Seeking advise for Calgary

[Eemaar]

Hello all wonderful people here,
I am kind of beginner with some experience. Some exp because i have condo in partnership rented last 4 years here in calgary.
Now after gaining some exposure to REIn members and resources available i am starting my investment journey.
My situation : i have about $120k + LOC available on my primary residence with $290k mortgage remaining.
I have about $70k in savings available.
I want to buy something this summer here in calgary.
Would like your expert inputs, what to consider.

Personally I am full time employed with $100k income with no additional debt and good credit.
I am not flip/renovate type. I would like to buy and rent for long time.
Appreciate your inputs in advance. Thank you.

 

[Thomas Beyer]

Buy a TH or half duplex close ( ie within walking distance ) to stations along the two new LRT lines going SE and N.

Related posts especially on how to get started http://myreinspace.com/threads/educational-rein-posts-by-thomas-beyer.10663/

Once you have picked a very very small area know exactly if $385,000 is good value, overpriced or a smokin' deal.

Also consider some presales condos if heavily discounted.

Also an ugly old house in land locked Canmore may make sense but likely over $600,000 so perhaps beyond your price range. Easy to rent if downtown. I say old and ugly as renters are often seasonal or short term in Canmore and as such, have high turnover, loads of weed and partying so tough on interior.

 

[Eemaar]

Thank you Thomas, i was hoping your reply and really appreciate.
any reason you did not mention detached house? not that i want to buy house but just curious. Thank you.

 

[Thomas Beyer]

Thank you Thomas, i was hoping your reply and really appreciate.
any reason you did not mention detached house? not that i want to buy house but just curious. Thank you.

House ok but much of it over 500 or 600,000. Tough to cash flow unless with illegal basement suite.

Rather own 2 THs than one house to start with.

 

[Eemaar]

House ok but much of it over 500 or 600,000. Tough to cash flow unless with illegal basement suite.

Rather own 2 THs than one house to start with.[/QUO

Thank you for quick response. you are great for people like me, i will keep you posted on my journey. Thanks.

 

[Matt Crowley]

Buying a home to rent out is like starting a small business with all of demands: marketing, legal, tax, maintenance.

I will be AMAZED if you can find a SFH in Calgary right now that will yield above 5%. Totally shocked.

Start by bench-marking a minimum return for yourself. Consider NCREIF and check out a couple other REITS, Dream REIT went very long on Calgary / AB assets and had a 40% asset writedown, maybe an opportunity there if you are bullish on Calgary. Also Northview Apartment REIT got hammered, I mean if you are bullish on Alberta there are some great proxies to get the identical exposure without any of the hassles or headaches. Plus they don't pay taxes and you do. Maybe put $45k in a TFSA and put some $ in a REIT for tax-free gains? Just saying, it is a scenario worth considering.

 

[Eemaar]

Buying a home to rent out is like starting a small business with all of demands: marketing, legal, tax, maintenance.

I will be AMAZED if you can find a SFH in Calgary right now that will yield above 5%. Totally shocked.

Start by bench-marking a minimum return for yourself. Consider NCREIF and check out a couple other REITS, Dream REIT went very long on Calgary / AB assets and had a 40% asset writedown, maybe an opportunity there if you are bullish on Calgary. Also Northview Apartment REIT got hammered, I mean if you are bullish on Alberta there are some great proxies to get the identical exposure without any of the hassles or headaches. Plus they don't pay taxes and you do. Maybe put $45k in a TFSA and put some $ in a REIT for tax-free gains? Just saying, it is a scenario worth considering.

Thanks Matt for your input.
I have read bit about REITs but still i have had no exp or knowledge of this. I do have TFSA mostly for index DYI TD-e funds with low MERs. For buying in calgary i do agree there are not great returns compare to whats market is for buying and whats rental market is. My current short term goal is to get something where i may not have good cash flow but still not put anything from pocket every month and have rental pay down mortgage.
may be in couple of years when things improve i may earn extra $100 via cash flow.
People are having sec illegal suits with good cash flows but i do not like to have illegal suits, just for peace of mind.

 

[KeithnCalgary]

Hi Eemaar:
There is a lot to consider from your post. There are opportunities to make great cash-flow with legally suited properties in Calgary. Condo's are difficult to get positive cash-flow from once you consider condo fees. I live and invest in Calgary with my wife and am an expert on Calgary Secondary suites. I have done REIN presentations and articles on secondary suites in Calgary. I am also an REIA coach and a mortgage broker. If you want to have a high level conversation about your investing I would be happy to speak with you either in person or by phone.

Keith Uthe, REIA
[email protected]
Mortgage Alliance Enrich Mortgage Group

 

[Martin1968]

Every real estate investor has its own strategy and will find out what works and what doesn't.
But seeing the cost for starters to break into the Calgary market, I would maybe advise to look outside of Calgary. Up and down the highway 2 corridor, or nr 1 east and a bit west, and in towns preferably 8000 plus or some smaller towns closer to a big centre is attractive. And if you can afford buying the run down props who are undervalued, with undervalued rents, these are the best. Just buying something as a nest egg by having the tenant pay down the mortgage is a strategy, but what if a tenant moves on and it sits empty for 3 months. $100 cash flow.......is No cash flow at all. What you want to strive for is cash flow, appreciation, mortgage paydown. Try to fire from all cylinders. Not saying it always works however It's something you want to strive for.
Good luck on your investing.