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cover story
JULY/AUGUST 2016 canadianrealestatemagazine.ca 39
New Brunswick’s untapped investment potential
New Brunswick epitomizes the astonishing beauty of eastern
Canada. The endless coastline and open water inspire nothing
short of wonder, and the wide range of activities, from vibrant
local festivals to encounters with great white sharks, are as varied
and stimulating as the province itself. New Brunswick’s myriad
charms make the province a wide-open treasure chest whose
rewards belong to anyone who comes near.
But New Brunswick’s potential as an investment destination
– recreational or otherwise – is often hindered by the province’s
overall economic malaise, a situation Jeff Murray of Canada
Homes For Rent is eager to change. Murray, a member of both the
Real Estate Investment Network and the Canadian Condominium
Institute, is one of a number of real estate professionals in New
Brunswick trying to stimulate the region’s market. CREW sat down
with Murray to investigate the feasibility of investing in the Picture
Province.
CREW: Let’s start with New Brunswick as a whole. Why should
people invest in a province with such murky economic prospects?
Jeff Murray: Investors keep saying they want to wait for job
growth, and understandably so, but with job growth you also start
paying a premium for properties. This is the precise time that you
want to be looking at real estate in New Brunswick – during these
down times. You can get a three- to four-unit building for under
$150,000 in most cases, and find a three-bedroom bungalow for
$100,000. More often than not we get investors from outside the
province during the high times. That’s when we get such a bad rap.
People buy in the high, but they don’t plan well enough, and they
can’t survive the low.
Our market is the best market, as far as I’m concerned, for
the new investor just looking to get their feet wet. In most cases
you can pay cash for properties in New Brunswick that, if you
were to buy in Ontario or BC, would be the same cost as your
down payment. You can take that money and get away with no
mortgage in New Brunswick. If you buy in the right areas, the
payoffs can be huge.
CREW: What kind of payoffs are we talking about?
JM: Well, you’re not going to buy a place for $150,000 and sell it
two years later for $250,000, but with property so affordable,
single-family rentals have a ton of revenue potential. And they’re
popular. We only have two houses in our inventory, and usually we
have 10 to 12.
Single-family homes are the great calling. Some people just
can’t qualify for mortgages, and new arrivals, temporary workers
and students all need places to live. A well maintained single
family home can get you $1,400 a month in New Brunswick.
There’s some really good cash flow out of single-family homes.
People don’t realize. Cash flow out of single-family homes is
very hard to do, but we’re doing it. We’re doing it in Saint John
and Moncton.
CREW: What about recreational properties?
JM: There are some great opportunities. A well-equipped, nicely
located place could easily generate $1,400 a week. We have a five-
bedroom beauty that gets $2,400 a week in the summer.
CREW: Where would be some ideal spots to invest?
JM: Cocagne is beautiful and fairly popular. It’s only 20 minutes
north of Moncton. Beautiful beaches, plenty of opportunity for
water sports. There are already a number of vacation rentals and
summer homes there. I’m getting a lot of calls from Moncton
investors with interest in Cocagne.
St. Andrews by the Sea is also stunning. It’s an hour and a half
south of Saint John, but only 40 minutes from the US border. It’s
a very small town, but you’re right on the Bay of Fundy, so there
are lots of fishing and whaling excursions, great food, amazing
festivals. And St. Andrews has the New Brunswick Community
College, so there’s a lot of demand for rentals in the off-season.
CREW: A lot of people reading this don’t live in the province,
meaning they’ll be needing to pay for some form of property
management. The costs can really bite into profitability.
JM: It depends what you’re getting, though. If you’re paying 40% of
your gross for someone to wash your sheets and maybe change
a light bulb or two, yeah, that’s not a very good investment. But if
you can find a company like ours that’s hands-on, full-service
and 24/7 – one that even vets your clients for you – it’s worth it,
no question.
And there are companies out there who charge a lot less –
maybe 7% for long-term and 20%, 30% for weekly. If you do your
homework, you can find them.
CREW: Is there anything else you want people to know about
New Brunswick?
JM: Sometimes folks need to invest in what can happen rather
than what is happening. There are a lot of solid revenue-
generating opportunities already, but if things turn around – if
the Energy East Pipeline goes through – our economy is going
to jump from zero to a hundred. The property here won’t be so
cheap once that happens.
JEFF MURRAY is the president of Canada Homes
For Rent. Jeff is both a trusted expert on property
management issues and a key member of a New
Brunswick business community dedicated to
improving the province’s economic fortunes.Anyone
with questions about investing in New Brunswick
or property management can contact him at jeff@
canadahomesforrent.ca.
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