Sales have been extremely slow lately, we’re looking at rental to pivot but it’s really hard to make the numbers work. Anyone else having the same issue? Any asset classes that work right now?
essentialagent Answered question
You’re not alone, a lot of residential builders are in the same spot. A few things that are working for people right now:
- Purpose-built rental with the right financing. The numbers rarely work on conventional debt. Insured programs with longer amortizations and higher loan-to-cost (in Canada, CMHC MLI Select) are what make most rental deals pencil right now.
- Renovation and retrofit work. Owners who aren’t moving are renovating. Energy retrofits, basement/secondary suites and accessibility upgrades are steady, and often have rebates attached.
- Institutional and public work. Schools, healthcare, municipal and infrastructure work holds up better in a downturn. Worth getting prequalified now even if margins are thinner.
- Light industrial, self-storage and service work. Smaller jobs, but they keep crews busy and cash flowing.
Whatever you pivot to, tighten up estimating and cost tracking first. Thin margins don’t leave room for surprises.
essentialagent Answered question