Canadian first timer looking for advice on first property.

[Anthony Chaloner]

Hello all, I have just started reading a few of the posts and I can seem most of you are American, but I was hoping to hear from some fellow Canadians who know the regulations etc. However I do have some questions that may be relevant no matter what country you are in so please feel free to pass along any advice :) I am currently looking at purchasing my first property and I have done a fair bit of homework, but I am looking for some experienced guidance on choosing my best option to start out. The situation: I am currently saving for my down payment and have saved about 10k of the 25k I will need to put down 5% for a $500,000.00 house (I should have the rest in the next 6 months of all goes as planned). I am pretty fortunate that I live in Calgary Alberta where currently the market is taking a sharp decline due to the declining energy market and it is very much a buyers market. Option 1: Purchase the most house for my money in order to have the most possible equity when the market goes back up and either flip or rent the place using the profit or equity in order to get into a new place (I am somewhat versed in the regulations around using rental income toward purchasing another property and my understanding is that I could count half of the monthly rental price toward my income while the principal of the property still counts toward my debt services ratio) please correct me if I am wrong. Option 2: My girlfriend currently lives in the smaller city of Lethbridge (about 2 hours south of Calgary) for 8 months out of the year while she is attending university. The market there has caught my attention since the prices are significantly lower, there are many new places being built, and there is a market for renting to students (she currently pays $1200 per month for a place where several more townhouse units are listed around 200k to purchase). I always like to peruse the realtor.ca website and I have noticed a 2 bedroom unit in decent condition for under 100k! I am very intrigued by the potential of a place this inexpensive because I see the prospect of moving in for a few months with a very low mortgage, condo fees, and taxes (I am not sure what the rules are on how long I would have to live there but I believe it is 6 months) and turn around after a few months and rent it out for around $1000 per month. Then potentially do the same with some of the newer places selling for around 200k. This has great potential for me as I work remotely and could balance the job while living further away from the city. I think option 2 has greater potential for building equity as I would have multiple properties paying for themselves while producing a profit. When I write it down like this it almost seems like a no brainer but I am looking for some advice from those with experience. Would I be hindering my potential for owning a dream home by having so much debt? Or would the equity work in my favor? Part of thinks I would be happy having a nice place in the city that I love and paying down my mortgage as I build equity but I think I will always wonder what would have happened if I chose a more aggressive strategy. All advice and commentary is much appreciated! Thank you to all who read my entire novel post :)