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  • Writer's pictureNeil Sullivan

Top 12 Real Estate Investment Strategies For Manitoba

By Neil Sullivan, Winnipeg Real Estate Lawyer


Person drawing buildings, real estate strategies

Investing in real estate in Manitoba can be a rewarding venture, offering opportunities for both steady income and long-term growth. However, success in real estate investment requires a well-thought-out strategy. Here are the top ten real estate investment strategies to consider in Manitoba:

1. Buy-and-Hold

The buy-and-hold strategy involves purchasing a property and renting it out over the long term. This approach provides steady rental income and potential appreciation in property value. Manitoba's stable economy and growing population make it an ideal market for this strategy.

2. Fix-and-Flip

This strategy involves buying undervalued properties, renovating them, and selling them for a profit. The key to success in fix-and-flip investments is thorough market research and a keen eye for properties that need cosmetic or structural improvements. Winnipeg, with its diverse neighbourhoods, offers numerous opportunities for this approach.  With the transaction costs when buying and selling as well as the interest costs, it is critical to both buy well and get the property back to market quickly.

3. Vacation Rentals

With Manitoba’s natural beauty and tourist attractions, investing in vacation rentals can be highly lucrative. With the growing popularity of ice-fishing many properties that were traditionally seasonal have become year-round income generators.  Properties near popular destinations like Lake Winnipeg or Riding Mountain National Park can generate significant seasonal income. Ensure compliance with local short-term rental regulations to avoid legal issues and ensure you have practical arrangements in place for cleaning and maintenance.

4. Multi-Family Properties

Investing in multi-family properties, such as duplexes or apartment buildings, can provide multiple streams of rental income from a single investment. This strategy can lead to higher returns and reduced risk, as vacancy in one unit doesn’t eliminate income entirely.  Ensure the rents are registered with the Residential Tenancies Branch; it regulates rent increases.

5. Commercial Real Estate

Commercial properties, including office buildings, retail spaces, and industrial properties, offer the potential for higher rental income and longer lease terms compared to residential properties. Winnipeg’s growing business sector makes commercial real estate a promising investment.  With the prospect of higher returns also comes a greater likelihood of extended periods of vacancy.

6. Real Estate Investment Trusts (REITs)

For those looking to invest in real estate without hands-on management, Real Estate Investment Trusts (REITs) offer a viable option. REITs allow you to invest in a portfolio of properties and earn dividends without the need to manage physical properties.

7. Real Estate Partnerships

Partnering with other investors can provide the capital and expertise needed to invest in larger, potentially more profitable properties. This strategy allows you to share risks and rewards while leveraging the strengths of each partner.  Having an experienced real estate lawyer such as myself, Neil Sullivan, drafting a partnership agreement in advance is highly recommended to avoid future acrimony.

8. Student Housing



With several universities and colleges in Manitoba, investing in student housing can provide a steady stream of rental income. Properties near the Universities of Manitoba and Winnipeg or Red River College are always in demand. Keep in mind the need for regular maintenance and management due to high tenant turnover. Properties near hospitals are also in high rental demand for staff. 

9. Land Development

Investing in undeveloped land for future development can be a long-term strategy that pays off significantly. As Manitoba continues to grow, the demand for residential and commercial development increases. This strategy requires patience and a deep understanding of zoning laws, municipal political goals, and market trends.

10. Rent-to-Own Properties

Rent-to-own arrangements provide tenants the option to purchase the property at the end of the lease period. This strategy can attract tenants interested in homeownership but may not currently qualify for a mortgage. It provides a steady rental income and a potential sale in the future.   

11. Syndication

If you have a unique insight into buying properties well or find yourself with a good deal where you cannot raise the investment capital, there may be an opportunity to assign the contract to someone at a profit.  The new buyer would stand in your shoes in terms of the original contract and could pay you a fee for the privilege.  

12. Purchase at Auction

Properties sold at auction—whether it be bank foreclosure, unpaid property taxes, or condominium fees—often sell at a substantial discount to their market value.  You must carefully review the auction sale conditions, which could mean you acquire the property without keys or even with the former owner still in occupation, but if you are willing to accept the risks, often the discount you can buy the property at makes it more than worthwhile.

Bonus Strategy – New Home Flipping

One risky but potentially rewarding strategy I do not often see discussed is new home flipping.  More commonplace with condominiums in Vancouver and Toronto, purchasing new homes on a pre-construction basis can be profitable if you time the market right.  This strategy does not seem to work well for new condominiums in Manitoba.  You often must live in the home for at least a year, but if you and your family are open to moving with regularity, you can steadily move up the property ladder with each move. People will typically pay more for a finished home with a driveway and grass than they will based on a set of architectural drawings and a muddy lot.

Conclusion

Investing in real estate in Manitoba offers diverse opportunities, from residential rentals to commercial properties and land development. Each strategy comes with its own set of risks and rewards, and the key to success is thorough research, careful planning, and professional advice. Whether you’re a seasoned investor or just starting, these strategies can help you make informed decisions and achieve your financial goals.  Often a balanced real estate portfolio allows you to hedge against risk and sometimes market trends may prompt you to re-think your investment strategy for a given property.

With its history of steady growth as opposed to the boom-bust cycles of other provinces, Manitoba is an ideal place to invest for many.


 

Neil Sullivan is a seasoned real estate lawyer based in Winnipeg, who practices real estate law and property law exclusively and advises on investment strategies. He provides expert legal advice to clients navigating the real estate market in Manitoba.


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