Real estate prices in Calgary and surrounding areas like Okotoks, Airdrie & Cochrane have been trending downward since 2014. Rental vacancy is low. Mortgage rules have tightened meaning a lot of people are not in a position to buy a home, needing to rent.
Now, is the time to shop around for the right investment property BUT, do not jump in without doing your homework.
INVESTMENT PROPERTY BUYING HOMEWORK
- Estimate 1% of property value for annual maintenance
- Expect to put at least 20% down to get your investment property mortgage.
- Buy a property that has positive rental flow from day one.
- Set out rules in your lease agreement and stick to them, ie, charge late rent payment fees, determine your pet policy, etc.
- Screen your tenants as if you were screening them to move in with you!
- Do not buy a fixer-upper unless you know for certain you have a contractor who does quality work.
- Look for a property close to schools, public transit, amenities, parks, grocery.
- Repairs will be unexpected and can be expensive. Ask your accountant what tax deductions are available for investment properties which may include: mortgage interest, repairs or improvement costs, etc.
- Research municipal bylaws and rules relating to property
- Research Alberta's Landlord & Tenants Act to be well informed of your rights and responsibilities as a landlord.
Own one property, or several, for a couple of decades, create high net worth, use to supplement a retirement fund, pay off mortgage using your rental income, and sell when you are ready to cash out.
Due to appreciation, you are likely to sell your property at a higher price than what you bought it at, which makes selling an exciting and profitable end goal to your investment!
Investing in real estate and property or any real estate for that matter is unpredictable and can have a lot of both positives and negatives. If you decide you re ready then...
- Do your homework.
- Contact us, Magnussen Real Estate Team, who are experienced and knowledgeable in this field and ready to help you find the right investment.
- Create a solid plan and stick to it
- Remember, investing in rental property is not going to make you rich quickly - plan for the long term. One of the best attributes of Real Estate Investing is ownership. You cannot lose until you sell.