The location of a property will determine the type of renters that will want to live there. Central areas generally have the highest demand, but less-pricey options in working-class areas often have better cash flows. Opt for high-growth areas over those that are in decline. Safety is also an important concern. Renters steer clear of unsafe neighbourhoods, so make sure your income property is in a safe and secure area.
The monthly rent you can charge for a given property will be crucial to determining whether it could be a solid investment. Determine average rental rates in the area to make sure the rent you charge will be able to cover your mortgage payment, taxes and other expenses like insurance every month.
Shopping, parks, restaurants, schools and public transportation are just a few of the amenities renters will be looking for, so make sure they are nearby when choosing a property.
An area with a high number of vacancies, indicated by a lot of housing inventory on the market, means it might be difficult to find renters for your property. It might also reduce the amount of rent you’ll be able to charge, impacting your cash flow.
- Property Taxes
Property taxes are a cost you will have to shoulder with any investment property, so make sure you review the most recent tax assessment to determine if they are high, and if so, why that is the case.
This is another cost you will have to factor in when determining your cash flow. Try to avoid areas where your coverage options might be limited or non-existent, such as a flood plain or other area that is susceptible to natural disasters.
Housing experts predict Calgary’s rental market to see another year of high vacancies, low rents
Calgary’s rental housing market this year will not change much from 2016 as historically high vacancy rates will continue to usher in incentives and lower rents, say experts.
“We expect the vacancy rate to remain close to 2016 levels” said Richard Cho, Calgary-based principal market analyst for Canada Mortgage and Housing Corp. (CMHC).
Real estate veteran to take reins of member organization
The New Year will welcome a new president for CREB® and its 5,200-plus members as local real estate veteran David P. Brown takes the reins during what’s expected to be a year of transition for the industry.
CREB®Now caught up with Brown to talk about everything from his financial background to what advice he has for prospective homebuyers.
Economic conditions create ideal situation for renters, challenges for landlords
In the most volatile economy in the country, it is no big surprise Calgary landlords endured 2016 with the highest rental housing vacancy rate in a quarter of a century.
“It is a free market economy, with all the ups and downs, and in the middle of (this downturn), you just hope many will survive it,” said Gerry Baxter, executive director of the Calgary Residential Rental Association (CRRA) of Calgary’s current seven per cent vacancy rate.
Over-supply, fewer newcomers behind increasing vacancy rates
Vacancy rates in Calgary have spiked so far this year and are expected to rise for the foreseeable future, say industry insiders.
And with few signs of significant changes in the economy on the horizon, renters will enjoy plenty of choice and price flexibility, while landlords will need to get aggressive.
“Vacancy started rising pretty rapidly after the spring of last year and it’s still been rising,” said Gerry Baxter, executive director of the Calgary Residential Rental Association, which has about 850 members, representing between 65,000 and 70,000 rental units. There are more than 700 landlords in the association.