Want to Invest in a Small Community? Here’s how to Market Your Suite!

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This is probably not the answer you want to hear, but I personally would not invest in a property in a small community of 3000 people or so. My answer is in part motivated by my experience as a former manager at CMHC’s multi-family default management department in the Prairie Region. The very few defaults and problems I saw during my tenure were for apartment buildings in smaller, and often remote, markets. Their economic base is not sufficiently diversified to create stability. When an economic downturn occurs, small communities are hit the hardest and vacancies shoot through the roof!

However, if you decide to invest in a small market, mitigate the risks accordingly. Namely, I would plan for higher vacancies to ensure you always have a positive cash flow. You could stress-test your property to be able to tolerate, say, 25% vacancy rate in the property, which means that you would still be able to pay the mortgage down even if you hit 25% vacancy rate.

The local market and economy should be sufficient in and of itself to attract tenants. If not, then you need to ask yourself if it’s a good market to invest in.

Pierre-Paul Turgeon is President of Matterhorn Real Estate Investments Ltd. See more about his 2.5 day hands on Multi-Family training at www.MultiFamilyBlueprint.com.


I would utilize Kijiji, Craigslist, signs on lawns, ads in local paper, ads at Safeway or gathering place (community center, post office, or local barber who has a community board, etc.)

Keep in mind that the rule of 150, whereby each dollar you increase in the value of the building (by lowering costs or increasing revenue) loosely translates into $150 dollars in equity, may not work well in small towns as you may be unable to raise rents due to local competition from small cheap houses and trailers. Do your homework in small towns; they are very high risk, and exit is very difficult. But, if they are run well, may cash flow great!  

Thomas Beyer is the founder and President of Prestigious Properties and has transacted over $175 million of real estate.

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