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In Northwestern Ontario sits a city known for its beautiful landscape, thriving culture and major strides in medical research and education – Thunder Bay. This gorgeous city sits on the edge of Lake Superior and just north of the Nor’Wester Mountains and the summit of Mount McKay.
This city is the largest population centre in Northwestern Ontario and the second largest in Northern Ontario being dwarfed only by Greater Sudbury and much like its neighbour had built much of its early history and infrastructure in the manufacturing and mining industries. However, today the city is more notably recognized for its ‘knowledge economy.’
So, why should you consider this modest city of 113,000 when planning your real estate investments? Let’s dive into the market and explore the potential this city possesses.
However, before we dive into the Thunder Bay real estate market, if you want to learn how to properly finance your Thunder Bay real estate investments, click the link below to book a free strategy call with our team at LendCity.
The Thunder Bay Real Estate Market is Affordable
Savvy real estate investors are always on the hunt for a high-value investment that they can obtain for the best available price. Fortunately for them, the Thunder Bay real estate market has some of the most affordable and competitive prices you can find in the province by a long shot.
In fact, even with the past few years resulting in massive surges in real estate markets across a variety of markets, the average house in Thunder Bay is still incredibly affordable.
At the time of writing this article the average single-family detached home is estimated to sell at a price of approximately $315,000 – less than half of what you would expect to be paying in similarly sized cities in Central and Southwestern Ontario. This means that it is a lot easier to buy a property in Thunder Bay while maintaining enough leftover funds to update, renovate and customize your investment property before listing it one the market than it would be elsewhere in the province.
Even renovations are regarded as a cheaper and more affordable process in Thunder Bay than in other parts of Ontario. While many parts of Ontario estimate an average price of $350-$500 per square foot in order to renovate a home, recent estimates in Thunder Bay estimate a cost of merely $250-$300 per square foot.
Naturally, these costs may vary on the type of work and the desired materials used on the project, but overall, this spells well for residential investors who want to make big changes on a tighter budget. However, you should never allow the lower average price in Thunder Bay allow you to forget to properly screen and research your contractors to make sure you are getting the best value for your investment.
In terms of rental rates, Thunder Bay has some of the most affordable rents in the province. While this may not contribute to a high level of cash flow from rental properties, it does mean that the risk of sudden affordability issues arising with your tenants is typically expected to be lower than it would be in markets with higher rent yields. This creates a more stable-reliable investment for people who are willing to play the long game when growing their wealth.
Tourism and Exploration Drives Thunder Bay Real Estate
One of the driving forces for commercial real estate investors in the city is the strong tourism sector that fills and surrounds Thunder Bay and its surrounding communities. After all, not only does the city sit comfortably along the beautiful Lake Superior, but to the south lie the Nor’Wester Mountains – a popular destination for skiers, snowboarders, and climbers alike.
So, investors who are looking to capitalize on the tourism industry in the region need to consider the following types of investments when forming their plan.
First, travellers and tourists require accommodations for their travels, this means hotels and commercialized short-term rentals have a natural demand. However, you will need to consider the local competition and aim to make your rental more appealing then surrounding competitors.
Travelers also need to find places to obtain key essentials such as food and supplies that they may need. So, appealing restaurants, bars and specialty retail properties may serve as a strong investment. Ideally, when doing this you should aim to embrace the local culture – after all tourists are looking to have a unique local experience.
You may also wish to consider entertainment and recreational real estate if you have the means to create something that tourists and locals alike will be attracted to. This could range from all sorts of properties but what is most important is that you do the research to ensure that it is something the community is actively demanding.
Investing in a Knowledge Economy
On top of the thriving tourism sector, Thunder Bay is a knowledge economy, that means that many of the jobs and driving forced for the city’s economy are in knowledge-based fields. In this case, that means that there is a strong dedication to medical research, practice, and education in the city.
So, if you are interested in investing in research facilities, medical offices, labs, or school/study space, the Thunder Bay real estate market will be quite welcoming.
After all, the city is home to some of the largest and most prominent medical research facilities in Northwestern Ontario at the Northern Ontario School of Medicine and the Thunder Bay Regional Health Research Institute. So, offering additional facilities so that people who are studying and branching off from these institutions can be beneficial.
Immigration Northwester Ontario has published a list of some of the priority sectors for investment for Thunder Bay and the rest of Northwestern Ontario based on the economic, industrial, and cultural needs of the region.
This list includes:
- Forestry and Value-Added Wood Products
- Mining and Minerals Extraction
- Environmental Technology
- Renewable Energy
- Biotechnology and Health Sciences
- Innovation and Technology
While this is not an exhaustive list of everything the community needs, it provides a clear picture of what is currently in demand in the area and what local supports are prepared to assist you with in order to help you and the community grow and thrive together.
Discover How To Buy Unlimited Rental Properties With This Step By Step Guide
A Unique Tourism Experience in Thunder Bay Real Estate
Thunder Bay is located in an excellent position for people who want to invest in a tourist market. Between the beautiful waters of Lake Superior and the slopes of Mount McKay and the Nor’Wester Mountains, the city is home to some of the most beautiful sights that people flock to visit year-round.
Naturally, as a city positioned in the middle of a beautiful natural environment, the city is known for its excellent camping experiences, fishing, and sailing activities. In addition to those tourism experiences, many people stay in Thunder Bay when they plan to go for hikes, ski down the local mountains or try their hand at climbing sports on the nearby terrain.
Another incredibly unique experience you can enjoy in Thunder Bay is their Amethyst Mining experiences. Since the city is home to large deposits of amethyst, visitors and residents are able to go into open mines to collect their own gems or buy polished ones that have been locally harvested.
As a result of the strong tourism in the region, some investors may consider short-term rentals when making investments in the region in order to capitalize off of the industry.
Education and Research – Building a Knowledge Economy in Thunder Bay Real Estate
Thunder Bay is regarded as a knowledge economy, that means the city’s economy is based largely off of its information-based jobs, notably in the medical research and education sector. Notably, the Northern Ontario School of Medicine has a campus at Lakehead University and the Thunder Bay Regional Health Research Institute where a great deal of research and medical education is conducted and practiced.
Thunder Bay Real Estate – Superior by Nature
Thunder Bay real estate is easily one of the most overlooked real estate markets with some of the most potential to become the next big name in the province for real estate investors.
However, before diving into any real estate market, you want to make sure you have a plan for both your investments themselves and how to secure the best available financing for all of your mortgage needs.
That is why at LendCity we pride ourselves on matching you with the best available lenders so that you can get the mortgage products best suited to your goals and investment journey. That way you can focus more on your investments and spend less time worrying about interest rates and monthly payments.
Thunder Bay Real Estate Professionals
We have searched high and low for real estate investing professionals in Thunder Bay. 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 Thunder Bay, 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.
If you would like to learn how to finance your future Thunder Bay real estate investments, click the link below to book a free strategy call today.