Investing in Calgary

[Sam Su]

Hello Everyone, 

I am looking for opportunities in Calgary, multi family preferred. Just wonder if anyone knows how the rental market is? Is anyone investing in Calgary? How is the cash flow? Can anyone make some comments? Thanks in advance. 

[Stevo Sun]

Quote from @Khai Hong:

Quote from @Sam Su:

Quote from @Khai Hong:

Hi @Sam Su, you'd be better off looking just a little outside of Calgary, like Airdrie or Lethbridge, better bang for your buck. I listen to several Canadian REI podcasts, and it sounds like a lot of experienced investors have been flocking to Calgary as of late. And given the recent rate rises, with more to come, it's going to be tough to compete directly with them. If you're thinking of investing remotely anyway, then also consider the Atlantic provinces, and dig deeper into which places have the most potential business & population growth. Wherever you end up choosing, it'd be best to add some healthy repair & vacancy contingencies into your underwriting. Here's a good discussion about landlord friendly provinces

Whats the best province to Invest in real estate in canada (biggerpockets.com)

Btw, did you get any good leads from Anthony? I'm surprised he doesn't outright post all the properties that he thinks are investor-friendly. As a realtor, that should be a great way to make oneself stand out and attract clients. 

Be conservative with your expectations, don't be dazzled by numbers like $1500/m - that's probably from a property that was purchased 10 years ago. Even with $300/m, a hot water tank replacement or furnace repair could wipe out a few years of income. So decide clearly if you need the rental income, or if you're building equity by having other people pay down a mortgage for you.

Hi khai, thanks very much for your input. Yes, Anthony did send me something and has been helpful. 

Also, I am actually thinking about Nova Scotia as well. But I have look into it yet. It is kind of too far from Vancouver. 

Btw, as you said, you are looking in Vancouver as well. What's your target if I may ask? Flipping or rental income? To me, it just can't make the numbers to be working for rental. I know long term appreciation Vancouver is always good for sure. 

 HI Sam, distance is just a mindset :) It's all just a phone call away. Or if (once) you have a good system and team in place, then not even many phone calls. You could probably get 2 properties in NS for the price of one in AB, spread out your risk a little, but more time up front to set up. Another thing to consider is the likely appreciation. To my mind, the performance in NS is a nice steady climb, whereas AB is more dependent on the economy, so pick your preference. Here's a price chart (ignore 2020-21) 

CREA | Try the MLS® HPI Tool

I'm currently looking in Vancouver (and Burnaby) because I want to move my family out of our condo in New West. I'm looking either to trade up to a house for $1.6M or less, or buy another condo ($600k or less) and rent out my current one. House hacking is part of the plan in both cases. The house would have to be fairly turn key with rooms for renting out, or another condo would also have to be live-in ready with the potential to add value through floor plan hacking. So, yeah, I have pretty specific requirements. 

You're right about rentals not making sense anymore in Vancouver, you can only get about half of the monthly mortgage cost, unless the property was purchased more than 5 years ago. And even short term rentals don't work if you follow the 30 day limit. I don't know how strictly the city enforces that limit, but it's pretty easy to see how many nights were booked on the airbnb app. The only rental strategy that still kind of works is house hacking. Some rough numbers for you to consider: values have doubled almost exactly every 10 years in Vancouver since 1980, so if you rent out a room for $900/m on $500k property, you'd get about $100k income plus another $500k appreciation in 10 years. And in about 5 years, there should be about 200k of equity to use for investing elsewhere. No guarantees, of course, but even 75% of that would be quite good. It would be very optimistic to expect even half of that in either AB or NS. That's why I'm going to find ways to stay around Vancouver.

I disagree with managing long distant property is 'just a mind set'. I think it's about a good team that you can trust. Those are not exactly easy to come by, even locally. I think if you are just getting started or this is just a side hustle, long distance management would be hard. I would be patient and look for local opportunities to get started. It might take a while to get started but it will build over time. 

If you are just counting on appreciation I would just say since the 80s the interest rate in Canada has steadily dropped. Inflation over time has also helped increase the house price. We seem to be in a rising interest rate environment for the near term so that could impact the speed of house value appreciation.