This small GTA exurban city is investors’ best-kept secret

Brantford, a small city west of the Greater Toronto Area, has become a hotbed of investor activity lately, thanks to its plenteous multifamily dwellings and affordable low-rise housing.

According to top local Real Estate Broker, Adam DeGroote, Brantford’s growing population—the city of roughly 100,000 residents is expecting another 30,000 over the following three decades—is the surest market fundamental denoting that rental demand is on the cusp of exploding—more than it already has. DeGroote noted that the city’s investment potential isn’t a nascent phenomenon: MoneySense named Brantford Canada’s top investment destinations in 2018 and the city consistently ranks near the top of MoneySense’s rankings every year.

“We’ve had a lot of eyes on Brantford since MoneySense came out with that ranking, and it’s been strong ever since,” DeGroote told CREW. “I get phone calls daily from investors in the GTA looking for mostly multifamily units in this area or older homes that they could convert, like turning basements into a secondary apartment unit, because they don’t have to get a license for that here.”

Multiplexes are, without doubt, the most popular segment of housing in Brantford’s investor market, although capitalization rates have fallen to 4-5%. Still, Brantford is located off Highway 403, making connectivity to Toronto, Buffalo, Detroit, Windsor, Kitchener-Waterloo, and London, simple, and it has attracted all kinds of industry, including major local employers like Ferrero Rocher, which just built a capacious facility, and S.C. Johnson. Moreover, as a blue-collar town, rental demand is slated to remain elevated in the years to come, especially as surging real estate prices have spilled out of the GTA in every direction into exurban markets like Brantford.

“The rental vacancy rate here is close to zero,” said DeGroote. “There’s such strong demand in Brantford with way more people looking to rent than there are places available.” Some places remain empty for renovation work, too.

“Prices are, however, rising, albeit not to the same extent that pushed investors out of metropolises like Toronto and Vancouver, because positive cash flows are still very much attainable.”

 The city also has several post-secondary institutions operating within city limits, including Wilfrid Laurier University, which has Brantford’s largest educational campus, that’s home to over 3,100 students, Conestoga College, Six Nations Polytechnic, and Westervelt College. With colleges and universities slated to reopen their campuses to students for in-class learning this fall, there will likely be even more downward pressure on the city’s rental vacancy rate, believes DeGroote. Moreover, residents priced out of nearby cities are also eyeing Brantford for its comparatively affordable rental accommodations.

 “There’s a large influx of residents from Hamilton and Burlington that are flocking to Brantford and surrounding towns, and it’s bringing prices up,” said DeGroote. “Anything multifamily is being scooped up in record time.”