The BRRRR Method: A Strategic Approach for Real Estate Investment in Ottawa

Nov 12

We spoke to Liane Moskal about the BRRRR method—an acronym for Buy, Rehab, Rent, Refinance, and Repeat—has become a popular strategy among real estate investors, offering a systematic approach to building a profitable property portfolio. With Ottawa’s diverse real estate market and recent changes in Canadian refinancing rules, the BRRRR method can be especially advantageous for local investors.

Here’s a detailed look at the steps involved in the BRRRR strategy and how Ottawa investors can leverage this approach for maximum returns.

1. Buy an Undervalued Property

The first step is to identify and purchase an undervalued property with the potential for appreciation. In Ottawa, this could mean looking in emerging neighbourhoods or finding homes that need work but are in desirable locations. Researching Ottawa’s current market trends and working with a knowledgeable real estate agent can help you spot opportunities to purchase properties below market value.

2. Rehabilitate the Property

Once you’ve secured the property, it’s time to rehab it. Rehabilitating may involve making structural repairs, upgrading interiors, or improving the exterior curb appeal. The goal is to make the property appealing to potential tenants and increase its value, boosting equity. With Ottawa’s climate, think about energy-efficient upgrades that can reduce heating costs and appeal to eco-conscious renters.

3. Rent to a Qualified Tenant

After the property is ready, rent it out to a qualified tenant and start earning rental income. In Ottawa’s rental market, where demand is high, especially near key areas like downtown, universities, or transit-accessible neighborhoods, finding tenants can be relatively straightforward. Screening tenants carefully is crucial to ensure steady, reliable income that will support your investment’s profitability.

4. Refinance to Cash Out on Equity Appreciation

Once you’ve rented out the property and established its increased value, you can refinance it to access the new equity. This step is key to the BRRRR strategy, as it allows you to unlock capital from the property’s appreciated value, which you can then use for future investments.

Ottawa investors can benefit from refinancing up to 80% of the property’s new appraised value. However, with new Canadian mortgage rules, you could refinance up to 90% of the appraised value if you’re renting out additional living spaces like a basement suite, carriage home, or backyard tiny home. This rule change provides an additional incentive for Ottawa investors to consider properties that allow for secondary units, maximizing rental potential and equity gain.

5. Repeat: Purchase Another Undervalued Property

With funds from your refinance, you can repeat the process and acquire another undervalued property. The goal is to build a portfolio of income-generating properties, leveraging each to finance the next. Ottawa’s growing neighborhoods and the city’s continuous urban development provide a range of opportunities for investors looking to expand their holdings and diversify income sources.

Why the BRRRR Method Works Well in Ottawa

Ottawa’s stable real estate market, combined with high rental demand, makes it an ideal city for BRRRR investors. The city’s diverse neighbourhoods—from historic areas with older homes to newer developments near transit—offer multiple investment opportunities.

Moreover, with Ottawa’s strong rental market and the recent refinancing rule changes, property owners who add rental units such as basement apartments or tiny homes on their lot can access additional refinancing options, amplifying the BRRRR strategy’s impact. This not only helps increase cash flow but also provides flexibility for further investments.

The BRRRR method offers Ottawa investors a structured, repeatable way to grow wealth through real estate. By purchasing undervalued properties, rehabbing them for rental potential, and leveraging new refinancing options, investors can continually build and diversify their portfolios.

If you’re interested in implementing the BRRRR strategy in Ottawa, working with a local real estate team like New Purveyors can provide the insights and market knowledge needed to make informed investment decisions.