The Real Estate Investment Network releases its brand new The REIN Score

November 03, 2014

November 4, 2014

FOR IMMEDIATE RELEASE

The Real Estate Investment Network releases its brand new The REIN Score

The REIN Score rates real estate investment markets across Canada in a way that allows investors to compare markets across provinces and across the country.  This cutting edge report replaces REIN’s Top Investment Town publication includes a new rating system and new communities.

“We wanted a more concise and detailed report that reflected the depth of our research”, said Melanie Reuter, Director of Research with REIN. “We realized that not all investors are alike and that everyone has differences in their risk threshold.  Some want quick, high yields and are willing to take a chance to get a more dramatic return, while other investors are happy with slow and steady appreciation and decent cashflow.  There are different measures of success and the new ranking acknowledges that.”

The REIN Score measures each city or town on five different categories for a total of 50 points including: Economic Risk (possible 12 points); Yield Growth Potential (possible 12 points); Investors’ Insights (possible 10 points), Political Climate (possible 8 points), and Accessibility (possible 8 points).

“The two most important criteria are the economic risk with a big focus on existing and future jobs and job growth, and the growth potential of yield,” says Reuter, “will the going-rent rates mean your cashflow is good in relation to the house prices and is there potential for more and larger growth as the local economy improves?”

“It is also important to take into consideration the political climate of a community and whether it has a solid growth plan, cashflow squashing taxes, and whether it has restrictive rental policies. If you can raise rents to match demand or your property taxes are expensive compared to other communities, your current and existing cashflow is compromised.”

The report also takes into consideration the immediate and long term impacts of Canada’s demographic changes.  Will communities continue to attract the two largest cohorts: an aging population and a very different Generation Y?

The current Alberta communities in REIN’s 2014 rankings are:

• Airdrie
• Edmonton (45/50)
• Calgary (44/50)
• Fort Saskatchewan (43/50)
• Leduc (43/50)
• Airdrie (41/50)
• Red Deer (39/50)
• St. Albert (39/50)
• Cold Lake (38/50)
• Lloydminster (38/50)
• Fort McMurray (36/50)
• Grande Prairie (36/50)

Below is a detailed list of the criteria used to measure Canadian communities.

The REIN Score Rating Scale —  Possible 50 Points

1. Economic Risk  (possible 12 points)

• GDP
• Job Creation
• population growth
• Post-Secondary Education
• Infrastructure supports city

• Hospitals & emergency services
• Water and sewers
• Schools

1. Yield Growth Potential (possible 12 points)

• Housing prices to rent ratio
• Rental increase potential

1. Political Climate (possible 8 points)

• Secondary suite legislation
• Rent control
• Commercial and residential mill rates (property taxes)
• Is the city pro-business development
• Solid economic development plan

• Tax breaks for new businesses

1. Accessibility: Movement of goods & people to attract jobs and residents

• Airports
• Ports
• Highways
• Bridges
• Access to Public Transportation (possible 8 points)

• Presence of transportation attractive to Baby Boomers and Generation Y
• Are multiple ways in and out of the city available

1. Investors’ Insights (possible 10 points)

• Call volume on rental ads
• How quickly are vacancies filled
• Tenant profile
• Buyer/Seller Market balance and market competition
• Sales price close to list
• Rental trends