Rental Properties in Calgary not making a dime!

[azimkabani]

Hi,

I have a number of properties in Calgary that are being managed by a reputable professional property management company who does not charge an arm and a leg.

My challange is that the properties are great investments but, after several years, I have still to see some rental profits - I only just break even at year end. This year I am replacing all the windows and can see myself in "loss" for the next 2-3 years. My property manager tells me this is usual but I find it hard to believe

Does anyone know where I can find some reading material about average rental prices in Calgary (NW and SW) and if indeed I should only be breaking even? (I have bunglows that are rented and my mortgages are in the 50-75K).

Thanks

A

 

[PaulPoulsen]

Hey azimkabani;

Check out websites like http://www.gottarent.com and http://www.rentfaster.ca and compare your properties to what`s available online. I also recommend that you grab a copy of whatever local paper you read and check out the rental properties available in the classified ads. Even go so far as to set up a few viewings and pretend that you`re interested in renting the property.

I have no experience with the Calgary market but I can tell you that all my rents here in Edmonton, at the very least, cover all my expenses. We`re very aggressive with our rents but it`s been my experience when you have a premium property and a premium manager, you can demand premium rent.

Best of luck!
-Paul

 

[JefferyJohn]

Hi A,

The statement from your property manager that no profit is "usual" is a red flag to me. There are obviously many variables, but with only $75,000 mortgages (I`m assuming 20-25 yr ammortization), properties in decent condition (5-10% maintenance budget), and market rents, there should be more than break-even cashflow.

I would suggest comparing your cash flow pro-forma with other Calgary REIN member residential investors to locate the source of the issue. A little bit of homework regarding Calgary market rents is a must - like the above poster mentioned. You don`t even need to pretend you`re interested in renting

As a landlord attaining the highest rents in my area, I gladly inform other landlords about my properties and what I am achieving in rent, it encourages them to keep their rates in line with the market as well.

Good luck!