?
A: Can you afford fries with that?

Ok, I know, bad joke. We’re seeing a small percentage of tenants not renewing their leases because they are looking for something cheaper. Guess what we’re seeing with new applicants? A percentage of them moving to a unit with lower rents. This makes economic sense for some.

When we started this decline we talked about preparing for a slower market and how to manage vacancies, now that we’re in the middle of it I think prudence is paying of for those that applied it. Matching market rents, ensure units are looking good and using a plethora of ways to advertise is essential.

Keeping communication open with tenants is important too so that you can retain the good ones. During a downturn, renovating your units can be more affordable and is a must for staying competitive in the market.

Bonnie Doon: Side by Side, 4-plex Conversion - Cash-flowing diamond in the rough

Turbo charge your portfolio. Great, soon-to-be 4-plex (side by side duplex style) is 7 minutes to downtown; in the heart of Bonnie Doon. I won’t lie, it’s a bit ugly right now and that’s where the opportunity is. This is a renovation deal where we use PPI to add a suite and improve this building. 1971 built, with good bones. Terrific access to local amenities in sought after Bonnie Doon.

We will add new furnace, windows, full upgrades, fire prevention system and complete suite. This property has potential for 4 X 2 bd suites. Includes a double garage, pad and large lot. Purchase price includes reserve fund and large renovations put into mortgage, to make the property shine! This is a turn-key deal. Excellent access downtown and in the highly rentable and desirable neighbourhood of Bonnie Doon.

Comes complete with great tenants making this a totally turn-key property for you. Bonnie Doon is a mature neighbourhood that is convenient for tenants working downtown and attending UOA. HUGE upside potential due to the great purchase price, strong economic fundamentals and the proximity of this property in relation to Edmonton's desirable growing core. *Purchase price includes $100K in renovations.

Purchase price: $625,000
Total Investment: $149,170
Your Estimated 5 Year Profit $88,841
Your pre-tax Total ROI is 60% or 12% per year

These 4 suites rent for top dollar and have everything arranged, including financing structure and incredible tenants. Your investment includes: impeccable tenant selection, financial analysis, professional inspection, insurance, financing set-up, legal fees, basic accounting, reserve fund, CMA, bi-annual statements, strategic market planning to ensure successful entry and exit, plus much more!

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Edmonton house prices hold steady despite economic downturn

By Gordon Kent, Edmonton Sun, April 4th., 2016

Edmonton-area home prices rose slightly in March compared to the same month last year despite Alberta's economic downturn, new Realtors Association of Edmonton figures show.

The average home in the region sold for $379,524 last month, up nearly two per cent from $372,289 in March 2015, according to statistics released Monday. READ MORE HERE

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Varcoe; Miserable Alberta recession no match for 80’s upheaval

By Chris Varcoe, Calgary Herald, April 5th, 2016

If you’re a fan of losing sports squads — hello Toronto Maple Leafs, Chicago Cubs or Cleveland Browns — you might be compelled in some dark moments to compare just how bad things are today with the past.

It might be masochistic, but looking back on a losing streak is often the only way to see if the situation is truly as painful as it seems, or if there’s a way out. GRAB THIS ARTICLE

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Oil and gas sector says investment will drop by $50B
Canada’s energy industry says it’s facing its biggest drop ever in capital spending

By Tracey Johnson, CBC News, April 7th, 2016

Capital spending in Canada's oil and gas industry will drop by more than half — $50 billion — by the end of 2016 as compared to 2014, according to a forecast released by the Canadian Association of Petroleum Producers.
In 2014, capital spending in the oil and natural gas sector amounted to $81 billion.

In 2016, that number is set to drop to $31 billion, a 62 per cent decline, as companies continue to cut back because of persistently low energy prices. FOLLOW THIS STORY

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I appreciate all your calls and emails. I'm looking forward to helping you with your next step towards building real wealth.
Your success continues EVERYDAY, let me help you build for tomorrow.

“You’ve got to stay strong to be strong in tough times.” -Tilman J. Fertitta

Warm Regards,

Todd and Danielle Millar

Balancing Act: Inside the Alberta Governments New Deal on Energy - "Notley didn’t kill the province’s golden goose. Drilling rigs won’t be trundling next door to Saskatchewan or over the southern border to avoid a cash-grab royalty regime. The oil patch’s sigh of relief was heard across the prairies. The government’s election promise was to review if Albertans are getting their fair share of royalties, and it’s been decided that yes, they are.

The review panel said, “Overall, Alberta’s royalties are comparable with other jurisdictions,” and that the existing regime gives the province an “appropriate share of value.” Broadly, it was well-received by the industry. “[The] announcement has been the result of a fair and credible process, one Albertans can trust,” says Tim McMillan, president and CEO of the Canadian Association of Petroleum Producers (CAPP)." Read more

Still afloat in Alberta despite tighter competition - "While Alberta's contracting economy is not yet causing panic among some Edmonton general contractors, its effects are taking hold. Competition is heating up for smaller-scale projects and dollars are being squeezed in bids, according to some industry executives.

"We see margins right now that are so tight, it's hard for us to go any lower than that. We still have to pay the bills and pay our employees. It's tough," said Antoine Gruson, vice-president of sales and marketing for Synergy Projects." Read More

IEA for the first time sees light at the end of oil’s ‘long, dark tunnel’ - “There are signs that prices might have bottomed out,” the Paris-based adviser to 29 countries said in its monthly market report on Friday. “For prices there may be light at the end of what has been a long, dark tunnel” as market forces are “working their magic and higher-cost producers are cutting output.” Read more

Well one good thing in Alberta is we are having a beautiful winter. Maybe there is a direct correlation between low oil and higher temperatures. Every one of us here would go down to -40C for an equal hike in oil prices.

Dropping oil prices aren't over yet nor is there any clear indication of when they will rally.

"A growing number of grim forecasts are calling for even that demolished price to fall further. Last fall Goldman Sachs warned oil could hit US$25 as crude storage tanks reached capacity. In December a report from the International Monetary Fund argued new oil flowing from Iran could push prices even lower. This week analysts at Morgan Stanley made the case for US$20 oil based on the strengthening value of the U.S. dollar, which tends to push commodity prices lower." JUMP

Some say that China's economic slump will keep the price of oil low for a long long time.

"They say you don’t know what you have until it’s gone. For Canada’s oil patch, China’s growing demand for oil always seemed like a permanent fixture – an everlasting thirst that would never run dry. Chinese oil consumption skyrocketed after the turn of the millennium, from an average of under 4.4 million barrels per day (bpd) in 2000 to just under 11 million bpd 15 years later. A massive infrastructure buildout in the country was fueling a bonanza, and in April 2014 China surpassed the U.S. as the world’s largest net importer of oil." Read More

And our current political situation hasn't helped with stability.

“Heightened environmental concerns, a lack of pipeline access to new markets and the unknown impact of the victory by the New Democratic Party in Alberta’s elections last year are causing companies to slow development,” IEA HERE

Alberta Oil Sands Investment Real Estate News®
Glenn Simon Inc., Suite 1217, 5328 Calgary Trail NW, Edmonton, Alberta, Canada. Tel 1-888-780-5940 Fax 1-888-276-4517
www.glennsimoninc.com email: info@glennsimoninc.com

February 1st., 2016
Volume 20, Issue 2

Dear Friends and Partners,

So, there you have January 2016 - done. It was an anemic month for growth, decisions and ‘keeping a steady hand on the rudder’.

But, let’s focus on the good; oil hung on around $30 bbl., rates stayed low (a neutral event), some cash was injected into the AB economy (see below) and a rather frustrating, yet good decision was made to keep the Royalty Rate - the same. You can read more about that from Don Braid.

What we need is more clear decisions and less indiscretions. The royalty review was a ‘decision' and that will create some stability, at a needed time - so that’s good news.

I’m seeing a lot of for rent signs up, but that’s what happens during down turns (preferably not in January, but hey..). You’ll have a segment of renters that will choose to move to cheaper properties. You’ll also have landlords adjust from higher rents to moderate ones and inexperienced landlords at already low rates, panic, and drop further - don’t be the latter sort.

Downtown Edmonton: Oliver 9-Unit Apartment

Turbo charge your portfolio. Great, 9-unit apartment, minutes from Ice District; a winner to add to any portfolio. 1972 built, meticulously maintained. Terrific access to local amenities in trendy Oliver.

Mechanical, roof and 6 units all upgraded. This property has a great suite mix; 6 X 2 bd and and 3 X studios, all parking stalls are energized and separately metered.

This property has a tried and true layout and is built to last. Purchase price includes reserve fund and estimated $30K in renos to make the property shine! This is a turn-key deal. Excellent access downtown and in the highly rent-able and desirable neighbourhood of Oliver. CAP rate of 6% and 5% C.O.C. return.

Comes complete with great tenants making this a totally turn-key property for you. Oliver is a mature neighbourhood that is desirable for tenants working in the downtown and attending NAIT. HUGE upside potential due to the great purchase price, strong economic fundamentals and the proximity of this property in relation to Edmonton's desirable growing core.

Purchase price: $1.05M
Total Investment: $387K.
Your Estimated 5 Year Profit $151,968.
Your pre-tax Total ROI is 40% or 8% per year

These 9 suites rent for top dollar and have everything arranged, including financing structure and incredible tenants. Your investment includes: impeccable tenant selection, financial analysis, professional inspection, insurance, financing set-up, legal fees, basic accounting, reserve fund, CMA, bi-annual statements, strategic market planning to ensure successful entry and exit, plus much more!

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Opinion: Let’s not let economic gloom kill Alberta’s dreams

By Thomas Lukaszuk, Edmonton Journal, January 29th, 2016

Recent media articles paint an apocalyptic picture of Alberta’s economy and the province’s prognosis for recovery.
Maclean’s magazine declared our economic slowdown as the “Death of the Alberta Dream.” The sudden drop in commodity prices, shifts in carbon fuel production and consumption, plummeting dollar and some counterintuitive fiscal policy shifts by the provincial government have resulted in massive job losses, the outflow of investment capital and immediate drop in government revenues.

These financial challenges are felt by Albertans and will become more evident in 2016. Yet my outlook is optimistic. FOLLOW THIS ARTICLE
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Alberta kicks in another $5M to help-high tech companies

By Jodie Sinnema, Edmonton Journal, January 22nd., 2016

The Alberta government is pumping an additional $5 million into a program to help small and medium companies and entrepreneurs create jobs and develop high-tech ideas into commercial products.

That’s on top of $4.1 million already funnelled into the program. It has allowed companies such as Pleasant Solutions, which hires out software developers and works in the security and password field, create one permanent job for every $15,000 in such grants. READ MORE HERE

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The 10 Best (non-oil) things about Alberta

By Todd Hirsch, Special for Globe & Mail, December 17th, 2015

While it was booming, Alberta’s petroleum sector was a gravitational black hole that sucked up everything else around it. Other industries scrambled to compete for labour, office space and investment capital. It’s a challenge for a tech firm, for example, to open an office in Calgary when a receptionist could command $75,000 a year.

Today, Alberta is grappling with an energy patch that has lost its gravity, at least for now. Oil is below $40 (U.S.) a barrel, and it won’t come suddenly roaring back in 2016. This winter will be difficult for thousands who’ve been thrown out of work. GRAB THIS STORY

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I appreciate all your calls and emails. I'm looking forward to helping you with your next step towards building real wealth.
Your success continues EVERYDAY, let me help you build for tomorrow.

“I don’t know where I’m going, but I promise it won’t be boring.” -David Bowie

Warm Regards,

Todd and Danielle Millar

===SPECIAL NOTICE: NO CASH, BUT GOOD CREDIT? CALL US TODAY TO LEARN HOW YOU CAN OWN INVESTMENT PROPERTY===

P.S. Stay ahead by checking out Danielle's daily blog at Edmonton Real Estate Investor for all your cutting edge market news and information.

Alberta Oil Sands Investment Real Estate News®
Glenn Simon Inc., Suite 1217, 5328 Calgary Trail NW, Edmonton, Alberta, Canada. Tel 1-888-780-5940 Fax 1-888-276-4517
www.glennsimoninc.com email: info@glennsimoninc.com

November 2nd., 2015
Volume 19, Issue 7

Dear Friends and Partners,

There has certainly been a lot of change with the Federal election and the Alberta budget tabled earlier this week. Oil doesn’t seem to be improving and we’ve definitely sailed into stormy, or at least unpredictable weather. The best advice which we gave earlier still stands; batten down the hatches.

Investors should place close attention to keeping their units in good condition, quality tenants in place (renew leases) and actively market units while keeping expenses low. It looks as though residential real estate will continue on a downward trend, industrial/commercial will trend lower as some leases will be broken due to downturn in the industry. This will make it more challenging for banks to value and approve certain commercial real estate loans as they see more risk.

Downtown Edmonton continues to grow with new projects beginning, underway and a few coming to completion. Most of the money has been allocated so this growth will continue, privately funded projects may be mothballed until more stability in the market.

Opportunities are always around if you look hard enough. Residential and multifamily properties in the downtown core and around can offer good value. Commercial and office will be tricky to navigate for junior investors but offers some upside. Cycles tend to last 5-7 years, some longer.

Hang in there… for the long, longterm.

North West Edmonton: Canora 4-Unit Cashflow

Turbo charge your portfolio. This bright and open four-unit is listed as a side by side Duplex with condo titles (I interpret that to mean that the lower suites are non-conforming and not legal). 1997 built, located a few blocks from 107th it has good access to local amenities.

Walking distance to schools, transport and close to downtown. This property has separate entrances to each suite; 2 X 3 bd and 2 X 2 bd, single garages, plus pad. This property was well designed for light and spaciousness, it’s in good condition.

This is a turn-key deal. Good access to downtown and in a rent-able, working-class neighbourhood.

Comes complete with great tenants making this a totally turn-key property for you. Canora is a mature neighbourhood that is desirable for tenants working in the Westend and downtown. HUGE upside potential due to the great purchase price, strong economic fundamentals and the proximity of this property in relation to Edmonton's desirable growing core.

Purchase price: $664,000
Total Investment: $153,540
Your Estimated 5 Year Profit $89,900
Your pre-tax Total ROI is 58% or 11.7% per year

These 4 suites rent for top dollar and have everything arranged, including financing structure and incredible tenants. Your investment includes: impeccable tenant selection, financial analysis, professional inspection, insurance, financing set-up, legal fees, basic accounting, reserve fund, CMA, bi-annual statements, strategic market planning to ensure successful entry and exit, plus much more!

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Gary Lamphier: Carlo Montemagno’s Plan to save the Alberta economy

By Gary Lamphier, Edmonton Journal, October 30th, 2015

The NDP government’s plan to revive Alberta’s struggling economy basically boils down to this: Let’s hope oil prices recover while we spend bags of money we don’t have on public infrastructure, with billions more aimed at juicing the growth of early-stage companies.
I hope the NDP approach works. Seriously. Short term, the options seem rather limited.

But here’s the thing. Real, sustainable economic growth only comes when the private sector is able to make products or provide services the world wants and needs, at prices that generate a healthy profit. Alberta used to do that. Now, not so much. GRAB THIS STORY

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NDP to table the largest deficit in Alberta history as provincial revenues plummet with oil prices

By Darcy Henton and Chris Varcoe, Postmedia News, October 25th, 2015

Lost in the hullabaloo over Rachel Notley’s NDP snuffing out the 44-year Tory dynasty has been the magnitude of the fiscal squeeze now facing the province.
The collapse of crude oil prices that had former Progressive Conservative premier Jim Prentice warning Albertans to brace for a $7-billion hole in provincial revenues will result in his NDP successors tabling a budget Tuesday that forecasts the largest-ever deficit in the province’s history.

Finance Minister Joe Ceci hinted this week the deficit will be just shy of $6.5 billion — nearly $1.5 billion more than Prentice forecast last March in a budget that was never passed. MORE HERE

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Edmonton home prices flat as sales decline

By Bill Mah, Edmonton Journal, October 2nd., 2015

Home prices in Edmonton held relatively steady in September despite nearly a double-digit sales decline, MLS figures released Friday by the Realtors Association of Edmonton show.
The average residential price for the Edmonton census metropolitan area last month was $368,874, down 0.75 per cent year-over-year. FOLLOW THIS ARTICLE

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I appreciate all your calls and emails. I'm looking forward to helping you with your next step towards building real wealth.
Your success continues EVERYDAY, let me help you build for tomorrow.

“Thinking will not overcome fear, but action will.” -W. Clement Stone

Warm Regards,

Todd and Danielle Millar

===SPECIAL NOTICE: NO CASH, BUT GOOD CREDIT? CALL US TODAY TO LEARN HOW YOU CAN OWN INVESTMENT PROPERTY===

P.S. Stay ahead by checking out Danielle's daily blog at Edmonton Real Estate Investor for all your cutting edge market news and information.