Dilemmas about purchasing a rental unit this year in Airdrie/Calgary..What to do!?

[Jonathan Yeh]

Hey guys, I'm an investor living in Airdrie right now, and I have been holding off to purchase a rental unit for the past year or so due to inflation and the forever-rising interest rate.

However, I plan to buy one this year to make "money work for me", but still..there are just so many things that I cannot overlook. I am hoping someone with much more experiences can give me some pointers! Here are my dilemmas:

1. Interest rate may not be rising any more, but it's not falling either - with a high interest rate right now, my ROI is only about 5%, which is much lower than what I was able to get from my other units from 2 years ago. Also, the 5% ROI is based on the "crazy" rent raise from 2022-2023. My struggles here are simply not knowing if the 5% ROI makes sense, and that future rent drop can also damage it easily.

2. Housing market is still at it's peak in Airdrie - a laned house that was valued at 400k 2 years ago is now selling close to 600k with the same specs (pricing from home builders). I understand that houses bought at a higher price today means nothing in 20-30 years, but still..it's a very hard pill to swallow.

3. Low inventory - there are just not enough houses for sales these days, and that's kind of forcing my hand to purchase houses that are not 100% rental ready. Which also pushes me back to purchasing pre-construction houses. The down side I found with pre-constructions is that the overall cash required is much higher than purchasing from otherwise. Garage, fences, laundry units...etc adds up to almost 35k cash from my previous units.

What do you think? Should I just hold cash for another while to see what's going to happen? Hoping for a semi-crash to take advantage of it? Invest in stocks or other options while waiting for RE to recover from the "bubble"?

Thanks in advance, I know it's not an easy answer for most! Much, much appreciated!