Benefits of Real Estate Investing in Sault Ste. Marie
As housing prices in major metropolitan areas keep going up, and remote work becomes more popular, more people are migrating to smaller towns. If you’re looking for an affordable area for your real estate portfolio, Sault Ste. Marie may be just the ticket. Situated across St. Mary’s River from its United States counterpart in Michigan, this waterfront city has plenty to offer for the beginning investor. As real estate prices slowly rise and the alternative energy industry creates jobs, Sault Ste. Marie looks promising for anyone willing to play the long game.
From fur trading to forestry
As with most areas in Canada, Sault Ste. Marie was originally populated by First Nations tribes, most of whom were Ojibwe-speaking. When French settlers moved into the territory, it was christened with the French name. Sault Ste. Marie was a mission settlement and fur trading post starting in the 18th century. Its waterfront location and nearby forests made it ideal for transportation and trade, including a robust forestry industry.
Before the War of 1812, Sault Ste. Marie also included the American city of the same name. The war’s ending prompted a treaty between the United States and Canada, which divided the territory. Since St. Mary’s River delineated the new U.S./Canada border, everything to the south of the border became part of the United States. Once the border was established, British traders were largely prevented from trading with Americans. Both cities developed separately.
Today, the International Bridge spans the river to connect the two Sault Ste. Maries. The city is about a three-and-a-half-hour drive from Sudbury to the east, seven hours from Toronto to the southeast and eight hours from Thunder Bay in the northwest. The French influence remains to this day—in fact, an English-only resolution in 1990 sparked a major outcry from the sizable French-speaking population.
Sault Ste. Marie - A city with an ageing population
As of the 2016 census, Sault Ste. Marie has a population of 73,368—significantly larger than its American counterpart. The average age is 46 years, and the largest age group is the 55-59 category. Over 45 percent of the population is married, and the vast majority of households consist of either one or two people. When you’re marketing and selling to Sault Ste. Marie citizens, keep these statistics in mind—they skew a lot older and less family-oriented than many up-and-coming areas in Ontario. However, this could indicate an excellent opportunity for ageing-in-place or multigenerational fix-and-flips.
When it comes to education, Sault Ste. Marie residents trend toward high school-educated or those without a certificate (about 24 percent of the population). About a third of the population has some university, college or apprenticeship education. The city hosts applied arts and technology school Sault College and the public Algoma University.
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A growing real estate market
Despite the COVID-19 pandemic, Sault Ste. Marie saw growth throughout 2020. According to the Canadian Real Estate Association, home sales went up nearly nine percent from 2019, and the average home price rose 16 percent to $208,507. That’s significantly lower than the national average of $531,000 in 2020. The average rent in 2019 was $849.
Three-bedroom homes are by far the most popular size, and single-family detached homes make up the majority of residential real estate. 68 percent own their own home. Currently, new housing construction is way down—research carefully if you’re considering building new developments.
Keep in mind that Sault Ste. Marie’s much-maligned property tax might cut into your profits. The higher tax rate (especially as compared to areas like Toronto) is necessary, city leaders say because fewer people are contributing to the tax revenue. Given how affordable property is, however, the higher taxes may still work out in your favour.
Sault Ste. Maries Economic outlook
The biggest industries in Sault Ste. Marie is healthcare, retail and manufacturing, and the most common occupations are in sales and service, trade and transportation, business and finance and education, law and government. The city used to be part of the steel industry, but imported steel caused most of those manufacturing plants to shut down. Call centers have also moved out of the area. However, the forestry industry, alternative energy industry and the Ontario Lottery and Gaming Corporation are some of the area’s major employers.
The median household income is just over $61,000, and most of the population is above the poverty line. In fact, the latest data puts Sault Ste. Marie’s unemployment rate at 6.3 percent in November 2020, which is lower than the national rate of 8.1 percent. During the COVID-19 pandemic, especially during May 2020, there were fewer jobs—but by the end of the year, the economy was rebounding. Although there’s no way to predict the future, this is a good indication that the numbers are moving in the right direction.
Come for the affordable market, stay for the sports and outdoor activities
Many of the city’s cultural and entertainment offerings center around sports: hockey and American football are quite popular in the area. There are also local art galleries, performing arts festivals and the Bon Soo winter carnival.
Residents and tourists alike take advantage of nearby outdoor activities in places like Pukaskwa National Park, as well as numerous provincial parks. Hiking, backpacking, canoeing, camping, skiing, swimming, fishing and hunting are popular activities, all within a short drive through the Algoma area. Anyone who loves spending time in nature will have a wealth of opportunity here.
A great place to test the waters
When you’re just starting out, major metropolitan areas like Vancouver and Toronto are usually out of reach for real estate investors. Properties in smaller areas like Sault Ste. Marie can be a great way to dip your toe into the industry without having to raise millions in capital. However, pay attention to the economy and population growth: without a major, immediate demand, you may need to play the long game. There isn’t a huge influx of new residents—yet—but if you’re willing to wait, it could be a great place to invest.
Real Estate Professionals in Sault Ste. Marie
We have searched high and low for real estate investing professionals in Sault Ste. Marie. Below, you can find professionals we have researched and can confirm they specialize in working with Real Estate Investors.
To ensure the maximum success in real estate investing in Sault Ste. Marie, or any city, you should always use professionals who understand and work with investors, your income depends on it.
This list may not fully list all the professionals in the area, but the ones we have personally investigated and that we would refer our clients to.
If you’re a real estate professional and would like us to consider adding you to the list, please contact us.
Mortgage Broker
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