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Lower yields in current market

Don Leggett

0
Registered
Joined
Sep 10, 2007
Messages
22
Greetings,
We are new members as of the June `07 Quickstart in Calgary. We`ve hooked up with a great realtor who is also a member and so far we`ve viewed twenty or so properties around Calgary and area with him and a few with his colleague in Edmonton. We are finding that the majority of these properties are falling into the 6% - 7% range for yield and are more or less at a break even point in terms of cash flow.
We did in fact purchase a suited bungalow in the Balwin area in Edmonton and it will just positive cash flow once we increase the rents a bit after possession in October but the increases won`t take affect until February (basement) and June (main) next year.
We`re hoping to look in Red Deer area this weekend and maybe back up to Edmonton if time permits.
What we`re wondering is if 6 to 7% and break evens are more or less the norm right now because we are being challenged to find ones that positive cash flow right out of the gate.
Any comments or advice would be greatly appreciated.
Thanks,
Don
 

bhandel

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Registered
Joined
Sep 4, 2007
Messages
5
With the huge price increases the past two years and the fact that rents have not increased proportionately your experience is typical as it is very hard to find cash flow propeties. Indeed, even when you find a cash flow property on paper, the reality with older homes is that maintenance and repair expenses cause it to easily go into negative cash flow.
 
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