“Location, location, location” is a phrase often repeated in the real estate business, meaning that where you end up buying property is where you end up making money. Lots of places in the United States are known for having high-end real estate that’s worth more and more as time goes on, yet not every market across the country is equal. Some can provide a suitable return on investment and others can make you a millionaire.
The San Francisco Bay Area has been a goldmine for real estate agents, particularly because of its tech-driven economic boom and limited housing supply, according to Tim Choate, the founder and CEO of RedAwning.
“The area’s combination of high demand and low inventory has consistently driven up property values,” Choate mentioned. “For instance, when I first ventured into property investments in the early 2000s, the market was just beginning to feel the impact of the tech sector’s explosive growth.”
Investing in properties near burgeoning homes for tech, such as Mountain View, Redwood City and Palo Alto paid off immensely for Choate, especially when companies like Google and Facebook expanded their campuses and workforces in those areas.
“I first saw the potential in Austin about ten years ago,” said Noah Guthart, COO and founder of Panacrypto.
Guthart observed that the capital city of Texas was growing rapidly with a new tech boom that attracted a whole new wave of young professionals looking to spend their high salaries.
“Good timing was everything — getting into the market just when some major tech companies were making their way into the city,” agreed Ben Johnson, a real estate agent and the CEO of Big Ben, who continued by saying this “brought an inflow of highly paying jobs and caused demand for housing.
“I was able to capitalize on huge appreciation by buying properties in up-and-coming neighborhoods before the tech boom,” Johnson said. “For example, properties bought for around $300,000 in the early 2010s now go for over $700,000. The flourishing job market, great culture, and absolute affordability compared to other tech havens were making Austin a hotspot for real estate investments.”
“I invested in several properties in the downtown area,” Guthart explained. “One property I bought for $300,000 in 2013 is now worth over $800,000. The combination of tech growth, a vibrant cultural scene, and a relatively low cost of living made Austin a perfect storm for real estate investment.
“I remember a client who was hesitant to buy a property in the emerging East Austin neighborhood,” Guthart said. “I encouraged them to take the leap, and within five years, their property value had doubled. This kind of return is what makes markets like Austin so lucrative.”
Charlotte, North Carolina
Seeing that Charlotte was blowing up as a new financial center, combined with a unique blend of political climates and local businesses, Johnson decided to invest in both residential and commercial properties. And it paid off big time.
“The city’s population continued to grow, and the cost of living was relatively affordable, offering pretty good options for buyers and renters,” Johnson said.
Johnson recounted one memorable deal involving “…a downtown condo bought for $250,000 and later sold three years down the road for $400,000, all because of the great increase in professionals moving to the region and corporations relocating there. This made Charlotte a good market due to the strategic location and ongoing urban development.”
Miami
“Miami has been another goldmine for me,” Guthart said, highlighting the city’s international appeal matched by a status as a hub of finance, culture and fun.
Guthart stated that Miami has consistently driven property values up.
“In particular, I’ve had great success with luxury condos in neighborhoods like Brickell and South Beach.
“I once sold a condo in Brickell for $1.2 million, which was bought just three years earlier for $700,000,” Guthart said. “The timing was perfect as Miami’s luxury market was booming due to an influx of foreign investors, particularly from Latin America. I believe Miami’s appeal will continue to grow, making it a long-term investment hotspot.
“One of my most memorable experiences was purchasing a beachfront property in Miami in 2015,” Guthart said. “I bought it for $2 million, and after some strategic renovations and marketing, I sold it for $3.5 million just two years later. The location, combined with Miami’s growing desirability, made this a highly profitable venture.”
Phoenix
It’s not just location, but timing that can truly add to the value of buying property in an area where it might look bust instead of boom. That was the case for Johnson in Phoenix.
“…my timing coincided with post-recession recovery in the early years of the decade. The market was recovering, and prices were therefore still low,” Johnson said.
“I bought; this had enabled me to invest in foreclosed properties and distressed sales at below-market prices,” Johnson said. “As the economy recovered and population grew, so did the value of the properties skyrocket.”
Johnson noted that a foreclosure home at $150,000 was sold at $300,000 within five years in Phoenix, a prime example of how the city is bouncing back as a real estate powerhouse.
“The warmer climate of Phoenix added to the attractiveness, with lower living expenses and an improved economic base,” Johnson added.
Nashville, Tennessee
Its music scene and southern charm are the city’s reputation to stand on, but Nashville has also experienced a real estate renaissance in recent years, in Choate’s professional opinion.
“I recall a period around 2015 when Nashville’s real estate market was just beginning to attract national attention,” Choate said. “We saw an opportunity in its downtown area, where historical homes and new developments were coexisting beautifully.
“By investing early in vacation rental properties there, RedAwning managed to ride the wave of Nashville’s tourism boom, leading to significant returns on investment,” Choate said. “The blend of cultural appeal and strategic urban development made Nashville a standout market for us.”
OAK STREET PARTNERS UNLOCKING OPPORTUNITIES FOR CANADIAN INVESTORS IN THE U.S. RENTAL HOUSING MARKET
Oak Street Partners is leading the way in cash-flow-focused U.S. affordable housing investments
TORONTO, ON | NOVEMBER 18, 2024 – With the Canadian real estate market facing challenges and declining opportunities for investors, Oak Street Partners, a Toronto-based private real estate investment firm, is offering a new avenue for Canadian investors to diversify into the U.S. rental housing market. Oak Street Partners enables investors to passively invest in U.S. affordable housing, providing them with stable, cash-flow-focused returns while helping meet the growing demand for quality, affordable housing in the United States.
“Market conditions in Canada have made it more difficult for investors to find reliable, income-generating opportunities,” says Parker Christie, Founder & CEO of Oak Street Partners. “By turning to the U.S. affordable housing market, we’ve been able to create consistent, cash-flowing investments that benefit both our investors and local communities.”
Building on this approach, Oak Street Partners facilitates investment by strategically acquiring and managing properties in the U.S., particularly in the Midwest and Southeast regions. Investors provide capital, while Oak Street handles all aspects of property ownership and management. Similar to a Real Estate Investment Trust (REIT), but privately structured, Oak Street ensures investors receive stable, cash-flow-driven returns without the need for direct involvement.
A key part of Oak Street’s approach is leveraging the Section 8 Housing Choice Voucher Program, America’s largest federal rental subsidy program that pays private landlords rent on behalf of low-income tenants. This guarantees a reliable, high cash flow income stream, even when real estate markets are challenged with high interest rate environments. By leveraging this program, Oak Street is not only able to provide consistent returns to its investors, but it also enhances lower-income communities, creating sustainable, quality homes for residents.
“It’s a win-win situation,” explains Trumbull Fisher, Director of Oak Street Partners. “Tenants are able to secure and enjoy quality, affordable housing, while investors benefit from reliable, government-backed rental payments that ensure steady cash flow.”
By investing in these properties, Oak Street is able to support the demand for affordable housing, while also contributing to the broader social good by addressing housing shortages and improving community infrastructure. This dual focus on financial return and social impact is what makes Oak Street’s approach stand out in today’s real estate investment landscape.
In its first year of operation, Oak Street has acquired over 100 units in Ohio. With $10 million in assets under management, the company has been able to offer its investors a 10 per cent cash dividend, which was distributed nine months into its operation. This is a rare milestone for companies in their first year, as many real estate investment firms operate at a loss in their early stages.
“As we look to the future, our goal is to expand Oak Street’s portfolio in high-demand areas across the Midwest and Southeast,” adds Christie. “Our focus will remain on sourcing properties that deliver strong, stable returns while positively impacting local communities.”
For more information on Oak Street Partners visit oakstreetgp.com/.
ABOUT OAK STREET PARTNERS
Oak Street Partners is a real estate investment firm focused on creating diversified and stable opportunities for investors in the U.S. rental housing market. We offer a unique pathway for investors to build and expand their portfolios by investing in affordable housing opportunities, improving the quality of life for tenants while delivering consistent returns for investors.
‘The Bidding War’ is a play skewering Toronto’s real estate market via a story about a one-day bidding war over the city’s last affordable home. The cast and crew say it exposes how the housing crisis brings out “the worst in people.” (Nov. 12, 2024)
TORONTO – The Toronto Regional Real Estate Board says home sales in October surged as buyers continued moving off the sidelines amid lower interest rates.
The board said 6,658 homes changed hands last month in the Greater Toronto Area, up 44.4 per cent compared with 4,611 in the same month last year. Sales were up 14 per cent from September on a seasonally adjusted basis.
The average selling price was up 1.1 per cent compared with a year earlier at $1,135,215. The composite benchmark price, meant to represent the typical home, was down 3.3 per cent year-over-year.
“While we are still early in the Bank of Canada’s rate cutting cycle, it definitely does appear that an increasing number of buyers moved off the sidelines and back into the marketplace in October,” said TRREB president Jennifer Pearce in a news release.
“The positive affordability picture brought about by lower borrowing costs and relatively flat home prices prompted this improvement in market activity.”
The Bank of Canada has slashed its key interest rate four times since June, including a half-percentage point cut on Oct. 23. The rate now stands at 3.75 per cent, down from the high of five per cent that deterred many would-be buyers from the housing market.
New listings last month totalled 15,328, up 4.3 per cent from a year earlier.
In the City of Toronto, there were 2,509 sales last month, a 37.6 per cent jump from October 2023. Throughout the rest of the GTA, home sales rose 48.9 per cent to 4,149.
The sales uptick is encouraging, said Cameron Forbes, general manager and broker for Re/Max Realtron Realty Inc., who added the figures for October were stronger than he anticipated.
“I thought they’d be up for sure, but not necessarily that much,” said Forbes.
“Obviously, the 50 basis points was certainly a great move in the right direction. I just thought it would take more to get things going.”
He said it shows confidence in the market is returning faster than expected, especially among existing homeowners looking for a new property.
“The average consumer who’s employed and may have been able to get some increases in their wages over the last little bit to make up some ground with inflation, I think they’re confident, so they’re looking in the market.
“The conditions are nice because you’ve got a little more time, you’ve got more choice, you’ve got fewer other buyers to compete against.”
All property types saw more sales in October compared with a year ago throughout the GTA.
Townhouses led the surge with 56.8 per cent more sales, followed by detached homes at 46.6 per cent and semi-detached homes at 44 per cent. There were 33.4 per cent more condos that changed hands year-over-year.
“Market conditions did tighten in October, but there is still a lot of inventory and therefore choice for homebuyers,” said TRREB chief market analyst Jason Mercer.
“This choice will keep home price growth moderate over the next few months. However, as inventory is absorbed and home construction continues to lag population growth, selling price growth will accelerate, likely as we move through the spring of 2025.”
This report by The Canadian Press was first published Nov. 6, 2024.
