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Meanwhile, in China…
If China’s energy demand reaches just half of North America’s, they will require twice the total energy we do. How will this impact your real estate investments?
Energy demand in China doubled during 2000 to 2007. In 2000, 4.5 BPY (barrel of oil equivalent per person per year) was consumed compared to 9 BPY in 2007.
It’s no secret that continued rapid growth in China, is putting upward pressure on the value of energy.
Even if China’s energy demand reaches HALF of North America’s, they will require TWICE the total energy we do.
That’s not including India and the remaining 4.6 billion people in developing nations.
What does this mean?
(process chart)
• Job Growth
Investment in, and development of, Alberta’s oil sands will continue to create thousands of jobs.
• Population Growth
An abundance of jobs will attract workers to Alberta creating increased demand for housing.
• Real Estate Price Increases
Increased housing demand pushes real estate prices higher.
The time to buy is now.
By joining Parkhurst REIT you can co-own multi-family apartment buildings in Alberta while prices are still low. See our Current Opportunity sheet and Investment Guide to see how we are taking advantage of this next market cycle.
IMAGE OF CURRENT OPP (small enough so that no numbers show)
IMAGE OF INVESTMENT GUIDE
Alberta is on sale.
There is a gap between current real estate values and where trend lines point. Here is a look at where prices were and where they’re going.
Alberta is on sale. We’re at the beginning of another promising market cycle. Whether you think Alberta’s economy will boom like the 2000’s or grow steadily like the ‘80s and ‘90s, there is a gap between current real estate values and where trend lines point.
Invest directly or pool your resources?
Are you thinking of buying an investment property? Use this to help you decide.
What powers our investments?
Three ways our investments make money over time.
Rental income is what allows Parkhurst REIT to hold properties long-term, regardless of market conditions and economic cycles. Rents generally increase in two ways:
A. With current cost of living (rent is higher now than it was 10 years ago).
B. Through improvements to the property and management practices.
We only acquire properties that produce a positive
cash-flow, meaning rental income exceeds expenses.
We look for opportunities to increase rents over time
while maintaining and improving vacancy rates.
2Mortgage Pay-down
As mortgages get smaller, your investment gets bigger. A portion of rental income is used to reduce mortgage balances each month. The result is increased equity in the REIT portfolio, and a larger account value for you.
3Market Value Growth
If the value of REIT properties increases, so does the value of your investment. Values can increase two ways:
A. Passively: the average price of real estate increases over time.
B. Actively: we increase property value through renovations, changing use/zoning, improving management, or other strategies. Even if the general market is flat or declining, increased value can still be realized.
Slow. Steady. Sizzling.
Why multi-family apartments are our favourite asset class in any market cycle.
Why we like multi-family apartment buildings:
Lower purchase price, same rent
Due to higher economies of scale, the ‘per door’ cost of an apartment unit is less than a single family home or condo, but can generate the same rental income.
For example, you can buy an apartment building for $90K–$100K per door that rents for $800 per month, or you can buy a condo worth $150K–200K that rents for a similar $800–$1,000 per month. This means you can have almost double the rent for the same amount of investment capital, assuming you have enough to buy the apartment building.
Less vacancy risk
Apartment vacancies are far easier to manage. If you own a rental property and your only tenant can’t pay their rent, you have a risk exposure of 100%, and you’re now paying all operating expenses (mortgage, taxes, etc). When you own an apartment building and tenant doesn’t pay their rent, the rest of your tenants still cover operating expenses. The chance of every tenant in the building failing to pay rent is almost zero.
Lower operating costs
Lower operating costs increase your cash-flow. Apartment buildings share electrical, plumbing, heating systems and more across all units, which reduces maintenance costs. The most obvious example would be that everyone shares one roof.
Easier management
When you own an apartment building, professional third party management and on-site caretakers become a reality. All tasks (rent collection, maintenance, etc) are handled at one location for all tenants. If you own a single family home or condo, finding third party management can be nearly impossible as they can’t work efficiently enough to make an attractive profit.
